Incredible read. While most of the article was somewhat over my head, I found my self enthralled. Hopefully PM Carney draws Lamont into his circle as an economic contrarian.
Interest rates are determined by the Central bank based on the false assumption that higher rates lowers inflation, which is like saying a sledgehammer kills mosquitos. High rates provide UBI for the already-rich (risk-free income from Treasuries , for no work) in proportion to how rich they are.
The Canadian Government spends the CDN $ into existence and taxes it out of existence. It does not have to borrow CDN $. Just spend to release the real resources a healthy society needs to prosper. Anything we can do…we can afford. ( we are self-funding).
I love this article (though I only fully understood maybe, 30-40% of it!). I never was a supporter of Friedman and the Chicago/Austrian school of economics and felt that Keynesian economics were far more in line with the "lived economic reality" of real people. Unfortunately, the far right and all the oligarchs have fully adopted (co-opted?) Friedman to the detriment of democracies and all but the richest around the globe and persecute any who attempt to offer a counter argument. That being the case, what options do we have as individuals, to counter the predominant exploitation by the 1%, especially given the easy ability to shift production, finance and assets anywhere around the globe in mere moments away from governments that might wish to increase corporate taxes, personal income taxes on high income earners or impose a wealth tax?
Aside from any issues around taxation, we need to focus on restructuring debt - which is a massive burden for the vast majority and a source of unearned income for the wealthiest. They "earn it in their sleep", and debt itself grows mathematically independent of any outside changes. Debt relief was done during and after the Depression and the Second World War - debts that had been racked up in a crisis were written off. In Canada, there were programs which by the 1950s had reduced farm debt by half. The federal Government helped the provinces get rid of their Depression-era debt. It's a form of modern jubilee.
This was very helpful for me at this stage of my life. So much of what we think we know is what we have been taught to know, and can just as quickly be unlearned. It’s pretty incredible that there are paradigms out there - such as economics like you describe - that have the capacity to swallow so much human experience. It’s like feeding a monster.
BTW, I couldn’t get the link to buy your book to work.
Agreed. It was Tommy Thomson's, funding of healthcare, (using tax money to benefit taxpayers them selves) which ushered in our greatest, redistribution of wealth and economy ( likewise in European countrys) that's we've ever seen and allowed the greatest growth on innovation, creativity, and entrepreneurship we ever seen.
Since then, conservatives have clawed back farmers of their privilege and the stagnation of our economy and our growth began.
We've forgotten who we were actually working for, tepeople that pay th bulk of the taxes, not the e wealthy investors that ony send their money to safe havens.
Not sure why this gets likes. Long winded and totally misses that many mainstream economists are saying these things. Just google Justin Wolfers, Stiglitz, Bannerjee, or Krugman.
This would be a much more credible blog if it simply published mainstream economists on this topic instead of the continuous- I found the truth every one else missed.
This blog is about new ideas, not failed old ones. You think it would be more credible for me to publish “mainstream” macroeconomists whose predictions were often catastrophically wrong, and my piece is about Canada.
Krugman in 2019 admitted that globalization had hurt American workers far more than anticipated. That is a colossal and harmful failure that has ruined millions of lives. They recognized the failures of the Global Financial Crisis after the fact, but didn’t see it coming.
Stiglitz, Bannerjee and Krugman are all recipients of the so-called Nobel Prize in Economics, which is itself a fraud. It was not created by Alfred Nobel or his family, it was an invention of the Swedish Central Bank which wanted to boost the profile of thinkers who would challenge social democracy. There is no Nobel for Economics, and the fact that we think there is, or that its recipients have any credibillity alongside the genuine accomplishments of Nobel laureates in the hard sciences is an embarrassment. It’s a phony prize, and the fact that people are willing to go along with this blatant fraud is an indictment of the profession.
Stiglitz has good insights, but Krugman gets lots of things wrong, and despite the crises of 2008 and the Euro Crisis and the Pandemic, there is still no new functioning paradigm that is empirically sound, which is why we are in massive crises.
