Not again. Philip, there are no qualms about your superior writing skills. But frankly this topic is getting boring and long-winded. You ain't going to convince sceptics and critics about your love affair with capitalism. So ... read full comment
Not again. Philip, there are no qualms about your superior writing skills. But frankly this topic is getting boring and long-winded. You ain't going to convince sceptics and critics about your love affair with capitalism. So please let it go and educate us about something more pressing today. How about some practical steps for improving the public services and growing the economy in Ghana?
Kojo T 8 years ago
1Karl Marx talked about command economy.Of course even Lenin did not know who produced what.That was left to the collectives and co operatives and relevant local authorities.That had nothing to do with Keynes .2 Location of p ... read full comment
1Karl Marx talked about command economy.Of course even Lenin did not know who produced what.That was left to the collectives and co operatives and relevant local authorities.That had nothing to do with Keynes .2 Location of productive units has always been determined by unit costs be it socialist or capitalist Difference my friend is who owns the enterprise.3 GIHOC did not fail because of socialism .It was our culture but more importantly poor management and IMF dictates.Nkrumah did not have cocoa plantations in the Accra plains but had cattle .Komenda had sugar factory and sugar cane plantation. The question still remains , is profit not the motive for private enterprise? Does it not work on principle of PROFIT MAXIMISATION? Pay less and get highest returns Is that not greed? So why is Kwarteng wrong? As for business failures they are there in private and state owned .New products are also away of life .American auto industry failed to adapt and was over taken by the Asian models.Change takes place all the time and you got to keep adapting. Refer to Einstein ïf you are stationery , you move backwards as others are moving forward" PKB you need to modernize your own theories .Africans need a marriage of the two to develop Nkrumah wa right on the button.
Philip Kobina Baidoo 8 years ago
Hello Kojo, you said quite a few things, but you hit on a very important phenomenon, which helps to sustain an enterprise, and that is profit. However, you are against it. State Fishing Corporation, for a few years till they ... read full comment
Hello Kojo, you said quite a few things, but you hit on a very important phenomenon, which helps to sustain an enterprise, and that is profit. However, you are against it. State Fishing Corporation, for a few years till they went down, was not making any profit, yet the workers were being paid. At a point, it became unsustainable and the back payment of their salary run into several months. Eventually the bottom gave up. Can you imagine if the management of the corporation had the concept of profit as their operating principle? The collapse wouldn't have happened. Thank you T.
Philip Kobina Baidoo 8 years ago
Hello JD, I have been expecting this for a very long time. We all indulge in things that sometimes do not make sense to other people. Just today there is piece captioned ‘World Bank raises concerns over new national airline ... read full comment
Hello JD, I have been expecting this for a very long time. We all indulge in things that sometimes do not make sense to other people. Just today there is piece captioned ‘World Bank raises concerns over new national airline’. Apparently, the government is still bent on establishing a new national airline that is sure to fail. I have written about this about thrice in the past. The last one was just about two years ago. What do you want from me; can’t I engage in something that interest me? You can check my previous articles, other than this series, regarding my contribution to nation building. I don’t have to tell you; the evidence is there for you to see. Thank you.
francis kwarteng 8 years ago
Readers,
To start, readers may want to read this book "Keynes: Useful Economics for the World Economy." The book's authors are David Vines (Oxford University" and Peter Temin (MIT).
This is a small volume and presents ... read full comment
Readers,
To start, readers may want to read this book "Keynes: Useful Economics for the World Economy." The book's authors are David Vines (Oxford University" and Peter Temin (MIT).
This is a small volume and presents Keynes ideas in an accessible manner and provide deeper insights into how Keynes' revolutionary ideas connect with the current international financial crisis.
It also goes into the roles Keynes played in Europe's reconstruction, post-First World War War economic policies, containing the Great Depression, post-Second World War world economy and more, ushering in the golden age of economic growth.
Now let's go to another topic:
Title: "Keynes: The Return of the Master" (A review)
Author: Paul Krugman (won the Nobel Prize for economics last year, 2008)
Source: The Guardian
Date: Aug. 29, 2009.
