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Lessons from the Moonshot for fixing global problems

5 days ago

From Jayati Ghosh
The World Health Organization appointed economist Mariana Mazzucato to head its Council on the Economics of Health for All in 2020. She is one of the architects of the biggest international research-funding scheme in the world, Horizon Europe, which launched this month. Her book Mission Economy is a timely and optimistic vision of how to fix the world’s “wicked problems” through directed public and private investment.
In two brilliant and accessible books published over the past decade, Mazzucato has established herself as a pre-eminent thinker, debunking myths about how markets function and offering options for more equitable economies. In 2013’s The Entrepreneurial State, she demolished the perception of governments as bureaucratic, corrupt and unwieldy when

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Prepare for a surge in global inequality

9 days ago

From C.P. Chandrasekhar and Jayati Ghosh
The United States prepares for moving out of the Trump era with the incoming President promising more rounds of stimulus spending to revive an economy ravaged by Covid-19. Other members of the Organisation of Economic Cooperation and Development, a predominantly rich nation’s club, have also been generous with their spending and signalled that they are willing to keep their wallets open to spend more if necessary. The evidence clearly is that the Covid-crisis has upended the fiscal conservatism that has been the hallmark of the neoliberal era since the 1980s.
However, not all nations seem to display this ability to depart from the prevailing orthodoxy. Where this weakness is most visible is the developing world, where governments, with very few

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Misleading economic signals

14 days ago

From C. P. Chandrasekhar
It’s a paradox that has periodically recurred in recent times. Financial indicators are hugely favourable from the point of view of those who benefit from them, even when the performance of the real economy is poor or dismal. In this Covid-afflicted year, that paradox has manifested itself with greater intensity. And with a difference. Even while the real economy remains in contractionary mode, not only have stock market returns exploded, but India’s stock of foreign exchange reserves, considered a measure of the country’s economic health from Independence to the balance of payments of crisis of 1991, have registered record-breaking increases.
While stock markets are no indicators of economic health, news that the BSE Sensex breached the 48,000 mark on January

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Sliding doors: The day US democracy almost died

15 days ago

From Thomas Palley
It is now four days since the January 6 mob attack on the US Congress which President Donald Trump incited. In a manner akin to a combat situation, the numbness induced by the overwhelming nature of the event is giving way to shock and anger. What is also becoming clear is just how close US democracy came to dying.
Sliding Doors
The film Sliding Doors begins with two different scenarios in which the course of the main protagonist’s life depends on whether or not she catches the subway by milliseconds. The events of January 6 have a Sliding Doors quality to them.
It now seems the attack has backfired for Trump and turned into a political fiasco. That fiasco resonates with Adolf Hitler’s failed 1923 Munich Beer Hall putsch (German for coup) – though lest we get carried

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Corporate power and the future of U.S. capitalism

22 days ago

From Shimshon Bichler and Jonathan Nitzan
Corporate power in the United States has risen to unprecedented levels, but the rate at which this power has grown is decelerating. Both facts have important implications for the future of U.S. capitalism.
According to the theory of capital as power (or CasP for short), the quest for capitalized power – and for more and more of it – is the key driving force of modern capitalism. Capitalists, CasP argues, particularly dominant ones, judge their power differentially. They measure it by the size of their earnings and assets – but they do so not absolutely, but relative to others. Driven by power, their goal is not simply to amass more money, but to do so faster than the average. Their ‘bottom line’ is not maximum accumulation, but differential

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As 2020 ends, let’s celebrate science

24 days ago

From Blair Fix
We’ve finally reached the end of 2020, a year that many people are happy to forget. In the history books, 2020 will be known for little besides the Covid pandemic. Fortunately, the end of this disaster is in sight. With multiple vaccines starting to roll out, it looks like 2021 will be a better year.
Speaking of vaccines, I’ve been racking my brain to find things to be thankful for this holiday season. It’s not easy. My wife, daughter and I are in lockdown in Toronto. The rest of our extended families are in lockdown in Alberta and BC. So no family Christmas this year. I suspect it’s the same for many people. Fortunately, the Covid vaccine provides some light at the end of the tunnel. This is something to celebrate. But more than that, we should celebrate the whole

