On the Topic of Post-Keynesianism

“Post-Keynesianism” has an intriguing pedigree, even by Keynesian standards. Based on what I had researched about that heterodox economic school of thought, Post-Keynesianism strives to transcend the ideological dogmatism inherent within Liberal Capitalism. It is critical of the mainstream variants of Keynesianism just as it is also skeptical of actual mainstream Neoclassical Economics in general. Its arguments uphold the desire to preserve the “General Theory” espoused by John Maynard Keynes. The belief that there are basic premises behind economics which are shared by all economic types of governance, regardless of its ideological orientation.

Granted, it does seem like an odd place to be discussing a particular variant of Keynesianism on a Blog devoted to Socialism. That was the thought I had at first while researching it as part of today’s post. But the historical record is clear about Post-Keynesianism drawing influences from Marxist interpretations of Socialism. A synthesis between Marxism and Keynesianism is probably the best way to describe Post-Keynesianism. It focuses more on “effective demand” being the determinant driver of Market, Mixed and certain low-tier Planned Economies. Command Economies, especially the variant promoted by the Work-Standard, are not included in their studies. But since the Work-Standard does in fact cover Command Economies and Planned Economies, I had to investigate Post-Keynesianism as part of my own studies into economic history in the wake of Bretton Woods.

It was repeatedly stated on various earlier posts that the death of Bretton Woods shattered the consensus regarding Keynesianism. Just as “New Keynesianism” developed in response, so too did Post-Keynesianism. Where Post-Keynesianism differed from New Keynesianism was its fixation on Kapital. There is a greater emphasis on monetary policy and how it interacts with fiscal policy and by extension economic policy. The emphasis on Kapital has led to two distinct offshoots which arose as their own separate developments, but nevertheless are related to Post-Keynesianism because of a shared intellectual lineage. Those two are “Modern Monetary Theory” (MMT) and “Monetary Circuit Theory” (MCT).  

So far in my personal studies of Post-Keynesianism, there have been topics of interest which caught my attention. One of them is the research of the Irish economist Philip Pilkington. Pilkington introduced a different way of calculating the “potential output” of an economy through a statistical and almost intuitive methodology of estimating and understanding it. He outlined this idea in a paper entitled How Far Can We Push This Thing?. Key to his research is the need to take into consideration the “capacity utilization” in relation to the GDP Rate. I had arrived at very similar conclusions, except I did so from the purview of the Work-Standard by means of the “Total Economic Potential” (TEP). Personally, the equations for the GDP Rate never accounted for the potential of the nation-state, let alone a single firm, to determine how much is capable of being created.

If there is any area which I can agree with Pilkington regarding economics, it is the proliferation of meaningless, counterproductive discussions of economics in today’s discourse. Serious research, not to mention experimentation, in most areas of economics is lacking. Monetary economics alone has proven itself to be a dearth in innovative proposals comparable to those promoted by the Work-Standard. Part of this has to do with the unwillingness of most economists from different schools of thought to apply a holistic analysis of any economy. It is a lot easier to focus on one specific area of an economy than the entire economy. Moreover, it also does not help that Parliamentarian governance deters such attempts at deeper understanding due to the prevalence of opposing parties and lobbying groups with vested interests in the implementation of governmental policies.    

Where I ultimately differ from Pilkington—and this is an important issue in regards to any form of Keynesianism—is whether we can go beyond Fiat Currencies pegged to Debt. It is obvious to me that there his ideas are more resonant with MMT than the Work-Standard, even if the intentions regarding both are mutually separate and even opposed in numerous areas. Even so, I am convinced that there is something to be inferred from Pilkington’s research in regards to Post-Keynesianism. His writings alone have advocated for the need to go beyond the Liberal Capitalist conception of economic theory as it is generally understood in universities, think tanks, financial markets, commercial firms and governmental bodies. That is at least one other thing which I can sympathize with. 
Pilkington does maintain a blog, Fixing the Economists, where he has disseminated his ideas for the past decade. I am mentioning his blog here because there is a body of research which I would like to explore on my own personal time outside of my own Blog. Even though Pilkington’s blog has not been updated for over a year now, I am still of the belief that supporting other heterodox economic theories favorable to the Work-Standard is important. 

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