Neoliberal economics, Big Pharma and pandemics

December 9, 2022 2 comments

from Imad Moosa  

The spread of the virus has been aided by the neoliberal drive to privatise everything under the sun, including healthcare. Forty years of the privatisation of public health institutions (allegedly in the name of efficiency and for the benefit of consumers) has resulted in a disastrous situation as private healthcare providers have no commercial interest in preparing for or preventing emergencies. The spread has been aided by the lack of staff and material capacities in underfunded public hospitals, and the complete inability of the private, profit-motivated healthcare industry to provide even the most basic medical equipment and treatment when they are needed. The followers of neoliberal thinking disagree with this proposition and suggest that only the private sector can deal with the pandemic. 

Free marketeers argue that the development of a vaccine would not have been possible without the free market principles. In his defence of “Big Pharma”, Ralph (2020) praises the “global pharmaceuticals sector”, which “has been working for months with academia and governments to develop vaccines at unprecedented speed and financial risk, but also against a backdrop of cynicism from a public weary of controversies from drug price ‘gouging’ to bribery and marketing scandals”. In an editorial, City A.M. (2020) suggests that only those who know the principles of free market economics, or those who are observant, realise that “over the past hundreds of years it has invariably been the private sector, driven by need, who have innovated the world into progress”.

Those who argue along these lines seem to overlook the fact that vaccines would not have been developed without government action and public sector support. Typically, pharmaceutical companies take the risk of innovation in return for a profitable period under patent protection. If research fails (in the sense that a useful product does not materialise) the underlying company will likely fail to recoup the cost of research and development. This means that the risk of innovation is borne by pharmaceutical companies. However, this time it is different as the risk posed by the pandemic forced governments to accept innovation risk by pre-ordering vaccines without knowing whether or not they would be effective. This acceptance provided the incentive for pharmaceutical companies to develop multiple approaches simultaneously in order to find those that work, while letting the government take the risk of those that do not work. Pharmaceutical companies have also been allowed to progress the vaccines through the necessary regulatory clearance stages more quickly, continuing with testing while seeking regulatory clearance in parallel, rather than sequentially. Those same companies have been assured that they would not face lawsuits if the vaccines produced side-effects that could kill or harm people. And they have been receiving billions of dollars of taxpayers’ money in the form of research grants and subsidies. Read more…

Stress, a negative externality, is ubiquitous

December 7, 2022 1 comment

from John Komlos 

Stress, the body’s biological response to external threats, is generated in the economic system as a negative externality through countless pathways, that include long working hours, being underpaid, being evicted, income insecurity, unhealthy work environments, tight deadlines, being fired, long spells of unemployment, underemployment, low income relative to the median, reduction of earnings, unexpected medical expenses, college tuition, being victim of predatory loans, financial pressure, inadequate work-life balance, being underinsured, excessive child-care costs, inflation, incarceration, and inadequate government safety net programs, to name some contributing factors.

The relevant literature is humongous: a search of the National Library of Medicine (PubMed) and of the IDEAS/REPEC websites found tens of thousands of articles in which stress and an economically relevant descriptor were both either in the title or in the abstract (Table 1). That these studies have increased exponentially in the 21st century is indicative of the increasing significance of this phenomenon. For instance, in the year 2000 there were 630 articles with “work” and “stress” in the title or abstract in the PubMed website while there were 4,986, or eight times as many (per annum) even before the Covid pandemic. In 2021 there were 7,299. This pattern obtained for all other keyword pairs investigated. Read more…

Is economics nothing but a library of models?

December 6, 2022 7 comments

from Lars Syll

Chameleons arise and are often nurtured by the following dynamic. First a bookshelf model is constructed that involves terms and elements that seem to have some relation to the real world and assumptions that are not so unrealistic that they would be dismissed out of hand. monocle_chameleon_2The intention of the author, let’s call him or her “Q,” in developing the model may be to say something about the real world or the goal may simply be to explore the implications of making a certain set of assumptions … If someone skeptical about X challenges the assumptions made by Q, some will say that a model shouldn’t be judged by the realism of its assumptions, since all models have assumptions that are unrealistic …

Chameleons are models that are offered up as saying something significant about the real world even though they do not pass through the filter. When the assumptions of a chameleon are challenged, various defenses are made (e.g., one shouldn’t judge a model by its assumptions, any model has equal standing with all other models until the proper empirical tests have been run, etc.). In many cases the chameleon will change colors as necessary, taking on the colors of a bookshelf model when challenged, but reverting back to the colors of a model that claims to apply the real world when not challenged.

