I had written:
> > > But the positive/normative mix could be very different: it seems to
> me that the NAIRU theory could easily be interpreted as an argument for
> overthrowing capital. "Capitalism requires a reserve army THAT BIG to
> keep it from punishing us with accelerating inflation??"<<
Christian Gregory writes:
>The way the PC gets explained in macro textbooks, though, there's no
>reserve army, and there is no "it" that punishes "us." The PC is a graphic
>representation of empirical evidence supporting an economic law. If you
>start using a different lexicon ("capitalism," "reserve army,"
>"punishment," etc.), you're not talking PC any more. You're talking about
>the uses of PC, which is a different kettle of fish.
I'm not responsible for the way it shows up in textbooks. Nor should we
reject something for the way it's presented in orthodox macro textbooks. In
intro texts, supply and demand are presented as if they were natural laws
(and they're even referred to as "laws") -- but that doesn't mean that we
should reject supply and demand out of hand. (Marx, for example, didn't do
so.) I don't see any reason why we can't see the PC as a manifestation of
capitalism's laws of motion (workers' inability to negotiate directly about
real wages, capitalists' ability to punish workers, etc.) if and when it
exists.
Anyway, most serious orthodox textbooks describe the PC as an empirical
generalization in search of a theory rather than as an economic law. Even
though the laughable neoclassical model of the PC dominates the textbooks,
there are really several different competing theories (Tobin's etc.)
>How do people who believe in PC make sense of Japan? Does it work all that
>well with European numbers?
my understanding is that the PC doesn't work well at all except in a large,
largely integrated, economy such as that of the US. (This means that the US
is _it_ unless the European Union gets big and well-integrated;
unfortunately or fortunately, the US is where I live, so it dominates my
consciousness.) Brad deLong, pen-l's resident NC economist, said so in his
column in the NY TIMES (though I don't remember him inquiring about _why_
the PC doesn't work outside the US). Anyway, this should remind us that the
PC is NOT a law of nature of any sort. Thus Marxian or other non-orthodox
theories might explain the empirical data seen in the US without sinking to
the level of asserting natural laws or the like.
Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~JDevine
"From the east side of Chicago/ to the down side of L.A.
There's no place that he gods/ We don't bow down to him and pray.
Yeah we follow him to the slaughter / We go through the fire and ash.
Cause he's the doll inside our dollars / Our Lord and Savior Jesus Cash
(chorus): Ah we blow him up -- inflated / and we let him down -- depressed
We play with him forever -- he's our doll / and we love him best."
-- Terry Allen.
