The way in which the political left conceptualizes an economy is a variation on how technocrats more generally conceptualize it. The left imagines the economy as possessing a kernel of processes that take inputs and produce outputs based upon purely technologic considerations. What distinguishes these processes as a kernel is that they are jointly self-sustaining; setting aside natural resources, the kernel produces everything necessary to maintain itself. Depending upon technology, the kernel may do nothing more than to sustain itself. The left often imagines an economy that does nothing more as a subsistence economy; but, as a matter of logic, they might imagine an economy as technologically constrained to produce exactly what it does to continue replicating itself, yet providing a fairly high standard of living. In any case, they more often imagine the kernel as producing a surplus, which is to say production above and beyond that necessary to sustain the kernel. Allocation and composition of the surplus is imagined to be determined not just by technologic considerations, but also by social power. This is why the left often does believe and still more frequently seems to believe that economics is a zero-sum game; they believe that for some people to get more, they must either leave less of the surplus for others or, still worse, must reduce the kernel. Because performance of the kernel is imagined to be determined purely by technologic factors, while it may be acknowledged that in our world resources have been priced largely by markets and hence inputs have been determined largely by markets, it is believed that, ultimately, the markets had little real choice; that they had to settle on relative prices that simply conformed to technologic considerations. The imagined kernel is as if an inflexible machine, however complex it may be. It is only pricing of commodities within the surplus that is imagined to be flexible.

The lock-downs that have been the political response to the SARS-CoV-2 pandemic are variously imagined either as shutting down production outside the kernel, with economic activity labelled as essential continuing, or indeed as going further to shut-down much of the kernel itself. As the lock-downs come to an end, it will be expected by many — including many not on the political left — that the economy will pick-up at about where it was before the lock-downs. If one imagines the proper inputs to each part of the kernel (or of the economy more generally) as technologically determined, then restarting the economy is a simple matter of resuming those proper inputs. If the kernel is believed to have been kept in operation, then what remains is again to allocate the surplus roughly as it was, or (in keeping with left-wing values) with a greater share given to those who are not wealthy.

The economy will not pick-up where it left-off, because the technocratic conception in general and the left-wing conception in particular are so terribly wrong. But the political left will diagnose the failure to restore the economy quickly as a failure of capitalism — either to solve a problem of technologic programming or to produce a socially just or fair division of the surplus. And, so, they will demand that the state become further involved, to take greater command of those industries that they regard as within the kernel, to strengthen worker unions, to establish floors on wages and both floors and ceilings on salaries, and to redistribute income through transfer programmes.

From technocrats, I often hear or read a claim that it would no longer make sense to extract petroleum when reserves were depleted to the point that extractions took more energy than could be got from the petroleum. What is unstated in the reasoning is that the value of an energy source is solely determined by the quantity of energy that it could yield; but that proposition is mistaken.

When petroleum is extracted, not only is one quantity of energy exchanged for another, but a quality of energy is exchanged for another. Petroleum is extracted by the use of mechanical or hydraulic energy. Those forms of energy might be derived ultimately from the burning of petroleum, but they might come from other sources instead.

When energy is converted from one form to another, as when a motor converts electrical energy into mechanical energy, that conversion too is an exchange, and as a practical matter those exchanges invariably involve a loss in the useable quantity of energy; that consistent loss is a matter of thermodynamics. Yet the change in form is implicitly deemd to be worth the loss in quantity.

A world in which the extraction of petroleum involved a net loss in the quantity of available energy would be very different from the present; if that state were somehow reached to-morrow, it would be catastrophic. Even just a decline in the net gain in the quantity of energy from extraction is note-worthy when it occurs (as is an increase). But, in a more gradually changing world, petroleum could and probably would continue to be produced even under circumstances that required a sacrifice in the net quantity of available energy.

Calvin Woodward, at the AP, calls this an overstatement:

Most economists, almost unanimously, recognize that even if philosophically you're wary of government intervening in the economy, when you have the kind of problem you have right now … government is an important element of introducing some additional demand into the economy.

but it goes well beyond mere overstatement. It's an gross lie.