Paul Pfleiderer

As we all know, economics has become a model-based science. And in many of the methodology and philosophy of economics books published during the last two decades, this is seen as something positive.

In Dani Rodrik’s Economics Rules (OUP 2015) — just to take one illustrative example — economics is looked upon as nothing but a smorgasbord of ‘thought experimental’ models. For every purpose you may have, there is always an appropriate model to pick. The proliferation of economic models is unproblematically presented as a sign of great diversity and abundance of new ideas: Read more…

The real economy is never in equilibrium

December 5, 2022 15 comments

from Philip George

What are vectors?

. . . we defined a vector as a quantity having both magnitude and direction and represented it by an arrow. This makes sense in Euclidean 3-dimensional space. But in higher dimensions the idea of direction is not intuitive and we need a more formal definition that is consistent with the definition in three dimensions. In mathematics, an object is defined as a vector if it is an element in a vector space. This seems a circular definition but the additional requirements make it clear why it is defined in this way. Thus, when a vector is multiplied by a scalar (a real number, for our purpose) the result must be an element of the vector space, i.e., another vector. And a vector added to another vector must also be a vector in that vector space.

Consider two 10-tuples of numbers, T1 = (t1, t2, t3, … , t10) and T1¢ = (t1¢, t2¢, t3¢,… , t10¢). Let these represent the temperatures at ten points along the lengths of two metal bars. Then it is obvious that these 10-tuples cannot be vectors because they fail the requirement of vector addition; it makes no sense to add t1 and t1¢ because, as shown in the section on temperature, adding temperatures is a meaningless operation.

Similarly, consider two 10-tuples of numbers P1 = (p1, p2, p3, … , p10) and P1¢ = (p1¢, p2¢, p3¢, … , p10¢). Let P1 be the prices of 10 goods which an individual consumes on Monday and P1¢ be the prices of the same goods which he consumes on Tuesday. Now it is meaningless to add the price of a good on Monday to the price of the good on Tuesday. Therefore, it is meaningless to add the elements of the two 10-tuples P1 and P1¢. Hence, the two 10-tuples cannot be vectors and, indeed, there cannot be such a thing as a price vector.

We are therefore forced to conclude that General Equilibrium Theory (GET), which in its modern version is nearly three quarters of a century old, is merely highfalutin nonsense.

A bit of history

Einstein described Gibbs as Read more…

Knowledge and growth

December 4, 2022 Leave a comment

from Lars Syll

Ideas Vectors & Illustrations for Free Download | Freepik
If you have an apple and I have an apple and we exchange these apples then you and I will each have one apple.

But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.

George Bernard Shaw

 

Adam Smith once wrote that a really good explanation is “practically seamless.” Is there any such theory within one of the most important fields of social sciences — economic growth?

In Paul Romer’s Endogenous Technological Change (1990) knowledge is made the most important driving force of growth. Knowledge (ideas) are presented as the locomotive of growth — but as Allyn Young, Piero Sraffa and others had shown already in the 1920s, knowledge is also something that has to do with increasing returns to scale and therefore not really compatible with neoclassical economics with its emphasis on decreasing returns to scale.

Increasing returns generated by non-rivalry between ideas is simply not compatible with pure competition and the simplistic invisible hand dogma. That is probably also the reason why neoclassical economists have been so reluctant to embrace the theory wholeheartedly.

Mainstream economics has tried to save itself by more or less substituting human capital for knowledge/ideas. But knowledge or ideas should not be confused with human capital. Although some have problems with the distinction between ideas and human capital in modern endogenous growth theory, this passage gives a succinct and accessible account of the difference: Read more…

Free trade theory fails to correspond to reality

December 3, 2022 8 comments

from Jeff Ferry 

For the last 90 years, the United States has pursued and advocated free trade. For the last 60 of those 90 years, American workers and other observers have watched America lose high-paying jobs to imports and asked: can this really be good for the American economy?

Professional economists have answered, virtually unanimously, that yes, it is good, due to something called the Law of Comparative Advantage.

They are wrong. Their free trade theory, based on the so-called Law of Comparative Advantage, does not work for the U.S. or for many other countries.  We know this because dozens of economists have published studies of the empirical results of import penetration showing that the Law of Comparative Advantage, and the modern economic theory built around it is outmoded and inapplicable to high wage nations like the U.S. Indeed, it can actually worsen the performance of high wage nations.

