This is not a review.
I finished Graeber’s Debt last night and was motivated to write a short review. You can see my earlier thoughts, based on the first 1/4 of the book here. There is much I like about the book, and I was interested in writing about them. There are important monetary-debt issues that don’t get addressed. I wanted to think about how his analysis would apply to them. There were also, particularly at the end, times where I disagreed and thought his argument was somewhat misleading. For example, he uses some FRED graph of US debt and defense spending to illustrate/bolster his argument about money/debt, power, and war. Well, I’m sympathetic to the project, but when I can produce a very similar graph with non-defense spending, there should be a more convincing way to make the case.
So, some of the my review would have been critical. The book is long. It is detailed. In that light, some of the looseness of the analysis of the contemporary situation sticks out. Instead of the theoretical-empirical richness we were spoiled with throughout the text, we get alarming quotes about the ability of the Fed to create money out of nothing. I’m not saying this is all there is to the concluding chapters. But I do think they are the weakest.
I hope to write about them in more detail, but I need to do more thinking. This is not the review. I was going to do my review, until I read Mike Konczal post on monetary policy and OWS. After reading it, and following the links, I just couldn’t get in the mood to criticize Graeber. Even with great sympathy. I think his attempt to move from the history/theory of debt to radical contemporary analysis fails. But as least he tried.
Konczal’s post is motivated by an understandable worry about Ron Paul monetary policy ideas becoming popular, and the importance of teaching people in the OWS movement about monetary policy. Wouldn’t want them getting any unorthodox economic ideas in their heads!
Matt Yglesias echos a reader’s concern about Occupy Wall Street lining up with “End the Fed” rhetoric driven by the Paul camp (“Occupy Gainesville Facebook page is currently full of posts about the evil of fractional reserve banking, the danger of inflation, & other such Ron-Paulishness”), and wonders what can be recommended to get people interested in monetary policy and the Fed.
I’d really like this audience’s reactions, particularly when it comes to blog posts, videos, online materials or other general thoughts. My friend Andrew Bossie is doing some teach-ins on monetary policy at the Occupy Wall Street New York, and we have been thinking of ways to formalize it for the audience – there’s a huge demand from people who want to learn.
For online stuff that comes to mind, there’s Matt’s article and Paul Krugman on the babysitters’ co-op. I really like Chris Hayes’ paper from early on, The Case for Inflation, which places it against the Washington Consensus of the past 30 years and the changing battle of ideas over economics. At one of the Federal Reserve panels we did, Josh Bivens of EPI outlined Five Ways to Determine a Strong Liberal Member of the Federal Reserve, which I thought was very helpful.
If you follow the link to Yglesias we get this Yglesian gem:
A certain number of members of the 99 Percent Movement seem to have picked up on some very unsound ideas about monetary economics, perhaps through the mechanism of joint participation with Paul-ites in anti-war activities.
Ut-oh! Unsound ideas! Now I’m not a proponent of unsoundness. I like sound. But if there is one thing we need to criticize along with Ron Paul monetary economics, it is the supposedly obvious authority of supposedly sound economics. From what I can gather, sound progressive economics is one part quasi-monetarism (or even crude monetarism) and one part “tight monetary policy is bad for workers.” This is a defensible position, and I understand how progressives end up there.
But at this period, in the context of OWS, is this really the best we can do?
The choice between unsound pop-Austrian economics and this sound technocratic progressive monetary policy is a false one. To the extent progressives insist on this choice they will lose people to Ron Paul. Sure, some of the OWS protester who are enamored with the wonkishness or pragmatic seriousness of the blogosphere will be convinced. But many who are interested in power and morality will naturally be attracted to Ron Paul types.
I’d be more sympathetic to the pragmatism of this progressive monetary policy (there is a lesser of two evils aspect to it) if it didn’t do so much to foreclose more radical criticisms.
At the same time, it is not the job of progressives to make radical critiques. They are quite busy pining for the days of Clinton, imagining the golden age of capitalism could exist forever, or daydreaming about a utopian world in which the Federal Reserve took the Taylor Rule more seriously.
Radical economists have done a very bad job producing accessible criticisms of money (and monetary policy). Part of this is understandable. On one hand, many radical political economists have little hope in monetary policy. On the other, some have teamed up with progressives and liberals to attack to the lesser evil of inflation targeting. It is also interesting to note that some of the left work on monetary policy has been devoted to democratizing the Fed, which is completely out of play for today’s progressives, who fight hard against the politicization of the Fed – at least until misguided Americans can be enlightened by Matt Yglesias.
First, I thought I’d review Graeber and criticize him some. Then, I guess, I thought I’d criticize the progressives and rethink Debt. I now realize I only have myself (or ourselves, to include sympathetic readers) to criticize.
I’m sorry! I’m working on it.