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Peter Radford

Peter Radford

Peter Radford is publisher of The Radford Free Press, worked as an analyst for banks over fifteen years and has degrees from the London School of Economics and Harvard Business School.

Articles by Peter Radford

Here we go

5 days ago

From Peter Radford
We all thought that this morning’s announcement of the new claims for jobless insurance would be shocking.  The usual scuttle in the financial markets had been that we might see numbers well over 2,000,000, but the actual number soared even beyond that.  At 3,283,000 it is difficult to articulate what this means.  To put it in some sort of perspective, the previous week had seen 282,000 new claims, and the previous all-time record high of 695,000 had been set back in the recession of 1982.
So to say we are in unprecedented territory is something of an understatement.
And yet:
Even as Congress struggles to come to grips with its responsibility there are rumblings of dissent.  The $2 trillion bailout package voted through the Senate yesterday includes a strong addition

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Our “Scheidel Moment”?

10 days ago

From Peter Radford
We are all familiar with what a “Minsky Moment” is.  Or we should be given the disaster of the Great Recession.  Whilst it’s true that economics has bumbled along pretty much unaltered since this dark years of just over a decade ago, and, yes, I am aware of the rumblings around the discipline’s edges, others have taken a bash at looking at facts.
One of those people is Walter Scheidel who has given us a much needed historical context for our discussion about inequality.  In a nutshell his extensive study of the history of inequality suggests that elites will always, and everywhere, succeed in rigging society for their own gain.  Whether they bother to hide their efforts behind socially acceptable or ideologically logical drapes is of no consequence: elites will find

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Political Economy?

January 24, 2020

From Peter Radford
“American economics harbors fierce political debates over theory, methodology, and policy.  In practice and in comparative perspective, however, the main trend over the course of the twentieth century has been the standardization of training as well as a homogenization of evaluation criteria that has marginalized nonorthodox approaches.  After institutionalism was dethroned by the rise of mathematical economics and more politically challenging forms of intellectual heresy (such as Marxism) were relegated to peripheral institutions and sometimes to other disciplines, American economists installed themselves confidently within the neoclassical paradigm.  It is within this paradigm that the major intellectual debates have taken place. … In other words, the dominant

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A quick note: utopian or real?

May 4, 2019

From Peter Radford
Just a brief follow-on to my recent comments on the role of economics and its relationship with power and/or politics.
I pulled out my old copy of Polanyi’s “The Great Transformation” to refresh my memory of his position on the topic.  Recall that he talked about the way in which economic activity is embedded within the larger social and political fabric.  Mainstream economists must shudder at such a thought.  Isn’t economics superior and more “scientific” than politics?
In any case, in his introduction to the edition I have, Joe Stiglitz made a very useful comment that is worth repeating.  His words are:
“… the very utopianism of market liberalism is a source of its extraordinary intellectual resilience … its theorists can always claim that any failures were not the

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Inequality conundrums

May 1, 2019

From Peter Radford
What am I supposed to make of the Scheidel book?
Having waded through it I emerge with a grim pessimism — certainly more than when I started.
The basic thesis, as I mentioned a couple of weeks ago, is that periods of relatively greater equality are rare in history and that they ebb away soon after the re-establishment of elite control over the distribution of national resources.  Worse, the relative equality that is then undone was only the result of some disastrous episode such as a war, plague, state failure, or revolution.
Scheidel is relentless in his delivery of historical facts and examples.  He allows us no escape.  We are left with a feeling of hopelessness and a fear that all we can do is to mitigate, but never stall, an inevitable tide.  Humanity, it

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Notes on: power matters

April 12, 2019

From Peter Radford
Let’s start with a different approach:
Reality suggests there are many ways in which resources are allocated within an economy, not just one.  Economics, as it now exists in its mainstream or standard form, has withered to study just one: that which takes place in markets — where markets are strictly defined in such a way as to guarantee outcomes compatible with a certain ideological perspective.  As we have discussed before this trajectory for the discipline was deemed essential for the mainstream to construct a logical defense against the mid-1800s criticism of early industrial capitalism.  It continues to act as a defense against more contemporary critiques as well.  In so doing it adopted a hostile and denigrating stance to alternatives.  “Markets good, all

