A complete manuscript of The Nature of the Beast is available for comment. It is under a password, so as not to upset potential publishers, and so I can keep track of who is looking at it. I would love to have feedback of any kind.
Use the Books and Downloads menu above, or go here.
A sample, the first 16 pages, can be downloaded without password.
I will now resume posting after a break.
I was travelling in August-September. Since my return I have focussed on finishing the long-intended short book on economics, The Nature of the Beast. My work earlier in the year was interrupted by some science left over from my retirement last year, by moving house, and by travel. I have now finished a draft with which I am pretty happy. I will be updating the pages relating to The Beast, and posting a few extracts.
In meantime the need for a concise, clear demolition of the dominant economic paradigm and a presentation of modern, sensible alternatives has only grown. The Occupy Wall Street movement is the most encouraging development in a long time, perhaps, we can hope, marking the end of the striking passivity that took hold after the sixties rebellions died away.
Recently some economics students at Harvard have walked out of Greg Mankiw’s economics course, echoing the criticisms of Parisian economics students a decade earlier, when they called for “post-autistic economics“. Steve Keen’s comments on some points of debate are illuminating. Other useful comments can be seen at Real World Economics Review Blog, and a commentary on Mankiw’s textbook is also starting there.
[Another sample from The Nature of the Beast, from Chapter 11: Economic Fire. Another downloadable instalment will be available after Easter.]
Almost every institution involved in the financial system is, in the jargon, highly leveraged. This is as true of old-fashioned banks with fractional reserves and mainstream banks with capital adequacy requirements as it is of shadow banks. What does highly leveraged mean? It means that you are betting a small amount on a large return. If the return is positive, you make a handsome profit. However if the return is negative you lose not only your stake but potentially everything you own.
[Another of my letters to the Editor, challenging the confusion between growth and well being. Published 19 April. Again I’ll post any responses.]
The front-page report “ACT economy trumps states” (Canberra Times, 18 April) highlights the biased spruiking that commonly passes for economic reporting.
[Another instalment of The Nature of the Beast has been posted, Chapters 5-8. Here is a sample from Chapter 6.]
In 1987 Margaret Thatcher said during an interview
“… they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people … But it went too far. If children have a problem, it is society that is at fault. There is no such thing as society. There is a living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate.”36
This was the origin of an infamous quotation: There is no such thing as society. Continue reading
[After a 6-month break I have returned to working on The Nature of the Beast. A new version of Chapters 1-4 is available for download and comment – use the links at the top. More will follow soon. To whet your appetite, here is a sample, from the Introduction.]
The Global Financial Crisis, also known as the Great Recession, is the biggest economic malfunction since the Great Depression. You might think that those in charge when it happened, and those who designed the economic system within which it occurred, would have been chastened and purged, to be replaced by those who saw the crash coming and those who warned that the design of the economic system was prone to such failures.
However few of those responsible have been purged, and few seem to have felt chastened. Rather, they claim that no-one could have seen the crash coming. If that were true, what exactly has the economics profession been doing for the past eighty years? Everyone knows there was a Great Depression. Would it not be a top priority to figure out how it happened, so we might see the next one coming, or better still avoid the conditions that would trigger a depression? One might think so, but that is not how the great bulk of the profession has spent the past eighty years.
Two lesser-known economic good news stories provide a revealing perspective on the mainstream economic paradigm, and on Australias current state.
The first economic miracle is Mauritius, brought to our notice by Joseph Stiglitz in the Guardian. Mauritius gained independence from Britain in 1968, and with few natural resources in its Indian-Ocean archipelago its economic prospects were rated as pretty dismal. Bucking the usual prescriptions of economists (sell your soul and your land to overseas investors and tourists), and despite per capita income of less than $400, Mauritius decided to invest in its one major asset – its people.
[This is posted in the new Category Economics, Technical]
[Published 14 March at Real World Economics Review Blog. Also posted 12 March at Steve Keen’s Debtwatch]
Many people, including many heterodox economists, understand that the neoclassical equilibrium approach to understanding economies is futile and misleading [1], because modern economies are far from equilibrium. The neoclassical prediction of equilibrium or near equilibrium requires a string of patently absurd assumptions. However the development of better theories seems to be significantly hindered by a feeling that any superseding theory has to be thoroughly quantified before it can be useful, and a feeling that the neoclassical theory has set a benchmark for sophisticated mathematics that must be matched before another theory can be respectable. Less fundamentally there seems to be a common perception that empirical insights can only be gained through elaborate statistical treatments of observations.
Here I offer some discussion from my experience as a natural scientist, and some examples regarding the Global Financial Crisis, to counter these hindrances. Continue reading
I just reviewed a small book by Geoff Mosley, Steady State: Alternative to Endless Economic Growth. Envirobook, Canterbury, NSW. RRP $21.95, 136pp, paperback. The review is for the newsletter of Nature and Society Forum, based in Canberra.
Scarcely a day goes by without news of some loss or degradation: a new invasive species, a habitat lost to fire or a shopping mall, a disintegrating ice shelf, a corner shop closing, rising obesity, on and on it goes. Behind much of this bad news is the relentless growth of our economies and populations. The casualties are in both the natural world and in our societies, affecting our health, relationships and communities, as I don’t have to remind this audience. Geoff Mosley argues that we must come to grips with economic growth if we are ever to stop the losses.
The obsession on both sides of politics with cutting the Federal Government deficit is not only short sighted in the context of the recovery from recent floods. It is also economically insupportable when private debt in Australia is more than twenty five times public debt.
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