Thursday, March 31, 2022

"on the disparity between these two types of men, the fate of all subsequent civilization has hinged"

Happy birthday, Mom.

Brooks Adams, The Law of Civilization and Decay. "Full book available" at Google Books

"The Law of Civilization and Decay is a book written by Brooks Adams in 1895. His intention was to prove that the rise and fall of civilizations follows a definite cycle of centralization and decay..."

From the chapter on Rome:

Chapter 1: The Romans

When the Romans first emerged from the mist of fable, they were already a race of land-owners who held their property in severalty, and, as the right of alienation was established, the formation of relatively large estates had begun. The ordinary family, however, held perhaps twelve acres, and, as the land was arable, and the staple grain, it supported a dense rural population...

The Latins had little economic versatility; they lacked the instinct of the Greeks for commerce, or of the Syrians and Hindoos for manufactures. They were essentially land-owners, and, when endowed with the acquisitive faculty, usurers. The latter early developed into a distinct species, at once more subtle of intellect and more tenacious of life than the farmers, and on the disparity between these two types of men, the fate of all subsequent civilization has hinged. At a remote antiquity Roman society divided into creditors and debtors; as it consolidated, the power of the former increased, thus intensifying the pressure on the weak, until, when centralization culminated under the Caesars, reproduction slackened, disintegration set in, and, after some centuries of decline, the Middle Ages began.

It could have been written today, but it wasn't. It could be written about us, and one day, the way things are going, it will be.

In the book's Preface, Adams writes:

In offering to the public a second edition of The Law of Civilization and Decay I take the opportunity to say emphatically that such value as the essay may have lies in its freedom from any preconceived bias. All theories contained in the book, whether religious or economic, are the effect, and not the cause, of the way in which the facts unfolded themselves. I have been passive.

I like that. And I know just what Adams means; I do economics the same way: Look at the data a thousand times, until it starts to tell a story; then look at the data even more, to see how that story stands up. My task is to do my best to understand what the economy is telling me: to understand what it is telling me. Perhaps this is why I say that to solve problems like unemployment, problems that trouble people, we must correct the imbalances that trouble the economy. It's not personification for effect. It is the way the economic system works.

Monday, March 28, 2022

Inequality and Insurrection

 "... all the ... benefits, were reserved to members of the nobility ... to an increasingly exclusive extent as we approach the Revolution."

Henri Sée. Economic and Social Conditions in France During the Eighteenth Century. Batoche Books, Kitchener, 2004. (Originally Published 1927)

The first two paragraphs below are for context. Beginning on page 5:

One fact which strikes us at the very outset is that the Revolution overturned all the old legal institutions. In eighteenth century France the social classes, as we conceive them today, can be detected only by an attentive observer of the realities of economic life... Three estates can be discerned—the clergy, the nobility, and the third estate. Between them rise the barriers of secular privileges.

The privileges of the clergy and nobility constitute one of the characteristic features of eighteenth century society. Clergy and nobility exercised a preeminent right over all land property. The manorial dues of various kinds that they imposed upon the peasants who tilled the soil formed one of their chief sources of revenue. Clergy and nobility thus evaded most of the taxes and financial burdens that fell upon the popular classes... Finally, most of the functions of the state were the prerogative of the privileged classes, especially of the nobility...

It is true that the ecclesiastical offices, in theory at least, seemed accessible to the commoners as well as the nobles; but in reality all the dignities of the high clergy, the episcopal sees, the abbeys, and the rich ecclesiastical benefits, were reserved to members of the nobility, especially the court nobility, to an increasingly exclusive extent as we approach the Revolution.

Sunday, March 27, 2022


First impression: The centerpoint of symmetry occurs in 1929.

Something else happened that year... in October I think...

Saturday, March 26, 2022

Keynes: The Toast

One page at JSTOR: Economics and "The Possibility of Civilization": Four Judgments by Dwight E. Robinson, from The Quarterly Journal of Economics, Vol. 67, No. 1 (Feb., 1953)

Robinson gets right to the point:

On a ceremonial occasion marking an important and advanced milestone in his career, John Maynard Keynes delivered himself as follows:

"I give you the toast of the Royal Economic Society, of economics and economists, who are the trustees not of civilization, but of the possibility of civilization."

The Keynes quote is footnoted:

R. F. Harrod, The Life of John Maynard Keynes (New York: Harcourt Brace and Co., 1951), pp. 193-94.

That's all I needed. Keynes makes the connection between the economy and civilization. That's what I wanted to see.

Keynes said economists are the trustees of the possibility of civilization. In other words, economics and economists do not create civilization, but they make it possible -- or impossible, when policy goes bad.

Friday, March 25, 2022

Not his words

In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution (PDF, 362 pages) by Geoff Mann, 2017.

I've been on the lookout for "civilization" as a topic in the work of Keynes for a long time. Not as a full-time preoccupation; but it is always in the back of my mind. 

In my experience, there is not a lot of discussion of civilization in the work of Keynes. Hey, he was an economist. He wrote about the economy. No surprise there.

The reason I look for stuff on civilization is that I see civ and econ as deeply intertwined. Big picture, I think civilization runs in cycles, and these are economic cycles. I look to Keynes (and elsewhere) for evidence of this connection. But it looks to me like Keynes tried to keep civilization out of the General Theory.

In the full text of the book, the word civilisation (with an "s") occurs only twice: once in chapter 10

At periods when gold is available at suitable depths experience shows that the real wealth of the world increases rapidly; and when but little of it is so available our wealth suffers stagnation or decline. Thus gold-mines are of the greatest value and importance to civilisation.

