My Favourite Quotes

I’m feeling a bit lazy today, so instead of contributing some original content I’m going to offer up some of my favourite quotes. They get progressively leftier, which wasn’t intended but is of course welcome. Enjoy!


It doesn’t make any difference how beautiful the hypothesis (conclusion) is, how smart the author is, or what the author’s name is, if it disagrees with data or observations, it is wrong.

Richard Feynman

…when two opposite points of view are expressed with equal intensity, the truth does not necessarily lie exactly halfway between them. It is possible for one side to be simply wrong.

– Richard Dawkins


I have found out what economics is; it is the science of confusing stocks with flows

– Michael Kalecki, quoted by Joan Robinson in Shedding Darkness

By applying V, velocity of circulation, that is turnover say per week or per year, to M, the stock of money used in transactions in a given market, we arrive at the flow of transactions in the market concerned.

So what? Neither M nor V is an independent causal factor determining or limiting the level of prices or of output but merely an element in the mechanism that relates one to another.

– Joan Robinson on the Quantity Theory of Money, ibid

Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this, they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations — the relations of bourgeois production — are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any. There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society, which the economists try to pass off as natural and as such, eternal.

– Karl Marx, The Poverty of Philosophy

Milton Friedman’s misfortune is that his economic policies have been tried.

– John Kenneth Galbraith


People who dismiss the unemployed and dependent as ‘parasites’ fail to understand economics and parasitism. A successful parasite is one that is not recognized by its host, one that can make its host work for it without appearing as a burden. Such is the ruling class in a capitalist society.

– Jason Read

People are taking the piss out of you everyday. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel small. They make flippant comments from buses that imply you’re not sexy enough and that all the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are The Advertisers and they are laughing at you. You, however, are forbidden to touch them. Trademarks, intellectual property rights and copyright law mean advertisers can say what they like wherever they like with total impunity. FUCK THAT. Any advert in a public space that gives you no choice whether you see it or not is yours. It’s yours to take, re-arrange and re-use. You can do whatever you like with it. Asking for permission is like asking to keep a rock someone just threw at your head. You owe the companies nothing. Less than nothing, you especially don’t owe then any courtesy. They owe you. They have re-arranged the world to put themselves in front of you. They never asked for your permission, don’t even start asking for theirs.

– Graffiti artist Banksy on advertising

We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.

– Richard Buckminster Fuller

The mine owners did not find the gold, they did not mine the gold, they did not mill the gold, but by some weird alchemy all the gold belonged to them!

“Big Bill” Haywood, Union Leader


….you can’t prevent me from believing that these notions of human nature, of justice, of the realisation of the essence of human beings, are all notions and concepts which have been formed within our civilisation, within our type of knowledge and our form of philosophy, and that as a result form part of our class system; and one can’t, however regrettable it may be, put forward these notions to describe or justify a fight which should – and shall in principle – overthrow the very fundaments of our society.

– Michel Foucault in the Chomsky-Foucault debate

History does not tell us what a Soviet Union, allowed to develop in a “normal” way of its own choosing, would look like today. We do know, however, the nature of a Soviet Union attacked in its cradle, raised alone in an extremely hostile world, and, when it managed to survive to adulthood, overrun by the Nazi war machine with the blessings of the Western powers. The resulting insecurities and fears have inevitably led to deformities of character not unlike that found in an individual raised in a similar life-threatening manner.

– William Blum, author of Killing Hope

There were two ‘Reigns of Terror’, if we could but remember and consider it; the one wrought murder in hot passions, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon a thousand persons, the other upon a hundred million; but our shudders are all for the “horrors” of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe compared with lifelong death from hunger, cold, insult, cruelty and heartbreak? A city cemetery could contain the coffins filled by that brief terror that we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror – that unspeakable bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.

– Mark Twain on the French Revolution


In the way that scepticism is sometimes applied to issues of public concern, there is a tendency to belittle, to condescend, to ignore the fact that, deluded or not, supporters of superstition and pseudoscience are human beings with real feelings, who, like the sceptics, are trying to figure out how the world works and what our role in it might be. Their motives are in many cases consonant with science. If their culture has not given them all the tools they need to pursue this great quest, let us temper our criticism with kindness. None of us comes fully equipped.

– Carl Sagan, The Burden of Skepticism

PS I also started to look through Robert Solow and John Maynard Keynes quotes, but decided that one should really just read all of them.


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  1. #1 by TACJ on August 5, 2013 - 4:29 pm

    From the William Blum quote:

    …overrun by the Nazi war machine with the blessings of the Western powers…

    Hum. This is interesting. If Blum is arguing that ‘the Western powers’ were *happy* that Hitler had decided to start a land war in Asia, thus sapping Germany’s military strength, to the benefit of the non-USSR Allies, then I suppose this claim is somewhat defensible; but if he’s claiming that the Allies in some sense ‘encouraged’ or ‘allowed’ the German invasion of the USSR – and the use ‘blessings’ carries that implication – then I’m not sure the claim that Operation Barbarossa had the ‘blessings’ of Western powers is defensible.