The point was your ideas are not new and sharing the insights of others who have spent their lives on the topics would support your case where it has merit.
However as with your take on the Econ Nobel it seems you’re nuts so that’s not going to happen.
Here is the link on the Nobel Prize website where it says, and I quote verbatim "Not a Nobel Prize
The prize in economic sciences is not a Nobel Prize. In 1968, Sveriges Riksbank (Sweden’s central bank) instituted “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”, and it has since been awarded by the Royal Swedish Academy of Sciences according to the same principles as for the Nobel Prizes that have been awarded since 1901. The first prize in economic sciences was awarded to Ragnar Frisch and Jan Tinbergen in 1969."
Great critique. No facts, no evidence, no thinking, just a patronizing tone and some insults.
I’m not interested in being lectured by mainstream economists for the same reason I don’t take marital advice from Cathlolic Priests.
I’ve spent 30 years in public policy, including as a university lecturer and as an elected official, working on the applied side of things, while also understanding the theory. It was my job to pick apart the reality of policy failures and compare them to the rhetoric and the outcomes, and to develop policies that would work. I developed and implemented policies and legislation that rescued an industry from collapse during the pandemic, as just one example.
So you’re saying “Why don’t you rely more on orthodox economists whose failed policies have led directly to the immiseration, despair, poverty and sometimes death that is the result of the application of their ideas,” because it was my job to try to find solutions to their failures.
I can name multiple outstanding economists who actually have a far better grasp on the reality of economics than any of the people you suggest. William White, who worked for the Bank for International Settlements actually predicted the 2008 financial crisis five years before it happened. So did Steve Keen. Adair Turner was the Chair of the UK financial authority who had to clean up the mess in the UK and is an academic who broke down the failures of theory leading up to 2008; Mark Blyth, who wrote an intellectual history of austerity that included 2008 and the Euro Crisis; Mariana Mazzucatto, who writes about innovation. Ha-Joon Chang, who has written extensively about orthodox economics and trade, as well as Keynes, and Michael Hudson who worked on Wall Street in the 1960s. Paul Romer in 2016 wrote the “Trouble with Macroeconomics”
Krugman’s Nobel Prize was in Trade, and he was wrong. There are multiple other examples of the recipients of the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” being catastophically wrong, including Black Scholes, Robert Lucas, Buchanan, Friedman and others whose ideas, when implemented, have led to financial crashes and massive crises, but remain unchallenged nevertheless.
Economics was never one of the original categories chosen by Nobel and his family - physics, chemistry, peace, medicine, and literature. It was created by the Swedish Central Bank in the 1960s by right-leaning central bank governors who wanted to resist social democracy. This is not my radical opinon - it’s right there in the name. It’s not a Nobel Prize, at all: it’s the “Swedish Central Bank Prize in Economic Sciences in Memory of Alfred Nobel” and members of Nobel’s family continue to object to it until this day.
If you search “fake Nobel Prize for economics” it turns up plenty of results, including this one from the Financial Times,
“ I have been absolutely deluged with letters, comments and e-mails, provoked by my column on economists and historians. One of the most interesting notes I got was from a French economic journalist, Christian Chavagneux, who makes the following point: ” One way to advance your ideas would be to call for the end of the so called “Nobel Prize” in Economics. You know that Alfred Nobel never intended to reward economists as great scientists and that the Prize is given by the Bank of Sweden. Thanks to a cuckoo in the nest strategy it obtained to award it at the same time as the real Nobel Prizes to make believe that economists were as much scientists as physicians and mathematicians and as useful as doctors ! In our magazine we now write about Paul Krugman or J. Stiglitz as The Bank of Sweden prize economists.” I think Christian is certainly onto something, when he implies that the phrase “Paul Krugman, the Bank of Sweden prize-winning economist,” would have a less impressive ring to it. The Economics “Nobel” only dates back to 1969, when those clever Swedes invented it. Here is an article from Mr Chavagneux’s journal , “Alternatives Economiques” that explains how the Nobel prize for economics was invented and how the “cuckoo in the nest” strategy worked.
