Wednesday, April 06, 2005

Economic lessons

Prof. Bradford DeLong seems to be in a mood for entertaining questions and to answer them in a nice teaching mode. He answers two different correspondents (undergraduate students from different places) who ask him the following questions in economics:

  • The first correspondent asks "whether or not Keynes was correct about deficit spending during depressions. By that, I mean whether deficits will provide at least a temporary boost in output and employment". Brad provides " a nice answer; it begins with "It all depends", and goes on to give the criteria that one can use to judge the probability of success of any Keynesian intervention.
  • The second correspondent asks, "However, reading Das Kapital and other things, I am seeing a different interpretation of how an item is valued, and the value of labor verses what I have been taught in traditional classes and I need more understanding. What is the “value” of a product, or of labor? Brad provides the answer using an extended example with which he concludes that the labor theory of value is "simply not a useful tool for either moral philosophy or political action".

Both the posts are crisp and clear, and written in a simple enough language that even a non-economist like me can get something out of them. In particular, the second one on Marx's theory contains some absolutely delicious piece of writing.