Marx Madness is Back

“Capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine democratic societies.” — Thomas Piketty, “Capital in the 21st Century” (2014)

The Economist magazine rightly called French professor Thomas Piketty the new Marx, although a watered down Marx. His bestseller (rated #1 on Amazon and the New York Times) is a thick volume with the same title as KCapital in the Twenty-First Centuryarl Marx’s 1867 magnum opus, “Kapital.” The publisher, Harvard University Press, appropriately designed the book cover in red, the color of the socialist workers’ party.

Piketty cites Karl Marx more than any other economist, even more than Keynes. He barely mentions Adam Smith. Instead of the modern scientific name “economics,” he prefers the old term “political economy,” a favorite of radical professors. [Read more…]

Economist Makes Lead Story in the Wall Street Journal….Barron’s….and Forbes

I made the lead story in the Wednesday, April 23, 2014, edition of the Wall Street Journal.  The title:  “At Last, a Better Economic Measure.”  You can read it here:  http://on.wsj.com/PsdoLM

The editors of the WSJ don’t allow the author to see or approve the headline or subhead, but they nailed it perfect.  And I love the cartoon graphics!  It’s a perfect rendition of my four stage model of the economy.

Many readers captured the essence of my message.  As economic forecaster Jim Hagerbaumer of Florida wrote:  “Skousen is introducing a whole new species. This is one of the most important WSJ op-ed articles in years.”

I also wrote about Gross Output (GO) in the December 16, 2013, issue of Forbes.  Here’s the online version, with charts and response to critics:

My original article in Forbes Magazine (December 16, 2013):

Mark Skousen, Beyond GDP: Get Ready For A New Way To Measure The Economy, Forbes

http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

Additional Commentary by Steve Forbes:
Steve Forbes, New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal, Forbes

http://www.forbes.com/sites/steveforbes/2014/03/26/this-may-save-the-economoy-from-keynesians-and-spend-happy-pols/

Gross Output Includes B-to-B….GDP doesn’t [Read more…]

Steve Forbes Endorses My Gross Output Statistic

“Mark Skousen’s Gross Output statistic…will have a profound and manifestly positive impact on economic policy and politics.”  — Steve Forbes, Forbes magazine, April 14, 2014

The Bureau of Economic Analysis will start releasing Gross Output (GO) along with GDP every quarter starting on Friday, April 25.  I consider it a triumph in supply side “Austrian” economics.

I think Steve Forbes captures the importance of this new national statistic in his column in the April 14 edition of Forbes.

Most of the textbook writers are going to include GO in their next edition.  Sean Flynn, now the primary writer of the McConnell/Bruce textbook, is going to highlight it.

Here’s Steve’s commentary — New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal: by Steve Forbes  http://www.forbes.com/sites/steveforbes/2014/03/26/this-may-save-the-economoy-from-keynesians-and-spend-happy-pols/

Here’s my original article in Forbes — Beyond GDP Get Ready for a New Way to Measure the Economy: by Mark Skousen  http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

Here’s my op ed in the Wednesday, April 23 edition of the Wall Street JournalAt Last, A Better Economic Measure: by Mark Skousen http://online.wsj.com/article/SB10001424052702303532704579483870616640230.html

 

Chapman Students Are Surprised by the Answer to My Environmental Question

In January, my wife and I had the opportunity to teach at Chapman University, where I am a Presidential Fellow for 2014.  She taught a class in poetry, and I taught “Modern Political Economy:  Who is Winning the Battle of Ideas?”  I used my textbook, “The Making of Modern Economics,” now in its 2nd edition.

One of today’s controversies is about pollution and the environment.  We talked about a recent address by U. S. Secretary of State John Kerry, who warned students in Indonesia that “global warming” is “the greatest challenge of our generation,” more than disease outbreaks, poverty, terrorism and the proliferation of weapons of mass destruction.

