Philip Pilkington: Economics as morality play – Why commentators and politicians treat economics as a subjective enterprise

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By Philip Pilkington. Journalist, writer, economic anti-moralist and aficionado of political theatre

So horrible a fact can hardly pleaded for favour:
Therefore go you, Equity, examine more diligently
The manner of this outrageous robbery:
And as the same by examination shall appear,
Due justice may be done in presence here

Liberality and Prodigality, a popular morality play from 1567

The morality play was a popular theatrical form throughout the Tudor period. In 15th and 16th century Europe people would crowd around small stages where the actors would play at being the personifications of moral attributes. So, for example, one actor would play the part of Virtue – who is speaking in the above quotation – and this actor would then embody all the characteristics we associate with such a moral position. Virtue then hunts out characters such as Prodigality, who is causing trouble in the region by robbing and murdering other ‘good’ characters – in this case, Tenacity.

The idea behind the morality play was that it would impart wisdom to those who watched it. The common people – thought somewhat stupid by the writers – could then follow the simple moral messages purported by the playwright. It was hoped, for example, that if onlookers could see Virtue winning out on the stage against Prodigality, the citizenry would then act more virtuously and be less prodigious and greedy.

Viewed in retrospect, this sort of entertainment appears rather crude. It is seriously doubtful that the moral messages taught in the plays actually changed the behaviour of the onlookers. Virtuous behaviour probably does not follow from watching a virtuous hero battling a prodigious glutton onstage. Nevertheless, morality plays were an important facet of late medieval life.

Today, the US media have invented a new type of morality play; it’s called Fox News. On Fox News we see many of the same simplistic moral messages being disseminated to the population at large. Talking heads – who, unlike normal news-broadcasters, play a definitive role in the narrative – battle it out against each other, all the while imparting their presumed wisdom to the populace.

I’ll be honest. Viewed from abroad Fox News appears primitive and strange – a product of a world I am almost wholly unfamiliar with. However, it never worried me as much as it seemed to worry others. Like the tabloid press in my own country, it appeared to me to be a silly distraction given to people to spice up their everyday live and reinforce their collective opinions. In short, Fox News appeared to me to be giving the audience what they wanted; not facts, but drama and moral reassurance.

Recently I came across a roundtable discussion with some of the US’s leading proponents of Modern Monetary Theory (MMT). In the discussion they talk about how the US economy might pull itself out of the rut it is in. Warren Mosler points out that this can be done from either a conservative ideological position – by cutting the payroll tax – or from a more liberal ideological position – by increasing government spending. Soon the discussion turned to why policymakers refuse to listen to such suggestions. And that’s where things get really interesting.

Mosler believes that most economists in key positions – such as Fed chairman Ben Bernanke – understand why unbalancing the budget is necessary and yet they continue to go in front of congressional hearings calling for deficit reduction. Mosler is quite clear that this behaviour is nothing short of deranged. He attributes it to political pressure. If Bernanke were to call for higher deficits he would by wantonly attacked by elected officials for being irresponsible. He might not even keep his job.

But this is strange, almost topsy-turvy. It is as if the politicians are telling the economists what they can and cannot think. Shouldn’t it be the other way around?

Then Mike Norman – a regular guest on various TV shows, including on Fox News – made an even more interesting comment (starting at around 20.30). He tells a story about how he once had David Walker – former Comptroller General and member of the deficit terrorist lobby over at the Peterson Foundation – on his show. While talking with him, Norman got Walker to admit that insolvency is not an issue for US government debt –Walker and his chums, of course, have been pushing the ‘bankruptcy’ argument hard so this was something of a shock to Norman. You can hear Walker quite clearly admit that there’s no solvency issue in this audio clip.

Walker, of course, continued to push the ‘insolvency’ line after his discussion with Norman.
Then Norman ran into Walker again while waiting to appear on Fox News. Walker said that he remembered the conversation and continued to think that there was no real solvency issue for the US. When they finished up their conversation Walker strolled out onto the set and started saying once more how the US was facing bankruptcy. How bizarre.

Norman quite correctly refers to this as a sort of ‘subversion’. It must be the case that, to a certain extent at least, the deficit terrorists are straight up lying. But perhaps it’s better to see them as actors in a giant morality play that the media are putting on for the general population.

Think about this for a moment. The media seek to get ratings – that’s their bottom line. Editors will always run stories that are more sensational, especially if these tap into a vein of common anxiety or passion. I know this from experience. So, the media love headlines about possible government bankruptcy and the like. This especially so during periods of economic strife, when people love to hear that they are not alone in their financial sufferings. Nothing boosts the ego quite like thinking that your own bankruptcy overlaps with the bankruptcy of the country as a whole. It absolves people’s guilt and reassures them that the suffering is collective.

Politicians and economic commentators play into this by acting out various roles. They’re not simply lying – indeed, to an extent they seem to believe in the part they play, even though they know that what they are saying is misleading. But to step outside of the play – to pull a Brechtian manoeuvre and bring the audience in on the truth – would make them appear crazy; nothing, after all, appears quite so crazy as when someone starts telling too much truth. So the commentators and politicians get caught up in a slipstream of misleading nonsense – all the while furthering their careers.

I looked around YouTube for some clips of Mike Norman appearing on various television shows, so that I could see how deeply the media themselves were involved in this strange staging. And, oh boy! are they deeply involved.

Consider this clip of Norman appearing on Fox News having a discussion with Neil Cavuto. Once again we see that topsy-turvy phenomenon whereby the presenter, who is not an economist, telling the economist what is right.

“This is strange,” I thought. “But perhaps it is unique to Fox News.” So I looked around for another clip and found a discussion with Norman on Russia Today. Once again, the same thing happens. The presenter – who comes across as irate and unpleasant – belittles Norman and essentially claims to know more about economics than him. The Fox format, it would seem, has been imported to other channels which have come to realise that they can get more ratings by appealing to the passions and morals of the viewer.

It’s the morality play format updated for the 21st century and the new language of morality is economics. Like morality everyone has their own ‘opinion’ on what is or is not the ‘right’ thing to do. You don’t just see this on American TV; you get it on the internet and in real life too. It’s as if economics is somehow subjective and everyone has their own idea about how the economy works. Not having some sort of vague idea about how the economy works essentially bars you from entering into discussion about the important issues of the day. But once you have an idea – no matter how airy and vague – not only can you discuss these issues, but you can have an ‘opinion’ on them.

In this there is no ‘correct’ or ‘incorrect’ opinion, it’s more so that what you think is either ‘right’ or ‘wrong’; in the moral sense of those terms. Politicians and commentators then take on a certain moral stance – usually one in favour of austerity and balanced budgets (‘belt tightening’ to rehash the moral term) – and hit the television circuit. The person with the most intriguing narrative then gets the most votes or viewers. Fire and brimstone narratives are particularly attractive as they’re easy to sell in hard times to a population that wants some sort of theological justification for their plight.

To ask if these commentators and politicians believe what they’re saying is to pose a tricky question. As Norman’s anecdote about Walker highlights that at least some people know that what they’re saying is not strictly true. But that doesn’t mean they don’t believe in it – that is, if we take the term ‘belief’ to mean something akin to ‘faith’. What the politician is saying may be factually inaccurate, but they may have full ‘faith’ in it. So we cannot simply chalk these people up as liars.
Media commentators are even trickier. At some level they must know that they have a very limited grasp of economics. But as we’ve argued above, economics is not to be seen as something like physics, where you either know what you’re talking about or you don’t. It’s seen in a far more subjective light – but one in which one’s opinion, even though subjective, is still ‘true’. In this economics is almost identical to moral judgement.

In Norman’s discussion on Fox News, his interlocutor Cavuto ends the conversation by spelling out his ‘beliefs’. He tells Norman that he ‘believes’ if the government stepped out of the way the private sector would flourish. This is clearly a belief in the religious or moral sense of the term. Cavuto doesn’t ‘believe’ this because he has studied it; no, he ‘believes’ it because it fits with his moral view of the world. He doesn’t ‘believe’ in these ideas in the same way he believes in gravity – that is, as an objective fact – he ‘believes’ in them in the same way he might ‘believe’ in the Holy Ghost or in the immorality of soft-drug use.

This is how the characters that act out our contemporary morality play constitute themselves. They are both the writers and the actors of this play and like their predecessors they do ‘believe’ in the morals that they are trying to convey. They think that if everyone listened to them and followed their example the world would be a better place – because it would come to closely resemble the ‘ideal’ they have in their heads.

But like the playwrights of the Tudor era, this faith is misplaced. People only queue up to see the action, to affirm their own moral conceptions of the world and to enjoy it vicariously. It’s all just entertainment after all and, even though it deals with a very serious topic, it is not to be taken wholly seriously.

Any actor that walks on stage with a story that contradicts the moral certainties of the viewer is instantly viewed as a clown. After all, he cannot be taken seriously – so offensive is what he is saying to our collective sense of what is ‘good’ and what is ‘bad’. He is like the court jester in Shakespeare or the contemporary comedian; what he is saying may be strictly and objectively true, but because it disturbs the ‘order of things’ it is to be viewed as a sort of clownish lunacy, not to be taken seriously.