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Certain decisions

March 24, 2019

From Peter Radford
One of the books I keep close by on the shelf is Paul Glimcher’s “Decisions, Uncertainty, and the Brain: The Science of Neuroeconomics”.  It dates back to 2004 and is one of those books that provides a glimpse of what a dialog between economic theory and psychology might produce.  More to the point it explores the issues surrounding economic decision making at a deep biological level.  It thus adds substantially to the behavioral explanation of economic activity.
Apart from making me think about the practical problems of decision making, one of the additional benefits I had from reading the book was that it introduced me to David Marr whose work was instrumental in the development of neuroscience. a few decades back.
Here’s a very long quote taken from Marr’s book

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Krueger

March 20, 2019

From Peter Radford
I want to note, with sadness, the death of Alan Krueger who was one of those economists undaunted by the existence of the real world and all its complexity, and had the courage to present conclusions based on empirical work rather than on pure theory.
Others will write more cogently than I can about his impact on the profession, so I will simply note that his work, with David Card, on debunking the notion that a rise in the minimum wage will always cause higher unemployment ended the anti-social grip of textbook economics on a very key issue for tens of millions of his fellow citizens.  And ended that grip on a positive note.
So much did that research roil the ideologically pristine waters of mainstream economics that no less a character than Nobel prize winner James

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Uncertain

March 17, 2019

From Peter Radford
I am not quite sure what to make of the phrase “radical uncertainty”.  It pops up in most discussions of Keynes as being a critical, if not the critical, point of departure of his thinking from the silliness we know as classical economics.
Is radical uncertainty a redundant statement?  If something is uncertain, what is it that can make it radically so?  Surely the whole point of uncertainty is that we have no idea just how radical that lack of knowledge may be.  Worse, how do we identify uncertainty?  Isn’t it simply a concept that describes our inherent lack of knowledge?
In any case, it is precisely because of uncertainty that I find Keynes so appealing.  Whether or not he dealt with it correctly is another matter, but at least he was sensible enough to eschew the

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Anti-social economics

March 6, 2019

From Peter Radford
Some jumbled thoughts prompted by my recent reading of Robert Skidelsky’s book, “Money and Government”
Just how anti-social is economics?
I don’t think the question is difficult to answer: economics in its modern mainstream form is, at its heart, designed to undermine democratic government.  It is, therefore, profoundly anti-social.
The genesis of this antipathy towards democracy is all the way back in the beginning moments of economics as an intellectual discipline when its earliest proponents had a very specific objective, which was to build an argument for the elimination of politics from the social space we now refer to as the “market”.  This effort to de-politicize commerce was driven by the perceived need to rid it of the constant interference of whimsical and

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The times are changing – tax style

February 15, 2019

From Peter Radford
The following is part of a correspondence I had recently with a friend here in Vermont:
The purpose of increasing taxes on the wealthy is twofold: one is to raise revenue; the other is to prevent growing concentration of wealth.  I think the second of the two is the more important.  The American system of opportunity and so on was founded on society being more equal than it is [not equal, but more equal].  As wealth gets entrenched further each decade inequality erodes that system and would eventually replace it with an “old world” class system.  So taxes on wealth are a buttress for democracy as much as a source of revenue. 
As for the funding for the various social and infrastructure being bandied about at the moment: I see no reason for us not to augment the

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New year, old arguments

January 4, 2019

From Peter Radford
“The universe is made of energy, matter, and information, and while energy and matter are here by default, information needs to find ways to emerge.  This is not always easy”  Cesar Hidalgo, “Why Information Grows — The Evolution of Order, from Atoms to Economies”
Why is it the economics still restricts itself to constructing its narratives around concepts like labor and capital?  Neither are very precise.  Both are amalgams of more fundamental concepts.  And, even in the hands of the very best of economists, no combination of them gives us much confidence that they explain major economic phenomena such as the extraordinary growth seen over the past two hundred years or so.
I regularly lampoon growth theory for its lamentable inability to eliminate its reliance on

