All posts filed under: Economics

The Growth Dilemma

More is more and more is also different ~Benjamin Friedman, The Moral Consequences of Economic Growth, 2005 For much of the last 70 years, economic growth has lifted the quality of life in Europe, North America, and East Asia, providing social stability after the violent disruptions of World War II. Today, however, many of the world’s most influential leaders, even in the United States, reject the very notion that societies should improve material wealth and boost incomes given what they believe are more important environmental or social equity concerns. This sharp break from the past is occurring as growth in Europe, Japan, and the United States has fallen to half or less of what it was just a generation ago, and while fertility rates are at levels not seen since the medieval era. This promises to create a tsunami of retired people whose retirements can only be addressed by economic growth. The combination of reduced real income, green-driven rises in energy and housing costs, and growing concern about pensions has sparked a new wave of …

Economic Inequality—Populism’s Rallying Cry

A nation will not survive morally or economically when so few have so much, while so many have so little. We need a tax system… which reduces the obscene degree of wealth inequality in America. ~Bernie Sanders [A]ffluent married people, the ones making virtually all the decisions in our society, are doing pretty much nothing to help the people below them… Rich people are happy to fight malaria in Congo. But working to raise men’s wages in Dayton or Detroit? That’s crazy. This is negligence on a massive scale. ~Tucker Carlson Populists on both the Left and Right have a narrative to push. According to this narrative, when economic inequality rises, the middle class suffers and the American dream dissipates. When the government combats inequality, conversely, the middle class rises and the American dream prospers. Let us call this the inequality fable. It is a tale the Left has been telling for over a century, though patriotic Americans on both sides of the aisle have been rallying around it with passionate intensity since the Great …

How Bitcoin Can Protect Free Speech in the Digital Age

Think about what happens when you buy a newspaper at a local cafe with cash. The shopkeeper takes your paper money, and gives you the item. They don’t know your name, address, phone number, email, or what you bought yesterday. They are not collecting any data about you. Until now, this level of financial privacy was perfectly normal. Today, cash is disappearing. In the UK, just 42 percent of transactions are still performed using cash. In America, it’s down to 32 percent. In Sweden, 20 percent. And in South Korea, only 14 percent. In some urban areas—for example, Stockholm or Beijing—electronic and touchless payments are virtually everywhere. In an increasingly cashless world, citizens are losing their privacy and, by extension, their civil liberties. When you buy a subscription to a political magazine like this one, you almost certainly do so with a credit card or through a platform like PayPal. These payment processors collect data about you that can be sold, leaked, hacked, or handed over to a curious government. When you make an electronic …

How to Tackle the Unfolding Research Crisis

Research [is] a strenuous and devoted attempt to force nature into the conceptual boxes supplied by professional education. ~Thomas Kuhn, The Structure of Scientific Revolutions Scholarly research is in crisis, and four issues highlight its dimensions. The first is that important disciplines such as physics, economics, psychology, medicine, and geology are unable to explain over 90 percent of what we see: dark matter dominates their theoretical understanding. In cosmology, 95 percent of the night sky is made up of dark matter and dark energy which are undetectable and inexplicable. Some 90 percent of human decisions are made autonomously by our sub-conscious, and even conscious decisions often emerge from a black box and have little support. The causes and natural history of important illnesses—including heart disease, cancer, obesity, and mental illness—are largely unknown for individuals. The second dimension of the research crisis is that systems which are critical to humankind—especially climate, demography, asset prices, and natural disasters—are minimally predictable. The best example of misguided theory can be seen in the conduct of organisations. Although a high …

Common-Good Capitalism: Populism With a Twist

“Despite three years of robust economic growth, millions are unable to find dignified work; they feel forgotten and left behind. We are left with a society with which no one is happy.” This is Senator Marco Rubio’s assessment of our current socioeconomic situation as a nation—and it’s bleak. Rubio believes that most Americans today have lost sight of the American Dream. They are struggling to find dignified work; a direct result of a modern economic system that no longer serves its people. Rubio contends that many Americans feel alienated by our current economic system, as evidently reflected by rising suicide rates, declining birth and marriage rates, and the opioid epidemic. This unhappy society was the subject of a speech that Rubio gave earlier this month at the Catholic University of America. There can be no doubt, based on the content and tenor of his speech, that Rubio certainly fears for the fate of our nation and its people; it’s clear in his earnest presentation of the issues as he sees them. His love of country shines through, as does his fear …