Economists advocate free trade theory less because they actually believe it than because of what Nobel laureate economist Paul Romer has called “a sense of academic group identity grounded in a common defense of [a] dogmatic position.”[1] In other words, economists use this dogmatic theory as a weapon to win jobs, influence, and consulting contracts.

In fact, free trade theory fails to correspond to reality, as the evidence published by economists for at least 100 years has shown. Read more…

Twitter temporarily suspends Dean Baker’s account after his “right-wing jerk” article

December 2, 2022 1 comment

Dean Baker’s article is two posts below this post. 

Here is an article from CEPR about the suspension.

Washington, DC — The Center for Economic and Policy Research (CEPR) expresses concern at the sudden and disturbing temporary suspension of Dean Baker’s Twitter account today. Baker, who co-founded CEPR with Mark Weisbrot in 1999, and who currently works with CEPR as a senior economist, had his Twitter account, @DeanBaker13, “permanently suspended” without warning earlier today, only to see it reinstated a short time later, but with only a small fraction of the over 66,800 followers it had before it was suspended. Baker was not given any explanation for the suspension other than a boilerplate notification, and had never been warned that he had violated any of Twitter’s rules of conduct.

While it may have been due to a technical issue, Baker’s disturbing, temporary suspension follows the removal of some Twitter accounts in recent days that have criticized the company’s new owner, billionaire Elon Musk. The Intercept reports that several prominent antifascist accounts have been suspended since Musk took over Twitter at the end of October. Far-right Twitter accounts have been circulating a list of thousands of accounts that they are urging Musk to also suspend.

Baker has repeatedly criticized Musk on his “Beat the Press” blog and elsewhere, including most recently in a November 29 post in which Baker proposed reforms that could help to stop the spread of disinformation, defamation, and promotion of violence. Notably, in this post and in previous writings, Baker has called for the removal of Section 230 protections for social media platforms such as Twitter “that either sell advertising or personal information. This means that the big platforms could be held liable for defamatory material that they circulated over their platform,” Baker wrote. Baker continued to openly criticize Musk and Twitter after Musk purchased the company.

Development economics

December 2, 2022 Leave a comment

from Asad Zaman

The prescriptions of Development Economics were applied to generate growth in Pakistan in the 1960s by a group of expert economists from Harvard. As already discussed, these theories focus on the accumulation of capital, rather than the lives of human beings. Pakistani economist Mahbubul-Haq saw through the mathematical formulations to the heart of the strategy proposed for growth. He wrote: “ It is well to recognize that economic growth is a brutal, sordid process. There are no shortcuts to it. The essence of it lies in making the laborer produce more than he is allowed to consume for his immediate needs, and to reinvest the surplus thus obtained.” Despite this clear recognition, he thought that exploiting the poor was necessary to create growth, which would bring long-term benefits to all. Much to his credit, he renounced his earlier views when he saw the bad effects of these economic policies. As the Power=Knowledge theory predicts, these theories were accepted and adopted not because they were true, but because they served the interests of the rich. Mahbubul Haq noted that wealth became concentrated (in the hands of 22 families) and did not “trickle-down.” He wrote that “we were told to take care of our GNP as that would take care of poverty – let us reverse this and take care of poverty as this will take care of our GNP.”  

Read more…

OMG, a right-wing jerk can buy Twitter! Media concentration matters

December 1, 2022 1 comment

from Dean Baker

It’s more than a bit bizarre that until Elon Musk bought Twitter, most policy types apparently did not see a risk that huge platforms like Facebook and Twitter could be controlled by people with a clear political agenda. While just about everyone had some complaints about the moderation of these and other commonly used platforms, they clearly were not pushing Fox News-style nonsense.

With Elon Musk in charge, that may no longer be true. Musk has indicated his fondness for racists and anti-Semites, and made it clear that they are welcome on his new toy. He also is apparently good with right-wing kooks making up stories about everything from Paul Pelosi to Covid vaccines. (Remember, with Section 230 protection, Musk cannot be sued for defaming individuals and companies by mass-marketing lies, only the originators face any legal liability.)

If the hate and lies aren’t enough to make Twitter unattractive to the reality-based community, the right-wing crazies are putting together their lists of people to be purged. We don’t know who they will come up with, and what qualifies in their mind for banishment. We also don’t know whether the self-proclaimed free-speech absolutist Elon Musk will go along, but there certainly is a risk that Musk will want to keep his friends happy.