    Obviously I could be misinterpreting his point, or simply ignorant of the context within which he makes it.

    My favourite two quotations:

    The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.

    — J.K. Galbraith.

    Civilization advances by extending the number of important operations which we can perform without thinking about them.

    — Alfred North Whitehead.

    • #2 by Unlearningecon on August 5, 2013 - 8:20 pm

      You can read the context, which is the first chapter of Killing Hope, online through the link I provided. Blum is presumably referring to the fact that Stalin tried to cooperate with the west before he ended up signing the Molotov-Ribbentrop pact, but the west refused. Blum also quotes Harry Truman as saying “If we see that Germany is winning, we ought to help Russia, and if Russia is winning, we ought to help Germany, and that way let them kill as many as possible, although I don’t want to see Hitler victorious in any circumstances.”

      All in all, the west’s (as well as western company’s) attitude toward the Nazis was one of ambivalence at best, endorsement at worst, until push came to shove. Even after WW2 the US and CIA took on board many former Nazis and prevented them from being prosecuted.

      • #3 by Jan C on August 7, 2013 - 8:16 am

        That´s realpolitik. Just like Stalin let the Polish resistance and the Nazi´s fight each other to death during the Warsaw uprising, while he could easily have intervened. One should not look for noble principles in international politics.

      • #4 by Unlearningecon on August 9, 2013 - 6:18 pm

        I agree although it is worth noting that Stalin did originally try to nip Hitler in the bud, something the west cannot similarly be credited with.

      • #5 by notsneaky on August 10, 2013 - 1:10 am

        Oy, I can take the ignorance of economics, but such a fundamental ignorance of history?

        Stalin did not try to cooperate with the west. He did not agree to MR because “the west refused”. He was talking to both simultaneously and went with Hitler because Hitler offered a better deal. The West did not endorse the Nazis, that’s just a silly statement. One can argue that there was “ambivalence” during the appeasement period of course, but that’s a different thing.

        Blum’s quote likewise is a piece of particularly stupid rhetoric.

        Anyway. Solow has some good quotes. Find the one where he calls Lucas crazy.

      • #6 by Unlearningecon on August 10, 2013 - 1:47 am

        The west were all too thrilled at the idea that the Nazis and Soviets might just kill each other (as stated by Truman when the Nazis actually did invade), and this contributed to the ambivalence toward Hitler and unwillingness to sign reasonable agreements with Stalin. One example of the west’s hands off attitude towards Hitler was the Munich Pact. It is also worth noting that western companies were all too happy to help the Nazis.

        Noting this reality was not merely a piece of ‘rhetoric’ from Blum, but has also been documented by others, chiefly Denna Fleming in ‘The Cold War and its Origins’, and is far from a ‘silly’, ‘stupid’ or ‘ignorant’ reading of history.

      • #7 by notsneaky on August 10, 2013 - 2:37 am

        Nonsense. It was Stalin who broke off the tripartite talks, once the secret deal with Hitler was in the pocket. The sticking point in the British-French-Russian negotiations was not any kind of “unwillingness to sign reasonable agreement” by France and Britain but rather Stalin’s insistence that Poland allow Russian troops to be stationed on its soil. Which no sovereign country would agree to, especially one which not that long prior had been at war with and overran by Soviet Russia. And which in any case, France and Britain, seeing as they weren’t Poland, could not promise anyway – it was a purposefully ridiculous demand made by Stalin to ensure the talks would go nowhere.

        And yes, everyone knows about Munich. And it was a colossal diplomatic failure on the part of the West. But that doesn’t translate into “endorsement of Hitler”. And yes Truman might have made a quip, a day after invasion of Soviet Union, though it was obviously more of a “well, Stalin got what he deserved” kind of a statement, seeing as how Stalin and Hitler where BFFs just shortly before. Still, the Soviet military effort against the Nazis was financed and supplied by the US – what kind of “blessing” of Hitler is that?

        You really need to read, like, real historians, not conspiracy nutters like Blum or “revisionists” like Fleming. It’s perfectly possible to be critical of American foreign policy without becoming some kind of a caricature that the right thinks of when they think of leftists, or descending into Stalin apologia. Not to mention saying stuff which is just plain false.

      • #8 by Unlearningecon on August 10, 2013 - 10:47 am

        So now we see your opinion rests on some value judgments. The Poland request was “ridiculous” – you may think this, but to be honest it seems to me that Stalin either wanted to surround Hitler or wanted a defensive buffer against him. To go further and say that Stalin made it because it was deliberately ridiculous would require some serious evidence/telepathy.

        The simple fact is that Stalin did try to cooperate with the west, and they ignored/refused the offer.

        Also, the US obviously provided the USSR with aid during the war. This is just realpolitik and doesn’t tell us much.

        You really need to read, like, real historians, not conspiracy nutters like Blum or “revisionists” like Fleming. It’s perfectly possible to be critical of American foreign policy without becoming some kind of a caricature that the right thinks of when they think of leftists, or descending into Stalin apologia. Not to mention saying stuff which is just plain false.