Something for Nothing—The Importance of Mindful Volunteering

Every day we receive fresh solicitations requesting our time, our money, and our attention to various causes. It is not enough simply to live our lives, we must somehow justify our existence beyond earning a living and paying our taxes. According to a VolunteerHub estimate, one out of four people in the U.S. volunteer their time and effort with an average value of $24.14 per hour. The average is 22–23 percent in Europe and 19 percent in Australia. The site states that volunteering improves health and chances of gaining employment by 27 percent. So it is not an entirely selfless act. I come not to praise volunteering but to consider its benefits and our motivations; to reflect on my experience that has led me to question what we are giving and what we are getting as volunteers. Such an assessment becomes more urgent as groups and individuals face decisions about where to invest limited resources in resolving crises such as global warming and inequities of wealth, freedom, and opportunity. For some, volunteering is an anodyne …

Corbynite Economics

A review of Stolen: How to Save the World from Financialisation by Grace Blakeley, Repeater Books (September 2019) 300 pages. It is tempting for Jeremy Corbyn’s critics to write off his electoral promises as bribes—a last-ditch attempt from the most unpopular major party leader in memory to buy his way to victory. There’s some truth to this when it comes to pledged levels of public spending. But Corbynism is not an opportunistic ideology. He and the people around him have a set of beliefs about the economy that they take very seriously, and it’s worth trying to understand them. Stolen: How To Save The World From Financialisation, by New Statesman columnist and socialist campaigner Grace Blakeley, is one of the more serious attempts to set out a version of Corbynism (compared to, say, Aaron Bastani’s buffoonish Fully Automated Luxury Communism). Blakeley, who recently tweeted that reading the Labour manifesto had moved her to tears, has tried to put modern leftism in a post-financial crisis context. Her book hopes to explain why she believes the crisis …

The Price of Sex

Working as a photographer for a charity a few years back, I was travelling through Malawi and stopped overnight in a mining town. It was a Wednesday, and I headed out to a bar. Other than a woman serving, everyone else there was male. Some were playing pool. Some were drinking, but most were doing neither. I asked the bargirl why there were no women in the place. With a look that suggested I was being dim, she explained: “The men get paid on Friday.” On the surface, in a mining town, the gender pay gap is huge, with the vast majority of money officially going to men. And yet, by Saturday morning, much of the cash has been transferred to bar owners, prostitutes, girlfriends, and wives. A privileged observer might suggest that women in such a town ought to be liberated to earn their own money. But the point is that they already are. While most fair-minded people would no doubt agree that women should be free to take mining jobs if they choose, …

Andrew Yang—Technocratic Populist

Andrew Yang is a peculiar candidate for the presidency; not only has he no previous political experience, but he has also placed great emphasis on issues that have been on the fringes of mainstream media political discourse usually examined by academics or YouTube personalities. It is a credit to him that topics like automation, the meaning and value of work, the concentration of elite talent in to narrow career paths, and of course, UBI, have had a chance to be touched upon during this campaign cycle. Nonetheless, the most provocative aspect of the Yang campaign, and of the man himself, is the unusual tension between a technocratic emphasis on expertise and efficiency, and the populist rhetoric he uses to denounce remote elite enclaves, and to call for a revolution that, in the words of Bismarck, we undertake rather than undergo.1 Yang views himself—or at least projects himself as—the people’s technocrat. An expert that the average Joe can trust. Yang as Technocrat Technocracy is government by experts. The term is Greek in origin, fusing tekhne (describing …

What Comes After Capitalism?

A review of Capitalism, Alone: The Future of the System That Rules the World, by Branko Milanovic, Belknap Press: An Imprint of Harvard University Press (September 24, 2019), 304 pages “The domination of capitalism as the best, or rather the only, way to organize production and distribution seems absolute,” writes Branko Milanovic in his new book, Capitalism, Alone: The Future of the System That Rules the World. With feudal systems demolished, and the ideological battles between fascism and communism resolved, a clear winner has emerged. Capitalism is unrivaled in its ability to produce material abundance and coordinate the use of scarce resources. But above and beyond that functional success, capitalist societies also inculcate a set of commercial values that reinforce its supremacy and reward its expansion into new spheres of life. If capitalism contains the seeds of its own destruction, as Marx thought, such forces are overwhelmed by its propensity to spread and self-replicate—at least so far. As a leading scholar on income inequality at the City University of New York, Milanovic is sensitive to …