[p2p-research] Feedback on a Summary/Explanation of John Maynard Keynes' General Theory

Paul D. Fernhout pdfernhout at kurtz-fernhout.com
Sat Nov 28 20:17:46 CET 2009

Kevin Carson wrote:
> On 11/21/09, Paul D. Fernhout <pdfernhout at kurtz-fernhout.com> wrote:
>>  Essentially, Keynes seems to assume (with some of these reading between the
>> lines, others he says explicitly):
>>  * people won't do good stuff unless they are paid to do it
>>  * the only right way to get stuff or services is to buy them
>>  * the only right way for people to get money is to earn it working
>>  * the quality of the actual "work" in terms of enjoyability is ignored
>>  * like most economists, promoting "community" is ignored
>>  * it is good that banks are the first to get newly created money
>>  * supply should come before demand
>>  * innovation is not an important issue to consider in economies
> Schumpeter, in his history of economic thought, classifies Keynes
> along with J.A. Hobson, Marxist theoreticians of late capitalism,
> etc., into the general category of "stagnationists."
> Where both Hobson and the neo-Marxists (esp. the Monthly Review group)
> are vastly superior to Keynes IMO is in dealing with the issue of
> overaccumulation, which Keynes completely neglects.  Keynes focuses
> entirely on issues of income and expenditure, and treats capital
> investment as just another form of expenditure.
> And he treats chronic underconsumption as some sort of automatic
> byproduct of economic development, rather than the result of the
> promotion of one kind of economic development at the expense of
> others.  (But Hobson and the neo-Marxists also do this).
> IMO the stagnationist problem results from two major causes.
> The first, and older, cause is economic privilege, which prevents
> labor from fully internalizing all the benefits of its productivity.
> Artificial scarcity of land and capital force labor to pay a
> significant portion of its natural wage to the rentier classes, and IP
> prevents productivity increases from innovation from being passed on
> quickly to the consumer.  E.g., instead of the price of Tom Peters'
> Minolta camera simply falling by 90% in the face of market
> competition, it has a price ten times higher that consists mainly of
> "intellect" and "ephemera" rather than parts and labor.
> The second cause is built into the specific structure of mass
> production industry, which reflects institutional forces created by
> collusion between government and industry since the beginning of the
> corporate revolution and the second industrial revolution around 150
> years ago.  Government has systematically promoted centralized,
> capital-intensive mass production, with product-specific machinery,
> and push distribution and planned obsolescence to amortize the costs.
> Absent these institutional forces IMO what we'd have wound up with
> instead is the integration of general-purpose electrical machinery
> into local industrial economies, organized on a demand-pull basis.
> And that would have been almost entirely free from the problem of
> overaccumulation and idle capacity the neo-Marxists describe.

Thanks for this explanation.

If true, it is yet another example of building political assumptions into 
our physical infrastructure.

--Paul Fernhout

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