........................................................................................................................................................
"At research seminars, people don't take Keynesian theorising seriously anymore; the audience starts to whisper and giggle to one another." So declared Robert Lucas of the University of Chicago, writing in 1980. At the time, Lucas was arguably the world's most influential macroeconomist; the influence of John Maynard Keynes, the British economist whose theory of recessions dominated economic policy for a generation after the Second World War, seemed to be virtually at an end.
But Keynes, it turns out, is having the last giggle. Lucas's "rational expectations" theory of booms and slumps has shown itself to be completely useless in the current world crisis. Not only does it offer no guide for action, but it more or less asserts that market economies cannot possibly experience the kind of problems they are, in fact, experiencing. Keynesian economics, on the other hand, which was created precisely to make sense of times like these, looks better than ever.
But while Keynesianism is experiencing a revival, there are major questions about just what needs to be revived. Many economists agree that their field went off track, that in some important ways it lost touch with reality, and that a return to some of the ideas Keynes laid out more than 70 years ago is part of the cure for what ails us. But there is much less agreement about what, exactly, needs to change in the way we think about matters economic.
In this book, Robert Skidelsky, the great biographer of Keynes, searches for clues in the original work of "the master". The book is part critique of the current state of economics, part biographical sketch (it's worth your time just for Chapter 3, "The Lives of Keynes"), part programme for the future.
It also offers a brief but compelling account of the anti-Keynesian counter-revolution, the movement that began with Milton Friedman and reached its apex with Lucas's whispers and giggles. Skidelsky's book is an important contribution at a time of soul-searching, a must read even if one doesn't fully accept its conclusions.
As you might guess, I do, in fact, have some questions about Skidelsky's conclusions, though not so much about how we got here as about what we do next. And those questions, in turn, centre on a long-running dispute over what Keynesian economics are really about.
In Part I of his 1936 masterwork, The General Theory of Employment, Interest, and Money, Keynes asserted that the core of his theory was the rejection of Say's Law, the doctrine that said that income is automatically spent. If it were true, Say's Law would imply that all the things we usually talk about when trying to assess the economy's direction, like the state of consumer or investor confidence, are irrelevant; one way or another, people will spend all the income coming in. Keynes showed, however, that Say's Law isn't true, because in a monetary economy people can try to accumulate cash rather than real goods. And when everyone is trying to accumulate cash at the same time, which is what happened worldwide after the collapse of Lehman Brothers, the result is an end to demand, which produces a severe recession.
Some of those who consider themselves Keynesians, myself included, agree with what Keynes said in The General Theory, and consider the rejection of Say's Law the core issue. On this view, Keynesian economics is primarily a theory designed to explain how market economies can remain persistently depressed.
But there's an alternative interpretation of what Keynes was all about, one offered by Keynes himself in an article published in 1937, a year after The General Theory. Here, Keynes suggested that the core of his insight lay in the acknowledgement that there is uncertainty in the world – uncertainty that cannot be reduced to statistical probabilities, what the former US defence secretary Donald Rumsfeld called "unknown unknowns". This irreducible uncertainty, he argued, lies behind panics and bouts of exuberance and primarily accounts for the instability of market economies.
In this book, Skidelsky puts himself in the camp of those who argue, in effect, that Keynes 1937, not Keynes 1936, is the man to listen to – that Keynesianism is, or should be, essentially about uncertainty and how it leads to economic instability. And from this he draws some radical conclusions.
Most strikingly, Skidelsky declares that the traditional division between microeconomics and macroeconomics, which is based on whether one focuses on individual markets or on the overall economy, is all wrong; macroeconomics should be defined as the field that studies those areas of economic life in which irreducible uncertainty, uncertainty that cannot be tamed with statistics, dominates. He goes so far as to call for a complete division of postgraduate studies: departments of macroeconomics should not even teach microeconomics, or vice versa, because macroeconomists must be protected "from the encroachment of the methods and habits of mind of microeconomics".