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A little knowledge

December 7, 2018

From Peter Radford
A little knowledge goes a long way.  That’s the saying, correct?  Well you’d never know it by looking at economics.  It’s hard to find knowledge anywhere.
Now I’m not being facetious about the gaps in economic theory.  Let’s all give the discipline its due and say that it has done a masterful job of getting as far as it has based on the limitations it bounds itself with.
It’s just that sometimes those limitations are glaring and can stop someone in their tracks if they’re not steeped in the dark arts themselves.
The results of those limitations are often a stunning avoidance of topics that are crucial to understanding a real economy.  Or at least they’re crucial to someone less determined to be so willingly limited.
I know, this is all vague.  Let me explain.
I have

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Elections matter … Right?

November 1, 2018

From Peter Radford

Elections Matter … Right?

Well, only if those being elected have an inkling of what their constituents actually want.  And it seems that, here in America at least, there is a considerable gulf between what those who are elected think are the key issues and what those who do the electing think of as the key issues.  The lack of overlap is distinctly upsetting.
We are constantly being told that the US is a relatively conservative nation.  This is why some of the more obvious social democratic remedies for our economic and social ills are considered as beyond the pale. They won’t fly here, we are told, because Americans won’t go for them.
This is odd when we think about how extremely popular programs like Social Security for retirees and Medicare for the elderly

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Those lumps matter

October 25, 2018

From Peter Radford
I feel bad for anyone who ventures into the social sciences.  Society is, after all, a devilishly complex subject.  Pull on any one string and you can convince yourself that you have understood it only to realize the next day that you missed the entire story.  It’s a maze: enter at your own risk.
Of course the flip side is that you can never be entirely wrong either.  Just about any half-baked idea has a smidgeon of truth hidden within it.
Take a look at mainstream economics.  It’s about as nutty as can be, based as it is upon axiomatic foundations that bring gales of laughter to anyone seriously interested in depicting or comprehending reality.  But we have whole academic departments filled with very clever people who cringe disbelievingly at the ridicule outsiders

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Corporations continued

October 18, 2018

From Peter Radford
The key to understanding corporations is to separate the economics from everything else.  We need to do this because the economics, as expressed in various theories of the firm, are usually entirely idealized and bear no resemblance to reality.  Economists, as usual, love to theorize about things that don’t exist but which they wished did exist.
But that may just be me being dismissively judgmental.
Corporations, far from being products of the free market, are actually franchises of the state.  They are sub-contracted jurisdictions.
To be a corporation is to possess a charter from the state.  That charter brings privileges not available to non-corporations. The most notable privilege is that the corporation is recognized as a distinct legal entity separate from any

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Who “owns” a corporation?

October 11, 2018

From Peter Radford
I have become quite a fan of David Ciepley this summer.  He, amongst many I am sure, is blazing a trail through the morass of corporate law and providing new insights into the role and status of the animal we know as the “corporation”.
Anyone with an interest in the role business plays in the economy needs to understand what Ciepley is saying.
In one talk he gave, at MacGill University, the introductory remarks by his host were illumination in themselves.  The occasion was a presentation and interdisciplinary discussion about the corporation and its role in shaping the social landscape.  The host rattled off the university departments and working groups involved in the discussion in his welcoming remarks.  There was no mention of economics.  The omission tells us all

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Clueless or Just Plain Stupid?

June 18, 2018

From Peter Radford
Here we are deep into the dark forest known as the Trump administration and half my friends are still grappling with the 2016 election result. How come America elected an erstwhile tyrant? How come a boatload of voters look quite happy tossing so-called democracy overboard?
Well, as you know, I have a simple answer. Money. Or, more precisely, the lack of it. If there is one characteristic of contemporary America that stands in stark contrast to those happier times a few decades back it is the corrosion of self-confidence and belief that  is a direct consequence of the obliteration of wage growth.
For some reason that eludes me our policy elite — both parties, the big media, academics, and business leaders — all fail to understand that for them to be allowed to govern

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Why Innovate?