But I can already hear someone piping up at the back. “Aha!” he’ll shout at me. “You’re doing the same thing as the economists. After all, you’re just spouting out more morals. Economics is no science and you, like the other economists, are claiming that it is. You sir, are just one more preacher among many.”

I sympathise. Economic is not nor ever will be a science like physics. However, what I am claiming is not simply to be the bearer of better morals – I am not trying to play the part of Virtue. The fact is that there are some things that are just simply true in economics. One of these is the necessity in a modern economy for budgets to go into deficit during periods of high-unemployment and low-growth. This is a fact. It is a fact like if I were to point out to a policymaker that, in order for him to step up police activity and arrests he will need to make more room for the arrested convicts in the prison system. The latter claim doesn’t need to be ‘science’ to be factually accurate – it just is. While morals may be relative in our post-Nietzschean world, facts are not.

My key point here is that the media and politicians – the players in our moral spectacle – ignore these facts as if they were somehow relative and open to opinion, while they are not. I think Mosler is right when he says that Benanke is aware of this and other truths but does not say so because to do so would be politically unfeasible. I also think that, after his discussion with Norman, David Walker did indeed come to understand that there was no risk of insolvency for the US. But because he was more interested in playing his role (as Prudence?) than telling the truth he acted as if it were not.

Once again to emphasise Mosler’s other point. A bigger budget deficit can be facilitated through the conservative measure of cutting taxes or the liberal measure of increasing spending, so this is not really an ideological issue (remember, Bush II increased the deficit massively to facilitate tax-cuts). The austerity line then, is not ideological nor should it be seen to be. It is, as I’ve been arguing, all an act. Like the actors in a morality play, the people taking part in it think that it is ‘moral’ to tighten our belts and so they insist upon it. They explain this ‘morality’ in pseudo-economic language, of course – they talk incoherently about ‘sustainability’ and ‘saving’ – but if you put a dog in a dress, it’s still a dog, and this is still morality no matter what garb it wears.
So what has created this vacuum into which the crazies have rushed? It seems to be due to a crisis of confidence in the economists themselves. Economists since the Reagan-era unwisely stepped into the limelight where they were treated as masters of the universe. Greenspan, of course, was the most visible manifestation of this. When the whole thing came crashing down no one really trusted them anymore. People began to realise that the economists’ theories were full of holes – so they just went out and created their own by cobbling together outlandish rubbish by integrating what they’d learnt in undergraduate class with their own moral sentiments and beliefs. Every man becomes his own economic theorist.

This is proving disastrous. Economists in the last thirty years have been turning their discipline into a pseudo-science, but even that was preferable to this anarchy. Even the crappy economists that universities have been turning out over the past thirty years had some standard of rigor – well most of them did, anyway – and they all recognise certain simple truths. When people start cobbling together their own theories – alloying morals and metaphysics, opinions and theology – the whole thing falls apart. Memes pass from one person to another and a collective hysteria takes hold, while rational voices are drowned out in a sea of shouting and perniciousness. All the world, to use the words of a great poet, becomes a stage.

This is what accounts for the curious situation we face today. The solutions are all on the table, they’ve even been tested before and yet we are impotent to step forward and pick them up. All we can do is watch this unusual spectacle play out – paralysed – and experience the very real implications that follow from it. Economics as morals – politics as theatre; apocalypse as a self-fulfilling prophecy.

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  1. psychohistorian

    I think that the current economists deserve the disdain with which they are having heaped upon them.

    Their models that don’t include the cost of war, economic imperialism and environmental issues are worse than neutral because they give cover to the economic and political abuse by folks of inherited wealth.

    If the public discussion of economics were seriously treated as a morality play it would not show the current leadership with any clothes.

  2. Toby

    “The fact is that there are some things that are just simply true in economics. One of these is the necessity in a modern economy for budgets to go into deficit during periods of high-unemployment and low-growth. This is a fact.”

    You are very stuck in conventional thinking, Mr. Pilkington!

    It is a fact that the relationship you describe is an inevitable consequence of double entry bookkeeping, a medieval (how pertinent!) invention for keeping track of assets and cash flow. What is not a fact is that money must be issued as debt along double entry bookkeeping lines. That is merely a convention, a convention, furthermore, which addicts us systemically to perpetual linear growth. That this system is unsustainable is clear to a child.

    Here’s a passage from economics Professor Franz Hoermann (from “Das Ende des Geldes”):

    “When this secret knowledge—that accountancy is not an empirical science but a medieval art form similar to the above mentioned theological debate about angels—becomes broadly known, then the interrelationships of the financial world and the wider economy will be clear to population and politician alike. Obviously theological discussion is important and necessary, and we have no intention here of devaluing it. But its methodology is simply not suited to running an economy, since its claims and counterclaims are always vague and therefore manipulatable. Small groups of insiders can twist the interpretation of the various meanings to their own unfair advantage as they please.

    We fear that genuine, foundational reforms, precisely for this reason, have remained underground and fringe all this time. This core reason, the unscientific nature, and high susceptibility to manipulation, of bookkeeping and accountancy, leads like an arrow directly to political lobbying, which is nothing more than targeted manipulation of commercial and other law in the interest of minority social groups. The damaging belief in bookkeeping and accountancy will be with us for as long students in schools and colleges are taught by rote the rules of accounting processes and legal texts. Learning by rote is of course not learning in an academic sense, in the sense of mentally free education. It is far more a mental manipulation tool of a narrow minded religion, repressing its flock for centuries. Those who are trained by rote learning have no way of recognizing the deeper context of the subject at hand. A deep belief is burned into them, without their active awareness and often against their wills. This process is called brain washing by psychology.” [My translation.]

    Hoermann, who is both economist and accountant, calls economics propaganda, as does Professor of Philosophy John McMurtry. Chilean economist Manfred Max-Neef points out that economics sees nature as a subsystem of the economy, an obviously absurd inversion of the truth. This sham discipline is not only unscientific, it is rotten to its core. A little tidbit from Keen’s “Debunking Economics”:

    “Economic theory argues that productivity falls as output rises, so that higher levels of output result in higher prices. The ‘supply curve’ therefore slopes upwards: a higher price has to be offered to entice firms to produce a higher output.

    Though this sounds intuitively plausible, when this theory was put to those who do know how factories are designed and managed, they rejected it as “the product of the itching imaginations of uninformed and inexperienced arm-chair theorizers” (Lee 1998, citing Tucker).”

    Hoermann describes the “Law of Supply and Demand” as a fairy tale. I am not aware of a single component of economic theory that holds up to scrutiny. Why treat it with anything other than contempt?

    1. rednek

      “That is merely a convention, a convention, furthermore, which addicts us systemically to perpetual linear growth. That this system is unsustainable is clear to a child.

      If only it were linear!

      Creating money as debt at interest commits us to exponential growth. Malthus, one of the first economists, clearly saw the contradiction between exponential growth and finite resources. The only way around this has been finding cheaper more abundant substitute resources (in the last round, fossil fuels) when the previous ones run low.

      1. Toby

        Very true, but I meant linear in the sense of “no recycling protocols or procedures, the implicit assumption of infinite resources, and no concern about the nature of waste.” And yes, yes, yes! usury foists on us a systemic addiction to exponential growth. A point most people simply don’t want to address. It may be the death of us. The denial is profoundly stubborn.

  3. attempter

    I don’t understand the compulsion to dress up simple lying and criminality as something more complex, but it’s not helpful. It’s just noise, and therefore at least objectively pro-criminal.

    Mosler…attributes it to political pressure. If Bernanke were to call for higher deficits he would by wantonly attacked by elected officials for being irresponsible. He might not even keep his job…

    Politicians and economic commentators play into this by acting out various roles. They’re not simply lying – indeed, to an extent they seem to believe in the part they play, even though they know that what they are saying is misleading…

    It must be the case that, to a certain extent at least, the deficit terrorists are straight up lying. But perhaps it’s better to see them…

    Enough. Except from the tactical know-your-enemy perspective, it’s not better to see liars as anything but liars, criminals as anything but criminals. Walker systematically propagates an economic and political fraud. Even by our rigged law he and similar liars are part of a criminal conspiracy to commit fraud. The political fraud is actionable by Nuremburg standards.

    Talking heads – who, unlike normal news-broadcasters, play a definitive role in the narrative…

    You really think Fox News is qualitatively different from the ideological tendentiousness of the entire MSM, as opposed to just somewhat more overt in its bias? It’s called the corporate media for a reason.

    It is as if the politicians are telling the economists what they can and cannot think. Shouldn’t it be the other way around?

    No. We can certainly do without economists completely (and politicians as well). But if we’re to have anything, the last thing we’d ever need or want is technocracy run by economists of all things. Economist-think is nothing but a combination of stupidity, arrogance, and callousness.

    But there’s no danger of politicians telling economists what to think. Both are told what to think by corporatism.