How far should we be willing to follow Skidelsky in this? I think we must trust the biographer in his assessment of Keynes himself; Skidelsky argues persuasively that Keynes spent much of his life deeply focused upon, even obsessed with, the question of how one acts in the face of uncertainty, which is why Keynes 1937 comes closer to the essence of the great man's own thinking.
That's not the same thing, however, as saying that Keynes was right – even about his own contribution. Surely it's possible to make the case for a less profound reconstruction of economics than Skidelsky advocates. I'd point out that behavioural economists, who drop the assumption of perfect rationality but don't seem much concerned by the essential unknowability of the future, have done relatively well at making sense of this crisis; I'd also point out that current disputes over economic policy, above all about the usefulness of government spending to promote employment, seem to be primarily about Say's Law – that is, Keynes 1936.
No matter. You don't have to agree with everything Skidelsky says to find this a wonderfully stimulating book, one that reflects the author's unparalleled erudition. We're living in the second Age of Keynes – and Robert Skidelsky is still the guide of choice.
........................................................................................................................................................
MARCUS AMPADU 8 years ago
"And this what happened in some of the GIHOC industries that were established by Nkrumah. When an economy is run like this it is bribery, corruption, nepotism, cronyism, gerrymandering and all the political vices you can thin ... read full comment
"And this what happened in some of the GIHOC industries that were established by Nkrumah. When an economy is run like this it is bribery, corruption, nepotism, cronyism, gerrymandering and all the political vices you can think of ...". Gerrymandering in Nkrumah's Ghana. Not for a bloody dictator, excuse my French, bent on establishing a one party state ?
Give me a break; you guys think Ghanaians can't read between the lines?
It would be nice Mr. P.K. Baidoo Jr. If you concede that Lord Keynes presented "the first economic rationale for a central bank as a development agency", and thus set the stage for a development model in which both the government and the market work together to achieve economic growth and ultimately development. Truth be told, this one of the conditions that allowed the Asian Tigers in East Asia to take off in their industrialization. A fact that did not escape the Osagyefo's establishment of GIHOC. A strong central government the economy rapidly forward until it reaches full industrialization of the developmental stage. Unfortunately, the nation wreckers had something else in mind to our loss & stagnation.
Kwame 8 years ago
China with the state owning the major means of production and distribution will soon takeover U.S. as a leading economic power. China does not overthrow the government of other countries and usurp power without responsibilit ... read full comment
China with the state owning the major means of production and distribution will soon takeover U.S. as a leading economic power. China does not overthrow the government of other countries and usurp power without responsibility and does not also steal the monies belonging to other countries as the U.S. does, and a cases in point are Iraq and Libya. We wrote that after the U.S. coup in Ghana in 1966 over 150 thousand Ghanaians lost their job and that did not make people who became unemployed rich, of course some of them remained unemployed for the whole of their lives. China has a state food production corporation and both China and India (which is a capitalist state) have state food distribution corporations. Francis Kwarteng, you lost the economy analysis even before you started it. We also gave a lot of example between Cuba and the U.S.
Philip Kobina Baidoo 8 years ago
Welcome back Mr Ampadu. It is good to know about the Asian Tigers, but where are all the GIHOC factories? The fact that they are defunct without replacement is my problem. TOR is rotting away and we cannot get it to work. Pol ... read full comment
Welcome back Mr Ampadu. It is good to know about the Asian Tigers, but where are all the GIHOC factories? The fact that they are defunct without replacement is my problem. TOR is rotting away and we cannot get it to work. Political wrangling has become the food for TOR. Do you see my point maybe not. Thank you, good to have you back.
KKO 8 years ago
Wow, Mr Amapadu,
How old are you? Most of the factories in Ghana were operating at 30% capacity or less. There was no money to import raw materials, let alone replace equipment! I saw a bit at a few of the factories first h ... read full comment
Wow, Mr Amapadu,
How old are you? Most of the factories in Ghana were operating at 30% capacity or less. There was no money to import raw materials, let alone replace equipment! I saw a bit at a few of the factories first hand.