        Yes, William Blum, that ‘conspiracy nutter’ who used to work at the state department and became disillusioned. His incredibly well sourced book is obviously wrong because he’s a ‘conspiracy theorist’, whatever that means. If you’d actually read Blum you’d know that he explicitly denies a conspiracy, and at one point he points out that sometimes even the CIA wasn’t sure which institutions were its own fronts. Anti-communism was an incoherent, paranoid mess, not a conspiracy. Furthermore, the events Blum documents are actually well established, they’re just not commonly drawn together – do you, for example, deny Guatemala? Iran? Chile? Indochina?

        What is this ‘real history’ you speak of? Does it mean Whig History? Or ‘things you agree with’?

        And who is making Stalin apologia? I have recently referred to Stalin as a ‘ruthless sociopath’. Talking about Stalin’s actions without going ‘ahhhh! What a monster11!!’ =\= Stalin apologia.

        edit: I am willing to retract the statement of ‘endorsement’ as it relates to the western governments. I was really referring to companies, though it is also worth noting that the British Upper Class had some serious love for the Nazis.

      • #9 by Jan C on August 12, 2013 - 6:52 pm

        “The simple fact is that Stalin did try to cooperate with the west, and they ignored/refused the offer.”

        We could easily make the opposite claim that ´the simple fact is that the West did try to cooperate with Stalin, and he ignored/refused the offer´, but you give Stalin the benefit of doubt. You have decided that the leaders of the imperialist countries were more wicked/evil/opportunistic than Stalin.

      • #10 by Unlearningecon on August 12, 2013 - 7:03 pm

        I don’t see where you’re coming from: Stalin was the one mostly putting out offers (as you’ll see if you follow my link), and the west did not bother to reciprocate. Considering the circumstances, it was a major diplomatic failure.

      • #11 by Jan C on August 13, 2013 - 4:50 pm

        While it was rational from Stalin to demand that Soviet troops would be stationed in Poland, but this was, as notsneaky wrote, not acceptable for Poland. At that time for many central European nations that were formerly part of Czarist Russia, the Soviet Union was perceived as as dangerous as Nazi Germany. And history proved them right. It would not have made any sense for Poland to accept this. A pact with the Soviet Union to avoid a German occupation would have meant accepting a de facto Soviet occupation. That didn´t make any sense for Poland.

      • #12 by notsneaky on August 14, 2013 - 2:25 am

        ”as you’ll see if you follow my link” – the Telegraph??? Really?Like I said, you really need to read serious, real historians, not cranks or tabloids. (and I have no idea what “Whig historians” are; seems like a mindless slur intended to dismiss the work of people who’ve spent their life studying questions you just became aware of, and somehow were uppity enough to come to different conclusions than yours)

        These kinds of sensationalist stories about “What If” in regard to WW2 appear all the time in papers like the Telegraph, because they tantalize the imagination. And 99.99% of the time there’s nothing there.

        It’s telling that the main (almost only) source quoted in that article is a “retired Russian foreign intelligence service Major General ” who appears to be the only one who “who sorted the 700 pages of declassified documents”, while the only actual historian that I can find in the story, Watt, “was sceptical about the claim that they were spelled out during the meetings”. (In other words this looks like some fantasy that some Soviet generals MAY have had at the time, but neither did Stalin take them seriously, nor was the offer actually made. Nor do modern historians take Gen. Sotskov’s theories seriously at present. Ever heard of Victor Suvorov? Same thing, just on the other side.)

        You know that thing about “strong priors”, right? Maybe you should start budging yours a bit.

        Look, at the end of the day it’s pretty simple. The best that Britain and France could offer Stalin was some vague guarantees about declaring war on Hitler, if Hitler attacked Poland and/or Soviet Union. And we know how that turned out for Poland, never-mind Czechoslovakia. Hitler, on the other hand offered Stalin the Baltics plus half of Poland (note that Stalin was demanding almost the exact same thing – worded differently – from the British and French, as a condition for the alliance). From a purely self interested, real politik point of view, Hitler offered the better deal, so that’s what Stalin took. Now – from a purely self interested, real politik point of view, who can blame him; but only from that point of view. Let’s not play silly games and pretend that Stalin “was forced” to ally with Hitler by the Allies. That’s just plain dishonest. Intellectually and morally. Oh yeah, and stupid too.

        As to what constitutes apologia for Stalin and all that – I don’t know where I’d put your own words, but I noticed in your Pieria piece comments that you like linking to that Gowans guy for support and that fellah sure does epitomize Stalinist apologia. Again, this is another one of those moments where one wonders if this is a serious conversation or a put on.

      • #13 by Unlearningecon on August 14, 2013 - 11:45 am

        So your actual criticism has died down now, and you are relying on speculation and judgments (next to some actual arguments, thankfully). Perhaps you shouldn’t be so dismissive and admit that my perspective is reasonable?

        Like I said, you really need to read serious, real historians, not cranks or tabloids.

