Where are we going in life?  The answer has economic implications but economics alone cannot answer it

Is our economic system struggling on many dimensions? Is the practice of economics responsible for the problems in the economy? Can we identify the major cause of these problems? In a bold and provocative new book, Victor Claar and Greg Forster give a resounding “yes” to these questions, targeting John Maynard Keynes as the major culprit for our modern malaise.

The authors argue that we live in an age of anxiety, with no clear understanding of the people we are becoming. The modern economy excels at producing goods and services, but both the moral framework under which we operate and the discipline of economics have been badly distorted by Keynes’s influence. With such broad pronouncements about our world, one might expect a screed, a moral diatribe with little analysis. Such is not the case. The Keynesian Revolution and Our Empty Economy is a thoughtful, carefully argued intellectual history of modernity and of the generally accepted analytical tools used to describe and critique it. The importance of teleological assumptions, or commitments to that which one believes is intrinsically good, drives the analysis. At the heart of the book is the authors’ argument that all people operate according to either an implicit or an explicit teleology. They also argue that the existing teleology of the modern American economy is warped, having been perverted by John Maynard Keynes’s influence.

Claar and Forster categorize Western systems of thought into three fundamental teleological categories. The classical world of Greece and Rome operated under the nature paradigm, wherein humans were a part of nature and nature was purposeful. Such a perspective implied moral obligations to live a virtuous life, with virtue inherent in the natural order. Not all people were seen as equally capable of conforming to the moral order, however, with women and slaves considered notably different than free males in their moral understanding and moral obligations.

The nature paradigm was followed by the God paradigm, which dominated the Middle Ages. Conformity to God’s purposes was the most important moral obligation. This obligation encompassed all of life, so economic matters were clearly important. Though a conception of the Christian God for the most part drove consideration of moral obligations, it also affected the relative role of political and ecclesiastical institutions. Christianity introduced a more linear view of history, but it did not endorse a completely optimistic perspective of human progress. It did, however, provide a framework for the definition and enforcement of property rights and the rule of law, both of which are crucial for economic growth.

The Enlightenment brought the reason paradigm, where “the proper goal of life is to join in this unfolding enterprise” (p. 259). Economic growth was seen as possible under this paradigm, and the use of reason was an important and valuable source of innovation. There was moral content to the reason paradigm; people were obligated to participate in building a better life for all. Claar and Forster recognize that the Enlightenment brought much that is good, but they also fault it for its incomplete view of humankind.

And so we arrive at the modern world. According to Claar and Forster, our world operates without an encompassing paradigm other than that introduced by Keynes, an end goal that is perverted and leaves out much that is meaningful in life. This paradigm is heavily influenced by the discipline of economics, which struggles with competing visions of what it is about.

The authors see economics as moving away from its moral groundings almost as soon as it became a discipline separate from other academic fields. They see David Ricardo, Nassau Senior, and John Stuart Mill as both clarifying the dimensions of economics (probably a good thing) and changing it to a supposedly completely positive discipline (definitely a bad thing). Those changes were minor, however, compared to the changes made under Keynes’s influence. Claar and Forster see his writing as prominent in introducing new concepts to business-cycle theory and in making a case for consumption as the moral grounding for human endeavors.

Thus, two things were going on simultaneously in economics at the time Keynes was writing in the 1930s and 1940s. It was becoming more widely accepted that the discipline was a completely positive discipline, making no moral claims. At the same time, Keynes’s arguments that the consumption paradigm should be the framework for all analysis were also accepted.

In his arguments for a robust normative framework, one with consumption as the only substantive goal, Keynes relied heavily upon his experience with the Bloomsbury group. Made up of Keynes and his associates in interwar England, the group’s members were explicitly committed to seeking immediate pleasure and saw existing moral concerns as outmoded. Thus, according to this view, there is no need to evaluate our appetites because all human desires are of equal value. The move to substitute consumption for production didn’t mean that production is unnecessary, just that production has no moral value in itself.

