an introduction to fiat money (pdf) by Steve Randy Waldman:* - "Self-reinforcing bootstrap dynamics hold as strongly for a king's token as it would for any other thing, but much more stably so, since the king can reinforce and assure the stability of his token so long as he retains the political capacity to coerce or persuade payment of tax." (via) [more inside]
The three party system - "There are three major political forces in contemporary politics in developed countries: tribalism, neoliberalism and leftism (defined in more detail below). Until recently, the party system involved competition between different versions of neoliberalism. Since the Global Financial Crisis, neoliberals have remained in power almost everywhere, but can no longer command the electoral support needed to marginalise both tribalists and leftists at the same time. So, we are seeing the emergence of a three-party system, which is inherently unstable because of the Condorcet problem and for other reasons." [more inside]
Helicopter drops might not be far away - "Central banks could be given the power to send money, ideally in electronic form, to every adult citizen. Would this add to demand? Absolutely."
It's Payback Time for Women - "Society is getting a free ride on our unrewarded contributions to the perpetuation of the human race." (via) [more inside]
For the Wealthiest, a Private Tax System That Saves Them Billions -"The very richest are able to quietly shape tax policy that will allow them to shield billions in income." (via) [more inside]
Rewrite the rules to benefit everyone, not just the wealthy - "If there's one thing Joseph Stiglitz wants to say about inequality, it's that it has been a choice, not an unexpected, unfortunate economic outcome. That's unnerving, but it also means that citizens and politicians have the opportunity to fix the problem before it gets worse." (via) [more inside]
FINLAND: New Government Commits to a Basic Income Experiment - "The Finnish government of Juha Sipilä is considering a pilot project that would give everyone of working age a basic income."[1,2,3] (via) [more inside]
Joe Stiglitz on Inequality, Wealth, and Growth: Why Capitalism is Failing (video; if you don't have 30m, skip to 20m for discussion of political inequality, wealth, credit and monetary policy) - "If the very rich can use their position to get higher returns, more investment information, more extraction of rents, and if the very rich have equal or higher savings rates, then wealth will become more concentrated... economic inequality inevitably gets translated into political inequality, and political inequality gets translated into more economic inequality. The basic and really important idea here is that markets don't exist in a vacuum, that market economies operate according to certain rules, certain regulations that specify how they work. And those effect the efficiency of those markets, but they also effect how the fruits of the benefits of those markets are distributed and the result of that is there are large numbers of aspects of our basic economic framework that in recent years have worked to increase the inequality of wealth and income in our society... leading to a society which can be better described, increasingly, as an inherited plutocracy." [more inside]
China rates its own citizens - including online behaviour: "The Chinese government is currently implementing a nationwide electronic system, called the Social Credit System, attributing to each of its 1,3 billion citizens a score for his or her behavior. The system will be based on various criteria, ranging from financial credibility and criminal record to social media behavior. From 2020 onwards each adult citizen should, besides his identity card, have such a credit code." [more inside]
Foundation: Public Goods and Options for the Bottom Billions - "Human beings just don't handle the very long run well" and that's where government increasingly comes in... (via) [more inside]
Let Us Face the Future - "All parties pay lip service to the idea of jobs for all. All parties are ready to promise to achieve that end by keeping up the national purchasing power and controlling changes in the national expenditure through Government action. Where agreement ceases is in the degree of control of private industry that is necessary to achieve the desired end. In hard fact, the success of a full employment programme will certainly turn upon the firmness and success with which the Government fits into that programme the investment and development policies of private as well as public industry." [more inside]
BIG and BOT Policy Proposals (transcript) - "Many of our current economic policies originated during times of scarcity. But now, says investor Albert Wenger, we live in an era of 'digital abundance', when creating new products costs virtually nothing. To adapt to the resulting economic upheavals, we won't need just more tech, says Wenger, but some strong policies. Here he explores two: basic income guarantee and the right to be represented by a bot." [more inside]