        The Telegraph link was simply as accessible example of what I’m talking about, and I am perfectly happy to believe the claims in it like ‘1 million soldiers’ are overblown. As for ‘cranks’, perhaps you should respond directly to what I said about Blum, or maybe read him yourself before making such blithe dismissals? Only somebody completely ignorant of US foreign policy during the cold war could characterise Blum’s work as a ‘conspiracy theory’.

        and I have no idea what “Whig historians” are

        I assume you know what Whig history is: the assumption that history up to this point has been a journey, culminating in what we have now as unquestionably superior. A mainstay of people who characterise the fall of the USSR as the final collapse of socialism as an idea.

        seems like a mindless slur intended to dismiss the work of people who’ve spent their life studying questions you just became aware of, and somehow were uppity enough to come to different conclusions than yours

        You mean like Blum? Wow, your hypocrisy here is laughable.

        Watt, “was sceptical about the claim that they were spelled out during the meetings”.

        Person who disagrees with a claim ideologically is skeptical about it. News at 11. What was that you said about ‘priors’?

        Anyway, here’s my impression: Stalin wasn’t making ridiculous demands deliberately, but wanted to stop Hitler and protect the USSR. The deals he offered may not have been particularly palatable, but it’s war – I would say the same about offers made by the UK or anyone else in that period. The (seemingly common) idea that Stalin and Hitler were best buds, or that the M-R pact was a naked act of imperial aggression, lacks context. Stalin was ‘forced’ into the pact in the sense that it was his best option for a defensive buffer against Hitler. On top of that, it’s fairly clear Stalin didn’t think it was a true ‘alliance’ with Hitler and knew that Hitler of all people would likely invade at some point.

        Re: Gowans, as I said it was rose tinted, but it was really just a narrow discussion of growth and so forth to counter popular perceptions about the USSR’s economy simply being a colossal failure.

        Again, this is another one of those moments where one wonders if this is a serious conversation or a put on.

        Right backatcha. In fact, drop the attitude and stick to real arguments, else fuck off and don’t come back. Deal?

      • #14 by Jan C on August 14, 2013 - 1:05 pm

        “Anyway, here’s my impression: Stalin wasn’t making ridiculous demands deliberately, but wanted to stop Hitler and protect the USSR. The deals he offered may not have been particularly palatable, but it’s war – I would say the same about offers made by the UK or anyone else in that period. The (seemingly common) idea that Stalin and Hitler were best buds, or that the M-R pact was a naked act of imperial aggression, lacks context. Stalin was ‘forced’ into the pact in the sense that it was his best option for a defensive buffer against Hitler.”

        Just like the pact with the Soviet Union was the best option for Hitler to have his hands free to occupy Poland and later France.
        But I still don´t understand how you can get from this fairly accurate history to endorsing this claim:

        “…overrun by the Nazi war machine with the blessings of the Western powers…”

        Blum can be right about a lot of things but that is nonsense.

      • #15 by Unlearningecon on August 14, 2013 - 1:47 pm

        Actually, yes, I agree – that is an exaggerated and unnecessary part of an otherwise excellent quote. I think I was immediately put on the defensive by notsneaky’s comments, and failed to see that point.

        Also, re: Poland – it surely was not sensible for Poland to endorse any superpower stationing troops in their country, but it was a difficult situation. Hindsight is 20/20 and all that, but it seems to me the west could have negotiated a more palatable way to ‘box in’ Hitler, or at least tried harder than they did.

      • #16 by Jan C on August 14, 2013 - 2:09 pm

        At the moment I am reading The wages of Destruction by Adam Tooze and he says, based on Hitler´s not well known second book, that Hitler envisioned a grand alliance with Britain. Britain could have its empire and the oceans and Hitler would be free to occupy Europe and turn the Soviet Union into a German colony. Hitler was thinking this would also be interesting for Britain as it would stop the rise of the US. Apparently he was somehow surprised that Britain was not interested in such a deal, and blamed it on the Jewish world conspiracy against Germany.
        It is a great book by the way (the descriptions of Hjalmar Schacht´s policies are particularly interesting).

      • #17 by Unlearningecon on August 15, 2013 - 12:01 pm

        I had no idea Hitler had a second book (and I actually haven’t read his first one, either).

        Britain could have its empire and the oceans and Hitler would be free to occupy Europe and turn the Soviet Union into a German colony. Hitler was thinking this would also be interesting for Britain as it would stop the rise of the US.

        That’s interesting. I might give the book a look.

      • #18 by notsneaky on August 14, 2013 - 4:24 pm

        Actually I have read Blum. I wouldn’t comment about him otherwise. And while it’s true that he doesn’t have an overarching meta conspiracy theory, he’s got a lot of little local conspiracies all over the place, which usually involve taking at face value the Soviet (or someone else’s) propaganda of the time. Off the top of my head, for example, the idea that Swiatlo was a Western spy in 1948, and post war Stalinist purges were engineered by American/British intelligence. Because you know, the communists really weren’t big into purging people on their own. The Americans made them do it. Etc.

        Basically, it’s not books one has serious conversation about.

        But anyway, it’s your blog, you make the rules, I’ll be happy not to post again. Thanks.

