Over the weekend Liz Truss was singing her own praises, with a front-page article in the UK’s Sunday Telegraph. She is known, of course, for being the UK’s shortest-term Prime Minister after her plans for tax cuts (mainly for the wealthy) sent finance markets into a spin. In particular, bond prices collapsed and saw pension funds running low on collateral, forcing the Bank of England to step in. But was she wrong? Former Chancellor George Osborne said she made the mistake of cutting taxes without cutting spending. Does that make her the poster child of MMT supporters? She’d be horrified at the description, no doubt. This week Phil and Steve talk about what was good (if anything) and bad about Liz Truss’ economic plan.487660a055c71bc8d6cc950a3efd059b83f2adb0 Hosted on Acast. See acast.com/privacy for more information.

For most of us liquidity is an easy concept to understand. Have we got enough cash to pay our bills? For small businesses it is a simple case of managing your cashflow and ensuring your cash on hand exceeds your current liabilities. For banks it’s a mix of ensuring you have the capital to meet demands from depositors, as well as the reserves to meet interbank transfers. To ensure we have liquidity we ensure there is a buffer, to keep us out of trouble. But does that buffer keep us using money productively. Even though Paul Krugman is Steve Keen’s Professor Moriarty, can his babysitting voucher analogy help us to understand the impact of low levels of liquidity on a functioning economy where productivity capacity isn’t being fully utilised. Hosted on Acast. See acast.com/privacy for more information.

It would be a bold prediction to say that capitalism is on the way out. Nor should it be. It has provided growth and innovation for the global economy, but has it become too laissez faire? Phil asks Steve whether we need to return to the mixed-economy many of us grew up with – when governments controlled large essential sectors, such as transport and utilities, and imposed tighter regulations on those sectors open to private sector involvement. Are we seeing how unfettered capitalism creates more problems, even before we consider the impact it is having on the consumption of the planet’s resources?   Hosted on Acast. See acast.com/privacy for more information.

Conventional economics is built around the idea of opportunity cost. If there is a limited resource a decision has to be made about how best to use it. How is that principle applied when you look at Modern Monetary Theory, when governments can create money without limits until you have reached a point of full employment. There is no need to look at one choice over another. Perhaps you can do both? So, what determines how money is spent? Are those spending decisions left in the hands of politicians? Steve Keen says, to start with, the theory of opportunity cost should be ditched because it only applies at a personal level. He explains why that is, but agrees with Phil that politics is the big stumbling block when it comes to the practical application of MMT.  Hosted on Acast. See acast.com/privacy for more information.

After a disastrous couple of years, can things get any worse in 2023? Steve Keen and Phil Dobbie look ahead and actually find some positive take-outs from the precarious situation we find ourselves in. Inflation will fall, that’s taken as read. Politics will shift to the left, that’s already happening. But our future is still left in the hands of politicians who have no idea how to steer us to a more positive future. Hosted on Acast. See acast.com/privacy for more information.

Most people think economics can be summarised in just two words – supply and demand. Where they cross that determines price and as they move the price moves. But what if the supply curve is wrong, or meaningless. One of the first economists to question that was Piero Sraffa, an Italian economist who had grave misgivings about the law of diminishing returns. Steve Keen talks through Sraffa’s life and theories on this week’s Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

Economist Joseph Schumpeter's theory of creative destruction is explored in this podcast, highlighting the importance of innovation for business success. The discussion covers Schumpeter's unique views on equilibrium, profit, and the need for constant change in the economy. The hosts delve into Schumpeter's background, his shift to America, and the impact of his theories on modern economic thought.

Bill Phillips, rightly or wrongly, has a lot to answer for, because his work is drawn on by central banks when trying to determine the likely rate of inflation. But are they misinterpreting his theories? This week Steve Keen explains why there’s more to the Phillips curve than most people understand. There’s also a lot behind the man, from life on a farm in New Zealand, to engineering a radio in secret in a Japanese Prisoner of War camp. Listen in to hear the story of the man behind the infamous Phillips curve. Hosted on Acast. See acast.com/privacy for more information.

We continue our series looking at economists who influenced Steve Keens thinking. This week it’s American economists Richard Goodwin, who Steve says is the chief proponent of non-linear thinking in economics. He wrote Theories of Surplus Value, which was about business cycles happening without any exogenous shocks, from overaccumulation and overproduction His biggest weakness was that he didn’t accept the role of banks in money creation, as he highlighted in a letter to Steve in the 1990s. Hosted on Acast. See acast.com/privacy for more information.

Irving Fisher was an American economist whose book The Purchasing Power of Money looked at the relationship between money supply and price levels. In fact, to many he is seen as the father of monetarism, but on this week’s podcast Steve Keen explains how Fisher’s struggles with debt led him to develop his thinking on debt deflation as the cause of major economic downturns. He’s the first of a series of economists who have influenced Steve’s thinking, that we’ll be looking at over the next five weeks or so. Hosted on Acast. See acast.com/privacy for more information.