The political economy of a universal basic income: "your view of what is feasible should not be backwards looking. The normalization of gay marriage and legalization of marijuana seemed utopian and politically impossible until very recently. Yet in fact those developments are happening, and their expansion is almost inevitable given the demographics of ideology... UBI — defined precisely as periodic transfers of identical fixed dollar amounts to all citizens of the polity — is by far the most probable and politically achievable among policies that might effectively address problems of inequality, socioeconomic fragmentation, and economic stagnation." [more inside]
- Welfare economics: an introduction
- The perils of Potential Pareto
- Inequality, production, and technology
- Welfare theorems, distribution priority, and market clearing
- Normative is performative, not positive
Monopoly is back: Barry Lynn on the concentration of American economic power — and how we can restore fairness. Highlights: [more inside]
VC for the people - "It's just that people who have options are much more likely to actually find success than people who don't." [more inside]
Free Money for Everyone - "A wacky-sounding idea with surprisingly conservative roots may be our best hope for escaping endless, grinding economic stagnation." (via) [more inside]
The return of "patrimonial capitalism": review of Thomas Piketty's Capital in the 21st century (pdf) - "Thomas Piketty's 'Capital in the 21st century' may be one of the most important recent economics books. It jointly treats theory of growth, functional distribution of income, and interpersonal income inequality. It envisages a future of relatively slow growth with the rising share of capital incomes, and widening income inequality. This tendency could be checked only by worldwide taxation of capital." [more inside]
This shift in how companies are governed and raise money is bringing with it a structural change in American capitalism. That should be a matter of great debate. Are these new businesses, with their ability to circumvent rules that apply to conventional public companies, merely adroit exploiters of loopholes for the benefit of a plutocratic few? Or do they reflect the adaptability on which America’s vitality has always been based? - Rise of the distorporation - how changes in the way companies are financed and managed is changing the wealth distribution of America.
Ha-Joon Chang on why separating politics from economic policies is bad for democracy. What free-market economists are not telling us is that the politics they want to get rid of are none other than those of democracy itself. When they say we need to insulate economic policies from politics, they are in effect advocating the castration of democracy. (Related FPP.)
Has politics gone peer-to-peer? A rich 90-minute panel discussion with Steven Johnson, author of "Future Perfect: The Case for Progress in a Networked World", featuring Yochai Benkler, Susan Crawford and Lawrence Lessig.
From the mid 40s to the mid 50s Coronet Instructional Films were always ready to provide social guidance for teenagers on subjects as diverse as dating, popularity, preparing for being drafted, and shyness, as well as to children on following the law, the value of quietness in school, and appreciating our parents. They also provided education on topics such as the connection between attitudes and health, what kind of people live in America, how to keep a job, supervising women workers, the nature of capitalism, and the plantation System in Southern life. Inside is an annotated collection of all 86 of the complete Coronet films in the Prelinger Archives as well as a few more. Its not like you had work to do or anything right? [more inside]
In the spirit of the Nobel season, Yasha Levine discusses the history of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel as a PR gimmick for laissez-faire economics, and how its existence is an affront to the Nobel legacy.
The Costs of Capitalism's Crisis: Who Will Pay? Economics professor Richard Wolff gives some context to the latest economic crisis and suggests a solution to prevent this from happening again.
The Control Revolution And Its Discontents - "the long process of algorithmisation over the last 150 years has also, wherever possible, replaced implicit rules/contracts and principal-agent relationships with explicit processes and rules."
The Future of History (non-gated, summary): Many have noted that democracy [1,2,3] does not often sit well with capitalism [1,2,3], but Foreign Affairs argues in its latest issue that, while the ideological battle was won in the 20th century, the challenge of 21st is one of implementation -- how to make liberal democracy work. [more inside]
Will we be all right in the end? David Runciman on democracy, fatalism, and the European crisis (LRB)
Standing up for the little guy. Robert Reich spoke last night on the steps of Sproul Hall at UC Berkeley -- the epicenter of recent violence -- as the speaker for the Mario Savio memorial lecture. Reich has been making the rounds, both within corporations, in the media, and at Occupy events, has been lecturing on the dangers of inequality well before the current income/opportunity disparity crisis. "There is going to come a time when the (inequality) trends we are seeing are going to cause something to snap... There are two kinds of snaps... one is the snap back... and the other is the snap break."