(but the topic here is gold and the economy, not civilization). The other occurrence is in chapter 23, where Keynes quotes Leslie Stephen on the "wickedness" of Bernard Mandeville’s Fable of the Bees. I was going to say this second one doesn't count at all; but on second thought it does show the connection between the economy and the moral views of society (that is, the moral views of civilization) as long ago as 1723. 

I therefore count one relevant reference to civilization in Keynes's book.

If Keynes focused on civilization when he wrote The General Theory, he didn't do it by making fulsome use of the word civilisation.

Here's why I have trouble reading Geoff Mann: While I find Keynes almost completely focused on economic concerns, Mann finds civilization in everything Keynes touched. As a result, I tend to doubt Geoff Mann's claims about Keynes's focus on civilization. And his book is full of such claims.

When I started thinking in terms of the cycle of civilization -- after reading A Canticle for Leibowitz as a teenager -- talk of our time as part of the decline of civilization would receive a dismissal at best. Nobody wanted any part of it. I learned not to talk about it.

So I tend to leave it out when I write for the blog. I've been gradually building up to the topic for years, laying a foundation, making the occasional reference.

It may be easier to talk about the decline of civilization now, as decline has become more obvious. I wouldn't know. But Geoff Mann seems to have found an audience.

I dug out my notes from the '90s on The Kondratieff Wave, the 1972 book by Shuman and Rosenau. This is what I was looking for, from the Preface:

Most of what happened in the 1960s, including the Vietnam War and the social unrest that preceded and accompanied it, could have been predicted...

Bold claim. And then this:

In an age that still relies on a narrow definition of scientific proof, a long wave that controls not only the economy but the way people act smacks too much of the occult to win the approval of rigidly scientific economists.

That last part, about the long wave not being acceptable to economists, that's what I was remembering. And that's how I try to deal with the topic, too, by assuming that people find the topic quirky at best, and generally unacceptable. I always picture the magazine cartoon of the disheveled bum carrying a "THE END IS NEAR" sign. Nobody likes that guy.

Myself, I always say thinking in terms of the cycle of civilization can be useful, because it sometimes helps when we try to fit the economy's puzzle-pieces together. I don't see how that could be objectionable at all, really.

Consider this again, from the Shuman and Rosenau book:

a long wave that controls not only the economy but the way people act smacks too much of the occult to win widespread approval...

My response to that, in my old textfile, was

my problem with this is, the wave does not "control the economy."
The wave is simply an observed phenomenon. The wave is a hint.

The wave, like GDP and various rates and measures, is feedback. It is information about how the economy is performing and whether policy is having the desired effect. Where's the harm in that?

So I am reading Mann's book -- searching for occurrences of "Keynes" in the text, actually -- and I come to this sentence:

The grandiose Utopia that Keynes sometimes proposes, like the virtuous full-employment "communism of capital" he envisions at the close of The General Theory, might occasionally give his futurology a rosy glow.

Dead stop.

I don't remember Keynes using the phrase "communism of capital" in the closing chapter -- and that chapter is one of my favorites. But there it is, in quotes, attributed to Keynes, apparently in the closing chapter, the end of the closing chapter of the General Theory.

I checked Mann's footnotes, just in case, but there was no reference to the "communism" quote.

I checked chapter 24 of the General Theory just to be sure, because my memory is reliably unreliable. The bottom line of the image at right shows the search field bordered in red, along with the text of the search result -- "phrase not found" -- which is also in red.
I checked the text of the whole book, just in case:
Phrase not found.

If I go back to Geoff Mann's sentence and read it carefully, I can see that he does not specifically say Keynes says the words "communism of capital". But Mann's sentence gives the impression that he is quoting Keynes. That is no accident. And Mann has the phrase in quotes. When I read it I thought he was quoting Keynes. I couldn't believe that I somehow missed that three-word phrase.

I didn't.

Thursday, March 24, 2022

I think Milton Friedman was a ...

Nine letters: A person who pretends to have certain beliefs, attitudes or feelings when they really do not.

  • Monetarist economics is Milton Friedman's direct criticism of Keynesian economics...
  • Friedman's permanent-income hypothesis ... undermines the case for progressive taxation.
  • Keynes emphasized volatile flows; Friedman emphasized stocks of wealth...
  • Friedman took issue with the Keynesian multiplier...
  • [Friedman said] "I think Keynes was a great economist."

Friedman was constantly littering. And yet he said "I think Keynes was a great economist".

Tuesday, March 22, 2022

Keynes's General Theory in one sentence

From chapter 3:

The effective demand associated with full employment is a special case, only realised when the propensity to consume and the inducement to invest stand in a particular relationship to one another. 

Monday, March 21, 2022

The economic cycle of civilization

In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution
(PDF, 362 pages) by Geoff Mann, 2017.

Geoff Mann, from page 49 in his book:

Keynesians are ... certain that neither civilization nor capitalism is natural; if left to self-regulate, things will not take care of themselves.

That's Mann's definition of "Keynesians", not mine. But it is true that economists often talk about equilibrium as if it was the natural state of the economy. It isn't. In the natural state, as in Eden, there is no economy. In Eden, and in the Dark Age.

We are often told that the troubles of our economy arise due to government interference. This is largely true. I, for one, am always pointing out flaws in policy and suggesting improvements. (Hey, I don't want to change everything. I only want to fix two or three things. I'm "always" pointing out flaws because the same two or three things come up all the time.)