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Climate Change and the Social Contract

27 days ago

Marcellus Andrews
I am sorry to say that I am about to confirm my marginal status in the economics profession by digging into a most unpleasant aspect of the already far too scary matter of climate change. I am going to consider why climate change will inevitably shred the contemporary American social contract – that evolving mix of markets and violence that creates knowledge and wealth, billionaires and prisoners, opportunity and social death in ways that fascinate and horrify the rest of humanity. I want to explain why climate change will force the United States, and every other market society, to abandon the practice of creating disposable classes of persons whose primary function is to serve as blood and bone buffers who absorb the risks of life at the cost of their bodies and

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Little value from Global Chains

29 days ago

From C. P. Chandrasekhar
On December 12, in an outburst of suppressed anger, workers employed at a factory assembling iPhones in Narasapura near Bengaluru ransacked its premises and damaged parked vehicles. The facility is a unit of Wistron, a Taiwanese vendor engaged in assembly of Apple iPhones, that had begun commercial operations only recently. This made the worker action surprising to say the least. Workers recently employed in a known foreign-invested firm are not likely to turn against the management in a matter of months. Something was clearly amiss.
The initial response of the administration was to arrest the workers involved for criminal violation and launch an image saving exercise to appease existing and potential foreign investors, whom the NDA governments at the Central

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Causes of global financial Crisis: House of debt

December 21, 2020

From Asad Zaman
This is a review and a summary of some of the key arguments presented by Mian and Sufi in their recent book “House of Debt.” It highlights the contribution of Mian and Sufi by showing how they have solved the mystery of why there was a huge drop in aggregate demand during the Great Depression of 1929 and also following the recent Global Financial Crisis of 2007-8. The article shows how major economists like Keynes, Friedman, Lucas and others tried and failed to provide an adequate explanation of this mystery. The key to the mystery is the huge amount of levered debt present during both of these economic crises. The solution suggested by Mian and Sufi is to replace interest based debt by equity based contracts in financial markets. This solution resonates strongly with

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ECONOMIC THOUGHT: History, Philosophy, and Methodology

December 21, 2020

Please click here to support this open access journal and the WEA
Vol 9, No 2, 2020
Table of contents

Consensus and Dissention among Economic Science Academics in Mexico
Jorge L. Andere, Jorge Luis Canché-Escamilla, Álvaro Cano-Escalante

1 – 23

Economics’ Wisdom Deficit and How to Reduce It
John F. Tomer

24 – 37

The Self According to Others: Explaining Social Preferences with Social Approbation
Oswin Krüger Ruiz

38 – 54

What can Economists Learn from Deleuze?
Abderrazak Belabes

55 – 67

Comment on Abderrazak Belabes’ ‘What can Economists Learn from Deleuze?’
James E. Rowe

68 – 70

Deleuze among the Economists: A Short Commentary on Abderrazak Belabes’ ‘What can Economists Learn from Deleuze?’
Geoffrey Pfeifer

71 – 73

Published 21st December, 2020

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WEA Commentaries – vol.10, issue 4

December 18, 2020

Volume 10, Issue No. 4This WEA commentaries issue is a PDF document, selected articles are listed below…
An interview with Professor Harold James on transformative crises and the end of globalization as we know it ›
How to Breathe 1—Capitalism as Robbery ›
One paradigm or many? Toward a democracy-oriented economics ›
Which healthcare system was up against coronavirus in Brazil? ›
Why do we need pluralism in times of disruption? A practical guide ›
The political economy of inequality indexes or why the Theil index is, from a political economy point of view, superior to the Gini index. ›
Interview on territorial development and on Italy with Professor Silvio Goglio ›
support the WEA

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Firing a warning shot across big tech’s bows