In this context, Homo economicus, the idea that humans can be analyzed as rational, narrowly self-interested maximizers, became more than an “empirical model to be investigated” and is instead “a social model to be imposed” (p. 95). Therefore, the idea of people as autonomous consumers became the new normative vision of the discipline as well as the dominant paradigm of the larger economy.

Claar and Forster argue that the consumption paradigm’s new agenda was extremely influential but not recognized as a moral crusade by those who translated Keynes for the masses. Keynesianism, as interpreted by Sir John Hicks, Alvin Hansen, and Paul Samuelson, was simply a technical innovation, a formal creation of the field of macroeconomics, wherein the consumption function and the paradox of thrift are tools for understanding and ameliorating business cycles. Nevertheless, the work of Keynesian economists was driven by a thorough-going commitment to the view of people as bundles of desires and the view of production as valuable only in its service of consumption.

The book also sees the consumption paradigm as a useful tool for those who wanted to expand government and as a dominating worldview for the economy as a whole. Authors such as John Kenneth Galbraith used Keynes’s worldview to argue for an expanded role for government to manage the “animal spirits” that it was claimed determine most of economic life. Both the Chicago and Austrian Schools made attempts to reform these trends, but they failed to deal with the fundamental change in the wider goals of economic activity, and both schools accepted the purpose of economics as finding the means to satisfy hedonistic desires.

In summary, The Keynesian Revolution and Our Empty Economy makes a strong case for the importance of teleology. It also criticizes the present state of the economy and the discipline of economics. But, interestingly enough, Claar and Forster do not close with as strong an agenda for reform as one might expect from the first ten chapters. They recognize pluralism as an important feature of the modern economy and argue that “[w]e must return to transcendence, but we must not impose a single, ultimate world view. We must reject both the hegemonic homogeneity of the older paradigms and also the equally hegemonic paradigm of the Consumption paradigm” (319).

The authors are careful historians and see danger in the use of violence to enforce a particular worldview. Therefore, they argue that the commitment to the concept of human striving for intrinsically good ends can be an adequate grounding for economics and economic society. “So the challenge facing economics is not whether the transcendent can be admitted. It already is. The question is how to admit it in a pluralistic context where people have different views about the transcendent, and we refuse to impose uniformity” (310). The Keynesian Revolution and Our Empty Economy is an important book that provides a fascinating train of logic and evidence about the development of economics and the moral anxiety the authors see as endemic to our modern economy. It is well worth the time to pursue their arguments. Several issues exist, however.

First, where does their analysis leave modern economics? Is it a useable endeavor? Or does its denial of ends and its acceptance of the consumption paradigm in combination mean that it is a dangerous tool? Relatedly, is it possible that some economists use Homo economicus as a tool of analysis, as a starting point for their work, but don’t claim that the model explains ultimate reality? But if that is the case, how does one determine which economic analysis to use and which to disregard? And is Claar and Forster’s analysis of Keynes and his consumption paradigm accurate in terms of the paradigm’s influence on economics? Does the paradigm infect all parts of the discipline? Is microeconomics as much a part of the consumption paradigm as macroeconomics?

Despite these unresolved issues, the book is well worth reading. It offers bold arguments, logic, and evidence for the necessity of moral understandings and moral commitments in economics. It also provides a very useful framework for engaging these issues.

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Trump Campaign Slams SPLC's 'Division and Fearmongering' Amid Coronavirus Crisis

Last month, the far-left Southern Poverty Law Center (SPLC) released its annual list accusing conservative and Christian groups of being "hate groups" on par with the Ku Klux Klan. In that list, the SPLC attacked President Donald Trump no fewer than 66 times. The leftist group later went on to accuse the president of inciting anti-Asian harassment by countering Chinese Communist propaganda and referring to the coronavirus as Chinese. Both the White House and the Trump campaign have responded to the smear group's attacks.