But the fact that some of our troubles arise from flawed policy does not mean that all of our troubles arise from flawed policy. Some of them arise from a lack of policy because our trust in self-regulation is too strong, and because "things" really don't take care of themselves.

(Oh, our economy does take care of itself, when conditions are good. That's when we get a "golden age" or "seven good years". But when we fail to promote the general welfare by proper management of economic conditions, we get the "seven bad years" or the "lost decades", or insurrection or revolution or a Dark Age.)

According to the José Ortega y Gasset quote I posted the other day -- also from the Geoff Mann book -- civilization "is not self-sustaining. It is artificial, and demands an artist or artisan." I'm retelling that story today.

According to A.J. Toynbee, civilization faces challenges but continues to advance as long as each challenge is met with a successful response. I'm retelling that story today.

Looking at "civilization" as one massive business cycle, I can see that Keynes was right to compare the Great Depression to the Dark Age. And I understand that the peak of the cycle occurred some time around 1776, with our Declaration of Independence, and Adam Smith's Wealth of Nations, and Gibbon's Decline and Fall of the Roman Empire first seeing daylight that year. 

It is ironic that Gibbon's book on the fall of Rome was published at the peak of the next cycle. But I do love irony. 

The irony gets deep when we realize that Smith's book is capitalism's handbook, and that capitalism drives the decline and fall. You can see this if you look. Geoff Mann, who knows what to look for, says on page 10: "I cannot help but see [it] everywhere I look".

I should say, I never said "capitalism drives the decline and fall" until today. I think I'm adopting the wording from Geoff Mann. (And my, hasn't my story changed since 14 March!) But don't forget: My version of "capitalism drives the decline and fall" goes more like this:

The cycle of civilization is a cycle of dispersion and concentration of wealth.

We are in the stage of civilization where capitalism-as-cause-of-decline is easy to see. Concentration of wealth is easy to see. Mergers and acquisitions are everywhere. Amazon owns MGM, for crying out loud.

During the rise of civilization, wealth increases faster than it concentrates. During the fall, wealth increases more slowly than it concentrates. As the end draws near, fewer and fewer owners remain. The rest of us, if we are lucky, get to be serfs.

The only acceptable alternative that I can see is to prevent decline. Fortunately, the cycle of civilization is an economic cycle, so policy can stop the decline and restore the rise, if we commit to doing so -- and if we get the policy right, and dally not.

Sunday, March 20, 2022

Use of the word "financialization"

Even if we combine the two spellings, there is essentially no use of the word financialization until the 1980s.

Saturday, March 19, 2022


Google tells me the great depression start date was August 1929. When I ask when was black thursday, it says September 1929. Britannica puts Black Thursday on October 24, 1929.

August, September, October 1929, somewhere in there. Okay.

For context, from Britannica:

Great Depression, worldwide economic downturn that began in 1929 and lasted until about 1939... Although it originated in the United States, the Great Depression caused drastic declines in output, severe unemployment, and acute deflation in almost every country of the world.

From an essay titled Liberalism and Labour, given as a speech by John Maynard Keynes in 1926:

As things are now, we have nothing to look forward to except a continuance of Conservative Governments, not merely until they have made mistakes in the tolerable degree which would have caused a swing of the pendulum in former days, but until their mistakes have mounted up to the height of a disaster. I do not like this choice of alternatives.


From an essay titled A Programme of Expansion, written by John Maynard Keynes in April 1929:

It is not an accident that the Conservative Government have landed us in the mess where we find ourselves. It is the natural outcome of their philosophy:

"You must not press on with telephones or electricity, because this will raise the rate of interest."

"You must not hasten with roads or housing, because this will use up opportunities for employment which we may need in later years."

"You must not try to employ every one, because this will cause inflation."

"You must not invest, because how can you know that it will pay?"

"You must not do anything, because this will only mean that you can't do something else."

"Safety First! The policy of maintaining a million unemployed has now been pursued for eight years without disaster. Why risk a change?"

"We will not promise more than we can perform. We, therefore, promise nothing."

This is what we are being fed with.

They are slogans of depression and decay—the timidities and obstructions and stupidities of a sinking administrative vitality.

Prescience? No. To call it prescience cheapens it. Keynes understood the economy as no one since has done.

Friday, March 18, 2022

Seven Ngrams

Ngrams. Word usage. For example, the graph titled "The use of credit" shows the usage of that phrase. It does not show the use of credit. And the graph titled "Beneficial credit" shows all usage of that particular word combination, not only when the source says credit is beneficial, but also when they say it is not.

(Click image to jump to the Ngram Viewer)

"Credit is good" (Peak circa 1918)

"The use of credit" (Peak circa 1933)

"Beneficial credit" (Peak circa 1985)

"Credit and economic growth" (Peaks in 1959 and 2017)

"Debt and economic growth" (Peak in 2019 with end-of-data)

"Credit and debt" and "debt and credit"

"Good credit" (Usage now half what is was in the early 1800s)

Thursday, March 17, 2022

Found by accident. Drew my attention immediately

In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution (PDF, 362 pages) by Geoff Mann, 2017.

The heading on page 58: A General Theory of Civilization

Page 59:

Keynes became a Keynesian not to save capitalism or liberalism per se, but to save the “thin and precarious crust” of civilization itself. He was, to be sure, a capitalist, and he believed that something like capitalism—although in a more or less radically different form—would be a central pillar in the construction of more robust, peaceful, and secure social formation. But to read his commitment to capitalism as his priority is to misunderstand his politics and that of many elites of his time. He understood capitalism to be intimately interwoven with but not identical to civilization. His work, especially but not only The General Theory, is an attempt to do via “economics” what, since the French Revolution, others had tried to do through other modes of analysis—philosophical, political, even literary: to understand the ways in which modernity puts civilization at risk and to uncover the means by which we might rescue civilization from modernity’s self-destructive tendencies.


