Debunking Economics - the podcast

Inflation is rising everywhere as supply chains hit prices in the shops and at the fuel bowsers. Central banks are responding to this the only way they know how – by pushing up interest rates. Phil Dobbie asks Steve Keen what’s their rationale, when higher interest rates won’t fix the supply issues? Steve suggests there will be a rapid reversal in policy when the central banks realise the real damage they are doing to the economy. ‘There will be no soft landing’, he says. ‘There never is’. But what about taxation, asks Phil. Could demand be softened by taxing the high earners? Hosted on Acast. See acast.com/privacy for more information.

When COVID has gone and the war is over, will we return to the patterns of international trade we were enjoying just a few years ago? Steve Keen says not, which puts him in the camp of anti-globalists that FT columnist Martin Wolf wrote about recently, in an article ‘The big mistakes of the anti-globalisers’. This week Phil puts some of Martin’s arguments to Steve, including the evidence that international trade has significantly boosted GDP globally and helped reduce extreme poverty. Won’t a more self-sufficient approach turn back the clock on both those achievements. Listen in for why Steve thinks times have changed for good, as we focus on sustainability over efficiency. Hosted on Acast. See acast.com/privacy for more information.

Conspiracy theorists are out there claiming that unelected representatives are holding power, using technology to control our behaviour. China has tried a bit of this social engineering, but there are those who believe its far broader than that. They also reckon the drive for us to not use cash is part of the agenda, so ‘they’ can track our behaviour. That’s why central banks (who are unelected representatives who control our behaviour) want to move to a digital currency and are against cryptocurrencies that they can’t control. This week Phil Dobbie asks Prof Steve Keen if there is any potential for truth behind this fearmongering. Maybe we could all do with a bit of control! Hosted on Acast. See acast.com/privacy for more information.

Central banks the world over are busy lifting interest rates and, at the same time, engaging in quantitative tightening. In other words, all those bonds they bought up, will progressively be sold back to the commercial banks they were bought from. As those central bank balance sheets start to fall, what impact does it have on the economy? Does it mean we’ll see a shrinking of the money supply. That’s the commonly held belief, but, in reality the shift will have little impact, except for making banks slightly better off. The bigger concern is when they sell off corporate bonds, as Prof Steve keen explains to Phil Dobbie in this week’s podcast. Hosted on Acast. See acast.com/privacy for more information.

The Tragedy of the Commons is a concept developed by William Forster Lloyd one hundred and fifty years ago. The argument is that if you allowed everybody to graze their cattle on common ground, with nobody in charge, the land would be overgrazed and the individual pursuits of many will result in destruction for all. So, do you put someone in charge, who imposes regulations on everyone. Or do you go the way of the free marketeers, who would argue that someone owns the land and rent sit out, with a vested interest in maintaining the long-term viability. Is there a definitive answer and how can we apply the Tragedy of the Commons to capitalism today? Phil Dobbie talks to Prof Steve Keen. Hosted on Acast. See acast.com/privacy for more information.

Central bankers and economists have often used the Phillips curve to determine the path of inflation. The problem is, they often get it wrong. No wonder then, that they question its validity when it doesn’t work the way it should. Call it operator error. On today’s podcast with Phil Dobbie, Steve Keen explains how most miss the dynamic aspects of Phillips’ observations – it’s the speed of change that counts, not a snapshot of employment levels at any particular time. Her also considered the changes in the price of inputs. On that basis, with unemployment rapidly falling and the price of imports rapidly rising, the Phillip’s curve has never been more relevant. So, does it tell us what happens next? Hosted on Acast. See acast.com/privacy for more information.

Stagflation is that worrying combination of rises prices in a stagnant economy. Central banks believe the answer is to push up interest rates, to magically reduce inflation and miraculously demand returns to normal. There’s a debate as to whether that can be done without kickstarting a recession. Some argue that might be the poison pill we have to take – pointing to when Paul Volcker at the US Federal Reserve pushed interest rates as high as 21.5% , leading to recession, but ultimately seeing economic growth return. Steve Keen says this time, it’s different. And we can’t assume the inflation cycle is as transient as many politicians, economists and central bankers believe. Hosted on Acast. See acast.com/privacy for more information.

