Study time has begun: macro is waiting!! Still, here are this week’s Sunday bites: Moral Issues; Skidelsky’s helicopter money; Trump is a symptom; Money, Homo oeconomicus, and other myths.
Let’s start with an interview with Nazi Propaganda Minister Joseph Goebbels’ 105-year-old secretary “No one believes me now, but we knew nothing“. Albeit I still have to read Hannah Arendt’s “Eichmann in Jerusalem: A Report on the Banality of Evil”, as far as I know, the book shows how people “simply doing their jobs”, without any critical enquiry, made the Shoah possible, as Pomsel states “But really, I didn’t do anything other than type in Goebbels’ office”. Of course, it’s easy to judge today, as she says “Those people nowadays who say they would have stood up against the Nazis – I believe they are sincere in meaning that, but believe me, most of them wouldn’t have”, but that’s the point, the scary truth is we can’t know what we would have been capable of back then!! This consideration should be our constant reminder…
Skidelsky’s helicopter money
Things seem to move in the UK – this time in the right direction – with the new Government intentioned to abandon the Cameron-style austerity policies. In his FT article “A tweak to helicopter money will help the economy take off” Robert Skidelsky makes some suggestions on what an alternative economic policy might look like: implement helicopter money (as Overt Monetary Financing), avoiding its hoarding (an update to Gesell’s ideas), inflationary pressures (govt investment program) and extra imports (preferential treatment for British firms). One may also accompany this plan with banking regulation encouraging credit for productive ends at the expense of speculation activities (credit that finances trading in existing assets), to further minimize inflationary pressures and expand output capacity, as suggested in the insightful book “Where does money come from?” (Ryan-Collins et al., 2011).
Too good to be true, honestly; plus, I’m afraid that preferential treatment is not in line with international trade treaties and would need to be carried out in implicit forms!? For some info about helicopter money and OMF go to Bill Mitchell’s blog (see
PS: For some info about helicopter money and OMF go to Bill Mitchell’s blog (see this or this article); Italian readers can also find a brief comment on helicopter money and the different approach by Friedman and Keynes. To those saying “cash transfers make people lazy”, there’s no empirical proof for that statement (see this Vox article “Economists tested 7 welfare programs to see if they made people lazy. They didn’t.”)
Trump is a symptom
Donald Trump is a joke, he’s a failed businessman cheating small businesses; dishonest and a liar (think of his ridiculous claim about Obama being the founder of ISIS; watch this, this, this or this video; go to any fact-checking!); a thin-skinned and ignorant candidate who has absolutely no clue (about anything, starting from politics); and a cynic, sexist and bigot with no empathy and decency (think of Khizr Khan or the handicapped journalist and all his other insults here, here, or here). His campaign has no direction, no platform, running on hatred and fear, and white-man-resentment. The problem is he’s a dangerous and frightening joke running for the highest office in the world. And it’s not like with Reagan or Bush jr., useful idiots who could be maneuvered by the establishment: he can’t even control himself!!
Trump is often depicted as an incident or an anomaly of the 2016 elections, as the illness of the GOP…a story I don’t buy. Maybe it’s the outsider perspective (greetings from Venice!), but to me, he’s a symptom of the GOP’s illness. This is also the thesis of two very interesting Jacobine articles titled “The Conservative Movement Has No Decency” and “The Republican Crack-Up“. The first article draws a parallel between Trump attacking Mr. Khan, and McCarty dragging as many people as possible in the mud. In particular, it recalls the outburst of Mr. Welch during a hearing by McCarty in 1954: “Have you no sense of decency, sir, at long last? Have you left no sense of decency?” In both cases, not only the individuals but also their party, the GOP, had no decency left, because it profited from laying a fertile ground, and supported them. In the second article, the author argues there are two types of political cycle in the US: “the rise and fall of presidential/party regimes” and “the rise and fall of conservative movements and regimes”. Trump came at the end of the Reagan regime, which coincides with the collision of the GOP’s two souls (Tea Party + Christian Right vs elite business and national security types), and when American conservatism needs to reinvent itself after it successfully destroyed its enemies, namely the labour, feminist and Black Freedom movements.
Finally, I’d like to notice that the intolerant racist base that Trump is appealing to has always been there, probably representing the core soul of the modern Republican Party: the “establishment” has accepted and coddled it for decades (Reagan calling for the states to watch over racial issues, or Bush Sr.’s campaign ties with the “Ethnic Outreach Committee”). And that base is not predominantly made of white working-class man: read here (primary season) or here or watch Ezra Klein tackling the issue here.
PS: Although I’m not socialist and the Jacobine magazine often gets – in my view -economics wrong, they offer worthwhile readings from time to time…the key, as always, is to read everything with a critical approach.
Money, Homo oeconomicus, and other myths
I warmly suggest following the work of the evonomics folks, some of many who try to fix what isn’t working in economics today by bringing in new insights and approaches.
These days I’ve read some of their articles :
- “Evolutionary Biology Proves Ayn Rand Didn’t Know What She Was Talking About” and “Scientists Discover What Economists Haven’t Found: Humans“: biology proves that not selfishness but reciprocal altruism (social contract style) has been the way and that the canonical predictions of the Homo oeconomicus fail in every human society – although in different ways across different societies – and work only with our progenitors, chimpanzees. I’d like to add that anthropologists and other scientists have shown how early and simple societies worked not by barter but by sharing.
- “You Don’t Own That! The Evolution of Property” and “Did Money Evolve? You Might (Not) Be Surprised“: Steve Roth shows how real assets are also exclusionary claims, having an offsetting entry on the right-hand side of “everyone else”, and that money is all about accounting (not surprisingly for someone like me who read David Graeber’s book “Debt: The First 5,000 Years” and has been following the MMT school for years). You can find an “aside” piece on property, libertarians and force here.
Finally, I’d like to cross-post from the first evonomics article a beautiful statement by Senator Elizabeth Warren, for all those who constantly speak about the “self-made man”:
There is nobody in this country who got rich on their own. Nobody… You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea — God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.