I find just two occurrences of the word "civilisation" in Keynes's General Theory

  • in chapter 10:

    At periods when gold is available at suitable depths experience shows that the real wealth of the world increases rapidly; and when but little of it is so available, our wealth suffers stagnation or decline. Thus gold-mines are of the greatest value and importance to civilisation.

    but do read the whole paragraph;

  • and in chapter 23, but here Keynes is quoting someone else, someone he disagrees with. (Recommended reading: the whole chapter.)

Keynes uses the word "civilisation" once in the book. Based on that one usage, it is clear that Keynes does see a strong link between civilization and the economy. But it would be a mistake to say The General Theory is a book about saving civilization. It is about fixing the economy.

It might not be wrong to say the book was motivated by the desire to save civilization (though I don't expect Keynes said any such thing). 

And it is certainly reasonable to look at all of Keynes's work (not only the GT) to see how he ties civilization and the economy together. This is what I think Mann is doing. But I need to see those quotes.

Wednesday, March 16, 2022

"A specifically evolutionary phenomenon"

In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution (PDF, 362 pages) by Geoff Mann, 2017.

From note 15 for chapter 1:

There is a great deal that separates Freud from Keynes and Keynesianism, but it is nonetheless true that on the question of civilization, Keynes thought along lines almost exactly the same as those laid out by Freud. In Civilization and Its Discontents, Freud posits civilization [Kultur] as a specifically evolutionary phenomenon ... Keynes shared Freud’s contentions that the “replacement of the power of the individual by the power of a community constitutes the decisive step in civilization,” that human life “in common is only made possible when a majority comes together which is stronger than any separate individual and which remains united against all separate individuals.” ... Freud clearly helped him [Keynes] think and see things in a new light.


Okay. When Mann says "Keynes thought along lines almost exactly the same as those laid out by Freud" and when he says "Keynes shared Freud’s contentions", these are Mann's observations, not Keynes's. I don't know what Keynes thinks until I see Keynes saying it himself (and sometimes not even then). So my objection to Mann's words here is the same as in mine of the 14th: Mann is presenting his own theory and calling it Keynes's.

However, mine of the 14th quotes a fragment from Mann's preface. And today's quote is part of a footnote. Neither quote is part of the main body of the book. But even if they were, those quotes are not evidence that Mann doesn't show Keynes expressing the same ideas himself.

They are not evidence that Keynes DOES say those things, but they are also not evidence that Keynes DOESN'T say those things. I get that.

But those quotes ARE evidence that MANN IS SAYING Keynes says those things. And this, for me, is a barrier to my acceptance of the thought that I want to accept, which is that Keynes did say those things. Mann plants the idea in my mind when he says Keynes said it. He makes me think Keynes said it. But he has shown me no evidence that Keynes said it.

I am in danger of accepting without evidence the idea that Keynes said some particular thing. My only rational response is to distrust the source of this information: Mann.

My reaction of the 14th was to distrust the source. A better reaction would have been to look for better evidence.

That's what I've been doing since the 14th. Today I present a quote that I like a lot. But I still don't see evidence that Keynes thought those things.

Today's quote, from the footnote, is important to me because of the ideas it contains:

  • I think civilization is a specifically evolutionary phenomenon (though I would omit the word "specifically" because it complicates the idea).

  • I think it is true that “replacement of the power of the individual by the power of a community constitutes the decisive step in civilization”. I also think Athelstan's Grately code is an example (and was a big part) of that replacement of power.

  • I think Freud's contention regarding "a majority" versus "separate individuals" is fascinating. (But I neither accept nor reject it at this time. And I still don't see Keynes saying he shared Freud's contentions.)

Mann gives me no reason to be convinced that Keynes thought along similar lines. I keep thinking about the boss at my old job. Whenever he wanted us to do something, he's say "Steve wants you to do it." Steve was the boss's boss.

People would stop challenging the boss's orders and just do the work when the boss said Steve wants it. But that doesn't mean Steve wanted what the boss said he wanted. Saying "Steve wants it" was just a way to get people to go along.

Geoff Mann uses that technique when he tells us what Keynes was thinking. Geoff Mann wants the reader to go along with what Geoff Mann is saying, so Geoff Mann says Keynes said it.

The main body of the book awaits.

Tuesday, March 15, 2022

Toynbee in one paragraph

José Ortega y Gasset, quoted by Geoff Mann:

Civilization is not simply here, it is not self-sustaining. It is artificial, and demands an artist or artisan. If you want to enjoy the advantages of civilization, but are not concerned with sustaining civilization—well, you are done. In the blink of an eye you find yourself without civilization. Just a slip, and when you look around everything has vanished into thin air!

Monday, March 14, 2022

Geoff Mann's theory of Keynes's theory of civilization

In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution (PDF, 362 pages) by Geoff Mann, 2017.

A Google Search search for "Keynes"  "civilization" turns up more than two million results, including this in the number one spot:

I am stopped dead by the words "Keynes's theory of civilization". 

Keynes's theory of civilization? You'd think I'd have heard of it before now!

I think somebody made it up. Somebody put the words in Keynes's mouth. Hey, I could be wrong about this. We will see.