BP made $12.8 billion profit last year, $4.1 billion on that in the fourth quarter. In the first three months of this year Shell’s profits reached $9.1 billion. Meanwhile pensioners and low-income families are struggling to keep their houses warm, as high energy prices add to the inflation squeeze being felt with food and other household essentials. Phil Dobbie asks Prof Steve Keen whether this all points to the need for a windfall tax on energy companies who are enjoying massive profits through no-action on their part. And should it be a one-off initiative, or is this time to rethink how we tax these companies in a way that will engender investment in renewables? Hosted on Acast. See acast.com/privacy for more information.

The supply chain disruption from COVID, and the imperialist ambitions of Vladimir Putin have demonstrated, more than ever, the need for nations – or at least neighbouring groups of friendly nations – to be self sufficient in food and energy. Will we find the world returning to a spit between the West, autocracies and developing nations? Can each group survive without the others? Prof Steve Keen tells Phil Dobbie that we will still be reliant on autocratic regimes for mineral resources, and the world really needs to come together to tackle climate change. Even if that’s a pipedream we at last need a plan for how we manage the world’s resources and ensure we have a reliable source of food and energy, without kowtowing to despotic regimes. Hosted on Acast. See acast.com/privacy for more information.

Property expert Russell Quirk maintains that housing will always be a good investment and prices will, in the long run, always go up. Perhaps this year inflation will rise faster, so in real terms prices may dip, but in the long run, he reckons, the direction will always be north. Prof Steve Keen on the other hand, maintains that, at some point, things will rapidly head south. Why? Because banks are offering loans through the creation of new money, which makes it easier for them to meet consumer demand, irrespective of how realistic house prices are. And they get locked into a feedback loop, where valuations are based on previous valuations. Your house is worth more because all the other houses around you are worth more. This, recons Steve, will come unstuck, possibly in a big way. He says we don’t accept it because it’s not happened in recent history. Just as we didn’t expect a pandemic because we hadn’t seen one like it for 100 years. Hosted on Acast. See acast.com/privacy for more information.

The UK the Chancellor’s wife Akshata Murty was in the news a couple of weeks ago when it was revealed that she was claiming non-domicile status in the UK, so most of her income from her shareholding in dad’s company in India could be taxed over there at a much lower rate. The issue for many was that she wasn’t paying her fair share of tax. But does her wealth present a bigger problem. This week Phil Dobbie asks Prof Steve Keen whether Akshata Murty is an example of the rentier class, who make money from having money. And does that necessarily mean the money is used less well than if it was in the hands of good old-fashioned capitalists? Or is it all just a bit of jealousy, because we don’t have wealthy parents? Hosted on Acast. See acast.com/privacy for more information.

Economists like to think that there’s an equilibrium that the economy is either briefly moving away from or heading back to, and it’s all explained in those simple models we did at school. Those were mostly microeconomic models, of course, that are somehow magically interpreted at the mac level. Or there are more complex mathematical models that reflect only a tiny slice of the bigger picture. But didn’t Sonnenschein–Mantel–Debreu theorem debunk that? This week Prof Steve Keen tells Phil Dobbie that even their work ignored a fundamental feedback loop which clearly demonstrates that equilibrium is fantasy land.  Hosted on Acast. See acast.com/privacy for more information.

The inflation genie is out of the bottle. Can we get it back in there before it does too much damage? Central banks are trying to tackle it by racing each other to put up interest rates, possibly to levels we haven’t seen in years, despite the fact we’re all leveraged to the hilt with our mortgages. Can that be done without causing a recession? More to the point, does monetary policy actually do what central bankers think it will? On this week’s Debunking Economics podcast Steve Keen tells Phil Dobbie that its up to governments, not banks, to bring inflation down. Instead, it seems, everyone is doing exactly the wrong thing! Hosted on Acast. See acast.com/privacy for more information.

Energy prices are going through the roof. They were before Ukraine erupted, but with Russia the world’s second biggest producer of natural gas, and Iran in third place, it seems we are destined to get our gas from trouble spots, and pay for the price for it. But Steve Keen says we have to get used to the idea that resources are no longer plentiful and rising prices from scarcity are becoming a fact of life. Phil Dobbie asks if there is anything that can be done to prevent an energy crisis akin to what we experienced in the seventies. The difference then, of course, that the issue was relatively short term. Now, its part of a major transition, escalated by COVID and geopolitics. Hosted on Acast. See acast.com/privacy for more information.

