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The New Keynesianism: An Outline PDF Print E-mail
The Labour Movement-Economy

GDP PPP Per Capita IMFThe practice of the abuse of power on the part of hedge funds, the self-appointed credit ratings agencies, and the many 'factors' in the market is still observable after their 'bail-out'. At this time, they are playing the casino the expense of the euro in the face of an expected explosion of unemployment in Europe and of a debilitated welfare state, given that their bail-out has derailed public finances.

It is provocative in the extreme that they are doing this after the first breathing-space - fictitious or actual - given by the restoration of their liquidity. As regards their impact on the economy of the United States in recent decades, Paul Krugman comments that the increase in inequality in the USA has no counterpoint anywhere else in the advanced world.[1]
These totalitarian, greedy, and pitiless practices which use - among other things - the power of fear and of panic broaden the debate over the need for a new Keynesianism.

As is the case with every step in evolution, in the field of the economy the new management must also necessarily start out from the level of resourcefulness. It is always the right of invention, reason, and imagination to manage events and data. The problem lies in the fact that, on the one hand, reason is not the dominant mentality and is not culturally well-founded, and, on the other, imagination does not have within it the fervour and psychological cordiality necessary to permit the transcendence of narcissism.

As regards narcissism, the foremost author who lays down the terms on which we think of the market economy even today, Adam Smith, in his book The Theory of Moral Sentiments, with which he achieved fame for the first time, defines narcissism as the motive force of the market society: "For to what purpose is all the toil and bustle of this world?what is the end of avarice and ambition, of the pursuit of wealth, of power, and preheminence?  [ ... ] To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease, or the pleasure, which interests us."[2]
We are, therefore, faced with a difficult situation, as regards progress in the recognition of society, and of its quality and role.

The timely need for a new Keynes
The time is more ripe than it has ever been for the role of a new Keynesianism to be defined, in the context of the regulation of the market. This role is suggested by the needs, in terms of the environment or sustainability, of the economy, as well as by political and social needs, or even by geopolitical impasses. The same applies to the level of parliamentary governance, where we actually have signs of saturation and fatigue in party-political development, at the same time as fatigue in parliamentary institutional administration and representation.
What we have before us, that is, is the need for us to be able to intervene definitively into developments, both in the market and in the community of politicians and administrators. Within this community there is an additional factor - that of modern political money. Political money is a point which requires particular attention, and its regulation is by no means only an institutional matter. There is a need for additional practices of transparency and openness, since here, if an effort is made to secure transparency, the danger lurks of our 'safeguarding' the established political figures and of contributing to the tendency to exclude from the political arena any representative of what is new, as well as to the reinforcing of its structure of cronyism. And so we have to be very careful.

In the field of economic money, new factors are now beginning to come into play. An example is the influence of sustainability on money, green money, in the theory of which the necessity for redistributory money (and we must pay particular attention to this) is also developing, just as there is, in any event, a need for cultural money. It could be said that the creation of new zones, of new qualities of capital is the characteristic of the present age.
Unfortunately, however, for the time being, this capital is being produced at a slow rate, and it does not have reason and inventiveness as its source, since it is fuelled by a creativity which is lacking in speed and perspective.

Our concern is again to allow reason to be the regulatory factor of these new qualities, of the new range of money, both at the level of the political and administrative, and at that of the economic system. The prospects for the expression of these changes in the realm of money are at present limited, as there does not seem to be the necessary awakening of consciousness on the part of the majority of citizens in the face of the impasses and problems of the system. Against this background, voices are increasingly raised to warn against the consequences of the practices of the abuse of power by market forces. Such a voice is that of Simon Johnson, who, with reference to Goldman Sachs, remarks that just as one corrupt stockbroker is all it needs to bring down a bank, so one corrupt bank is all it needs to bring down the world financial system.[3]
At the same time, civil society is still going through its awakening with an inner narcissism which, from an anthropological point of view, is perhaps inevitable. The entirely constructive awakening of civil society involves dangers - as is the case with all human affairs - which have to do with the phenomenon of the 'backwardness in enlightenment' and with a deficit in the sphere of the development of correct human relations and of discernment, in connection, naturally, with what is expected of civil society if it is to be useful and react effectively to the challenges with which it is presented.

Characteristics of the new Keynesianism
Amartya Sen has shown us - and for this, moreover, he was honoured with the Nobel Prize - that in the end consummation of democracy and the democratic maturing of societies are cognate with their economic development. The scientific demonstration of the fact of the interconnected and holistic character of the forms of development leads us to the conclusion that a new Keynesianism is imminent.

This new Keynesianism, then, has to do, on the one hand, with the highlighting of the holistic and differing character of development, something about which even liberalism appears to speak, and, on the other, with conscious intervention, with drawing attention to the rational features in the market and in institutions. Drawing attention to these rational features in a subsidised way is a subsidization of history itself. History needs subsidisation, it needs new quantities of money and capital, to be invested and to bring us to a fulfilment of man's employment.

