Economics

Saturday, 8 September, the Barbican, London

Published by Anonymous (not verified) on Thu, 02/08/2018 - 8:44pm in

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Economics

Krugman on a roller coaster says ‘print more money’

Published by Anonymous (not verified) on Thu, 02/08/2018 - 6:49pm in

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Economics

He's right.

As he also is on inflation.

The worst of wasteful government spending

Published by Anonymous (not verified) on Thu, 02/08/2018 - 7:38am in

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Economics

It is also common for politicians to arrange a 'work' meeting as a pretext for a holiday, social or campaigning event so that the taxpayer bears what should be a private travel cost.

India Mortgaged? Forced-Fed Illness and the Neoliberal Food Regime

Published by Anonymous (not verified) on Thu, 02/08/2018 - 1:00am in

Colin Todhunter Like many countries, India’s food system was essentially clean just a generation or two ago but is now being comprehensively contaminated with sugar, bad fats, synthetic additives, GMOs and pesticides under the country’s neoliberal ‘great leap forward’. The result has been a surge in obesity, diabetes and cancer incidence, while there has been no let-up in the under-nutrition of those too poor to join in the over-consumption. Indian government data indicates that cancer showed a 5% increase in prevalence between 2012 and 2014 with the number of new cases doubling between 1990 and 2013. The incidence of cancer for some major organs in India is the highest in the world. The increase in prevalence of diabetes is also worrying. By 2030, the number of diabetes patients in India is likely to rise to 101 million (World Health Organization estimate). The figure doubled to 63 million in 2013 from 32 million in 2000. Over 8% of the adult male population in India has diabetes. The figure is 7% for women. Almost 76,000 men and 52,000 women in the 30-69 …

The government is not a household and imports are still a benefit

Published by Anonymous (not verified) on Wed, 01/08/2018 - 6:14pm in

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Economics, Music

It is Wednesday and so a shorter blog post today while I spend more time writing other things. But there was one issue that was raised in the comments in the last week following my blog post – Build it in Britain is just sensible logic (July 26, 2018) – that I thought warranted attention. The government is not a household is a core Modern Monetary Theory (MMT) proposition because it separates the currency issuer from the currency user and allows us to appreciate the constraints that each has on its spending capacities. In the case of a household, there are both real and financial resource constraints which limit its spending and necessitate strategies being put in place to facilitate that spending (getting income, running down savings, borrowing, selling assets). In the case of a currency-issuing government the only constraints beyond the political are the available real resource that are for sale in that currency. Beyond that, the government sector thus assumes broad responsibilities as the currency issuer, which are not necessarily borne by individual consumers. Its objectives are different. Which brings trade into the picture. Another core MMT proposition is that imports are a benefit and exports are a cost. So why would I support Jeremy Corbyn’s Build it in Britain policy, which is really an import competing strategy? Simple, the government is not a household.

The trilogy of blog posts is my most recent discussion of issues relating to trade:

1. Trade and finance mysteries – Part 1 (May 8, 2018).

2. Trade and finance mysteries – Part 2 (May 9, 2018).

3. A surplus of trade discussions (May 23, 2018).

Household consumers are users of the currency and aim to use their disposable incomes to create well-being, primarily for themselves and their families.

We exhibit generosity by extending our spending capacities to others when we give gifts.

But our aims are to get the best deal we can in our transactions. That means we like goods and services that satisfy our quality standards at the best price possible.

Which means that we will be somewhat indifferent to geography. If local suppliers are expensive and imported goods and services are cheaper, then as long as quality considerations are broadly met, we will purchase the imported commodity and be better off in a material sense.

If other nations are willing to send more goods and services to us than they get back in return then the real terms of trade are in our favour.

Exports require we give up our use of those real resources while imports mean we deprive other nations of the use of their resources.

There are nuances obviously.

A nation with lots of minerals (Australia) may not feel it is too much of a ‘cost’ to send boatloads of primary commodities to Japan or China.

We also individually might ascribe to broader goals in our purchasing decisions, although the evidence for this is weak.

For example, some of us believe that imports are only a benefit if they come from nations that treat their workers reasonably (no sweat shops, killing trade unionists etc) and do not ravage the natural environment in the process of producing the goods.

