politics – Common Law Economics

The Paradox of Unthrift Waiting for another – doubtless very different – Keynes

The cornerstone of John Maynard Keynes’ General Theory of Employment, Interest and Money is the rejection of one of the pillars of classical economics, and indeed of virtue itself classically understood. That pillar is saving. In that classical world, saving is a fundamentally important action, crucial to economic survival and growth. From it flows the … Continue reading “The Paradox of Unthrift Waiting for another – doubtless very different – Keynes“

Border-Adjustment Sleight of Hand? Sense and Nonsense on the Border Adjustment Tax

The trickle of articles discussing the proposed Border Adjustment Tax (BAT) has turned into a veritable flood. Not surprisingly, the lion’s share of these articles oppose the idea of border adjustment. It would be tedious to run through them all; suffice it to say that the primary argument is that such a tax would raise … Continue reading “Border-Adjustment Sleight of Hand? Sense and Nonsense on the Border Adjustment Tax“

A Monetary Solution to Trade Imbalances? Gilder and the Gold Standard

The wait continues regarding the tax reform proposal to come out of the White House and be taken up by Congress. Despite the headlines dominated by more peripheral matters, tax reform is shaping up to be one of the cruxes to the success of the new administration. It is not simply a matter of reducing … Continue reading “A Monetary Solution to Trade Imbalances? Gilder and the Gold Standard“

The Shape of Things to Come?

The fledgling Trump administration has been greeted by an explosion of resistance on the part of the Left. The Democratic Party has shown its antipathy in various ways. For one thing, many Democratic members of Congress declined to attend the inauguration. For another, Senate Democrats have delayed the appointments of President Trump’s cabinet appointees, even … Continue reading “The Shape of Things to Come?”

Trumponomics and the Great Rebalancing

Donald Trump’s election victory on November 8th is now a fact. Reactions to it have not been lacking, of course. On the economic front, they have ranged from the cautiously optimistic to predictions of utter doom. For their part, the financial markets went from downturn to upturn in short order (as chronicled here by Jerry … Continue reading “Trumponomics and the Great Rebalancing”

On the Road to Elysium When fiction approaches fact

The 2013 movie Elysium depicts a dystopian future of unremitting, jarring poverty juxtaposed with serene, detached wealth. Literally detached: wealth resides in a lavishly equipped, lebensraum-furnished space station, high above an impoverished, exhausted Earth. The planet is only useful as a source of provision and maintenance for the space station; its fruits have been extracted … Continue reading “On the Road to Elysium When fiction approaches fact“

Carrying the Water The Role of the Left in the Neoliberal Order

I am struck with disbelief with the apparently unlimited extent of their smug arrogance. It is these very men (and yes, they are mostly men!) who are singularly responsible for the mess we are in. Blair and Clinton in particular presided over the massive accumulation of debt, reckless deregulation and disproportionate and unbalanced boom in … Continue reading “Carrying the Water The Role of the Left in the Neoliberal Order“

Prospects for the US Economy

THE WORLD ECONOMY IN RÉSUMÉ In the previous post we outlined the structural condition of the world economy, and in particular the structural flaws it contains. The main flaw is the divorce between production and consumption. Prior to the establishment of this new macroeconomic structure, supply and demand were roughly in balance in the domestic … Continue reading “Prospects for the US Economy”

Pettis on Brexit

Michael Pettis is one contemporary economist whose blog is worth reading. His books The Volatility Machine and The Great Rebalancing are required reading for those who would understand the workings of international trade relations, currency movements, and financial markets. His comments regarding the recent “Brexit” vote by the UK’s electorate are worth delving into. “Last Friday’s … Continue reading “Pettis on Brexit”

The Economic Consequences of the Release (i.e., Brexit)

Much has been written on the recent decision by the UK to leave the European Union. Much of it is emotion-driven. But that is no way to assess such an important turn of events. The actual significance is, in significant degree, economic in nature. This calls for an economic analysis, to which we now turn. … Continue reading “The Economic Consequences of the Release (i.e., Brexit)”

The Mystery of Capital in Context

Given the rancorous debate unleashed by the UK electorate’s decision to depart the European Union – in particular, regarding the damage to the UK economy that independence might bring – it seems wise to re-examine the foundations of economic prosperity and its relationship to political and legal factors. I do so by examining Hernando de … Continue reading “The Mystery of Capital in Context”

Maggie’s Revenge

The British vote on June 23rd, 2016, to leave the European Union, is one of those events that will long be remembered. Yet there was another event involving Britain on the one hand and the European Union (then Community) on the other, that likewise came as a shock, and which likewise lives on in the … Continue reading “Maggie’s Revenge”

The Problem of Saving

When Schumpeter writes, “Now to the question: what is a savings account?”,[1] he is not being facetious. There is more to savings than meets the eye. Of course, the bare fact of saving is simple enough to understand. Rather than spend all of our earnings, we take some and put it to one side. What … Continue reading “The Problem of Saving”

Confessions of a Free Trade Advocate

Ever since I can remember I have been a proponent of free trade. It seemed the logical thing: why should the government restrict economic activity which in itself is legal and aboveboard? And when I began exploring economic theory, lo and behold, free trade was at the forefront of most every exposition. It was the … Continue reading “Confessions of a Free Trade Advocate”

National Economy?

At first glance the notion of a national economy would seem to be self-evident. After all, the lion’s share of economic data comes in the form of “national accounts,” which treat the nation as a self-contained economic entity, like a business. And the talk, when it comes to the economy, is always of how the … Continue reading “National Economy?”

Capitalism and the “Modern World System”

World system analysis was first developed in the early 1970s as an alternative to the traditional nation-state-oriented analysis of the global economy. In its initial form (which has since been expanded – even, significantly, to ancient Mesopotamia[1]) the focus was put on the modern world system, as evidenced by the title of the pioneering work … Continue reading “Capitalism and the “Modern World System””

Weighing the Gold Standard

Seeing as how the gold standard is a “money method”[1] by which all exchange value is made dependent upon the weight of a certain substance, viz., gold, it would seem appropriate to “weigh it up” to determine whether or not, “weighed in the balance,” it is “found wanting.” Indeed, weight measurement was the standard of … Continue reading “Weighing the Gold Standard”

Cloverfield Government

Well it’s about time I woke up from hibernation to begin posting again. Not much to say for awhile there, not to mention being preoccupied with finishing the next volume of the Stahl translation, about the state and constitutional law. I hope to have it published within a month (that’s quite optimistic though). At any … Continue reading “Cloverfield Government”

What’s Behind the Meltdown

The stock markets continue to plummet in unnerving fashion. The blame for it is centering on the “bailout” package — was it too little too late, was it too much, was the passage of it a dispiriting display of bad leadership. I think it goes deeper than that. The bailout was never meant to solve … Continue reading “What’s Behind the Meltdown”

The Bottom Line: False Weights and Measures

At bottom, the issue involved in this financial crisis is false weights and measures. That is, a standard of valuation that is manipulated, making people believe they are receiving something other (of lesser value) than they actually are. The Bible has this to say about such false weights and measures: Le 19:36 Just balances, just … Continue reading “The Bottom Line: False Weights and Measures”

More than an Analogy?

One of the themes running through my head regarding a description of the current financial crisis is that of the similarity of subprime mortgages to HIV. Just as HIV gets in the bloodstream and destroys immune capacity, subprime mortgages were packaged together in MSOs and CDOs which, circulating through the banking system, in turn have … Continue reading “More than an Analogy?”