Zer esan nahi du T-k DTM delakoan?

Bill Mitchell-en Understanding what the T in MMT involves

(http://bilbo.economicoutlook.net/blog/?p=40383)

(i) Teoria bat dago tartean1

(ii) ‘Modernoa‘ dela eta2

(iii) ‘Teoria‘ dela eta3

(iv) Gizarte zientziak eta natur zientziak4

(v) Ekonomia zientzia5

(vi) Iragarpen zehaztasuna, kongruentzia6

(vii) Azken hamarkadako akatsik handiena7

(viii) Abstrakzioa8

(ix) Zergatik dago T bat DTM delakoan?9

(a) Sektore balantzeak10

(b) Sektore balantzeen ekuazioaz11

(c) Sektore balantzeak eta DTM12

(d) DTMko gastu-modeloa13

(x) Teoriak dioena14

(xi) Inflazioaz15

Ondorioak

(1) MMT is much more than a descriptive lens.

(2) It is a coherent body of propositions that allow us to understand how the monetary system works. Understanding comes with explanation.

(3) Explanation requires, in part, theory.

(4) MMT is appropriately named. There is no misnomer.

Gehigarria: Warren Mosler-en legea

There is no financial crisis so deep that

a sufficiently large tax cut or spending increase

cannot deal with it


1 Ingelesez: “I’ve been meaning to write about this topic for some time, but a Tweet the other day reminded me that there was still major misunderstandings of what Modern Monetary Theory (MMT) represents and that it was time to clarify some of those errors in comprehension. Specifically, there is a current out there that considers MMT to be incorrectly labelled because according to the argument there is no theory involved. It’s hard to imagine why anyone would think that but the fact that they do tells me that I should write this blog post. As I noted yesterday, our Macroeconomics textbook to be published by Macmillan Palgrave in February 2019 is full of theory. It has a lot of description, taxonomy, accounting, history, and philosophy, but also a lot of theory that ties some of those other components together in a meaningful way. The T in MMT is not a misnomer. The Tweet I saw the other day also said there was nothing new in MMT so what’s with the modern bit! I have already dealt with that issue in the past.

Ingelesez. “On the question of the ‘modern’ bit, the following blog posts are relevant among others:

1. Modern Monetary Theory – what is new about it? (August 22, 2016).

2. Modern Monetary Theory – what is new about it? – Part 2 (long) (August 23, 2016).

3. Modern Monetary Theory – what is new about it? – Part 3 (long) (August 25, 2016).

When I don’t know the meaning of something I initially look up the dictionary, which in part, also helps me understand the etymology involved.”

Ingelesez: “The Oxford Dictionary entry for Theory is:

NOUN

1 A supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.

1.1 A set of principles on which the practice of an activity is based.

1.2 An idea used to account for a situation or justify a course of action.

1.3 Mathematics A collection of propositions to illustrate the principles of a subject

It comes from the late C16th “denoting a mental scheme of something to be done) – “contemplation, speculation”.

The Oxford Thesaurus notes:

SYNONYMS

hypothesis, thesis, conjecture, supposition, speculation, postulation, postulate, proposition, premise, surmise, assumption, presumption, presupposition, notion, guess, hunch, feeling, suspicion.

This list isn’t very helpful because it conflates many different conceptual structures with the work theory.

For example, a theory begins, in my view with a hypothesis or conjecture which is different to a postulate or assumption. A theory is more than a conjecture though.

The Wikipedia entry for – Theory says:

A theory is a contemplative and rational type of abstract or generalizing thinking, or the results of such thinking … Depending on the context, the results might, for example, include generalized explanations of how nature works …

In modern science, the term “theory” refers to scientific theories, a well-confirmed type of explanation of nature, made in a way consistent with scientific method, and fulfilling the criteria required by modern science. Such theories are described in such a way that scientific tests should be able to provide empirical support for, or empirically contradict (“falsify”) it. Scientific theories are the most reliable, rigorous, and comprehensive form of scientific knowledge … Scientific theories are distinguished from hypotheses, which are individual empirically testable conjectures, and from scientific laws, which are descriptive accounts of how nature behaves under certain conditions.

