So Ritchie’s not a Keynesian then

John Plender has an article in the FT this morning under the title ‘Deflation is a rising threat for markets’ with the subheading ‘The world is prey to the growing problem of deficient demand’.

I could not disagree more on the second point. The world is full of demand, for education, housing, jobs, security, health and social care and so much more.

What the world is prey to is a growing refusal of politicians to meet the demand that is within their capacity to supply because to do so would require redistribution of income and wealth and a growing role for the state. We face economic problems for that reason, and no other. There is more than enough demand to go round.

Fascinating, isn’t it? Our all round leading economist and political thinker is not in fact the Keynesian he claims to be. Or, possibly, doesn’t actually understand what he is saying that he believes. The basic point about Keynes and Keynesianism being that our current economic situation is explained by a lack of effective demand. And yet here’s Ritchie telling us that there’s plenty of demand around.

My best guess is that he’s simply not got the wit to put the two points he’s separately making together and thus seeing that they are incompatible, exclusionary even.

39 thoughts on “So Ritchie’s not a Keynesian then”

  1. He certainly doesn’t seem to understand effective demand. Or he doesn’t understand enough to realise that this is what is meant by ‘demand’ in most FT articles.

    Anyway he and his MMT chums have moved beyond Keynes now. And Friedman. And Krugman for that matter.

  2. Christie

    I wrote on that post, noting that Tim Worstall ‘stood.together’ with the magazine by posting the cartoons and suggesting that this would be genuine bravery. He wasn’t Courageous enough to post my comment; Qu’elle Surprise.

  3. he’s just being sloppy with the meaning of demand.

    if you are a Keynesian, in a situation of deficient demand, you still think that people would like more stuff (education, housing, jobs, security, health and social care and so much more) but that for some reasons the economy as coordinated around a lower-demand equilibrium (sorry for jargon). Individual demand (consumption, investment) depends on the expected demand of others, and with familiar paradox of thrift, demand multiplier stories, we can get to a situation in which demand is low despite the fact people would like to demand more, and he’s right that (most?) Keynesian think that the government has it within its powers to move us back to a higher demand equilibrium.

  4. Flacap Army/ Christie

    Thanks for that link – amidst stiff competition that has to take the prize for his most obscene/ offensive post he has ever written – it has rendered me speechless, and confirmed that the man is in need of serious psychiatric help, if not sectioning…..

  5. @ironman – I suspect you won’t be the only person to suggest that the fat fuck put his actions where his pompous words are but he won’t of course. I hope Murphy reads this blog.

    Murphy, you’re a fat pompous cowardly cunt.

  6. Christ on a bike, the sheer narcissistic hypocrisy of it. It’s enough to make you gag. His comment about courage as well, and his fear of being mocked for it.

    Coz that’s courage, see – taking money from Leftwing groups and writing articles about Leftwing causes, in a society where Leftwing bloggers are daily dragged out of their homes and shot in the streets. I salute his raw courage.

    What a wanker.

    BTW, who else thinks that photo of him on his site bears more than a passing resemblance to Himmler?

  7. Murphy Cockface today: “I thought about writing a response to the murder of Charlie Hebdo journalists and the police who protected them yesterday, but it felt almost too soon to do so. Silence appeared to be an appropriate response out of respect for those who died and their loved ones.’

    Murphy Cockface the day after Maggie Thatcher died:

  8. We have NOT got deflation – the Eurozone has got mild *Disinflation* . John Plender is letting his”deflation is the enemy” complex carry him away from thinking.
    Prices have dropped 0.2% when the oil price has halved – is that deflation? Utter nonsense. Demand is strong other wise prices would have dropped 10-20% in response to the drop in the oil price which cuts costs of petrochemicals, costs of transport of materials and finished goods, cost of energy-used-in-manufacture costs, interest cost on working capital, …
    Murphy is right about something at last: “The world is full of demand, for education, housing, jobs, security, health and social care and so much more.” Which is why the Eurozone (but not us) have such very minor disinflation due to the inflationary impact of demand.

  9. Isn’t he using sophistry to confuse two entirely different meanings of ‘demand’?

    i.e. One set of things you are actually prepared to pay for, and one you’re not particularly bothered about.

    Also, I’d never really seen his site before until today.
    HOLY CRAP! The derangement is palpable. The comment about Charlie Hebden and his own ‘courage’ is simply breathtaking. The man’s delusional Pooter. Eugh!