      • #19 by Unlearningecon on August 14, 2013 - 5:18 pm

        But something being a ‘conspiracy theory’ doesn’t automatically render it invalid: conspiracies can and do actually happen. It would not be unreasonable to term the coups in Chile, Iran or Guatemala ‘conspiracies’, for example.

        I won’t bother going into the Swiatlo case in depth, and I can’t seem to find evidence of Blum denying Stalin’s responsibility for purges. The idea that the US worked to inspire paranoia in the USSR, however, is entirely reasonable and expected.

        In any case, the important point is that although Blum may be wrong on some specifics (surely this is likely), we should evaluate his book as a whole. The question posed is this: did the US systemically destroy communism and socialism across the world in blind paranoia, committing unforgivable atrocities along the way? I’m not sure how anybody could answer ‘no’ to that question.

        Oh, and as far as I remember, Blum relies extensively on internal reports from the CIA and state department, not just “Soviet propaganda”.

      • #20 by Jan C on August 15, 2013 - 10:38 pm

        The second book was never published during Hitler’s life.

        “Zweites Buch was not published in 1928 as Mein Kampf was not selling well, and Hitler’s publisher informed him that having two books out would depress sales even further. By the time Mein Kampf started to sell well after the September 1930 Reichstag elections, Hitler decided that Zweites Buch revealed too much of his foreign policy goals. Kept strictly secret under Hitler’s orders, the document was placed in a safe inside an air raid shelter in 1935, where it remained until its discovery by an American officer in 1945.”

        To avoid confusion: I read Adam Tooze’s book, I never read Mein Kampf or the second book.

      • #21 by Unlearningecon on August 16, 2013 - 3:31 pm

        Very interesting, thanks.

      • #22 by Jan C on August 17, 2013 - 9:34 am

        Adam Tooze writes:

        “In July 1940, in a desperate bid to unhitch the Soviet Union from its pact with Germany, Churchill sent Stafford Cripps, his new ambassador in Moscow, to a meeting with the Soviet Dictator. To Cripps, Stalin explained with chilling clarity the logic that had motivated his agreement with Hitler eleven months earlier. The Soviet aim had been to upset the balance of power in Europe and in this the Hitler-Stalin pact had succeeded brilliantly. When Cripps replied that the Soviet alliance with Hitler had in fact destroyed any kind of balance in Europe and that the entire continent was now threatened by German hegemony, Stalin snapped back: ´I am not so naive as to believe the German assurances that they have no desire for hegemony, but what I am convinced of is the physical impossibility of such hegemony, since Germany lacks the necessary seapower.´ ” (p. 396)

        And before you think that Tooze is writing Whig history:

        “…The result by the late nineteenth century was a dramatic transformation in the distribution of land and population. Meanwhile, native populations in North America, much of Latin America and Australasia were subject to more or less deliberate genocide…” (p. 166)

        See also:

      • #23 by Unlearningecon on August 19, 2013 - 10:45 pm

        If you take a look at the timeline, I don’t think any of this is mutually inconsistent:

        (1) Stalin makes some offers to the west that involve protecting the USSR against Hitler. The west are reluctant for whatever reason: they don’t want to side with Stalin; they underestimate the Nazi threat; they hope Stalin & Hitler will bleed each other dry.

        (2) When these offers are rejected, Stalin wants to buy time and protect the USSR (they were fighting Japan at the time, too) so he signs M-R and hopes Hitler goes west.

        Diplomatic failures on both sides, and harsh realpolitik, but that’s the nature of war. I just don’t think that Stalin’s first choice was the M-R pact.

  2. #24 by rjw on August 5, 2013 - 5:04 pm

    I’m reminded of another purported Joan Robinson quote: “the purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.”

    I used to think this a little harsh, particularly since I’m an economist myself. But there is a real kernel of truth. A lot of economic knowledge is useful in a negative sense, in that it helps you identify when people are making bad arguments for things.

    • #25 by Unlearningecon on August 5, 2013 - 8:23 pm

      Joan Robinson was never one to shy away from a sharply worded comment – her comments about MPT and utility theory show as much.

      But that quote is certainly one of her best. In fact, it’s the same reason that I bothered studying economics at all.

      • #26 by Luis Enrique on August 7, 2013 - 12:34 pm

        are you prepared to reveal at which university?

        I want to revise downwards my opinion of it

      • #27 by Unlearningecon on August 7, 2013 - 1:00 pm

        Me too, after learning economics here. Though maybe that’s got more to do with economics than the university.

    • #28 by Paul Schächterle on August 5, 2013 - 9:08 pm

      Unfortunately in a lot of cases “studying” economics at a university in fact means getting deceived by economists.
      To really study economics as a field of inquiry (and not as a set of ideologic believes) you should first take the antidote, i.e. read “Debunking Economics” by Steve Keen. Then you might go studying economics at the university – if you can bear it. (I could not.)

      • #29 by Unlearningecon on August 6, 2013 - 10:48 am

        I’m just entering my third year of undergraduate economics. I have also written a series on Keen’s book, so I wouldn’t worry too much about the education polluting my thought.

