Real-World Economics Review

from C. P. Chandrasekhar and Jayati Ghosh In the past decade, talk of “currency manipulation” has become a frequent trope in discussions of international trade. Much of this stems from the US government’s aggressive position on the bilateral trade deficits the US has with several countries, and the associated tendency to blame these deficits on “currency manipulation” by governments of these countries. This has generated a wider tendency for others to assume that some developing countries...

from Jason Hickel Even people who are concerned about ecological breakdown are forced to submit to this logic: if you care about human lives, then you must call for growth first and foremost, regardless of the ecological consequences; we can deal with the environment later, once everyone has enough. But there will be no later, because the problem of scarcity is never solved – there is never enough. Whenever scarcity is about to be solved, it is always quickly produced anew. In 1930,...

from Lars Syll Positivism does not seem to realize at all that the concept of verifiability — or that the position that ‘the meaning of a proposition is the method of its verification’ — is covered by a dialectical penumbra in spite of the apparent rigor of the sentences used in the argument … I hope the reader will not take offense at the unavoidable conclusion that most of the time all of us talk some nonsense, that is, express our thoughts in dialectical terms with no clear-cut meaning...

from Ken Zimmerman Most economists (and policy makers) of the last 50 years see no difference between potato chips and microchips, favor unrestricted globalization, and celebrate the loss of US manufacturing jobs as a desirable evolutionary step toward a purely service economy. But human culture is invented by many people. Many of whom have never read economics and don’t spend much time with policy makers. They insist we pay attention to the basics. And the basics in this case is...

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from Lars Syll The fallacy of composition basically consists of the false belief that the whole is nothing but the sum of its parts.  In the society and in the economy this is arguably not the case. An adequate analysis of society and economy a fortiori can’t proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts. This fact shows up when mainstream economics tries to argue for the existence of The Law of Demand – when the price of a...

from Ikonoclast In a television special about China, one patriotic Chinese commentator said: “China’s population is four times bigger than that of the USA, therefore China’s economy should be four times bigger than the USA’s.” On an equality basis he is justified. Why shouldn’t Chinese people, on a per capita basis, have the same wealth as citizens of the USA? On a realism basis, we would have to question how this would or could come about. If we were to ask Scotty of Star Trek fame what...

from Katharine Farrell Georgescu-Roegen’s call, echoed by many of his contemporaries, and today paid lip service to by most, if not all economist, was to give serious analytical attention to representing the role of biological dynamics in economic process. It was expressed in large part through his detailed and repeated reference to the second law of thermodynamics, which served as the basis for his proposal to radically reconfigure the mathematical foundations of economic analysis:...

On June 17 Olivier Blanchard, an influential economist, held a dinner speech at the ECB Sintra Forum. Weird. Nothing changed. No Hyman Minsky. No Claudio Borio. No Ulrich Bindseil and intertemporal instability of the asset side of bank balance sheets. No Flow of Funds. Nothing of the kind. His solution for the problems of the Eurozone: get relative prices right and, trust me, general neoclassical equilibrium will return. Just plain old 2007 macro-economics. The whole reason we’re stuck...

from Lars Syll Consider the problem of money. Money is of central importance to any modern capitalist market economy. Yet it is mainly sociologists, philosophers and dissenters that have maintained an interest in what money “is” with a view to continued critique and development … One might think this is because economics has already provided an agreed clear concept of money. But this is not the case. Contemporary economics defines money in terms of function (unit of account, store of...