From C. P. Chandrasekhar and Jayati Ghosh
It is more than a year since China, reportedly in retaliation to US-driven restrictions on exports of advanced semiconductors and related manufacturing equipment, imposed export controls on two crucial materials—germanium and gallium—that enter into the production of semiconductors and military and communications equipment (advanced microprocessors, fibre-optic products and night-vision goggles).
Imposed in the name of safeguarding “national security and interests”, the restrictions on the exports of these materials from China were viewed with alarm. China accounts for 98 per cent of global production of gallium and for two thirds of imported supplies of germanium in the US market. If these restrictions, requiring prior permission for export

From Asad Zaman and current issue of RWER

Our current environmental predicament is fundamentally a crisis of knowledge, rooted in the Enlightenment’s narrow conceptualization of epistemology. This shift fostered an illusion of objectivity that has since permeated our understanding of the world, particularly in the context of societal dynamics. The Enlightenment’s emphasis on objective knowledge marginalized the subjective realms of emotional intelligence, moral intuition, and diverse lived experiences. This exclusion led to a worldview that erroneously equates scientific rationality with absolute truth, consequently overlooking the multifaceted and nuanced nature of human experience and its interaction with the environment. See Zaman (2015) for a detailed discussion of the deification

Real-world economics review
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Issue no. 108July 2024
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The creationist foundations of Herman Daly’s steady state economyJohn Gowdy and Lisi Krall2
Data: a critical perspectiveCarlos Guerrero de Lizardi16
Enlightenment Epistemology and the Climate CrisisAsad Zaman29
Fabulous MacroeconomicsGerald Holtham33
A Tour of the Jevons Paradox. How Energy Efficiency BackfiresBlair Fix40
A Debtor Countries Club?  The Cartagena Consensus reloadedJuan Pablo Bohoslavsky and Francisco Cantamutto41
Why Has Growth Theory Been a Failure?Bernard C. Beaudreau63
Socialism, Fascism and Neoliberalism:Karl Polanyi’s Institutionalism and the Democratic Question in the XXI CenturyManuel Ramon Souza Luz, Renan Veronesi Compagnoli

From C. P. Chandrasekhar and Jayati Ghosh
In the past three years, global food prices have been on a roller coaster, rising rapidly especially in the first half of 2022 due to a speculative bubble and then falling from July 2022 onwards (Figure 1). The phase of rising food prices led to increasing food prices around the world, especially in lower income countries—and this was obviously associated with growing hunger. According to the FAO, 122 million more people faced hunger in 2022 than in 2019, before the global pandemic. Around 42 per cent of the world’s population—more than 3.1 billion people—were unable to afford a healthy diet in 2021.
Figure 1.

Source: https://www.fao.org/worldfoodsituation/foodpricesindex/en/
The dramatic rise in global food prices (especially for wheat)

From Asad Zaman and WEA Pedagogy Blog
In this sequence of posts, I will present the contents of the video podcast entitled “Michael Hudson: Why the US has a unique place in the history of imperialism? ” For me, Hudson’s book Super Imperialism: The Economic Strategy of the American Empire was an amazing eye-opener, essential reading for anyone who want to understand modern real world economics. The podcast provides a summary of his ideas, and these posts break it down further to make it accessible to a broader audience. This first post covers about the first 20 minutes of the video.
Introduction: Michael Hudson, a distinguished economist and professor at the University of Missouri Kansas City, provides a critical analysis of the economic strategies that underpin U.S. global dominance.

From Lars Syll
So, certainly, both non-theorists and some theorists have little patience for research that displays mathematical ingenuity but has no value as social science. But defining this work exactly is impossible. This sort of work is like pornography quite simple to recognize when one sees it.
Jeffrey Ely
As researchers, we (mostly) want to try to understand and explain reality. How we do this differs between various disciplines and thought traditions. Creating a ‘map’ at a 1:1 scale of reality is of little help. We have to rely on some kind of ‘approximation’ to grasp an often inaccessible reality. Exactly how this approximation is done varies significantly between different research traditions.
In mathematics, by simply defining things clearly and conveniently, some tricky