The EU has talked about issuing new bonds to protect its eastern borders against Russia and to prepare Europe for a future without reliance on Russian oil and gas. Normally bonds are issued by individual countries. If the ECB felt the need to intervene it would buy up those bonds, normally proportional to the size of the member countries. Even during the pandemic, their pandemic emergency purchase program saw them buying up sovereign bonds from member countries. Could this time be different?Is there a Europe wide need that could see the EU operating a centralised budget to, for example, fund a European army? Well, they have already started down that track with the issuance of green bonds this year. How does it work? How does it create a budget through debt issuance, and see that money move to suppliers in individual European nations? The answer is, its complicated but not insurmountable. The question is, is a centralised EU budget, supplementing each countries own budgets, a good thing or a bad thing?Phil Dobbie talks to Prof Steve Keen about what could be a new direction for the EU, where it wields money for pan-European spending projects. Hosted on Acast. See acast.com/privacy for more information.

The war in Ukraine looks set to continue for a long time. A 90 minute high-level meeting between the two parties, mediated in Turkey, got nowhere today. Meanwhile, the west is imposing more and more sanctions on Russia. Putin spoke calmy at a press conference today about how they will manage these increasing constraints on trade and finance, making out it wasn’t really a big deal. So will they make their way through it, or will these sanctions be the nail in the coffin for Putin’s plan? Or will they just make him more resolute? Will he start to attract the support from his people that Hitler gathered between the two world wars? Phil Dobbie talks to Prof Steve Keen, asking whether we are taking the right approach on this. Whatever the outcome, Steve reckons we should prepare for more unrest in the future, as demand for minerals heightens and the world is split between those with them, and those without them. Could this resource split and an increasing sense of protectionism become a deadly combination? Hosted on Acast. See acast.com/privacy for more information.

Most people agree that Rishi Sunak is crazy to introduce new taxes on the British public when inflation is compromising living standards and the Bank of England is lifting rates and pushing up the cost of mortgages. Now a war in Europe is pushing the cost of fuel ever higher. But the Chancellors argument is that the government has to pay back the money it borrowed during the pandemic. If it did, it would take decades. But, as Steve Keen explains in this week’s podcast, Modern Monetary Theory suggests the money doesn’t need to be paid back, and tax is really on a mechanism for controlling the money supply. Phil Dobbie looks at some of the crazy taxes that have been introduced, many to do with changing behaviour or distributing wealth. Both noble aims, but the execution might have left something to be desired. Hosted on Acast. See acast.com/privacy for more information.

It seems Putin will not be satisfied until he has a puppet leader installed in Ukraine to replace what he’s called their Nazi leader – he’s Jewish by the way. This week Phil Dobbie talks to Steve Keen about Russia’s motivations for the invasion. None of them justify the action, but a bit of history helps explain the animosity between the east and the west. Meanwhile, the approach of sanctions will hurt countries depend on Russian resources, and will they have any impact on the crazed Russian leader? Hosted on Acast. See acast.com/privacy for more information.

A society riddled with debt is a society that is reluctant or unable to spend. A lot of that debt has now found its way into housing, with mortgages higher than ever. That’s money we’re using to pay off our home loan that we could be spending keeping the economy moving. In short, its slowing the speed at which money circulates. So, how do we fix it? The answer is get rid of the debt. And Steve Keen has a cunning plan. A monetary reset. How would it work? Phil Dobbie explores the idea in detail with Steve on today’s Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

Last year Andrew Bailey, the Bank of England Governor, spoke optimistically about how the UK economy would bounce back because so many people had stashed away money in their savings accounts. But, at the same time, we also saw rising levels of debt. This week, Phil Dobbie asks Steve Keen how you can have rising savings and debt at the same time. If you have spare cash sitting in your bank account, wouldn’t you use it to pay off your debts. The fact that people are not doing that tells us something about the state of the economy. And where did all these extra savings come from anyway? And why did they never materialise into a massive spending splurge like the Governor had predicted? Hosted on Acast. See acast.com/privacy for more information.

House prices in Australia continue to rise. According to Domain’s House Price Index, prices in Sydney have risen by a third in the last year, to a median value of $1.6 million. Housing affordability has never been a bigger issue, but how do you bring prices down when two thirds of the population are owner occupiers. That’s a question Phil Dobbie puts to Steve Keen, as he explains his two-pronged approach to containing house prices – first, limiting the value of loans to a multiple of the rental value of a property and, secondly, a big reset, which sees debt repaid and bonds issued to those who don’t currently own a property. Would it work, and could it be explained in a way that the voting population will understand? Hosted on Acast. See acast.com/privacy for more information.

