October 29, 2019

Why economists always seem to lose the fight against inequality

Comment on Editor on ‘Rising global income inequality is not inevitable in the future’

Blog-Reference and Blog-Reference

David Ricardo defined the task of economics back in 1821 “To determine the laws which regulate this distribution [between rent, profit, wages], is the principal problem in Political Economy.” (Principles, p. 5)

Ricardo failed and so did economists to this day.#1 Neither orthodox nor heterodox economists know what profit is and therefore, they cannot solve the “principal problem in Political Economy”.

The reason for the failure of economists is trivial: economists are too stupid for the elementary algebra that underlies macroeconomics.

The axiomatically correct macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M). With regard to the state, the Profit Law boils down to Q≡G−T, i.e. Public Deficit = Private Profit.

Public deficit-spending/money-creation is a free lunch program for the Oligarchy.#2 The fact is that the so-called free market economy is already for a long time on the life support of the State. Profit is in the main produced by public deficits. Financial wealth grows in lockstep with public debt. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, judiciary institutions.#3

Needless to emphasize that economists, too, work for the Oligarchy. Naive MMTers, who present themselves as Progressives and propagate deficit-spending/money-creation do not know or do not care that their policy is to the detriment of WeThePeople.#4 They instead enthuse about the blessings of a Job Guarantee or a Green New Deal.

It is economists themselves who work ― intentionally or unintentionally does NOT matter ― for the growing inequality of income and wealth.
Egmont Kakarot-Handtke


#1 See cross-references Profit/Distribution
#2 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#3 Criminals and the monetary order
#4 Dear idiots, MMTers are Wall Street’s agenda pushers

Related 'Econogenics in action' and 'How the 99 percent can bring overall profit of the 1 percent legally down to zero in 2017' and 'Economists’ periodically recurring crocodile tears about inequality'.
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Home > Uncategorized > Rising global income inequality is not inevitable in the future

Rising global income inequality is not inevitable in the future

October 28, 2019Leave a commentGo to comments
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  1. Ken Zimmer-man
    October 28, 2019 at 1:38 am
    Reply
    Another indicator that the US, despite the propaganda has not fostered income and wealth fairness for about 40 years. Historically, that’s been the case for well over half the life of the nation. The question: how do we change the long- and short-term trends for the US?
  2. Helge Nome
    October 28, 2019 at 4:15 am
    Reply
    By We The People demanding it Period
    • Ken Zimmer-man
      October 28, 2019 at 5:06 am
      Reply
      According to the polling ‘we the people’ have demanded it since the 1970s. And I remember protests, letters to legislators, and hundreds of petitions over the last 50 years demanding it. Yet US voters keep returning to office legislators and presidents who ignore these demands. It’s time ‘we the people’ become a lot tougher with its demands and the force they exert on politicians. Do they have the courage and strength to do this?
      • Craig
        October 28, 2019 at 4:24 pm
        The people don’t see a simple, workable and transformational solution that is decidedly in their self interests, that’s why. That’s what the 50% Discount/Rebate policy at retail sale awakens them to. MLK’s freeing civil rights movement awakened self interested purpose in people, and the freeing effects of the new monetary paradigm will awaken us all and give us the purpose of ending monetary, financial and economic slavery.
  3. Jorge Buzaglo
    October 28, 2019 at 9:12 am
    Reply
    Some pessimists affirm that war is the only great leveler. Or, somewhat more rationally, we could say that extreme inequality leads to war — external aggression defuses the internal tensions caused by inequality. War induces/requires internal cohesion, which induces/requires reduced inequality. However, modern (e.g. nuclear) war is not at all “labor-intensive”, and would not “solve the problem” either.
    • Ken Zimmer-man
      October 28, 2019 at 9:59 am
      Reply
      Jorge, war today may not be labor intensive, but up to and including the war in Vietnam, war is very labor intensive. In the US, even today many poor young people or young people with few job prospects join the military. That was even more the case during previous wars. And while WWII decreased both economic inequality and class distinctions, World War I had only slight effect on both of these. The Great Depression effected both more than did WWI. And seldom, in my view does the chaos of war defuse the internal struggles in a nation before the war. The compressed violence, blood, and terror of war mostly just adds the additional problems of mental health and caring for the wounded. I’ve participated in three wars and studied them for most of my life. They seldom cure anything.
      • Egmont Kakarot-Handtke
        October 28, 2019 at 10:21 am
        Ken Zimmerman
        The macroeconomic Profit Law Q=Yd+(I−S)+(G−T)+(X−M) tells one that government deficit-spending/money-creation is the main driver of profit. Thus the Oligarchy’s financial wealth and public debt grow in lockstep. For details see cross-references Profit/Distribution.
        Egmont Kakarot-Handtke
      • Jorge Buzaglo
        October 28, 2019 at 3:01 pm
        My idea and warning were that if nothing is done to rampant inequality, the consequence might in the end be global war(s). An absolute evil, of course.
    • Ken Zimmer-man
      October 29, 2019 at 2:58 am
      Reply
      Jorge, sorry about my misunderstanding. I agree about war being one of the very likely results of “rampaging” economic inequality.
  4. Ken Zimmer-man
    October 29, 2019 at 3:05 am
    Reply
    Egmont, I suggest we eliminate both profit and government debt from all economists’ equations. Both were invented for nefarious purposes.
    • Egmont Kakarot-Handtke
      October 29, 2019 at 8:24 am
      Reply
      Ken Zimmerman
      You say: “Another indicator that the US, despite the propaganda has not fostered income and wealth fairness for about 40 years. Historically, that’s been the case for well over half the life of the nation. The question: how do we change the long- and short-term trends for the US?”
      You say also: “Egmont, I suggest we eliminate both profit and government debt from all economists’ equations.”
      No, because the macroeconomic Profit Law shows us how to effectively “change the long- and short-term trends for the US.”#1
      You say: “It’s time ‘we the people’ become a lot tougher with its demands and the force they exert on politicians.” Toughness, though, does not help much. In order to improve the economy, one must know precisely how the machinery works. If one wants to get a plane/rocket off the ground one needs scientific knowledge, wishful thinking or “tough demands” do NOT help. It is the same with economic policy.#2
      Egmont Kakarot-Handtke
      • Ken Zimmer-man
        October 29, 2019 at 2:42 pm
        Egmont, there are no laws (in the universal, everywhere “sciencee” sense) in human societies and cultures. There are rules that people create to explain themselves and the events they perceive around them, guide their actions. And since humans create all the physical sciences, as well the same can be said for physical laws. What humans take as fixed and universal, as laws is usually the result of limited humans perspectives. For example, most physicists are now certain that the speed of light is not fixed. It seems fixed due to these limitations. It seems unlikely, in light of the remarks above that any equation or group of equations can change any trends, economic or otherwise. In most instances we don’t have that kind of control. Sometimes, no control at all. Social scientists, the honest ones, have hit the government, the wealthy, and their fellow scientists with scientific facts for decades. The result, moves toward authoritarianism grow stronger and economic inequality gets bigger and bigger. This is a political fight, and a dirty one.
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