Google Search turns up a handful of results for the phrase "As Keynes's theory of civilization makes clear". One of the results is a blurb page for the Geoff Mann book In the Long Run We Are All Dead. The blurb says in part "Keynesians are not and never have been out to save capitalism, but rather to save civilization from itself." But it is not Keynes saying this. And even if it actually is a "Keynesian" idea, that doesn't mean it has anything to do with Keynes.
// But wait: Could saving civilization from itself be an obscure reference to the four words, "Civilization dies by suicide"?? Hmm. Nah. To save civilization we have to save capitalism, Carroll Quigley would say. Or we have to come up with a better "instrument of expansion" right quick. 

But Carroll Quigley is not Keynes. And I've tried to find Keynes talking about civilization and its troubles. And yeah, I found a few statements. But it's always like pulling teeth. I always feel like I'm putting words in Keynes's mouth. This is why I distrust Geoff Mann when he puts civilization there.

One of the search results is a Google Book of the Geoff Mann book. It turns up this snippet:

A sentence and a half, without context, and with no hint of a source or reference to where Keynes might have offered such a theory.

Two of the results link to a D&D chat page at A quote from the Geoff Mann book, by ronya, who says Mann is "trying his best to steelman contemporary liberalism". I had to look up "steelman".

And one result links to a PDF of the Geoff Mann book.

So all this search effort was not a total waste. At least I learned a new word.


Rummaging, I remember having looked before for something by Geoff Mann that I could read and make sense of. Without success, as I recall. I find nothing on this blog about Mann, before today.

Nothing on Mann on this blog. Nothing on the old blog. And nothing posted on my Test & Development blog, though I have some notes and such saved as drafts.

I have the hardest time making sense of what Mann says. Could be because he's very smart; some reviews suggest this. But if he was that smart, he should be smart enough to explain it simply. I have the Einstein quote in my Blog Themes folder: "If you can't explain it simply, you don't understand it well enough." I struggle with that all the time.

116 occurrences of the word "civilization" in the Geoff Mann book. The first occurs in a paragraph on page 10:

If Keynesianism returned with the most recent crisis, it is not because of Keynes’s theory of effective demand or his employment function, but because climate change, war and accelerating inequality seem to have put what many think of a “civilization” on the ropes.

And right there, Geoff Mann puts the words in Keynes's mouth. He says "many [people] think" civilization is on the ropes. Those people, Mann says, turned to Keynesian economic policy in response to the financial crisis. But this is not "Keynes's theory of civilization."

The monetary and fiscal policy response to the financial crisis of 2008 was kneejerk Keynesianism. What it showed is that a guy who has been dead since 1946 still understands the economy better than do our policymakers and the people they turn to for advice.

I reject Mann's assumption that the financial crisis was just one of many problems (including "climate change, war and accelerating inequality") that "seem to have put what many think of a 'civilization' on the ropes." I see bad economic policy as the one problem and the cause of all the problems Mann lists. What Mann offers is a list of results of the "bad policy" problem.

And I reject what looks like Mann's implicit dismissal of the idea that 'civilization' is not "on the ropes".

And why does he put the word civilization in quotes? Is he trying to deny that the word applies?

One sentence. I can't get through one sentence that Geoff Mann writes without having a dozen problems with it. Here, let me shorten his sentence:

If [something happened, it is] because climate change, war and accelerating inequality seem to have put what many think of a “civilization” on the ropes.

And shorter:

[C]limate change, war and accelerating inequality seem to have put what many think of a “civilization” on the ropes.

Do you see it?

... put what many think of a “civilization” on the ropes.

Something is wrong. Maybe he dropped the letter "s". Maybe Geoff Mann meant to write

... put what many think of as “civilization” on the ropes.

Maybe he did drop the "s". I dunno. But how am I supposed to understand what he means to say if he says it with typos that obscure the meaning? Moreover, this sentence of his seems to be central to the argument of his book (though it is early yet for me to be drawing that conclusion). How am I supposed to read and understand a guy who makes his key sentences unintelligible?

I can think of other ways to repair his sentence. But I cannot repair his sentence, as I do not know what he meant to say, because he didn't say it in a grammatically correct sentence. "For want of a nail" and all that.


Mann's paragraph continues:

Robespierre—or Hitler (Keynes understood them as two sides of the same populist coin)—might be right around the corner.

That sentence is offered as further evidence of civilization-on-the-ropes. I'm not sure of the timing, but Geoff Mann's book has a copyright date of 2017, which is the year of Donald Trump's inauguration. That is, at the very least, an odd coincidence.


The panic that gripped Europe and North America following the bankruptcy of Lehman Brothers in fall 2008 was partly motivated by rich people’s frantic effort to stay rich, but it was also motivated by lots of not-that-rich people’s fears that we were at some tipping point in the social order.

Decline of civilization, again. Again, the concern of many people who are not Keynes. So even if Mann is right about the concern, he is not right to attribute it to Keynes, who has been dead since 1946 (in case I didn't make that clear before).

Those people, were not, primarily, trying to save capitalism, they were trying to stave off a calamity caused by capitalism, in the hope that something better will come along. That is what Keynesianism is, and always has been, all about.

Mann makes assumptions about what people were hoping, and what people were fearing. He treats his assumptions as fact. And he attributes these, as facts, to Keynes and to Keynesianism. This is some bold bullshit, far as I'm concerned.

Mann finishes his paragraph:

This book is a (mostly) sympathetic critique of that sensibility, which I cannot help but see everywhere I look, perhaps because I have yet been unable, despite my best efforts, to escape it completely myself.

So, maybe these thoughts and hopes and fears that Geoff Mann attributes to Keynes, to Keynesians, and to "many" people are actually thoughts and hopes and fears that pester Mann, despite his best efforts to escape it completely.

