The document discusses the emergence of Post Keynesian economics in Finland over the past four years. It notes that Post Keynesianism had virtually no role in Finland previously but has now gained significant interest in both academic and public policy circles. This is despite Post Keynesianism having no tradition in Finland and being advocated primarily by a small number of young researchers without prestigious academic positions. The document examines potential reasons for Post Keynesianism's rise in Finland, including focusing the debate in the public sphere rather than just within academia, emphasizing policy relevance, and cooperating with civil society groups. It argues this approach allowed Post Keynesians to overcome the "gatekeeping" of orthodox economists and start shifting the overall
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
The Strange Emergence of Post Keynesian Economics in Finland
1. The Strange Emergence of
Post Keynesian
Economics in Finland
12th International Post Keynesian Conference
Kansas City, September 25th 2014
Lauri Holappa, University of Helsinki
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2. Outline
1. Reflections on the debate about the future of Post
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Keynesianism
2. Absence of Keynesianism in Finnish economic
history
3. Emergence of Post Keynesianism in Finland
4. How was it possible?
5. Conclusions
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3. Future of Post Keynesianism:
The Debate
• Why Post Keynesianism has failed to achieve a stronger
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position?
• Two broad explanatory models
1. Post Keynesians should move away from criticising
mainstream economics and engage in positive dialogues with
the mainstream (Colander et al, Fontana & Gerrard)
2. Post Keynesians have made strategic errors in the academic
battle
‒ First generation of Post Keynesians failed to organise the
continuation of the school (King)
‒ Post Keynesians make too many citations to orthodox papers and
too few to other PK papers (Dobusch & Kapeller, Foley)
‒ Post Keynesian papers are scarcely available (Dobusch & Kapeller)
‒ Post Keynesians do not concentrate enough on the positive
development of their theory (Lee)
‒ Post Keynesians do not cooperate with other heterodox schools
(Dobusch & Kapeller, Stockhammer & Ramskogler, Lee)
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4. Keynesianism and Finland
• Finland has a strong Nordic welfare model but fiscal policy
has traditionally been very conservative
• Even orthodox Keynesianism has never gained significant
support in Finland (Pekkarinen & Vartiainen)
• Even very few visible Old (or dissident New) Keynesian
economists in the Finnish policy debate or academia
• Debate mostly dominated by supply-siders and orthodox
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New Keynesians
• Post Keynesianism has had virtually no role in Finland
before the 2010s
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5. Emergence of Post
Keynesianism in Finland (1)
• PK was never mentioned in the Finnish public or
academic economic policy debate before 2010
• Most economists, let alone journalists, had never even
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heard about PK
• Everything has changed in four years
• Currently Post Keynesians play a significant role in Finnish
public economic policy debate
• PK is now a widely discussed topic even in mainstream
Finnish media
• PK has gained quite significant interest also in the Finnish
academic world
• Political parties, NGOs and social movements have shown
great interest in PK
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6. Emergence of Post
Keynesianism in Finland (2)
• Rise of Post Keynesianism has happened
although…
• there is no PK tradition in Finland
• there are only a handful of Post Keynesians in Finland
• the rare Finnish Post Keynesians are all very young
researchers and do not have prestigious academic
positions
‒ Best-known Finnish Post Keynesians are still writing their
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dissertations!
‒ None of Finnish Post Keynesians are connected to
economics departments
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7. Emergence of Post
Keynesianism in Finland (3)
• Examples of the rise of Post Keynesianism in Finland
• PK blog “Raha ja talous” (Money and the economy) is now the most
popular economics blog in Finland (Cision 2014)
• PK textbook Rahatalous haltuun (Ahokas & Holappa 2014)
(Understanding the Monetary Economy) was one of the most sold
non-fiction books in the spring of 2014
‒ Reviewed very positively in the biggest Finnish orthodox economics journal
Kansantaloudellinen aikakauskirja (Finnish Journal of Economics)
‒ Even the Bank of Finland reacted to the book in its own website
• Post Keynesians are now frequently interviewed in mainstream media
• Major television channels have run feature stories about PK
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economics
• Post Keynesians have been called to give expert statements on
economic policy in the Finnish parliament
• Post Keynesianism has become the semi-official economic theory of
the Left Party (see Patomäki 2014)
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8. Emergence of Post
Keynesianism in Finland (4)
• The electoral programme of the current chairman of the Social
Democratic Party also included many PK elements and was
written, to a large extent, by self-proclaimed Post Keynesians
• Numerous academic (and non-academic) seminars that discuss
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Post Keynesianism
• Special issue on PK theory in general social sciences journal
Tiede & Edistys
• Biggest Finnish newspaper Helsingin Sanomat (HS) has
published several op-eds from PK researchers
• HS has also hired an openly Post Keynesian economics analyst
themes such as uncertainty, endogenous money and sectoral
balance analyses now frequently discussed in HS
• Many altermondialiste and environmental groups now endorse
Post Keynesianism (Attac, degrowth movement)
• Best-known Finnish economists have reacted strongly and
publicly against the rise of Post Keynesianism
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9. How Was It Possible? (1)
• How has the rise of Post Keynesianism been
possible even though the premises have been so
difficult?
