Reddit reviews Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?

Everything you learned is wrong and there are major empirical and logical flaws with what you've said here

https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926

This is not negotiable. You'll have to start from first principles, in this case Marx's own commentary on supply and demand in volume 3 of capital.

There's an ok-ish textbook, Energy and the Wealth of Nations by Hall and Klitgard in BioPhysical Economics that's a good starting point.

Robert Ayres also has a thermodynamical based approach that is very consistent with what you probably know from ecology. The Economic Growth Engine is also a pretty good general introduction to economic concepts that are thermodynamically correct.

Steve Keen's Debunking Economics is a good general critique of current neoclassical thinking from a scientific standpoint. It's sometimes good to read an insider's critique of the paradigm so you know what is problematic.

Doyne Farmer does more complexity stuff but he's involved in a similar space.

Elenor Ostrum is also another great place to start. Her work on sustainability and common pool resources is hugely important in the area.

There is also a huge amount of work being done in complexity economics using ecological models that I've only just started scratching the surface of.

There is a huge amount of work being generated in this area. Sadly very little of it is getting through to the economists.

Right now the 'science' (better, the theory) of economics is standing on the top of not one but several, enormous, paradigm-destroying fault lines. Economics as we know it is not going to survive the next 20 years without being ripped to pieces, and born again, in a similar way to how physics, geology and biology underwent these changes in previous centuries. Your comment alludes to one such fault line:

>The government has a limited amount of money to distribute to the poor to try and improve their quality of life.

There is so much to unpack here and some risk of insufficient nuance, but here goes:

There is actually no limit to the money that the government could potentially create. Because money is created as 1s and 0s on a balance sheet, there is no real limit to the money that could be created. That's a technical/semantic point but nevertheless important to get right. There is no de facto scarcity of money. It is a limitless resource if ever there was one.

What the conventional consensus would next articulate is, yeah, but, there is some point at which money creation leads to runaway inflation. That is theoretically true, but we have strictly speaking no idea how high that ceiling is. Its theorized that this point is reached once a society's circulating currency outstrips its productive capacity - e.g. when an economy reaches full economic capacity, but increasing circulation of money allows humans to increase their demand even after this point. Its a complicated point because an increase in circulating currency, depending on how its distributed, would probably also lead to increased utilization of productive capacity and maybe even an increase in max productive capacity. See Germany under the Marshall Plan.

We don't have accurate models of how economies based on Universal Basic Income work or function historically, because economies like this haven't existed historically. We would be stuck in the position of trying to infer how one system behaves, possessing only data from completely different historical economic systems.

At this point in the debate, our lack of knowledge is usually rushed into a premature conclusion via talking points, the most near at hand being examples of hyperinflation from Zimbabwe and Weimar. Its clear that one of the main justifications within the mass mind for the non-viability of money printing, and thus the ongoing maintenance of the illusion of the scarcity of money, is this: money printing equals Weimar, money printing equals Zimbabwe. A no less money-printing-friendly organization than the Cato Institute performed a study of all recorded hyperinflations in the historical record and came to the conclusion that they were not monetary events: e.g. the collapse of industry and agriculture, or war, were always necessary precursors for a hyperinflation. Other historians have noted that the two hyperinflation events noted above, Weimar and Zimbabwe, were deliberately induced by the governments in question, and the Weimar inflation was also reversed without much effort on their part through a change in economic policy. So the spectre of hyperinflation - that ever-ready go-to boogeyman of Austrian economics - looms less large when one keeps those facts in mind.

One of the most important economic points for the general populace to wake up to at this point is that governments are not households. (the full video is here). Rodger Mitchell calls this the single most misunderstood fact in all of economics. This is a paradigm shift that results in a changed understanding of economics on the whole.

Public Debt is not debt. It is owed to no one, just as the entire supply of any given fiat currency was, at one time, created out of nothing. And public debt need not be paid back. It is best thought of as "Gross Domestic Currency Issuance" - e.g. "How Much Money We Created". A growing economy should have an ever-increasing money supply. Historically, paying off the national debt has resulted in depressions and recessions, and if you grasp these new facts, you understand why: nothing is actually owed to anyone when the government creates 1 billion dollars. It just creates that money ex nihilo. Conceptualizing money creation as a 'debt' was done for historical and psychological reasons, because it assuaged fears people had about the nature of where money comes from (which is, nowhere), and because it pays homage to a relic of the historical fixed exchange system, called the bond market. There is no need for a bond market. Governments do not need to pretend that IOU investment vehicles with promises to pay are somehow different than the currency they are placeholders for.

There you have it: money is not scarce. This is the copernican revolution in macroeconomic theory. The scarcity that currently exists is needless and without virtue. The bond market is a farce, taxes are largely unnecessary, the banking system is almost completely unnecessary, and the US could potentially create 3 to 4 times what it currently does in annual currency - depending on whose analysis you follow (I follow Stephanie Kelton's) - and distribute it for free to everyone - without noticeable negative economic repercussions, in fact, with tremendous positive gains resulting from this.