The longest lasting ones were Aboso Glass Factory, Bonsa Tyres and GIHOC Distilleries because 90% of their raw materials were obtained locally, but even then, when their machinery began to beak down they could not be replaced, so the Nkrumaist Kwesi Botchey and his friend Jerry gave them away for a song, o their friends!
Why do you think Kwame Nkrumah's ministers denounced him after February 24 1966? Most of them recognised that their socialist experiment had been a monumental failure!
If you look around Africa, almost all the parties of independence, including even Nyerere's, are still forces to reckon with in national politics. Why is it that the CPP constantly gets 3% approval in national elections?
Kufuor's eight years in office showed clearly that the spirit of entrepreneurship with which our forebears embraced cocoa farming in the Eastern, Central, Ashanti and later Western and Brong Ahafo Regions, is very much ingrained in the Ghanaian and only a system of "Free Enterprise in Freedom" will move Ghana forward. Mahama's present fumbling says it all!
Kay 8 years ago
Africans flock to the prosperous western countries bexause they are the ones that descended on them and plundered and enslaved them.How many colonies did Russia,or North Korea had in west Afrixa? get it into your head that on ... read full comment
Africans flock to the prosperous western countries bexause they are the ones that descended on them and plundered and enslaved them.How many colonies did Russia,or North Korea had in west Afrixa? get it into your head that one party dictatorship was the epitome of lee Kuan Yew and Park of South Korea regimes.Mitchell Palmer as an Attorney General of USA incarcerated more than 3000 people without any care about human rights or the law.Who elected him? Edgar Hoover caused more misery to people in America"s bogus democracy for 48 years.Who elected or voted for him? When your father came to Tema to work,Nkrumah made sure there was a decent flat for him to live in without paying crazy rent to Rackman styled landlords.Go and tell the people of Biafra the virtues of Shell and other capitalist vultures.What has capitalism done for the aveage Nigerian? A snatior earns more than a million dollars a year.Dictatorship has nothing to do with socialism.Pinochet was not some socialist adherent. The six big oil companies made over 500 billon dollars profit in 2013.Those in the mangroves and swamps of the delta basin are not benefactors.I do not want any of your simplistic answers.Cuba as a third world country without natural resources still beats Nigeria in all aspects of HDI.They might earn only $20 amonth but they have medical care and education.In capitalist Nigeria if you do not pay upfront you die.Nigeria is a good case of all what is wrong with capitalism.
Philip Kobina Baidoo 8 years ago
Did you really want answers Mr Kay? I don't think so. Thank you anyway.
Did you really want answers Mr Kay? I don't think so. Thank you anyway.
amanfo 8 years ago
Dear Sir Baidoo
never forget this fact that, capitalist exploitations once nearly succeeded in wiping out an entire continent and her race. Subsequently, it left behind its trail, loss of dignity and pride which has made nob ... read full comment
Dear Sir Baidoo
never forget this fact that, capitalist exploitations once nearly succeeded in wiping out an entire continent and her race. Subsequently, it left behind its trail, loss of dignity and pride which has made noble minds like yours to sojourn in a faraway land from home. No ideology is perfect in its form and so are both communism and socialism but, in anyday i humbly believes socialism wil prevail. Let's analysis this scenario, you have a firm and have employed people to work for the progress and contineous sustenance of the entity with your workers well paid. You found out later, these same workers are siphoning the company's scare resources for their own comforts. I don't think you will be happy witnessing this and may lead you to take some drastic actions which may be diasatrous at the end. This was exactly what happened and is happening in state owned enterprises and you don't expect a good leader to laugh at this total craze for materialism. This and many more are some of the reasons that accounted for some of the excesses in the socialist states. Thank you
Philip Kobina Baidoo 8 years ago
Hello Mr Amanfo, per your analysis if you are a manager or owner and cannot be able to determine how to counter such behaviour then you are not worthy of the name or ownership. If you have your eyes on your accounts and keep ... read full comment
Hello Mr Amanfo, per your analysis if you are a manager or owner and cannot be able to determine how to counter such behaviour then you are not worthy of the name or ownership. If you have your eyes on your accounts and keep your stock control tight l don't see why you should have any problems. Thank you.
