Question for DUers particularly economists

[malaise]

To what extent has the undermining of Economics Departments and the concomitant rise of well funded Business schools facilitated the culture of greed and deregulation since the 1980s. Was this designed to destroy the Keynesians.

[Captain Hilts]

1. Look to the Univ. of Chicago as the prime culprit. nt

[FormerDittoHead]

4. Yes. This is the source. Check it out. n/t

[Mike 03]

5. That is the answer I hear a lot on Bloomberg.

I'm NOT an economist, but I have heard some very bright economists, particularly those in Europe and the UK, express extreme criticism of "The Chicago Boys" (quants, basically) and their over-reliance on computer models and assumptions, that led to the sort of dangerous use of leverage and so forth, so I have to agree with MookieWilson's answer.

[T Wolf]

2. I think, to an enormous degree. The rise of business majors who create nothing

except wealth, rather than actual products that better people's lives is indicative of the mistaken priorities our nation has fostered.

Are we headed to a future when the only product produced is money? You can't eat that shit.

Whether it was done purposely or not, it certainly has been effective. The financial wizards have been totally successful in creating a system that only they understand, and can exploit.

[malaise]

8. I always discourage students from reading for Management

Degrees or MBAs. I tell them to study something real.

I found a real propaganda effort to move students to management when we were being bombarded with the neo-liberal agenda. The irony of it is that 30 years later, the group losing jobs are the said management studies and business school graduates.

You make a good point re the financial wizards. They sure fucked up the system with complicity from right wing and center-right politicians.

[gravity]

3. I will say that the developments were in good intention

Keynesian economics had some flaws in it at the time so it allowed for other schools of economic thought to arise.

They believe that free markets are self correcting, and that promoting investment and lowering taxes will help grow the economy. Some of these ideas worked to a certain extent and the economy was growing well, so it was considered the accepted theory.

I think that this financial crisis will change the way economics is taught in this country, and it will return to a more Keynesian approach emphasizing the need for regulation.

The day that Paulson asked for 700 billion was the day that neo-liberalism died.

[malaise]

7. I agree with you to a large extent but while neo-liberalism is comatose

it isn't quite dead yet or Bush would not be working overtime to kill the Unions. That said the neo-liberal model is on its death bed in a terminal state.

[Mike 03]

6. I've heard many economists overseas argue that quantitative analysis, as taught

at the Chicago school, bred a kind of arrogance that may, as a secondary effect, led to the types of abuse you are probably talking about.

ON EDIT:

They've done some good things too, though, notably in Latin America in the late 80s and early 90s.

And they've had some screw-ups too, notably in Latin America in the late 90s.

[malaise]

9. We had a B-fight here between the social-democrats , Plantation school dependency theorists

and Marxists versus the Chicago school boys. The former political scientists, sociologists and economists are having a damn good laugh at the neo-liberals these days. Vindication is a wonderful feeling. I'll be toasting those who died and missed this historical moment over the holidays.

[hfojvt]

10. Keynes sorta got destroyed in the 1970s by reality

there was no good way to deal with stagflation with Keynesian economics. Of course, government policy in the 1970s was not all Keynesian because you had monetarists in the FED (good old Paul Volcker, and now he's suddenly one of the good guys advising Obama?). Of course, I studied graduate economics at Nebraska where the economics department was in the business school, but there was still a stronghold of Institutionalists there (drawing more from Veblen and Clarence Ayres than Keynes with some John R. Commons as a minority view.) Supply-side economics won a huge victory in the political world and was thus adopted wholesale by the Republican party.

After losses in 1980, 1984, and 1988, Reaganomics was adopted by the new Democrats. Clinton ran as a Reaganite. He attacked Bush Sr. for raising taxes and he, like Reagan, promised a tax cut for almost all. Gore sorta did the same thing, responding to Bush's tax cut plans with a tax cut of his own. This after Clinton caved to the Republicans on capital gains and inheritance taxes in 1998. Obama continued this, campaigning on a tax cut for 95% of taxpayers and attacking McCain for promising tax increases.

Keynesian economics though is separate from regulatory issues, which pretty much fell to the American obsession with growth and winning the rat race. IMO, Clinton also added to this more than he fought it.

edit for journal link

http://journals.democraticunderground.com/hfojvt/74

[malaise]

12. Thanks for your link

Don't you think the American obsession with growth and winning the rat race was promoted by the Chicago school. The structural adjustment model forced on Jamaica was clear - devalue, divest and deregulate.
Only right wing morons like the Chamber of Commerce and Seaga didn't see it meant the growth of poverty and the destruction of any notion of people- centered development.

[hfojvt]

14. I think growth is promoted by almost everybody

the international development model I think is more pragmatic. It is sold to people as 'development' but its primary purpose is corporate profit. If it profits some rightwing elite, they are happy with it.

[Beausoleil]

11. Here's a good writeup on Friedman-style market absolutism

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=409305&mesg_id=409305

[malaise]

13. Very good

Thanks.

I think any discussion of growth that does not begin with people-centered development is doomed to failure.

[applegrove]

15. I think so. Business schools changed how they taught MBAs in the 1990s according to the

economist magazine. They were taught to treat government like a competator and to see the fight to become less regulated as a way to increase profits.