Capitalism: Competition, Conflict and Crises, Lecture 1: Introduction to Course

Lecture 1 is the introduction to the first semester of a two-semester sequence of a classical approach to economic analysis, built around the material in Professor Shaikh's book, Capitalism: Competition, Conflict, Crises, Oxford University Press, 2016. The aim is to show that there exists a coherent alternative to neoclassical and Post Keynesian theory that does not rely in any way on utility maximization, rational choice, rational expectations, or perfect/imperfect competition.
Follow Dr. Shaikh on Twitter, @shaikhecon

[@RajatBose1964]

It is a matter of great pleasure to be able to do this course on youtube. I have just got my copy of Professor Shaikh's book. I intend to make full utilization of both the book and the video lectures. Thank you for making them available. It is just too good!

[@iberico467]

Hello. Could you share a link where I can get the book or share the pdf? thanks in advance.

[@raidigull8254]

Thank you for these lectures, i have started the course recently and I m already in love with the ways Professor is taking us on the journey.

[@vili7783]

Con sus extensiones y contribución a la Teoría, Shaikh es el "Marx economico" de nuestra época!!! Shaikh recupera lo mejor de la CIENCIA en economía, sin prejuicios!!!!!

[@mattcosta9358]

This is totally brilliant, thanks for uploading this lecture series! So glad to see more episodes being uploaded over time!

[@smldiff]

Oh, thank you very much for providing the lecture through youtube!

[@jamesdoctor8079]

Great lecture series with obvious real world applications! Thanks so much

[@josephcoon5809]

22:00 “Inflation” is another relative term which is merely the comparison of value between two traceable commodities. If there is a surplus of frogs used for trade, then the cost of any traded items inflate increasing the number of frogs needed to trade for the item. If there is a surplus of a particular item that frogs are used to traded for, then the value of frogs have inflated reducing the number of frogs needed to trade for that item. Of course, demand is also a factor in this. This is why markets that receive large amounts of government subsidy (ironically, college tuition and college textbooks) necessarily cause the cost of those commodities to increase from the artificial injection into those markets. Add to that the lack of competition in the “higher education” market, and you have an environment ripe to be inflated beyond the means of the general public forcing them to seek government assistance for an artificially increased demand. Had colleges and college textbooks operated in a FREE market, then justifying the purchase of a new edition of textbooks every year on the premise that a couple pages of edits necessarily required a completely new edition RATHER than a publication of a digital or physical errata greatly increased the artificial demand for pristine new textbooks. That would NEVER have happened in a free market where the consumer is more savvy with their wealth. College, in general, is a scam when the same knowledge for most subjects can be found for free on the internet. However, by subsidizing colleges, colleges receive an unfair advantage against new technologies and methods for knowledge dissemination. Lastly, the gate keeping of certification through the diploma system also creates an artificial demand by gate keeping employment through a system that does not have to be implemented by the same institutions that disseminate the knowledge in the first place. What difference does it make of one student spends $60,000 and 4 years and another spends $5,000 and 10 years to score the EXACT same on the certification tests?

[@favio100]

Oro puro estos videos.

[@duvelization]

awesome, many thanks for uploading these lectures

[@Jonx97]

This is a godsend! Thank you very much!

[@waynemcmillan5970]

Brillant lectures!

[@filiplazz]

yes, this, more. MUCH MORE

[@fionaboyd7065]

This is brilliant thanks so much, for putting this up

[@oksks]

muchas gracias!! una maravilla

[@luismarinsegarra1078]

Muchas gracias! Es genial

[@user-qk2bo6tq9d]

НУ это уже такая, настоящая пушечка❤‍🔥

[@user-py4oy3uk2c]

Just got my copy. Attempting to tackle this difficult work. The videos are a great companion.

[@mdbergfeld]

thanks for this.

[@webmthread2253]

Video speed 1.5x is essential for this course.

[@julesgleeson1237]

Trying this now and it's either going to be a life saver, or send me completely mad.

[@blakerotti1540]

I like the extra speed but, jesus i feel like i'm listening to ben shapiro now

[@torrentialrage]

1.25 is more bearable.

[@qabbala1015]

I'm at 2x

[@kevinmathewson4272]

@@qabbala1015 amateur, I'm at 10x

[@psynamessynames2272]

am gonna enjoy this. thank you. 😅😁

[@anwarsk6689]

Thanks

[@hakanerbil1505]

Thank you. Could you add subtitles to the other lectures?

[@First_Principals]

These lectures could be even better if the course was uploaded to moodle or similar educational software. Then people could ask questions and share other information the re-enforces the course material or contradicts it. By doing that people learn from each other collaboratively.

[@First_Principals]

The charts at 32 minutes should have labels showing what each of the large drops are.

