Debunking Economics - the podcast

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.

Today on the podcast Phil Dobbie talks to Steve Keen about the value of things. Supposedly, price is a substitute for value, meaning if someone is prepared to pay more for something then they must value it more. But as they discuss, that only applies if everyone has the same amount of money. A poor household will place greater value, as a proportion of their wealth, on heating their home. A rich household will see extra use of that same resources as a discretionary item that they place little value on, particularly relative to their income. So, is the concept of value another broken element of a modern capitalist economy, and is there a way to allocate resources more effectively? We know, from the Soviet experience, that getting the state to do it creates even worse results. Hosted on Acast. See acast.com/privacy for more information.

US inflation is now running at 4.2% on an annual basis, and producer prices the world over have been rising as input costs for product creep up. How much of this will be passed on to the consumer as companies struggle to absorb these costs – and what impact will these higher prices have on demand? Central banks are all toeing the same line, that rising inflation is only transitory, driven by supply chain disruption, so there’s n o need for them to respond by pushing up interest rates anytime soon. But will prices bounce back? In this week’s podcast Prof Steve Keen tells Phil Dobbie that the bigger concern, post-COVID, is going to be deflation. Listen in to find out why. Hosted on Acast. See acast.com/privacy for more information.