Introduction by Paul Krugman to The General Theory of Employment, Interest, and Money, by John Maynard Keynes – Seminar Paper

Krugman outlines the basic theories that john Maynard Keynes outlines in his book The General Theory. The majority of Krugman’s work is a study of each chapter of Keynes’ writing. Krugman praises Keynes’ writing style. During this overview Krugman also outlines which chapters of The General Theory should be read with relevance to economics and which ones can be purely read for entertainment. I found that to completely understand, or at least try to, most of Krugman’s writing it was important to first understand Keynesian economic theory.

“If your doctrine says that free markets, left to their own devices, produce the best of all possible worlds, and that government intervention in the economy always makes things worse, Keynes is your enemy. And he is an especially dangerous enemy because his ideas have been vindicated so thoroughly by experience.”

The basis of Keynesian theory is that the economy will not balance itself like Adam Smith believed; Keynes denies the idea of the hidden hand of the market but instead the economy is driven by consumption. If the economy is in a depression and there is mass unemployment then consumption must be increased to improve the economy. Krugman describes Keynes view and wrote “The economy’s automatic tendency to correct shortfalls in demand, if it exists at all, operates slowly and painfully” I believe that this is Krugman showing Keynes’ first step away from the classical economy of Smith.

Rather than the market being self-regulating Keynes says that instead of waiting for the economy to come back to normal it instead needs to be stimulated by the state. For example in the great depression in 1930s America Keynes argued that the way to bring the country out of the depression would be to decrease interest rates and for the government to inject income. With an injection of money into the economy this would increase consumption which in turn increases demand and creates jobs; therefore it would boost the economy. In fact at the end of Krugman’s article he mentions that the government spending and work programme that pulled America out of the depression was WW II. Chris mentioned in the lecture that wars are good for an economy because it allows a government to increase public debt by billions of pounds, which may sounds like a negative, but this then in turn stimulates the economy. For example the current costs of the Afghanistan and Iraq was reached over £20 bn in 2010.

In Krugman’s writing he breaks down Keynes’ theory to four broad bullet points :

•  Economies can and often do suffer from an overall lack of demand, which leads to involuntary unemployment

•  The economy’s automatic tendency to correct shortfalls in demand, if it exists at all, operates slowly and  painfully

•  Government policies to increase demand, by contrast, can reduce unemployment quickly

•  Sometimes increasing the money supply won’t be enough to persuade the private sector to spend more, and government spending must step into the breach.

Krugman also mentions that Keynes’ opposition to the classical economic theories was started by his rejection of Say’s Law. Say’s law said that recession is not caused by a failure in demand of unemployment. Say believed that an economy was improved by increasing production rather than increasing demand. It is clear that Keynes’ views are a polar opposite of Say’s law.

Krugman does criticise Keynes, he recognises that the economic time during which The General Theory was written was a rare economic time, where he says “unable to create employment no matter how much they tried to increase the money supply” and says that Keynes identified this as the state of the economy for the future. But we have not seen the low interest rates which plagued America through the 50s.

Overall Krugman sees The General Theory as one the of the most influential pieces of economic writing because Keynes changed the way in which people looked at economics and compares it to The Wealth Of Nations by Adam Smith in terms of importance. Krugman says “suddenly the idea that mass unemployment is the result of inadequate demand, long a fringe heresy, became completely comprehensible, indeed obvious.” And although not all of his ideas stand up now his effects on economics can still be seen today, especially during the current global recession.

Tom Wolfe - New Journalism

In The New Journalism Tom Wolfe tracks the development of a new journalism and the features game as he calls it. In chapter one of The New Journalism Wolfe tells the story of his move into journalism from leaving graduate school, which he seems to think is a leaping point for people to write a novel. In his early years Wolfe seemed to think that writing a novel was the overwhelming goal for any feature writers was to rent a cabin in Nebraska, disappear for 6 months and come back with a bestseller in toe. He gives the example of two features writers one being a man called Portis who Wolfe describes as “living out the fantasy” when he quits his job in London rents a fishing shack in Arkansas and comes back 6 months later with 2 bestsellers Norwood and True Grit.

Chapter two, called “Like a Novel” begins with an example the change in the way features were written. “Joe Louis: The King as a Middle Aged Man” tracked the fall of a world championship boxer into his middle aged life through several broken marriages. This article took a highly person look into his life telling the story through pieces of conversations that he had with his wife and that his friends had about him. Wolfe was shocked by this new way of writing a feature and says “what the hell is going on!” he sees the text article as a combination of a short story and a traditionally written feature article.

Wolfe sees Brelisn as a bit of a revolutionary within the world of features because he moves away from traditional columnist way of churning up the old news in a liquid oxygen powered bowling ball, and instead shocked the world by stepping out the door and finding a story. The example of Breslins work that Wolfe gives is a court case where the focus of the column is not the prosecution and the defence but instead what each party had on their pinky.

