Hey Kieth,
Whether I would advocate a return to a national economy or not, there
is no path back, that ship has sailed.
In anycase, The sectoral ballances approach is used by many modern
economists, i.e. Wynne Godley, L. Randal Wray, etc. The accounting
identities are facts that are true by definiation, and thus certainly
apply. Peter Cooper explains it as follows:
"When a sector, in aggregate, spends more than its income, it is
said to be in deficit.
If it spends less than its income, it is in surplus. We can write
the identity as:
(G – T) + (I – S) + (X – M) = 0
This makes clear that the deficit of the government sector plus
the deficit of the
domestic private sector plus the deficit of the external sector
(foreigners, including
both foreign private sectors and governments) must sum to zero,
balancing each other out.
This is an identity, true by definition. It tells us that whatever
the net positions of
two sectors, the other sector must offset them exactly. {1}
Dispute emerging economic relations which may be "off the books." The
social reality of debt, whether that of US students or Eurozone nations,
and is very much "on the books" and thus understood by way of the
macroeconomic identities described.
If you're studying emerging economic practice these formulations may
seem obsolete, however they still shape the big politics of the day. The
fact remains that student debt and bond debt alike must be paid in
government currency, the availability of which is governed by the
accounting facts described. Thus, in terms of political organization,
these identities help understand and analyze the policies of existing
governments.
Now, one day we may transcend the national economy even more than today
so as to make it completely irrelevant to everyday life. Perhaps at some
higher level of society we will have so much available wealth and
spontaneous co-operation that we wont need to count anything at all.
However we are a long way away from there, and in the meantime we still
need to confront society as we encounter it.
And even looking forward, certain questions like how do we collectively
achieve economic and social outcomes, and no matter how we define the
collective form, no matter how we view the constitution of the public
after the national form has receded in importance, our new public still
need means, at least for some time, by which to withdraw productive
capacity from the service of private consumption towards the service of
public good. In other words, the need for these new publics to have
fiscal and monetary policy is likely to remain for some time, and thus
the understanding of macroeconomic identities remains far away from
being a "relic."
Best,
{1} http://heteconomist.com/?p=2360
On 11.09.2012 18:17, Keith Hart wrote:
Hi Dmytri.
I agree with: "Organizing around debt means uniting against insane
policies that promote the interests of rich corporations and rich
countries against common households and poorer countries. Much of the
debt born my households and the debt born by peripheral nations is a
result of bad government and bad economic policy." But I don't understand
why you stick with this Keynesian analysis which, if it ever applied
anywhere, partly illuminated the national economies of Europe during *les
trente glorieuses* of social democracy. The approach doesn't offer much
insight into the current global system of money where most of it goes off
the books. Do you advocate a return to national economy? There must be
some rhetorical purpose for exhuming this relic.
--
Dmytri Kleiner
Venture Communist
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