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In the early 1970s,... economists began to embrace the Rational Expectations Hypothesis (REH), according to which market participants' expectations are essentially the same as the predictions of the relevant economic theory (Muth 1961: 316). What has been largely overlooked is that, … REH theorists presume that the role of market participants' expectations in driving outcomes is not autonomous from the other components of the model. … Because REH models, by design, rule out an autonomous role for expectations, they are best viewed as derailing, rather than developing, the microfoundations approach.
Enclosure, once accepted, redefines community. Enclosure underlines the local autonomy of community. Enclosure of the commons is thus as much in the interest of professionals and of state bureaucrats as it is in the interest of capitalists. Enclosure allows the bureaucrats to define local community as impotent — "ei-ei schau-schau!!!" — to provide for its own survival. People become economic individuals that depend for their survival on commodities that are produced for them. Fundamentally, most citizens' movements represent a rebellion against this environmentally induced redefinition of people as consumers.
The most widely discussed formulation of [the One World model] was the "end of history" thesis advanced by Francis Fukuyama. "We may be witnessing, Fukuyama argued, "… the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government." … The future will be devoted not to great exhilarating struggles over ideas but rather to resolving mundane economic and technical problems. And, he concluded rather sadly, it will all be rather boring.
The patterns that are normalized in the family — the whole idea that some people cook and some people eat, that some listen and others talk, and even that some people control others in very economic or even violent ways — that kind of hierarchy is what makes us vulnerable to believing in class hierarchy, to believing in racial hierarchy, and so on.
It may also be noted that the authoritarian states are in trouble internationally. Some regard this as intentional, as part of the diversion and scapegoat technique, while others think that it is more or less inevitable because of the very co-ordination of the economic activities of the individual nations in question.
The gospel of St. Matthew told of the angry Jesus driving the merchants and money-changers out of the temple, knocking over the tables of the money-changers and spilling their coins on the floor. Jesus was not opposed to capitalism and the profit motive, so long as economic activities were carried on outside the temple. In the parable of the talents, he praises the servant who used his master's money to make a profitable investment, and condemns the servant who was too timid to invest. But he draws a clear line at the temple door. Inside the temple, the ground belongs to God and profit-making must stop.
Both Socrates and Christ taught economic man to be at least slightly ashamed of himself when he failed to sacrifice the lower capacity to the higher. Freud is America's great teacher, despite his ardent wish to avoid that fate. For it was precisely the official and parental shams of high ideals that Freud questioned. In their stead, Freud taught lessons which Americans, prepared by their own national experience, learn easily: survive, resign yourself to living within your moral means, suffer no gratuitous failures in a futile search for ethical heights that no longer exist—if they ever did.
This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance.
The circular-flow diagram offers a simple way of organizing the economic transactions that occur between households and firms in the economy. The two loops of the circular-flow diagram are distinct but related. The inner loop represents the flows of inputs and outputs. The households sell the use of their labor, land, and capital to the firms in the markets for the factors of production. The firms then use these factors to produce goods and services, which in turn are sold to households in the markets for goods...
Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future.
What we need is a concept of "gross national cost." Life is a balance sheet, not simply economic growth. It is income and outgo. And until we know what the cost of growth is we will continue to operate under an illusion. As long as we consider only the growth of goods and ignore the growth of personal and community well-being, we will be impoverished by growth. That is what is happening in our society today.
I did not call him "Fritz." To me he remained always "Professor Hayek," despite his own graciousness in treating me as a peer. I shall not attempt to evaluate Professor Hayek's monumental contribution to our understanding of the events of this turbulent century, to the influence of his ideas on these events themselves or even to the development of economic theory in a strictly scientific sense.
I am not saying that such a theory cannot be constructed, but only that I cannot see how to do it in any way that might be useful. The decisive point, anyway, is that a macrotheory of international politics would lack the practical implications of macroeconomic theory. National governments can manipulate system-wide economic variables. No agencies with comparable capabilities exist internationally. Who would act on the possibilities of adjustment that a macrotheory of international politics might reveal?
Our adversaries are not demons, witches, fate, or mental illness. We have no enemy whom we can fight, exorcise, or dispel by "cure." What we do have are problems in living — whether these be biologic, economic, political, or sociopsychological. In this essay I was concerned only with problems belonging in the last mentioned category, and within this group mainly with those pertaining to moral values. The field to which modern psychiatry addresses itself is vast, and I made no effort to encompass it all. My argument was limited to the proposition that mental illness is a myth, whose function it is to disguise and thus render more palatable the bitter pill of moral conflicts in human relations.
Americans know economic security can vanish in an instant without health security. I ask Congress to join me this year to enact a patients' bill of rights, to give uninsured workers credits to help buy health coverage, to approve an historic increase in the spending for veterans' health, and to give seniors a sound and modern Medicare system that includes coverage for prescription drugs.