Something that I knew, but it still shocks me, is illustrated in this data from The Economist. Exhibit 1 In terms of regional inequality, the UK is more divided than the US. The situation in the UK is extreme. It is as if a great crime has been committed on large parts of the UK… Read more
Category:
Basic Economics
Uneconomic aimed at the general reader. Normally descriptive with minimal Mathematics
The single most important piece of economics that everyone should know.
Sectoral balances may not sound like something you need to know, but if you will give me a moment I will try to convince you. It might change what you do. We are all familiar with whether our bank account is in the black or the red. Sectoral balances are the same, except that now… Read more
The magic multiplier effect
When you plant a tree in the ground, it grows, producing seeds which become the source of new trees. But remember, trees can only grow where there are resources – water, sunlight and nutrients in the soil. We can think about government investment in the same way. In a democracy, government spend happens because society… Read more
Everything you ever wanted to know about Bitcoin – and just a little bit more
There is a marvelous article in the ‘Washington Post’ (yes, I know it’s owned by Bezos, the man that owns Amazon, so is not my usual read either) but it provides the best summary of Bitcoin that I’ve yet encountered. I’ve quoted the introduction to whet the appetite: Bitcoin changes prices too quickly to be… Read more
What is the economy for? Further thought for 2018
In my earlier piece on ‘What is the economy for?’ I should really have mentioned the economist Steve Keen’s idea of what the economy is for, which is “to provide for all the population”. This very succinct summary certainly conveys clearly the idea that it is not to provide for any one group in particular…. Read more
Rethinking economics? What is the economy for?
As much interest has been provoked by the recent effort to make economics less of a belief system and more of a servant to society I thought it worth revisiting a post from much earlier in the year to help us fathom rethinking this thing called economics. It is said there is no such thing… Read more
Ireland As Cyprus Rather than Germany?
The Good Friday agreement allows for a border poll and the reunification of Ireland should there be a possibility of a majority in NI being in favour of the poll. Like the Brexit referendum a simple majority (50%+1) is sufficient to trigger a United Ireland (unlike the Brexit referendum which was simply advisory a NI… Read more
Why can’t a household be more like a bank?
The short answer to this question is of course that householders don’t issue their own money. But banks do. So perhaps we should be complaining less about the household analogy that is the bugbear of a proper understanding of how the economy works – and suggesting another more fitting analogy. A government with a sovereign… Read more
The Duopoly of Money Creation
How is money created? Fiat money is created from nothing on the basis of a promise – a promise to deliver goods or service in the future. Another word for promise is debt – I prefer promise. Only if we believe in these promises does money have value. The teacher promises to teach. The roofer… Read more
What is Fiat Money?
This post addresses the question: What is fiat money? Once we have answered this question, we consider a much harder question – how to maintain confidence in the fiat money belief system?… Read more