In that case, Twitter may go the way of Truth Social and Parlor, which would be unfortunate, but probably better than having a massive social media platform subject to Elon Musk’s whims. But we should still be asking how we can get in a situation where one right-wing jerk can have so much power?

The Problem of Media Concentration Is Not New

The Musk problem is hardly new. After all, Rupert Murdoch has been broadcasting his imaginary world to the country for decades, highlighting pressing national issues like the War on Christmas and President Obama’s tan suit.

But the problem goes well beyond Murdoch. Media outlets are owned and controlled by rich people and/or large corporations.  Read more…

The empirical turn in economics

November 29, 2022 5 comments

from Lars Syll

The Empirical Revolution in Economics - Business Review at BerkeleyCe qui fait l’unité de la discipline est plutôt l’identification causale, c’est-à-dire un ensemble de méthodes statistiques qui permettent d’estimer les liens de cause à effet entre un facteur quelconque et des résultats économiques. Dans cette perspective, la démarche scientifique vise à reproduire in vivo l’expérience de laboratoire, où l’on peut distinguer aisément la différence de résultat entre un groupe auquel on administre un traitement et un autre groupe semblable qui n’est quant à lui pas affecté.

Les outils statistiques permettraient aux économistes d’appliquer cette méthode en dehors du laboratoire, y compris à l’histoire et à tout autre sujet. Là encore, il faudrait considérablement nuancer ce constat. Mais, il ne me semble pas aberrant de dire que si, pour comprendre les canons de la discipline, tout économiste devait auparavant au moins maîtriser les bases du calcul rationnel, il s’agit surtout aujourd’hui de maîtriser les bases de l’identification économétrique (variables instrumentales et méthode des différences de différences en particulier).

Si les canons de la discipline ont changé, les rapports de l’économie dominante aux autres disciplines n’ont quant à eux pas évolué. Certains économistes se considéraient supérieurs auparavant car ils pensaient que seuls les modèles formels d’individu rationnel pouvaient expliquer les comportements de manière scientifique. Les autres explications tenant de l’évaluation subjective non rigoureuse.

Eric Monnet

Although discounting empirical evidence cannot be the right way to solve economic issues, there are still, as Monnet argues, several weighty reasons why we perhaps shouldn’t be too excited about the so-called ’empirical revolution’ in economics. Read more…

Modern money and inflation

November 28, 2022 3 comments

from Asad Zaman

Milton Friedman was a powerful magician. His words charmed people into believing that night was day, against the evidence of their own eyes. Friedman’s maxim that “inflation is everywhere and always a monetary phenomenon” is widely believed by economists, even though it is abundantly obvious that costs of production, especially energy costs, play a major role in creating inflation.

                                             Pinochet meets Friedman (STF/AFP/Getty Images)

Today, inflation is soaring around the globe. Economists under the spell of Friedman search for, and find, monetary causes. Central Banks around the world pursued vastly expansionary monetary policies to combat the Great Recession which followed the Global Financial Crisis of 2007. To the great surprise of many top-ranked economists, there was no inflationary impact. Emboldened by this experience, Central Banks again poured money into a stuttering economy during the COVID era. Again, inflation did not respond. But now, after the end of all this monetary expansion, high inflation has suddenly hit. Since Friedmanites believe that inflation must have monetary causes, they are forced to think that the fifteen years of monetary expansion since 2008 suddenly caused soaring inflation in 2022. Read more…

Sam Bankman-Fried’s truly effective philanthropy: teaching

November 26, 2022 3 comments

from Dean Baker

We should all recognize that Sam Bankman-Fried is much smarter than the rest of us. After all, outwardly he looks to be one of the biggest frauds of all time. By the age of 30 he amassed a fortune that dwarfs that of your average billionaire. He did it by running a crypto Ponzi-scheme. While claiming to be using his wealth to support philanthropies that were carefully selected to maximize human welfare, he was actually living a high life-style with his friends.

Now that the Ponzi has collapsed, the investors who trusted him look to be out of luck. And, of course there is no money for the philanthropies that he supported, many of which will are now struggling because they won’t get contributions they had been counting on.

That all looks pretty reprehensible, but maybe that’s the point. See, Sam Bankman-Fried was so committed to his philosophy of effective philanthropy that he was prepared to make himself appear to be the epitome of a despicable human being, and spend many years in prison, all to teach us that finance is a wasteful cesspool that needs to be reined in for the good of humanity. And, the place to start is his particular corner of the cesspool: crypto.

