I’ll just mention out that back in Feb. 2009, I was pointing out that Michał Kalecki was saying this back in his 1943 essay “Political Aspects of Full Employment.” Here’s the seventy years ahead of Paul Krugman version of the argument above:
Among the opposers of this doctrine there were (and still are) prominent so-called ‘economic experts’ closely connected with banking and industry. This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic. That is not to say that people who advance them do not believe in their economics, poor though this is. But obstinate ignorance is usually a manifestation of underlying political motives.
And that’s really one of the things I’m trying to do on this blog, point out to liberals trying to understand how the world works that explanations involving class struggle work better than ignoring class issues. I find Kalecki useful for this sort of thing, as he managed to come up with many of the basic insights that Keynes did (and did it shortly before Keynes, in fact), starting from a Marxist perspective. I think Krugman’s slowly coming around.
Yesterday, Paul Krugman posted “The Smith/Klein/Kalecki Theory of Austerity,” which doesn’t actually say “Yeah, Jeremy, you were right all along” but I think we can all agree that it’s what he means:
Two and a half years ago Mike Konczal reminded us of a classic 1943 (!) essay by Michal Kalecki, who suggested that business interests hate Keynesian economics because they fear that it might work — and in so doing mean that politicians would no longer have to abase themselves before businessmen in the name of preserving confidence. This is pretty close to the argument that we must have austerity, because stimulus might remove the incentive for structural reform that, you guessed it, gives businesses the confidence they need before deigning to produce recovery.
Meanwhile, it’s been fun, over the last decade or two, to watch Paul Krugman be radicalized by his opponents. This is a longtime globalization advocate who was hired, by the Times, presumably to write a column based mainly on economics, along the lines of his old Slate columns where he’d explain Japan with ticket scalping analogies and so on. Instead they got this angry fulminating liberal truth-crusader.
And this wonderful new Krugman even occasionally sounds very slightly like Doug Henwood.
And that’s about right. It’s interesting watching how Krugman seems to be playing a completely different game than any of the other mainstream media pundits. And they hate him for it.
In any event, I just figured I ought to let my readers know that they’re getting quality political/economic commentary here, ahead of the best the mainstream media has to offer, and with more random pictures of hot guys tossed in as well.