So we get an idea that theory is about abstraction intending to explain characteristics of reality.

However, while a conjecture is a proposition we consider, in advance, will help us understand and explain reality, they transcend to theoretical status when they are confronted with that reality using data and empirical techniques.

We start with a conjecture or hypothesis and then interrogate that supposition with the data.

I don’t want to get into the eternal debates in the philosophy of science about falsification and the like. Suffice to say, I am not a Popperian (falsification) and lean more to the ideas of Imre Lakatos (but not his anti-Marxism British phase!) and even Paul Feyerband.

A body of thought often doesn’t subject itself to empirical scrutiny because it is inherently untestable – it represents a sort of core faith – the ‘hard core’ of the research program in the Lakatosian sense.

Surrounding that ‘hard core’ is a ‘protective belt of auxilliary hypotheses’, which taken together constitute a falsifiable theory.

But the practice of refutation (empirical scrutiny) might conclude that the theory (the ‘hard core’ and the ‘auxilliary hypothesis’ together) produce false empirical predictions (see below) but then we have a dilemma.

Does the empirical prediction failure lead to a rejection of the ‘theory’ or just an alteration of the ‘auxilliary hypotheses’?

Scientific communities are very reluctant to jettison their ‘hard core’ when they can simply alter the ‘protective belt’.

But, ultimately, too many empirical failures, spawns counter paradigms, which eventually supplant the dominant program.

And so it goes.”

Ingelesez “But all those rabbit holes aside, what is obvious is that even though research and theorising in the social sciences must involved empirical confrontation, it is quite different to the natural or physical sciences because we study humans in uncontrollable situations.

That means the way we proceed and the types of conclusions we draw are quite different. There are no ‘laws’ in economics as their are in physics, for example.

This has been a debate within economics for decades.

The mainstream like to think they are doing ‘science’ akin to the way a physicist does science. This gives them a sense of authority, which they use to parade over the masses, and tell them that certain propositions are non-contestable.

They even call some of their conjectures – ‘Laws’ – for example, the so-called Law of Diminishing Returns, which is a pillar in the propositions that mass unemployment is the result of excessive real wages and, hence, cuts are required to cure it.

To hide the ideology, they invented a ‘Law’.

While gravity is a law founded on measurable physical relationships, this mainstream economics ‘Law’ is just an assertion, which, because of its conceptualisation and abstraction (marginal analysis), bears little relationship to real world practices and is inherently ‘untestable’ as a conjecture.

The real world doesn’t look as though the ‘Law’ could be applicable in most situations (certainly outside of agricultural applications).

Ingelesez: “So we understand that economics is a social science and is contestable as a result.

A theory is thus a logical ordering of linked conjectures about the real world.

A theory will typically have several components.

1. Definitions and concepts – which describe or delineate key components that make up the theory – so concepts such as national income, unemployment, trade etc

These concepts will be defined in particular ways and often, in economics, related to in an accounting manner.

So total output (GDP) is equal to the sum of the expenditure flow on final goods and services in some particular period.

There are a number of definitions and concepts required to make that statement operational.

2. Functional or behavioural relations – which take the important variables (concepts) and write out how they interact.

What drives what? And to what effect?

This stage of the theory requires us to make assumptions as a way of adding some control to the analysis and to develop conjectures (hypotheses).

3. Predictions and shocks – we then ‘shock’ the behavioral relationships that make up our ‘theory’ by changing values of variables or the parameters linking them in the behavioural specification and make predictions as to what happens to some or all of the variables (the ‘system’).

That is what I think of as a process of theorising.

A theory transcends a conjecture when it has empirical congruency.

So if we say that if national income rises by a dollar, household consumption will rise but not by a dollar – that is a conjecture.

If it turns out that the conjecture is what happens in the real world, then we have a theory that is congruent.