[@nthperson]

As time permits, I hope to audit this course delivered by Professor Shaikh. As someone who has taught political economy for many years (as well a course on the history of economic thought), I have my own strong feelings about how to best explain what is happening in the world. Henry George's system of political economy (a closed system) answered the questions I had as a student of mainstream economics in college.One issue I would raise with Professor Shaikh at the outset is the inclusion of "profit" as an economic outcome rather than an accounting outcome. Profits are recorded when revenue exceeds expenses, but this tells us nothing about how the revenue is derived. Revenue generated from rents is, in Henry George's analysis, unearned. In effect, privately captured rents represents a redistribution of income and wealth from its producers to non-producers. This is both a factual observation, and a normative (i.e., value based) statement.His explanation of inflation is also subject to criticism, in that prices can be increased by the withholding land (and land-like assets) from the supply brought to the market. Speculators in land understand this market outcome very well. In some circumstances the supply curve for land will actually lean to the left.We might also argue against the use of the term "capitalism" to describe the socio-political arrangements and institutions that direct markets and the behavior of market participants. I suggest that Professor Shaikh needs to go back in time to that period when people began to settle rather than migrate and the rules that became necessary to guarantee to all members of groups a reasonably equal access to nature. Those rules were supplanted by relations based on power and privilege.Boom-to-bust cycles can be traced back over time, but are such cycles natural or caused by the ongoing redistribution of wealth from its producers into the hands on a nonproducing "rentier" elite? A strong case can be made for the latter. Rent-seeking is a powerfully destructive force that imposes enormous levels of stress on a society. About every 18-20 years (absent a powerful shock to shorten the cyclical stress point), the level of rent-seeking siphons off such a high level of revenue from business and of income from consumers that a crash occurs.Edward J. Dodson, M.L.A.

[@warrenarthur5629]

Steve Keen has modeled this in a general dynamics model, simple yet potent. He shows it's from a general level of rent seeking in the economy, namely private debt in general, that is largely driven by the debt in the housing market.

[@RushuFriends]

Warren Arthur Shaikh and Keen are my favorite economists. It would be great to see them work together.

[@nthperson]

Although I have read articles by Steve Keen and listened to him being interviewed and delivering talks, it is not clear to me that he makes a distinction between the private appropriation of location rents, rents associated with the value of broadcast frequencies or other inherently-monopolistic licenses to exploit natural resources. Of course, rent-seeking derived income from patents or legislative privileges are important, but I would argue they are of a different kind. It is also quite important to observe that private debt is far less attributable to the rising cost of "housing" than to the price of the land parcel thereunder. For this reason, I always refer to these markets as markets for residential property. At one time it was standard banking practice to require a 20 percent cash down payment toward the purchase of a residential property. The buyer was essentially paying cash for the land and financing the housing unit (a depreciating asset) with an amortizing loan the balance of which fell with each payment roughly in accord with the rate of depreciation.

[@illler362]

@Edward Dodson Can you recommend any books?

[@user-ep6sq6kc5p]

He loves to teach

[@bernd9000]

is there any way to get the sildes he uses? i have the book, but still i find it difficult to look for the corresponding pages, esp. b/c i cannot always figure ot the slides visually.

[@drtone]

How is this related to Henry George

[@Hurikokoko]

Thank you ! But if you have courage to do it, it would be wonderful to have real subtitles (not automatic ones) for foreign people :)

[@CyberClone138]

I should probably get a job as a hedge fund manager after this.

[@manuelmanolini6756]

what about debt? financialization and rent seeking? Does that exist for economists?

[@SusanSt.James-33]

Reforms in China begin to be undertaken in 1978, in order that China could accommodate contract production, bargaining power of workers in the West began to diminish.

[@Diamat1917]

9:10 The typical economics course starts with the study of how rational agents interact in frictionless markets producing an outcome that is best for everyone.

[@josephcoon5809]

How is “rational” defined? Is it treated as the subjective assessment that it is wherein a rational decision made based on a smaller data set is usually irrational when made on a larger dataset?

[@nickolasrobert7340]

Starting the course today. It's interesting that he tries to use a empirically accurate study of capitalism and how economics works, instead of create a ideal or perfect vision of economics(as neoclassical school does).

[@nicholassamuel4454]

Those taking this course should take a look at the book'Unending Recovery" that rethinks economics, and shows that economic recovery is simply impractical because the free market has been overridden by plutocratic pseudo-markets featuring the growth-inhibiting traits of monopolization, globalization, politicization and corruption.

