Building a New Economics

We are at the 250th anniversary of the establishment of the United States of America, and we are witnessing the end of the American Empire at the same time. I attribute this decline, not only to having elected a Mad King as President, but the mistake the USA made over 80 years ago, to insist the the US dollar replace the UK pound as the currency for international trade.

I’m releasing this chapter somewhat out of sequence, and in full, because Tyrone Keynes and I will discuss this live on YouTube at 5pm UK time today. Come along and join the debate: Blanchard was quite correct that “The pursuit of a widely accepted analytical macroeconomic core, in which to locate discussions and extensions … is a dream surely worth pursuing” (Blanchard 2016, p. 3).

I’m very pleased to be able to announce that I have completed the manuscript and sent it to the publisher Polity Books. There is now a reasonable chance that this book will be available by February of 2027. (PS the figure numbering is wrong, which is a SNAFU by Microsoft Word that I can’t fix) None of what I have covered in the last six chapters is known by Neoclassical economists.

Firstly, thank you to all those subscribers who sent me messages after my post “Some Unpleasant Personal News” yesterday—and a special thanks to all those who either became paying subscribers, or increased their donation. Secondly, the figure numbering here is stuffed up because of a bug in Word which is as old as the program itself: it doesn’t auto-update Figure and Table numbers, and the trick I used to use to force it—printing a PDF—no longer seems to work.

A few weeks ago, I found out that my wife has stage 4 cancer. That, and an inexorable trend for my crowdfunding revenue to fall, is forcing me to sell my apartment in The Netherlands. The sale will enable us to afford treatment for her in the private health system in Thailand. After the sale, I will move to Thailand, where my wife is undergoing treatment in the public health system, since she is a Thai national. It also means that family is nearby, for whatever the outcome might be.

If you’ve ever felt dumb because you couldn’t understand economic arguments, this video shows that it was probably the economics that was wrong, not you. Share

Hedging, rife in the financial and commercial world, is designed to protect our investments. If prices of our investments go down, or the cost of our business inputs go up, hedging is the insurance that stops things getting too bad. But does it work? Steve argues it doesn’t work when there’s financial crisis - when all prices go the same way. The exampl…

The model that Neoclassical economists use to describe money creation is called “the Money Multiplier”, or “Fractional Reserve Banking”. This model describes money creation as an iterative process involving the creation of additional Reserves for a bank, the bank holding a small fraction of those reserves and lending out the rest, the redepositing of the larger loaned fraction with another bank, and so on.

A new video on the Iran conflict, and why the USA has set itself up for attacks on its own territory by its terrorism in the Middle East, goes live at 8PM UK time: Share

Double-entry bookkeeping was developed in Venice in the 1200s. It spread across Europe when it was popularized by the monk Luca Pacioli after the invention of the Gutenberg Press. His simple explanation was that: ‘All the creditors must appear in the Ledger at the right-hand side, and all the debtors at the left. All entries made in the Ledger have to be double entries—that is, if you make one creditor, you must make someone debtor.’ {Gleeson-White, 2011 #4185`, p.