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The non-existence of economic laws | Real-World Economics Review Blog
from Lars Syll In mainstream economics, there’s — still — a lot of talk about ‘economic laws.’ The crux of these laws — and regularities — that allegedly exist in economics, is that they only hold ceteris paribus. That fundamentally means that these laws/regularities only hold when the right conditions are at hand for giving rise…
In search of radical alternatives | Real-World Economics Review Blog
from Crelis Rammelt and current issue of RWER Our presumed dominion over nature is an illusion. No matter how clever technological innovations may seem, they remain subject to the laws of thermodynamics. Consequently, a growth-centered capitalist economy finds itself trapped in futile attempts to completely decouple itself from nature – aiming for a 100% circular, service-oriented and…
Cutting-edge macroeconomics … | Real-World Economics Review Blog
from Lars Syll No sooner had I finished my comment on the irrelevancy of economics but I had confirmation — albeit unwittingly — in this morning’s Financial Times. There on the editorial page was a short column by Soumaya Keynes talking about the rise of Hank. For those of you not on the cutting edge,…
The eclipse part wo | Real-World Economics Review Blog
from Peter Radford What are we to say of a discipline that steadfastly ignores reality in its pursuit of ever more formality in its methods? Wow. Steve Levitt has really shaken me. I come not to mock, but to follow up … Stand up and take a bow Ben Moll! You daring soul. Clearly I…
Chang’s “Edible Economics” | Real-World Economics Review Blog
from Junaid Jahangir and current issue of RWER [Ha-Joon] Chang’s latest book Edible Economics (2022) crystallizes the narrative that he has developed through his popular books over the years. . . . I have reviewed the salient ideas as follows in a bid to draw out lessons I could share with my ECON 101 students.…
Chicago economics — nothing but pseudo-scientific cheating | Real-World Economics Review Blog
from Lars Syll Unlike anthropologists … economists simply invent the primitive societies we study, a practice which frees us from limiting ourselves to societies which can be physically visited as sparing us the discomforts of long stays among savages. This method of society-invention is the source of the utopian character of economics; and of the…
The increasing collusion between . . . . . . | Real-World Economics Review Blog
from a comment by Ikonoclast “A truth is permitted only a brief victory celebration between the two long periods where it is first condemned as paradoxical and later disparaged as trivial.” – Arthur Schopenhauer. As they break new ground, the Capital as Power theoreticians will encounter the “Schopenhauer Effect” over and over. When you point…
Wealth catapulted up | Real-World Economics Review Blog
from Blair Fix and current issue of RWER Speaking of competition and losers, Ronald Reagan set the tone of the neoliberal era when, in 1981, he fired 11,000 striking air-traffic controllers (Houlihan, 2021). The message? Workers were losers who would be subjected to the discipline of competition. Reagan called it ‘morning in America’. But really, it was…
The need for a new economic paradigm | Real-World Economics Review Blog
from Giandomenico Scarpelli and current issue of RWER As documented in the previous paragraph, in recent years it finally seems that most orthodox economists have become more aware of the catastrophic outcomes of climatic disturbances; but at this point the traditional policy they recommend could be insufficient to meet the goals set at international level.…
Weekend read – Enlightenment epistemology and the climate crisis | Real-World Economics Review Blog
from Asad Zaman Introduction At first glance, it appears that industrialization, with its rampant overproduction and overconsumption, stands as the primary antagonist in our climate crisis narrative. However, this surface-level perception overlooks a more profound shift that lies beneath: an epistemological revolution birthed in the European Enlightenment. This era marked a pivotal transition in our…
There ain’t no libertarians, just politicians who want to give all the money to the rich | Real-World Economics Review Blog
from Dean Baker David Wallace-Wells had a column discussing the trip by Javier Milei, Argentina’s new president, to the World Economic Forum (WEF) in Davos, Switzerland. The WEF is an annual gathering of many of the world’s richest people, where they also invite politicians, academics, and others who they think may amuse them. According to Wallace-Wells, Mr.…
What’s the use of economics? | Real-World Economics Review Blog
from Lars Syll The simple question that was raised during a recent conference … was to what extent has — or should — the teaching of economics be modified … The simple answer is that the economics profession is unlikely to change. Why would economists be willing to give up much of their human capital,…