I know I sound like another internet revolutionary. But this is just one of the shifts in thinking that is going to destroy the foundation of traditional economics. Here is a YouTube channel with lots of informative videos explaining these concepts. For more you can check out Steve Keen's work in Debunking Economics; Richard Vague's analysis of the difference between public and private debt in The Next Economic Disaster (a crucial point to understand); Michael Hudson's ongoing refusal to submit to an economics that does not allow a critique of rent-seeking; Mark Blyth's analyses of Europe's austerity policies; anything by the Positive Money Movement; Thayer's original paper (no longer online)[see here]; and anything by the genius Richard Mosler. For wider concentric circles you can look at the anthropological work of David Graeber on the nature of debt and currency in traditional societies. There are a slew of other authors proposing alternative economic approaches - many related to the blockchain and cryptocurrencies - which I won't touch upon because its changing so quickly.

https://www.marxists.org/archive/bukharin/works/1927/leisure-economics/

https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926

https://kapitalism101.wordpress.com/2011/11/15/law-of-value-8-subjectobject/

Socialism/Communism

A People's History of the World

Main Currents of Marxism

The Socialist System

The Age of... (1, 2, 3, 4)

Marx for our Times

Essential Works of Socialism

Soviet Century

Self-Governing Socialism (Vols 1-2)

The Meaning of Marxism

The "S" Word (not that good in my opinion)

Of the People, by the People

Why Not Socialism

Socialism Betrayed

Democracy at Work

Imagine: Living in a Socialist USA (again didn't like it very much)

The Socialist Party of America (absolute must read)

The American Socialist Movement

Socialism: Past and Future (very good book)

It Didn't Happen Here

Eugene V. Debs

The Enigma of Capital

Seventeen Contradictions and the End of Capitalism

A Companion to Marx's Capital (great book)

After Capitalism: Economic Democracy in Action

Capitalism

The Conservative Nanny State

The United States Since 1980

The End of Loser Liberalism

Capitalism and it's Economics (must read)

Economics: A New Introduction (must read)

U.S. Capitalist Development Since 1776 (must read)

Kicking Away the Ladder

23 Things They Don't Tell You About Capitalism

Traders, Guns and Money

Corporation Nation

Debunking Economics

How Rich Countries Got Rich

Super Imperialism

The Bubble and Beyond

Finance Capitalism and it's Discontents

Trade, Development and Foreign Debt

America's Protectionist Takeoff

How the Economy was Lost

Labor and Monopoly Capital

We Are Better Than This

Ancap/Libertarian

Spontaneous Order (disagree with it but found it interesting)

Man, State and Economy

The Machinery of Freedom

Currently Reading

This is the Zodiac Speaking (highly recommend)

Steve Keen (Australian "post-Keynesian" economist) has written a book called Debunking Economics criticizing current Keynesian, Neo-classical and Austrian economics. It's a good read and I suspect it will answer a lot of your question, including many you haven't even thought of yet.

My thoughts ? Traditional economics is ridiculous. A waste of time at best and seriously destructive at worst when fools pay attention to it and take it seriosuly.

start here

https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926

For the efficiency issue? If you read spanish I have a great book, but if not I think these might be good too:

Roadmap

Rhetoric

Debunking I made a cardinal sin. Forgive me Smith for I have sinned. I hadn't actually read this book and thought it would be an accessible version of my argument. Apparently not.


A good shorter read might be found here, I haven't revised it but they are usually really good: Standford


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But basically the point is this: The definition of efficiency as a pareto optimal is arbitrary, in the sense that it is efficient because that's how you defined efficiency. For example, if you have 10 people (5 with two dollars each, 5 with nothing) and 10 loaves of bread, and all wanted bread, the efficient allocation of those goods could be 2 loaves of bread per person. Now is 5 people going without food efficient? Sure, if you define efficiency as pareto optimal, but that just begs the question. In broader terms, markets are efficient because by fiat they allocate goods to where there is demand (demand=$$), so they are efficient because efficiency is conceptualized pre facto as that kind of allocation.



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edit: In case anyone who reads Spanish reads this, the book is Neoliberalismo by Fernando Escalante Gonzalbo, a sociologist at El Colegio de Mexico (one of best universities in Latin America and the world). Great, short read.

> this contrarian reddit attitude where mainstream economics isn't correct

LOL, my understanding of the world comes from more than reddit. I'm in my 40s now and have been studying economics for some time.

As for mainstream economics, it is largely bullshit -- little more than paid propaganda -- and I submit the colossal professional mismanagement of our economy 1980 - now as evidence of that.

Steve Keen's book is a good read about that, but there are others, including the O.G. heterodox economist himself, Henry George. Stiglitz is also very consistently good, and Michael Hudson has his moments.

>people were buying mortgages on 23% interest and paying very high interest payments. It's simply illogical.

no, it is you who doesn't understand logic here. High interest rates served to dampen price rises in the 1970s and 80s, since the vast bulk of housing is purchased with loaned money.