[@amdali6288]

anwar raeen 22

[@josephcoon5809]

2:00 All the situations you mentions were the direct result of centralized government interference. That is not an issue with capitalism. That is more an issue with unrepresentative collectivism. 4:00 That’s another bastardization of language: “gains.” In Individualism, it’s called “profit” to make it sound malevolent because it is based on “greed.” In Collectivism, it’s called “surplus” to make it sound benevolent because it is based on “empathy.” This is in conjunction with “capital” having a negative connotation even though it is synonymous with “means of production” which has a more neutral if not positive connotation. Economic language is full of emotionally charged terms to obfuscate basic concepts. 4:45 Those drift patterns are motivated so that individuals place individual success over community success which leads to highly polarized elections, government regulations, and taxes. Laws and taxes are impositions on those that disagree with them. Living with the people you agree with means laws are forced on fewer people; less crimes are committed; less resources are wasted on law enforcement, judicial acts, and punishment. Taxes become VOLUNTARY CONTRIBUTIONS. Rational choices would involve placing ideology above personal financial gain resulting in natural economic systems arising and political systems decreasing. 5:30 You just described the interactions in the brain. Maybe if you studied a more perfect society, you’ll come up with better conclusions. 7:00 Interested to see if you address the effect on inflation that government subsidy and regulations has on inflations. “Chart of the Century” is a stunning visualization of the effects of nationalized socialism upon various markets within the economy. “Crises” like “happiness” is subjective. You seem pretty calm for living though a “crises.” 8:30 All those people looking for “an alternate explanation,” yet none think to look inwards, literally. If collectivists designed the brain, we never would have left our caves. There is no human society that has even come close to the stability and efficiency of the human brain, and “academics” conveniently disregard such a well-designed social structure. It’s pretty fascinating, really.

[@juanchymartin7824]

???

[@juanchymartin7824]

What is capitalism? And why are you talking about socialism here?

[@juanchymartin7824]

The term profit or gains doesn't change the action that where are describing.

[@juanchymartin7824]

Why your definition of rational action have a relationship with something as ideology? How do you can know when a person is not being rational? If your ideology commands your economic ideas and enterprises, it would be irrational follow them, no?

[@juanchymartin7824]

If you are studying an imaginary more perfect society you are not studying the society at all. You are creating concepts as the utopian socialist was creating a perfect system of society. This is trying to talk about the reality, about what it is and not what it should be. The reason behind it is the problem of the neoclassical economics.

[@robe_p3857]

He attributes the divergence of wage and productivity to Reagan which is common. However, the divergence clearly starts in the early 70's at the time of Bretton Woods failure. Im unclear why so many people ignore this fact. I suspect its rooted ideology.

[@C_R_O_M________]

I'm gathering sources to write a book that connects psychological parameters/facts and economic thinking. One of the biggest mistake of scientists (especially in the "science" of economics) is that they adhere to details and disregard the big picture. Yes, booms and busts occur but they happen predominantly when the ruling elite, which is comprised by politicians and their cronies, distort market dynamics. Why did the 1929 depression escalated? What was the role of the FED which was the institutionalised instrument to provide liquidity to the market if it was needed? The 2008 bust was another typical example with the GSEs FM & FM doing the fatal mistake of lifting the risk from the shoulders of first-line creditors/lenders and taking it upon themselves, creating bundle of securities and selling them to the secondary markets to acquire fresh liquidity and continue to blow into the housing bubble. What free and unregulated market people talk about is beyond me. In terms of psychological dynamics (assuming that all these people are well-intended to begin with - I have my reservations on the matter) I hypothesise that people that are pro-control of market dynamics (a chaotic system) are left-brainer control freaks. Marx for example was certainly wrong about every single prediction that he made. The "means of production" are now everywhere around us and capitalism has made them available for virtually everybody. Even the poorest. Intervening in a chaotic system like the economy and expect a predictable outcome is utterly idiotic. Politicians of course have more in this than just the welfare of the people that they regulate. They look after what's best for their job which is creating the need for more politics. I fear that economists have "read" the situation and have joined the "party". They have self interests too for not to reduce the role of the government in our lives. One of the most useful and revealing quotes I've ever encountered was in a Peter Drucker's book in which an Englishman was quoted to be saying: "(all) governments are criminal organisations whose sole purpose is to deceive and exploit the populous. Moreover, the only laws that they obey are natural laws"!

[@warrenarthur5629]

This sounds pretty much just like another rehash of what is known as "Austrian economics". You should consider carefully what market dynamics actually involve, especially the Mantel-Debreu theorems on general demand that show that a general demand curve in a free market is an arbitrary polynomial. Also, please consider looking at the general dynamic derivation of Godley, stock-flow-consistent models, such as that developed by Steve Keen. You'll find that modelling the simplest relationships in capitalism in a dynamic model can be based off irrefutable truths, giving behavior of a system that is not only chaotic, but given normal market forces will fall flat on its face and not be able to get up again. There is no such thing as a stable free market economy under market forces.