Central banks control the interest rate through the decisions of their various monetary committees. Almost all of them are set to raise rates multiple times this year. But what do they basis this decision on? These days it is related to the rate of inflation, but to what extent is that driven by the amount of money in circulation. Can the central bank control both? And what about the velocity of money? All questions Phil Dobbie puts to Steve Keen in this week’s Debunking Economics podcast, along with the question, what if we didn’t change interest rates at all? Hosted on Acast. See acast.com/privacy for more information.

One of the surprises as we emerge from the worst of COVID (hopefully) is what’s being called the Great Resignation. Even though employment levels in most countries remain below pre-pandemic levels, that’s not stopping those who hung onto their jobs through the crisis from leaving in their droves. So, what’s driving this trend. Prof Steve Keen suggests it’s a “kick in the balls to the gig economy”. But what happens next? Already central banks are lifting interest rates, fearful of rising wages pushing inflation higher. How is that going to work out. Tune in to this free half-hour podcast as Phil Dobbie talks to Steve about what’s driving this dramatic shift in the labour market.   Hosted on Acast. See acast.com/privacy for more information.

Even the most ardent supporters of small government will agree there are times when governments need to offer subsidies to companies and industries. Paying for the furloughing of workers during the pandemic was one unavoidable example. But are their times when subsidies can distort the economy in unforeseen ways. The support for the food industry that promotes livestock over plant-based diets is a prime example. This week Phil Dobbie asks Prof Steve Keen whether there a better way of supporting industries without complex subsidies? Hosted on Acast. See acast.com/privacy for more information.

Around the world we have seen the size of the money supply increasing considerably over recent decades, but none more so than the last couple of years, as governments spend like crazy to support people during lockdowns and illness. In the UK the amount of money in circulation has increased by almost £200 billion. Phil Dobbie asks Steve Keen if there are consequences of growing the monetary base so quickly, and what’s the role of the central banks in controlling this supply?  Hosted on Acast. See acast.com/privacy for more information.

There are a lot of people questioning the direction of conventional economics, yet, even after the biggest spending splurges ever made by governments outside wartime, there is still a lot of talk about fiscal conservatism, paying back the debt and balancing the budget. But contrarian voices question whether that is the best way forward, whilst others are seeing an end to fiat money and are buying into alternatives, like Bitcoin. In this free half hour podcast Phil Dobbie and Steve Keen look at those questioning the way our economies run and the contrarians who believe there’s a better way; contrarians who don’t agree with each other. Hosted on Acast. See acast.com/privacy for more information.

Is a negative trade balance such a bad thing? Some countries with a bit deficit seem to be doing okay, like American, even the UK to an extent, whereas others, like Japan have a trade surplus and a economy on the road to nowhere. This week Phil Dobbie and Steve Keen discuss how important is a trade balance for the overall good of an economy. And what about jobs? Donald Trump was concerned his trade deficit was giving away jobs to China. Was he right about that? And what about the strange suggestion from Modern Monetary Theorists that exports are bad, imports are good for an economy? Hosted on Acast. See acast.com/privacy for more information.

Economics works so well because we al have perfect information about everything, all the time. Right? We choose products at the best price because we know all about all products and their prices, so we can make the best choice. That means we can all pursue our own self-interests to provide the most efficient outcome for any situation. Huh? This week Phil Dobbie talks to Steve Keen about the myth of perfect information and the equally as convoluted theories around asymmetric information. But are we getting closer to this supposed information utopia, thanks to the internet? Or is it the supplier who is gathering perfect information, about us? Hosted on Acast. See acast.com/privacy for more information.

If capitalism is driving everyone to make a profit – and we all save a bit of that profit and therefore accumulate more wealth, does that mean everyone can be better off, if we all run profitable businesses? Does that mean Boris Johnson’s idea of levelling up is a good one? Or is there a constraint on how much wealth there is. Today on the Debunking Economics podcast Steve Keen explains to Phil Dobbie the difference between stocks and flows. Profits are flows, whereas accumulated wealth is a stock. He shows how everyone cold theoretically create a profit, but if you increase your wealth you are doing so at the expense of someone else. Once again, it’s easier to explain if you understand double entry bookkeeping. Hosted on Acast. See acast.com/privacy for more information.

