Modern Monetary Theory (MMT) (previously) is an alternative to neoclassical economics that holds that sovereign states that issue their own currency can't default on debts denominated in that currency (if you are the sole source of Canadian dollars and all your debts are in Canadian dollars, you can always pay those debts), and that deficit spending is normal (every dollar in circulation was "deficit spent," since the money to pay taxes enters the economy when the government spends it into existence), and that inflation isn't a mere function of government spending -- but rather, inflation occurs when governments and the private sector are bidding against each other for the same goods and services. Read the rest

Mariana Mazzucato (previously) came to prominence after the publication of her 2013 book The Entrepreneurial State, which described the way that robust state spending on large-scale R&D was critical to the kinds of commercial technological "breakthroughs" that the private sector liked to take credit for, and argued that the decades-long drawdown in public spending on the theory that governments were bloated and inefficient had stalled economic growth and technological progress because private firms systematically underinvest in research. Read the rest

Modern Monetary Theory (AKA MMT) is the latest incarnation of a long-running current in economic thought, once called Chartalism, which has gained prominence in recent years as an alternative to austerity economics, whose dictates have immiserated millions, destabilized world politics, and threaten the extinction of the human race thanks to climate inaction in the guise of "fiscal restraint." Read the rest

[[Generations of propaganda about the instability of "the commons" and the desirability of assigning property rights in everything has led the human race into a very dark place: now, two scholars, David Bollier and Silke Helfrich, have published Free, Fair and Alive, which offers a critique of the "Tragedy," case studies of working commons, and a path to a better world based on shared resources and commons-based production. -Cory]]

Could we please, finally, lay to rest the tendentious "tragedy of the commons" fairy tale that has poisoned the minds of at least two generations? The accurate story about the commons deals with its ability to address the intractable problems of our time -- wasteful economic growth, predatory markets, the climate emergency, savage inequality. The commons offers practical ways to develop non-capitalist social systems that meet needs while helping rebuild our ecosystems and create a sense of belonging.

This was a key reason why we wrote Free, Fair and Alive: The Insurgent Power of the Commons. At some point, Big Deceptions such as the "tragedy" fable become so deeply rooted they need to be confronted and debunked. One way to do this is to recognize the social realities and political potential of actual commons.

Robert Skidelsky is an eccentric British economist: trained at Oxford, author of a definitive three-volume biography of Keynes, a Lord who sat with the Tories as their economics critic during the Blair regime, who now sits as an independent who is aligned with Labour's left wing. Back in September, Yale University Press published Skidelsky's latest book, Money and Government: The Past and Future of Economics, a retelling of the history of economics as a discipline that seeks to uncover how economics' failings created the 2008 crisis and have only made things worse since. Read the rest

Modern Monetary Theory (previously) is an economic philosophy based on the idea that all state spending is "deficit" spending, since money comes into existence when the government spends it, and when the government raises taxes, it does so in order to take that money out of existence, both in order to control inflation and to limit the concentration of power in the hands of the wealthy. Read the rest

New US Census Bureau data shows that while the median household income for the United States (and 14 states within the USA) increased a bit from 2017 to 2018, "income inequality was significantly higher during the same period for the nation and nine states.... Maryland ($83,242) was among the states with the highest median household income and West Virginia ($44,097) was among the lowest."

More data and an interactive version of the map: "2018 Median Household Income in the United States" (Census.gov)

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Thomas Piketty, the French economist behind 2014's game-changing Capital in the 21st Century, has a new book, Capital and Ideology (out in France now, coming in English in 2020), which uses the same long-run economic series that Capital 21C benefited from to understand the relationship between wealth and ideology. Central to Piketty's thesis: that it's not enough to use class to understand how people vote -- you also have to take account of peoples' beliefs about class (this is a neat way of resolving the tension between traditional left class analysis and contemporary "identitarian" theories of leftist politics). Read the rest

Economists are famously fragile about their field; after all, this is the field that created a fake Nobel prize to give its practitioners the veneer of credibility and empiricism that actual sciences enjoy. Read the rest

After NYC raised its minimum wage from $7.25/h to $15/h this year -- the largest pay hike for low-waged workers in half a century -- the city's restaurants boomed, posting the highest growth levels in the country. Read the rest

A new report from the International Institute for Sustainable Development (IISD) estimates the cost of subsidizing a full transition to clean energy, and comes out with a figure that is only 10-30% of the subsidy presently given to the planet-destroying fossil fuel industries. Read the rest

Modern Monetary Theory is the latest incarnation of chartalism, the economic theory that holds that government spending -- and a federal jobs guarantee -- doesn't create inflation, so long as the spending is on things that the private sector isn't buying: if a factory can produce ten widgets but is only producing five because that's all the public sector wants to buy, the government can put in an order for five more widgets, putting more workers to work, without driving up the price of widgets. Read the rest

Not much detail, as the paper that makes the claim is only available at present to American Economic Association members; but in Did Austerity Cause Brexit? University of Warwick economist Thiemo Fetzer asserts that he found a "significant association between the exposure of an individual or area to the UK government’s austerity-induced welfare reforms begun in 2010, and the following: the subsequent rise in support for the UK Independence Party, an important correlate of Leave support in the 2016 UK referendum on European Union membership; broader individual-level measures of political dissatisfaction; and direct measures of support for Leave. Leveraging data from all UK electoral contests since 2000, along with detailed, individual-level panel data, the findings suggest that the EU referendum could have resulted in a Remain victory had it not been for austerity." (Image: Peter Damian, CC-BY-SA) (via Marginal Revolution) Read the rest

In all but a few of the most expensive cities in the USA, median rents on one- and two-bedroom apartments have fallen, sometimes quite sharply (for example, in NYC median asking rents on a one bedroom are down to $2940, a 12.8%/$430 decline from their peak in March 2016; while in Honolulu, rents are down 21.6% from their peak in Mar 2015, down to $1670 from $2130). Read the rest

Back in 2017, a law student named Lena Khan made waves in policy circles with the publication of her massive, brilliant, game-changing 24,000-word article in the Yale Law Journal, Amazon's Antitrust Paradox, which revisited the entirety of post-Ronald-Reagan antitrust orthodoxy to show how it had allowed Amazon to become a brutal, harmful monopoly without any consequences from the regulators charged with ensuring competition in our markets. Read the rest

38.8% more than the same period a year ago

Responding to Professor Sir Angus Deaton’s report into the causes of inequality, economics writer Chris Dillow provides an excellent list of eight ways in which unequal societies sacrifice overall economic growth and national prosperity to preserve the fortunes of their elites. Read the rest