May 31, 2018

From Peter Radford
Every so often one of the numerous news feeds that fill my inbox contains a story that stops me short. In this era of Trump dominated news I have become numb to the corruption that he has brought in his wake and to the absurdity of his autocratic style with its contempt for the rule of law. Instead I focus on why it was that so many Americans were willing to elect someone so ill fitted to the job. The insecurities of the contemporary workplace offer a partial answer. So when I read Steve LeVine’s “The Future of Work” feed from Axios recently, not only did it stop me short, it gave additional insight into that electoral conundrum.
Not that I was reading anything particularly new. Sadly the there was no news. What struck me, however, was the brazen attitude and

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The future of work is now

May 1, 2018

From Peter Radford
The future of work has become one of the most hotly debated and analyzed topics of the past couple of years. No one with a pretension of a serious nature or a desire to be seen opining on the “big” issues can afford not to have a point of view on it. Thus we are bombarded by an endless torrent of articles, books, academic papers, and speeches on the way in which the workplace will be changed by the emergence of  various technologies. The usual umbrella under which these technologies lurk is the one we call artificial intelligence.
There is no doubt that AI will have an enormous impact. There are countless breathless accounts of the number of jobs that will simply disappear as AI sweeps through the economy. These accounts usually appear from those involved in the

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Ryan, deficits and hypocrisy

April 13, 2018

From Peter Radford
Paul Ryan is leaving Congress. Before he had finished announcing his upcoming retirement the airwaves were awash with commentary about his legacy.
Count me as one of those who have a particularly strong perspective on this. Paul Ryan was, and presumably still is, a supremely hypocritical human being.
Recall how he sprang into public consciousness. He quickly established himself as a severe right winger, but one with the smarts to back it all up. He promoted himself as a thoughtful conservative. He quoted all the thinkers one has to refer to if one is to be such a person. Ayn Rand was his go-to intellectual foundational source.
He spoke eloquently about the damage that Federal deficits would do. He berated Democrats, and Obama especially, for their wanton reliance on

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Watch the boulder

April 5, 2018

From Peter Radford
There’s a bold rolling down the hill.
We are watching it carefully. It is accelerating. It is enormous. It will mow us down. Lives will be lost. Or at least livelihoods will be lost. People will suffer. The boulder is terrifying.
But, hey, let’s keep watching.
That’s about the attitude of the people who keep on talking about the imminent tsunami of automation, AI, and other so-called disruptive technologies. Let’s keep watching because it’s bad — really, really, bad.
The good folks at Axios distribute a regular synopsis of all the hyperbole surrounding the future of work and today’s edition caught my eye. Buried deep in the summary is a short item headed: “A long disruption is ahead, with low-paying jobs“.
The contents are grim reading.
Here’s a taste:
“Their big

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What happens next?

March 17, 2018

From Peter Radford
As we tumble from one degrading political spectacle to another it is worth remembering that things that mattered were actually addressed periodically, even if the result was tumult. For reasons not worth mentioning here I am taking good look at English history between 1909 and 1911. In this case the tumult was triggered by a budget which was resisted by landowners and the House of Lords, and ended with a radical reorientation of power that left the House of Lords relatively toothless — although not, unfortunately, eliminated.
That radical budget was introduced by its major proponent, Lloyd George, as follows:
“This is a war Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this

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Beware what you ask for

March 3, 2018

From Peter Radford
This has been a long and miserable time. Deluged daily by strange and almost surrealistic gyrations in Washington I decided to sit to one side and simply watch. The spectacle of America rapidly decaying and apparently unable to prevent itself from gnawing away at its institutions is compelling. The regular attempts to undermine the credibility of everything meant to act as a bastion against tyranny is riveting. The subsequent indulgence in endless introspection about how dire our political collapse is equally absorbing.
Why add to the malaise by commenting?
It’s all out there.
A great nation turned against itself, locked in polarized paralysis it drifts buffeted by the incessant whimsy of its current leadership. That denigrates the word leadership, so I refer only to