During his Tory Party conference speech, Boris Johnson said that he remembers something about Wilfredo Pareto, in the “cobwedded attic of (his) memories”. In his mind, Pareto was all about levelling up – that you can improve the lot of some of society without anyone else losing out. But Pareto is most famous for the 80:20 rule – at the time he observed that 80 percent of land in Italy was owned by 20 percent of the population. It’d be worse than that today. For example, in England half of all land is owned by less than one percent of the population. So, can you really expect to be able to improve the wealth of everyone? If the poor suddenly get rich, won’t they demand the swathes of land that is the domain of the uber-wealthy? Plus, doesn’t climate change place a ceiling on growth that puts paid to Jonson’s ambitions. Phil Dobbie talks to Prof Steve Keen, and asks whether levelling up is a vain hope, and whether Pareto ever argued the case in the first place. Hosted on Acast. See acast.com/privacy for more information.

Donald Trump believed that China was manipulating its currency to get an unfair advantage against the US. This week Professor Steve Keen explains why manipulating currencies isn’t that easy – and the US will always be at a disadvantage when it comes to competing for international trade. He talks with Phil Dobbie about why countries moved to floating exchange rates, and how the system would have worked better if people had listened to Keynes. Meanwhile, it’s helped create an industry that transacts almost $2.5 quadrillion each year! Hosted on Acast. See acast.com/privacy for more information.

The world’s leaders are getting together in the UK at the end of this month to discuss how to tackle climate change. Meanwhile, fuel prices are rising higher and higher, and increasing talk of inflation. Prices are rising because, quite simply, demand is rising but supply is still constrained. Gas supplies in Europe are dependent on Russia and renewable energy has been held back by low winds and other weather-related influences. Now, to meet demand, countries are stepping up their use of fossil fuels. Energy supplies “at any costs” has been the approach in China. Phil Dobbie asks Steve Keen whether we’ll ever reach renewable targets whilst the energy industry is in private hands. In the UK how much of the problem we now face is the result of Thatcher-era philosophies that believed competition would yield greater amounts of lower priced energy? Hosted on Acast. See acast.com/privacy for more information.

Governments have been spending their way through the pandemic, so what happens to that money? Regular listeners will understand how this spending gets added to the money supply, but then what? Steve Keen looks at the impact of government spending on the private sector, and Phil Dobbie asks if this is a prime example of modern monetary theory in action? Could the COVID years be used as the case study of how MMT works? There’s also some discussion on whether government handouts, like furlough payments, were the best approach. Would tax cuts have had the same impact? And what’s the relationship between an increase in the supply of money and the velocity of that money? If the government is injecting cash but we’re not spending it, is it really having the impact governments had hoped for? Hosted on Acast. See acast.com/privacy for more information.

Steve Keen is a man of many surprises. His latest is that he is going to stand for the Senate in New South Wales. He’s packing his bags and heading back to Australia, for an election that will be held early next year. He’ll be one of six senate candidates in NSW for the New Liberals. So, is this a good move? From an academic to a politician, from developing and challenging theories to creating soundbites for TV? Phil Dobbie asks why he is making the move, what are his chances and what does the New Liberal party stand for. And could this spell the end of our weekly podcasts? Hosted on Acast. See acast.com/privacy for more information.

COVID is causing supply disruptions the world over, evidenced by disruptions to supply chains and rising producer prices and consumer prices. Central banks are quick to suggest this is a temporary measure, and inflation will start to fall as quickly as it rose. And yet, they are also making noises about raising interest rates, as a way of controlling inflation. Last week the Bank of England was hinting that could happen sooner, rather than later, even as they implement quantitative easing. Phil Dobbie asks Prof Steve Keen whether there’s any merit in lifting rates in an economy struggling to recover. And what if inflation is here to stay? What policy can work for an economy where supply falls well short of demand and prices rise beyond the means of many lower paid workers? Hosted on Acast. See acast.com/privacy for more information.