The 70X figure does sound preposterous, but the MJ article is from 2004 so that 70X figure has some support since that was the very teeth of the housing bubble, the one that no "mainstream economist" managed to identify at the time. Thanks to no-down, negative-amortization, interest-only, liar loans, and outright loan broker fraud, people were able to get loans they had no way of paying, and this did result in the housing market greatly outpacing incomes 2002-2005. Whether it was 70X is debatable, but:

"a big part of the two-income trap is that families have basically bid up the cost of living. Housing is a big example."

should be uncontroversial. The fundamental dynamic is that land is completely fixed in supply in any given area. We can increase housing supply only by building up (but that is subject to NIMBYism), or reducing transportation costs (but that is limited by NIMBYism and lack of capital).

Given the unbounded demand we have for land -- everyone would like a better view, bigger back yard or a vacation place somewhere -- the land market tends to take every spare dollar we make as we bid the price of it up & up.

Henry George first identified this core dynamic of our economy in his book Progress & Poverty. It's a great, if long, read.

>GDP is very flawed because quality is not part of the equation combined with the fact that it's pretty fundamentally flawed

yes, I prefer to look at wages not GDP to measure an economy. They're not making 'hedonic' adjustments to wages yet.

I was reading the 1925 UCLA catalog and this caught my eye:

http://i.imgur.com/UPPxh.png

$75/month for an apartment in West LA. Inflation measures alone says this should be $900/mo. Actual cost in West LA is $1500/mo, and houses are still even more insane. West LA is a perfect demonstration of how land is something not very well understood by mainstream economics.

This is by design, btw, the neoclassical school was founded to elide the difference between land and capital.

http://homepage.ntlworld.com/janusg/coe/cofe00.htm for more on that.

Thanks for the recommendation. I already have a copy of Steve Keen's Debunking Economics in the mail, so I'll have that to work through first, but I'll be sure to check it out.

Price is not the product of the law of supply and demand. Increasing price will favor the producer (And so increasing his demand) while disadvantaging the consumer (and so his demand), rising income for the luxury good producer will lower the income of the necessity goods producer, etc. The result is that we can see demand rise and prices fall or demand fall and prices falling as well or even prices rising with demand.

In other words the law of demand holds true only for individuals and not aggregates of individual demand curves.e.

Production is first and foremost concerned with demand directly: rarely (if at all) price is adjusted because of changes in demand. To make an example movie theaters charge the same price for all movies, whether they are Steven Spielberg or M. Night Shyamalan.

When a blockbuster comes out sometimes there's so much demand that the movie theaters just end up turning people away. Theoretically they should raise the price on these ultra-popular movies. Similarly, when bad movies come out the theatre is going to be pretty much empty anyway, so theoretically they should lower the price and try to get a few more bucks filling up the theater with price-sensitive moviegoers.

This does not happen however because if you lowered the price of a movie, people would immediately infer from the low price that it's a crappy movie and they wouldn't go see it. If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway. The entertainment industry has to maintain a straight face and tell you that Gigli or Battlefield Earth are every bit as valuable as Wedding Crashers or Star Wars or nobody will go see them.

The fundamental issue (here at least) is that price in the eyes of the costumer represents value. With this role it cannot also work as a supply/demand signal for the producer because its fluctuation for the consumer rather than represent availability represents a change in quality. This is the reason after all that when the clothing industry tried to be honest and stopped constantly applying discounts when the discounted prices where their actual value, sells fell like bricks.

I really recommend picking up this book. Keen is a great economist (and not a Marxist, in fact he dedicates part of the book to dismantle Marx as well).

They can be found as follow;

http://www.amazon.com/Modern-Principles-Macroeconomics-Tyler-Cowen/dp/1429278404?ie=UTF8&keywords=Modern%20Principles%3A%20Macroeconomics&qid=1462500483&ref_=sr_1_1&sr=8-1

http://www.amazon.com/Macroeconomics-N-Gregory-Mankiw/dp/1464182892/ref=sr_1_1?ie=UTF8&qid=1462500554&sr=8-1&keywords=Mankiw%27s+Macroeconomics

http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/ref=sr_1_1?ie=UTF8&qid=1462500589&sr=8-1&keywords=Debunking+Economics+-+Revised+and+Expanded+Edition

He wants to renogiate trade policies and increase protectionism. All good ideas:

https://www.amazon.com/Free-Trade-Doesnt-Work-Replace/dp/0578079674/

https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/

https://www.amazon.com/Endangered-American-Dream-Edward-Luttwak/dp/0671869639/

Strong immigration reform, which is not trickle down economics.

https://www.amazon.com/Heavens-Door-Immigration-American-Economy/dp/0691088969

He favours America first. Which is in effect disengaging from a unipolar American led world and accepting a multi-polar world. What function does NATO serve aside from trying to force Russia into accepting US hegemony?

He never mentioned small government at his convention speech.

Everyone in politics have been blinded by a religion claiming to be a science, the religion of economics.

Edit: read http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926 and see if my religion jab is that off the wall...