Then he demonized anyone who disagrees with him, calling critics of global warming “shoddy scientists and extreme ideologues.” You could say the same about Al Gore.  Kerry added, “We should not allow a tiny minority of shoddy scientists and science and extreme ideologues to compete with scientific fact.”

Kerry is typical of the hysteria surrounding the issue of ecology and the environment. Students are being brainwashed into thinking the problem is getting worse and worse. Kerry and the extreme environmentalists blame any weather disaster, the cold snow in the Northeast or the drought in the West, to global warming.  You can’t argue with these fanatics.

I asked my students at Chapman University, “Has pollution declined or risen in the past 50 years in LA county?”  Over half thought pollution was worse.  The cold, hard fact is that pollution has been reduced sharply in LA county even as gasoline use has risen.  See this chart:

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&docid=pYBObTbuYbS9tM&tbnid=xwtv0ahLCtELQM:&ved=0CAUQjRw&url=http://www.noaanews.noaa.gov/stories2012/20120809_laairqualitystudy.html&ei=ht4EU5jyEKbb2QXRm4CoCg&bvm=bv.61535280,d.aWc&psig=AFQjCNGsuMz1HbLz7IT1IMCVqhIlch9HSA&ust=1392914426522327

The fact is that the average world temperature has been flat or declining for 17 straight years.  If you want to know the facts about global warming and pollution, read this column by Larry Bell in Forbes.com:  http://www.forbes.com/sites/larrybell/2013/08/21/the-new-york-times-global-warming-hysteria-ignores-17-years-of-flat-global-temperatures/

During the class, a journalist visited my class and gave this nice write up:  http://blogs.chapman.edu/happenings/2014/01/28/class-act-economics-comes-to-life-with-mark-skousen-teaching/

I will be returning to Chapman University on Wednesday, April 16, to give a public lecture as part of my Presidential Fellowship.

Students (each holding an American eagle silver dollar) join me in front of the Adam Smith statue at Chapman University.

A Personal Triumph 25 Years in the Making with Launch of New Macro Statistic

For the first time since World War II, the Federal government (Bureau of Economic Analysis) will begin publishing a new macro statistic Gross Output [GO] starting in spring 2014 at the same time it releases its quarterly GDP data.

Forbes.com article has just published my article on this new statistic “Beyond GDP“: http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/

A shortened version will appear in the Dec. 16 issue of Forbes magazine (circulation over 1 million).

I’ve been advocating this new national statistic since writing The Structure of Production (NYU Press) in 1990. Now it’s finally happening. Steve Forbes calls it a “real breakthrough.”

Steve Moore of the Wall Street Journal and Gene Epstein of Barron’s are looking into writing articles on GO.  So is The Economist.

Bill Nordhaus, professor at Yale University, writes, “Congratulations on the article and the work.  It has been a long slog to get the national accounts to introduce innovative measures, and Steve Landefeld [Director, BEA] has been a superstar in this respect…This will open up the potential for new insights into the behavior of the economy.”

GO goes a long way in providing the right balance in the production-consumption process that is missing in GDP data. As BEA Director Steve Landefeld and co-editors Dale Jorgenson and Bill Nordhaus state: “Gross output [GO] is the natural measure of the production sector, while net output [GDP] is appropriate as a measure of welfare. Both are required in a complete system of accounts.”

I think you’ll find the chart comparing GO and GDP of interest, how GO is consistently more volatile than GDP, and a better measure of the business cycle. (Click on the chart below to go directly to the article)

I’m excited — this is a personal triumph nearly 25 years in the making.

Most of the economics textbook writers are planning to include a section on GO in their next editions (McConnell, Parkin, Gwartney, Hubbard), and economic analysts are now starting to look at it.  In an email, Roger Leroy Miller, professor at University of Texas at Arlington, says that he has added a section on Gross Output for his 18th edition of Economics Today.  It is already part of my own Economic Logic textbook.

I hope you’ll check out the Forbes article, as well as Economic Logic and The Structure of Production for a more in-depth look at this important development.

Has Government Adopted My New Macro Model?