December 15, 2020

From Jayati Ghosh
It was a long time coming, but the day of reckoning for the big digital companies may finally have arrived. Despite the growing monopoly power of big tech and their use of anti-competitive practices, earlier attempts to regulate them (such as an attempt by the U.S. Department of Justice in 1998 to rein in Microsoft) had only limited success. The novel coronavirus pandemic further enhanced the monopoly power of the big tech giants.
Timeline and actions
But now, a rash of lawsuits and regulatory moves in the United States and Europe against the big non-Chinese digital companies (particularly Facebook, Amazon, Apple and Google) suggest that the days of their easy expansion in an unregulated environment may be coming to an end. In October 2020, the U.S. Department of

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Neoliberalism must die because it does not serve humanity

December 12, 2020

From  Nikolaos Karagiannis and current issue of 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.
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

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issue 94 – real-world economics review

December 10, 2020

Please click here to support this open access journal and the WEAsubscribe to the RWER
download whole issue                                                leave comments here
Alarm. The evolutionary jump of global political economy needed Hardy Hanappi 2
Neoliberalism must die because it does not serve humanityNikolaos Karagiannis 27
Climate arsonist Xi Jinping: a carbon-neutral China with a 6% growth rate?Richard Smith 32
All the good things a digital euro could do – and all the bad things it willNorbert Häring 53
Is economics a science?Andri W. Stahel 61
Private equity and public problems in a financialized world: an interview
with Rosemary BattRosemary Batt and Jamie Morgan 83
Macro: understanding quantitative easingEdward Fullbrook 109
The hemispheres of finance: GDP and non-GDP

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As we exhaust our oil, it will get cheaper but less affordable

December 4, 2020

From Blair Fix
It was a bet heard around the world. Okay, that’s an exaggeration. It was a bet heard mostly by academics and sustainability buffs. But still, it was a bet … and it was important.

The year was 1980. The players were biologist Paul Ehrlich and business professor Julian Simon. The two had conflicting ideas about where humanity was headed. Ehrlich, the author of the 1968 book The Population Bomb, thought humanity was headed for a Malthusian catastrophe. Simon thought the opposite. Humanity, he argued, was itself The Ultimate Resource. Because humanity’s genius knew no bounds, Simon proclaimed that we could think our way out any problem.
The debate between Ehrlich and Simon was fundamentally about resource scarcity. What’s interesting, though, is that their actual

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A valid ontology for economics?

November 26, 2020

From Ikonoclast (originally a comment)
The challenge is to develop a valid ontology for economics. In medicine, early theories of disease failed to yield efficacious treatments because their ontology (a theory of basic real existents and how they interact) was wrong. A few of the more common ideas founded on false ontologies were that diseases were caused by evil spirits, miasma and imbalances of the four humors. It was not until the advent of the germ theory of disease that real progress was made. More basic and real biological existents were found, microscopic “germs” or pathogens, and the pathogenic theory of disease was founded. With continued research, further causes of disease were found, namely deficiency disease, hereditary disease and physiological disease. Again, this

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Discrimination and bias in economics, and emerging responses

November 24, 2020

From Jayati Ghosh
Recently, mainstream economics has been forced to acknowledge some of the explicit and implicit forms of discrimination and bias that are rampant in the discipline, thanks in particular to some brave interventions by some women economists. The focus of these interventions has been on still-pervasive patriarchal and racist attitudes that are evident within the discipline in the Global North, particularly in the United States – such as the now-famous blog by Claudia Sahm: “Economics is a disgrace.” While these are critical concerns, there are other severe and persistent forms of discrimination and power imbalances in economic analyses that have not been the focus of attention, which have also operated to impoverish the discipline.
I would like to highlight two of these

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Tech platforms feel the heat

November 18, 2020

From C. P. Chandrasekhar
In a move that was expected, the US Justice Department has filed an anti-trust lawsuit against internet search giant Google, alleging that it resorts to anti-competitive practices to ensure its dominance in the search engine space and, through that, over the related online advertising revenues. As a leading example the case cites the successful effort to exclude the competition through a deal, in place since 2005, in which Google pays Apple around $8-12 billion a year in return for pole position as the default search engine in Apple’s devices and the Safari browser. Around half of Google’s search traffic is reportedly mediated by Apple devices. Such practices, Justice holds, help Google attract users and win a substantial share of the internet advertising