From Jayati Ghosh
The international-development sector has become fixated on calculating financing gaps. Hardly a day goes by without new estimates of the funds low- and middle-income countries (LMICs) need to meet their climate targets and achieve the United Nations Sustainable Development Goals (SDGs).
The Independent High-Level Expert Group on Climate Finance, for example, estimates that developing and emerging economies (excluding China) need $2.4 trillion annually by 2030 to close the financing gap for investments in mitigation and adaptation. Achieving the SDGs would require an extra $3.5 trillion per year. Similarly, the UN’s 2023 Trade and Development Report suggests that LMICs need roughly $4 trillion per year to meet their climate and development goals.
Such estimates can

From Lars Syll
It’s hard not to agree with DeMartino’s critique of mainstream economics — an unethical, irresponsible, and harmful kind of science where models and procedures become ends in themselves, without consideration of their lack of explanatory value as regards real-world phenomena.
Many mainstream economists working in the field of economic theory think that their task is to give us analytical truths. That is great — from a mathematical and formal logical point of view. In science, however, it is rather uninteresting and totally uninformative! The framework of the analysis is too narrow. Even if economic theory gives us ‘logical’ truths, that is not what we are looking for as scientists. We are interested in finding truths that give us new information and knowledge of the

Planet is headed for at least 2.5C of heating with disastrous results for humanity, poll of hundreds of scientists finds

From C. P. Chandrasekhar and Jayati Ghosh
Once again, low and middle income countries (LMICs) are at the brutal receiving end of the fickle trajectory of international capital flows. As Figure 1 indicates, net financial flows to such countries, which increased rapidly after the Global Financial Crisis that began and was created by advanced economies, peaked in 2014. Thereafter, they have been on a downward trend, which has accelerated dramatically from 2021, to the point that they turned negative in 2023, and are expected to fall further in 2024. In 2023, LMICs as a group (excluding China) sent an estimated $21.4 billion (which they could ill afford to do) outside—and by 2024 that number is expected to more than double, such that these countries will be sending as much as $50.5

From Crelis Rammelt and current issue of RWER
Our presumed dominion over nature is an illusion. No matter how clever technological innovations may seem, they remain subject to the laws of thermodynamics. Consequently, a growth-centered capitalist economy finds itself trapped in futile attempts to completely decouple itself from nature – aiming for a 100% circular, service-oriented and zero-waste existence. This obsession stems from an incapacity to imagine an economy that does not grow, where both the quantity and quality of its metabolism remain within secure ecological and planetary boundaries.
Hence, we must seek radically different pathways (the Latin radix means root). One such alternative is degrowth. In the broadest sense, degrowth represents a socio-economic transformation

From Junaid Jahangir and current issue of RWER
[Ha-Joon] Chang’s latest book Edible Economics (2022) crystallizes the narrative that he has developed through his popular books over the years. . . . I have reviewed the salient ideas as follows in a bid to draw out lessons I could share with my ECON 101 students.
. . . the main ideas of Ha-Joon Chang can be distilled in point form as follows.
Neoclassical economics gives precedence to mathematics over real-world issues of inequality and power. It emphasizes markets over democracy.
Culture has elements both conducive and detrimental to development. Policy directs economic development, which then shapes culture.
Free market advocates focus on the economic freedom of consumers and corporations and not the freedom of workers to push for

From a comment by Ikonoclast

“A truth is permitted only a brief victory celebration between the two long periods where it is first condemned as paradoxical and later disparaged as trivial.” – Arthur Schopenhauer.
As they break new ground, the Capital as Power theoreticians will encounter the “Schopenhauer Effect” over and over. When you point out something clearly for the first time, or even again after a long interregnum when few could see it, then everyone will say, “Oh, we always knew that.”
To widen the focus, I think a big part of what is happening now is the increasing collaboration, or rather collusion, between big government and big capitalism. I think what we have in the modern neoliberal system is a symbiotic relationship between big government and big corporations. It is

From Blair Fix and current issue of RWER
Speaking of competition and losers, Ronald Reagan set the tone of the neoliberal era when, in 1981, he fired 11,000 striking air-traffic controllers (Houlihan, 2021). The message? Workers were losers who would be subjected to the discipline of competition. Reagan called it ‘morning in America’. But really, it was ‘morning for American big business’.
Today, we are well into the next-day’s hangover, and we know how the party played out. For workers, it was a disaster. But for the rich, it was an incredible boon. Wealth didn’t trickle down so much as it got catapulted up. The result, as Figure 1A shows, was a relentless rise in the concentration of American wealth.