    Why do so many commentators, even those who claim to oppose the kleptocracy, act in such a way as to try to obfuscate and therefore extenuate these crimes? I think this post is an example of the ego-boost and absolution it claims to analyze. If an outsider can come up with a clever gloss on the crimes of the insiders, on some level he gets to feel vicariously “inside” as well.

    1. Patricia

      People have a difficult time believing that there is systemic criminality. They can believe in the “over there” crime (other countries), or the “specific” crime (robbing a store) but when the crime is pervasive in their system, they become frightened because their societal structures are at question. Systemic crime takes a long slow 360-degree mind-crank to understand/believe. Moreover, these crimes are from people who they chose as leaders. There is the “betrayal of my vote”, forcing one to admit that “I was deceived, or that “I was plain wrong”, that “I’m out of control and tricked”.

      These are not easy admittances for humans. They are downright painful. And once admitted, the requirements for action are equally daunting and painful as well as discordant, draining, seemingly intractable, and, finally, unassured. It’s not surprising that humans will use whatever excuse they can find not to start down that wretched road. And once started down the road, there are going to be many little tricks of minimization and slipping-sideways, attempts to make it a little less difficult than it actually is, just to get by.

      I think Philip is correct in noticing a morality play “meme” but as I see it, MSM/gov’t/corps are merely serving up crime under cover of a morality play, along with all their other cute permutations of cover. Our resident criminals are supposedly bright, right? Well, let’s give them credit, then. They know doggone well that most humans have a difficult time facing systemic crime and will do all they can to avoid/deny this kind of reality before finally turning around to face it. A kaleidoscope of ready excuses, framings, denials, lies, serves everyone well. Until it doesn’t.

      But I know that you know this. It’s just terribly frustrating, that’s all.

      1. rednek

        “Moreover, these crimes are from people who they chose as leaders. There is the “betrayal of my vote”, forcing one to admit that “I was deceived, or that “I was plain wrong”, that “I’m out of control and tricked”.”

        Funny how this happens to them every two years for their entire lives and they still insist on not “wasting” their vote on a potentially honest person. There is no other conclusion: Americans are going to have to learn the hard way.

        1. Patricia

          I sometimes check in on Max Keiser simply because he is funny, which I desperately need these days. A few days ago, he posted a (not funny) film that is translated “Argentina’s Economic Collapse” (maybemore accurately translated as “Recounting the Pillage of Argentina”). If you watch it, notice how many times it takes the general public to catch on to the awful shenanigans of their politicians. It is a long sad litany. Many politicians are bald-faced liars and under cover of a corrupt media; after they get into office and show their true colors, citizens are so embarrassed and shocked that they are stopped cold, then walk around muttering, demurring and quibbling rather than instantly dumping them out, sweeping house and starting over. (As we should have done immediately after Obama put Geitner and boys into their positions.) From the film, you can see that uprisings happen approx every 20 years—when the new crop of citizens grow up.

          This isn’t an American problem. It’s a human problem.

          Here is the film at Max’s site, pulled from youtube:

    2. Goin' South

      A better analogy than the morality play might be the old story of Daniel and Bel from the longer (LXX) version of the Book of Daniel.

      The Babylonians had an idol called Bel, and every day they provided for it six barrels of fine flour, forty sheep, and six measures of wine. The king worshiped it and went every day to adore it; but Daniel adored only his God. When the king asked him, “Why do you not adore Bel?” Daniel replied, “Because I worship not idols made with hands, but only the living God who made heaven and earth and has dominion over all mankind.” Then the king continued, “You do not think Bel is a living god? Do you not see how much he eats and drinks every day?” Daniel began to laugh. “Do not be deceived, O king,” he said; “it is only clay inside and bronze outside; it has never taken any food or drink.” Enraged, the king called his priests and said to them, “Unless you tell me who it is that consumes these provisions, you shall die. But if you can show that Bel consumes them, Daniel shall die for blaspheming Bel.” Daniel said to the king, “Let it be as you say!” There were seventy priests of Bel, besides their wives and children. When the king went with Daniel into the temple of Bel, the priests of Bel said, “See, we are going to leave. Do you, O king, set out the food and prepare the wine; then shut the door and seal it with your ring. If you do not find that Bel has eaten it all when you return in the morning, we are to die; otherwise Daniel shall die for his lies against us.” They were not perturbed, because under the table they had made a secret entrance through which they always came in to consume the food. After they departed the king set the food before Bel, while Daniel ordered his servants to bring some ashes, which they scattered through the whole temple; the king alone was present. Then they went outside, sealed the closed door with the king’s ring, and departed. The priests entered that night as usual, with their wives and children, and they ate and drank everything. Early the next morning, the king came with Daniel. “Are the seals unbroken, Daniel?” he asked. And Daniel answered, “They are unbroken, O king.” As soon as he had opened the door, the king looked at the table and cried aloud, “Great you are, O Bel; there is no trickery in you.” But Daniel laughed and kept the king from entering. “Look at the floor,” he said; “whose footprints are these?” “I see the footprints of men, women, and children!” said the king. The angry king arrested the priests, their wives, and their children. They showed him the secret door by which they used to enter to consume what was on the table. He put them to death, and handed Bel over to Daniel, who destroyed it and its temple.

      For us, it’s the “Invisible Hand” rather than Bel, and economists, politicians, media shills and bankers rather than the priests of Daniel’s story.

      1. attempter

        That story makes me think of my reading earlier this morning on constitutions and rights.

        Here Daniel is like the true democrat directly citing the sovereign constitution and natural rights while the Bel cultists are those who look to (and in fact worship as a cult) elites, governments, corporations. They think constitution and rights cannot exist except as mediated through these structures of clay and bronze. They sacrifice all the produce of their hard work to these false idols. And the parasites merely sneak in to gobble it all up.

      2. Patricia

        Excellent story that addressed our situation! But it is a truth-telling story rather than a cover for the truth, which is how MSM et al use the genre of the morality play. The way they use the morality play is just another sheepskin donned by our current wolves.

      3. F. Beard

        Thanks for that!

        If liberals and progressives were smart they would realise that there is plenty of ammunition in the Bible to use against the Right.

        And contrary to popular belief the Bible does not spend an excessive amount of time on sexual sins; instead there is plenty about oppression of the poor, integrity, forgiveness, charity, etc.

        1. Mel

          Joseph’s counter-cyclical intervention as Pharaoh’s Prime Minister has always stuck with me. I never see how the party of wooing the religious right can be so hostile to that.

          1. F. Beard

            I never see how the party of wooing the religious right can be so hostile to that. Mel

            They will claim that they wish all charity to be private and they would have a point if banking was purely private but it isn’t. In fact, our banking system is a government backed counterfeiting cartel that ESPECIALLY cheats the poor.

      4. Doug Terpstra

        Another apropos morality play might be Shakespeare’s
        “The Merchant of Venice”, about moneychanger / loan shark, Shylock, whose greed and attempted bribery in demanding his pound of flesh betray him. Here, Phil plays the role of the Christians who forgive him and spare his life.

    3. Doug Terpstra

      Agreed. This is propaganda for an utterly discredited “profession”.

      Economics has always been subjective and political, faux religion cloaked in the emperor’s tapestry, as ECONNED, you, and DownSouth convincingly reveal — objectivist religion clothed in fictional imperial objectivity. But this post would have us swallow the myth that neo-liberal economists have ever been objective and worse, that these thieving, lying liars and their faux-journalist coconspirators—all of them preaching the exact same neoliberal dogma after all—are merely actors on a stage, and their lies just words on a script. They know not what they do, or if they do, it’s just harmless play-acting.

      Pilkington: “Economists in the last thirty years have been turning their discipline into a pseudo-science, but even that was preferable to this anarchy.”

      Bull! All but a scant few of these “high priests” (DownSouth) have abdicated all claim to their ivory-tower, black-box authority in their objectivist faith. Anarchy is far preferable to their systematic collaboration in crime, which now amounts to capital crime —armed robbery and mass-murder— because they directly promote ever-increasing agressive global war and violence.

      1. Yves Smith Post author

        I think the point is that even in a field like economics, there are some things that are pretty well known (as in don’t cut government spending in a serious downturn unless your aim is to make matters worse) which are nevertheless under attack.

        1. HTML Reader

          …the point is that even in a field like economics, there are some things that are pretty well known (as in don’t cut government spending in a serious downturn unless your aim is to make matters worse)

          It is not well known, but merely commonly believed by those who know history and Keynes. I mean this in the somewhat strict sense of “known,” in that you cannot “know” something that is false. I agree with the commonly-held belief that deficit spending is needed during an economic downturn, but not all deficit spending is alike. At present, the U.S. government should be cutting nearly all spending on military and “intelligence” programs and agencies and should be increasing spending on confronting the problems of global warming (and the consequent changing climate) and replacing the fossil-fuel energy base of the economy, along with several other pressing problems. The people who are employed in the military and “intelligence” agencies and the various private companies that support them should be put out of work–at least, out of the work that they are at now. Their employment there is wasteful of resources and creates both economic and political obstacles to the changes in spending that are needed. Economics does not prescribe this change in spending, but the actual world that we humans live in does. This reality constrains and supersedes the abstract prescription that “deficit spending is deficit spending,” that is, that it does not matter if you pay people to dig holes and pay other people to fill them in. That was true in Keynes’s time, but it is no longer true in ours. It now matters what you pay people to do.

