Real-World Economics Review

from C.P. Chandrasekhar and Jayati Ghosh Following the COP28 Summit, there is an attempt to establish that the conference was a significant step forward in the effort to address the causes and consequences of climate change. However, a reading of the actual outcome only illustrates how the resistance of the developed countries to own up to their historical responsibility as emitters is stalling the effort to combat climate change and manage the consequences of the changes already...

from James Galbraith and RWER current issue An economic theory that is consistent with life processes and physical laws is necessary for a simple reason:  the economic theory that underlies modern “mainstream” economics and practically all textbook teaching in economics is not consistent with life processes and physical laws. And this is a problem. Human beings are living organisms. All human activities, including mental activities, are consistent with physical laws. It is natural to...

from Gregory Daneke and RWER issue 102 Emerging ecological ideas . . .  rushed headlong into the canonical growth imperative of the mainstream. Anyone who uttered ecology and economics in the same breath was bullied and harassed going as far back as the 19th century, but the battering became more intense in the late 1970s as Neoliberalism was fully asserting itself in the halls of power (Reagan, Thatcher, etc.). The unrelenting and scurrilous ad-hominem attacks on the scholars associated...

from Peter Newell and RWER issue 101 All wealth in the end is ecological. Economists contend that growth can continue indefinitely because they measure growth in terms of economic value rather than material throughput (Jackson and Victor 2019). Yet we diminish natural wealth and undervalue its exhaustion at our peril. Even in a highly financialised and service oriented economy, where direct connections to patterns of resource extraction and consumption are sometimes less observable,...

No Christmas celebration on this blog this year. But a story about communities: the Commons of Buren and Hollum on the Waddensea island of Ameland. Commons have been studied by Elenor Ostrom. Studying Commons is of prime importance: we only have one earth. Reading Ostrom makes one optimistic. One of the things she mentions is the age of commons. Often, they survived centuries. Commons, which invariably voluntarily set limits on the use of resources, are sustainable. The Ameland Commons...

Please click here to support this open-access journal and the WEA real-world economic review issue no. 106 download whole issue Special IssueHow can we construct an economics consistent with the biophysical limits to economic growth? Invitation 3 PART I – PARTIAL ANSWERS TO THE QUESTION Economics as if ecology matteredPeter Newell 5 An economic theory compatible with life processes and physical lawsJames Galbraith 13 Supporting well-being over time: Six kinds of capital required in a...

Not all prices are market exchange prices. I’ve been writing about administered prices (here and here) and ‘commons’ prices (here). In January, I hope to make a first small step towards a badly needed periodic table of prices. Today a new element, Gift Exchange Prices. Gifts are like the Greeks. They come in many varieties. But always, something is transferred from somebody to somebody, even when there often is no market price or even transfer of ownership. There might be a transfer of...

from Yoshinori Shiozawa Review of John Komlos, Foundations of Real-World Economics / What Every Economic Student Needs to Know, Third Edition, 2023 Introduction This review article must not be too long. Readers of this Real-World Economics Blog are accustomed to read posts less than one thousand words. I want to limit it within three thousand words. In view of the objective of the new book review series (to create a forum to inform each other), this must be too short. No detailed account...

from Peter Radford This is just for fun.  It’s nearly the holiday season after all. Let’s tell a story: a friend of ours here in southern Vermont was looking for a job.  She saw an advertisement posted by a local business.  Or, perhaps, she heard something about a job from a friend.  In any case she applied and got the job. Well done. Her wage is, naturally, determined by her marginal productivity.  We all know that.  All wages are determined by individual worker marginal productivity....

from Asad Zaman and WEA Pedagogy Bog I recently gave a talk to students of Modern Money and Economics of Sustainability at Torrens University. The video of the talk is here. I have also written up some notes about this talk which clarify some points only sketched briefly in the talk, and provide links to more detailed discussions.  The following writeup provides some details and background missing from the talk, and also links to related materials: The transition from a traditional...