Author Archives: geoffdavies1944

The Nature of the Beast: eBook now available

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The Nature of the Beast: how economists mistook wild horses for a rocking chair.

Mainstream free-market economics fundamentally mis-identifies the nature of market economies.  Its record is of retarded growth followed by disaster.  It counts costs as positives instead of negatives.  It is blind to how the present banking system destabilises the economy.  It is relentlessly materialistic and adversarial.  It ignores most of what we know about real people and the real world.

The result is pseudo-scientific gobbledygook, and the unstable, inequitable, undemocratic, destructive and unsustainable mess known as the global economy.

The Nature of the Beast draws out the real nature of market economies using modern knowledge of systems, human behaviour, ecology, biology and physics.  It points the way to stable, prosperous, democratic market economies that can support people, societies and the living world into the indefinite future.

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Bad theory, Bad Practice – Bad Ethics

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[ The three earlier posts “How free-market fundamentalists are hopelessly wrong” are extracted from a paper that is now published by the World Economics Association in an on-line conference on Economics in Society, the Ethical Dimension.  The full text of the paper follows, covering more deficiencies of the mainstream and some new modelling illustrating a more useful approach.   A pdf can be downloaded here (300 kb) ]

A profession that claims to understand economies, and that has gained power over the greater part of our societies, has big responsibilities.  The fundamental responsibility is to ensure its perception of economies gives some useful guidance to the behaviour of real economies.  Here mainstream economics fails utterly, and has been failing for a long time.  Worse, it actively resists alternative views that might overcome its failings.  Ethics do not come much worse than that.

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Precious Media

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Bob Brown has named it, the media are being precious.  First, they whine, people complained about Gina Rinehart buying a few media shares, then Treasurer Wayne Swan got stuck into the gang of three miners for using media as their personal megaphones, then the Finkelstein media review recommended some actual, semi-government enforcement of abuse rectification.  Oh, the outraged howls of injured innocence!

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How Free-Market Fundamentalists are Hopelessly Wrong, III: money, debt and blindness

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Part I presented the evidence that economies in the free-market era delivered only mediocre performance before crashing in the disastrous Global Financial Crisis.  Part II showed how the standard theory of free markets bears no useful resemblance to real economies, and its application amounts to pseudo-science.

Returning to the GFC now, there is a particular reason free-market economists claim the GFC was unforeseeable:  debt and money play no role in their standard equilibrium economic models.  They claim one person’s debt is another person’s asset, and so aggregate “demand” is not affected by debt.  This would be true in a barter economy, or if the banking system was based entirely on savings, for only in those cases would the extra purchasing power of the borrower be balanced by the reduced purchasing power of the depositor.

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How Free-Market Fundamentalists are Hopelessly Wrong, II: the theory

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In Part I we saw that readily available evidence shows clearly that economic performance in the free-market era that began around 1980 was already poor, even before the disaster of the Global Financial Crisis.  Here we look at the theory that underlies the free-market rhetoric, the so-called neoclassical theory.

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How Free-Market Fundamentalists are Hopelessly Wrong, I: the evidence

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Australia’s commentariat is thickly populated with right-wing guardians of the doctrine of free markets.  Many of them have been groomed by right-wing think tanks in a long-term campaign to drag our perceptions to the right.  Chris Berg and Sinclair Davidson, of the Institute of Public Affairs, are regulars on the ABC’s The Drum Opinion.  The campaign has been highly successful, as the free market mantra has taken over both sides of politics and dominates economic discussion.

However it is very easy to demonstrate the doctrine is hopelessly wrong.  The evidence is clear that free markets have retarded growth.  The theory underlying the doctrine is plainly and absurdly unrealistic.  The Global Financial Crisis was caused by financial markets building up mountains of debt, yet debt and money are absent from mainstream economic models and, apparently, from economists’ thinking.  Hence their blindness to the GFC’s approach, its cause and its remedy.

These problems will be covered in a three-part series.  First, the evidence.

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Cherry Picking 2 – Faking Global Cooling

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 My previous post showed how you can get a series of downward trends in global temperature data, even though the overall trend is clearly upwards (courtesy of Skeptical Science.

The most frequent false claim about the data is that there has been no warming since 1998.  For a long time I’ve wanted to demonstrate explicitly the cherry-picking behind this claim.  Now here it is (taking advantage of some free plotting software I recently downloaded, and generating an animated gif at a free online site).

HadCruT temperature analyses

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Down the up escalator: cherry picking for the global temperature trend you want

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Here is a graph I’ve wanted for a long time.  It shows how you can get the answer you want out of the global temperature data series.  Just pick the right start and finish point and, presto, the temperature is rising, or falling, or flat.

It’s why denialists keep insisting that global warming stopped in 1998.

Courtesy Skeptical Science: http://www.skepticalscience.com

Media Ownership: by Us, The People, Directly

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[Published 7 Feb on ABC’s The Drum Opinion.]

Gina Rinehart’s evident intention to own large chunks of our media is focussing many minds on the question of media ownership.  However most of the discussion does not properly recognise the special role of the media in our society, and canvasses only variations on concentrated ownership by very rich people, usually with an implication that ownership by government is the only alternative.

The media are the means of social conversation in large societies.  They deserve to be accorded special status, like the courts.  Ownership could be widely distributed among those served by each outlet.

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