All posts filed under: Economics

What the Banking Crisis tells us about Unregulated Technology

Leave a comment
Economics / Politics

The table below parallels the discredited arguments that supported the hypertrophy of banking in the run up to the banking crisis (left hand side) and fashionable ideas from the US in favour of technological laissez faire (right hand side). Banking Technology market participants should be left unregulated because markets are efficient  information wants to be free the prices generated by markets are perfect future technological development is determined/inevitable regulators can’t set better prices than the market technology […]

Who predicted the rise of the populists? Part 5 – Bernard Connolly

comment 1
Bernard Connolly / Democracy / Economics / Globalisation / Party System / Politics / Populism

Looking at who predicted the victory of the populists before 2016 helps us sift through the deluge of ex post facto rationalisations. Bernard Connolly wrote The Rotten Heart of Europe in 1995. Connolly previously worked at the European Commission. He rose to head of the unit responsible for the European Monetary System and monetary policies. The book delivered a harsh attack on the European project for monetary union, and warned of disaster ahead. Connolly saw the monetary policy […]

Who predicted the rise of the populists? Part 3 – Dani Rodrik

comments 3
Dani Rodrik / Democracy / Economics / Edward Luttwak / Globalisation / Party System / Politics / Populism

Looking at who predicted the victory of the populists before 2016 helps us sift through the deluge of ex post facto rationalisations. Third in this series is the economist Dani Rodrik. Unlike the other thinkers in this series Rodrik has not made a habit of prediction. While some of the predictions he has made have failed spectacularly. He appears not to have grasped deep political significance of his ideas until late in the day. Nonetheless, along the way Rodrik outlined a set […]

Who predicted the rise of the populists? Part 2 – Richard Rorty

comments 2
Democracy / Economics / Globalisation / Party System / Philosophy / Politics / Populism / Richard Rorty

Looking at who predicted the victory of the populists before 2016 helps us sift through the deluge of ex post facto rationalisations.Second in this series is the philosopher Richard Rorty. His 1998 book “Achieving our country” contains a wealth of predictions about the future of American politics. Many  now appear uncannily accurate. Rorty was a self-declared member of the “Old Left”. Its principle concern was economic equality. He contrasted it with the new “Cultural Left” that he believed would progressively undermine US politics. Eventually it […]

Who predicted the rise of the populists? Part 1 – Edward Luttwak

comment 1
Democracy / Economics / Edward Luttwak / fascism / Globalisation / Party System / Philosophy / Politics / Populism

Looking at who predicted the victory of the populists in 2016 helps us sift through the deluge of ex post facto rationalisations. First in the series is Edward N Luttwak. His 1994 book “The Endangered American Dream” made a series of bold claims about the results of globalisation. He believed it would undermine the traditional parties of both right and left. In his view neither could address the concerns of the losers from globalisation. Their failure would eventually open a […]

Seven reasons economics needs to start from scratch

comments 2
Business Cycle / Complexity Economics / Economics / Eric Beinhocker / Philosophy

There are a number of problems with mainstream macro-economics so fundamental that they require the slate to be wiped clean and the enterprise begun from scratch. Here is an incomplete (but growing) list of knockout issues with the conventional approach. Economics can’t describe the Business Cycle Economics’ first assumptions prevent it from explaining its central phenomenon. The first question of the economy is the nature of the business cycle. Economics has no useful theory of the business cycle. In fact, since Walras […]

Low interest rates – a toxic medicine

Leave a comment
Economics / Politics / Quantitive Easing

Low interest rates are the solution to the problem of deficient demand in the same way that taking heroin is the solution to the problem of heroin addiction – quick acting, superficially compelling and yet totally wrong. If there is one belief that unites the UK mainstream it is a belief in the benefits of low interest rates. The chief desire of successive UK governments has been to finagle lower interest rates by any means. Investors have […]

Customer Development – why its an evolutionary algorithm and not a science

Leave a comment
Complexity Economics / Economics / Eric Beinhocker / Evolutionary Economics / Philosophy / Politics

Serial entrepreneur Steve Blank wrote the ‘Startup Owner’s Handbook’ to relay what he had learned from running startup organisations. The book tries to impart the techne of building a profitable startup and does so in a brilliant and original way. He rejects the old business plan driven model for running a new company. He claims that no one can know how a product will fare in the market before they try it out. He recommends […]

The War of Metaphors : Why the Global Financial Crisis Was Marxs’ Revenge

Leave a comment
Business Cycle / Complexity Economics / Economics / Hegel / Philosophy / Politics / Uncategorised

“universal history is the history of a few metaphors.” Jorge Luis Borges On February 20, 1974 Hiroo Onoda, an army intelligence officer of the Imperial Japanese Army, left the Philippine jungle. He had spent the previous 19 years continuing to fight the Pacific War despite Japan’s surrender. Ono refused to hand over his sword until his old commanding officer, then a civilian bookseller, travelled to the Philippines to receive it in person. Onoda’s identity was defined by […]

The immigrant’s fallacy. The liberal case against immigration from poor countries.

comment 1
Adair Turner / Economics / Immigration / Rational Choice Theory

Liberals traditionally see immigration from poor countries into the rich west as a win-win transaction. The immigrant increases their living standards. The host country gets new and enthusiastic workers willing to take the jobs that natives don’t want. When migrants express dissatisfaction with their lot, liberals attribute it to xenophobia in the host nation. They believe that if discrimination could be eliminated, the frustrations and disappointments of immigrants would disappear with it. Thus liberals are obliged to attack the prejudices […]