Real-World Economics Review

from Ken Zimmerman Oligarchy is an old form for economic and political organization. It was invented long before the invention of capitalism. From about 1500 forward all western nations have been organized as oligarchies politically and economically. All modern capitalist nations today are democratic oligarchies. That means in many areas of life pluralities of citizens, or even populist demands make the decisions about major areas of concern. But oligarchies attempt to protect their...

from Asad Zaman The central message of MMT is that once the illusion of gold is removed from the picture, money is valued because everybody has confidence in it. This confidence can be safely created by sovereign authority. The King, or the state, can create any amount of money, without limits. There is no issue of sustainability of deficit. Creation of money has powerful effects on the economy, and printing too much money would definitely cause inflation, so it would never be advisable...

from Jason Hickel We can also see the logic of artificial scarcity at work in the realm of consumption. Industrialists who fear that people’s existing needs are too limited to absorb capitalism’s immense productive output must seek to create new needs, or else the juggernaut will grind to a halt. This is accomplished by various means. One is to expand desires through sophisticated advertising campaigns – and to extend these campaigns into all public and private spaces – manipulating...

from Maria Alejandra Madi                   GOING DIGITAL conference site The advent of digital economy creates new challenges for businesses, workers, and policymakers. Moreover, business prospects for artificial intelligence and machine learning are evolving quickly. These technologies have transforming implications for all industries, businesses of all sizes, and societies. The digitalization of economic activities calls for a deep reflection on the forces that will shape the future of...

from Lars Syll Hotelling’s model, then, is false in all relevant senses … And yet, it is considered explanatory. Moreover, and perhaps more importantly, it feels explanatory. If we have not thought much about Hotelling’s kind of cases, it seems that we have genuinely learned something. We begin to see Hotelling situations all over the place. Why do electronics shops in London concentrate in Tottenham Court Road and music shops in Denmark Street? Why do art galleries in Paris cluster...

from Ikonoclast “If we choose to continue to produce with the techniques we have developed, then our society and earth will disappear faster than if we introduce small-scale production, resource-saving technologies and limited consumption.” – Lars Syll. Correct! The hubris, arrogance and blindness of the neoclassical or neoliberal economic view is well exemplified by the anecdote about the member of the Nobel prize committee. The blindness of the modern conventional economic view is...

from Lars Syll Analogue-economy models may picture Galilean thought experiments or they may describe credible worlds. In either case we have a problem in taking lessons from the model to the world. The problem is the venerable one of unrealistic assumptions, exacerbated in economics by the fact that the paucity of economic principles with serious empirical content makes it difficult to do without detailed structural assumptions. But the worry is not just that the assumptions are...

from Joachim Spangenberg and Lia Polotzek  The discipline of economics has played and continues to play a major role in leading humankind towards the ultimate calamity. It is driven by world views and their ontologies, which are more based on Newton’s mechanics than rooted in modern science’s understanding of systems complexity (Spangenberg, 2016). To make good for its past harmful role, and to provide guidance for economic and other policies for a sustainable 21st century, economics must...

from Dean Baker It is impressive to see many of the leading Democratic candidates put forward bold progressive proposals. Unfortunately, in the case of prescription drugs, their imagination has been notably weak. While there have been proposals for lowering drug prices, none of them have been willing to attack the fundamental problem: government makes prices high by granting patent monopolies. This is a simple but incredibly important point that is often lost in the debate. We frequently...

from Ken Zimmerman A few basics for economists on money. Money is not a thing or even a physical object (although money may use physical objects). Money is a cultural process (institution) created to credit and clear, satisfy and impose obligations, duties, and responsibilities. Historians often misunderstand money because they focused too much on what it leaves behind, coins, contracts, pay and tax records, etc., rather than the networks created via money and their working out over time....