Okay. So Mann says people think The End Is Near. He even thinks so himself. Why try to escape it?

Own it. Don't try to convince us that you have almost completely escaped it. Don't attribute it to other people. And, above all else, don't say it is all Keynes's idea unless you damn well show Keynes, himself, saying it.

I don't understand this Geoff Mann at all.

Friday, March 11, 2022

Political Economy: Notes while reading Wikipedia's Oikonomos article

Under the heading "In Ancient Greece":

The oikos (household) was the base unit for the organization of social, political, and economic life in the Ancient Greek world. The person in charge of all its affairs was the oikonomos.[2][3] The oikos was composed of a nuclear family as well as extended family members such as grandparents or unmarried female relatives.[3]

Their note [3] links to household, Greek at Oxford Research Encyclopedias, which reads in part:

The household (oikos) was the fundamental social, political and economic unit of ancient Greece, though its precise links into larger political and economic structures changed regionally and over time. 

Let me grab that sentence and emphasize that the way the oikos fits into "larger political and economic structures" differed regionally and changed over time. Regional differences are to be expected, I think, but the "changed over time" thing strikes me as important. It ties in to economic evolution both within human lifetimes and on the scale of civilization. 

The OxfordRE article continues:

At one level it [the oikos] was a co-resident group, many (though not all) of whose members were kin or affines (related by marriage)... Though a nuclear family (parents and children) might form the household's core, there is considerable evidence for the regular appearance of stem families (nuclear family plus a grandparent) and various kinds of extended families, especially incorporating unmarried female relatives (aunts, sisters, nieces, cousins, etc. ). The senior man in the household usually took charge of ‘official’ relations with the outside world and acted as the head of household (kyrios).

So the ancient Greeks had a word for "head of household" and a different word for "household manager". But really, the household manager was "head of business operations". What had me confused for many years (until I was out with the dogs the other day) was that the old Greek "oikonomos" is always translated as "household manager". No connection to business activity is ever indicated. I finally made the connection myself when I realized that in that time and place, the home base of most business activity must have been the home. The point is, the word that means "household manager" was used to identify a key job title in "the primary unit of economic organization", the oikos, the home-based business. And now I think I finally figured it out.

Back to the Wikipedia article:

In addition to family members by kinship or marriage, slaves or metics [foreigners] might have lived and worked within the household. Wealthy households would have had many slaves and metics working for them.[3] The oikonomos of the household would have played a role in directing the labor of the slaves and metics...

A small oikos would have had only a few household slaves known as oiketai.[8] Of the oiketai, the men might have had the responsibility to work in the field. In a larger oikos, many slaves would be entirely dedicated to agricultural work. This is generally considered to be less favorable than work in the house itself.

The "oikos" was the household, but it was really more like a small business; ancient Greece was like a society of small businesses; and where we have "employees" working for "employers", ancient Greece had slaves working for the household manager. And this, for  me, turns today's "wage slave" notion into something a bit closer to a valid economic concept. 


The oikos was the primary unit of economic organization within the ancient Greek world... An oikos was expected to be self-sufficient in what it produced for itself.[9] Thinkers such as Aristotle considered the self-sufficient oikos to be the fundamental, indivisible constituent of the polis. In order to be a true oikos, it had to be entirely self-sustaining it what it produced and consumed...

So Aristotle saw successful small business as the fundamental element of the Greek society of his time.  Carrying that thought to its logical conclusion, for him the economy was of the greatest importance.

For me, also.

Note [9] links to economy, Greek at Oxford Research Encyclopedias. It reads in part:

Greece itself was not a single entity, but a congeries of more than a thousand separate communities. One should therefore speak of Greek economies rather than the Greek economy... Our ‘economy’ is derived from the ancient Greek word oikonomia, but this meant originally and usually the management of a private household (oikos) rather than that of a ‘national’ economy (see household, greek).

See? This is a perfect example of defining "oikonomia" as the management of a private household while giving no indication that the private household was typically the location of some small business, and no indication that the head-of-household was the entrepreneur-in-charge.

But they do note the distinction between private household economy and national economy. This is the distinction I was trying to emphasize in the previous post, regarding individual households versus "society as a whole". The distinction is an important one, because the economics of the private household slash small business, in our day, is microeconomics; and the economics of the national economy is macro.

I picture society in ancient Greece as similar to feudal Europe: a society of self-sufficient manors, but smaller and more numerous than manors, consisting of households and estates. Economic thought in both feudal society and ancient Greece focused on the small unit, the manor or the oikos, the "primary unit of economic organization". That economic thought would have been a version of microeconomics. 

Macroeconomic thinking first arose, it would seem, in 1615 with Antoine de Montchrestien and his notion of political economy:

Montchrestien demonstrates that this knowledge of human nature can be used to promote the wealth of the people and the power of the monarch...
The science of commerce in general is thus essentially different from political economy, which aims to be a source of inspiration for “good government”.

Where Maucourant says "good government" I would say "good policy".

The conclusion reached in my previous was this: The word "household" is always used when the meaning of oikonomos is given. But the guy with that job title managed the household business. I picture this as the decisions of one individual directing the business activity of one firm: in other words, again, it is a version of microeconomics. Political economy, on the other hand, is macroeconomics, and it becomes relevant only when the economic unit is not the personal property of its leader.

Today I reach the same conclusion, based on old Greek words rather than on thoughts that pop into my head while I'm out with the dogs.

