The Shotgun Blog
Wednesday, December 17, 2008
Can "Funky Lady" prove Keynes was right?
(Originally posted on the Prometheus blog):
Today we're going to do an economic experiment with music.
You may have heard of Keynesian economics. To summarize, it's a bunch of economic ideas espoused by the British economist John Maynard Keynes that offer more government and consumer spending as the solution to economic slow-downs. Keynes saw saving as a "leakage", particularly during slumps, and thought government needed to borrow, tax, inflate and do anything it could to spend, spend, spend. It should also do anything in its power to "stimulate" consumer spending.
Anyone really interested in studying it from a theoretical standpoint will find ample evidence both from neoclassical economists like Milton Friedman and other Chicago School types, as well as from Austrian School economists like Ludwig von Mises and F.A. Hayek that Keynes' ideas don't hold up.
As for the ideas in practice, I'm not content with the massive record of history that Keynesian policies are a terrible mess. Bush's "stimulus" check and the bailouts as recent examples (and Obama's FDR style public works projects as future examples) aren't enough to put the nail in the coffin. They're too far removed from me. That's why I'm launching, with your help, an experiment to test Keynes' theories.
We all need to go to iTunes and buy the new single from the liberty-loving and funky-fresh band Major Maker. "Funky Lady" is not only a great single (why do they call it a single when it has two songs?), but it will help us test Keynesianism. If we all go out and buy the single (only $1.98!) for ourselves and as gifts for as many people as possible, we can bring the economy back; that is, if Keynes was right. The only way to know is to try.
The good news for you is that even if Keynes turns out to have been wrong and your purchase of "Funky Lady" doesn't make the stock market leap and your home value soar, you still have a great MP3 in your collection. Unlike government attempts to test Keynsianism, you walk away with a valuable asset in the end, even if the experiment fails.
In fact, by the time we see the results and judge whether or not our Keynesian consumption test was a success your new Major Maker MP3 asset may be worth MORE than the $1.98 you spent, due to inflation. Then you could trade or sell "Funky Lady" for a nominal profit. You may want to buy lots of "Funky Lady" singles, just like people buy lots of gold and commodities when inflation is expected; Major Maker songs may become a default currency if the dollar becomes too unstable.
So, everyone go to iTunes, buy Major Makers new single "Funky Lady" and know that you're not only supporting an awesome liberty-loving band, getting some sweet and super hip tunes, but also engaging in a massive empirical test of Keynesian economic theory AND investing in a stable commodity to hedge against monetary inflation.
Who new rocking sweet songs could be so freaking educational.
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I just bought ten copies of "Funky Lady" and my boss immediately gave me a raise. The equity in my house just jumped 150% and my portfolio exploded. Not to mention unemployment just disappeared.
You guys have to try this! That Keynes was onto something...
Posted by: Isaac Morehouse | 2008-12-17 11:36:23 AM
Is it ok if I purchase a copy of a different song? or will this defeat the purpose and muddy the experiment? I feel my net worth will increase if I buy an mp3 of a song I know and like, whereas I am not so sure if I purchase if I buy a copy of this song.
Posted by: Tom | 2008-12-17 12:40:09 PM
I don't think very many economists or politicians think Keynes was right, but rather that it allows them to APPEAR to be doing something positive, rather than just letting the market heal. Much like if a patient goes to the doctor complaining of a scab on his back and the doctor picking it off. Of course the doctor appeard to be doing something but the wound will just scab over again and get infected and the doctor will pick it off again and again until the patient dies or heals on their own, but it'll take MUCH longer than if they just left it the frick alone.
Posted by: pete | 2008-12-17 12:48:35 PM
...again until the patient dies or heals on their own, but it'll take MUCH longer than if they just left it the frick alone.
Posted by: pete | 2008-12-17 12:48:35 PM
That's really gross pete, but the analogy works! :)
Posted by: JC | 2008-12-17 2:52:01 PM
Sorry, Isaac, but you are wrong again (as usual).
Keynes' theories have been accepted as valid by most mainstream economists and Republicans as well as Dems in the US.
Public spending projects have lifted the US out of the Great Depression and restored the economies of Western Europe after WWII.
Buying some itune is silly, proves nothing, and has no bearing on the validity of economic theory.
Why not sell your atheistic, anarchist theories where someone may buy them? Oh, that's right! No serious country has ever bought them anywhere.
Posted by: carl | 2008-12-17 3:46:49 PM
The mess we are in now and the massive debts held by Western governments is proof Keynes was WRONG. Look Keynes was a FABIAN SOCIALIST. Part of the upper crust intellectual "elite" of Britain - meaning he didn't know a damn thing.
People you don't REALLY believe the New Deal worked? Gawd.
Posted by: Faramir | 2008-12-18 12:23:28 AM
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