Philanthropy verse Reform: How Best to Save Humanity  Read more…

On models and simplicity

November 23, 2022 7 comments

from Lars Syll

Quotes about Simplicity (804 quotes)When it comes to modelling yours truly does see the point emphatically made time after time by e. g. Paul Krugman about simplicity — at least as long as it doesn’t impinge on our truth-seeking. ‘Simple’ macroeconomic models may of course be an informative heuristic tool for research. But if practitioners of modern macroeconomics do not investigate and make an effort of providing a justification for the credibility of the simplicity assumptions on which they erect their building, it will not fulfil its tasks. Maintaining that economics is a science in the ‘true knowledge’ business, yours truly remains a sceptic of the pretences and aspirations of  ‘simple’ macroeconomic models and theories. So far, I can’t really see that e. g. ‘simple’ microfounded models have yielded very much in terms of realistic and relevant economic knowledge.

All empirical sciences use simplifying or unrealistic assumptions in their modelling activities. That is not the issue – as long as the assumptions made are not unrealistic in the wrong way or for the wrong reasons.

Being able to model a ‘credible world,’ a world that somehow could be considered real or similar to the real world, is not the same as investigating the real world. Even though all theories are false since they simplify, they may still possibly serve our pursuit of truth. But then they cannot be unrealistic or false in any way. The falsehood or unrealisticness has to be qualified. Read more…

The pandemic treaty, crypto, and inequality

November 22, 2022 1 comment

from Dean Baker

The World Health Organization is in the early phases of putting together an international agreement for dealing with pandemics. The goal is to ensure both that the world is prepared to fend off future pandemics by developing effective vaccines, tests, and treatments; and that these products are widely accessible, including in low-income countries that don’t have large amounts of money available for public health expenditures.

While the drafting of the agreement is still in its early phases, the shape of the main conflicts is already clear. The public health advocates, who want to ensure widespread access to these products, are trying to limit the extent to which patent monopolies and other protections price them out of the reach of developing countries. On the other side, the pharmaceutical industry wants these protections to be as long and as strong as possible, in order to maximize their profits. As Pfizer and Moderna know well, pandemics can be great for business.

The shape of this battle is hardly new. We saw the same story not just in the Covid pandemic, but also in the AIDS pandemic in the 1990s, when millions of people needlessly died in Sub-Saharan Africa because the U.S. and European pharmaceutical industries tried to block the widespread distribution of AIDS drugs.

Although the battle lines are familiar, one disturbing feature is the continuing failure of those concerned about inequality to take part in this debate. In the United States, we have plenty of groups and individuals who will spend endless hours fighting over clauses in the tax code that may give a few hundred million dollars to the rich. This is generally a good fight, but it is hard to understand the lack of interest in the structuring of a pandemic treaty that could mean hundreds of billions of dollars going to the rich. Read more…

Macroeconomics and the Friedman-Savage ‘as if’ logic

November 17, 2022 3 comments

from Lars Syll

0An objection to the hypothesis just presented that is likely to be raised by many … is that it conflicts with the way human beings actually behave and choose. … Is it not patently unrealistic to suppose that individuals … base their decision on the size of the
expected utility?

While entirely natural and under-
standable, this objection is not strictly relevant … The hypothesis asserts rather that, in making a particular class of decisions, individuals behave as if they calculated and compared expected utility and as if they knew the odds. The validity of this assertion … depend  solely on whether it yields sufficiently accurate predictions about the class of decisions
with which the hypothesis deals.

M Friedman & L J Savage

‘Modern’ macroeconomics — Dynamic Stochastic General Equilibrium, New Synthesis, New Classical and New ‘Keynesian’ — still follows the Friedman-Savage ‘as if’ logic of denying the existence of genuine uncertainty and treat variables as if drawn from a known ‘data-generating process’ with a known probability distribution that unfolds over time and on which we, therefore, have access to heaps of historical time-series. If we do not assume that we know the ‘data-generating process’ – if we do not have the ‘true’ model – the whole edifice collapses. And of course, it has to. Who really honestly believes that we have access to this mythical Holy Grail, the data-generating process? Read more…

The monetary policy fallout for developing countries

November 16, 2022 Leave a comment

from C.P. Chandrasekhar and Jayati Ghosh

The monetary policies of the major advanced economies have been obsessively nationalist for more than two decades now, with hardly any genuine international cooperation beyond some coordination among G7 economies. These policies in turn have had all sorts of impacts—often very negative—in the rest of the world, and particularly in the low and middle income countries referred to collectively as emerging and developing economies (EMDEs).