Thursday, March 10, 2022

A “household economy” for the "polis"

The economy has been my hobby and my passion since 1977. But I still don't know what "political economy" means. Now it has come up, though, and I have to figure it out.

From Investopedia:

Political economy is an interdisciplinary branch of the social sciences that focuses on the interrelationships among individuals, governments, and public policy.
Political economy is a branch of social science that studies the relationship that forms between a nation's population and its government when public policy is enacted. It is, therefore, the result of the interaction between politics and the economy and is the basis of the social science discipline.
Political economy may draw upon sociology, economics, and political science to define how government, an economic system, and politics influence each other.

So, assuming we trust Investopedia on this, that's what political economy is today: It describes how the economy influences (and is influenced by) politics and government. Okay, I guess, but Investopedia doesn't make it real for me. There are no specifics. You wouldn't even know that money might be involved.

But they do link to "Antoine de Montchrétien and the birth of Political Economy" at Storep. This Montchrétien guy wrote a book back in 1615 that "analyzed how economics and politics are interrelated," Investopedia says. Apparently that was the beginning of "political economy". But I can't find the book online in English, so I don't know what I think that guy said.

This isn't helping me understand the meaning of the term "political economy". I have to try a different approach.


Based on this bit from the Investopedia article,

the term is probably best ascribed to the French writer and economist, Antoine de Montchrestien. He wrote a book called "Traité de l'économie politique" in 1615, in which he examined the need for production and wealth to be distributed on an entirely larger scale—not in the household as Aristotle suggested.

and this from Britannica,

The term political economy is derived from the Greek polis, meaning “city” or “state,” and oikonomos, meaning “one who manages a household or estate.”  Political economy thus can be understood as the study of how a country—the public’s household—is managed or governed...

I get the impression that in Montchrestien's time, his version of the word "economy" still referred to the household economy, so he used the term political economy to describe the "entirely larger scale" economy he had in mind.

If "economy" did still mean in 1615 the same as it meant in ancient Greece, something like household budgeting -- and it might have, as even today we try to "economize" when we spend money -- then this Montchrestien was apparently the one who developed the idea of the economy as applying not simply to the household but also to society as a whole, which is how we think of the economy today. How I think of it, anyway.

Now I can picture what the term "political economy" would have meant when it was invented in the 17th century. It meant, then, the same that "economics" means today. I didn't get that impression from the Investopedia article.

I've known of this ancient Greek word "oikonomos" for a long time. It has to do with household management. But I was thinking about it while I was out with the dogs: The word "household" is always used when the meaning of oikonomos is given. But I doubt it was only used, in ancient Greece and Rome, in reference to places where people lived. As in the Britannica excerpt, it referred to "a household or estate".

In ancient times, at least as I picture ancient times, there was not a lot of factory work. Most people may have lived where they worked, at home or on the estate, but either way, "oikonomos" must have mostly meant planning and tracking business revenue and expenses. Sure, a guy that only worked on the estate could do "oikonomos" for his personal budgeting, at home, after work. That might have been part of it. Sure.

If this is correct, then "oikonomos" included budgeting andor accounting, as needed, for consumers and businesses both. If the government also had the oikonomos -- and they must have, I would think -- then in all sectors of the economy there was oikonomos.

Now it makes sense to me. But let me make a distinction between the oikonomos of government and the "political economy" of government. I read the other day that the income of the Roman Empire was the personal income of the emperor. The empire was his magnificent estate. His accounting was oikonomos.

Political economy is horse of a different color, one that becomes relevant when the nation is not the personal property of its leader.

Monday, March 7, 2022

Pointing out the financialization of 1820-1850

 From Blackwood's Edinburgh Magazine of February 1851 at Project Gutenberg:

For thirty years past it has been the uniform policy of the British Government, directed by the pressure of the money power, and the influence of realised capital, to augment the value of realised wealth, by enhancing its price and cheapening everything else. To effect this, gold was first selected as the standard, because it was the most valuable of the precious metals; and as its price had for a long course of years been slowly but steadily advancing, it was thought, with reason, that the assumption of it as the standard could not fail to enhance the value of realised capital of every kind, by cheapening the money-price of all the articles in which every one else dealt.

Next, small notes were extinguished, because they formed a currency commensurate to the wants of the nation; and consequently their abundance tended to raise prices. Then the issue of notes beyond £32,000,000 in the whole empire was made to depend on an amount of gold coin corresponding to the notes issued being in the coffers of the banks issuing: in other words, the currency beyond that limited amount, not half of what the nation required, was made entirely metallic.

Free Trade was next introduced, in order still further to augment the value of realised wealth, by taking a fourth from the price of every commodity which it might purchase, and consequently depressing to a similar extent the remuneration of productive industry.

All this was rested on the plausible plea of maintaining a fixed and unchangeable standard of value, and preventing monetary crises, by having no circulation except what was based on the most precious of the precious metals.

Saturday, March 5, 2022

The cost of public construction

From chapter 9 of Free to Choose by Milton (and Rose) Friedman (starting at the bottom of page 267):

Financing government spending by increasing the quantity of money looks like magic, like getting something for nothing... The workers who build the road get their pay and can buy food, clothing, and housing with it. Nobody has paid higher taxes. Yet there is now a road where there was none before. Who has paid for it?

The short answer is "Supply creates its own demand" or, alternatively, "the more men can produce, the more they will purchase." Friedman goes with the long answer:

The answer is that all holders of money have paid for the road. The extra money raises prices when it is used to induce the workers to build the road instead of engage in some other productive activity. Those higher prices are maintained as the extra money circulates ...