          1. alex

            “That was true in Keynes’s time, but it is no longer true in ours. It now matters what you pay people to do.”

            How is it that it was so true in Keynes time but not now? What’s changed?

          2. HTML Reader

            How is it that it was so true in Keynes time but not now? What’s changed?

            What has changed is our knowledge. We now know that there are constraints that were not known then–constraints more definite than “we live on a finite planet.” We now need to be addressing those limits, whereas in the 1930s and ’40s we did not know what those limits were. So, unlike then, we can no longer afford to simply deficit spend on any activity. We need to spend on activities that reduce our reliance on fossil fuels, replace them as an energy source, and stop and eventually reverse the amount of CO2 and other greenhouse gases are in the atmosphere and dissolved in the oceans.

            In one sense, the current circumstances are like then, but we are responding incorrectly. Then, the government did an enormous amount of deficit spending, but the spending was focused on the problem the country faced, namely, a war. Now, the government is also deficit spending, but the spending is not on the problems that the country is facing.

        2. Doug Terpstra

          Yes, Yves, Philip Pilkerton’s main point was spot-on as always — that trickle-down voodoo has utterly failed and it’s time for serious, New Deal pump-priming — but I think that is IN SPITE OF still-enthroned mainstream economists, most of whom are still champions of austeria.

          I greatly appreciate Philip’s insightful commentary here, and I’m a little embarrassed by my hot-button reaction. I hope I didn’t sound as obnoxious as ad-hominem Dan, but Philip appears to have a clinical blind spot for the objectivity and professionalism of double-minded, double-handed, forked-tongued economists. As DownSouth notes, these are a privileged caste of “high priests” overpaid to perpetuate the kleptocracy. Most share a level of integrity with politicians, well below a brood of vipers. These have abdicated credibility and been disrobed, yet they still cling tenaciously to their throne and scepter. (IMHO :-)

          1. Doug Terpstra

            Sorry, that’s ‘Pilkington’. (Say what you want about me, just spell my name right)

  4. DidierF

    Would it be possible to consider that economy is a tool for politics, not a master but a servant to the society ?

    Economy was put at the helm of the US. It failed at driving the country. It was noted by a lot of people who looked for another way to drive this country.

    Since there is no unity in the US, since self interest should have taken care of everything, a lot of divergent opinions came out. Facts couldn’t accepted anymore as facts. Pressures from the mighty (“We create the reality”) became facts. You have self interest applied to politics.

    Economy serves self interests. It’s dead.

  5. /L

    Of course there is most of the time complex circumstances and history why people do what they do, some can be more understandable and than others, some is by will some is environmentally formed and so on. But still a lie is lie, a fraud is a fraud and criminal behavior is criminal behavior no matter why people do what they do or even realize it.

    Europeans is much more under an authoritarian spell, the authorities are sent by God to rule the people. The French revolution was a brief occurrence the new masters pretty soon take on the old ruler’s quest for obedience. The church masters and state religions continued. Those who couldn’t stand this and wanted to be free of authoritarian spell left for America to be able to be the architect of their own fortune.

    “One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession. Even neoclassical economists know that the ECB’s policies towards the periphery are insane. The IMF and ECB impose pro-cyclical policies that make recessions worse.

    Why left-wing parties embrace the advice of the ultra-right wing economists whose anti-regulatory dogmas helped cause the crisis is one of the great mysteries of life. Their policies are self-destructive to the economy and suicidal politically. Lemmings don’t really follow each other and jump off cliffs – that’s fiction. Left-wing European governments, however, continue to support the ultra-right wing policies that the ECB pushes even when they know those policies will harm the economy and cause the left-wing party to be crushed in the next general election. They watch the ECB’s policies fail and their sister parties lose power and then they step forward to do the same.”
    Bad Cop; Crazed Cop – the IMF and the ECB
    William K. Black

    Probably rooted in the obedience of authorities, I have hard time believing that any American political brand would survive if they obeyed to some foreign entity and advocated selling American public property to foreigners.

    1. /L

      The first paragraph was meant for this post the rest of it for the post on public trust. One shouldn’t read posts simultaneously. :-)

    2. baghot

      ‘I have hard time believing that any American political brand would survive if they obeyed to some foreign entity and advocated selling American public property to foreigners.’

      But isn’t this exactly what they do with respect to China and privatization of the commons?

      1. Jesse

        You are quite rights about the ‘selling of the commons.’

        The thing is not the act itself, but the direct beneficiaries. This is how an American elite serves itself first, and the rest of the country be damned.

    1. baghot

      Economics is the bastard child of mathematics. The assumptions and simplifying assumptions necessarily made disqualify it from having any real world applicability.

      1. Procopius

        No, Yves explained it well in ECONned. Economists were jealous that Physics and Chemistry were seen as “hard” sciences and Economics was seen as “squishy”, like Sociology. So they decided it was because Physics had a lot of mathematics in it. But as Noah Smith pointed out in his column on what he learned in graduate school, in Physics the mathematics are used to make predictions, while in Economics the mathematics are used to “tell a story.” Its ieasy to create a mathematical function that will produce a particular group of data. In fact there are many functions (an infinity?) that will produce the same date. So Economics has become more like Theology, where there is no substance but you can argue forever over which belief is to be preferred.

  6. Schofield

    Popular media doesn’t do nuance. The whole notion that we might inhabit a universe that is self-organized on opposities like selfishness – altruism, self-interest – other-interest and cooperation – competition is too much for minds that prefer a simple-minded life.

  7. DownSouth


    For someone who takes a chainsaw to psychology, you seem to hold economics to a far more lenient standard. Why is this so?

    If there is any putative “science” whose practitioners play fast and loose with the truth, which departs from factual reality and can be classified as predominately a normative endeavor, as opposed to an objective endeavor, then certainly it is the discipline of economics. And yet you save your fire for psychology.

    Economics, since its very inception in the 18th century, has never been about truth-seeking. Quite the contrary, it has always been about social control. And as such, factual reality was tolerated only when it was expedient, when it didn’t interfere or depart from this central mission of social control.

    I agree that an economics discipline predicated on a respect for factual reality would be light years ahead of what we currently have. But as long as the high priests of economics are in denial about the history (for instance, the fiction that the economics priesthood only secured a prominent place at the policymaking table since Reagan, or the fiction that economics has ever been anything but a “pseudo-science” since the very moment it was conceived) and current state of the discipline of economics, I don’t see how any improvement is possible. It’s kind of like an alcoholic who denies he’s an alcoholic trying to cure himself.

    You say that “My key point here is that the media and politicians – the players in our moral spectacle – ignore these facts as if they were somehow relative and open to opinion, while they are not.” So you indict (rightfully so) media and politicians, but economists somehow slip through your net.

    I think you should seek a middle ground somewhere between your blanket condemnation of psychology and your kid glove treatment of economics, and apply the same standard to both disciplines.

    And when you conclude that “rational voices are drowned out in a sea of shouting and perniciousness,” after trumpeting empiricism throughout your entire post, you fall into an abyss of contradictions, implying that empiricism should be sacrificed on the altar of rationalism.

  8. Sungam

    Quick aside, all the countries reining in their spend that I can think of are running a budget deficit and will continue to do so for several years yet.

    If you talk about action rather than talk show rhetoric the debate is more about how large a deficit you can afford to run in a recession rather than whether to run a deficit at all.

    The on-going morality play at the moment which reaches from tabloids to policy makers, is about passing on haircuts to lenders/bond holders; be it from Greece or from mortgages. There you can see most economists firmly on the side of passing on losses. Taking Greece as an example you can see most serious commentators state that some serious restructuring will be needed as their debt is unsustainable. In the case of mortgages opinion is slightly more divided…

  9. craazyman

    “People began to realise that the economists’ theories were full of holes – so they just went out and created their own by cobbling together outlandish rubbish . . . ”

    Dude, you’re making me feel a little guilty. :)

    But at least I CAN feel guilty.

  10. jenahill

    Medieval literacy rates were quite low and these plays introduced many to concepts unavailable to them through any other medium. Obtaining information from only one source limits the ability of the receiver to make choices, for they don’t have the ability to compare ideas or teachings. One thing to consider regarding the public today is that we are a “literate” population completely unschooled in economics. The only education provided in economics to most US students is that the US capitalist myth, that our economy is the most profitable and successful in the world, fact, period. And our schools are also used to promote values that will make more workers for their cause through these teachings, and covertly, i.e. bell times and hours in class. Most folks don’t have the critical thinking and analytical skills to even see the contradictions. They are also likely to become offended if someone tells them anything that contradicts the myth. To make matters worse this myth making not only supports the status quo but calls into question the patriotism and seriousness of those who would point out that the emperor has no clothes.
    Fox news regularly calls into question anything but the official line and people think that is right, because they’ve been living out the patriarchal parental myth for most of their lives. Doing the right thing and being a good citizen amounts to working and paying your bills, intellectual pursuits are considered dangerous and frivolous. Social Justice is criticized not because it teaches helping others is moral, but because it challenges the economic myth that all goodness comes from hard work for a man who knows better that ye.
    Fox news must keep blaring the myth, the morality play of today, so that folks who are losing everything can keep hope that the myth is true, that good male corporate leaders and politicians know best and everything will get better. And leaders are indebted to the myth makers and don’t want to get kicked out of the club, hey who really likes Bernie Sanders anyway? I do in case you wanted to know.

