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new issue of real-world economic review

3 days ago

Real-world economic review

issue no. 101   –   September 2022download whole issue

Two conceptions of the nature of money Tony Lawson          2
How power shapes our thoughtsAsad Zaman         20
SARS-CoV-2: The Neoliberal VirusImad A. Moosa          27
The giant blunder at the heart of General Equilibrium TheoryPhilip George          38
A life in development economics and political economy: An interview with Jayati GhoshJayati Ghosh and Jamie Morgan          44
John Komlos and the Seven DwarfsJunaid B. Jahangir          65
A three-dimensional production possibility frontier with stressJohn Komlos           76
Free trade theory and reality:
How economists have ignored their own evidence for 100 yearsJeff Ferry          83
The choice of currency and policies for an independent

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WEA Commentaries 

19 days ago

WEA CommentariesVolume 12, Issue 2
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Can university education in economics contribute to strengthened democracy and peace? Peter Söderbaum
The Irish anomaly. Rethinking the concept and operationalization of ‘Gross Fixed Capital Formation’ Merijn Knibbe
Benefits of fathers caring for children remain underestimatedin several European contexts Mitja Stefancic
The WEA Textbook Commentaries Project
What’s Capitalism got to do with it? David F Ruccio
Please click here to support the World Economics Association

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Markets are only a sub-set of economic life

August 15, 2022

From Ken Zimmerman  (originally a comment)
Economic life is the activities through which people produce, circulate and consume things, the ways that people and societies secure their subsistence or provision themselves. Activities by which communities sustain themselves. ‘[T]hings’ is, however, an expansive term. It includes material objects, but also the immaterial: labor, services, knowledge and myth, poems, religion, names and charms, and so on. In different times and places, different ones of these will be important resources in society, and when they are important they come within the purview of economic anthropologists. That is, where some economists have identified economic life in terms of the sorts of mental calculus that people use and the decisions that they make (for

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A coherent alternative has to be proposed

August 10, 2022

From Nikolaos Karagiannis and Issue 94 RWER
The practical use of the term “neoliberal” exploded in the 1990s, when it became closely associated with two developments. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle. The second was economic hyper-globalization, which accelerated thanks to free flows of finance and to new, more ambitious types of trade agreements. Financialization and hyper-globalization have become the most overt manifestations of neoliberalism in today’s world.[1]
That neoliberalism is a highly biased concept does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift towards markets from the 1980s on? Or that centre-left politicians –

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The reinjection of empirical ideas

August 1, 2022

“As a mathematical discipline travels far from its empirical source, or still more, if it is a second and third generation only indirectly inspired from ideas coming from ‘reality’, it is beset with very grave dangers. It becomes more and more purely aestheticizing, more and more purely l’art pour l’art. This need not be bad, if the field is surrounded by correlated subjects, which still have closer empirical connections, or if the discipline is under the influence of men with an exceptionally well-developed taste.
But there is a grave danger that the subject will develop along the line of least resistance, that the stream, so far from its source, will separate into a multitude of insignificant branches, and that the discipline will become a disorganized mass of details and

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Book Review by Jayati Ghosh : The journey to greater equality

July 26, 2022

From Jayati Ghosh

Economic inequalities have increased substantially across the world in the past three decades and have deepened during the COVID-19 pandemic. Thomas Piketty and his colleagues at the World Inequality Lab at the Paris School of Economics (PSE), France, have been at the forefront of tracking these changes, providing extremely useful analyses based on careful aggregation of national data on income and wealth inequality from a multitude of sources. They have shown that globally, inequality is now as entrenched as it was during the first part of the 20th century.
Despite this sobering assessment, A Brief History of Equality by Piketty, who is Professor at the École des Hautes Études en Sciences Sociales and the PSE, is, in many ways, an optimistic account of long-term

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What is really going on?

