The simple Kaleckian macroeconomics of Nanterre: GDP, consumption and France
For some time now I have been trying to make you understand that the situation in other European countries is less rosy than our dear information operators are trying to let on. The easy prophecy about " sawing off the branch " is materializing in its own time, which unfortunately is that of history, the slowness of which should not lead us to doubt the logic of the economy. The deadly ideology of austerity (ie the ultra vires defense of the distributive share of capital) can only lead to a chronic insufficiency of demand, ie to a world of poor people and low remuneration of capital. A vicious circle which has nothing original and which explains the cyclical eruptions of violence which punctuate the history of humanity. Periods of prose end with a period, those of history with a war.
Even if the attention of many is concentrated on the hegemonic power, the German one, for a series of reasons, including the country's undoubted importance, its penetration into the fabric of our economy, the fact that I know it well and that I have a long direct and indirect experience of it, for some time, since well before the gigantic QED of Nanterre, I have been trying to draw your attention to France, which, unlike Germany, is, as we have long known, a direct victim of the rigidities determined by the single currency. Its chronic external deficit would have (and has) imposed regressive policies ( Hood Robin policies ) on it, as we said here many years ago : taking away from the poor to support the country's competitiveness, giving to the rich. Poor Macron would have been the victim of these objective dynamics, as we had said here and reiterated here , not necessarily in the sense that he would have been overwhelmed by them, but in the sense that their management would have become increasingly complex, as social tensions (in the image of my friend from the previous post , the pressure of the steam in the pressure cooker) had proved to be more explosive.
The Awanagan-Gianninian crew, worthily represented here by his friend Marco with a capital "m", overwhelmed by his own anti-Italian hatred (that country so ungrateful that it does not attribute an honorary degree to braggarts!), but also the intelligent (sic) such as Valerio , imbued, these, with different but coaxial hatred towards this population of mandolinists who idly linger on an insignificant blog (and which, moreover, does not exist) instead of bowing down to the superiority of their strong thinking, reacted to this coherent and with long roots abandoning himself to the temptation (cit.) of "mugginismo": micuggino told me that he's fine in France, Numbeo told me (and what the fuck is he? But why not go to the Eurostat website?) that the GDP in France is higher, etc.
All absolutely inconsistent observations, as I show you with a simple numerical example, summarized by this table:
Let's imagine that in Krakow there are 10,010 (ten thousand and ten) inhabitants, of which 10 are rich and 10,000 are poor. As is known, the rich everywhere have a low propensity to consume. If you earn a million, you will hardly spend 750,000 euros on bread (the risk of diabetes would materialize quickly), and to the objection that the rich can buy champagne, however, it can be objected that with 750,000 euros of champagne you can bathe in the Jacuzzi keeping it off , but certainly don't quench your thirst, unless you want to end up like the immortal author of The Crow . As you understand, the different propensity to consume rich and poor is a physical, objective fact. Of course almost no economic model takes this into account, apart from Kaleckian ones, like this one . In the example I assume that in Krakow the rich consume 20% of their income (they save 80%) and the poor 90% (they save 10%). If 10,000 poor people earn 1,000 eury, their total income is 10 million, exactly like the total income of the 10 rich who earn a million each. Therefore, the GDP of Krakow in the base scenario is 20 million (of which 10 earned by the rich and 10 by the poor), with 11 million consumed.
Let's now move on to the scenario "My cousin told me that er Pille is a limb in France" (the scenario of the Awanagan-Gianninians and the intelligentsia).
Just imagine that the income of the rich doubles, passing to two million per skull, and that of the poor halves, passing to 500 eury per skull.
At this point, the rich alone make 20 million of income (i.e. the rich are enough to reach the baseline income of the previous scenario), to which are added the 10,000×500=5,000,000 million of income of the poor, for a total of 25 million (or: the GDP increased by 25% from 20 to 25 million, and similarly the per capita GDP – given that the inhabitants are always the same: you do the billing!). Consumption, however, has decreased, going from 11 million to 8 and a half million: this is because the incomes of the population with the highest propensity to consume have halved.
This explains why when an economist sees this graph:
(taken from here ) immediately displays this :
while when an Awanagan-Gianninian engineer or an intelligent person sees the same graph, they immediately go to Numbeo to try to prove to Bagnai that he was wrong (unaware of the fact that Bagnai gets overwhelmed), and they look like peers (but we mustn't rage where Nature raged).
Got it, pirlottoni? I love you, but (or even why) you can't do it! Go and talk about football at the Bar dello Sport, your Academo garden, trying to climb the tobacconist's , but here it's better that you forget it: you're not even good as sparring partners !
Oh, and I know you're self-defeating, so I eagerly await, stifling chuckles, your minority report. In the meantime, the able-bodied, if they haven't already understood it, have a clear picture of the situation: we can easily speculate about the fact that Marco's cousin is strictly within the "circle of the Navigli" in Paris. I did my last visit to Paris XIII in 2017 and even then they told me not to move alone from the subway to the faculty because it was dangerous (and in fact during a seminar we were interrupted by the news that a colleague had broken his jaw – in the sense that they had beaten him – in an attempt to defend his computer backpack from the affectionate attentions of a nuà – noir – I'll spare you the logical contortions the messenger underwent, having to bring such unfortunate news to a left-wing university) .
It's not 10 super riches (of which France abounds) to reassure us:
( here ): should they ever want to do so, it will not be Arnault, Bettencourt, Saade, Pinault and Wertheimer who stem hundreds of thousands of underprivileged people who have nothing, or too little, to lose, and whom the Government literally does not know in which language to speak ! The only way they would have to do it would be to hire mercenaries, but if they did (and they will have to) they would use them to defend themselves, not Macron! They will retire to Ile Saint Louis, they will transform the Luis Philippe Bridge, the Marie Bridge and the Sully Bridge into drawbridges with funds from the PNRR, and many greetings! For points to the south, as anyone who knows Paris knows, a few Friesian horses and about thirty boys equipped with shotguns will suffice.
Is the concept clear?
Then it goes without saying that the motions will subside, until the next spark, in a resonant alternation of acute and chronic phases. But France is also subject to original sin . Removing the effects without removing the causes is an exercise as noble as it is desperate. Reforms, France needs:
Do you see it, my poor pacifiers!, that in terms of foreign accounts it is systematically below us, despite the fact that energy is not a problem for it? So to the rowdy people who are setting fire to the cities (not just les cités) of France Macron can tell them what he wants, but what he should, and in the end he will have to tell them, and that even if he doesn't tell them they will understand, if not have already figured it out, unfortunately it is: "Are you already pissed off now? Think how much more pissed you will be when, not being able to let the exchange rate yield, I will be forced to further cut your wages to try to limit foreign debt!"
That's all.
As I've always told you, time is on our side, or, at least, it's not on theirs: and this isn't Schadenfreude , it's economy, and it's not strategyh: it's strategy.
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/07/la-semplice-macroeconomia-kaleckiana-di.html on Sat, 01 Jul 2023 10:43:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.