      • #30 by Paul Schächterle on August 6, 2013 - 10:11 pm

        Re: “[…] I wouldn’t worry too much about the education polluting my thought.”
        I was talking in general terms and not speaking about anyone particular. I really like your site which would probably not be the case if you were strongly influenced by neoclassical thought. Btw. I did not know (and did not have the impression) that you are still undergraduate. So keep up the good work. 🙂

      • #31 by Unlearningecon on August 19, 2013 - 9:12 pm

        Ah OK, was confused – thought your comment was aimed at me, despite the fact even my name shows I’m not too fond of neoclassical economics!

        Anyway ,thanks for the kind words.

  3. #32 by Dinero on August 6, 2013 - 11:03 am

    That was a good read

  4. #34 by Jan C on August 6, 2013 - 9:37 pm

    “Marxian Socialism must always remain a portent to the historians of Opinion — how a doctrine so illogical and so dull can have exercised so powerful and enduring an influence over the minds of men, and, through them, the events of history.”

    John Maynard Keynes

    Nice one 🙂

    • #35 by Unlearningecon on August 7, 2013 - 12:25 pm


      Keynes actually had a deeply reactionary, aristocratic view embedded beneath his support for full employment etc. He compared the proletariat to mud at the bottom of a pond, and said that class war would “find him on the side of the educated bourgeois”. Joan Robinson suggested he had never really read Marx.

  5. #36 by Luis Enrique on August 7, 2013 - 12:33 pm

    could you tell us where you think economics confuses stocks with flows?

    • #37 by Unlearningecon on August 7, 2013 - 12:35 pm

      I think Kalecki’s comment was more to the effect of how easily this can be done than a comment on any particular theory. However, Joan Robinson goes onto criticise the QtoM on related grounds in that article, as I quote.

      • #38 by Luis Enrique on August 7, 2013 - 1:26 pm

        so what do you like about that quote, if you don’t actually think that economics has a tendency to confuse stock and flow variables? (my experience has been it differentiates between the two quite carefully).

        [having looked at that Joan Robinson article, I see she thought MV=PY is uninformative, but cannot see where it confuses a stock with a flow.

        But I am not sure I understand it correctly. Here’s my current understanding, expressed in a simple toy example.

        suppose economy consists of two individual farmers, who grow crops with an unusual monthly seasonality, and one ten pound note. On alternate months, one farmer purchases one unit food
        from the other in exchange for the £10 note. This occurs 12 times per year. Annual market output Y is 12 units of food. Price is £10.

        M = 10, V = 12, P = 10, Y = 12

        where’s the confusion between stocks and flows? I mean M is a stock, Y is a flow, and the two are related, but there’s nothing wrong with that is there? You can write down an equation that shows how the stock of debt is related to the flow of saving / borrowing and interest payments, for example.

        Joan’s question about “what is the units” of MV/P presumably comes from the fact that in economies with more than one good / price, you have to deal in indexes, so answer is that units are index units. One “basket of goods” or whatever. If I have understood that correctly, it does not strike me as a terribly smart question.

      • #39 by Unlearningecon on August 7, 2013 - 2:02 pm

        I believe she is referring to the fact that not recognising the stock-flow distinction has led some (Friedman, for example) to believe that mechanistically increasing M, a stock, will automatically translate into an increase in PY, even though this won’t necessarily be the case.

        Obviously market monetarists emphasise the importance of expectations in forming V, but Robinson sort of addresses this by arguing that neither M not V are ultimately causal factors but just a formal decomposition of total income.

      • #40 by Luis Enrique on August 7, 2013 - 2:35 pm

        um, what? increasing M will not automatically translate into an increase in PY because V is not a constant. What has that got to do with not recognising stock-flow distinctions?

      • #41 by Unlearningecon on August 7, 2013 - 2:40 pm

        What I am saying is that crudely thinking MV=PY implies that, cet par, M and/or V going up will increase PY rests on an imperfect understanding of the mechanisms involved, much like the whole S=I controversy.

      • #42 by Luis Enrique on August 7, 2013 - 2:43 pm

        otoh, increasing M may very well increase PY, because what reason is there to suppose V will adjust to exactly offset the increase in M.

        Did Friedman really proceed as if V was a constant? I’d be surprised.

      • #43 by Luis Enrique on August 7, 2013 - 2:45 pm

        right. I am still waiting to see any trace of confusion between a stock and flow.

        [and do you really mean “cet par”? For instance if V increases but M does not change (all else is equal), PY must have increased. That’s not “crude” that’s just an accounting identity, which is always what I understood MV=PY to be].

      • #44 by Unlearningecon on August 7, 2013 - 2:55 pm

        I’m talking about the lack of explicit acknowledgement between what is a stock and what is a flow.

        MV = PY is true by definition, but the equation alone doesn’t have any useful implications. An increase in M will not necessarily translate into an increase in income: to put it in simplistic terms, it may just ‘sit there’. Similarly, though higher PY, same M implies higher V, V is not actually an independent variable that can be directly manipulated; it was just what’s left over from the other side of the equation. I feel that Robinson is correct in implying that acknowledging M as a stock and V as a flow which, afaik, is not often done explicitly, leads to a more comprehensive understanding than just the basic identity.