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“necessities of thought”

November 13, 2020

Concepts that have proven useful in ordering things easily achieve such an authority over us that we forget their earthly origins and accept them as unalterable givens.  Thus they come to be stamped as “necessities of thought,” “a priori givens,” etc.  The path of scientific advance is often made impassable for a long time through such errors.  For that reason, it is by no means an idle game if we become practiced in analyzing the long commonplace concepts and exhibiting those circumstances upon which their justification and usefulness depend, how they have grown up, individually, out of the givens of experience.  By this means, their all-too-great authority will be broken.  They will be removed if they cannot be properly legitimated, corrected if their correlation with given things be

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Developing Asia: The growing divergence between China and the rest

November 12, 2020

FromC. P Chandrasekhar and Jayati Ghosh
The past year has brought into sharp relief the significant differences between China and the rest of the world. The experience of the pandemic is probably the most extreme and definitive expression of that: the ability of China to contain the spread of the virus and prevent a renewed outbreak of any substantive nature is unmatched by almost all other countries, with the exception of a few outliers. The reasons for this certainly deserve separate study, but what is also worth noting is how this has also been associated with a relatively rapid recovery of the Chinese economy from the decline of the first quarter of 2020 to relatively rapid growth once again. This is contrary to almost every other major economy.
The differences are particularly

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Degrowth vs. growthism

November 10, 2020

From Jamie Morgan and RWER issue 93
[D]egrowth advocates tend to question the naturalisation of growth and objectification of an economy as though we had no alternative, they do highlight the structural conditions that lead to exploitation in the name of progress. For example, Gerber states:
“The ideology of growth – or growthism – is at the core of capitalism. Growthism sustains capitalism politically because it allows avoiding redistribution by giving the impression that everyone will continually benefit from it. Growthism pacifies class struggle while justifying existing structures of inequality…  In the West, growth was instrumental to diffuse demands of the workers’ movement, in the East, to excuse the lack of democracy and worker control, and in the South, to justify

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Cassandras whose counsel should no longer be ignored

November 9, 2020

From John Benedetoo and RWER issue 93
In the 1980s and early 1990s, mainstream economists railed against heterodox economists and non-economist thinkers for questioning the appropriateness of “free trade” and for advocating national industrial policies. The debate was resolved, at least among the arbiters of acceptability, in favor of the mainstream economists. And yet, the heterodox arguments ring now like the unheeded warnings of prophets, while the mainstream economic view looks more and more debunked by reality.
The appearance of the United States as a unipower over 1990-2015 depended on policies that damaged the future of the United States and hurt a large segment of its population. It is likely that even during 1990-2015, the United States was never really a unipower. It was a

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The reason 2008 was a momentous year

November 8, 2020

From Yanis Varoufakis
. . . . Trump trades on anger, weaponises hatred and meticulously cultivates the dread with which the majority of Americans have been living after the financial bubble burst in 2008. Obscenities and contempt for the rules of polite society were his means of connecting with a large section of American society.
The reason 2008 was a momentous year wasn’t just because of the magnitude of the crisis, but because it was the year when normality was shattered once-and-for-all. The original postwar social contract broke in the early 1970s, yielding permanent real median earnings stagnation. It was replaced by a promise to America’s working class of another route to prosperity: rising house prices and financialised pension schemes. When Wall Street’s house of cards

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Developing Asia: The growing divergence between China and the rest

November 5, 2020

From C. P Chandrasekhar and Jayati Ghosh
The past year has brought into sharp relief the significant differences between China and the rest of the world. The experience of the pandemic is probably the most extreme and definitive expression of that: the ability of China to contain the spread of the virus and prevent a renewed outbreak of any substantive nature is unmatched by almost all other countries, with the exception of a few outliers. The reasons for this certainly deserve separate study, but what is also worth noting is how this has also been associated with a relatively rapid recovery of the Chinese economy from the decline of the first quarter of 2020 to relatively rapid growth once again. This is contrary to almost every other major economy.
The differences are particularly