Four parking places and a car. Let’s make that a stellar charged wedding. | Real-World Economics Review Blog
Graph 1. The increasingly inefficient use of cars Summary: parking places are a woefully inefficient use of space. And ugly. Cars are a woefully inefficient use of machinery. Using them, in combination with bi-directional charging of cars, to produce solar can amend this. Doing this the right way, parking places can be beautified, costs will…
new issue of Real-World Economics Review | Real-World Economics Review Blog
Please click here to support this open-access journal and the WEA real-world economic review issue no. 106 download whole issue How entropy drives us towards degrowth Crelis Rammelt 2 “It is much too soon to act “ - Economists and the climate change Giandomenico Scarpelli 8 Addressing the climate and inequality crises: An emergency…
Long Read – Is Bitcoin more energy intensive than mainstream finance? | Real-World Economics Review Blog
from Blair Fix When it comes to Bitcoin, there’s one thing that almost everyone agrees on: the network sucks up a tremendous amount of energy. But from there, disagreement is the rule. For critics, Bitcoin’s thirst for energy is self-evidently bad — the equivalent of pouring gasoline in a hole and setting it on fire.…
Weekend read – The trouble with words | Real-World Economics Review Blog
from Peter Radford Words are not ideas. They are our means to capture ideas and make them tangible. The problem is that words are a porous net that inevitably lets some accuracy slip away, but sometimes captures irrelevant detail that shines brightly in the moment and then dulls in the light of later thought. Trying…
In a free market, drugs are cheap, government-granted patent monopolies make them expensive | Real-World Economics Review Blog
from Dean Baker This simple point was left out of a Washington Post article on the legal battle surrounding the Biden Administration’s efforts to negotiate lower prices for drugs purchased by Medicare. This point is important because the drug companies are definitely not trying to get the government out of the market, as the industry claims. The industry is…
I heard there’s some good shit on TV tonight … | Real-World Economics Review Blog
from Lars Syll Time is a scarce resource on television. However, if one still — as is so often the case nowadays — uses precious airtime for trivial matters and meaningless ‘entertainment,’ there must be a reason. Television is — still — for a large part of the population one of the primary sources of…
Is “greedflation” over? | Real-World Economics Review Blog
from Dean Baker Peter Coy used his column yesterday to beg President Biden not to use the term “greedflation” to explain the runup in inflation since the pandemic. I am sympathetic to much of his argument, most importantly, the idea that corporations suddenly turned greedy is a bit far out. As Coy notes, corporations are always greedy.…
Why and how economics must change | Real-World Economics Review Blog
from Jayati Ghosh Economics needs greater humility, a better sense of history, and more diversity The need for drastic change in the economics discipline has never been so urgent. Humanity faces existential crises, with planetary health and environmental challenges becoming major concerns. The global economy was already limping and fragile before the pandemic; the subsequent…
“The Political Economy of COVID-19” | Real-World Economics Review Blog
New book from WEA Books At the beginning of 2020, the outbreak of Covid-19 and the lockdown practices imposed worldwide generated a global economic crisis that challenges the traditional explanations of economic downturns . Like the economic crisis of 2008, the Covid-19 pandemic crisis was systemic and global, and this collection of essays examines it…
Utility theory — explaining everything and nothing | Real-World Economics Review Blog
from Lars Syll Despite the rise of behavioral economics, many economists still believe that utility maximization is a good explanation of human behavior. Although evidence from experimental economics and elsewhere has rolled back the assumption that human agents are entirely self-interested, and shown that altruism and cooperation are important, a prominent response has been to…
The Commons of Ameland: An Uncommon History. | Real-World Economics Review Blog
There is no 'tragedy of the Commons.' But a tragedy of the absence of Commons-as organizations, let's call it 'the tragedy of uncommons', does exist. Below, I will provide the example of the island of Ameland in the Northern Netherlands, in line with the historical examples of successful Commons mentioned by Elinor Ostrom (especially those…
Income inequality in the USA increased with each expansion | Real-World Economics Review Blog
Pavlina R.Tchemevra is the source of the data for this chart which appeared in September 2014 in the New York Times in an article by Neil Irwin “The Benefits of Economic Expansions Are Increasingly Going to the Richest Americans”. Can anyone source or provide an updated version of this chart?