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1937

December 30, 2017

From Peter Radford
Hayek says this:
“The problem which we pretend [to] solve is how the spontaneous interaction of a number of people, each possessing only bits of knowledge, brings about a state of affairs in which prices correspond to costs, etc., and which could be brought about by deliberate direction only by somebody who possesses the combined knowledge of all those individuals … “
This is from his essay ‘Economics and Knowledge’ which was published in 1937.
Hayek’s thrust is, of course, to demolish the notion that an economy can be centrally planned to any degree of efficiency. His argument is simplicity itself: the body of knowledge that exists within an economy is so asymmetrically distributed, so extensive, and so diverse, that it is not possible for anyone sitting at the

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Consistency is the …

December 12, 2017

From Peter Radford
Well, at least I am being consistent. Whether that’s being a good thing or not I will leave to you to figure out.
David Brooks set me off on a rant a few days ago, and he’s doing it again. I have to stop reading his columns. Last time it was about the rotting Republican Party: Brooks is one of those people who realized way too late that the GOP of yore disappeared long ago and has been replaced by a mash-up of far right cause driven groups smeared together with a good dose of corporatism. A good example being Trump who managed to win the last election by appealing to enough disgruntled and disaffected voters with exhilarating visions of smashing up the ossified Washington consensus and replacing it with something more responsive to everyday voter needs. Except, as we

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Real tax reform?

December 7, 2017

From Peter Radford
OK, let’s all calm down. The Republican tax plan is now in its last stages of design. The two versions that exist need to be stitched together and then the compromise version passed in both houses of Congress.
The law as we currently know it is a classic piece of plutocratic largesse. It will fail in its supposed intentions: it will not do much at all for the economy. It gives rich people and large corporations big dollops of cash and a slew of new loopholes to feather their respective nests. It does nothing for the middle class, except for its upper reaches in the rise enclaves around our biggest cities where it will raise rather than lower taxes. And it raises the possibility, but not the certainty, of cost to social programs down the road when the deficit grows

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Doomed to repeat?

November 19, 2017

From Peter Radford
One of the great pleasures of living here in southern Vermont is that we have a terrific local bookshop. I go there simply to absorb that book shop vibe unattainable in the bits and bytes of Amazon. And like all good bookshops this one throws up surprises. About three weeks ago I was browsing the small business and economics section and found a book by Heinz Kurz. It’s his “Economic Thought, A Brief History” I recommend it for all of you who want to understand the predicament of modern economics.
Now I admit I am a sucker for reading about the history of economics. It’s a great parallel story to the broader social history of the past few centuries. Economics as it weaves back and forth from one emphasis to another is a much more humble adventure than the arrogance of

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Taxes: 1970’s Redux?

November 16, 2017

From Peter Radford
Taxes. What a problem.
I was going to start by saying something about our current national debate about taxes, but that would have been an untruth. We are not having a debate. Instead we are all sitting on the sidelines whilst the Republican Party desperately tries to cobble together a tax plan in order to fulfill one of the promises it made during last year’s election. That this would be the only major promise thus fulfilled we can ignore for now.
Instead, I think I will start with an observation I have made many times before: the American tax code is ridiculously complex and inefficient. It is also rigged, although the real extent of the rigging only comes into focus when we take a look at the budget that the tax code nestles within.
One of the sneaky ways that

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Speculation

October 27, 2017

From Peter Radford
Robert Locke’s excellent discussion of the different perspective presented by a tacit-knowledge rather than explicit-driven driven enquiry into economic matters prompts me to reprise my understanding of the purpose of a business firm.
Put briefly: a business firm exists to translate what is often called tacit knowledge in to what is called explicit knowledge. An alternative wording would be that firms take the ad hoc and various and make them into the codified and uniform. In my own thought I use the words “secondary knowledge” to refer to the kind of knowledge that tackles ad hoc or unexpected circumstances. I use the words “primary knowledge” to refer to the codified knowledge that allows us to tackle the usual and/or repetitive circumstances. It is phraseology I

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