Tom Wolfe continues working through influential works that have inspired him and then seems to realise an important factor in feature writing, the role of the narrator. He says that his work on the small Sunday supplement New York made him work  to grab the reader’s attention by “Yelling in their face”. A story he did about a women’s prison called Nut Heaven, in which the women would yell names at passing men until their victim stopped and then they would “suggest a lot of quaint anatomical impossibilities for the kid to perform”. This gave Wolfe the idea to move the narrator out of a passive role and instead put them in the scene yelling along with the women. He said he liked this technique because it allowed the audience to talk to the characters.

Wolfe expands on the importance of the narrator when he has the idea of changing the way the narrator talks to match the interviewee. The example he gives is feature he wrote on the drover Junior Johnson who was a NASCAR driver who learnt to drive by running moonshine. Wolfe felt that that the “century old British-tradition” which was the style in which all other narrators would talk in would contradict the way the moonshiner talked. So instead the narrator matches the character voice, he calls this device the “downstage voice” as though voice is talking downstage from the character. By 1966 he says that a new era of writing style has been created not by novelists or short story writers but by Journalists.

In chapter 3 Wolfe begins to talk about what today we would recognise as Gonzo Journalism but Capote named them non fiction novels.  He describes 3 journalists who all put themselves inside their story: John Sack joined the army and went to Vietnam as a Journalist; George Plimpton joined a professional football team and Hunter Thompson “ran” with the Hells Angels.

In his final chapter he writes his four rules of new journalism after seeing how journalists have taken the technical aspects of writing away from the Novelist and put in their new set of rules. A basic overview of the 4 rules is:

Scene by scene construction. Rather than rely on second-hand accounts and background information, Wolfe considers it necessary for the journalist to witness events first hand, and to recreate them for the reader.

For example when I mentioned Sack, Plimpton and Thompson who all put themselves inside their work, and even risked their lives to get a fist hand account of the events.

Dialogue. By recording dialogue as fully as possible, the journalist is not only reporting words, but defining and establishing character, as well as involving the reader..

An example Wolfe gave of this would be “Joe Louis: The King as a Middle Aged Man”

The third person. Instead of simply reporting the facts, the journalist has to give the reader a real feeling of the events and people involved. One technique for achieving this is to treat the protagonists like characters in a novel. What is their motivation? What are they thinking?

This is what John Sack did in his book “M” which was his account of the Vietnamese war.

Status details. Just as important as the characters and the events, are the surroundings, specifically what people surround themselves with. Wolfe describes these items as the tools for a "social autopsy", so we can see people as they see themselves

This is noticeable at the start of The New Journalist when he introduces the New Yorker’s Newsroom.

Sigmund Freud

Sigmund Freud was born in Austria in 1856 and founded the discipline of Psychoanalysis. Freud thought himself more of a scientist than a philosopher, but had a massive influence on the field of psychology especially philosophy of the mind, ethics and religion. Freud described psychoanalysis as nothing more than exchanging words with your patient. Freud thought that by simply talking to his patients would reveal some kind of psychologically traumatic event in the persons past that they have repressed. Freud came to the conclusion that the traumas dated back to infancy and were usually related to sex. This lead him to his sexual development theories.

Freud explained that there are several stages of a child’s sexual development which can affect people in later life. The first stage is the oral stage which is from birth to 15 months, during this phase pleasure if focused on the mouth for example thumb sucking and biting things. Too much or too little gratification in this stage can lead to an oral fixation in later life

The second stage is the anal stage, from the age of 15 months to 3 years old. The most important part of this phase is toilet training which is a conflict between the Id and Ego, which will be covered later. If this stage is over emphasized then it can lead to a compulsive personality and if the parents do not put enough emphasis on this stage can lead to the opposite, so a messy or disorganised person.

The third stage, and the stage that Freud focused on the most is the phallic stage, which spans the age of 3-6 years old. In this stage children becomes aware of its own body and focuses on its own genitals. During this stage a male becomes sexually attracted to his mother which leads to resentment and jealousy towards his father. This jealousy leads him to fear his father because he fears that his father will retaliate by castrating him. This leads to the boy abandoning his attraction to his mother and he begins to identify with his father and becomes sexually attracted to women, This is the Oedipus complex and is a crucial stage in male development.

In his later work Freud expanded on his work on the unconscious mind by breaking the mind into three mental apparatus: the id, the ego and the super ego.

The id is the impulsive instinctual and acts according to the pleasure principle and seeks to avoid pain and gain pleasure.

The ego is the reason and common sense and its role is to balance between the basic impulses of the id while balancing this with the super-ego. As long as there is balance between the id and the super ego then everything is ok, but an imbalance can lead to neurosis.

The super-ego makes us act in a socially acceptable manner and works in conflict with the id and seeks for perfection and is what we call our conscience. An example of the super ego in society would be the church which sets out impossible rules which if not adhered to will lead to punishment in this case eternal damnation.

Freud used these three mental apparatus to explain different mental disorders caused by a lack of harmony between the three parts of the psyche, Conflicts between the id and ego lead to neurosis for example OCD and phobias. Conflicts between the id and super ego lead to depression and if the ego comes into contact with the external world psychosis appears because people loose their contact with reality.

David Hume video

Great discussion about David Hume's philosophy to celebrate his 300th birthday.