  11. eric anderson

    Naked Capitalism has become the Naked Deficit Promotion blog.

    I don’t think it is dishonest to say the US is bankrupt. In strict economic terms, we can print money and never go bankrupt. But the term is being used colloquially, not as a precise mathematical or technical term.

    The debt we have, the debts we are incurring, cannot or will not be paid back. Oh, they can be paid back in printed dollars, which will obviously be worth less than the dollars loaned. That’s a haircut by different means.

    Those promoting these deficits, and proposing to pay for them with some form of QE3, QE4, QE5, which is what it will come down to in the end, are proposing something that will have an effect similar to haircuts for bondholders — call it an inflation haircut. I consider this just as dishonest and fraudulent as banks who made liar loans, and investment banks who bundled and sold that crap as AAA securities.

    We are not technically bankrupt. We are de facto bankrupt. Trying to confuse the two concepts in order to beat up on the majority of Americans who want fiscal responsibility is something you could do a morality play about.

    1. rednek

      Let me guess, when Bush Jr. was king, you agreed with Sir Dick that “deficits didn’t matter.”

      1. JasonRines

        Eric Anderson is correct Rednek, the United States is bankrupt. Purposely spending beyonds one’s means is criminal and both the left amd right are complicit in this practice. So now Chairman Bernanke devaluing the dollar (again) and inflation is really a tax without any return benefit to the citizenship, outside of the top 1%. They pay the tax too but it is miniscule compared to the income level of the rest of the population.

        Deficita do matter. Cheney was disingenerous for saying this and so is Philip for basically rebroadcasting this lie. All Philip did was redirect the lie back toward Walker, a Republican. A lie is a lie whether Paul Krugman (or Philip) says it on the left or Cheney says it on the right.

        How brainwashed people are across the Anglo European continent is beyond disturbing, that includes you Philip.

    2. Patricia

      Eric, it’s not that complex, at bottom. In your personal life, when you’re making a good income, you save up for crises. Then, when you find yourself in a crisis, (let’s say medical) you spend that money which was saved. It would be plain stupid not to spend money on hospital care or quit eating food simply because a crisis hit and you don’t think you should spend money.

      If you did not save up during the good times, then what? Or let’s say that you had saved a good amount, but not enough, and now here you are, without money and in a huger crisis than you ever expected life could land on you. Should you just suck it up and obediently starve? Suck it up and peaceably die at home from an untended liver infection (as eg)?

      So our country didn’t save “enough” during its good times. Whose fault was that, Eric? Then, we had a large number of thieves stealing whatever surplus there was. (Sort of like someone came and stole those 401Ks that you squirreled away for extremis or retirement.) And here we are, in a huge crisis. Shall we let the people of our country suffer and die because of insufficient surplus, chronic unwanted war, and massive thievery?

      You are suggesting that our citizens should not only endure the normal austerity always attendant in a crisis, but also quit eating and going to hospital. Quit needing a house over their head, stop wanting their kids to get a decent education. And for what? Because of illegitimate debt?

      Debt is an important concept. Is it more important than life? And whose proper debt is this deficit? And how do we best get out of debt over the long haul, in such a situation as this? How would you go about it, in your personal life?

      You write righteously about dishonesty and fraudulence and fiscal responsibility. Well, ok. When your personal crisis hits, I will call on you in your cardboard box under the bridge and extol your honesty and fiscal responsibility and will make sure that your excellent moral character will be made known at your funeral wake. Let me know when you move.

      1. JasonRines

        The producers who demand higher and higher amounts of devalued fiat to provide food and health products decide how much you, me or anybody else consumes from here on out and over the next decade. It will be less and the people are going to face a decreased quality of life.

        Patricia, the crime has already been committed over the last four decades. Aiding and abetting the criminals in a call to ‘fairness’ and continued rise of the deficit doesn’t mean a freebie. It means the banking leadership gets more fees for further currency devaluation and inflation is the result. That free medical care now costs you 30% more for health care AND all other goods like food. It’s lose, lose for 99% of us now so at least let’s the Chinese water torture over sooner, shall we?

        Us producers are getting bored working 30 hrs a week and just increasing our prices…

        1. Patricia

          Jason, I’m not looking for “fairness” (“aiding and abetting criminals”), spreading goodness everywhere, like peanut butter across a sandwich. I demand the crimes to stop, and for justice to be served. Justice means meting out correction and consequence where required. It means a restoration of the rule of law.

          And I demand help for our wounded citizens—not a panacea, just plain life-line “aid”. So far, there is little on offer–instead there’s BS about “paying down the deficit” at any cost.

          I didn’t say that raising the deficit is a freebie—there are no freebies in a crisis such as this, not even if (best case scenario) justice is served. The illegitimate deficit is part of this crisis. I clearly stated that crisis always is painful, and I know it as well as you do, living here in Detroit, watching corporations take over our schools as I write, and my own neighborhood taking over more and more of the general city services because the city itself is writhing in disability.

          Your thoughts are both confused and supercilious, an unpleasant combination. No wonder you are bored. You cannot get out of the deep rut of the same repetitious thought. You cannot imagine subtle and complex action in the face of crisis.

          Perhaps you could take those extra 10 hrs/wk and begin a vegetable garden. And as you put your hands in the dirt, you can sort out your thinking. Ask yourself how on God’s green earth paying down the deficit at this particular time actually lessens the deficit? And if you can’t get past that one, then perhaps you could sort out, for us all, how to cut out of our national budget those things that can be easily sacrificed: multiple unwanted wars, subsidies to international corporations, burgeoning national security firms, gobal military/black sites, the ongoing money drain to our absurdly useless financial sector. These considerations, while pulling weeds, should stop your boredom tout de suite. And you will obtain the added bonus of minimizing food-price inflation in your home budget.

          Bah. One-dimensional insistences such as yours guarantee total societal collapse.

    3. F. Beard

      Oh, they can be paid back in printed dollars, which will obviously be worth less than the dollars loaned. eric anderson

      Not necessarily! Remember, the money supply is mostly (97%?) credit. If the banks were forbidden to issue any new credit then the effect would be massively deflationary. Then quite a lot of new money could be printed without price inflation.

      The mistake you make is to assume that “credit” is legitimate loans. It is not. It is equivalent to counterfeiting.

    4. Susan Truxes

      When were we not bankrupt? The dollar has been under pressure since 1945. Gold flew out of the country until we got off the gold standard. Before WW2 only rich people played fast and loose with money – and created the great implosions of capitalism on a regular basis. If they hadn’t bankrupted the system at any given moment all you had to do was wait a bit. And all money even is is a means to an end. Money is useful. Let us use it.

  12. JTFaraday

    “I think Mosler is right when he says that Benanke is aware of this and other truths but does not say so because to do so would be politically unfeasible.”

    I think you’ve been swept up into another American morality play here. Mosler is setting up the ubiquitous “the Evil (Republican) Deficit Hawks aren’t letting the Good Banker, representative of the best and bightest in the professional class, do what he knows to be economically correct” narrative line.

    Bernanke has signed on to liquidate the “middle class” that is the professed base of the Party that recently reappointed him. Mooing in a keynesian direction while failing to convincingly make the case in order to blame the lack of action on the obstructionism of the Evil Republicans is the current (D-)Party part in this morality play.

    Bernanke knows a good story when he sees one. He’s adopted exactly the same tactic as Obama (and most of the rest of the coporatist D-Party). Both know exactly what they are doing and both are doing exactly as they choose.

    The wonder of it all is that you’re accepted Mosler as a legitimate economist– or, technically, a legitimate political commentator– when he is clearly yet another media fabulist, covering for the people he wants to cover for and scapegoating those he does not.

    1. Susan Truxes

      Back in the Fall of 2008 when Bernanke and Paulsen were sitting in front of the Banking Committee asking for TARP (just a formality as it was already a done deal), Senator Dodd leaned forward and asked both of them if certain things were in place to move forward. He wanted to know if our Banks could meet the next set of Basel regulations and Bernanke assured him yes they could. Then he asked a cryptic question: Do we have enough money to stimulate the economy by investing in our infrastructure? Yes was the answer again. So Senator Dodd, and everyone on his committee knew we needed fiscal spending. It was part of the original deal. It has been hijacked. And things are looking pretty grim. So the question is, as usual, why (has it been hijacked)?