One word from Friedman's answer troubles me: "instead". They write:

The extra money raises prices when it is used to induce the workers to build the road instead of engage in some other productive activity.

If, instead, they had written

... to build the road in addition to other productive activity...

they would be describing the increase of output rather than the increase of prices.


Friedman's famous graphs show the price level increasing on a path similar to the "money relative to output" (MRTO) ratio. Given that calculation, if money increases then prices go up, but if output increases then prices go down. The increase in output (which you would expect, if more people are working) undermines Friedman's argument that the extra money raises prices.

To make his argument work, Friedman has to assume there is no increase of output. So he says the workers build the road instead. It's a little bit true, Friedman's argument, and a little bit bullshit.

In the real world, at least in the US for most of the period after WWII and before the 2008 financial crisis, government spending on public construction was a plan to put additional people to work. It was never a plan to have people set aside productive work and do government work "instead".

Friday, March 4, 2022

"The cessation of public construction"

From the Alan Samuel essay in Ancient Economic Thought (PDF), page 224:

The Frankish leaders were not hostile to the cities and towns as institutions, but they did not in any way fulfill themselves through them, and royal inattention turned out to be a neglect of which the effects were not so benign. The cessation of public construction brought an end to the infusions of cash for materials and labor which represented an important source of income for urban dwellers in an economy which did not generate much money from town industry and commerce.

Keynes, at the end of Chapter 10 writes:

Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely, pyramid-building as well as the search for the precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges. Two pyramids, two masses for the dead, are twice as good as one; but not so two railways from London to York.

Wednesday, March 2, 2022

Is it "ideas OR economics", or "ideas AND economics"?

Max, our 110-pound puppy, was restless. I let him out.

I turned around and there was Lexi (our canine "middle child") giving me a look that said Hey I want to go out too! But Lexi doesn't want to go out by herself. She wants me to go with her. She talked me into it.

And then there's Mish, our oldest. I asked her: Do you want to go out? She looked me straight in the eye and licked her lips. In our house that's universal language for "I want a treat!"

So I told her: You can go out, or you can stay in and have a treat. She wanted the treat. She got her treat, and I went out with Lexi. 

But as soon as I closed the door, I heard the bark that said "Now I'm ready to go out." 

Treats and out, that was Mish's plan.

They're so human in so many ways, our dogs.

In Ancient Economic Thought (PDF), in the Alan Samuel essay "Assumptions, Economics, and the Origins of Europe", at one point Samuel struggles to choose between"ideas" and "economics". Let me start at the beginning of his third paragraph:

I may, therefore, risk running against the tide if I treat this discussion in terms of the categories of Pirenne’s arguments ...

Pirenne was a historian; Alan Samuel suggests that Pirenne's views have been superseded by more recent work. (I wouldn't know. But in a PDF on Robert Lucas from Econ Journal Watch, Lucas is quoted as saying he was influenced by "Henri Pirenne, the Belgian historian, who stressed economic forces". This stress on the importance of economic forces could be the most important thing Robert Lucas ever said.) Resume Alan Samuel:

... if I treat this discussion in terms of the categories of Pirenne’s arguments, and if I focus on the question in the terms Pirenne saw it: what was the phenomenon which made life in Western Europe different after the Roman patterns were no longer in effect? However evolutionary the change may have been, and however much one may prefer to see a multiplicity of factors at work, in the history of that period, as of all periods, there was something qualitatively different from life in the former Roman Gaul—different both from earlier times and from the contemporary Roman and Islamic East.

Pirenne was looking for "the phenomenon" -- the one phenomenon that caused Western Europe to evolve in the way it did. Alan Samuel:

It is that difference, and its causation, which still can bear discussion, it seems to me.

Samuel continues then, taking "ideas" as one phenomenon, "the economy" as another: [1]

It is true that ideas were fundamental to the changes that took place, but many of those ideas can be traced in the economy... “Ideas or economics” does not, therefore, seem to me to be a very suitable set of alternatives and exclusions, while even “ideas and economics” draws too sharp a line between concepts and their results, which may, in fact, feed upon one another.

He rejects both: "OR" presents us with "alternatives and exclusions". "AND" gives rise to false distinctions between "concepts and their results". Samuel finds big meaning in those little words.

He struggles to choose between "ideas OR economics" and "ideas AND economics", but finds neither alternative acceptable. Finishing the thought, he writes:

The strategies adopted by the leaders of society during the difficult years 400 to 800 were dictated to a significant extent by the underlying ideas about society and its material needs ...

"Society and its material needs" IS the economy. Alan Samuel is saying it was ideas about the economy that dictated the strategies of those difficult years. I have to say he is exactly right. I have been saying that the economy drives civilization up to the peak and down to the trough. Now I have to adopt Alan Samuel's view and say the economy drives civilization even during the trough. In all its phases, the cycle of civilization is an economic cycle.

Economics is ideas about the economy. Ideas and economics don't disentangle.

Should it be "ideas OR economics" or "ideas AND economics"? With Samuel, I reject the question. I cannot choose between economics and ideas. Economics *IS* ideas. At the end of The General Theory of Employment, Interest and Money, after inventing macroeconomics and showing a path out of the Great Depression, John Maynard Keynes asked 

"Is the fulfilment of these ideas a visionary hope?" 

Ideas. His word. He pondered the chance of success for his ideas. He was optimistic:

"I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas."

Economics is ideas:

"the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else."

The ideas that drive the advance of civilization, those that bring its decline, even those in effect at the bottom of the cycle of civilization, are economic ideas. "Indeed the world is ruled by little else."