I would guess those concerns do not dominate our decision making generally because if they did China would not have huge export surpluses.

But there are nuances.

However, a government is not a household. It has a wider remit (objectives) than a household and must consider a broad range of concerns when it uses its currency-issuing capacity to shift real resources (as goods and services) from the non-government sector to the government sector to fulfill its elected mandate.

In that sense, imports remain a benefit but the broader concerns make the net decision more complex than it is for the non-government sector.

The government must consider regional disparities. When a household is making a decision to purchase a good or service, what is happening elsewhere in the nation might not rank very high in the decision.

The government must consider how best to maintain full employment. A household is really only concerned with their own employment although that doesn’t preclude us being generally concerned with high unemployment rates.

But ‘buy local’ campaigns typically do not work when they try to steer household consumption expenditure.

The government can always maintain full employment through its fiscal spending decisions. We know that because it can always purchase the services of all idle labour that wants to work and receive payment in the currency of issue.

So from that starting point, there is no question that mass unemployment is a policy choice not some uncontrollable outcome of a ‘market’.

In that context, the challenge for government is to work out how to frame the spending capacity to get the best employment outcomes.

* Direct public employment – that is, obvious.

* Subsidy of local non-government firms – that is, operate by lowering the unit costs for firms to render them profitable when they otherwise would not be.

* ‘Build it in Britain’ – that is, use procurement policies to sustain sales for local firms rather than subsidise their costs.

None of these full employment strategies negate the insight that imports are a benefit to a nation.

But the government has to consider broader concerns than just getting a good or service at the cheapest ‘market’ price.

There are more considerations but that is how we can understand this issue.

What I was listening to today

More on the John Mayall theme, although in this case, Mayall had little to do with the genius of this track.

I have listed this track before but it is on my frequent play list and never stops amazing me.

It is from one of my favourite guitar players – Peter Green – who recorded this after replacing Eric Clapton as the guitar player in John Mayall’s Bluesbreakers.

The whole album from John Mayall’s Bluesbreakers – A Hard Road – which was recorded in 1966 is exceptional, but this track – The Supernatural – is one of the best guitar tracks of all time.

Without doubt.

The control he gets on his reverb and sustain is something else.

2:57 minutes of pure tone!

Event – Launch of Anti-Privatisation Book – Sold Off Sold Out, Sydney, August 2

I will be speaking in Sydney tomorrow night (August 2, 2018) to launch the new edition of Sold Off Sold Out – which exposes the costs of privatisation in Australia.

The event will run from 18:30 to 20:00 and will be held at the Information and Cultural Exchange (ICE) centre located at 8 Victoria Road, Parramatta, NSW 2150.

The promotion page says:

Over the past 30 years, there has been a massive sell-off of public assets to private corporations right across Australia. For the public there is no upside. We have been robbed in multiple ways by privatisations.

You can find details – HERE.

I look forward to seeing Sydney readers at the event.

Event – The second international MMT Conference in New York – September 28-30, 2018

The second international MMT Conference will be held in New York between September 28-30, 2018.

I will be speaking and most (if not all) the founding MMT group will be in attendance, contributing in one way or another.

The Conference Home Page has been launched and you can register for the conference through that page.

It will be great to see as many of you as possible at that event.

In the two weeks following, I will be giving talks in:

1. Galway – Wednesday, October 3, 2018.

2. Dublin – Thursday, October 4, 2018.

3. London – Friday, October 5, 2018 – Launch of the new Gower Initiative for Monetary Studies.

4. Lisbon – Sunday, October 7, 2018.

5. Glasgow – Wednesday, October 10, 2018.

6. Wurzburg – Saturday, October 13, 2018.

I will have more details of that lecture tour in due course. More dates might be added once confirmations are made.

That is enough for today!

(c) Copyright 2018 William Mitchell. All Rights Reserved.

Labour, universal basic income and a job guarantee

Published by Anonymous (not verified) on Wed, 01/08/2018 - 5:40pm in

John McDonnell, the Shadow Chancellor, has apparently decided that the next Labour manifesto should include a commitment to Universal Basic Income (UBI) even though, as yet, no figures are available to support the proposal in the UK, and no data from previous trials has proven whether the system will work, or not.

