Category Archives: Free markets and their discontents

Jamie Galbraith on Inequality and Instability

Real News Network interviewed Jamie Galbraith on his new book, Inequality and Instability, in which he argues the two phenomena are linked.

Spain’s Severity is Not Sustainable

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

The pain in Spain continues with the government releasing the country’s latest budget which has been described by some Spanish economists as ‘the most severe since Franco’

Marshall Auerback and Randy Wray: America Needs Healthcare, Not Health Insurance

Ironically, the Roberts Court could actually be the instrument that leads us toward something approaching a rational, affordable healthcare provision.

Mark Ames: The One Percent’s Plan for the Rest of Us – Livestock to be Milked for “Rent”

Yves here. Mark Ames’ post discusses the institutionalization of a regressive policy, that of trying to eke more corporate growth out of extracting more and more out of workers rather than sharing the benefits of productivity gains with them.

Chris Cook: Spikes and Speculation in the Oil Market – Flash Crash Part Deux?

By Chris Cook, former compliance and market supervision director of the International Petroleum Exchange

Cui Bono from High Prices?

If there is one thing that the history of commodity markets tells us it is that if producers can support and manipulate prices in their favour, then they will.

Bill Black: (Re) Occupy Greece

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

While the Occupy Wall Street (OWS) movement set its sights on occupying a financial center, Germany has accomplished the vastly more impressive feat of occupying an entire nation – Greece. Germany has experience at occupying Greece having done so during World War II. The art of occupying another nation is to recruit a local puppet to do the dirty work required to repress the citizens. Germany used several puppets, most notoriously the murderous Ioannis Rallis, to (nominally) rule Greece and terrify the Greek people during World War II. (After Germany’s defeat, Rallis was executed for his treason.)

This time around, Germany has been far more successful in recruiting and using a puppet to (nominally) rule Greece and terrify the Greek people before the German occupation.

Taxing the Rich Does Not Hurt Jobs

This Real News Network interview with professor of economics Jeffrey Thompson debunks the notion that increasing taxes on the well off is not a negative for employment.

Gillian Tett Exhibits Undue Faith in Data and Models

I hate beating up on Gillian Tett, because even a writer is clever as she is is ultimately no better than her sources, and she seems to be spending too much time with the wrong sort of technocrats.

Philip Pilkington: Policing the Economists from Within Their Own Minds – ISLM as a Model of Intellectual Control

By Philip Pilkington, a writer and journalist based in Dublin, Ireland. You can follow him on Twitter at @pilkingtonphil

We want structures that serve people, not people that serve structures!

– Graffiti in Paris, May ‘68

Recently there has been a bit of debate about MMT knocking around the blogs. To a large extent it has been rather superficial. This was not the fault of those involved – despite a few displays of pomp and bluster from some of the cruder economic bloggers (no names!). The superficiality of engagement was mainly due to the nature of the medium itself. For all their accessibility blogs don’t allow, or should I say, don’t generally encourage the scholarship that is required before considering a new theoretical approach. Indeed, the very nature of blogs is restrictive in that it demands that authors engage with a new theoretical approach only in a cursory manner. After all, there will always be something new to write about tomorrow.

Better, I thought, to engage with one of the participants more directly.

The New Priesthood: An Interview with Yanis Varoufakis Part II

Yanis Varoufakis is a Greek economist who currently heads the Department of Economic Policy at the University of Athens. From 2004 to 2007 he served as an economic advisor to former Greek Prime Minister George Papandreou. Yanis writes a popular blog which can be found here. His treatise on economic theory ‘Modern Political Economics: Making Sense of the Post-2008 World’, co written with Nicholas Theocrakis and Joseph Haveli is available from Amazon.

Interview conducted by Philip Pilkington.

Philip Pilkington: In the book you talk about how humans are extremely hard to model – you go as far as to call them a ‘radical indeterminacy’. Now, some of this comes back to the classical theory of value that we already discussed. That theory of value seeks out the basis of value in the human capacity for labour – essentially putting humans out front and centre when modelling is undertaken. But the neoclassical theory of value – that is the marginal theory of value – also relies on humans to build models, in that it concentrates on their consumption preferences and derives so-called laws from these. Could you talk about this a little?

Satyajit Das: Pravda The Economist’s Take on Financial Innovation

By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)

In the old Soviet Union, Pravda, the official news agency, set the standard for “truth” in reporting. Discriminating readers needed to be adroit in sifting the words to discern the facts that lay beneath. Readers of The Economist’s “Special Report on Financial Innovation” (published on 23 February 2012) would do well to equip themselves with similar skills in disambiguation.

Cathy O’Neil: Economists Don’t Understand the Financial System (Quelle Surprise!)

By Cathy O’Neil, a data scientist who lives in New York City and writes at mathbabe.org

A bit more than a week ago I went to a panel discussion at the Met about the global financial crisis. The panel consisted of Paul Krugman, Edmund Phelps, Jeffrey Sachs, and George Soros. They were each given 15 minutes to talk about what they thought about the Eurocrisis, especially Greece, the U.S., and whatever else they felt like.

It was well worth the $25 admission fee, but maybe not for the reason I would have thought when I went. I ended up deciding something I’ve suspected before. Namely, economists don’t understand the financial system, and moreover they don’t get that they don’t get it. Let me explain my reasoning.