Once the 1970s happened and Keynes was accepted, the Revolution was over, wasn't it? My macroeconomics courses in the 2000s basically said, "Yeah, stagflation happened. How bout that," and went back to the G plus E plus I whatever.
Example: you won't get funding if you go around saying there's no such thing as a labor shortage in a market economy, even though this is entry level economics. Why would that tank your career? Because big business has paid the government to pull the right levers to suppress your wages. The solution to a labor shortage is higher wages, but that can't be the government's response to their donors. Technically you can say the truth, but you better not be very loud about it.
> to suppress your wages
Can't really tell where you're going with this. The solution to a labor shortage is higher wages. You seem to be suggesting that it should be an increase in minimum wage.
In a market economy, you absolutely wouldn't need this if you had a labor shortage...the market would resolve on its own. But we don't have that. We have an economy where millions are paid by the govt to do nothing. This then becomes what employers are competing with.
Wouldn't that just mean that the employers need to compete with the government, i.e. raise wages? So than the market should resolve this on its own as well?
The Economics 101 answer is clearly wrong or at least incomplete in this case. Think about it this way: if people's wages increase in real terms by definition this means they can buy more with their wages. Producing stuff requires, amongst other things, workers. Suppose we're in a situation like the current one where unemployment is low and businesses across all sectors cannot find enough workers to keep up with consumer demand. What happens if they all try and solve this by increasing wages across the board? Well, their workers have more money to spend so this increases consumer demand even more - and remember, the problem we were trying to solve was that this was already too high compared to supply. What it doesn't do much for is the supply of workers, since there's not some big pool of potential workers who could be working but aren't. It's not going to encourage people to work longer hours either since when would they have time to spend the money? Basically, it makes the whole problem worse, and that's why the Fed and central banks around the world are freaking out right now.
A labor shortage is potentially an opportunity for the economy to re-rorient itself and for wealth to be redistributed. Companies producing goods that are more in demand will afford higher wages, while companies that produce less in-demand goods will not, and can ramp-down their production or go bankrupt.
To take an extreme hypothetical - let's say there was a massive shortage of food workers. As the price of food increases, so would the wages for food workers, until they will start pulling people from other industries, which can no longer offer competitive salaries. This could lead to something like ad-tech eventually start losing low-level workers to agri-business.
Essentially, the mistake in your argument is to assume that demand is high and inflexible around the board. In reality, certain industries have higher demand than others, and many workers can change industry, even in the short term, if incentives are high enough.
However, companies used to cheap labor and high margins are not willing to give up their profits and reduce their margins, so they are begging the state to find a way to force people to keep working for them for nothing.
(It's not like the other stuff can just become cheaper in order to make up for it either - remember, all the other industries are suffering the same underlying cost pressures as the food companies and the whole reason they're losing the competition for workers is because there's no longer enough people willing to pay the increased prices they'd have to charge.)
If I remember rightly, the proportion of a country's workers employed in food production is even pretty good approximate measure of how advanced an economy is, with more advanced economies employing a much smaller proportion of their workers that way and having much more doing other things.
People express a lot of concern about things like how wages have not kept up with inflation for decades, how families have to have two incomes to survive, etc. Just when workers were maybe gaining some of that ground back, the fed chairman tells you he's going to fuck you with policy. The type of person who supports such policies and pretends that's good for you are the ones who get the positions, the funding, etc.
Exactly, and it's insane to see other workers support these policies instead of trying to push for alternatives.
Stagflation killed the Phillips-curve "Keynesianism" which emerged after Keynes' death as wasn't actually in the General Theory: the idea that inflation was inversely proportional to unemployment so you could get rid of the latter if you had enough of the former. It didn't kill off the more generally useful idea of macroeconomic modelling or the assumption government policy could mitigate recessions. . Similarly, strict monetarism (the idea that the government could easily stabilise things by ensuring the money supply was at a certain level) didn't survive the realisation the banking system made the money supply flex and so the result was interest rates and other monetary aggregates bouncing around all over the place , but the basic idea that controlling inflation was possible and a priority for central banks persisted once governments switched to fixing interest rates instead.
Yes, but for how long.
The same Milton Friedman that, along with the rest of the Chicago Boys, guided the policies of Augusto Pinochet. Generally regarded as one of the most brutal dictators South America has ever faced...
> You know who became vegetarian because of his concern for animal suffering? Hitler
Either way, the comment further upthread ranting about Keynes was weird considering that Keynesianism really didn't involve shooting people, and whilst the ideologically opposed Chicago School policy didn't either, it was famously most faithfully implemented by a military junta Friedman himself had plenty of time for.
An effective government isn't evidence of anything. You forget that the most productive economy the US has ever had was during WW2. When the government basically took complete control over almost every aspect of production to make sure everything went to the war effort. Does it work? Yes. Does it mean it's a "good economy"? I don't think I'd wanna live in such an economy personally