July 21, 2022

Yanis Varoufakis
. . . what is really going on? My answer: A half-century long power play, led by corporations, Wall Street, governments and central banks, has gone badly wrong. As a result, the West’s authorities now face an impossible choice: Push conglomerates and even states into cascading bankruptcies, or allow inflation to go unchecked.
For 50 years, the US economy has sustained the net exports of Europe, Japan, South Korea, then China and other emerging economies, while the lion’s share of those foreigners’ profits rushed to Wall Street in search of higher returns. On the back of this tsunami of capital heading for America, the financiers were building pyramids of private money, such as options and derivatives, to fund the corporations building up a global labyrinth of ports,

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Economics is always ‘political economics’

July 11, 2022

From Peter Söderbaum
Mainstream neoclassical economics is attacked by many and from different angles or vantage points. Neither the defendants nor the critics can claim value-neutrality. “Values are always with us” (Myrdal 1978) and economics is always ‘political economics’. The neoclassical attempt to construct a ‘pure’ economics has failed. Neoclassical theory may still survive as a theory that is specific in scientific and ideological terms and useful for some purposes. But this survival has to be accompanied by the admission that neoclassical theory is built on assumptions that are specific in terms of ethics and ideology and that alternatives to these assumptions exist. The future of neoclassical theory is therefore not only a matter of its usefulness to solve economic problems in

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The magnitude of the required reductions

July 10, 2022

From Ted Trainer
It is not commonly understood how large the reductions would have to be to enable a society that is globally sustainable and just. The World Wildlife Foundation’s Footprint measure (2018) estimates the average Australian per capita use of productive land at 6–8 ha. Thus, if the 9–10 billion people expected to be on earth by 2050 were to live as Australians do now, up to 80 billion ha of productive land would be needed. But there are only about 12 billion ha of productive land on the planet. If one third of it is set aside for nature then each Australian would be living in a way that would require about 10 times as much productive land as all people could ever have. Some other measures taking into account factors such as materials consumption (Wiedmann et al., 2015)

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Weekend read – Danger signals from the crypto casino

July 9, 2022

From C. P. Chandrasekhar
The meltdown in May 2022 in the cryptocurrency world, in which the values of digital coins plunged and rendered some near-worthless, is a wake-up call. It once again shows that cryptocurrencies are nothing but a bunch of insubstantial, digital ‘bits’ created by speculators as ‘coins’ for speculation. Over the years since 2009, when the first bitcoin was minted, privately generated cryptocurrencies have failed to live up to the claim that they offer an alternative to government-backed and regulated fiat currencies. They are hardly used as media of exchange in routine economic transactions. They mainly serve as virtual instruments on which speculators, with money to lose and the time and inclination to gamble, place costly bets. And consequently their ‘value’

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COVID and the broken global order

July 6, 2022

From C. P. Chandrasekhar
When the COVID pandemic affected every one of the world’s nations, the way forward seemed obvious, even if difficult to traverse. Given the rapid spread of the disease and its severity that overwhelmed long neglected health systems, and the cost to lives and livelihoods that shutdowns of economic and social activity implied, quick access to drugs and vaccines to manage the pandemic were crucial. Fortunately, government support for biotech research, in general, and research on new generation vaccines, in particular, had advanced science to some degree. Many developed country governments and some developing country governments were willing to outlay large sums to accelerate further research on and pre-order potential production of any promising drugs and

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real-world economics review issue no. 100

July 4, 2022

Real-world economics review
issue no. 100
download whole issue
Introduction to RWER issue 100          3
Real Science Is Pluralist           issue no. 5 – 2001Edward Fullbrook         5
Is There Anything Worth Keeping in Standard Microeconomics?          issue no. 12 – 2002Bernard Guerrien          11
How Reality Ate Itself: Orthodoxy, Economy & Trust          issue no. 18 – 2003Jamie Morgan          14
What is Neoclassical Economics?         issue no. 6 – 2006Christian Arnsperger and Yanis Varoufakis          20
A financial crisis on top of the ecological crisis: Ending the monopoly of neoclassical economics         issue no. 49 – 2009Peter Söderbaum          30
U.S. “quantitative easing” is fracturing the Global Economy          issue no. 55 – 2010Michael Hudson          41

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University departments of economics are degraded to political propaganda centres.