Central banks around the world are at different stages of how they supposedly deal with the COVId-19 crisis. Most are implementing some form of QE, but many are now reducing their purchases, and some are even lifting interest rates. How can they all have a different monetary approach to dealing with the same crisis? And can any claim to have been operating independently, buying up the increasing amount of debt issued by their respective governments? With the big four central banks (the BoE, the ECB, the Fed and the BoJ) having amassed $24.5 trillion in government bonds, does anybody really expect they will ever get their balance sheets back down to zero? If not, have they really embarked on MMT but are afraid to admit it? Phil Dobbie talks to Prof Steve Keen. Hosted on Acast. See acast.com/privacy for more information.

Whilst the UK still lumbers under high COVID infection rates, and the economic recovery stalls, with GDP growth now at a trickle, the government wants to raise taxes. Even if you believed it was a fair tax, is next April – when the rise kicks in – the time to be taking spending money out of people’s pockets. But, as Phil Dobbie discusses with Prof Steve Keen, this is far from a fair tax. Those earning over £50,000 per year will pay disproportionately less than those on lower incomes. The money will help to fund the health care sector which is predominantly serviced by for-profit companies, some of whom are paying their senior staff very handsome salaries. We’re told we can expect more tax rises soon as the Tory government scrambles to reduce its debt burden. All of this ignores, of course, the ideas of Modern Monetary Theory (MMT) that suggests governments can overspend if the excess money is used to create jobs. Even if you ignored MMT, doesn’t the issue of caring for the elderly, raise the obvious question about inheritance tax. Isn’t it time to tackle Britain’s problem of hereditary wealth? Hosted on Acast. See acast.com/privacy for more information.

There’s a lot happening with China right now. First, they are extending their social and commercial controls, which is adding uncertainty to foreign investors looking to get involved with Chinese firms. Maybe the Communist Party likes it that way. There’s also the risk that a more cocooned China could play a stronger military role in the Asia Pacific region. Then there’s the ever-expanding debt – private and government. Hilliard MacBeth, a Debunking Economics listener asks whether private sector debt, in particular, will create a problem. Hosted on Acast. See acast.com/privacy for more information.

Following on from a fortnight ago, what happens as resources start to become scarce? We’re already seeing the short-term impact of supply chain disruption because of COVID, but what when this becomes more common, and we have to get used to the idea of not always getting what we want? Prof Steve Keen suggests that rationing of goods might be the only way forward, but Phil Dobbie asks whether a shift to a more localised service-oriented economy might cut our demand for resources, particularly if the prices become prohibitively expensive. Hosted on Acast. See acast.com/privacy for more information.

More students than ever are off to university next month because of the A level grade inflation, accentuated by teacher assessments replacing exam results because of COVID. How useful is it to society to have more and more people studying at university? Is it adding to the GDP of the country? In today’s podcast Steve Keen suggests that we are devaluing a university education, which helps nobody. He explains why. And Phil Dobbie suggests, for those who don’t reach university standards – or who simply don’t want to go – could another two years of A levels be the answer? Hosted on Acast. See acast.com/privacy for more information.

We’ve talked about the climate change crisis on the Debunking Economics podcast, but there’s a broader issue we all face, highlighted in the Club of Rome back in 1972. We are chewing up resources faster than they can be renewed or sourced. It’s not just oil, but iron ore for steel production and previous metals used in microprocessors. Simon Michaux, associate professor at the Geological Survey of Finland, joins Phil Dobbie and Steve Keen to talk through the scale of the issue and how it’s already impacting the economy. Hosted on Acast. See acast.com/privacy for more information.

Many governments have done an excellent job at propping up businesses during the pandemic. For example, paying companies to furlough workers will, in theory, enable those businesses to quickly bounce back, with a workforce ready to go. But what if the pandemic drags on for years to come? Already governments are talking about how they will claw back the massive increase in government spending. And, whilst large corporations might have the cash to survive, perhaps after a little restructuring, small businesses have the most to lose. They have also borrowed the most. So how does the global economy come back from this? Prof Steve Keen tells Phil Dobbie that it’s a shame this hasn’t been seen as an opportunity to embrace modern monetary theory. But it’s been shunned by governments and central banks who prefer the old way of doing things, which will be highly detrimental to all of us, but particularly those most in need. Hosted on Acast. See acast.com/privacy for more information.

Karl Marx never advocated violent revolution, but he did expect that the power balance between capitalists and workers would change. On today’s podcast Steve Keen tells Phil Dobbie that Marx wrongly expected that profits would ultimately shrink, so workers would be fighting for a slice of a shrinking pie. That’s not happened. Perhaps the main reason we’ve avoided a violent revolution is because the poor have become richer, just not as much as the very rich. It could be a different story soon though, if the pie starts shrinking. Hosted on Acast. See acast.com/privacy for more information.

