mck@ratex.UUCP (Daniel Kian Mc Kiernan) (05/08/85)
Comment of Gadfly: >[...] Capitalism has its strong points, but the misery brought >about by boom-and-bust overproduction is not one of them. Business cycles are indeed not a strong point of Capitalism; nor are they a weak point. They are, in fact, not a point of Capitalism at all, but rather of government manipulation of the money supply which distorts patterns of savings and investment. Back later, DKMcK
ritter@spp1.UUCP (Phillip A. Ritter) (05/10/85)
In article <1146@ratex.UUCP> mck@ratex.UUCP (Daniel Kian Mc Kiernan) writes: > >Comment of Gadfly: >>[...] Capitalism has its strong points, but the misery brought >>about by boom-and-bust overproduction is not one of them. > >Business cycles are indeed not a strong point of Capitalism; nor are they a >weak point. They are, in fact, not a point of Capitalism at all, but rather >of government manipulation of the money supply which distorts patterns of >savings and investment. > > Back later, > DKMcK I admit that my knowledge of economic theory is limited, but I think that it is pretty clear that government manipulation of the money supply is NOT the cause, but rather they are a natural occurance. The reason I think that DKMcK believes that they are a result of government manipulation is that most of the governments attempts to smooth them tend to make them worse - the government tends to be re-active where any attempt to smooth business cycles REQUIRES predictive behavior. Phil Ritter For reference: One of the things that Marx was so upset about was (after explotation of workers) the Business cycles in capitalistic systems. He really beleived that his ideal society would not be subject to them. In the late 1920's, however, an economist name Kondratiev, working for the Soviet Union, studied one special type of business cycle, the so called ``50 year'' or ``long'' business cycles, in theoretical socialist and marxist systems. Needless to say, when he determined that business cycles would not only still exist, but be worse(!) in both cases, he recieved a very long fellowship to study the effects of hard labor in a cold climate! His work was almost lost (supressed?). [FYI - these ``long'' business cycles are now generally known as ``Kondratiev business cycles''] In the late 1930's, a western economist named Schumpeter picked up on some of Kondratiev's work as one part of a book he published (unfortunately, I can't remember the name). However, his work was published by an obscure publisher, written in a very hard to read style, and about one year after the work by Keynes, and thus leading to very little ``exposure'' for his theories. Schumpeter makes some very interesting arguments to explain the business cycles (especially the long cycles studied by Kondratiev) and some methods of dealing with them by attacking the causes (unlike Keynes, who simply proposes a way to attack the symptoms of business cycles). Marx claims business cycles exist in capitalistic systems. Kondratiev claims Marx's proposed systems don't eliminate them. Schumpeter, using the work of Marx and Kondratiev (and others) gives very convincing arguments that business cycles simply exist, government meddling and particular economic system notwithstanding. I suggest to anyone, marxist, socialist, capitalist, or other, to study both the works of Kondratiev and Schumpeter (even if you don't agree with everything they say, they are all interesting). They both add interesting insight into most other treatments of economics. -- Phillip A. Ritter
mms1646@acf4.UUCP (Michael M. Sykora) (05/11/85)
What possible reason could there be for their existence, apart from government manipulation of the money supply?
myers@uwmacc.UUCP (Jeff Myers) (05/12/85)
I suggest to anyone, marxist, socialist, capitalist, or other, to study both the works of Kondratiev and Schumpeter (even if you don't agree with everything they say, they are all interesting). They both add interesting insight into most other treatments of economics. -- Phillip A. Ritter Indeed. Also check out Ernest Mandel's treatment of long waves in *Late Capitalism*. jeff m
mmt@dciem.UUCP (Martin Taylor) (05/21/85)
A very interesting article that suggests economic cycles are very strongly
controlled by almost "physical" processes is:
Swings, Cycles and the Global Economy. Cesare Marchetti, New Scientist,
2 May 1985, pp12-15.
I know few net contributors have time to read before adding their views
to a controversy, but the New Scientist should be readily available, and
the article is quite easy to read as well as being reasonably short.
--
Martin Taylor
{allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt
{uw-beaver,qucis,watmath}!utcsri!dciem!mmtec120bgt@sdcc3.UUCP (ANDREW VARE) (05/26/85)
In article <1146@ratex.UUCP>, mck@ratex.UUCP (Daniel Kian Mc Kiernan) writes: > > Business cycles are indeed not a strong point of Capitalism; nor are they a > weak point. They are, in fact, not a point of Capitalism at all, but rather > of government manipulation of the money supply which distorts patterns of > savings and investment. > > Back later, > DKMcK As an addenum, note the central bank's behavior just before the Great Depression. Almost no open market activity on their part, even in the face of a money supply contraction in the order of 25% in three years! Hardly what I call responsible monetary management! Andrew T. Vare