The Debt Delusion – Living Within Our Means and Other Fallacies

JWeeksDebtDelusionJohn Weeks has a new book out, The Debt Delusion, which takes a progressive line in debunking a number of what he terms the myths that surround fiscal policy.

Weeks is an Emeritus Professor of Development Studies at SOAS, and coordinator of the Progressive Economy Forum. He is heavily critical of austerity and proposes an ‘anti-austerity’ agenda on tax and spending for today’s policymakers.

Weeks has long been critical of mainstream economics in general, not least in his previous book for the layman, Economics of the 1%.

Summing up his proposed fiscal policy framework, he writes (p.182-3): Continue reading

On Joan Robinson

Joan Robinson was a brilliant economist at the University of Cambridge and a member of the ‘circus’ of thinkers led by John Maynard Keynes in the 1930s. In the lecture below, John Eatwell, a pupil and co-author of Robinson, and who advised the British Labour Party on economic policy in the 1980s and 90s, gives a very clear and stimulating introduction to her life and work.

Eatwell covers topics in economics addressed by Robinson that remain highly relevant today, such as disguised unemployment and the trade protectionism that tends to result from a deflationary global economic environment.

As the talk makes clear, Robinson published path-breaking work on imperfect competition as distinct from theories of perfect competition and monopoly; she later contributed to the development of Keynes’ magnum opus The General Theory, which put forward an explanation for the persistence of mass unemployment under capitalism and gave birth to the modern discipline of macroeconomics. After the war she attempted to extend Keynes’ theory to deal with problems of economic growth in a number of books and papers, particularly her own magnum opus The Accumulation of Capital.

A strong intellectual personality and something of a zealot, one of Robinson’s most notable quotes regarding economics was: “I never learned mathematics, so I’ve had to think”.

As a liberal socialist, latterly she increasingly favoured central planning to achieve full employment and social justice, as well to promote economic development in the poorest countries. On this, as well as in her enthusiasm for Maoist China, she was perhaps naive and misled and these aspects of her thinking discredited her somewhat in her later years.

Robinson also supervised Amartya Sen who went on to win the Nobel Memorial Prize for his work on welfare economics.

Thanks to the blog The Case For Concerted Action for sharing this video.

An abundance of wealth and a scarcity of capital: resolving the paradox

One of the major economic phenomena of our time seems to be an enormous accumulation of elite wealth amidst rising inequality within nations, even while output and productivity growth, particularly since the Great Recession, have been mediocre across much of the world.

In his book Capitalism without Capital, Alan Shipman draws together a wealth of economic ideas, from the theory of the global savings glut and the Cambridge controversies in the theory of capital to Thomas Piketty’s writings on inequality, to argue that we are living in an era of abundant ‘wealth’ alongside a shortage of real productive capital assets. It is growth in the latter which remains the driver of rising living standards for the majority. Continue reading