As I recount in my book Making Hate Pay: The Corruption of the Southern Poverty Law Center, the SPLC has weaponized its history as a civil rights group that bankrupted the Ku Klux Klan in order to smear its political opponents and scare donors into writing big checks. Its list of "hate groups" is inflated and politically biased, but it bills that list as the gold standard on hate, encouraging Big Tech, corporate America, and the media to demonize and cut off from polite society whichever organizations end up in its crosshairs.

President Trump has worked with organizations the SPLC unjustly smears as "anti-immigrant hate groups," "anti-Muslim hate groups," and "anti-LGBT hate groups." Both the White House and the Trump campaign powerfully countered this narrative.

"President Trump’s leadership has lifted countless people from minority communities out of poverty, elevated LGBT Americans to the highest ranks of his Administration, and championed religious freedom for all faiths across the nation," Ken Farnaso, deputy press secretary for the Trump campaign, told PJ Media. "The SPLC’s division and fearmongering are counterproductive as the American people are uniting behind the President to defeat the coronavirus and continue to keep America great."

Similarly, White House spokesman Judd Deere, who as an openly gay man is one of the LGBT people Trump has elevated, slammed the SPLC as a "far-left smear organization" and condemned its attacks as "disgusting."

In a statement to NBC News, Deere explained that Trump has "fought for inclusion and repeatedly condemned hate and violence."

"While the radical left has pushed false accusations that LGBTQ Americans are threatened, the president has hired and promoted LGBTQ Americans to the highest levels of government, including positions at the White House, Cabinet agencies and ambassadorships," Deere added. "He launched a global campaign to decriminalize homosexuality. … And the president has made the bold declaration that we are committed to ending HIV transmissions in the United States within 10 years."

Yet the SPLC considers such actions irrelevant so long as Trump works with conservative Christian groups like the Family Research Council (FRC) and Alliance Defending Freedom (ADF) or national security groups such as ACT for America or the Center for Security Policy. Any association with these falsely accused "hate groups" is grounds for condemnation in the eyes of this leftist attack dog.

Never mind that liberal activists like former ACLU President Nadine Strossen and Military Religious Freedom Foundation Founder Mikey Weinstein have rebuked the "hate group" label against ADF as false and deceptive. Never mind that an increasing chorus of voices from both the right and the left has exposed the SPLC's hate labeling as a scam. Never mind that the "hate group" accusation actually inspired a man to attempt to carry out a terrorist attack at FRC's Washington, D.C. headquarters.

As President Trump faces the coronavirus crisis, marshaling America's medical experts and partnering with the private sector to battle the twin threats of disease and recession, the SPLC is throwing cheap shots, using fearmongering as a political weapon and a fundraising tool. When Americans are already on edge, the SPLC terrifies them with deceptive reports about "hate groups" that demonize the president in the midst of a crisis.

President Trump has too much on his hands to respond personally to these ridiculous attacks, but his White House and campaign rightly exposed the fearmongering as false. Americans already have more than enough to worry about.

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AL: Government cannot block abortions during coronavirus panic, judge rules

A federal judge has ruled that Alabama cannot ban abortions as part of the state’s response to the coronavirus.

US district judge Myron Thompson on Sunday issued a preliminary injunction sought by clinics to prevent the state from forbidding abortions as part of a ban on elective medical procedures during the Covid-19 outbreak. He said abortion providers could decide whether a procedure could wait.

The US Center for Reproductive Rights filed emergency lawsuits in five states to thwart moves by legislators to ban abortion during the pandemic.

In the Alabama court judgement, Thompson said that based on the current record, the defendants’ efforts to combat Covid-19 did not outweigh the lasting harm imposed by the denial of an individual’s right to terminate her pregnancy, by an undue burden or increase in risk on patients imposed by a delayed procedure, or by the cloud of unwarranted prosecution against providers.

The ruling was a victory for abortion rights advocates who are fighting efforts in Texas, Ohio, Alabama and other states to prohibit abortion services during the Covid-19 pandemic. States have argued they need to conserve medical equipment and potential hospital beds during the outbreak.