One example of many which gives expression to a line of thought on the prevalence of one-sided approaches to the way in which the level of remuneration in our age is determined is provided by Howard Zinn when he wrote: "I worked hard as a college professor, but it was pleasurable work compared to the man who came around to clean my office. By what criterion (except that created artificially by our culture) do I need more incentive than he does?"[4]

The fulfilment and direction of people's employment is the most cultural point, and it could be said that the community of the spirit aims at the maximisation of the potentialities curve, in terms both of quality and quantity. This potentialities curve has within it the universality of employment, qualitatively and quantitatively.
The emergent spiritual dimension of labour is another point in the jigsaw which requires its connection with that desirable broader framework of operation of the market which is not imprisoned in its economic dimension. It is in this direction that the sociology professor Richard Sennett is moving when he says: "If we really mean to emerge from the crisis, we must seek its epicentre... . A rebirth of any kind will only come through the rebirth of the place and institution of labour ... . Modern capitalism has led to the weakening of democratic values. ... I consider it essential for us to focus our attention on the work environment and see how this can change. Because there is no other available means of educating people afresh in participation.[5]
Our desideratum is not that we should bring reality towards a conception of a quasi-ideology. It is that we should be liberated from ideologies, and the road to this liberation is followed by not leaving reality to operate on its own.

Reality can operate better when it is propelled by reason. In one way or another, a zone is taking shape in the market of supply and demand - demand and its artificial development have always been there in the operation of the market. Why, then, should we not advance to a new dimension and quality of demand? Why should we not orientate ourselves to that demand which will have within it the elements of sustainability and of holistic development, with all those new products and services which are connected with the rounded development of man and of his civilisation?

It is an absurdity that, among economic doctrines, dogmatic insistence on 'traditional' positions should intolerantly continue at a time when the historic character of developments is breaking down dogmatism of any kind. If we approach the developments historically and judge them with practical and clear reason, we shall find a new proposal before us. This proposal is, primarily, 'dialogue' and then 'open dialogue' in which all views are recorded and registered; thereafter we are faced with the need for new institutions. L'institution imaginaire de la société has held good in the past and can hold good in the future.  
Our concern, that is to say, is that we should recognise the right of man and society to redefine their creations. Such creations are all economic magnitudes, all economic concepts, all economic behaviours - just the same as all political behaviours. We could say that the new Keynesianism is primarily cultural, because it redefines and thus creates a new capital of institutions, and the re-positioning of the terms liberates us on to new horizons of conditions, on to new horizons of the observance and development of commitments.

Sustainability, homoeostasis, and neo-Keynesianism
Undoubtedly, genuine economic neo-Keynesianism contains the parameters of a qualitative and quantitative redistribution of the product, of goods, and of services in such a way that the maximisation of benefit is favoured. Although this maximisation of benefit may involve inequality, it may also, in certain instances, be meritocratic, and in others, non-meritocratic; it contains within it a range of fluctuation and allows everyone to have a sense of social cohesion and homoeostasis.

Homoeostasis is a rule of survival of organisms, and, to the extent that mankind is fulfilled through universality and is embodied through the locality of societies, it cannot advance without homoeostasis. Homoeostasis is, in effect, a Keynesian term, and is connected with sustainability. Without sustainability, the economy loses its meaning, and here we mean a sustainability which is both political and geopolitical, both cultural and environmental. Homoeostasis is a key concept for the maintenance of the network of development and its feedback. Alienation as a disruptive feature in relationships - and a characteristic of neo-liberal capitalism - has within itself features of functional decline and favours the cancerous development of the economy - that is, an economy which has no limits to its development, or tendencies towards affinity and contact. This economy is doomed to operate destructively upon the body which brings it forth.

Reason and neo-Keynesianism
We are confronting a new historic turning-point which introduces a new level of crisis and of the probability of disaster. The response to this crisis must be such as to give scope once again for reason to control developments. For this to happen, a prerequisite is for everyone to share in reason. And, in this sense, it presupposes a liberation, an openness in the field of ideas and people. This openness is achieved when we become aware and play a part in a community of the spirit and of quality, from which in the end we will derive the historic capital which we will invest in a sustainable future.

An obstacle to this necessary openness of thought is raised by habituation to the illusion of security provided by 'expert thought'. Edgar Morin's thinking on the limitations of expert thought and reactionariness in the face of a 'psychology of openness' towards the field of ideas and people is described as follows: "As spirits are fashioned chiefly by the mould of closed specialisation, the possibility of knowledge beyond their expertise seems an absurdity. ... The realm of experts is the realm of the most hollow general ideas, the most hollow of these being that which states that there is no need for general ideas."[6]

The community of the spirit and neo-Keynesianism
The community of the spirit is not consolidated as a merit elite. It cannot be identified in any circumstances in a totalitarian way with particular persons. In a sense, everyone can play a part in it. At the same time, however, it is a connective, articulating, and holistic community. The community of the spirit, though appearing to have all the similarities with a hierarchy of the Alfred Weber type, involves no elements of elitism. It is more a community for development of science, of service, of donation of the spiritual capital than a community claiming recognition.