Steve Keen has often said, the problem with economics in, it ignores thermodynamics. That’s not always been the case. Georgescu-Roegen, a Romanian economist, wrote The Entropy Law and the Economic Process in 1971, which embraced the orle of energy and waste in economics. But we’ve taken backward steps since then. This week Phil Dobbie asks Steve Keen to explain what thermodynamics is and why it is critical to the forward direction for economics. Without it, can we really save the planet? Hosted on Acast. See acast.com/privacy for more information.

Even the most ardent free marketeer accepts that there is some degree of subsidy needed to support low income earners or necessary industries that are not commercially viable. This has particularly been the case through the pandemic. But what’s the best way of applying these subsidies? If you pay directly to companies will you be inhibiting efficiencies and competition. If you pay directly to consumers how do you know they will spend the as you intended? Should governments be offering payments to individuals that can only be spent in a particular way? And how do you avoid political motivation behind the issuing of subsidies. This week the government published the UK Subsidy Control Bill, which sets out the rules that apply to local authorities and national governments, but not the UK government. To no media scrutiny whatsoever. Hosted on Acast. See acast.com/privacy for more information.

From day one economics students are taught that their discipline is all about the optimal allocation of resources. The concept of scarcity is at the very heart of how we are supposed to think. And yet, as Prof Steve Ken explains this week, that scarcity doesn’t really exist. There’s plenty of people available to do jobs, there’s masses of untapped energy potential from the sun. This challenges the idea of opportunity cost – why do A or B when you can do A and B? Ironically, the one recource which is scarce, the environment, is the one element that economics has traditionally blithely ignored. So, if its not to do with managing the allocation of scarce resources, what should be the real definition of economics? Phil Dobbie suggests one – perhaps you can do better. Hosted on Acast. See acast.com/privacy for more information.

Canada and the west coast of the US have been hit with extreme heat the last week. The town of Lytton in British Columbia reached 49.5C, the result of a heat dome caused by static high-pressure. It’s another reminder that the world has to act on climate change. This week the ECB’s Christine Lagarde talked about how the EU needs to see around €330 billion every year by 2030 to achieve Europe's climate and energy target. Couldn’t they just issue this as bonds, in the same way they have with the Pandemic Emergency Purchase Programme? And what about Rishi Sunak’s plan in the UK to issue green bonds for regular households to invest in? Will either of these proposals create new money, or simply redirect spending away from other non-green initiatives. Be prepared for another discussion between Phil Dobbie and Steve Keen on when money is actually created and whether some of the proposals could actually destroy money, hindering our efforts to tackle climate change. Hosted on Acast. See acast.com/privacy for more information.

Businesses and politicians have worked tirelessly to reduce the power of workers and dissemble unions. Of course, nobody was better at it than Margaret Thatcher. But has she, and all those did their damnedest to reduce the power of unions, actually done the country a disservice? Do economies function better with strong unions? Are they the necessary counter to a system that allows companies and financiers to push wages down to the lowest possible level leading to slow economic growth? Questions Phil Dobbie puts to Steve Keen in this week’s Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

Boris Johnson has enjoyed photo opportunities this week with Australian Prime Minister Scott Morrison with the announcement of an ‘in-principle’ free trade agreement between the two countries. It’s the first new one for the UK outside those that already existed through the EU. Great news for biscuit eaters, because Tim Tams are so much better than Penguins. But it’s seen as bad news by UK farmers who adhere to standards that don’t exist in the UK. Like hormone fed beef. So, is it a bad deal? And what about the idea for free trade generally. The argument since Ricardo’s day was that for agricultural it removes the constraint of land and, therefore, the law of diminishing marginal return. That should make goods cheaper, even those made here. Is the theory right? Hosted on Acast. See acast.com/privacy for more information.

The world is fixated with the present. We want to earn money quickly and spend it quickly. CEOs don’t care about much beyond their stock options, politicians only work to getting re-elected, consumers want instant gratification. It’s no wonder then that we’re not prepared to make compromises for long term consequences, like climate change, because the economic system we use has no way of managing our investment in the future. Is there a better way of managing the economy, in a way that ensures we look after the planet and provides for you in your old age? Hosted on Acast. See acast.com/privacy for more information.