Stephan Schulmeister is an economist from Austria who has little in common with the economically liberal so-called Austrian school.
The economist born on August 26, 1947 was a research assistant at the Austrian Economic Research Institute (Österreichisches Institut für Wirtschaftsforschung/WIFO) for forecasts, economic development, financial markets and international trade from 1972 to 2012.
The focus of his work is on the conflicts of interest between employees, employers from the real economy and the financial markets or financial capital.
According to Schulmeister the orientation of the economic order fluctuates permanently between real capitalism and financial capitalism. Long upswings are caused by an alliance of interests between employees and real capital and long downswings are caused by an alliance of interests between real capital and the financial markets or financial capital.
With his new book "The Way to Prosperity" he shows how much Schulmeister is concentrating on this and how good he is at this. The book explains the basics from his side such as Keynes or Smith as well as the basics of the opposite side such as Hayek or Friedman.
The book is an indictment and argument against the opposite side such as Hayek or Friedman. But Schulmeister has not only dislike for the opposite side but also admires how quickly and how many of their goals they have achieved.
Von Hayek and von Mises and later various other economists have organized themselves for this manufacturing of consent. In 1927 von Hayek and von Mises jointly founded the Austrian Institute for Business Cycle Research (Österreichisches Institut für Konjunkturforschung) which later became the Austrian Institute for Economic Research (Österreichisches Institut für Wirtschaftsforschung/WIFO). In 1931 Hayek became a professor at the London School of Economics. And last but not least Hayek became Keynes' greatest opponent. In addition von Hayek had the Warsaw Pact member states as an example of how badly the state's competencies can be exceeded. Schulmeister distinguishes three main currents in this countermovement. [1,p.58-74,75-103,73]
"The Road to Serfdom" from 1944 is considered to be Hayek's Magnum Opus and the standard work of economic liberals and libertarians. And in the closing remarks of "The Road to Serfdom" von Hayek writes that his work is supposed to have a long-term influence. And in 1947 von Hayek met with like-minded people to found the Mont Pelerin Society. According to Schulmeister this was followed by a manufacturing of consent in favor of this countermovement by institutions such as the "Foundation for Economic Education", the "Liberty Fund", the "Heritage Foundation", the "Fraser Institute" or the "Center for Policy Research". [1,p.58-74,75-103,82,83,96-97]
According to Schulmeister this counter movement has propagated the stability of free financial markets, the harmfulness and dispensability of state regulations, general state failure and the futility of full employment. According to Schulmeister the proponents of a real capitalist and demand-oriented economic policy according to Keynes were too confident and ignored the countermovement for too long. This dynamic is already known from previous publications and appearances by Schulmeister. [1,p.58-74,75-103]
[1] Stephan Schulmeisters Buch - Der Weg zur Prosperität- ISBN 978-3711001481
[2] Welche Aufgaben kommen für die Sozialdemokratie? Schulmeister und Max Lercher 2018-05-07
https://youtu.be/iJzheZwCtV0
[3] Der Weg zur Prosperität Stephan Schulmeister Buchvorstellung WU in Wien 2018-06-08
https://youtu.be/_s2SJIKk204
[4] Stephan Schulmeister - Europas Weg in die Krise und zurück zur Prosperität 2018-06-22
https://youtu.be/cKy4Y5Zk8ig
[5] „Wir sind in gefährlicher Nähe zu den 1930er-Jahren.“ Stephan Schulmeister im Gespräch 2018-06-18
https://youtu.be/tL0kaHQTByA
[6] Märkte als Religionsersatz? | Stephan Schulmeister bei quer.denken. 2019-02-07
https://youtu.be/EUCGzOkfBtc
According to Schulmeister the orientation of the economic order fluctuates permanently between real capitalism and financial capitalism. Long upswings are caused by an alliance of interests between employees and real capital and long downswings are caused by an alliance of interests between real capital and the financial markets or financial capital.
With his new book "The Way to Prosperity" he shows how much Schulmeister is concentrating on this and how good he is at this. The book explains the basics from his side such as Keynes or Smith as well as the basics of the opposite side such as Hayek or Friedman.
The book is an indictment and argument against the opposite side such as Hayek or Friedman. But Schulmeister has not only dislike for the opposite side but also admires how quickly and how many of their goals they have achieved.
