2017 Our manifesto for full employment is almost ten years
Ths manifesto written in common with our friends from the association "chômage et monnaie" can be found on this site at page www.neties.com/manifeste.html and on the site chômage et monnaie page http://www.chomage-et-monnaie.org/2008/01/manifeste-2008/
-A recent trip to New York where I had very deep discussions with Tom Ferguson Director of Research of the Intitute for New Economic Thinking (INET) on the economic future of the USA after the election of Donald Trump and on the rise of populist parties coming from the nationalist right wing in France and in Europe.
- Two conferences in Italy with my friend Warren Mosler : the first in Cagliari, the second in San Reggio di Calabria
- A conference in Torino to teach the general theory of monetary circuit and distribution at the invitation of Jan Toporowski
- A conference in London at the seminar of Victoria Chick at the faculty for oriental studies in which I addressed how a full theory of distribution is to be included in a general Circuitist Kaleckian model.
- A conference at the university of AAlborg-DK at the northern Post-Keynesian spring school invited by my friend Jesper Jespersen. I addressed "No, we can't", a harsh dismantling of the austerity-to-death policies in the euro-zone.
- Two interventions at the Grenoble Post-Keynesians summer-school, one on the core principles of the theory of monetary circuit, the other one in the round table on the future of the euro.
- A conference in Poland, see below.
Many new publications all of them in the International Journal of Political Economy (IJPE) edited by my friend Mario Seccareccia and in the Mexican Journal Ola Financiera edited by my colleagues and friends Alicia Gijon et Eugenia Correa;
- A paper with my friend and colleague Slim Thabet for the special issue on "Keynes today" (2016) "The XXIrst century world crisis, a Keynes moment". IJPE Vol. 42 pp. 26-39
- A paper in the special issue, criticism of current New-Liberalism
from a Polanyian perspective. IJPE Vol. 41 n° 4 winter 2012-2013
Like Daniel Pichoud, I am horrified by the accelerated
collapse of the financial real economy and society. France like all european
countries is evolving towards what Peter Temin (2016) deems the unsustainable
dual economy, On one side, there is the leading dominant sector Finance-High-Tech-Electronic
Sector, on the other side there is the subordinate overwhelming sector
of the economy and society. Duality instores a rigid apartheid between
the two part of society. The FHTE sector controls economic and social policy
and the State becomes its tool to enhance its rule.
As I explain in my last research paper presented in Poland, such a total metamorphosis of capitalism leads to effective risc in unemployment, unsustainable inequalities in distribution of income, debasement of education and culture.
In USA, the Trump regime is the outcome of such a catastrophe.
It regenerates a very dark past since the impact of strong neo-nazi commitment
is strong amid his closest advisers.
In Europe, governments are blind to the disaster. They applaud the Greek Prime Minister who destroys his country to pay the State debt. It is a perfect exemple of the obscure faith into the euro new order of which the core principle is to demonetise the State by preventing ab initio the State creation of money.
Are governments and their experts that ignorant of the law of macro-economics?
Today, my answer is straighforawed : illimited austerity
was and is still the ultimate ratio of the Euro as I prove in my study
(IJPE). The father of the Euro, François Perroux, was a dedicated
nazi philosopher for whom austerity was part of racism as the sine qua
non of creating a strong, brutal, new people! In the course of years, nothing
changed, Perroux and his followers shaped the so-called "French Plan" aiming
at a permanent austerity.
What is a pure drama : in the course of time the very spirit of resistance vanished with the debasement of culture and education.
In USA, there could be hope under the Obama administration
when Janet Yellen replaced as chair of the Federal Reserve Board Ben Bernanke
the ultra-conservative "Albeit new-Keynesian (which means nothing)
aimed at minimizig the rate of unemployment (official measure) by accelarating
the acquisition of federal bonds held by banks.
Whatever the dubious success of those policies only targeting banks one must wonder what could be the Trump administration political economy. As far as we know, Trump's agenda is to restore some kind of State monopoly capitalism like in the XXth century golden age. It would be a cornucopia for financial trusts and big corporations, with the promise of quasi 0 taxes and abolition of all protection of environment!
In any case, I strive to enlarge my prespective as shown
by my Post-Marxist
last essay thanks to discussions
with high-minded friends in Mexico, Italy, France indeed.
To sum up for Europe:
- Abandon the Euro
- Renounce all fiscal pacts
- Repudiate the debt
Herein are the sole solutions.
My friend Daniel Pichoud believes that the Euro could be saved by a sovereign decision of the European Council. For me, it is fully impossible.The ruling technocrats at all levels want permanent harsch austerity like the early fathers of the order.
I am now working hard of what could be a useful social protectionism against multinationals like Monsanto.
I am also thinking anew on the question of exchange-rates.
With some delays, the outcome of some health problems here is what I did or strived to do in the past year and the early new year.
-Two conferences in Bergamo Italy presenting the core of the general theory of the monetary circuit and at the invitation of MMT (Modern Money Theory) with my friend Warren Mosler.
-One invitation in Mexico to teach monetary theory and public finance and receive the
“Reconocimiento Ifigenia Martinez”
-A presentation of the book in my honour in Ottawa followed by the delivery of a paper at the Eastern Economic Association conference in Boston: A critique of flat earth economics: Potential output and structural deficits.
-Three books, the first in English a collection of paper of Post-Keynesian economists: Monetary Economies of Production: Banking and Financial Circuits and the Role of the State: Essays in Honour of Alain Parguez. Co-edited by Louis-Philippe Rochon and Mario Seccarecia. Cheltenham: Edward Elgar.
the two others in Italian one being on line in its original english version at : http://www.edizioniandromeda.com/media/6/24.pdf
A paper with my friend and colleague Slim Thabet for the International Journal of Political Economy special issue on “Keynes today” : The XXIst century world crisis : a Keynes moment IJPE vol 42 pp26-39.