I find the announcement a challenge.  I have in my time argued for UBI.  If I was now given a choice between Labour adopting modern monetary theory, with a job guarantee attached,  or a universal basic income I  believe that modern monetary theory with a job guarantee would be more important,  more realistic,  more likely to deliver,  and more acceptable to voters.

I can see value in a UBI. I do not dismiss the idea.  But I think the public are a long way from accepting it as yet,  whereas a job guarantee makes a lot of sense to many people,  especially given Labour's priorities, and the current state of the economy.

Preview: What are taxes actually for?

Published by Anonymous (not verified) on Wed, 01/08/2018 - 10:18am in

We need to talk about taxation. I do not think it means what you think it means.

While some of us are pretty conscious of the importance of using the correct terminology when it comes to issues of social justice, race, gender and sexuality, when it comes to addressing inequality, we are still using language straight out of the neoliberal handbook

We need to be honest about how the tax system works and what it is for. To do so isn’t radical, or even progressive. It is simply the economics of reality…

To continue reading, subscribe to my Patreon for as little as $3 a month

Can a Universal Basic Income rid the world of bullshit jobs?

Published by Anonymous (not verified) on Wed, 01/08/2018 - 10:15am in

This piece was originally published on Patreon.

In his best-selling book, Bullshit Jobs: A Theory, professor David Graeber makes the case for a Universal Basic Income (UBI) as a means to move away from the wage labour system.

Perhaps it is my cultural background — I am the product of two, very hard-working Jewish / Catholic parents both with an insanely Protestant work ethic — but the idea that we are moving into an age of post-employment is a little terrifying to me.

As I look around even my local community, I see so many different areas of the economy that are poorly served or simply non-existent. Surely, there must be enough meaningful ones to replace the bullshit ones?

So, I caught up with Graeber to ask him a couple of questions, namely: why a UBI and not a job guarantee?

“I mean there’s enough meaningful work, right?,” says Professor Graeber.

“But does it have to be organised into jobs? To me the difference between the job guarantee and the UBI is simply who’s going to decide how the labor is allocated.”

“I don’t have a problem with the jobs guarantee as a supplement to a Basic Income. But one of the interesting things is who the burden is on.”

Who gets to create jobs?

Graeber credits prolific Twitter user @rattlecans who recently made the very valid point that when governments or industry talk about job guarantees, they always assume they’re going to be the ones deciding who should do what.

“So if a job guarantee was based on, ‘I’m trained as a chemist, find me a job as a chemist’. Well, sure,” he says. “Nobody would object. Yet somehow that doesn’t seem to be what they are talking about.”

The anthropologist says it is telling why so many in the professional managerial class love of the concept of a job guarantee and are suspicious of a basic income.

“They fantasise that once work becomes completely automated, workers of the world will just sit around getting drunk, playing darts and fighting all day,” he says.

“Because they don’t trust people. Because they have no imagination about what people are like.”

As an anthropologist, Graeber says he is keenly aware that people, even with only two-or-three hours of actual work a day, can come up with of all sorts of interesting things to do with the rest of their time, if you give them enough time to work on it.

“It’s a vicious circle,” he says. “We imagine people can’t think of things to do.”

The 30-year war on community

With regards to the concept of work and how it is organised, Graeber says there has been a 30-year war against community relations: People don’t know their neighbours. They wouldn’t even know how to begin forming groups together to address local, regional or federal problems.

“So if there’s a problem like the canal needs cleaning or something, in a functional community where everybody has a basic income, people can get together to clean the canal, for example,” he says.

“But you could make the argument that this will be harder in societies where people are really atomised. On the other hand, all you need is one or two people with initiative on a UBI to dedicate themselves to these things.

“To some degree the The Works Progress Administration, some of those examples, they did actually pay people to do things that people came up with locally.”

(The WPA was a public works agency that grew out of the New Deal which employed millions of people in public works programs like infrastructure, construction, roads, teaching and literacy).

“That’s one of the reasons everybody always pulls that example out,” he says. “But that’s a little different than what they’re talking about.