It's bad enough when people use consensus to argue for a proposition that ought instead to be tested by logic applied to brute fact. But this business of using counterfeit consensus is just actively vile.

Any time that the state spends money, there is some cost to the economy.

The state can tax, in which case the cost is obvious. But I put obvious in quotation marks here, because people don't seem to think past the fact that money is taken, without much thinking that the value of money per se is its purchasing power.

The state can print money, issuing new currency to fund its expenditures. The cost here comes because

where M is the total supply of money in an economy system, ν is the average frequency with which a unit of currency changes hands in the system, q is vector of the quantities of goods and services purchased in the system per unit time, and p is the corresponding vector of prices. If M is increased, and there isn't some off-setting increase in the elements of q, or a drop in ν, then elements of p must increase. If prices go up, then the purchasing power of the unit of currency goes down. Ceteris paribus, when the state issues new currency, the value of the holdings of currency that people already had is decreased. (There are some other, potentially far more costly effects than the direct loss of purchasing power, but I don't want this entry to mushroom into some huge treatise.)

In many modern states, printing money is made to look like borrowing, whereïn the ostensible borrowing is from a central bank, a special creature of the state, which prints money and uses this to make the loan to the state.

But the state may also more genuinely borrow money (especially when officials of the central bank think this better than printing more) in the financial markets. In this case, borrowing by the state shifts out the demand curve for loanable funds. Unless the supply curve for loanable funds were perfectly elastic, so that any amount of funds would be made available by lenders at the prevailing price — the rate of interest — that price will go up.

When people lose purchasing power to taxation or to an over-all increase in prices, they reduce purchases of goods and of services, and they save less, so that funds for investment are decreased, and hence investment is decreased. When the price of borrowing is increased, people borrow less for consumer purchases and less for investment. So whenever the state spends, no matter whether it taxes, inflates, or borrows, that spending takes a piece of the economy. Whether there is a net cost turns upon whether the activity funded by state spending is somehow more productive than the private activity that it has crowded-out.

As I have explained, state allocation of resources can be more productive only if private provision is hampered by transactions costs, and the effects of those transactions costs are greater than the combined effects of state transactions costs (red tape and all that) and the loss of economic coördination which results from substituting guess-work for market prices.

Okay, so this gets me to these stimulus bills in the United States legislature. Various numbers are associated with various versions, but the bill that left the House of Representatives was for about 800 billion dollars. And various commentators, both conservatives at institutions such as the Wall Street Journal and social democrats (liberals) at institutions such as NPR, have noted that only about one-eighth of the projects in that bill could be reasonably claimed to be stimulus, with the rest just being pork-barrel projects. Regardless of whether we buy-into the Keynesian hopes for about $100,000,000,000, the loss to the economy associated with about $700,000,000,000 in pork will be vastly greater.

It was claimed that a stimulus bill was necessary because the economy is tanking. The word depression is being bandied-about. And, yet, a majority in Congress and the President are pushing what will plainly be a massive hit on the economy.

To explain the behavior of these parties, we could offer various hypotheses. Many politicians are simply great fools; some politicians might believe that we are indeed on the cusp of an economic disaster, but be so greedy for the political gains associated with these projects that they just won't allow themselves to think. Other politicians might not believe the talk of economic crisis, but be knaves who participate in it, creäting a smokescreen behind which to seek much the same gains as are the fools. Finally, some of these politicians might both genuinely believe that the economic crisis is quite dire, and recognize that a stimulus like those proposed will be greatly damaging, but expect that the effects of the bill can be blamed on other things, especially upon what remains of the market economy, so that those effects become an excuse for even greater expansion of state power.

With regard to one particular politician, the President, I don't at all think that he's so great a fool as to misunderstand what a stimulus bill that is about 7/8 pork would do. He knows that he's pushing a hit on the economy. I don't know whether he is amongst the knaves who don't really believe that the economic situation is all that dire, or amongst those who want to engineer a greater crisis in order to have a greater excuse to technocratically restructure the economy. But when the President speaks of recovery as taking years rather than months, I worry that he is not merely lowering expectations to reduce future criticism, but revealing more ambitious plans.