June 8, 2022

From Peter Soderbaum
Climate change is perhaps the most threatening aspect of the ecological crisis but not the only one. Reduced biological diversity, reduced water availability and deteriorating water quality in some regions exemplify other relevant dimensions. On the financial side, the ‘market mechanism’ has been unable to come up to expectations.
How can these problems be understood? Many factors have certainly contributed but in my judgment neoclassical economics as disciplinary paradigm and neo-liberalism as ideology are among the most important. If actors in society have failed, this can largely be attributed to the mental maps they have used for guidance and these mental maps are largely connected with dominant ideas about economics (as conceptual framework and ideology) and

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Contextual economics

May 30, 2022

From Neva Goodwin
Starting in the early 1990s I have worked with a number of great colleagues to develop a full alternative that we call contextual economics. The name comes from our conviction that an economic system can only be understood when it is seen to operate within a social/psychological context that includes values, ethics, norms, motivations, culture, politics, institutions, and history; and a biophysical context that includes the natural world as well as the built environment.
The starting point for our contextual economics textbooks is an inquiry into goals: What are the appropriate goals for an economy? And, relatedly: What are the appropriate goals for the discipline of economics? Contextual economics emphasizes that most traditionally understood economic goals –

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The useful economist and economic research

May 29, 2022

From James Galbraith
The useful economist
The common characteristic of almost all of this work, excepting a few who preoccupied themselves with logical skirmishes with the neoclassical orthodoxy – e.g., the Cambridge-Cambridge controversies over the theory of capital (Robinson, 1956; Sraffa, 1960; Harcourt, 1972), or in microeconomics (Keen, 2011) – is that the protagonists were concerned, in the first place, with the practical questions of policy facing their governments or the international community of which they were a part. Whether reformist or revolutionary, their economics was (and still is) the elucidation of problems and the means of dealing with them. The purpose of economic reasoning is to inform and buttress political and social choices. It is not merely to create a

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Hazel Henderson obituaries

May 27, 2022

Washington PostGreen EconomyThe Telegraph
Hazel Henderson attacked economics as “politics in disguise” and demanded economists take account of quality of life.   And for two decades she offered moral support for this blog and the Real-World Economic Review.

“The paradigm of sustainability, with its notions of limitations and carrying capacities confronts dominant paradigms of progress which do not recognize limits to unchecked growth.”

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Great and rising inequality

May 23, 2022

From Jamie Morgan
An interest in great inequality and rising inequality have become prominent features of our times. According to Oxfam in 2019 the 26 richest people on the planet had equivalent wealth to the 3.8 billion who comprise the lower 50% of the world population. The previous year it required the top 43 to create this equivalence. The 2020 Oxfam report adds a series of statistical claims: the world’s richest 1% have more than twice the wealth of 6.9 billion of the world’s population, the 22 richest men have more wealth than all the women in Africa (and the estimated value of the unpaid work of women in the world is $10.8 trillion); a report from the Institute for Policy Studies, meanwhile, highlights that US billionaire’s tax obligations as a %  of wealth reduced by 79%

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Ethical criteria which hold the sustainability of life at their core

May 22, 2022

From Fernando García-Quero and Fernando López Castellano
Overconfidence in the magical thinking of technification, economic growth, the free market, and neoliberal globalization has led many to forget that the state is the main policy architect and actor when facing a crisis. Successful responses to Covid-19 have shown, once again, the central role of states in organizing political measures that foster and maintain the welfare of their populations, through actions to guarantee quarantine, social distancing, mobility restrictions, as well as extraordinary support to manage losses related to the economic downturn.
The role adopted by the states and politics in countries’ performances when tackling COVID-19 is very different from the perspectives that dominate the current agenda of

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The Collapse of the India’s creative Industries

May 21, 2022

From Jayati Ghosh
There is no doubt that creative industries, along with care activities, are going to emerge as some of the most significant economic sectors of the future. Broadly speaking, the creative industries consist of advertising, architecture, arts and crafts, design, fashion, film, video, photography, music, performing arts, publishing, research & development, software, computer games, electronic publishing, and TV/radio.
A 2019 report from by UNCTAD (Creative Economy Outlook 2019, Geneva: UNCTAD) notes how these activities are valuable in both cultural and commercial terms. Obviously, they improve human and social well-being, and as expressions of the human imagination, bring joy, meaning and fulfilment to lives. In their finest forms, they can spread important social and