Peter Orszag (previously of Obama's OMB) argues that circumventing democracy is the best way to save it, but Catherine Rampell isn't sold, and Uwe Reinhardt points out that technocrats base "science" on moral values.
Need a little political philosophy? Why not try this conversation on economics, the human person and democracy between conservative Catholic legal scholar Robert George and the always fascinating African-American studies professor and philosopher Cornel West? [more inside]
Winner-Take-All Politics [1,2] (PDF) - "The sources of American economic inequality are largely political – the result of deliberate political decisions to shape markets in ways that benefit the already-privileged at the expense of a more-or-less unaware public." (via bd) [more inside]
With capitalism in crisis, can it be sustained or is it altogether outdated? As Umair Haque asks though, perhaps a better question is: "are organizations and markets making decisions that help make people, communities, and society better off in the long run, by allocating their scarce resources to the most productive uses?" [more inside]
You can slog through the video, but I preferred the transcripts 1 | 2 | 3 | 4 | 5 [more inside]
You can slog through the video, but I preferred the transcripts 1 | 2 | 3 | 4 | 5 [more inside]
Prelude to Federation - Like a neocolonial SEZ (or TAZ) Paul Romer, not to be confused with David, posits "less developed countries contract with capitalist nations to set up Hong Kong's for them... that we rethink sovereignty (respect borders, but maybe import administrative control); rethink citizenship (support residency, but maybe import voice in political affairs); and rethink scale (instead of focusing on nations, focus on cities—on city states like Hong Kong and Singapore)." cf. neocameralism [1, 2, 3] [more inside]
Economist Bryan Caplan is author of the best contemporary critique of democracy and democraticness (previously), and therefore the person I'd most like to visit Singapore and share his thoughts. He recently took a trip to this quasi-democracy lauded for both its pro-growth policies and its strong, competent government (and criticized for its repression and its draconian penal code). The trip to what is in some ways an economist's utopia allowed Caplan to think about the implications of his own writings, and the validity of Churchill's dictum on democracy. Here's what he had to say: [more inside]
The Rise of China and the Future of the West: Can the Liberal System Survive? "China's rise will inevitably bring the United States' unipolar moment to an end. But that does not necessarily mean a violent power struggle or the overthrow of the Western system. The U.S.-led international order can remain dominant even while integrating a more powerful China -- but only if Washington sets about strengthening that liberal order now." [more inside]
The dangers of living in a zero-sum world economy - naked capitalism reprints (with added commentary) an FT article by Martin Wolf on why it's vital for (civilised) society to sustain a 'positive-sum' world, otherwise: "A zero-sum economy leads, inevitably, to repression at home and plunder abroad." Wolf's solution? "The condition for success is successful investment in human ingenuity." Of course! Some are calling for more socialism, while others would press on to build more megaprojects. For me, at least part of the solution lies in environmental accounting and natural capitalism :P
Why are American voters reluctant to support free market policies when professional economists have achieved near-consensus? Bryan Caplan of the Cato Institute investigates. (pdf)
"Trade with x only benefits the repressive government of x; it does not get into the hands of the people." How does the White House policy towards x make sense in light of Bush's statement that "Free trade supports and sustains freedom in all its forms. When we open trade, we open minds. We trade with x because trade is good policy for our economy, because trade is good policy for democracy"? Well that's because the first x refers to Cuba and the second x is for China. How's that economic engagement working out with China? Why don't we ask the Tibetans, Falun Gong or the Uighurs? Which foreign policy is the right way to go? Economic isolation or engagement?