There are so many little things that you claim here and there that are mostly built on oversimplifications, hyperbole, and/or downright misuse of facts that I don’t have time to respond to everything. Instead, here are a few comments about the larger points you make. Your argument, especially the second half of your essay, that ‘neoclassical’ economics (an incredibly vague and functionally meaningless term — define it) lacks intellectual rigour is built on cherrypicking certain iterations of macroeconomic thought, and attributing this to price theory as a whole – a fallacy of composition.
“Value is about whether we think something is important or not, and how important it is to others. How are we determining whether the information we are looking at is important or not, and how important is it? Neoclassical economics, in which Carney is an expert, has no such intellectual underpinning.” Yes it does, it’s called marginalism — And you clearly have never actually studied economics otherwise you would know this. (“my undergraduate degree was in literature with a minor in philosophy, and my master’s degree in literature” — Thank you for letting us know)
Economists today rely upon the use of statistical modelling (aka econometrics) to test hypotheses; this is the bulk of modern economic work today (which I might add, rests upon the microeconomic theory of the past –– See Debreu-Arrow, Frisch, Angrist, Heckman, Card, etc.)
Next, your claim that “there are prescriptive disciplines, which is what mainstream, orthodox economics has become. Neoclassical and neoliberal economics do not accurately and impartially describe the functioning of the economy. The Global Financial Crisis and the Euro Crisis both showed that.” is perhaps the most intellectually lazy claim in the entire piece (and there are many).
There are undoubtedly normative elements of economic theory, no disagreement here. But to claim that economics is purely prescriptive is evidence of either profound dishonesty, ignorance, or both. In fact, most of economics is descriptive. Calculating marginal productivity, calculating real and nominal wage growth, national income accounting, etc. etc. Moreover, that the financial crisis somehow ‘disproves’ the legitimacy of economic thought, how so? I think this comes from a fundamental confusion between economics as a subject and economics as a discipline. Many laymen who make this critique seem to misunderstand what economists actually do — in short, it is less about prediction and more so about causal inference.
Your final claim is the most puzzling to me. You basically restate certain platitudes about economic thought that have been made for decades (if not centuries!) by economists yet claim that economics fails to adequately capture the 'informational' elements! A market is exactly what you are proposing! (See Hayek “The Use of Knowledge in Society”) “The money economy is entirely informational” Yes, in fact many if not most economists would agree with this! That is exactly what markets, prices, incentives, help us understand… Fiat money has no intrinsic value but it relays information to us about the real value of goods and services. Again, I think if you had actually studied economics before criticizing it (and I mean take the time to study industrial organization, RBC models, econometrics, etc. which it is clear to me that you have not, your arguments would have much more veracity and you could separate the wheat from the chaff in your own writing)
I have a degree in philosophy so am capable of reading quite esoteric texts. Your post was definitely a difficult read (several grammatical errors or missing words--cut and paste issues?--adding to the fun). May I suggest you try to make your post more accessible for readers. Your substantive argument is important and worthy of adequate communication. Please make it readable!
Incredible read. While most of the article was somewhat over my head, I found my self enthralled. Hopefully PM Carney draws Lamont into his circle as an economic contrarian.
I may have to get business cards with that title.
Thank you very, very much.
Interest rates are determined by the Central bank based on the false assumption that higher rates lowers inflation, which is like saying a sledgehammer kills mosquitos. High rates provide UBI for the already-rich (risk-free income from Treasuries , for no work) in proportion to how rich they are.
The Canadian Government spends the CDN $ into existence and taxes it out of existence. It does not have to borrow CDN $. Just spend to release the real resources a healthy society needs to prosper. Anything we can do…we can afford. ( we are self-funding).