• The fact that Finland is a rather small country may
explain part of the phenomenon
• Post Keynesians have, however, had more favourable
circumstances in many other countries yet PK has
remained marginal
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10. How Was It Possible? (2)
• Post Keynesians (and heterodox economists more generally)
have adhered to Kuhn’s theory of paradigm shifts from the
1960s onwards (King 2002)
• Kuhn suggested that scientists are not usually willing to
overturn the bases of the accepted scientific truth
• Popperian view of an open-minded scientist constantly trying to
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falsify hypotheses refuted
• Most scientists work within an established framework of ideas
and methods (normal science, hegemonic paradigm)
• Scientific changes can occur only whenever there is a
scientific crisis
• Every theoretical perspective includes some anomalies
• Anomalies of any theory may become embarrassing or otherwise
indefensible in right circumstances scientific crisis and possible
paradigm shift
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11. How Was It Possible? (3)
• Post Keynesians have waged a scientific war against the
mainstream and waited for the right circumstances for a
paradigm shift to emerge
• Kuhn’s theory is not, however, applicable to (neoclassical)
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economics
• In Kuhnian theory, paradigm shifts are possible to occur
only because anomalies are always considered to be
burdens for all theories in right circumstances these
anomalies become unbearable
• The problem with Kuhn’s theory is that, although it rejects
the Popperian view of an ideal scientist, it analyses the
academic community as somewhat isolated and
autonomous society
• It especially overlooks social power relations
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12. How Was It Possible? (4)
• Neoclassical economics derives its authority, to a great extent, from
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extra-academic factors
• Orhtodoxy offers legitimation and reification for a particular political
and social order (neoliberalism)
• Passive protection of this order guarantees the special status of
neoclassical economics and economists (job offers, access to visible
and powerful positions, consultant fees etc.)
• Theoretically weakest points of the neoclassical narrative, its
anomalies, are foundations of the special social status of the
orthodoxy
• Say’s law
• Long-run neutrality of money
• Ergodic axiom
• Anomalies of the neoclassical theory are not burdens for the
orhodoxy but factors, which help the orthodoxy to maintain its
hegemony Kuhnian paradigm shift may not be possible in the
case of neoclassical economics
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13. How Was It Possible? (5)
• Kuhnian scientific crises are not likely for the neoclassical theory
because orthodox theory gains its status largely from outside the
academia anomalies do not cause autonomous scientific crises
• Neoclassical theory must be challenged directly in the public
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discussion
• Political nature of neoclassicism must be explicitly stated and the
theoretical debate in economics connected to real-world economic
problems
• Rise of Post Keynesianism in Finland was possible because the
battle was fought right from the beginning in the public eye
orthodox community had to react: they could not just ignore Post
Keynesians
• Finnish Post Keynesians were forced to operate through the public
sphere because their academic position was so weak public
visibility has also increased the academic status of Post
Keynesianism in Finland
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14. How Was It Possible? (6)
• PK project in Finland was launched with a visible op-ed piece in the
country’s biggest newspaper blog launched at the same time
• The piece was essentially a neo-chartalist argument stating that the
“sustainability deficit” of the Finnish economy is a consequence of
Finland joining the EMU
• In the beginning of the project, Post Keynesians dealt with very
concrete policy problems and gave numerous unorthodox policy
problems
• “Be politically relevant”, the first suggestion of Stockhammer and
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Ramskogler (2012)
• This gave significant media attention, which allowed the Post
Keynesians to move the debate into a more theoretical area
• Finnish Post Keynesians were also right from the beginning co-operating
with sympathetic think tanks, NGOs, civil society
movements, trade unions and political parties
• Post Keynesians also dominate the economic debate in the social
media
• Similar features can also be seen in the rise of the MMT in the USA
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15. Conclusions (1)
• As many Post Keynesians have suggested, it is questionable
can the neoclassical theory even be seen as scientific or
academic if neoclassical economics is not academic, it
cannot be beaten in an academic debate Kuhnian theories
of academic paradigm shifts do not apply
• Social scientists have to focus on the realism of their theories
but they must keep in mind that factors relating to the
sociology of science and knowledge very often determine the
success of a particular theory
• Post Keynesians should be a lot more active in the public
debate and social media because the gatekeeping of
neoclassical economists can thus be overcome
• Stockhammer’s and Ramskogler’s advice extremely
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important: Be politically relevant!