The Mont Pelerin Society and the Counter Movement
For Schulmeister the conflict between the demand-oriented and real capitalist model according to John M. Keynes and the economically liberal model according to Friedrich A. von Hayek and Ludwig von Mises has been representative of economic development since 1945. On the one hand there is the demand-oriented and real capitalist model by Keynes and its success. This success was so great that Keynes won the competition with von Hayek. And on the other hand there is the deregulated and supply-oriented economic policy according to von Hayek and von Mises and its failures. According to Schulmeister this economic policy was and is propagated through deliberate manufacturing of consent by an organized countermovement. [1,p.58-74,75-103]Von Hayek and von Mises and later various other economists have organized themselves for this manufacturing of consent. In 1927 von Hayek and von Mises jointly founded the Austrian Institute for Business Cycle Research (Österreichisches Institut für Konjunkturforschung) which later became the Austrian Institute for Economic Research (Österreichisches Institut für Wirtschaftsforschung/WIFO). In 1931 Hayek became a professor at the London School of Economics. And last but not least Hayek became Keynes' greatest opponent. In addition von Hayek had the Warsaw Pact member states as an example of how badly the state's competencies can be exceeded. Schulmeister distinguishes three main currents in this countermovement. [1,p.58-74,75-103,73]
- " The "Austrian School" emphasizes the limited nature of human knowledge. Price changes send signals/incentives and thus control supply and demand. At the center of the analysis are (therefore) market processes and not equilibria. The dimension of time - also in the form of history - was given great importance (the "Austrians" in Mont Pelerin in 1947 were Hayek, von Mises and Machlup). "
- " The "neoclassical school" (its center became the University of Chicago) works with mathematical equilibrium models and therefore extremely unrealistic assumptions (Homo oeconomicus etc.). Temporal processes and thus evolutionary processes are not "foreseen" in the model. In addition to Milton Friedman, Aron Director and George Stigler represented "neoclassical neoliberalism" at the founding meeting. "
- " The "ordoliberal school" focuses on economic policy guidelines. In general the state should prevent an unregulated market economy from abolishing itself through the formation of monopolies and cartels. Issues of ethics in ordoliberalism are also of greater importance. His influence was and is limited to Germany. Ordoliberal founding members of the Mont Pelerin Society were Walter Eucken, Willhelm Röpke and Alexander Rüstow. "
"The Road to Serfdom" from 1944 is considered to be Hayek's Magnum Opus and the standard work of economic liberals and libertarians. And in the closing remarks of "The Road to Serfdom" von Hayek writes that his work is supposed to have a long-term influence. And in 1947 von Hayek met with like-minded people to found the Mont Pelerin Society. According to Schulmeister this was followed by a manufacturing of consent in favor of this countermovement by institutions such as the "Foundation for Economic Education", the "Liberty Fund", the "Heritage Foundation", the "Fraser Institute" or the "Center for Policy Research". [1,p.58-74,75-103,82,83,96-97]
According to Schulmeister this counter movement has propagated the stability of free financial markets, the harmfulness and dispensability of state regulations, general state failure and the futility of full employment. According to Schulmeister the proponents of a real capitalist and demand-oriented economic policy according to Keynes were too confident and ignored the countermovement for too long. This dynamic is already known from previous publications and appearances by Schulmeister. [1,p.58-74,75-103]
An opposing Mont Pelerin Society
Schulmeister is not only averse to the counter-movement and its successful manufacturing of consent. Schulmeister also has a certain admiration for their success. According to Schulmeister the representatives of a real capitalist and demand-oriented economic policy according to Keynes could at least change this. The title alone is a nod to Hayek's "The Road to Serfdom" by swapping the goal. [1,p.58-74,75-103,115,116]" A significant difference to early social crises is that there is currently no economic theory accepted by most >>anti-neoliberals<< that can explain Europe’s path from prosperity to the great crisis in concrete terms and thus also shows the way to overcome it. "It is obvious that Schulmeister wants an opposite Mont Pelerin Society. According to Schulmeister real capitalist and demand-oriented economic policy according to Keynes is superior to supply-oriented economic policy according to von Hayek and von Mises. And Schulmeister explains why the countermovement took place and was why it was successful. [1,p.58-74,75-103]
" Despite the excellent performance of the Keynesian-real capitalist arrangement in the prosperity phase the neoliberal economists managed to dominate with their worldview. The >>Keynesians<< on the other hand were unable to develop an alternative theory despite the miserable performance of the neoliberal financial capitalist arrangement. "
[1,p.115]
[1] Stephan Schulmeisters Buch - Der Weg zur Prosperität- ISBN 978-3711001481
[2] Welche Aufgaben kommen für die Sozialdemokratie? Schulmeister und Max Lercher 2018-05-07
https://youtu.be/iJzheZwCtV0
[3] Der Weg zur Prosperität Stephan Schulmeister Buchvorstellung WU in Wien 2018-06-08
https://youtu.be/_s2SJIKk204
[4] Stephan Schulmeister - Europas Weg in die Krise und zurück zur Prosperität 2018-06-22
https://youtu.be/cKy4Y5Zk8ig
[5] „Wir sind in gefährlicher Nähe zu den 1930er-Jahren.“ Stephan Schulmeister im Gespräch 2018-06-18
https://youtu.be/tL0kaHQTByA
[6] Märkte als Religionsersatz? | Stephan Schulmeister bei quer.denken. 2019-02-07
https://youtu.be/EUCGzOkfBtc
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