      1. JasonRines

        I advised President Bush to declare an energy emergency in 2008 and fund energy independence, letting the banks be broken up and fire-sold. This was in April of 2008. The question of why didn’t stimulus go towards fiscal policy such as infrastructure can be answered as follows:

        1) Congress abdicated their fiscal policy to the bankers decades ago.
        2) Bankers make loans which is considered monetary policy. Lending has a money multiplier so it is useful for a time (couple decades) but the multiplier is now negative and therefore now damaging to Main St.
        3) Emerging markets with slave wages and no environmental protections were far more interesting to bankers than the U.S. The Federal Reserves charter expires in 2013.

        So the bankers with the corrupt senior politiciansused debt pyramiding and bailouts to loot the country instead ofcreating fiscal policy or at the least countercyclical jobs policy such asenergy. They are criminals. At the root of criminal behavior is laziness. Why work hard creating sustainabl policy when you can steal it, ship production East and log-into your online account to see how your American tax payers investments ae doing for yourself. After all, voting in thy own interest is as old as the Republic itself.

        4) Lobbying groups now amplify the effects of Sr. Politicians voting thy own interests.

  13. Cameron Hoppe

    “The austerity line then, is not ideological nor should it be seen to be. It is, as I’ve been arguing, all an act. Like the actors in a morality play, the people taking part in it think that it is ‘moral’ to tighten our belts and so they insist upon it.”

    NO! You’ve got a well-done, informative piece, and the portrayal of FN and much of the media as a morality play is very interesting. Correct in many ways as well.

    However, I cannot agree with you that the deficit cries are about morality, at least among self-styled media punditry. There were no cries throughout the media about deficits when the wealthy were being bailed out. Ah, but when it was the poor and middle class–the weaker members of society, deficits were suddenly too high.

    You referenced a bit of Nietzsche (good on you), so I will too. If we agree that there is the morality of the master and the morality of the slave (the master’s being subjective and the slave’s being objective), then what we have in our popular media is a group of masters shoveling collective guilt onto those who choose slavery. The cries about the deficit are about keeping wealthy people powerful and keeping everyone else in a position of weakness.

  14. Dan Duncan

    “I can’t believe I read the whole thing”

    Yeah I read it. I read every word of the Pilkington Post.

    And now that I’m done, I feel like that poor old slob, sitting on the side of his bed after a night of stupidly stuffing his face…

    [“I can’t believe I ate the whole thing.” ]

    This Pilkington Post is one of the most laughable posts ever made on this site.

    Did Pilkington really open with a multi-paragraph “lesson” on The Mortality Play? “Gosh…that ‘morality play’ sure is an obscure reference. We had never heard of such a thing and would have been lost without your patient explanation.”

    Then, of course, Pilkington baits the stupidity hook with a Fox News worm. “I’ll be honest. Viewed from abroad Fox News appears primitive and strange – a product of a world I am almost wholly unfamiliar with.” Are you freaking kidding me?!?! This is straight outta Phil Hartman’s bit on SNL as Caveman Lawyer.

    Then, in a post ostensibly about the bullshit of economists, Pilkington backs it up with nothing but bullshit of his own. Evidently, bullshit is OK when it comes from “journalists” like Pilkington.

    Take his audio clip of David Walker that Pilkinton links to in the 9th paragraph. Pilkington acts as if the audio clip is a “gotcha” confession of Walker “off the record”, wherein “you can hear” Walker admits to Mike Norman that there is no solvency issue.

    Hey Moron: In that audio clip, Walker is not having a confessional with Mike Norman. In that clip, Walker is on television, and he’s not even talking to Mike Norman. Walker is actually speaking to Neil F*cking Cavutto on Cavutto’s Fox News Television Show.

    In the clip, it’s Fox News’ Neil Cavuto who leads with the statement that “there is no solvency issue.” Walker acknowledges the same, but is immediately cut-off before we get to hear the rest of what he says. Regardless of whether one agrees with Walker…this is a blatant example of quote mining. An Utterly pathetic example of journalist dishonesty.

    There is no smoking gun here. You just took an audio clip from Norman’s sorry website (PitBullEconomics) and you were either too stupid or too lazy (typical journalist) to get your facts straight.

    The rest of Pilkington’s Post is more of the same….

    I’ll conclude with this gem, straight from Pilkington: “The fact is that there are some things that are just simply true in economics. One of these is the necessity in a modern economy for budgets to go into deficit during periods of high-unemployment and low-growth.”

    “To go into deficit”??? As if we aren’t in deficit already, and the debate we are having is whether to “go into deficit”

    He can’t even frame the debate properly.

    And Pilkington’s self-reference as “an economic anti-moralist” is a laugh-out-loud, transparent attempt at out-Taleb-ing, Nassim Taleb.

    This Pilkington is a joke.

    1. Matt Franko

      Phil has linked the correct clip. No need to F bomb Philip here. That audio clip is Mike Norman interviewing David Walker on Mike’s radio show from several years ago now. On that show Walker admitted there is no “solvency issue”. You are confusing Neil’s voice with Mike’s. (maybe both have slight NY accents?)

      If Walker really thinks this then what is he carrying on about all over the country with his “fiscal sustainability” nonsense?

      Mike has chronicled his encounters with Walker here at his blog:



    2. readerOfTeaLeaves

      Oh, goodness.
      I fear that if Dan’s comment is accurate, then I must be a witless dweeb of the most lame, moronic, and pernicious vapidity.

      Because I thought Pilkington’s insights absolutely brilliant.
      I thought them ‘spot on’.

      If Dan is right, then Dan would be a good person. Moral, even.
      If Dan is right, then I must be wrong.
      And if I am wrong, then I must indeed (and unwittingly) be some sort of loutish dweeb.

      Nice for Dan.
      Sad for me.

      Nevertheless, I will persist in my views that Pilkington’s analysis here is simply brilliant, and if more people took it seriously and woke up to what he is saying, then we’d make notable strides toward a saner, more productive conversation about economics, social policy, and governance.

      Economics has always been a language of morality.
      Read Malthus.
      Read Bentham (if you can stand it).
      Moralists, both of them.

      It’s when economics passes itself off **as** religion that we find ourselves in no end of woe. I’d say that happened in a rather spectacular fashion with the neoliberals and neoclassical economists.
      In my mind, it led to Epic Fail.

      But then, Dan won’t have to pay one whit of notice to what I might think, because — as an admirer of what Pilkington has written here — I can be easily dismissed as a lame, pathetic dweeb.

      Unfortunately for Dan, this will not trouble me in the slightest. I will go on quite happily about my day. (And hope that Dan does, as well. But I also hopes that he reads Pilkington again, and with a bit less hostility and far more understanding, because Dan is really missing a treat.)

    3. craazyman


      too much time on his hands
      too much time on his hands


      typing in the dark
      typing in the dark

      -Mr. A. V. Airy
      The Magic Parrot Who Knows

      Don’t worry. You’re in good company. bowahahahahahahaha

  15. grandiosity

    The current stalemate over deficit spending should not be viewed as a refutation of economics. As this article says, the actors in the play are working in their rational best interest. But the paper does economics a disservice. The corruption of powerful economists should not be mistaken as a weakness of the science behind them.

    The history of science is full of weak characters with
    “degrees” who agree to play a role that gratifies the elites. A similar corruption occurs in the drug industry, with doctors accepting payments in return for “authoring” drug company approved papers. Does that mean that bio-medicine is bad science?

  16. jm

    “The fact is that there are some things that are just simply true in economics. One of these is the necessity in a modern economy for budgets to go into deficit during periods of high-unemployment and low-growth. This is a fact.”

    This is a fact if full employment and economic security, more or less, for all is the policy goal. As is clearly seen in the tacit–and occasional explicit— bipartisan consensus, neither full employment and economic security for all are considered worthy goals.

  17. alex

    Of course there are moral aspects to economics. For example, we teach small children that it’s wrong to steal another child’s toy. The problems with the morality plays that Pilkington criticizes are two fold:

    1. Failure to distinguish between the science of economics (to whatever small degree such a thing actually exists) on the one hand, and economic policy (including moral considerations) on the other.

    2. More importantly, these morality plays teach peculiarly selective lessons. They teach that it’s utterly immoral for even a hungry peasant to poach a rabbit from the king’s forest (a capital offense in Tudor England), but ignore the question of whether it’s moral for Henry VIII to plunder the monasteries.

  18. F. Beard

    He tells Norman that he ‘believes’ if the government stepped out of the way the private sector would flourish. Philip Pilkington

    A libertarian would have piped up – “You mean end the Fed and other privileges for the banks?”

    Our economic plight does have a moral cause – we have a government enforced banking and money cartel which essentially allows banks to counterfeit.

    Morality is not the problem; hypocrisy is. When are liberals and progressives going to call the Right’s bluff and call them the thieves they really are?

    “The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.” Lord Acton

  19. Jesse

    The problem with the Mosler approach is that it seeks to perpetuate and even energize what is essentially a ponzi scheme of misplaced trust, a confidence game.

    This MMT is in its endgame, and this is essential to understanding what is happening in the world, and the world of finance, today.

    Here is an interview with Jim Grant that extends some broader and historical perspective to the discussion.