I love this article (though I only fully understood maybe, 30-40% of it!). I never was a supporter of Friedman and the Chicago/Austrian school of economics and felt that Keynesian economics were far more in line with the "lived economic reality" of real people. Unfortunately, the far right and all the oligarchs have fully adopted (co-opted?) Friedman to the detriment of democracies and all but the richest around the globe and persecute any who attempt to offer a counter argument. That being the case, what options do we have as individuals, to counter the predominant exploitation by the 1%, especially given the easy ability to shift production, finance and assets anywhere around the globe in mere moments away from governments that might wish to increase corporate taxes, personal income taxes on high income earners or impose a wealth tax?
Aside from any issues around taxation, we need to focus on restructuring debt - which is a massive burden for the vast majority and a source of unearned income for the wealthiest. They "earn it in their sleep", and debt itself grows mathematically independent of any outside changes. Debt relief was done during and after the Depression and the Second World War - debts that had been racked up in a crisis were written off. In Canada, there were programs which by the 1950s had reduced farm debt by half. The federal Government helped the provinces get rid of their Depression-era debt. It's a form of modern jubilee.
It's all in my book >> https://www.mcnallyrobinson.com/9783127323207/dougald-lamont/bring-on-the-brand-new-renaissance
This was very helpful for me at this stage of my life. So much of what we think we know is what we have been taught to know, and can just as quickly be unlearned. It’s pretty incredible that there are paradigms out there - such as economics like you describe - that have the capacity to swallow so much human experience. It’s like feeding a monster.
BTW, I couldn’t get the link to buy your book to work.
Thank you and I will fix the link. It’s here, as well: https://www.mcnallyrobinson.com/9783127323207/dougald-lamont/bring-on-the-brand-new-renaissance
fantastic
Thank you!
Agreed. It was Tommy Thomson's, funding of healthcare, (using tax money to benefit taxpayers them selves) which ushered in our greatest, redistribution of wealth and economy ( likewise in European countrys) that's we've ever seen and allowed the greatest growth on innovation, creativity, and entrepreneurship we ever seen.
Since then, conservatives have clawed back farmers of their privilege and the stagnation of our economy and our growth began.
We've forgotten who we were actually working for, tepeople that pay th bulk of the taxes, not the e wealthy investors that ony send their money to safe havens.
Not sure why this gets likes. Long winded and totally misses that many mainstream economists are saying these things. Just google Justin Wolfers, Stiglitz, Bannerjee, or Krugman.
This would be a much more credible blog if it simply published mainstream economists on this topic instead of the continuous- I found the truth every one else missed.
Well, maybe it’s not for you.
This blog is about new ideas, not failed old ones. You think it would be more credible for me to publish “mainstream” macroeconomists whose predictions were often catastrophically wrong, and my piece is about Canada.
Krugman in 2019 admitted that globalization had hurt American workers far more than anticipated. That is a colossal and harmful failure that has ruined millions of lives. They recognized the failures of the Global Financial Crisis after the fact, but didn’t see it coming.
Stiglitz, Bannerjee and Krugman are all recipients of the so-called Nobel Prize in Economics, which is itself a fraud. It was not created by Alfred Nobel or his family, it was an invention of the Swedish Central Bank which wanted to boost the profile of thinkers who would challenge social democracy. There is no Nobel for Economics, and the fact that we think there is, or that its recipients have any credibillity alongside the genuine accomplishments of Nobel laureates in the hard sciences is an embarrassment. It’s a phony prize, and the fact that people are willing to go along with this blatant fraud is an indictment of the profession.
Stiglitz has good insights, but Krugman gets lots of things wrong, and despite the crises of 2008 and the Euro Crisis and the Pandemic, there is still no new functioning paradigm that is empirically sound, which is why we are in massive crises.
The point was your ideas are not new and sharing the insights of others who have spent their lives on the topics would support your case where it has merit.
However as with your take on the Econ Nobel it seems you’re nuts so that’s not going to happen.
