Karl Marx – an intro

Following last week’s brief introduction to Keynes, here is one for Karl Marx, along the same lines. This year is the 200th anniversary of Marx’s birth and his work remains important to an understanding of the modern world.

I found this video interesting as it contains some ideas and perspectives on Marx that I hadn’t come across before, so it is well worth viewing.

As the narrator explains, much of Marx’s writing was on capitalism rather than what should replace it, at least in any detail. His magnum opus, Capital, is hard-going but remains an extraordinary achievement, while his and Engels’ earlier work, The Communist Manifesto, is pretty short but also very much a fiery and passionate diatribe.

Marx praised capitalism’s productive powers and, remarkably, predicted that it would sweep the world. He was also its foremost critic, and the video does a good job of outlining many of the flaws he identified.

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John Maynard Keynes – a brief intro

Here is a nice video introduction to the life and work of John Maynard Keynes, whom many regard as the greatest economist of the 20th century. Keynes’ goal was to save the capitalist system from its worst defects, particularly mass unemployment, through intelligent government interventions, at both the national and international level. For Keynes, it was more about economic reform than revolution.

As an economics student I was strongly influenced by leftist Keynesian ideas, which I later found out are broadly termed post-Keynesian. I often tried to make that come across in my essays. Some of my teachers didn’t like that, as such ideas tend to be outside the mainstream.

Since then, I have explored political economy more widely, including the work of Marx and modern-day Marxists. I have become a little disillusioned with Keynesian policies, or at least the prospect of our political masters coming together to put them into practice. I now see industrial and social welfare policies as equally important at the national level, both for the developed and developing nations.

As a result, I have become less of a post-Keynesian, and more aware of the limits to successful interventions under capitalism. I try to be more flexible ideologically, but I still find Keynesian ideas useful and they remain important to progressive thinking.

High wages vs high savings as models of development

I refer to the work of Michael Pettis quite often on this blog. He strikes me as a highly original thinker, combining macroeconomics, finance, development, political economy and economic history in a way which provides a deep understanding of world economic events.

He recently posted here about what he sees as the two main models of economic development which nations have used to transform their economies at certain times in history: the high wages model, and the high savings model.

Models of development can be described as a set of policies and institutions which aim to develop the economy and achieve sustained rises in productivity and output via industrialisation and the advancement of technology.

For Pettis, both models aim to raise wages and productivity, but they are distinct from one another in how they drive the investment which makes this possible. Continue reading

Mariana Mazzucato on innovation and the creation of value

A very brief interview on YouTube with Professor Mariana Mazzucato, who specialises in the economics of innovation. Admittedly she is plugging her new book The Value of Everything: Making and Taking in the Global Economy, but she makes a good case that we should have more of an appreciation for the role of the state, in partnership with the private sector, in driving innovation under capitalism. She argues that we must use that partnership to promote greater and more widely-shared prosperity.

Historically the state has often been a major player in funding, researching and developing new technologies, not least those behind the smartphone, as she describes in The Entrepreneurial State. I hope to read her new book during the next few weeks. In the meantime, a critical review by Marxist Michael Roberts can be found here.