    1. F. Beard

      Jim Grant is a gold-bug. That is a huge defect to overlook.

      MMT is not the complete solution but it is easily 1/3 of it.

  20. Susan Truxes

    Yesterday’s article about the fulcrum point and the two weights and the discussion that followed made my eyes glaze over and gave me a headache. In fact it was the clarity of the argument that confused me! Kind of like good legal arguments. Just the facts. Crazy how that works. So Philip’s post today has cleared up my confusion. Modern Monetary Theory is pretty straightforward. It does not stop fraud; it does not build a new transit system. It just makes money work more efficiently. If we have the political will to use it with fiscal policy. And if we do, then while we are at it we really should nationalize the Fed-Bank system and start paying interest to ourselves. And raise interest rates a little.

    1. F. Beard

      If we have the political will to use it with fiscal policy. Susan Truxes

      There’s the rub and here’s the solution – allow genuine private currencies. That way, if the government overspent wrt taxation then ONLY the government and its payees would suffer, not the private sector.

      And if we do, then while we are at it we really should nationalize the Fed-Bank system Susan Truxes

      Or leave it completely on its own. The US is ruining its currency to back up the banks.

  21. Hugh

    As I have written many times, kleptocracy is a system. To make the con work and keep the looting going, much more is needed than a few overgreedy financiers. The financial system must only be geared toward looting. The political Establishment must be bribed both with campaign contributions while in office but also revolving door golden sinecures on their leaving. The media is an example of corporate control and Upton Sinclair’s maxim:

    It is difficult to get a man to understand something when his salary depends upon his not understanding it.

    Much the same occurs in economic and political science departments at universities and think tanks and institutes elsewhere. The academics are important in rationalizing kleptocracy. Media is important in propagandizing for it and shutting out opponents of it.

    ABC may compete with NBC or CNN in ratings. The New York Times may preen itself on its pre-eminent, if failing, position. Nobel prize winning economists, even those employed by the Times, may spar with other economists from time to time. Democrats and Republicans may always be at each others’ throats. Goldman Sachs may be seek to f*ck over Morgan Stanley, but in the end, it is all kleptocracy. None of these is a struggle between truth and untruth, honesty and dishonesty. It is a competition for spoils. That’s all.

    There are no innocents, no misunderstandings, no confusions. Kleptocracy is not an accident. It didn’t just happen. These people mean to steal from us. They mean it with every fiber of their wizened greedy criminal hearts.

    1. Doug Terpstra

      Agreed. And what makes this a crime much worse than “mere” robbery, is its reliance on ever-increasing state-terror and mass-murder — wherein aggressive, mercenary war is profitable industry in and of itself and also subject to the economists’ “religious law” of never-ending growth.

  22. Brian

    Much of the comments are not a refutation of the study of economics and its work to reveal the mechanics of the markets. However they are a repudiation of American life, politics, class consciousness, corporatism, media…and on and on…it should be noted political economy was studied (se Adam Smith) until circa 1940s when economics and political science (??) were separate disciplines and MBA assigned to the discovery of the firm and its management(microec). Why not pick on political science which truly calls it a science?

    1. alex

      “Why not pick on political science which truly calls it a science?”

      Are you claiming that economics doesn’t call itself a science because it’s not generally called “economic science”? I can think of lots of universities that have a “Chemistry Department” but none that have a “Chemistry Science Department”. Does that mean chemistry doesn’t consider itself a science?

      1. readerOfTeaLeaves

        There used to be a field called ‘political economy’.

        In the 20th century, as social and political life became more complex, the field split into two strands: political ‘science’ and economics (just as physics separated more and more from chemistry as the amount of information within each field became more complex).

        All the status was in the ‘sciences’.
        But some things are SOCIAL sciences, and in those fields, it’s much harder to do the kind of hypotheses backed up by experimental design and testing that is normally done in chem and biology.

        By adopting claims to ‘science’, both political studies and also economic studies sought to wrap themselves in a sort of Intellectual Invincibility that neither field merited.

        If you read Econned, it takes apart the whole charade of economics claiming to be a ‘science’ with a precision and detail that is simply a marvel of analysis. Maybe someone will do the same for the field of political studies, but ‘politics’ is not a science – it may be an art, a craft, but it is definitely not a science.

        Because neither economics or politics are ‘hard’ sciences, they are particularly vulnerable to the seductions of ideology — in the absence of genuine, verifiable testable methods, they easily fall prey to whoever funds tenured positions, whoever is appointed to journal editorships, etc, etc.

        Biology and chem are not subject to the predation of ideology in the same way that the social sciences (political studies, economics) are so easily bent to the needs and requirements of existing power structures.

        Both Yves and Prof William Black have written extensively about how this has shaped and affected academic departments and studies of economics — no end of mischief has occurred.

        I think that Brian is point out that **neither** politics nor economics are a true, ‘hard’ science. That claiming either is a ‘hard’ science is dishonest and leads to no end of mischief.

        They were originally Siamese twins, and they still are, and we should recognize that simple fact.

  23. anon48

    After reading the article and came away uncomfortable with the morality play analogy. To me, it gives too much respect and credibility to the current crop of role players. Likening what’s happening out there to a morality play presumes all the trash talking taking place, as the author states, “… was that it would impart wisdom to those who watched it. The common people – thought somewhat stupid by the writers – could then follow the simple moral messages purported by the playwright…”

    Sorry, there is no moral message being promoted today. Role playing has as its sole goal to win the argument. That ultimately translates into more money. Isn’t that the essence of what most politicians are after- more money so they can get elected and remain in office? They say whatever is necessary to achieve that goal.

    As a side note – Sam Waterston opens his heart and lays out his political beliefs, which appear to be the early stages of this role playing political philosophy very clearly in the movie Mindwalk. As the US Senator Jack Edwards he futilely attempts to justify his political methods to his new friend, the reclusive retired physicist Sonia Hoffman(Liv Ullmann) as they spend the day sightseeing around the remote island of Mont. Saint Michel in France. But even as the words are leaving his lips his close friend, former speechwriter and poet, Thomas Harriman (John Heard), who is also on the trip, seems to become more and more disenchanted with the Senator the more & more he hears. Harriman actually plays the part that’s missing from today’s so-called morality play- the conscience.

    And it’s not just the politicians, it’s the network pundits(including all the Fox Network stars, Rachel Maddow, others on the left, et al), corporate and nonprofit leaders. Somehow, it’s become not only OK to utilize BS when in the spotlight but it’s now considered foolish and unsophisticated not to do so. I guess this is the end game after we’ve idolized the likes of James Carville and Karl Rove for so long.

  24. Jim


    A brief critique of what you wrote could come from several directons.

    You state “all the world, to use the words of a great poet, becomes a stage.”

    It might be worthwhile, for a moment, to take such a claim seriously.

    What if Shakespeare is right–that life is about the inescapability and insurmountability of playacting as the substance of human reality.

    Do any of us ever get to stand outside the play?

    Ask yourself this question: Are all of us condemned to the infinite encactment of roles because there is no script pertaining to the unfolding of our lives that we can claim is fundamentally, uniquely our own?

    A critique coming from another direction, might argue that reason (our calculating ability) is a slave of the passions.

    What if all of us(including MMT advocates) are looking for adequate premises for which to infer conclusions already and independently accepted because of one’s feelings or sympathyies.

    Personally, I’m partial to this view, initially articulated by both Hume and Hobbes, that the reasons generated by reason (our calculating ability) are largely concerned with clarifying the ends to which our passions are driving us and figuring out the most expeditious means of getting there.

    From such a premise one can embrace a vision of human equality not based on our reasoning ability (which is differentialiy distributed among human beings)and consequently divides us from one another and tends to be used to end up justifying a society run by “experts.”

    Instead, we can build our vision of human equality on the passions–which refer to a common set of vulnerabilities(such as pleasure and pain) that are broadly distributed among us and therefore can potentially unite us.

    If, then, what makes us authentically human has more to do with what we feel (to experience joy and suffering) than what we think and calculate then we may have established a focus for justifying a greater and greater equalization of human societies.

    Thus, we may all well inhabit a world in which our premises, inferences and conclusion bleed into one another in such a way that they ensure the prescriptive lurch of our supposed empirical descriptions.

    1. DownSouth


      If you are interested in investigating further what Jim is talking about here, an excellent primer can be found in Michael Allen Gillespie’s Nihilism Before Nietzsche. The Chapter is entitled “Fichte and the Dark Night of the Noumenal I” and the section is called “The Historical and Intellectual Background of Fichte’s Idealism.”

      Fichte’s idealism provides the philosophical underpinning upon which utopian ideologies like Marxism and Neoliberalism are built.