Figure 1: A neoliberal experiment — rising wealth concentration among Americans,

From Giandomenico Scarpelli and current issue of RWER
As documented in the previous paragraph, in recent years it finally seems that most orthodox economists have become more aware of the catastrophic outcomes of climatic disturbances; but at this point the traditional policy they recommend could be insufficient to meet the goals set at international level. In fact, that policy consists mainly of pollution permits and carbon taxes, but if the permits are offered with great generosity and if carbon taxes are low, these policies are ineffective. In order to counter climate change effectively economists should abandon the “… irrational commitment to exponential growth forever on a finite planet subject to the laws of thermodynamics”. This commitment is based on the assumption that GDP

From Asad Zaman
Introduction
At first glance, it appears that industrialization, with its rampant overproduction and overconsumption, stands as the primary antagonist in our climate crisis narrative. However, this surface-level perception overlooks a more profound shift that lies beneath: an epistemological revolution birthed in the European Enlightenment. This era marked a pivotal transition in our relationship with the planet, from Mother Earth to a dead machine. Turbayne (1962) explores the significance in the change of metaphor in depth. This essay seeks to unravel this transformation in thought and its subsequent paving of the road to our current environmental challenges. Our solution lies not in mere technological or policy changes but in a fundamental revolution in thought—a

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real-world economic review

issue no. 106
download whole issue

How entropy drives us towards degrowthCrelis Rammelt2
“It is much too soon to act “ – Economists and the climate changeGiandomenico Scarpelli8
Addressing the climate and inequality crises:An emergency market plan simulationJorge Buzaglo and Leo Buzaglo Olofsgård21
Stocking up on wealth … concentration
Blair Fix
40
Back to the past: income distribution in AmericaAhmad Seyf57
Blinded by science: The empirical case for quantum models in financeDavid Orrell68
Critique of Ayn Rand’s Atlas Shrugged political economy and its place in neoliberalism
Rafael Galvão de Almeida and Leonardo Gomes de Deus
80
Twenty-first century money: Huber and the case for CBDC
Jamie

From Blair Fix

When it comes to Bitcoin, there’s one thing that almost everyone agrees on: the network sucks up a tremendous amount of energy. But from there, disagreement is the rule.
For critics, Bitcoin’s thirst for energy is self-evidently bad — the equivalent of pouring gasoline in a hole and setting it on fire. But for Bitcoin advocates, the network’s energy gluttony is the necessary price of having a secure digital currency. When judging Bitcoin’s energy demands, the advocates continue, keep in mind that mainstream finance is itself no model of efficiency.
Here, I think the advocates have a point.
If you want to argue that Bitcoin is an energy hog, you’ve got to do more than just point at its energy budget and say ‘bad’. You’ve got to show that this budget is worse than

From Jayati Ghosh
Economics needs greater humility, a better sense of history, and more diversity
The need for drastic change in the economics discipline has never been so urgent. Humanity faces existential crises, with planetary health and environmental challenges becoming major concerns. The global economy was already limping and fragile before the pandemic; the subsequent recovery has exposed deep and worsening inequalities not just in incomes and assets but in access to basic human needs. The resulting sociopolitical tensions and geopolitical conflicts are creating societies that may soon be dysfunctional to the point of being unlivable. All this requires transformative economic strategies. Yet the discipline’s mainstream persists in doing business as usual, as if tinkering at the

New book from WEA Books

At the beginning of 2020, the outbreak of Covid-19 and the lockdown practices imposed worldwide generated a global economic crisis that challenges the traditional explanations of economic downturns .  Like the economic crisis of 2008, the Covid-19 pandemic crisis was systemic and global, and this collection of essays examines it in a broad geographical and historical context.

Kindle $6.00                  Paperback $14.99Amazon US   UK   FR  DE   IN    AU    CA

Pavlina R.Tchemevra is the source of the data for this chart which appeared in September 2014 in the New York Times in an article by Neil Irwin “The Benefits of Economic Expansions Are Increasingly Going to the Richest Americans”.  Can anyone source or provide an updated version of this chart?

