Wednesday, December 03, 2008

Happy Birthday, Professor Chomsky

There is a long interview with Chomsky available here on ZNet. In his discussion of the latest crisis in global capitalism he quotes the Indian economist Prabhat Patnaik -

John Maynard Keynes [...] had located the fundamental defect of the free market system in its incapacity to distinguish between `speculation' and `enterprise.' Hence, it had a tendency to be dominated by speculators, interested not in the long-term yield on assets but only in the short-term appreciation in asset values. Their whims and caprices, causing sharp swings in asset prices, determined the magnitude of productive investment and, therefore, the level of aggregate demand, employment and output in the economy. The real lives of millions of people were determined by the whims of 'a bunch of speculators' under the free market system.

Now that makes Keynes sound much more interesting than the shy and timid Keynes who can be spotted every now and again on the comment pages of respectable newspapers. The absence of an accessible and wide-ranging guide to Keynes's thought is rather irritating, in the current circumstances. Anyone interested in having a go?

Patnaik's presentation, entitled The Present Crisis and the Way Forward, can be found here. In it he points out the disastrous impact of both booms and busts on developing nations and argues for a restoration of capital controls as part of a meaningful response to the crisis.

Patnaik's piece is part of an interactive thematic dialogue organised by the United Nations. There are other contributions and resources here.

Professor Chomsky is 80 on Sunday. Happy birthday.