“How can I possibly put a new idea into your heads, if I do not first remove your delusions?” – Robert Heinlein

For several years now, I have been advocated the need for adding a new national aggregate statistic called Gross Domestic Expenditures (GDE) that measures total spending at all stages of production and not just the final stage (GDP).

I believe that GDE fills in a major piece of the macroeconomic puzzle.  It establishes the proper balance between production and consumption, between the “make” and the “use” economy, and one that is consistent with growth theory.

Most importantly, GDE and my 4-stage model of the economy are compatible with standard national income accounting and neo-classical macroeconomic analysis. You don’t have to rewrite the textbooks, just add it into the chapters.

Now for the good news.  I recently received a letter from Steven Landefeld, the director of the Bureau of Economic Analysis (BEA), the official government agency that releases GDP data every quarter.  He wrote me that starting next year, the BEA will begin publishing an expanded aggregate statistic that is similar to my own GDE, every quarter along with GDP. [Read more…]

Record 2,500 Gather at “Best FreedomFest Ever”

By Mark Skousen

“FreedomFest was a gigantic conference.  It drew many academics, journalists, activists of all ages, vendors, investors, and a huge variety of professionals in all fields. And of course, Laissez Faire Books was there in full force. The level of fun was totally over the top. But the content of every session I attended was just spectacular.” – Jeffrey Tucker, president, Laissez Faire Books

Everyone seems to agree:  Our 7th FreedomFest was the “best ever” according to the many emails I’ve received – from Alex Green, Floyd Brown, Susana Etcheverry, Bert Dohmen, Brian June, and Gene Epstein, economics editor at Barron’sDinesh D’Souza said that FreedomFest has rapidly become “the premier libertarian gathering.”

We broke all kinds of records this year – number of attendees, sales of books at our official bookstore (Laissez Faire Books), and CDs/MP3s.  Numerous sessions, panels and debates at Planet Hollywood were standing room only.  And for the first time we had a major TV network, Fox Business at FreedomFest, along with C-SPAN.  (Plus a nice mention by Bill O’Reilly on Fox News in his interview with John Stossel.) [Read more…]

Head to Head: “Public Vs. Private Spending: How to Get the Economy Growing Again”

Today’s Orange County Register published a point-counterpoint debate between Mark Skousen and Robert Kuttner on “Public vs. Private Spending:  How to Get the Economy Growing Again.”  See the attached file, that includes an ad to this year’s FreedomFest. 

Public vs. Private Spending: How to Get the Economy Growing Again

 

Second Review of John Mackey’s Revolutionary “Conscious Capitalism”

Whole Foods’ Better Business

Conscious Capitalism: Liberating the Heroic Spirit of Business, John Mackey and Raj Sisodia, Harvard Business Review Press, 368 pages

Ever since the robber barons stalked the earth and Balzac expostulated that “behind every great fortune is a crime,” the media has attacked Wall Street, Madison Avenue, and anything to do with corporations. In the latest Gallup poll on the trustworthiness of various professions, business executives come out little better than lawyers and used-car salesmen, far below the ethical standings of medical doctors, engineers, and police officers.

Even as the global marketplace has raised the standard of living a hundredfold in the past century, the accusations keep pouring in—that capitalism promotes inequality, materialism, greed, environmental degradation, and short-termism on Wall Street, and that fraud, deception, and corporate welfarism would run rampant if it weren’t for Sarbanes-Oxley, Dodd-Frank, and a host of government regulatory agencies. [Read more…]

Huge Response to Our Latest FreedomFest Promo

 Dear FreedomFest Friends,

We’re getting a huge response to our announcement that John Stossel is bring his #1 Fox Business show to FreedomFest, with hundreds of attendees signing up so far.

And that’s just the beginning of what the Washington Post calls “the greatest libertarian show on earth.”

One of the reasons people keep coming back to FreedomFest is to enjoy our unique panels and debates you won’t find at any other conference. Here’s 11 new events for this year’s show, all in keeping with our theme this year “Are We Rome?” [Read more…]