Abortion clinics in Alabama said they sought the injunction after the state refused to clarify that the clinics could continue to operate.

Alabama had ordered a postponement of medical procedures except in cases of a medical emergency or to avoid serious harm from an underlying condition or disease, or necessary as part of a patient’s ongoing and active treatment.

A lawyer representing clinics praised the decision. Preventing someone from getting an abortion did not do anything to stop Covid-19, it just took the decision on whether to have a child out of their hands, said Alexa Kolbi-Molinas, a senior staff attorney at the American Civil Liberties Union’s reproductive freedom project.

The Alabama attorney general’s office did not immediately respond to an email seeking comment.

The US ruling came as the World Health Organization was being urged to declare abortion an essential health service during the pandemic. It earlier issued guidance notes advising all governments that women’s right to sexual and reproductive healthcare “should be respected irrespective of Covid-19 status, including access to contraception and safe abortion”.

There have been growing calls for governments to protect abortion services during the crisis. Last week, 100 NGOs issued a joint statement imploring European countries to find new ways to help women access services during lockdown, such as through online consultations and, as introduced in the UK last month, by allowing them to take abortion pills at home.

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Australia: Pell injustice shows why we need to restore fairness to the law

The unanimous decision of the High Court quashing George Pell’s convictions was the end of the matter for Australia’s most ­famous Catholic priest. But to understand the dreadful state of justice inside our courts, you need to go back to where this courtroom drama started.

The decision by the primary judge preventing Pell’s legal team from using psychological evidence about the credibility of the complainant points to a much deeper dilemma about how the accused can defend themselves from allegations of sexual assault in 2020.

Pell had the wherewithal and the resources to pursue his wrongful conviction to the country’s highest court. But spare a thought for others in jail today who may have faced what Pell did, and are not so well-equipped to appeal to the High Court. It is likely Pell is the tip of the iceberg.

My colleague, Chris Merritt, ­deserves praise for exposing this ­little-known and devastating weakness at the heart of the Pell prosecution. Last September, Merritt revealed for the first time that Pell’s accuser had suffered long periods of psychological problems requiring treatment. But Victoria’s Evidence Act meant that not only were Pell’s lawyers unable to access details of those psychological issues and treatment, but the jury could not be made aware of them, or even the fact Pell’s lawyers asked for them. The public was also in the dark about this until Merritt’s careful reading of Pell’s application for special leave to the High Court.

It is high time that more of us understand how the legal system, not just in Victoria, has become dangerously skewed against defendants in sexual assault cases. It stems from well-intentioned but ill-considered amendments to evidence laws in 2006. In an attempt to ease the undoubted stress and pain caused to complainants of sexual assault from being cross-examined on their past psychological history, section 32D of the Victorian Evidence (Miscellaneous Provisions) Act makes it almost impossible for a defendant to gain access to a complainant’s psychological records or bring evidence of those issues to a jury.

The section sets up an impossible circular threshold: without having access to the relevant evidence, defendants must convince a judge that they cannot properly defend themselves without putting the psychological evidence to the jury.

There is, undoubtedly, a need for sensible, measured steps to ­address the fact sexual assault is under-reported, and the court process is traumatic for its victims. But when these cases are often contests of credibility, it is neither ­sensible nor measured to strip a defendant of the ability to adduce relevant psychological evidence in that contest.

Pell’s legal team had one hand tied behind its back from the start. This was compounded by the flawed judicial method adopted by Chief Justice Anne Ferguson and Court of Appeal president Chris Maxwell. Without the benefit of seeing and listening to the complainant give evidence at trial, the majority decided that he was a truthful witness, that he was not a liar or a fantasist.

The majority’s reliance solely on the complainant’s credibility to uphold the jury’s verdict against Pell delivered a double whammy — it meant Pell faced a reverse onus to prove to the jury that the complainant was lying, but Pell could not satisfy that reverse onus by tendering psychological evidence about the complainant that may have helped to prove that.

