Murderer's Row Lineup of Killer Ks: Krugman, Konczal, Kalacki, and Keynes

     I love this kind of thing. Krugman has recently gone as far as anyone in the mainstream profession has considered going. I know that people like Steve Keen love to talk about his flaws and I agree there are limitations with Krugman's approach-that he himself has admitted to I should add.

     http://www.amazon.com/Never-Serious-Crisis-Waste-Neoliberalism/dp/1781680795/ref=sr_1_1?s=books&ie=UTF8&qid=1376956360&sr=1-1&keywords=phillip+mirowski

    pg. 21.

    Still there is value in having a friend within the mainstream. He has certainly stepped on some toes with this:

    "Paul Krugman’s recent columns, responding in various ways to JM Keynes, Michal Kalecki and Mike Konczal have made interesting reading, signalling a marked shift to the left both on economic theory and on issues of political economy.¹ Among the critical points he has made

• Endorsement of Kalecki’s argument (which he got via Konczal) that “hatred for Keynesian economics has less to do with the notion that unemployment isn’t a proper subject of policy than about the notion of shifting power over the economy’s destiny away from big business and toward elected officials.”
• Rejection of the Hicks-Samuelson synthesis of Keynesian macroeconomics and neoclassical microeconomics and advocacy of (at a minimum) comprehensive financial controls
• Abandonment of the idea that the economics profession is engaged in honest intellectual debate, in favor of the conclusion that the rightwing of the profession, including leading economists, is characterized by denialism and bad faith. As he says, while many economists would like to believe otherwise ” you go to economic debates with the profession you have, not the profession you want.”

     http://crookedtimber.org/2013/08/18/krugman-keynes-kalecki-konczal1/

     Krugman's suggestion that petty politics motivates those on the Right will be found particularly egregious. However, the Public Choice theory has charged liberals as having a naked political agenda for economic positions for years:

     "Krugman is certainly going to upset plenty of people in the econ profession with this. But as with most partisan debates in recent decades, it’s a case of sauce for the gander. The public choice school has routinely represented economic arguments for government intervention as the product of rent-seeking by interest groups, and the economists who make such arguments as pawns or hirelings of these groups."

     "Still, this marks a striking shift in macroeconomics, where only five years ago, the leading figures were congratulating themselves on the convergence between saltwater and freshwater schools, under the banner of dynamic stochastic general equilibrium. As I argued in Zombie Economics, it’s precisely the centre ground of convergence that has been rendered most thoroughly untenable by the crisis. Yet that is still where the majority of academic work being published in journals is grounded."

     Certainly Kalecki's argument has always been somewhat disquieting-the mainstream Neoclassical school always finds social and institutional aspects being factored in disquieting.  I think his premise is at least worth considering-that maybe Keynesian stimulus is not resisted simply because it's believed it won't work but because business owners themselves feel it would be a social dimishment of their power even if it did work. 

    Again, as I said regarding Morgan Warstler the other day who complains of people discussing economics with a social agenda, economics is after all a social science. It shouldn't be a shock when actual social factors and motivations surface. 

    Meanwhile, what Krugman's words seem to point to is that the future of Macro is going to be in a lot more flux in the coming years. The happy homogeneity of just a few years ago is over as Crooked Timber suggests.  There won't be the consensus we've known in the past even within the Neoclassical mainstream. You might say that Macro is now embarking on a Postmodern future.