A jobs guarantee that, like: ‘if you are unemployed and come to me with a project, I guarantee I will fund it’, well that would be ok. Who would object to that? We need a post office. Ok, we’ll hire you all to build a post office. But I haven’t seen a proposal that looks like that.”

Does your job matter? The pay probably sucks

In his book and in a recent presentation to the Bank of England, Graeber outlined that, particularly in Britain, but also in the United States and other parts of the world, austerity policies have been most punishing on those with the most socially useful occupations.

This is particularly the case in health, education, and care industries, but also police, transit workers and others, while private sector resources appear to have been distributed upwards to the administrative and executive sector.

The obvious question this leads me to is: would a UBI reflate the value of meaningful work that pays poorly? (Like, journalism, say…?).

“Well that’s a good question,” he says.

“I think it would definitely inflate the value of trash collection.

“I imagine journalists would manage to get paid exactly the same as what they are paid now, but on top of a UBI. That is what I am guessing would happen.”

The danger is we might end up getting paid less…

“The thing is, if you have UBI, what you’re validating is the people,” says Graeber.

“So there’s an assumption you start at, which is that everybody is valuable, that is why you have a living allowance.”

Graeber says that the effect a UBI would have on different types of work is an interesting question morally.

“I think the moral advantage of saying that your existence and your freedom is the ultimate value, that is going to more than compensate for other discrepancies,” he says.

“The whole thing about a UBI, is that there is no structure to say who gets it. There’s no minimal requirement for annoying people deciding whether you get it or not.”

How much should a UBI pay?

So, how much would each member of the public need to receive in order to rid the world of bullshit jobs? And does the anthropologist really expect the governments of today to shell out that kind of money?

“Well, first of all, governments are already shelling out that kind of money,” says Graeber. “They’re just doing it in really stupid, bad ways.

“Take even Quantitative Easing. They calculated recently that spending per person in Europe is like €6000 a year or something. They could have just given it to them. I mean, that’s not enough, but it’s a good start.

“Obviously you can make the argument that one reason it wasn’t inflationary is because people sat on it anyway. Whereas, if they gave it to people, they’d spend it, but that would also stimulate the economy. I think with QE they were trying to create inflation and failed.

“Inflation is harder to create than you think.”

But, the ‘where do we get the money’ argument, that comes from a broad misunderstanding of money, what it is and where it comes from, the anthropologist says.

“They, (the government), can make it up, (issue the currency),” he says.

The question is: what would be the larger effects?”

Graeber’s UBI proposal is a transitional demand.

“It would be the kind of thing which would move us maximally in the direction of moving away from the wage labour system,” he says.

Change the tax code

In the meantime, governments ought to be changing their tax codes to address the casualisation of the work force.

“One of the British Labour party’s platforms is to change the tax code to make it easier for self employed people,” says Graeber.

“More than half of the money I make on my books is taken away from me. But if I were a parasitic investor, it would be like 7%. Instead, it’s like 55%, if you’re actually producing something and you’re not somebody’s slave.

“I kind of like the French tax system. It’s still not that bad, but back in the ’80s, it was entirely value-added, but it was negative on stuff they thought were necessities: wine, bread and meat, basically,” he said.

“Most groceries aren’t taxed. Things considered a human right are subsidised. And if you buy a Maserati, it’s like 300%. Because you want to boast about how much you paid for your Maserati.”

Thank you for reading. I couldn’t afford to continue my research, or write this book, were it not for the support of my generous sponsors. Support independent journalism, sponsor me on Patreon, starting at $3 a month, or throw some money at my PayPal.

Strong dollar could cap oil prices

Published by Anonymous (not verified) on Wed, 01/08/2018 - 8:13am in

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Economics

Even Donald Trump is a bit wary of the strengthening dollar, recognizing that it poses challenges to the US economy.

Small business and sole traders to be bludgeoned with red tape... again

Published by Anonymous (not verified) on Tue, 31/07/2018 - 9:47pm in

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Economics

The bulk of 'Black Economy' activity occurs through undisclosed cash payments in industries such as construction and opaque activities over the internet. None of these proposals provide tools to deal with these practices.

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