        I also didn’t say that Friedman thought V was constant, but that he thought stabilising M could stabilise PY (or maybe just P).

      • #45 by Luis Enrique on August 7, 2013 - 3:24 pm

        ” An increase in M will not necessarily translate into an increase in income: to put it in simplistic terms, it may just ‘sit there’.”

        yes “it may just ‘sit there’.” is just a restatement of “V is not a constant”. In my farmer example, if you injected a second £10 into the economy, but neither farmer wanted to trade more food more often, then they’d only need to use their £10 notes half as often and V would fall to perfectly offset increase in M leaving PY unchanged.

        I just don’t know where you get the idea that it is not generally acknowledged that M is a stock and V is a flow. M is defined as a stock and V is defined as “the number of times in a year that a dollar is used to purchased goods and services” which is self evidently a flow, but even if you somehow managed to remain unaware of that distinction, you’d still be able to understand that you need V to be a constant (or to be relatively stable, predictable) if you want to control PY by changing M. Once you know what V means, where is your “more comprehensive understanding” coming from once you see the stock flow distinction?

        sorry I did not mean to imply you’d claimed Friedman thought V was a constant, I was just asking whether he did. However, some googling suggests the crude QtoM does assume V is constant:

        this Nick Rowe post might be interesting

        now, back to original question. The quote “I have found out what economics is; it is the science of confusing stocks with flows” looks like a claim economics involves confusing stocks with flows. Why do you like that quote if, as it turns out, economics does not confuse stocks with flows?

        Is your answer really that you think expositions of QtoM don’t place enough explicit emphasis for your liking, even though the distinction is plain in the definition of the term?

      • #46 by Unlearningecon on August 7, 2013 - 4:12 pm

        I’m not suggesting V will change, I’m suggesting M will not go into national income: that is, it will not have V ‘applied’ to it, much in the same way that the paradox of thrift decouples savings from income.

        If, for the purpose of argument, we assume a fixed pool of M, we might see that the ‘pump’ applied to it, V, may be applied to varying quantities of the available pool, and hence increasing the pool does not necessarily relate to an increase in income.

        This is what I mean by recognising the stock-flow relationship.

      • #47 by Jan C on August 7, 2013 - 4:27 pm

        “I’m not suggesting V will change, I’m suggesting M will not go into national income: that is, it will not have V ‘applied’ to it, much in the same way that the paradox of thrift decouples savings from income.”

        Are you confusing the monetary base and the money supply? Probably not, but it is difficult to make sense of this. But probably that is because of my lack of understanding. 🙂

      • #48 by Unlearningecon on August 7, 2013 - 4:31 pm

        I was really just adopting a hypothetical friedman style thought experiment where money is just notes and coins.

      • #49 by Jan C on August 7, 2013 - 8:00 pm

        If they get extra coins, or like in Luis’ example a £10 note, but this note is not used, if the farmer just puts the note under his matrass, should it be counted then as part of the money supply? Would the note not be more be more like savings that are not lent out, like bank reserves that aren’t lent out? Monetary base in other words.
        I am just an amateur who studies economics in his free time, so I am sorry in case I say stupid things. 🙂

  6. #50 by Dinero on August 7, 2013 - 5:30 pm

    Is “market capitilisation” a confusion of stocks and flows. When sellers of a share are rare that reduces supply and increases the price at which the few sales are made. That makes the market cap calculated on the remaining shares go up, but if those other shares were actually put on the market sellers and sales would not be rare by definition.

  7. #51 by Luis Enrique on August 7, 2013 - 6:31 pm

    “I’m not suggesting V will change, I’m suggesting M will not go into national income: that is, it will not have V ‘applied’ to it, much in the same way that the paradox of thrift decouples savings from income.”

    Than you are suggesting V changes, return to my farmer example, and the idea of introducing a second £10 note. Suppose this new note does “not go into national income” and does not have V applied to it, but the original note still changes hands 12 times. M is now 20, V refers to the velocity of that, which is now 6, which you could think of as the velocity of the average dollar of M.

  8. #52 by Luis Enrique on August 7, 2013 - 8:33 pm

    Jan C I think the monetary base is part of, a subset, of broader measures of money supply. So if you think of QE swapping bonds for money, but the money sitting in reserves going nowhere, and doing nothing to PY, I think that would count as M up, V down. My memory of precise definitions is hazy though.

    Of course if you used an alternative definition so that this new but inert money was not counted as part of M, then you haven’t changed M so talk of it “not going into national income” or whatnot is irrelevant because nothing has happens to M.

    • #53 by Unlearningecon on August 8, 2013 - 4:28 pm

      It’s not irrelevant because once we acknowledge that it won’t ‘go into’ M, we can understand that monetary policy will not translate to an increase in PY and MV = PY loses its relevance for practical purposes, as the causation runs from PY to MV.