A paper soon to be published in the Review of Keynesian Economics: A modern capitalist economy without deflation.
Numerous videos on YouTube under the search words “ Parguez MMT” or “Parguez Euro”
My analysis of the present situation
With Daniel Pichoud we are horrified by the collapse of the French real economy.
In Europe governments advisers have a very poor knowledge of the laws of macroeconomics. We can forecast that if the European Council keeps implementing austerity policies that mistake good use of public spending with forbidding the financing of public investments by a budget deficit, we will see a shrinkage of our countries real wealth when there is an outrageous unused human capital. This is not to be accepted. On the false pretext of not indebting our children we forbid to a great number of them to work and build their future and deprive them of the means to live then as we do now with our competitive advantages;
Discussions with Daniel Pichoud and with my friend Riccardo Bellofiore convinced me that the problem of the Eurozone is not the Euro but the way the governments use it to give legitimacy to their predatory ideology.
In the USA at the end of a 2013 monetary committee (FOMC),
the Federal Reserve has indicated that it will reduce from 85 down to 75
billions dollars (from 63 down to 56 billions euros) the monthly purchase
of assets that is made to support economic activity. Beginning in january
2014 the bank will purchase 40 billions $ in treasury bonds instead of
45 previously and 35 billions $ of mortgage backed securities instead of
40 previously (when In Europe the ECB cannot buy directly treasury bonds
from the member States and thus cannot master their interest rate). It
was the last decision of Ben Bernanke, a "New Keynesian" with
a somewhat high target of unemployment (6,5%), Janet Yellen who succeeded
him aims at less than 6% unemployment (she is a Keynesian deficit dove)
and money creation will continue.
With Daniel Pichoud we are owls (Keynesian deficit owls) thinking that it is feasible to aim at a long-run target of 0% rate of unemployment (not including of course those who lrft a job for anther job they are sure to obtain) before stopping to rise the public debt of the States to avoid triggering inflation.
In Europe, alas, most economists will continue to state that this money creation about half for the State an half for the rest of he economy is unsustainable and will have no impact on job creation. They simply ignore the fact that in the USA the budget deficits of 10% of GDP accepted during the two first years of the Obama presidency brought unemployment down from 10% in 2009 to 7.6% in 2013.
As for myself I will continue to « enlarge » the Theory of the Monetary Circuit and economics emphasizing the leading role of the State as an existence condition of the circuit itself. Studies like the wonderful book “The entrepreneurial State” of Dr Mariana Mazzucato support this core proposition which rejects all exogenous limits to “public deficits” and public debt as long as they reflect State investments building the best possible future and as long as the State never get indebted to private banks. It must be supported by a theory of exchange rates, I am working on, proving that on one side floating exchange rates are required, on the other side that the tragedy of the Euro is that it is grossly overvalued by speculation.
I will leave this work as a legacy to the future generations
of progressive economists;
"By decree of the European council
wealthiest States whose debt is still rather well rated, create a pool
, a special fund managed by the European Investment Bank (EIB), issuing
euro-bonds sold to the ECB, technically to the respective central banks
at zero or quasi zero rates.
Proceeds from euro creation by the ECB will be borrowed at quasi zero rates by Greece, Spain , etc... which could cancel enough share of their debt to reverse private banks expectations.
The success depends on three conditions.
First condition : No more destruction plans imposed on Greece. All existing destruction plans should be stopped.
Second condition : Proceeds of this acquisition of euro bonds should not be included into public debt, borrowing should be purely conventional.
Third condition : what about the
The technique is to fail if it only deals with past never to be reimbursed debt. It must free the future, allowing all member States to change the course of their policy and play again their anchor role. It means that the principle of privatisation of public finance should be jettisoned. Euro bonds must be issued by all member States to allow the reconstruction of the Euro-zone economy and society by public investments bypassing the still frightened private banks. The counterpart of these bonds is the accelerated growth of the stock of public capital including of course its crucial component; human capital.
Proceeds will be transferred to
all member States and especially to poorest States to reconstruct their
real economy devastated by addiction to punitive austerity imposed by France
and Germany alike. "
“Could this solution be accepted? I have to express my strong doubts since it violates the hidden supreme purpose of the "Union". Instead of an hyper-capitalist system which is dying it could achieve a new mode of production what could be deemed social-capitalism. How could this evolution be accepted by Germany and especially by France which are more than ever starting the race to "Austerity" or "Rigor Mortis"?
No shrewd financial innovations can save what cannot be saved because it does not want to be saved.
The dismantling of the State, its
privatisation shared by the whole EU rulers is the true cornerstone of
the Union. What would banks do with the money created to save them, invest
it in private assets never issued for real value generating expenditures.
Henceforth, while destroying the real base of the economy and depriving
public bonds of any real value, forced "reimbursement" of the debts
will generate a new wave of hyper-speculation and capital gains plus dividends
to former productive corporations motivating them to abandon without remorse
the real economy! As for wished reimbursement before terms decreed
by Germany and France for their own debt one can only cry before
such a folly of the ruling elite!!!
Finally, the loss of value of private assets, the collapse of the "financial markets" will be the twilight of the gods of EU Walhalla”
May 18 - Responding to the invitation of Alain Parguez
the great american economist James Galbraith gave a lecture at the University
of Besancon Read the report
On the theme of the new "New Deal of President Obama this conference which was a complete success, has been very enlightening on the differences in economic policy between the USA and Europe.