Complexity and Econ 100 | Real-World Economics Review Blog
from Maria Alejandra Madi and RWER issue 106 Complexity is characteristic of a system that preserves the differentiation among its constituent elements while also preserving their identity. Complexity also implies dynamic systems, that is to say, open totalities of interrelated parts constantly changing in spacetime. The complexity of a system is related to the coexistence of intertwined parts in…
The problem with economics — too much maths, too little history | Real-World Economics Review Blog
from Lars Syll Mainstream economists have always wanted to use their hammer, and so have decided to pretend that the world looks like a nail. Pretending that uncertainty can be reduced to risk and that all activities, relations, processes, and events can be adequately converted to pure numbers, have only contributed to making economics irrelevant…
Three principal strategies for theorizing a “new economics of ecological limits” | Real-World Economics Review Blog
from Richard Parker and RWER issue 106 Back in the late 1960s, a tiny band of unconventional economists encountered an environmentalism in the midst of radical rethinking. Prompted by Carson’s Silent Spring, capitalism and its science were being accused of major crimes—against nature, our fellow species and humankind itself. Hiroshima had shattered confidence in the benignity of Progress,…
Game theory — a waste of time on a staggering scale | Real-World Economics Review Blog
from Lars Syll We certainly agree that regularities or models that explain or that give heuristic value over many different cases are highly desirable. But ones that do neither are not — especially if they use up huge resources along the way. When looking at the details, the Prisoner’s Dilemma’s explanatory record so far is…
Internalizing “externalities” | Real-World Economics Review Blog
from Victor Beker and RWER issue 106 There was a time when it was thought that the main task of economics was to assure economic growth. For example, John M. Keynes predicted that “the day is not far off when the Economic Problem will take the back seat where it belongs” (Keynes 1931: 6). Then, once…
“I object to the question on which this volume focuses.” | Real-World Economics Review Blog
from Richard Norgaard and RWER issue 106 I object to the question on which this volume focuses. It assumes that biophysical limits are real and knowable rather than a human construct associated with a particular understanding of how natural systems might behave. Limits have been an extremely useful construct for critiquing the even simpler construct…
Why economics is an impossible science | Real-World Economics Review Blog
from Lars Syll In a word, Economics is an Impossible Science because by its own definition the determining conditions of the economy are not economic: they are “exogenous.” Supposedly a science of things, it is by definition without substance, being rather a mode of behavior: the application of scarce means to alternative ends so as…
Introducing nonlinear and non-equilibrium perspectives into ecological economics | Real-World Economics Review Blog
from Ping Chen and RWER issue 107 Economic Complexity vs. Neoclassical Simplicity Complexity science originated from astrophysics when Henri Poincaré discovered the three-body problem had no analytical solution in 1899. The discovery and development of deterministic chaos in the 1960s to 1990s found wide evidence that nonlinear deterministic systems only have limited predictability. Ilya Prigogine further…
Do you want to subsidize rich people’s political contributions? | Real-World Economics Review Blog
from Dean Baker In prior decades we in the US used to try to restrict the ability of the rich and very rich to buy elections. We have limits on campaign contributions to candidates and political parties. Until the Supreme Court’s 2009 decision in Citizens United case, corporations were prohibited altogether from contributing to politicians…
Lessons from monetary history: The quality-quantity pendulum | Real-World Economics Review Blog
from Asad Zaman and WEA Pedological Blog In the previous section, we saw how economic theories changed from classical to Keynesian to Monetarist over the course of the 20th century. These changes were driven by historical events. Taking this historical context into account deepens our understanding of economic theories. This contrasts with conventional methodology of economic…
“Complexity” in economics | Real-World Economics Review Blog
from Maria Alejandra Madi and RWER issue 106 Anthropogenic climate change and ecological breakdown are now major threats to human life and other species. It is widely acknowledged that mainstream economic theory and especially neoclassical theory lack adequate concepts to address these problems and arguably have contributed to them through misdirection and delay. “Complexity” sciences,…
Mainstream economics — an explanatory disaster | Real-World Economics Review Blog
from Lars Syll To achieve explanatory success, a theory should, minimally, satisfy two criteria: it should have determinate implications for behavior, and the implied behavior should be what we actually observe. These are necessary conditions, not sufficient ones. Rational-choice theory often fails on both counts. The theory may be indeterminate, and people may be irrational. In…
Weekend read – Neoliberal angst? | Real-World Economics Review Blog
from Peter Radford I wonder why it is that neoliberals so reject the label we have given them. Is it because they’e embarrassed? I don’t think so. They all seem very proud of their attachment to the old order. Every so often one of them will surface and proclaim bitterly that they are misunderstood and…
Basics of Monetary Economies | Real-World Economics Review Blog
from Asad Zaman and WEA Pedological Blog . . . conventional modern textbooks of economics do not correctly describe monetary economies.. . . For instance, a popular textbook by Mankiw states that: . . . I am planning to write a textbook on monetary economies. I will draft it section by section and chapter…
A future threat has become a present reality and time is against us | Real-World Economics Review Blog
from Jamie Morgan and RWER issue 106 ‘How can we construct an economics consistent with the biophysical limits to economic growth?’. As any ecological economist is aware, this is a foundational issue not an afterthought chapter tacked on to the end of a textbook or delegated to a sub-disciplinary specialist who can ‘deal with that…