Ingelesez: “Predictive accuracy – congruency

When we undertake empirical research in economics using the techniques derived from mathematical statistics and econometrics we are not searching for truth but congruency with the data.

Congruency means that an explanation is currently the tentatively most adequate in terms of helping us understand the dynamics of the data of the real world.

There is a lot of misconception about that.

A congruent body of ideas should also have some predictive confidence, although cannot withstand sudden regime shifts the push the data in unpredictable ways.

I wrote about those themes some years ago and this 2007 Working Paper (a revised version of a paper I wrote in May 1995) – Econometrics, Realism and Policy in Post Keynesian Economics – covers some of the discussion. This paper was subsequently published in a modified form but this version is free to all.

The point of the paper was to oppose the view by so-called Post Keynesian realists who eschewed any serious empirical work in economics on the grounds of fundamental uncertainty.

I argued that econometric research and practice is a necessary part of a paradigm which ultimately emphasises policy intervention.

I argued that, without negating the existence of fundamental uncertainty, the demands of policy can be accommodated and the utility of econometrics justified within a satisficing environment where rules of thumb and habits create a stable context for decision making.

If you take the fundamental uncertainty line to its logical conclusion you end up with a nihilism, which would appear to be at odds with an interventionist policy emphasis.

Following the great George Schackle, it is true that “we simply do not know” about the future but we make guesses about it and try to calibrate those guesses based upon what we do know – humans behave habitually, hunt in packs, etc.

Fundamental uncertainty only prevents us from ever discovering, knowingly, the truth and therefore the best solution.

As a result, people and institutions thus search for adequate solutions to their problems. In the institutionalist literature this has been called satisficing. When we discuss satisficing the role of rules of thumb and habits emerges

It is not the existence of uncertainty which is important, but rather the ways in which people in the economy deal with its existence.

So when I talk about predictive accuracy, I’m not talking about knowing the future or establishing truth. Rather, I’m talking about congruency.

And I think it is without doubt that economists who see the world through an MMT lens have been much more successful in making statements about future events, particularly following major policy interventions, then our mainstream colleagues.

The latter have what can be called an appalling record of congruency.”

Ingelesez: “There was a great article in The Week last month (August 14, 2018) by Ryan CooperThe biggest policy mistake of the last decade – which took his readers through a sequence of forecasting blunders by significant mainstream economists after the GFC.

He notes the predictions of Alberto Alesina and Silvia Ardagna, Carmen Reinhart and Kenneth Rogoff, apart from having “major conceptual problems”, “got everything wrong” about the real world.

You also cites “a bunch of conservative financial and economics luminaries, including Michael Boskin, John Cogan, Niall Ferguson, Kevin Hassett, Douglas Holtz-Eakin, Bill Kristol, and John Taylor” were also raising alarm bells about inflation following the fiscal stimulus in the US:

Yet it’s been six to eight years since their arguments and there’s hardly been a glimmer of the kind of inflation they warned about.

In fact, not only has there been no hyperinflation, inflation has consistently come in under the Fed’s supposed target value of 2 percent.

He lists over major blunders by the mainstream doomsayers.

I discussed some of these issues in this blog post – MMT predicts well – Groupthink in action (February 6, 2017).”

Ingelesez: “Abstraction

Abstraction is an important part of theorising. We cannot simply have a theory of everything (easily!). So we simplify.

In itself simplification is not a reason to criticise a theoretical structure. So attacking neoclassical ‘theory’ because involves highly abstracted assumptions to be tractable is not the reason we reject it.

We reject it, for example, because the predictions it makes about human behaviour, which are based on their highly simplistic set of axioms about human behaviour, simply do not explain reality.

Psychologists just laugh at the promotion of Homo Economicus (the basis of neoclassical theory about the individual) by mainstream economists.

We should also understand that in macroeconomics there are many abstract concepts.

If you think about it (and understand it), the entire body of macroeconomics is an abstraction.

There is no such thing as a “price level” in the aggregate, or a household. The aggregates are the sum of the parts.

