I wrote: >>terms and theories to fit perceived data. So, like a stopped clock, he can be right twice a day. (Even Goebbels was right about some things, such as how to employ propaganda.)...<< Tom writes: >A stopped clock is only superficially "right" twice a day. If MF's NAIRU anticipates some "correct" empirical phenomena but uses a "misbeggoten Walrasian mess" to do so, then the theory is _intrinsically_ of no use or interest. What does make the theory worth studying, however, is the extent to which it captured the policy makers' and economists' imagination. It's in the sense of this propaganda effect of NAIRU that one would want to understand how it is that the stopped clock could be right twice a day...< I don't know if MF's theory is "worth studying" at all (since as I said, it's a misbegotten Walrasian mess with no interesting theory). That's different from saying that his theory might have a "rational core." It does reflect the fact that there is probably a minimum unemployment rate below which the system screams. The rational core concerns MF's theory's empirical implications more than the theory itself. If this theory has a rational core, then it's more than just propaganda. It should be stressed that the best propaganda fits (or at least does not contradict) people's empirical experiences -- or in this case, economists' empirical experience. There's a problem of inflation. Instead of blaming it on the root cause -- capitalism's need for a reserve army and the capitalists' ability to punish us when they don't get what they want -- the MF's propaganda provides a mystified mess of supply/demand equilibria that apologizes for the system. >The reserve army of labor might help explain why NAIRU is right twice a day as might Carlin and Soskice. Galbraith also discussed some points about why NAIRU was persuasive. But at some point it seems we can lose track of the practical purpose of such investigations. Are we trying to explain why NAIRU can predict SOME phenomena in spite of its theoretical incoherence or are we trying to analyze what the fundamental relationships are between unemployment and inflation. If it's the latter, there are more fruitful avenues available and Galbraith takes them. < It's the MF's theory that is theoretically incoherent, not _all_ theories of the NAIRU. >>I used the phrase the "rational core" before and Tom ignored it.<< >I didn't ignore it. I just downplayed it. I said no one is denying that there is some relationship between unemployment and inflation. That, along with the observation that the Philips curve doesn't adequately explain the relationship, is the rational core.< Sure, everyone knows the PC doesn't do a perfect job. That's why they always put a stochastic term in the regressions. But there's another rational core: if high inflation is sustained, people -- both workers and bosses -- begin to expect it to continue. If so, they try to anticipate the inflation in their actions. If they have sufficient power to do so, this leads to the inflation getting worse. >>Marx was extremely critical of Hegel's idealist, mystical, and apologetic system.<< >Friedman ain't no Hegel.< Absolutely! But the idea that most theories have some sort of rational core gets us away from the sectarianism that prevails in academia. It tells us that what's needed is not a total rejection of those perspectives we disagree with but a critical synthesis. >>The rational core of the MF's theory is that there exists some low rate of unemployment below which the capitalist system will punish us with << >$100 prize if you can show me where MF talks about the "capitalist system punishing us." That's not the "rational core of MF's theory", that's your explanation of how MF's theory may be right twice a day.< Of course he never said that. I never said he said that. Tom, for an anti-academic, you sure are good at quibbling. Again, the rational core is the behavior of the economy, which the MF describes in a mystified and ideological way. >>What this says is that the Philips Curve is relatively flat in the short run. Probably so. But neoliberal "reforms," waves of downsizing, anti-union measures, etc. have made that PC steeper. Fewer workers and management employees are insulated from the vicissitudes of the market than was true 20 years ago (at least in the US -- I don't know about Canada).<< >The Philips Curve, like the class struggle, is not something that can be seen, it is an interpretation.< Of course. But we need interpretations. Theories are necessary to thinking (as are empirical observations). BTW, up above, where I said "probably so" I meant "possibly so." >>sheet! I got up an hour early, having forgotten that we switched away from Daylight savings time last night. Does anyone have a reasonable argument against abolishing DST?<< >Take comfort, Jim, in the fact that a stopped clock will STILL be right twice a day even after we have switched back from daylight savings time.<< Not true. Earlier this year, one of my many stopped clocks was right only once. It was stopped at 1:30. It was right during that afternoon, but in the morning, time "official time" skipped from 1 a.m. to 2 a.m. due to the shift to DST. Of course, that clock was right _three_ times today, so we could say that over a year it is right twice a day, _on average_. Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