      The section is only eight pages long but provides a quick overview of what a few great thinkers have postulated as they have struggled with some of the issues you are currently struggling with. Here’s an excerpt:

      Hobbes spoke for nearly every empiricist when he argued that Descartes had established his system upon a faulty foundation by positing the I as fundamental. The I and the whole subjective realm in this view are merely permutations of matter. Consequently, there is no free will. Human beings, like all other beings, are governed by the laws of matter. The supposedly free will is in reality only the last impulse before motion. Moreover, without the certainty of the I, Descartes’ demonstration of the existence and goodness of God cannot be maintained. Descartes’ God, from the perspective of empiricism, is thus nothing. More importantly, without the certainty of the I and God, Descartes’ apodictic science lacks a foundation. Empiricists such as Hume could thus argue that what seemed to Descartes to be causal connections were only regularities of experience. For empiricism, science can only describe such regularities. Its results are thus not certain or a priori but probably and a posteriori.

      Kant attempted to save both science and freedom (and thus morality and religion) from the empiricist attack by both deepening and limiting the subjectivist foundation that Descartes had established. Descartes and rationalism in general had come into disrepute in Kant’s view because they laid claim to knowledge that transcends the limits of the human understanding. In order to establish a true ground for science and to open a space for freedom, morality, and religion in the face of skepticism, Kant believed that a thorough critique of reason was necessary.

      Hume’s skepticism was a frontal attack on rationalism. His demonstration that causality could not be logically deduced or derived from experience dealt an especially grievous blow to rationalist science. Kant perceived the power of this argument and also recognized that it could be extended to other concepts. Such a critique seemed to Kant to undermine the foundations of all knowledge. Kant, however, did not believe that Hume’s argument proved that certain knowledge was impossible. It pointed rather to the crucial failure of rationalism to restrain reason to a sphere commensurate with its capacities. This failure necessarily brought reason into contradiction with itself, into what Kant called antimonies.

  25. /L

    “What is economics? A science invented by the upper class in order to acquire the fruits of the labor of the underclass.”
    August Strindberg 1849 – 1912

    Alfred Nobel, hated economics “from the bottom of my heart”

    1. craazyman


      That’s pretty good!
      That’s pretty good!


      Mr. A. V. Airy
      The Magic Parrot Who Knows Economics
      Birdcage 7, Planet Nine, Galaxy 8y7

  26. herman sniffles

    “It is seriously doubtful that the moral messages taught in the plays actually changed the behaviour of the onlookers.”

    Compare Americans in their 50’s who were brought up on “Leave it to Beaver” and “Andy of Mayberry,” and who were read “The Little Red Hen” and “Chicken Little,” to the kids today who spend hours blowing the heads off people on video games and who are read books in school (if this happens at all) that are dictated by the state department of education to contain “No Moral Message.” In India some of the Hindu Goddesses are believed to be incarnations of intelligence or virtue. Believers in the goddess worship her by trying to BECOME those traits.

    “While morals may be relative in our post-Nietzschean world, facts are not.”

    EVERYTHING is relative. That’s rule number one. If you fail to see the relativity of a topic YOU ARE HARBORING A BIAS.

    “The fact is that there are some things that are just simply true in economics. One of these is the necessity in a modern economy for budgets to go into deficit during periods of high-unemployment and low-growth. This is a fact.”

    Or? ‘The fact is that there are some things that are just simply true in the treatment of heroine addicts. One of these is the necessity in a modern hospital for more drugs to be administered to the patient during periods of withdrawl and psychosis. This is a fact.’

    ““Aha!” he’ll shout at me. “You’re doing the same thing as the economists. After all, you’re just spouting out more morals.”

    No, not moral, just hogwash.

    1. MyLessThanPrimeBeef

      I agree morals are relative.

      If we can sustain people with something other than vegetables and meat, moralists will join me in decrying about vegetable cruelty.

      Since we haven’t been able to do that (yet), it’s convenient to overlook the daily murders.

      Long live The Full Life Spectrum (it doesn’t stop at the animal kingdom)!



  27. Lloyd C. Bankster

    I’m giving this article a +10!! (the highest mark)

    Not that I understood a single word, but the anti-bankster crowd does not seem too thrilled by this post and that’s good enough for me. As long as I can keep the $10 billion I’ve stolen without suffering any consequences, that’s all that matters. Say whatever you want, believe whatever you like, but just don’t threaten me with jail time, that’s all I ask.

    All the world’s a stage, and I’m the villain. Yeah, it’s a tough job, but at least it pays well and somebody has to do it so it might as well be me. :)

  28. Deus-DJ

    Mr. Pilkington: it would be appropriate to say that the LANGUAGE of neoclassical/neoliberal economics has become firmly institutionalized into the discourse. It’s not simply a morality play by the part of those doing the interviews…they have been lulled into the language of market failures or distortions because they are seen as tools of rationalization that occur INSULATED FROM POLITICS that apply a form of impartial reason. This is typically what the rule of law, interpreted by legal institutions, serve as. The language of neoclassical economics has today become a non-judicial and extra-political constraint imposed on society…it tells us what is or isn’t good for society. It institutionalizes skepticism about assumptions the welfare state does not question. This institution(called meta-regulation among law types) has today become a social institution that shapes the agenda of politics that has reached across every facet of society.

    1. Deus-DJ

      Its my argument that this institution of meta-regulation tells us morally what we are supposed to be for or against. This is why you generally have the same reaction to Mike Norman every time he utters a statement from different commentators, even those that we know aren’t particularly biased like say Neil Cavuto is.

  29. markg

    Physics (economics). Imagine trying to put a man on the moon (fix the economy) but most of the engineers (politicians) and scientist (economist) do not understand gravity (fiat money system). One group of scientist (MMT) has come up with facts about gravity. These are concrete mathematical equations that are not disputed by other scientist. The scientist (MMT) have spaceship designs but the engineers do not like the designs because the engineers do not understand gravity.
    It’s too bad all the scientist (economist) cannot get together and agree on how gravity (monetary system) works. Then the engineers (politicians) can be educated and we can come up with the best spacecraft design (economic policy) to get to the moon (fix the economy). The economist need to concern themselves with how the system works; not formulating policy.

  30. Michael Warhurst

    Morality is made up of human and social values -none of which can be measured or described in terms of dollars.
    Morality has three positions: moral,which means that one knows what it is and does it; immoral, which means that one knows what it is and doesn’t do it; and amoral, which means one never considers morality in the first place.
    There can be no better operating description of amoral than one for whom dollars are the only, or final and deciding value considered before decision/action.
    This means that corporations (and wealthy elites to some degree) are amoral and have zero capacity to be moral.
    Government on the other hand, in a democracy, is elected to represent the human and social values of the majority of voters and has the ability to force corporations and wealthy elites to be moral.
    Corporations and the wealthy elites would rather disembowel themselves than be moral. Corporations and wealthy elites spend billions a year corrupting politicians and destroying government’s ability to force them to be moral. These corrupters and destroyers of government would never spend a penny unless there was a dollar in it for them. The fact that they are willing to spend so much money to stalemate, destroy, and disable government is proof that government ultimately does have the ability to force them to be moral.
    However, if government power is divided up, say 51 ways, it is much more difficult for government to coordinate to force morality on the amoral corporations and wealthy elites. If corporations and wealthy elites were sooooo against bureaucracy why hasn’t their media machine ever contended for ten states instead of 50?? This would rid them or 40 bureaucracies which one would think would be a priority. The reason they do not do this is because 50 states divide up government power such that it is almost impossible to focus it to force morality on them.
    ‘Checks and balances’ – operating as the designers expected – further frustrate the ability of government to force the amoral corporations and wealthy elites to be moral.
    Plato invented the form of government called “republic” as a result of Greek democrats forcing Socrates to suicide with hemlock because he refused to recant the statement “Not all government positions should be elected because some require special skills which cannot necessarily be obtained by general election”. At Socrates death, Plato freaked out and devised a system of government which is the antithesis of democracy. A democracy is run by and responsive to the majority of voters; while a republic is run by and responsive to wealthy elites and in modern times their corporate entities.
    Socialism is when the government takes the risk and gets the reward; capitalism is when the individual takes the risk and gets the reward; fascism is when individuals get the rewards while governments take the risk – as in fascist Germany.
    Republic and fascism are very similar and both cater to wealthy elites.
    Corporations, wealthy elites,and fascist governments are all incapable of morality because to them human and social values are non-existent – in their value system only dollars are considered.
    To attribute to corporations and wealthy elites the ability to be moral – outside of governmental force – is just ignoring reality.
    The study of economics can become moral if and only if it acquires the ability to realize that it is after all a study of humans and human society and must accommodate the primary importance of the human and social values of the majority; not just the dollar denominated amoral interests of corporations and wealthy elites.

  31. Mario

    great stuff here man. Love the literary references as I’m a literature major and am now involved in learning economics (follow Mosler and Norman and others too), the markets, and am working to become an accountant too as well.

    Your stuff is beyond spot on!!

    Thank you…it actually really helps me to gestalt what is really going on here with all of this as I’ve not been able to get what has been going on culturally at all with all of this…until I read this article. Thanks again!

    MT :)

  32. Charles Wheeler

    It’s just not as complicated as that.

    David Walker talks about national bankruptcy to scare the masses into accepting lower wages, services, social security, Medicare, etc.

    It’s really very simple: the wealthiest are grabbing all they can before the ship goes down.

    They’ve just forgotten one thing – there are no life boats.

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