Britain's run out of talent?

So this years Britain's got talent ended yesterday, with singer Jai McDowall who probably deserved to win the competition, especially when looking at the rest of the finalists. In fact half of the acts in this years final were either a novelty or to be honest just not that good. I personally felt that the only good thing about this years competition was the inclusion of Michael Mcintyre to the judging panel, who provided some much needed comic relief to the judging panel.

Here is a quick run though of the acts in the final; 3 singers, a piano player, for some reason an organist, 3 dance acts; only one of the deserved to be in the final; then there was a teenage boy band and finally an impressionist to round up the group. Compared to some of the acts that we have seen on BGT in previous years this group of finalists were largely a disappointment and I think that the lack of Simon Cowell during the auditions shows that BGT could be on its last legs.

This quick blog is not only to say how bad BGT was this year but to also show an amazing act from the start of this years America's got talent. The act is called iLuminate and are probably the best thing I have ever seen on a talent competition. Here is their audition

J’Accuse, Zola, the Dreyfus Affair and a little bit of Stephen Lawrence.

J’Accuse was written by Emile Zola in 1898 in response to the imprisonment of a French military officer Alfred Dreyfus. J’Accuse was written as an open letter to the President of France exposing the errors in the trial, and accusing the French army of anti-Semitism. To understand the concepts within the article a little background of the state of France at the time is needed.

The French had recently been defeated by the Prussian army in the Franco-Prussia war, it was an embracing defeat for France, who believed themselves to be dominant over their opponents. The French people looked for an excuse as to why the war was lost and many came to believe that it was a conspiracy masterminded by Jews which had given the Prussians the advantage. This only helped to increase the anti-Semitism in France at the time.

In 1894, a French spy who worked as a cleaning lady in the German embassy found a suspicious document in a bin, it was found to contain French military secrets. The French army accused an artillery officer Alfred Dreyfus of handing to documents to their enemy and was stripped of his ranks and then imprisoned on Devil’s island, it is as bad as the name suggests.

Emile Zola was outraged by this obvious miscarriage justice and wrote J’Accuse to expose the lies that had sent an innocent man to be unjustly imprisoned.  In J’Accuse, Zola, gives his reasons for why Dreyfus is an innocent man.

In J’Accuse Zola said why he thinks Dreyfus was accused of the crime. The French army claimed that handwriting analysis from several experts showed that Dreyfus had written the letter, but because of the nature of the evidence, to show it would endanger national security. But Zola believed this evidence to have been falsified so that the French can blame their defeat to the Germans on Jewish conspirers. Dreyfus was a clever, successful, high ranking in the army and most importantly Jewish. This is why Zola believed Dreyfus to the perfect target for the army to blame for the crime. Zola then gives evidence that it would have been an member of the infantry who would have had the information in the letter that Dreyfus was accused of writing, Zola even goes as far as identifying the guilty man. But he said that for this man to actually be guilty it would mean that all of the generals involved in the court-martial would be guilty as well. By saying this I think Zola believes that he is fighting a lost cause because he knows even with the evidence he provides he knows that it is unlikely the guilty man will be brought to justice.

In 1899 Dreyfus returned to France for a re-trial, he was found guilty again but this time was given a pardon; after a second appeal 7 years later he was given an annulment of the guilty verdict.

Zola deliberately brakes French libel laws and challenges the man that have been accused to defend themselves and prove their innocence, Zola fled to London after this to avoid the libel claims. This tactic of deliberately defaming people in newspapers to try to gain justice though libel. One of the notable examples of this is an article published in the Daily Mail, declaring the murderers of Stephen Lawrence.

After the case was dropped by the Crown Court for insufficient evidence the Daily Mail published a front page with the headline “Murderers” and pictures of the 5 suspects in the case. The newspaper challenged the men to sue them after clearly being defamed, but the men did not, and haven’t till this day. This was an important case for journalists to study because it had an effect on newspaper laws, double-jeopardy laws and highlighted race problems within the metropolitan police. I have mentioned this example, not only because of its relation to Zola and J’Accuse, but also because after 18 years, two men are now standing trial for the murder after new evidence has been discovered. Stephen Lawrence new DNA evidence here is a link for more information about the new evidence and the trials.

Much like the Stephen Lawrence case Zola’s J’Accuse exposed many flaws in the legal system and brought to light a lot of prejudice and corruption. It is still considered to be one of the most influential pieces of journalism ever written.

He's Back

The former Mr Universe, actor and former Governor of California is back, this time in a comic book. Arnold Schwarzenegger has reinvented himself again, this time as the super hero The Governator. Arnie has teamed up with comic book legend Stan Lee to create the comic book and cartoon.

The character was inspired by the persona Arnie adopted during the 2003 elections, after the media began calling him Governator. Arnie has been known to take on some questionable roles in the past, just a few that come to mind include playing a pregnant scientist in Junior and Danny DeVito's twin in Twins. But for every poor comedy there has been a great action role.

Here's a trailer for The Governator, tell me what you think about it

It aslo looks like Arnie will be returning to the big screen in a few years, are you excited about his return?