The demand for recognition exists in every individual, and this is natural. It is present at all levels and in the community of the spirit. But there we have to do with a community which operates as a transparent nucleus for the development of sociability itself. It is based primarily on the transcendence of the materialism of the 'ego'. The materialism of the 'ego' can take many forms of idols, even some which are relatively dematerialised. Idol forms come under narcissism. The overcoming of narcissism remains an ontological objective.

Sharing and neo-Keynesianism
The spirit of sharing, even if, this too, is expressed through individuals and groups, is what is connected with the community of the spirit and the community of quality. Quality (in its positive sense - because there is both good and bad quality) does not exist when we have an expectation of recompense from what is separate, from our separateness. From the moment when separateness is defined as the critical factor for something which is created or produced, there is no concept of quality.

A fortiori, quality does not exist in something which is automatically functional within a framework of unrelenting competition and the continuation of the Darwinian model of competitiveness. If this were so, we should be told that the community of the spirit, the community of quality, is a utopia.  But it is not a utopia, precisely because man realises for himself his own transcendence. This is also the spirit of the evolution of man through the ages, in history. The realisation of this transcendence of the self has also created the superstructure -which must not lose its references to the base – as it looks towards the necessary cohesion and the triggering of enthusiasm for the adventure of wholeness and freedom.

Redistribution of political and economic surplus value
The Keynesian model must be one which rests not on regulations of the market of the circulation of money and employment, but on structures which will ensure the redistribution of the world political and economic surplus value. In the sphere of politics, the new Keynes should approach, resolve, and deal with the problem of the structures of politics and of the communications surplus value and thus create a model which is open and gives us all an equal right to speak freely in which the point of entry for ideas will be established as in an amphictyony. Included in the policy on surplus value is institutional and collegial democracy.

Individuals and players will be able to table and identify innovative ideas regardless of their size. They will be able not only to express them, but also to take part in their realisation, in a recognisable way, in a way which will also give expression to collegial democracy, and will also express without fail the individual right to be heard, which ought to contribute to quality. Similarly, in the geopolitical sphere, enormous redistributions are needed, such as to make every field on earth an open gate, an open door for actions which will be diffused world-wide, which will be diffused in a regulatory manner, and will function within a framework of universal sharing of actions.

This geopolitical distribution has to do, on the one hand, with redistributions of terms and recognitions, and, on the other, with the capability of each region and individual or collective agency on the network of expressing its action within a world system. On this basis, a synthesis so that the right to be heard on equal terms is not a mentality or an intransigent divisiveness; as the poet Henry Longfellow wrote: "... to act, that each tomorrow / Find us farther than today."[7]

Characteristics of the new Keynesianism
--- It recognises the fact that democratic consummation and the democratic maturing of societies are cognate with their economic development.
--- It brings out the holistic character of the market.[8]
--- It brings out and subsidises the rational features of the market and institutions.
--- It maximises the qualitative and quantitative performance curve of human beings, as it regards the fulfilment and direction of people's employment to be the most important cultural point.
--- It brings out that demand which incorporates the elements of sustainability and holistic development.
--- It brings out those new products and services which are connected with the rounded development of man and of his civilisation.
--- It capitalises the right of man and of society to redefine their economic and political creations.
--- It redistributes, qualitatively and quantitatively, the product, goods, and services, maximising the benefit, which, since it is distributed meritocratically, permits everyone to have a sense of social cohesion and homoeostasis.
--- It capitalises the flexibility to redefine institutions and to reposition the terms in liberating new horizons of conditions, new horizons of observance and development of commitments.
--- It allows everyone to have a sense of social cohesion and homoeostasis. (Homoeostasis is, in effect, a Keynesian term, and is connected with sustainability. Without sustainability, the economy loses its meaning, and here we mean a sustainability which is both political and geopolitical, both cultural and environmental.)
--- `It regulates the market of the circulation of money and employment and the structures which will ensure the redistribution of the world political and economic surplus value.


[1] Krugman, Paul, The Conscience of a Liberal [Greek edition], 2008, publ. Polis.
[2] Cohen, Daniel, The Prosperity of Vice [Greek edition], 2010, publ. Polis.
[3] Imerisia newspaper, Saturday 20 - Sunday 21 February 2010: 'Tremors in the EU edifice caused by the machinations of Goldman Sachs' by Yorgos I. Mavros.
[4] ' On Rewarding people for their talents and hard work' by Howard Zinn, 25 November 1999, translated into Greek by Dimitris Prapas [http://chomsky-speaks-greek.blogspot.gr/2010/02/blog-post_07.html]
[5] Richard Sennett, professor of Sociology at the LSE and at New York University, Kathimerini newspaper, 14/06/09.
[6] Morin, Edgar, La tête bien faite [Greek edition], publ. Eikostou Protou.
Ηenry Longfellow. Source: Mumford, Lewis, The Transformations of Man [Greek edition], 1998, publ. Nisides.
[8] Zisis, Ioannis, 'Assessment of the foundations of economic thought, policy, and activity', [in Greek], [http://solon.org.gr/index.php/ergatiko-kinima-oikonomia/120-ergatiko-kinima-oikonomia/1626-per-neos-keynsianismo.html]

Ioannis Zisis, writer

Photo from wikipedia

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