After the Global Financial Crisis, the advanced economies unleashed historically loose monetary policies, with major liquidity expansion and very low or even negative interest rates of their central banks. This enabled and encouraged massive increases in debt both within their own economies and in the rest of the world, as banks and other financial companies sought to use cheap money to maximise returns in sectors and locations that would otherwise not record much capital inflow. Since these cross-border capital flows were inherently speculative, much of this debt was short-term in nature or in bond markets that facilitated easy withdrawal.

This rush of finance of emerging and “frontier” markets did not necessarily result in productive investment. Instead, they typically pushed up domestic assets prices and caused exchange rate appreciation in the recipient countries, which actually worked against encouraging more investment in tradeable sectors even as they made the balance of payments more fragile and vulnerable to sudden shocks. Read more…

CRYPTO MELTDOWN is a great time to eliminate waste in bloated financial sector

November 15, 2022 3 comments

from Dean Baker

I remember talking to a progressive group a bit more than a decade ago, arguing for the merits of a financial transactions tax (FTT). After I laid out the case, someone asked me if we had lost the opportunity to push for an FTT, now that the financial crisis was over. I assured the person that we could count on the financial sector to give us more scandals that would create opportunities for reform.

Shortly thereafter, we were rewarded with the trading scandal from the aptly named investment company, MF Global. It seems that FTX has given us yet another great case study in greed and corruption in the financial sector.

The financial sector was and is a happy home for those seeking big bucks, and who don’t mind bending or breaking the rules to fill their pockets. Corporate America is not in general known as a center of virtue, but in most other sectors there is at least a product by which a company can be evaluated. Does the auto industry produce cars that are safe and drive well, does the airline industry get people to their destinations on time?

These are metrics that can be applied in a reasonably straightforward way. But what does the financial sector do? In fact, there are metrics, but they are not as straightforward, and we literally never see the business press applying them to the sector. Read more…

The dangers of using unproved assumptions

November 14, 2022 1 comment

from Lars Syll

2014+22keynes%20illo2The unpopularity of the principle of organic unities shows very clearly how great is the danger of the assumption of unproved additive formulas. The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y) and only in special cases will it be true that f(x + y) = f(x) + f(y). It is plain that it is never legitimate to assume this property in the case of any given function without proof.

J. M. Keynes “Ethics in Relation to Conduct” (1903)

Since econometrics doesn’t content itself with only making optimal predictions, but also aspires to explain things in terms of causes and effects, econometricians need loads of assumptions — the most important of these are additivity and linearity. Important, simply because if they are not true, your model is invalid and descriptively incorrect. It’s like calling your house a bicycle. No matter how you try, it won’t move you an inch. When the model is wrong — well, then it’s wrong.

Monies

November 12, 2022 21 comments

What’s money? Wrong question. The right question: ‘which kinds of monies do we use for which purposes?’ as there are different kinds of money which are used for different purposes. Here, I want to stress that ‘receivables’ are: money. And are, at the moment, mainly used for inter-company purchases. The quarterly balance sheets (below) of Alphabet (formerly Google) show that, as of September 2020, Accounts Receivable had a value of almost 35 billion dollar. Accounts receivable are privately issued money. They are backed by the law but not created by banks or governments. They are created when a buyer promises to pay and a seller accepts this promise, a promise which can be legally enforced. But it’s not the payment by the debtor which defines the moment of the sale. The actual sale is legally finalized when the seller accepts the promise of the buyer. That’s the moment when ownership changes hands. Receivables are stated in a unit of account, they are a legal means of exchange and they surely are a store of value (that’s why they are included on the balance sheet).

Read more…

new from WEA Books – “Heterodox Economics: Legacy & Prospects”

November 8, 2022 Leave a comment

Look inside this book.

Heterodox Economics: Legacy and Prospects by [Lynne Chester, Tae-Hee Jo]

Kindle edition $5.99   US UK DE FR ES IT NL JP BR CA MX AU IN

paperback $14.99    US UK DE FR ES IT NL PL SE JP CA AU

“The pressing need for alternative approaches in economics that is evident in the wake of the global pandemic, has also signalled an opening of space for the ideas and prescriptions of heterodox economics. This timely volume interrogates the rich diversity of the legacy of the heterodox economics, the institutional context and constraints that determine its influence, while addressing important questions about appropriate and desirable strategies and practices for fostering a vibrant constructive heterodox tradition . . .”

Edited by Lynne Chester & Tae-Hee Jo

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