Palestra Paul Davidson - 18/04 EESP FGV-SP

Participei desta aula em São Paulo, e estou disponibilizando o conteúdo desta aula para os interessados: 

Paul Davidson Class - Prof. Sen. Eduardo Supplicy

18/04/200 - ESSP-FGV

Mr. Paul Davidson starts its presentation introducing his concept of Keynes’s theory, which differs from the world view of Keynes.  He first says that Keynes was hardly hit by the classical economy mainstream. They didn’t accept his thoughts and spread out that Keynes had a Socialist Theory, but Mr. Davidson explains the true meaning of his theory.

Keynes Theory first of all thinks about a Civilized Society. He means civilized society, at first place, as where people respect each other, as it should be. If you take its first affirmation to add values in the whole society scope, you would add it to the government, to the market rules, and to the agents. It actually, according to Mr. Davidson, it would make a safer society.

At first Mr. Davidson criticizes David Ricardo’s Theory, the Advantage of Comparative Systems. He brings out an example of an Industry in a little town in the countryside of the US. After 50 years in this Town, the investor decided to move out of the city to another country because in this new country he could do the same job as he was doing in the US, with the advantage of a cost price of 10% lower.  In other words, in the US they would pay 10 dollars an hour for an employee and in this new country it would be around 1 dollar per hour.

The David Ricardo’s Theory says that in some years the employers that lost that jobs would learn another profession (as computers) and would find other jobs to keep their life running. But as he observed its theory as just a theory, practically, from the 200 employers of that Industry, about 80% are unemployed and the other 20% are working on a job earning 60% of its old income. He affirmed that this situation has been going through many towns in the USA. The “white color” employment is disappearing. Most of the lower technology goods which are easier to transfer technology are being moved out to low poverty countries. Like China, a country with no Labor Laws, no Human Rights, “it is not a civilized society”. Perhaps the Classical Theory says it’s ok.

So he asks, is it right to allow the market run as a Liberal Capital System? As the Microeconomics system applies, Perfect Competition Market. It is a low cost for business industries but, the society pays hard for it. In the United States, all the labor law is guaranteed, the human rights are respected, the law system works perfectly, taxes, etc. But in countries like China, none of these are applied.

So we ask, is it all right to work in a free market rules? The agents are unable to take action against the flow of the capital, people are being unemployed, Keynes brings out the solution suggesting a Civilized society where the government interfere when necessary seeking to protect the labor, and the prosperity of its generation.

On this Sub prime crisis he questions how tough it will be if the government doesn’t take any action. The amount of the housing prices could drop to 35% of its price. If the government doesn’t take any action it will be a 6 trillion dollar brake on the economy. It is so dangerous that if it really happens Student loans will drop, and the next generation won’t be able to go to the university.

The Keynes Theory brings the Fiscal and monetary adjustment to make the society civilized. That’s the Keynes’ lesson for us. When such crisis happens, the government has to interfere so people would prosper with their family. We can not just use the Classical theory, and let the market rule the economy!

Por Felipe Santos

Ciências Econômicas - UFG

 Considerações: Durante a aula cerca de 20 minutos do diálogo foi a respeito da Crise Sub-Prime, mas como o tema é bastante extenso e complicado de se explicar em um pequeno resumo, irei dedicar minha próxima postagem a crise sub-prime.