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In economics value-neutrality is an illusion

May 18, 2022

From Peter Söderbaum
I am a professor emeritus with many years of experience of the functioning of university departments of economics and other social science disciplines, such as business management. As has already been made clear I consider the close-to-monopoly position of neoclassical theory at university departments of economics as a major problem in relation to aspirations of sustainable development. The two “facts” that (a) values are necessarily involved in research and education and (b) those employed at university departments of economics live in democratic societies – means that economics (in democratic societies) cannot be reduced to a centre of propaganda for those values that are built into the neoclassical paradigm. A degree of pluralism in education and research

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Economics Textbooks

May 17, 2022

From Steve Keen
Thomas Kuhn once famously described textbooks as the vehicle by which students learn how to do “normal science” in an academic discipline. Economic textbooks clearly fulfil this function, but the pity is that what passes for “normal” in economics barely deserves the appellation “science”.
Most introductory economics textbooks present a sanitised, uncritical rendition of conventional economic theory, and the courses in which these textbooks are used do little to counter this mendacious presentation. Students might learn, for example, that “externalities” reduce the efficiency of the market mechanism. However, they will not learn that the “proof” that markets are efficient is itself flawed.
Since this textbook rendition of economics is also profoundly boring, the majority

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Weekend read – MMT, post-Keynesians and currency hierarchy: Notes towards a synthesis

May 14, 2022

From Luiz Alberto Vieira and current issue of RWER
The current moment seems favorable to debate and potential reconsideration of theoretical systems, a situation derived both of developments in the analysis of public financing and the nature of money, but also, largely, due to the particular political and social circumstances observed in many countries. US hegemony is in crisis, as its industrial might decreases and is put in question by China’s development. The Asian country is now responsible for a large part of the world’s industrial output, boasting a complex and innovative economy. Another point worth noticing is former president Trump’s challenge of the basic principles of American politics and society, a situation the US shares with other countries.
Trump’s defeat

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The threat of a pharma-dictatorship

May 12, 2022

This is an extract from Norbert Häring‘s International Health Regulations: A big step toward a health dictatorship is imminent 12 May 2022 
What the U.S. has in mind here is an authorization for the WHO to immediately take the reins out of the hands of national governments in the event of an actual or alleged health risk from a pathogen and to be able to determine the assessment of the situation and the countermeasures. The US and their allies in this, the EU and Switzerland, are home to most of the major global pharmaceutical companies, To be sure, governments would retain the right to say no. However, this right is greatly devalued by the fact that they can then immediately be pilloried worldwide, either by the WHO or by a single, powerful government, such as that of the USA.

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The magnitude of the required reductions

May 9, 2022

From Ted Trainer and current issue of RWER
It is not commonly understood how large the reductions would have to be to enable a society that is globally sustainable and just. The World Wildlife Foundation’s Footprint measure (2018) estimates the average Australian per capita use of productive land at 6–8 ha. Thus, if the 9–10 billion people expected to be on earth by 2050 were to live as Australians do now, up to 80 billion ha of productive land would be needed. But there are only about 12 billion ha of productive land on the planet. If one third of it is set aside for nature then each Australian would be living in a way that would require about 10 times as much productive land as all people could ever have. Some other measures taking into account factors such as materials consumption

Read More »

COVID-19 has shown that capitalism is not enough

May 8, 2022

From Fernando García-Quero and Fernando López Castellano and current issue of RWER
Constructing the capitalist world-economy was only made possible through the use of racism and sexism as tools for the hierarchization and categorization of the population (Mbembe, 2000; Wallerstein, 2000). The history of capitalism is also the history of the open veins of the South and massive exploitation of natural resources (Galeano, 1972; Herrero, 2013). Its logic of accumulation entails irreconcilable contradictions and growing inequalities between centers and peripheries (Prebisch, 1949). In the field of Development Economics, the structural adjustment policies promoted by the Washington Consensus are a contemporary example (López Castellano, 2009), as are the Troika impositions which, in 2011,

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