So that sort of abstraction is not the reason to criticise a body of work.

However, if those abstractions, taken together, lead to predictions that are just ridiculous, then one can reject the ‘theory’.

For example, New Keynesian macroeconomics did not even have the banking sector included before the GFC. It could never explain the reality that unfolded as a consequence.

Ingelesez: “Now why is there a T in MMT?

At the outset, we have to be careful not to conflate theory with new. A body of work can be considered to be a theory even if in putting together that body of work there was no new theorising involved.

In the case of MMT there is a substantial body of ‘theory’ that we inherited from past schools of thought and integrated into a MMT framework.

The standing on the shoulders of giants syndrome!

Now, lets start thinking about theory in the MMT context.

Here is a simple example.

An oft-stated claim is that MMT is about accounting relationships. Well in part it certainly is. It is part of the stock-flow tradition in heterodox economics that ensures consistency between flows of things and the stocks they flow into, period to period.

I wrote about that in this blog post – Stock-flow consistent macro models (September 8, 2009).

Those who make that spurious claim about MMT often use the sectoral balances framework to make their point.”

10 Ingelesez: “They note that the basic sectoral balances relationship, which is a core part of the way an MMT economist analyses the world, is, at heart an accounting truism that has to be true because it is derived from a larger accounting framework – the nation’s National Accounts.

That is true so far.

While I know there is a debate in accounting about the theory of accounting, we will accept, here, that an accounting truism is one that has to be true (add up in this case) by the way we define it. It is not opinion or conjecture – it just has to be.

So the statement: the Government deficit (surplus) equals the Non-government surplus (deficit) dollar-for-dollar is such a truism.

It must be true.

By introducing this truism into the economic debate, MMT proponents have been able to alter the way people think about government deficits and surpluses and that sparks interesting new insights and options.

So when a mainstream economist or a politician that is mouthing that same economist rails against deficits and says surpluses represent national saving and putting money into the piggy bank for the future, anyone who understands MMT knows automatically that surpluses destroy non-government financial wealth (through the fiscal squeeze).

They further know that a currency-issuing government doesn’t ‘save’ in the sense that a household saves by postponing consumption to generate higher consumption possibilities in the future.

A financially-constrained household has to save to achieve that goal.

A currency-issuing government can spend whenever it wants as long as there are things for sale in its own currency, irrespective of what it did last period.

A fiscal surplus provides such a government with no extra capacity to spend in the future.

So a simple truism has a powerful effect if understood correctly.”

11 Ingelesez: “But we can go much further than that.

When we write out the sectoral balances equation as:

[(S – I) – CAD] = (G – T)

We know the term on the left-hand side [(S – I) – CAD] is the non-government sector financial balance and is of equal and opposite sign to the government financial balance.

So if (G – T) > 0 (a fiscal deficit) then it has to be true that [(S – I) – CAD] > 0 (a non-government surplus).

Further, if (G – T) increases (that is, a larger fiscal deficit), then the non-government surplus has to increase.

These propositions are true by definition.

Further, if there is a current account deficit (CAD < 0), and the private domestic sector start to save overall (S – I > 0) then the government deficit has to become larger and if the government tries to resist that fall in non-government spending, then national income will fall and the fiscal deficit will become even larger still.

This statement goes beyond the inherent sectoral balances accounting.

Focus on the part of that statement – “national income will fall”.

The interesting question is what drives the movements in the components of the sectoral balances such that they always obey the accounting truism?

That is where we need theory!

12 Ingelesez: “Remember that the derivation of the sectoral balances comes out of the basic income-expenditure framework that is a core part of MMT (inherited from earlier Keynesian theory).

We know that expenditure drives income through output creation.

In the national accounts, the sources of expenditure are:

1. Household consumption expenditure (C)

2. Investment expenditure (I)

3. Government expenditure (G)

4. Exports (X) less Imports (M) – or Net Exports (X – M)

We can clearly write out accounting relationships (and identities) about these variables such as

(1) GDP = C + I + G + (X – M)

which says that total national income (GDP) is the sum of total final consumption spending (C), total private investment (I), total government spending (G) and net exports (X – M).