[@C_R_O_M________]

I appreciate your high quality comment as I'm not familiar with the points you've mentioned. If I finally go through with my book project I will certainly take a look at the things you mentioned. It is also true that Austrian economics have been a major influence for me. However as far as I know there haven't been an instance in which Mises and Hayek have fallen short in explaining market dynamics and busts and crises (not to mention Friedman/Sowell as well). I suspect that under scrutiny the demand curve in the Mantle-Debreaux would light up just a narrow perspective of real market dynamics (like all specialised tools tend to do) and that it might hold truth only under the umbrella of the initial arbitrary assumptions of its theorists. Truth can be found in anything as long as you ask the suitable questions (for that truth). P.S. Why does stability of the markets is a priori desirable? Couldn't it be that fluctuations of the markets incentivise creativity and create new opportunities for win-win entrepreneurial ventures. My apologies if I have expressed myself poorly, English isn't native to me.

[@kevinmathewson4272]

This is libertarian bullshit. Also, per your reply to Warren Arthur, asking "why is stability of markets desirable," it is desirable because instability derails the lives of ordinary people who are not heroic self-sufficient titans like Conan the Barbarian in your profile picture, people whose wellbeing is tied to a system infinitely larger and more powerful than themselves that they have essentially no influence over. You should choose something other than economics to pour your individualist fantasy life into.

[@kevinmathewson4272]

@@C_R_O_M________ Also, your profile picture and your outlook on the economy make me think your name is an abbreviation of "cromagnon." There are exactly the right number of underscores to fit this word, and cromagnon men were huge paleolithic europeans. My guess, and I would be happy to be wrong, is that you have some unpleasant ideas about race. *edit: And your favorited playlists do not convince me otherwise - a bunch of videos railing against social justice, some videos against critical race theory, Jordan Peterson, etc. This is always what libertarianism boils down to at the end of the day, huh? Just misanthropic social darwinism. A belief that there are weaker groups who should serve the strong.

[@C_R_O_M________]

@@kevinmathewson4272 thank you for your eloquent comment #NOT. I stopped reading at “this is libertarian BS”. Next time around be polite and maybe I’ll pass the first sentence and read the whole comment.

[@Achrononmaster]

Has this dude spent 15 years writing a book about market debt driven crises only to have empirical evidence? Someone should show him Steve Keen’s Minsky’s models that show dynamically how these crises occur.

[@josephcoon5809]

10:00 You left out neuroscience, computer science, network engineering, biology, and botany. These are all SCIENTIFIC fields that study large complex systems analogous with each other and human economies. 11:00 “Actual capitalism.” I’m looking forward to YOUR definition for capitalism and capital to add to the other definitions found in other texts. Rational discourse requires, as a foundation, an agreement on terms; not terms overloaded with “nuanced definitions.” The lack of imprecise language is what anchors economics as a soft-science as it is currently taught. It is also import to distinguish between socialist-driven corporatism and free market capitalism. Academics have a bad habit of pinning the blame for things that collectivist polices caused on to the capitalist framework. 14:15 “Capital for the use of making a profit.” THAT is the fundamental piece of emotional rhetoric used by collectivists since Marx coined “means of production” (capital) and used “surplus” instead of “profit.” If individuals do it, it’s capital to create a profit. If the state does it, it’s means of production for surplus. 21:00 You cannot discuss individual wages in the aggregate for a nation as large and diverse as the United States. Aside from all the local and national regulations and taxes affecting wages, you cannot attribute the state of wages in the US entirely on capitalism. 21:40 “Capitalism creates a pool of unemployed labor.” That’s not what happened during the oil boom in North Dakota in 2008. That single example debunks both the premise that capitalism depresses wages and creates unemployment. Matter of fact, wages were directly affected by local businesses COMPETING for unskilled labor with the oil companies that brought jobs to the area. Walmart hired people off the street at $17/hr to COMPETE with the oil companies offered wages. The unskilled labor pool was so depleted (supply) that laborers immigrated to the area in large numbers. Supply and demand are relative terms depending on the agent considering the transaction. To laborers, jobs are the supply. To employers, laborers are the supply.

[@a46475]

So he proposes to explain "capitalism" (doesn't define it) via "gain-seeking behavior". As opposed to what proposed by whom? This is a basic assumption underlying all of economics. And who gives a damn what some columnist at the Financial Times thinks? I can tell from this video, the book's title, and perusing that book on Amazon that there is nothing of value within those 1000 pages, but weak sophisms.

[@kevinmathewson4272]

I only skimmed your comment, but I can tell there is nothing of value in it

[@smldiff]

Oh, thank you very much for providing the lecture through youtube!

[@user-ep6sq6kc5p]

Thanks