  10. John77

    You make a fair point. Negative inflation due to lower energy costs is qualitatively different from prices pulled down by reducing demand (OK effective demand). However, to what degree will expectations of lower prices feed on themselves to inhibit consumption and drive demand lower? And let’s be clear, the Eurozone’s monetary death embrace still has much to do with its negative inflation.

  11. Does Ritchie have an armed bodyguard to protect him from militant members of the Tax Payers Alliance?

    Does his publisher lie awake at night worried about an attack by fanatics from the ICAEW?

    Have booksellers who stock his fascist manifesto been firebombed by Big Four extremists?

    The man is a fucking cunt.

  12. And I hope you noticed that I used the BBC/Guardian official terminology there – militants, extremists. Despite these killings leaving me almost incoherent with anger.

    I’ll say it again – the man is a fucking cunt.

  13. @ Ironman
    Good point, but we’re not expecting the oil price to drop from $50 to $-10 so if a drop from $110 to $50 prodced a price fall of 0.2% then expectations of future price falls aren’t enough to worry about. Expectations of flat prices might reduce the amount of stuff that people buy because they are worried that it will cost more in future, but I recko that is, economically, a good thing.

  14. @ GlenDorran
    The TPA and the ICAEW are relatively meek law-abiding citizens. the best that we could hope is that some accountant hit Murphy over the head with the latest copy of IFRS and he (the accountant that is) did not drop dead with a heart attack from lifting it.

  15. bloke (not) in spain

    Like the pool of vomit you find on the pavement outside your gate…well you do have a confirmatory glance, don’t you? Confirm there are indeed diced carrots.

    The Great Man responds to a sycophant:

    “I can assure you, on occasion it has taken courage

    I am aso (sic) aware I will be mocked for saying so”

    Not many you won’t be. Aso.**

  16. Bloke in Costa Rica

    The combination of toxic narcissism and disabling levels of Dunning-Kruger cognitive deficit that is Murphy makes for a pretty repulsive read at the best of times, but that comment on the Charlie Hebdo massacre takes the cake. There’s not the slightest risk that any harm will come to him as a result of his drivel, although given that he’s a grubby little Fascist in thrall to an ideology that has killed millions and impoverished billions, perhaps there ought to be.

  17. Summary of blog post:

    “Wasn’t that thing in Paris awful? Anyway, enough about that, let’s talk about me”.

  18. Ironman

    It looks like he has barred any more comments on the post – doesn’t want the ‘trolls’ to potentially cause him harm.

    I think even though he matches Owen Jones for the highest number of ‘blocks’ on Twitter that post could be the end of him – offensive doesn’t even begin to cover it.

    It’s certainly something that any blog mentioning the man needs to refer back to often.


    Spot on – and I will be belatedly following your wholly principled stance of not posting on his blog (I sometimes intercede on historical matters which he normally allows) as a result of this post – otherwise I cannot do any more than echo the comments of either any one of Bloke in Costa Rica, stuck record, B(N)IS, stuck record or GlenDorran – truly mindbending stuff, even for him.

  19. @Rob – spot on.

    What next from Murphy?

    “Jesus was not recognised as the son of God and was persecuted during his lifetime and I know how he must have felt”

    or even

    “It would be great if Jesus came again as this time round he’d have me to look up to”

  20. @ Andrew C
    I *really* hope that you are joking: the first is just insufferably narcissistic, the second is blashemous.

  21. Yes I hope it’s a joke too – otherwise militant nuns will storm Andrew’s home and gun him down with AKs, yelling ‘Ave Maria!’ And something about infidels.

  22. Andrew C, Interested: cartoon material?
    And maybe one of Richie and Mo trying to trump each other on the “slander” angle.

  23. Meanwhile, o er in Ritchie la d? ‘Simon’ has blamed Austerity for the massacre. Richard Murphy just keeps km sinking lower and lower.

  24. Ironman

    Wow, just wow!

    Mark C then in effect follows it up by asking “but why comedians and not bankers”..!!?

    Ljh – I wanna see it..:) Though surely there must already be one in the Mo & J series?

  25. Ironman

    Although your comment failed to get through (probably because of the reference to Tim) did you see his reply to the same point from Geoff? – I don’t think the description of him by the superb GlenDorran can be repeated often enough – absolutely no depths he won’t plumb…..

  26. Timmy I’ll think you will find the distinction is between the lack of demand and the lack of effective demand. This is central to Keynes.

  27. Theoldgreenfascist

    And y I’ll find we started our comments with is point. And Ritchie’s post doesn’t make sense if that is the point he is trying to make. Hence he doesn’t get Keynes.

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