The majority’s arrogance was breathtaking because they knew about the complainant’s history of psychological treatment but didn’t mention it in their decision to ­uphold Pell’s conviction. Indeed, their approach was so simplistic as to be reckless: by relying exclusively on the credibility of the ­complainant, they effectively discharged themselves from having to carefully consider all of the other evidence that raised reasonable doubts as to whether the ­alleged sexual assaults could have occurred.

Human nature is fallible. Alleged victims do lie. In the ACT last year, Sarah-Jane Parkinson was sentenced to more than three years’ jail on charges of making a false allegation of rape against her former husband. Studies show that witnesses can also unconsciously lie, genuinely believing something to be true even if it is not. Alleged victims might also be co-opted by others for a cause. Some or all of that may have happened in the Pell case.

Yet ill-considered sections in Victoria’s Evidence Act, that prevent the tendering of psychological evidence, have cemented into law the dangerous tenor of our times. When zealots in the #MeToo movement and Victorian Premier Daniel Andrews say that they believe all victims, they knowingly chip away at a court system that is based on evidence, the presumption of innocence, the burden of proof and due process. Just straight to conviction and jail, then?

Injustice has been legislated into the NSW legal system too. In a recent case, a trial judge was forced, by NSW evidence laws, to exclude a woman’s proven history of making false sexual assault claims. Despite the trial judge pleading for these brutally unfair laws to be reformed, the NSW ­Berejiklian government has done nothing.

While we wait for the outcome of the defendant’s appeal of the trial judge’s decision, which was heard last week, we are left with the dreadful likelihood that other defendants have been wrongly accused, tried and found guilty where alleged victims have told lies about alleged sexual assaults for revenge or simply because they were suffering from delusions or confusion arising from psychological conditions.

This is what happens when, with the best of intentions, we depart from first principles. In his 1760 Commentaries on the Law in England, the great common law scholar William Blackstone stated the principle that our legal system is founded on: “It is better that 10 guilty persons escape than that one innocent person suffer.”

Some misguided souls might say that Blackstone’s ratio is a get-out-of-jail card for rapists; that it needs to be reversed or restrained to deliver victims justice. In other words, the Blackstone 2020 Victorian edition should read “it is better that an innocent man be punished than a complainant have his or her credibility challenged”.

The #MeToo advocates tell us that men have been getting away with sexual assault for years. That is correct. Some say it is about time the tables were turned. That is wrong. While the desire for revenge is understandable — particularly among those who have suffered greatly — it surely cannot become a new organising principle on which society, and our legal system, is based.

Even for those whose motivating principle is more noble, wanting to bring an end to sexual assault, unbalanced and unfair rules of evidence are not the right way to get there. Substituting one form of injustice for another is not justice, and it is not noble. Once you allow systematic injustice in sexual assault cases, on the ground that Blackstone’s maxim is outdated, where do you stop? Which group of defendants will next be deprived of the means of defending themselves because their alleged crime is under-reported and needs to be reined in?

Who will next be deemed unworthy of basic principles that underpin our legal system? As ­Pell’s case shows, there, but for the grace of God, go I.

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Political correctness is most pervasive in universities and colleges but I rarely report the  incidents concerned here as I have a separate blog for educational matters.

American "liberals" often deny being Leftists and say that they are very different from the Communist rulers of  other countries.  The only real difference, however, is how much power they have.  In America, their power is limited by democracy.  To see what they WOULD be like with more power, look at where they ARE already  very powerful: in America's educational system -- particularly in the universities and colleges.  They show there the same respect for free-speech and political diversity that Stalin did:  None.  So look to the colleges to see  what the whole country would be like if "liberals" had their way.  It would be a dictatorship.

For more postings from me, see TONGUE-TIED, GREENIE WATCH,   EDUCATION WATCH INTERNATIONAL, AUSTRALIAN POLITICS and  DISSECTING LEFTISM.   My Home Pages are here or   here or   here.  Email me (John Ray) here.  Email me (John Ray) here. 

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