Expression (1) tells us that total income in the economy per period will be exactly equal to total spending from all sources of expenditure.

But that begs the question, what determines (explains) these components (C, I, G, X, M)?

To answer that question, we need theories about the behaviour which determines how much and when a household or business firm will spend.

We need theories of government spending.

We need theories about the way trade operates to determine exports and imports.

We also know that when the government taxes total income, households are left with disposable income. That is just an accounting statement.

Then households make choices on how to use that disposable income – to consume and by construction (as a residual) to save. For the individual household total saving becomes a behavioural choice. We need a theory to explain that.”

13 Ingelesez: “In the most simple MMT expenditure model (which we inherited) we say that

1. C is a function of disposable income. That seems like a very simple statement. But it is a conjecture that can become theory if it stacks up against the data.

More advanced studies try to work out the nature of the relationship between C and (Y – T) and a number of competing theories are out there (Permanent Income Hypothesis, Relative Income Hypothesis, Life Cycle Hypothesis and more).

We might try to work out how wealth (a stock) impacts on consumption expenditure (a flow).

2. I is a function of the cost of funds (interest rate), expected revenue (proxied by some function of income) and other non-linear type of impacts (irreversibility etc).

And so it goes. I won’t rehearse all the theories for G, X and M (only M is considered in the simple model to be a function of income and real exchange rates).

So while the sectoral balances equation as an accounting identity provides some interesting insights in its own right, the really interesting times begin when we place the equation in a dynamic setting to analysis what happens if.

The ‘if’ being a change in the one or more component and the way those changes evolve over time by reverberating through the theoretical linkages between the components.

And by theorising we understand how national income changes bring the economy into a state that we account for.”

14 Ingelesez: “Thus, if private domestic sector households decide to cut consumption expenditure, what happens next?

We need our theory to trace the consequences through!

Firms notice inventory build up. They don’t produce to store goods and servies. They produce to sell.

So they start to cut production – first by cutting working hours (shifts, intensity etc) then, if the expenditure decline cements itself, they start laying of labour.

Incomes fall and this reverberates into further reductions in expenditure.

Soon enough the firms form a view that expected future revenue from sales is lower than previously expected and so they cut investment plans.

And this creates further expenditure shocks and so on.

Our theory tells us that the national income changes that follow these expenditure adjustments impact on:

1. C – it falls.

2. S (household saving) – it falls because it is linked to income.

3. I – it falls.

4. T (taxes) – they fall because they are linked to economic activity (income generation).

5. M (imports) – they fall because they are linked to economic activity (income generation).

6. G – it is likely to rise because welfare payments through income support systems rise.

And so you can see that the national income changes drive shifts in the financial balances for each sector.

At all times in this adjustment path, the accounting relationship we call the sectoral balances equation is satisfied.

Eventually, when the economy reaches a new equilibrium (an abstraction), which just means the national income changes from the expenditure shock finally become zero, we reach a new set of sectoral balances.

But we needed theory to explain how we got from one steady state to the next one following a shock.

Of course, in the real world, there are shocks occuring continuously, and it is hard to isolate them.

But that doesn’t alter the point.”

15 Ingelesez: “I could talk about other examples of how ‘theory’ is a core part of what we call MMT.

I discussed the ridiculous proposition that MMT has no inflation theory in this blog post – I wonder what the hell I have been writing all these years (February 12, 2013).

The same character who made the original assertions that MMT had ignored inflation is still making the claims – he is just a serial nuisance.

(…) MMT has an elaborate theory of inflation embedded within it.

(…) our textbook, (…) contains 3 chapters which develop that theory in contradistinction to the mainstream theory.

We inherited some of the ‘inflation’ theory that is now part of the core MMT body of work. But some of it is new.

