Money and Economic Theory session at 12th International Conference

1. The 12th International Post
Keynesian Conference
September 25-27, 2014
Rebranding Monetarism as Keynesianism
Wesley C. Marshall
UAM - Iztapalapa

2. The neoliberal thought collective
• Moral philosophy
• Methodology
• Public Policy

3. Moral Philosopy
• Abundance vs. Austerity
• Planning vs Free Market
• Science vs Oscurantism
• Banks vs People
• Monetary vs Fiscal policy

4. Obscurantism and money pt. I
Monetarism has come under increasingly sharp attack over
the past few years. Recent critics have detailed 'the trouble
with monetarism', argued that the choice is between
Monetarism or Prosperity and even recoiled in horror from
the Scourge of Monetarism. Various accounts of the failure of
monetarism in Argentina, Canada, Chile and Great Britain
have received widespread attention – St Louis Fed, 1983
Few traits of totalitarian regimes are at the same time so
confusing to the superficial observer and yet so characteristic
of the whole intellectual climate as the complete perversion
of language, the change of meaning of the words by which the
ideals of the new regimes are expressed – Von Hayek, TRTS

5. Obscurantism and money, pt. II
• Civilization advances by extending the number of important
operations which we can perform without thinking about
them.' This is of profound significance in the social field. We
make constant use of formulas, symbols, and rules whose
meaning we do not understand and through the use of
which we avail ourselves of the assistance of knowledge
which individually we do not possess.
• Money is such a routine part of everyday living that its
existence and acceptance ordinarily are taken for granted.
A user may sense that money must come into being either
automatically as a result of economic activity or as an
outgrowth of some government operation. But just how
this happens all too often remains a mystery- Chicago Fed

6. Obscurantism and money, pt. III
• Because our knowledge is dispersed,
particular and limited, our ability to enact
effective public policy is severley
circumscribed – Von Hayek, TRTS
• The moral of the story is that there is
knowledge which is intrinsically forbidden
fruit; there are things which are better left
unknown - Mirowski

7. Banks vs. People
• 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
• any individual bank does, in fact, have to lend out the
money it receives in deposits. Bank loan officers can’t
just issue checks out of thin air; like employees of any
financial intermediary, they must buy assets with funds
they have on hand. I hope this isn’t controversial,
although given what usually happens when we discuss
banks, I assume that even this proposition will spur
outrage - Krugman

8. Banks vs. People, pt. II
• the United States was supposed to control the amount of
money issued by the Federal Reserve. In turn, the amount
the Federal Reserve issued controlled the amount of money
issued by the commercial banks which in turn controlled
the amount of money that individuals, businesses and
industry could get from the banks
• 'this statement is simply mindboggling. It’s so wrong I don’t
know where to begin. The Fed NEVER limits the supply of
currency. Never. Ever. To do otherwise would be to violate
its mandate in the Federal Reserve Act to provide for an
elastic currency and maintain stability of the payments
system'.

9. Lying pays off – QE; or, monetary vs.
fiscal policy
• QE the word
• QE the bank bailout
• QE as public policy

10. Conclusion
• Euthenasia of the rentier – ‘Keynes at his most
irresponsible’
• New Keynesians gatopardism.
• Monetarism is dead! Long live monetarism!