Here is the link on the Nobel Prize website where it says, and I quote verbatim "Not a Nobel Prize
The prize in economic sciences is not a Nobel Prize. In 1968, Sveriges Riksbank (Sweden’s central bank) instituted “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”, and it has since been awarded by the Royal Swedish Academy of Sciences according to the same principles as for the Nobel Prizes that have been awarded since 1901. The first prize in economic sciences was awarded to Ragnar Frisch and Jan Tinbergen in 1969."
https://www.nobelprize.org/nomination/economic-sciences/
So what is the fraud you are claiming they are guilty of?
It’s not a Nobel prize because it is not one of those Alfred Nobel set up.
It is managed in exactly the same way as all those he did set up by the same organization. They are completely open about this.
Your problem here is you want to turn a semantic argument into some nefarious fraud. And you are staring at the information that makes this clear.
It’s the hallmark of someone with nothing better to say who’s actively seeking an echo chamber,
Great critique. No facts, no evidence, no thinking, just a patronizing tone and some insults.
I’m not interested in being lectured by mainstream economists for the same reason I don’t take marital advice from Cathlolic Priests.
I’ve spent 30 years in public policy, including as a university lecturer and as an elected official, working on the applied side of things, while also understanding the theory. It was my job to pick apart the reality of policy failures and compare them to the rhetoric and the outcomes, and to develop policies that would work. I developed and implemented policies and legislation that rescued an industry from collapse during the pandemic, as just one example.
So you’re saying “Why don’t you rely more on orthodox economists whose failed policies have led directly to the immiseration, despair, poverty and sometimes death that is the result of the application of their ideas,” because it was my job to try to find solutions to their failures.
I can name multiple outstanding economists who actually have a far better grasp on the reality of economics than any of the people you suggest. William White, who worked for the Bank for International Settlements actually predicted the 2008 financial crisis five years before it happened. So did Steve Keen. Adair Turner was the Chair of the UK financial authority who had to clean up the mess in the UK and is an academic who broke down the failures of theory leading up to 2008; Mark Blyth, who wrote an intellectual history of austerity that included 2008 and the Euro Crisis; Mariana Mazzucatto, who writes about innovation. Ha-Joon Chang, who has written extensively about orthodox economics and trade, as well as Keynes, and Michael Hudson who worked on Wall Street in the 1960s. Paul Romer in 2016 wrote the “Trouble with Macroeconomics”
Krugman’s Nobel Prize was in Trade, and he was wrong. There are multiple other examples of the recipients of the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” being catastophically wrong, including Black Scholes, Robert Lucas, Buchanan, Friedman and others whose ideas, when implemented, have led to financial crashes and massive crises, but remain unchallenged nevertheless.
Economics was never one of the original categories chosen by Nobel and his family - physics, chemistry, peace, medicine, and literature. It was created by the Swedish Central Bank in the 1960s by right-leaning central bank governors who wanted to resist social democracy. This is not my radical opinon - it’s right there in the name. It’s not a Nobel Prize, at all: it’s the “Swedish Central Bank Prize in Economic Sciences in Memory of Alfred Nobel” and members of Nobel’s family continue to object to it until this day.
If you search “fake Nobel Prize for economics” it turns up plenty of results, including this one from the Financial Times,
“ I have been absolutely deluged with letters, comments and e-mails, provoked by my column on economists and historians. One of the most interesting notes I got was from a French economic journalist, Christian Chavagneux, who makes the following point: ” One way to advance your ideas would be to call for the end of the so called “Nobel Prize” in Economics. You know that Alfred Nobel never intended to reward economists as great scientists and that the Prize is given by the Bank of Sweden. Thanks to a cuckoo in the nest strategy it obtained to award it at the same time as the real Nobel Prizes to make believe that economists were as much scientists as physicians and mathematicians and as useful as doctors ! In our magazine we now write about Paul Krugman or J. Stiglitz as The Bank of Sweden prize economists.” I think Christian is certainly onto something, when he implies that the phrase “Paul Krugman, the Bank of Sweden prize-winning economist,” would have a less impressive ring to it. The Economics “Nobel” only dates back to 1969, when those clever Swedes invented it. Here is an article from Mr Chavagneux’s journal , “Alternatives Economiques” that explains how the Nobel prize for economics was invented and how the “cuckoo in the nest” strategy worked.