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Globalization: Markets are socially constructed “spaces”

November 3, 2020

From David Westbrook and The Inequality Crisis
Suppose we understand markets in fairly simple-minded fashion, as social contexts in which folks buy, sell, and invest. Markets have often been understood individualistically – homo economicus is not a friendly guy – and orthodox economics even proposed “methodological individualism” to be a cardinal intellectual virtue. But the social simply must be stressed at the present juncture. As digital enterprises make inescapably clear, markets are constructed through mutually intelligible communication. “The market” is not a place that exists ex ante, to which self-interested rational actors go to buy and sell. Instead, markets are socially constructed “spaces,” which can be real or virtual, in which economic communication and even law (most

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Today’s extremes of wealth and inequality result from the confluence of three historical developments

November 1, 2020

From David Westbrook and The Inequality Crisis
While we may find many sorts of inequality in the United States and elsewhere, this essay is about the specific form of inequality exemplified by Jeff Bezos or Bill Gates, that is, the Himalayan summits of contemporary wealth, mostly in the United States.
I would like to suggest that such wealth results from the confluence of three historical developments.
First, the social processes referred to under the rubric of “globalization” have created vast markets. A dominant position in such markets leads not only to great wealth, but also to the elimination of peers. Since there are few such markets, relatively significant wealth is possessed by very few people. There is only one Jeff Bezos, one Bill Gates.
Second, digital markets powerfully

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The drunk looking for the key

October 30, 2020

From Yoshinori Shiozawa  (originally a comment)

This is a part of my essay “Between Math and the Occult” written in 2002 for a journal named “The pleasures of mathematics” (in Japanese) No. 30.
There is an interesting parable that points out this. Originally of Arab origin, it was introduced and disseminated in economics by writers like Martin Shubik and Thierry de Montbrial.
At midnight, a drunken person was wandering under a lonely streetlight. He seemed to be looking for something. When a passerby asked, the drunken person said he was looking for a key. The passersby joined in the key hunt, saying it would be a problem. But they couldn’t find the key. After a while, the passerby asked for the drunkard. “Did you really drop the key here?” The drunkard replied calmly. “No, it’s

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The algorithms of wealth accumulation

October 28, 2020

From Ikonoclast  (originally a comment)
Capitalism is already an algorithmically determined system on the financial economy / financial accounts side and it has been so at least since the 1850s. The axioms and algorithms of private property, income, finance and national accounting determine the vectors of wealth/money flows and the depositories of wealth/money stocks, all as denominated in the numéraire. This is not to devalue the thesis of machina-economicus. Indeed it magnifies the importance of the thesis.
Humans are and can become many things. One thing they can become is rational (and heartless) calculators and here I mean NOT the consumers at all, who are existentially and hedonistically motivated, but the producers and purveyors of capitalism. It is this group which implements

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Economists have no ears

October 28, 2020

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.
Since this textbook rendition of economics is also profoundly boring, the majority of those exposed to introductory course in economics do no more than this, and instead go on to careers in accountancy, finance or management – in which, nonetheless, many to continue to

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Contemporary inequality is a challenge to economics

October 24, 2020

From Peter Radford and The Inequality Crisis
The challenge of contemporary inequality is not just to the cohesion of modern society it is also a challenge to economics, because it is economics and its values that sit squarely within the social framework that has allowed inequality to become so pervasive and debilitating. We have built a society resting on only one view of liberty and equality, that of the economic sphere, rather than on a more holistic view that allows the inclusion of other spheres. We persist in believing ourselves as free, but it is a harsh and hollow freedom built upon individuality and isolated action, rather than on solidarity and communal action.
There are economists of a certain type who question whether there is any distortion produced by inequality. They

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