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16. Conclusions (2)
• PK is not very well-known in many countries makes it
possible to frame it as something new and fresh
• Post Keynesians might have more academic possibilities
and freedom within other disciplines than Economics
(Political Economy, International Political Economy,
Economic Geography, Economic Sociology)
• Post Keynesians should avoid unnecessary and overly
aggressive internal debates and appear as uniform as
possible
• PK is a more promising and coherent basis for a
revolution in economics than obscure concepts like
‘heterodox economics’
• However, PK must be inclusive big tent interpretation
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necessary
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Hinweis der Redaktion
Postkeynesiläinen debatti: antautujat (Colander, Fontana) vs. Taistelijat (muut). Ongelmaksi yleensä koetaan heikko strateginen toiminta. Katsotan syyksi sekä historialliseen tilanteeseen että nykytilanteeseenkin.
Suomessa vahva hyvinvointivaltio ja rakenteellista keynesiläisyyttä, mutta äärimmäisen konservatiivisita finanssipolitiikkaa. Ei juuri keynesiläisiä intellektuaalisia vaikutuksia. Ei oikeastaan lainkaan postkeynesiläisyyttä.
Kuvataan postkeynesiläisyyden rantautuminen Suomeen 2010 alkaen ja mitä siitä on seurannut.
Aluksi teoreettinen kuvaus: postkeynesiläisyys on menestynyt Suomessa, koska kamppailua ei ole edes yritetty käydä taloustieteen sisällä. Taloustiede on haastettu, mutta julkisuuden kautta: blogit & some, liikkeet, puolueet, media tila tieteelliselle kamppailulle. Taloustieteen sisäinen paradigman vaihdos ei ole mahdollinen, koska anomaliat eivät voi kaataa uusklassista taloustiedettä (juuri anomaliat pitävät uusklassisen teorian pystyssä, tarjontapuolen tekijöiden vaikutus pitkällä aikavälillä ei voi tapahtua kuhnilaista kumousta). Uusklassisen taloustieteen asema perustuu yhteiskunnalliseen (vallanjakoon) vahvemmin kuin minkään muun tieteen asema sitä ei voida arvioida teorioilla, jotka koskevat yhteiskunnallisen vallanjaon kannalta irrelevantteja akateemisia kamppailuja.
Keskeisin viesti on, että postkeynesiläisyyden on suoraan haastettava uusklassinen teoria, mutta se ei voi onnistua talousiteteen sisällä. On ohitettava uusklassisten kontrolloimat välineet ja vietävä viesti suoraan esiin. Uusklassisen taloustieteen asema neutraalina tieteenä on horjutettava. Postkeynesiläisyydelle on olemassa luonnollista kysyntää, mutta se on saatettava osaksi kansalaisyhteiskuntaa.
Tähän asti 5 minuuttia.
Niin pitkään kuin kamppailu säilyy akateemisen yhteisön sisällä, eivät anomaliat kyseenalaistu, koska niistä on tiedeyhteisölle enemmän hyötyä kuin haittaa. Anomalioiden pohjalta rakentuva kritiikki on aina mahdollista ignoroida. Sen sijaan kamppailun tuominen suoraan julkisuuteen pakottaa uusklassisen yhteisön reagoimaan anomalioihinsa.