I can claim some credit there personally as key propositions from my PhD (buffer stocks etc) are now part of that inflation approach and represent a ‘new’ way of thinking about the relationship between unemployment and inflation.

MMT replaces the mainstream Phillips curve with an employment buffer stock.”

Iruzkinak (1)

  • joseba

    Curriculuma ekonomian
    Bill Mitchell-en Economics curriculum is needed to work against selfishness and for altruism
    (http://bilbo.economicoutlook.net/blog/?p=40367)
    (…) I have written about the behavioural impacts that studying mainstream economics, particularly the microeconomics component can have on students as they progress through their studies. I have observed sort of nice young people entering first-year and by later years, become arrogant, self-opinionated and delusional jerks. This phenomenon is particularly prominent if they go onto to do postgraduate level studies. It is well documented. The way mainstream economics is taught builds on anti-social attitudes that might already be present in students who choose to undertake this sort of training. The curriculum matters a lot. In that context, our next macroeconomics textbook (see below) will, in my view, actively work against any predisposition towards selfishness and against altruism, while still providing students with a first-class, technical education in how the monetary system operates.
    There was an interesting 2005 study published in the academic journal Human Relations – Personal value priorities of economists – by a group of researchers mainly from Israeli-based universities.
    The authors (Neil Gandal, Sonia Roccas, Lilach Sagiv and Amy Wrzesniewski) noted that:
    Policy decisions in the public and private sectors are guided by complex specialized knowledge, often not easily understood by the public. Hence they depend to a large degree on the professionalism of decision-makers. Professional’s decisions, however, are affected not only by the knowledge they hold: they also reflect their underlying beliefs, assumptions and goals. In other words, they reflect personal values.
    When I was beginning my economic studies it was rammed down our throats that mainstream economics was ‘value-free’. One of the main textbooks at the time (Lipsey) was entitled ‘Positive Economics’, which was claimed to be objective, and, there was a distinction made between that and so-called normative economics, which apparently was where values were to be found.
    It was obvious nonsense but consistent with the mainstream desire to masquerade as an ideologically free space.
    Why would want to do that? Answer: because the values that were embedded in mainstream economic theory were pro-capital and anti-government.
    The Israeli study notes that:
    economists play a central role in forming and implementing policy, both in the public and private sectors. They hold key positions in governmental and other public institutions where they advise policy-makers in diverse areas such as international trade policy, fiscal policy, and regulatory policy … it is thus important to study the factors that implicitly affect the perceptions and attitudes of economists, which are likely, in turn, to influence the policies they adopted endorse.
    And, the “training process of economists usually starts in university departments”.
    This means that we can gain an understanding of the way in which the curriculum of economics and the “perceptions and attitudes” of the students engaged in the curriculum (note: I don’t use the word knowledge in this context, given that I consider mainstream economics to be largely fake knowledge) interact, which, in turn gives us some insight into why policy decisions are what they are.
    This is exactly what the Israeli study did.
    1. They were able to compare “the values of economic students to those emphasized by students from other disciplines”.
    2. They were able to study the evolution of values of economic students over the course of their studies – by comparing values of economics students in the “first week of study to … students at the end of their first year” and “first year … to … soon to graduate”.
    3. They were able to “identify the pattern of values are distinctive to economists while controlling for other variables such as age and socio-economic status”.
    4. They could also discern “whether eventual differences in values as a result of self-selection and training processes”.
    I won’t go into the techniques they used but there is nothing particularly controversial about them. They were really trying to differentiate between what are known as “self-enhancement” values (power, achievement, and hedonism) from “self-transcendence” values, which “emphasize promotion of the welfare of both close and distant others”.
    The study found that:
    1. “Economics students placed more value on achievement … hedonism … and power” than students from other social science disciplines.
    2. “economics students attributed less importance to universalism values that did students from other disciplines” – that is, “care for society as a whole – for humanity, and for nature.”
    3. “Individuals who attributed great importance to universalism care about tolerance, social justice, and equality … economists may make good friends or neighbors, but are relatively less concerned with the welfare of people who are not part of their in-group.”
