How might opposing schools of economic thought — from neoclassical and Keynesian to Libertarian and Marxist, view Christmas presents? Levity aside, the answer reveals the pompousness and vacuity of each and every economic theory.

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Photo by Carsten Koall/Getty Images.

By Yanis Varoufakis

ATHENS — To welcome the New Year with a cheeky take on the clash of economic ideologies, how might opposing camps’ representatives view Christmas presents? Levity aside, the answer reveals the pompousness and vacuity of each and every economic theory.

Neoclassicists: Given their view of individuals as utility-maximizing algorithms, and their obsession with a paradigm of purely utility-driven transactions, neoclassical economists can see no point in such a fundamentally inefficient form of exchange as Christmas gift-giving. …

In Argentina and Brazil, one cannot understand recent political changes without reference to the corrupt antics of populist and semi-populist operatives. But that simple explanation does not fit Chile, where outgoing President Michelle Bachelet misdiagnosed the public mood.

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Sebastian Pinera and his wife Cecilia Morel. Photo by Claudio Reyes/AFP/Getty Images.

By Andrés Velasco

SANTIAGO — In Chile’s November election, anti-establishment voting was the name of the game. A new populist left coalition, modeled after Spain’s Podemos, received one-fifth of the vote. Many long-established figures, including the president of the Senate, lost their seats in Congress. Pundits were quick to describe a sharp turn to the left.

And yet in the second round of voting held on December 17, Chileans sent Sebastián Piñera, a billionaire former president and poster child for the local conservative establishment, back to La Moneda (the presidential palace). …

Economists have always believed that previous waves of job destruction led to an equilibrium between supply and demand in the labor market at a higher level of both employment and earnings. But if robots can actually replace, not just displace, humans, it is hard to see an equilibrium point until the human race itself becomes redundant.

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Photo by Christopher Furlong/Getty Images

By Robert Skidelsky

LONDON — Dispelling anxiety about robots has become a major preoccupation of business apologetics. The commonsense — and far from foolish — view is that the more jobs are automated, the fewer there will be for humans to perform. The headline example is the driverless car. If cars can drive themselves, what will happen to chauffeurs, taxi drivers, and so on?

Economic theory tells us that our worries are groundless. Attaching machines to workers increases their output for each hour they work. They then have an enviable choice: work less for the same wage as before, or work the same number of hours for more pay. And as the cost of existing goods falls, consumers will have more money to spend on more of the same goods or different ones. …


Project Syndicate

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