Real-World Economics Review

from Duncan Austin and RWER The “free market” advocate is in the dissonant position of wishing market actors to be the sole conferees of new property rights while also depending on the government to uphold a general rule of law which is the necessary condition for property to being meaningful at all. Indeed, because of the indispensability of the rule of law, we should be more accurate with our terminology. We never have “free markets”. We only ever have “enabled markets” – markets...

from Lars Syll What Modern Monetary Theory (MMT) does is more or less what Knut Wicksell tried to do more than a hundred years ago, when he in 1898 wrote on ‘pure credit systems’ in Interest and Prices (Geldzins und Güterpreise). The difference is that today the ‘pure credit economy’ is a reality and not just a theoretical curiosity — MMT describes a fiat currency system that almost every country in the world is operating under. In modern times legal currencies are totally based on fiat....

from Geoff Davies and RWER Yet consider a model of the Global Financial Crisis of 2007-8 by Eggertsson and Krugman (2012), the latter a pseudo-Nobel prize winner. They made two models, one for before and one for after a crash, with the difference between the models being effectively that the amount of available credit was presumed to be less in the second. Nothing in the model determined the amount of credit, it was imposed from the outside. Their equations of optimisation did require...

from Philip George Until 1982 it was believed that stomach ulcers were caused by stress and lifestyle. That year, two Australian scientists, Robin Warren and Barry Marshall, demonstrated that most gastric and duodenal ulcers were caused by a bacterium, Heliobacter pylori. They cultivated the bacteria which they discovered in biopsies of patients suffering from ulcers, after which Marshall ingested the bacteria to prove that they caused gastric ulcers. As this example shows, it is not...

from Tanja von Egan-Krieger and RWER . . . the World Bank builds on a utilitarian definition of efficiency, which is of course a normative criterion. It is a criterion of judgement. The implicit aim is increasing the net value or total wealth. The World Bank refers to this idea in terms of a “social benefit”: “Even investments that are highly profitable for an investor will generate sustainable social benefits only if they are not associated with environmental externalities”. An ethical...

from Richard Norgaard . . . until early in the 19th century, merely two hundred years ago, an effort to intertwine reality and morality still existed in natural theology, the project to understand the character, will, and operating manual of God through the study of nature. Isaac Newton was both an accomplished moral philosopher and a path-breaking natural philosopher (Iliffe, 2017). The Physiocrats made moral arguments about who should be taxed based directly on what they understood to...

Source: Sighing for paradise to come | The Economist

from Asad Zaman and WEA Pedagogy Blog Reducing politics to rational calculation allows the destruction of entire countries, and killings of millions, for the sake of political power or corporate profits. Today this “rationality” dominates the world where corporations are busy destroying the planet for the sake profits. Introduction: The dark underside of leading lights of the European Enlightenment has been skillfully concealed. Nearly all major enlightenment thinkers held abhorrent views...