amanfo 8 years ago
your criticism on Nkrumah cannot help matters especially when i suspect that you have taken pains to read the totality of Yuri SMERTINS's book 'Kwame NKRUMAH' or have chosen to ignore the facts presented. Thank you
your criticism on Nkrumah cannot help matters especially when i suspect that you have taken pains to read the totality of Yuri SMERTINS's book 'Kwame NKRUMAH' or have chosen to ignore the facts presented. Thank you
PhiIip Kobina Baidoo 8 years ago
Hello Mr Amanfo, the fundamental is the results, and I don't mean through foul means to achieve it. Therefore, it doesn't matter what others write. Despite the evil nature of Hitler there are some who still write in glowing ... read full comment
Hello Mr Amanfo, the fundamental is the results, and I don't mean through foul means to achieve it. Therefore, it doesn't matter what others write. Despite the evil nature of Hitler there are some who still write in glowing accounts of him. Thank you.
Not again. Philip, there are no qualms about your superior writing skills. But frankly this topic is getting boring and long-winded. You ain't going to convince sceptics and critics about your love affair with capitalism. So ...
read full comment
1Karl Marx talked about command economy.Of course even Lenin did not know who produced what.That was left to the collectives and co operatives and relevant local authorities.That had nothing to do with Keynes .2 Location of p ...
read full comment
Hello Kojo, you said quite a few things, but you hit on a very important phenomenon, which helps to sustain an enterprise, and that is profit. However, you are against it. State Fishing Corporation, for a few years till they ...
read full comment
Hello JD, I have been expecting this for a very long time. We all indulge in things that sometimes do not make sense to other people. Just today there is piece captioned ‘World Bank raises concerns over new national airline ...
read full comment
Readers,
To start, readers may want to read this book "Keynes: Useful Economics for the World Economy." The book's authors are David Vines (Oxford University" and Peter Temin (MIT).
This is a small volume and presents ...
read full comment
"And this what happened in some of the GIHOC industries that were established by Nkrumah. When an economy is run like this it is bribery, corruption, nepotism, cronyism, gerrymandering and all the political vices you can thin ...
read full comment
China with the state owning the major means of production and distribution will soon takeover U.S. as a leading economic power. China does not overthrow the government of other countries and usurp power without responsibilit ...
read full comment
Welcome back Mr Ampadu. It is good to know about the Asian Tigers, but where are all the GIHOC factories? The fact that they are defunct without replacement is my problem. TOR is rotting away and we cannot get it to work. Pol ...
read full comment
Wow, Mr Amapadu,
How old are you? Most of the factories in Ghana were operating at 30% capacity or less. There was no money to import raw materials, let alone replace equipment! I saw a bit at a few of the factories first h ...
read full comment
Africans flock to the prosperous western countries bexause they are the ones that descended on them and plundered and enslaved them.How many colonies did Russia,or North Korea had in west Afrixa? get it into your head that on ...
read full comment
Did you really want answers Mr Kay? I don't think so. Thank you anyway.
Dear Sir Baidoo
never forget this fact that, capitalist exploitations once nearly succeeded in wiping out an entire continent and her race. Subsequently, it left behind its trail, loss of dignity and pride which has made nob ...
read full comment
Hello Mr Amanfo, per your analysis if you are a manager or owner and cannot be able to determine how to counter such behaviour then you are not worthy of the name or ownership. If you have your eyes on your accounts and keep ...
read full comment
your criticism on Nkrumah cannot help matters especially when i suspect that you have taken pains to read the totality of Yuri SMERTINS's book 'Kwame NKRUMAH' or have chosen to ignore the facts presented. Thank you
Hello Mr Amanfo, the fundamental is the results, and I don't mean through foul means to achieve it. Therefore, it doesn't matter what others write. Despite the evil nature of Hitler there are some who still write in glowing ...
read full comment