    • #54 by Jan C on August 9, 2013 - 8:10 am

      M1, M2 and M3 do not include reserves. If you see this graph,

      you would not say that an increase in Mb failed to translate into an increase in M, but you would say that V went down?

      • #55 by Luis Enrique on August 9, 2013 - 10:13 am

        Hi Jan,

        thanks for that, although I think that graph is hard to interpret w.r.t to what is a subset of what because all measures are indexed to 100 at a certain point in time. I’m still not quite sure because if you look here, for instance

        the monetary base is currency + reserves. M1 is currency + deposits at depository institutions (roughly, bank deposits) + some other stuff.

        I’d normally think of reserves as a fraction of deposits (i.e. “fractional reserve banking”) but I suppose in recent times reserves might have grown so much as to exceed 100% of deposits? I would have thought what was crazy, but this

        seems to say July 2011 M1 is roughly $2000bn,

        and this

        seems to say March 2012 monetary base is $2600bn

        assuming I haven’t mis-read the units. Does that mean reserves > deposits? Do we have >100% reserve banking?! I can’t quite believe that, but can’t immediately see my error, perhaps you will be able to spot it.

        Still, even if we know that Mb isn’t the same thing as M, I don’t think we know that changes in Mb do not cause changes in M, although we know the change won’t be 1-for-1.We can see from you graph that Mb and M have decoupled, but we cannot see what the path of M would have looked like in the absence of the explosion in Mb, perhaps it would have fallen even more, so the massive increase in Mb may have propped it up somewhat.

      • #56 by Luis Enrique on August 9, 2013 - 1:23 pm

        nah, I must have made a mistake. If reserves > deposits, who owns the surplus?

  9. #57 by Luis Enrique on August 8, 2013 - 8:15 pm

    I’m just being pedantic. You can say some action, say QE, fails to change M. Or you can say M can change without affecting anything because the change in M hasn’t “gone in” to economic activity. But it you are going to say M hasn’t changed then talking about how changes in M do, or don’t, affect things, is irrrrelevant.

  10. #58 by Dinero on August 9, 2013 - 10:06 am

    I think unlearning econ is envisioning two stocks of M. Central bank reserves and then money in the hands of individuals.
    In that case Mb mulptiplied by the velocity at which primary dealers buy bonds increases their prices. So it does work, but at two levels.

  11. #59 by Dinero on August 9, 2013 - 10:13 am

    The confusion of stock and flows is where people think that an increase in M will necessarily cause inflation, whilst not taking account that an increase in M (the stock) does not necessarily means more purchases (the flow). Especially as the money supply can go up or down depending on peoples choices about credit.

    • #60 by Unlearningecon on August 9, 2013 - 6:19 pm

      Yes, this is what I am trying to say.

  12. #61 by rjw on August 13, 2013 - 10:08 am

    I’ve only just come back to this thread, but on the general confusion of stocks/flows, I happen to think Kalecki was spot on. The confusion is pervasive – consider the use of the term “savings”, which is sometimes used to refer to a flow (saving as a part of national income) and sometimes used to refer to a stock (of financial assets). The confusion between these two usages is widespread in much popular journalism, and not much better in some discussions of contentious topics in economics (think budget deficits). I’m reminded of a comment Victoria Chick makes in her book “Macreoconomics after Keynes”, where she opines that macreoconomics would be a more coherent subject if we banned the word saving altogether. There are other examples. More generally, a lot of textbook economics also provides very little examination of the necessary linkages between stocks and flows – to an almost criminal degree. I blame this partly on the magnificantly confusing “loanabale funds” presentation that you find in many texts.

    • #62 by Unlearningecon on August 13, 2013 - 12:28 pm

      Yes, I don’t know why the S =I identity was not my immediate response to Luis. That thing has caused more confusion than even the QToM, despite the fact that Kalecki pointed out that all it tells us is that investment is self-financing. Simply recognising that ‘savings’ refers to a flow, not a stock, helps clear away a lot of the confusion.

  13. #63 by gailbradbrook on August 22, 2013 - 8:18 am

    Thanks for these- especially love the Buckminster Fuller one!

    Do any of you have “favourite” quotes from Neo-liberal economists which capture the spirit of what they really think – I need some for my Street School Economics project.

    An example: “Economics are the methods. The object is to change the heart and soul.” Margaret Thatcher, 1981

    I think there is another suggesting that when people feel their employment is under threat (e.g. in Austerity) they are willing to put up with a worsening of pay and conditions (hence a feeling of stress about your job is a good thing)- but I can’t find it- anyone know?
    Or others?

    Many thanks!

    Gail Bradbrook
    H: 01453752828
    M: 07866838584

    T: @fixthewebgail

    1 Stratford Court, Stratford Road, Stroud, GL5 4AQ

  14. #66 by Hedlund on August 25, 2013 - 2:33 am

    Some choice quotes from the Yalta Conference, highlighting the myriad intricacies of that political landscape.

    Well, okay, the strength is more in the scene as a whole than in any one quote.

    • #67 by Unlearningecon on August 25, 2013 - 2:56 am

      OK, I’m pretty sure this wins the WW2/Stalin debate.