    4. “economists behaved less cooperatively than others”.
    Was this due to self-selection?
    That is, are “economists just choosing vocational environments … that are congruent with their interests, goals and values”?
    Alternatively, were the value differences “the result of training processes”. In this regard, economics “students undergo both formal and informal socialization processes that expose them, through norms, expectations, and explicit communication, to the values emphasised in their department”.
    It is now well documented that the way students are trained by economics departments bias is towards developing “self-interest” above other more desirable attributes.
    The Israeli study found in this regard:
    1. Economics students exhibited less altruism and more self-interest in their “first week of their freshman year”.
    2. That is, “differences between students of economics and students from other disciplines were already apparent before students were exposed to training in economics”.
    3. After one year of study these differences were maintained and stable.
    4. By the final year of study, the emphasis on “achievement, power, hedonism” were sustained and economic students valuation of “benevolence”, which we might think of as being empathy towards others, had declined significantly.
    These results suggest that the mainstream economists exhibit what we might consider to be sociopathological tendencies.
    I looked up the International Classification of Diseases (ICD) to check out what constitutes sociopathological behaviour. Terms like “Callous unconcern for the feelings of others” and “Gross and persistent attitude of irresponsibility and disregard for social norms, rules, and obligations” are used.
    You can also consult the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, under the T 04 Antisocial Personality Disorder (Dyssocial Personality Disorder) – “a pervasive pattern of disregard for and violation of the rights of others”.
    The elevation of selfishness and greed above benevolence and altruism certainly suggests that economists tend to this state.
    In their 1993 article – Does Studying Economics Inhibit Cooperation? – economist Robert Frank and psychologists Thomas Gilovich and Dennis Regan summarised the extant literature and conducted a series of their own experiments to explore whether there are significant differences between “economists and noneconomists” in relation to whether they exhibit sociopathological tendencies.
    They conclude that:
    1. “that economists are more likely than others to free-ride”.
    2. “economics training may inhibit cooperation …”
    3. And, interestingly, that “the ultimate victims of noncooperative behavior may be the very people who practice it”.
    4. And students in economics classes are more likely to lie when confronted with experiments about generosity – that is, claiming to be more generous than they were.
    But at any rate, while economists might lean towards acting like the humans they assume, the rest of us act out our lives in a very different way.
    Note I am including myself in ‘us’ even though I have a PhD in Economics and would be called an Economist. I think I was a black sheep. There have to be some.
    For more discussion on this topic see my earlier blog post – Humans are intrinsically anti neo-liberal (May 22, 2017).
    Which brings me to the point of all this.
    As I explain below, our new macroeconomics textbook (the two-year sequence) will be published in February 2019 by Macmillan Palgrave.
    A student who progresses through this curriculum will receive a first-class technical understanding of monetary systems and the how they underpin the real economy.
    There has been no compromise in our pedagogy on those matters.
    But, most importantly, students who use our book will be disabused of the notion that self-interest is the best strategy. The book exudes an implicit empathy – an appreciation of history, of class struggle, of collective values.
    We are open about the value system we share (Bill, Randy and Martin).
    We don’t hide behind the faux objectivity that mainstream economists use to disguise their ideological preference for capital, deregulation and small government.
    We maintain that a full employment framework remains relevant in the current period and will do so into the future. Thus we reject the modern notion that the old full employment world is gone forever and workers have to get used to casualised work, periods of idleness, and precarious lives.
    That is clearly a notion that works in favour of capital that wants as much flexibility as possible and wants to shift the risk of enterprise onto the workers.
    The stupid Left has also bought that line and have become obsessed with ‘solutions’ such as UBI. This surrender to neoliberalism is why the social democratic parties are struggling around the world and why maniacs like Donald Trump have power.
    So we think that the curriculum offered by out textbook will develop economics graduates who will be confronted with a societal world view to attenuate any pre-existing tendency towards selfishness.
    One hopes.

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