https://www.ft.com/content/1e31e76f-aeba-35fa-a1bb-b6967fc4f40b
https://www.alternatives-economiques.fr
This is a bunch of meaningless gibberish, but I am sure it will pass as sophisticated for some.
Sorry, are you referring to your own comment?
I don't tolerate comments that make no substantive arguments. You are offering no facts, no critique and no counter-argument. Make one or get banned.
There are so many little things that you claim here and there that are mostly built on oversimplifications, hyperbole, and/or downright misuse of facts that I don’t have time to respond to everything. Instead, here are a few comments about the larger points you make. Your argument, especially the second half of your essay, that ‘neoclassical’ economics (an incredibly vague and functionally meaningless term — define it) lacks intellectual rigour is built on cherrypicking certain iterations of macroeconomic thought, and attributing this to price theory as a whole – a fallacy of composition.
“Value is about whether we think something is important or not, and how important it is to others. How are we determining whether the information we are looking at is important or not, and how important is it? Neoclassical economics, in which Carney is an expert, has no such intellectual underpinning.” Yes it does, it’s called marginalism — And you clearly have never actually studied economics otherwise you would know this. (“my undergraduate degree was in literature with a minor in philosophy, and my master’s degree in literature” — Thank you for letting us know)
Economists today rely upon the use of statistical modelling (aka econometrics) to test hypotheses; this is the bulk of modern economic work today (which I might add, rests upon the microeconomic theory of the past –– See Debreu-Arrow, Frisch, Angrist, Heckman, Card, etc.)
Next, your claim that “there are prescriptive disciplines, which is what mainstream, orthodox economics has become. Neoclassical and neoliberal economics do not accurately and impartially describe the functioning of the economy. The Global Financial Crisis and the Euro Crisis both showed that.” is perhaps the most intellectually lazy claim in the entire piece (and there are many).
There are undoubtedly normative elements of economic theory, no disagreement here. But to claim that economics is purely prescriptive is evidence of either profound dishonesty, ignorance, or both. In fact, most of economics is descriptive. Calculating marginal productivity, calculating real and nominal wage growth, national income accounting, etc. etc. Moreover, that the financial crisis somehow ‘disproves’ the legitimacy of economic thought, how so? I think this comes from a fundamental confusion between economics as a subject and economics as a discipline. Many laymen who make this critique seem to misunderstand what economists actually do — in short, it is less about prediction and more so about causal inference.
Your final claim is the most puzzling to me. You basically restate certain platitudes about economic thought that have been made for decades (if not centuries!) by economists yet claim that economics fails to adequately capture the 'informational' elements! A market is exactly what you are proposing! (See Hayek “The Use of Knowledge in Society”) “The money economy is entirely informational” Yes, in fact many if not most economists would agree with this! That is exactly what markets, prices, incentives, help us understand… Fiat money has no intrinsic value but it relays information to us about the real value of goods and services. Again, I think if you had actually studied economics before criticizing it (and I mean take the time to study industrial organization, RBC models, econometrics, etc. which it is clear to me that you have not, your arguments would have much more veracity and you could separate the wheat from the chaff in your own writing)
I have a degree in philosophy so am capable of reading quite esoteric texts. Your post was definitely a difficult read (several grammatical errors or missing words--cut and paste issues?--adding to the fun). May I suggest you try to make your post more accessible for readers. Your substantive argument is important and worthy of adequate communication. Please make it readable!
See https://warwickpowell.substack.com/p/beyond-solvency and
https://kathleenmccroskey.substack.com/p/the-hour-of-decision-for-canada