From Maria Alejandra Madi and RWER issue 106
Complexity is characteristic of a system that preserves the differentiation among its constituent elements while also preserving their identity. Complexity also implies dynamic systems, that is to say, open totalities of interrelated parts constantly changing in spacetime. The complexity of a system is related to the coexistence of intertwined parts in spacetime and complexity is intrinsic to real-world natural, economic and social processes (Almeida Filho, 1998). If we are to address contemporary problems of the kind referred to in the introduction both the natural world and human society need to be understood as complex systems, where the latter is nested in the former and interdependencies of different kinds arise.
An economy, similar to

From Richard Parker and RWER issue 106
Back in the late 1960s, a tiny band of unconventional economists encountered an environmentalism in the midst of radical rethinking. Prompted by Carson’s Silent Spring, capitalism and its science were being accused of major crimes—against nature, our fellow species and humankind itself.  Hiroshima had shattered confidence in the benignity of Progress, especially Progress through Markets and Corporate Science.  Now that skepticism looked around through a wider lens and would soon birth “ecology” with its excoriating indictment of our fundamental relations with Earth.[1]  Herman Daly and John Cobb’s pioneering works, Ken Boulding’s “spaceship earth” argument, and The Club of Rome’s Limits to Growth warnings led the way.  Much has since

From Victor Beker and RWER issue 106
There was a time when it was thought that the main task of economics was to assure economic growth. For example, John M. Keynes predicted that “the day is not far off when the Economic Problem will take the back seat where it belongs” (Keynes 1931: 6). Then, once scarcity has been overcome, mankind would devote most of its efforts to real problems, the problems of life and human relations (ibid,).
The impact of economic growth on the Earth environment was not an issue. This is no longer so. The ecological impact of economic activities can no longer be ignored. Ecological sustainability is an imperative if we want to preserve the planet for future generations. Ecological economics is a new subfield which addresses the challenge of introducing the

From Richard Norgaard and RWER issue 106
I object to the question on which this volume focuses. It assumes that biophysical limits are real and knowable rather than a human construct associated with a particular understanding of how natural systems might behave. Limits have been an extremely useful construct for critiquing the even simpler construct that assumes science and technology can provide unlimited economic growth. Nature, however, has zillions of limits that are crossed all of the time, and not only by people (Giorgos Kallis 2019). Nature is continually changing and reconstructing itself in response to zillions of events. The idea that people can affect nature and have it resiliently return to an historic equilibrium unless we affect it too much is a myth. Yes, nature

From Ping Chen and RWER issue 107

Economic Complexity vs. Neoclassical Simplicity
Complexity science originated from astrophysics when Henri Poincaré discovered the three-body problem had no analytical solution in 1899. The discovery and development of deterministic chaos in the 1960s to 1990s found wide evidence that nonlinear deterministic systems only have limited predictability. Ilya Prigogine further recognized the important role of irreversibility in biological evolution since time’s arrow and history inherent to biological evolution works against thermodynamics equilibrium. In reality, non-stationarity is dominant in time series economics but absent in controlled experiments in physics and biology. In this sense economic complexity is more complex than physics and biology. In

From Maria Alejandra Madi and RWER issue 106
Anthropogenic climate change and ecological breakdown are now major threats to human life and other species. It is widely acknowledged that mainstream economic theory and especially neoclassical theory lack adequate concepts to address these problems and arguably have contributed to them through misdirection and delay. “Complexity” sciences, however, are now widely adopted but have as yet made little impact on economics. In this short article I advocate the widespread adoption of “complexity” in the field of economics. Complexity means more than just acknowledgement that “it’s complicated”. Its greatest attraction in our current “climate emergency” is that it is capable of dealing with the interconnection and interdependence between the

From Asad Zaman and WEA Pedological Blog
. . . conventional modern textbooks of economics do not correctly
describe monetary economies.. . .  For instance, a popular textbook
by Mankiw states that: . . .

I am planning to write a textbook on monetary economies. I will draft it section by section and chapter by chapter, and put down the drafts here for feedback and comments. The first section is given below – it is an introduction to the topic, and provides some motivation for the study, as well as hints of the methodology to be adopted.
Introduction & Motivation
A Monetary Economy is one in which the use of money is essential to the functioning of the economy. That is, without money, people would starve, and massive amounts of economic misery would result. Since monetary economies have