The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse - Bloomberg News, July 21, 2017
The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse - Bloomberg News, July 21, 2017
China's Central Bank Chief Warns of ‘Sudden, Contagious and Hazardous’ Financial Risks - Bloomberg News, November 5, 2017,
China's Central Bank Chief Warns of ‘Sudden, Contagious and Hazardous’ Financial Risks - Bloomberg News, November 5, 2017,
"It's the economy stupid!" - a political consensus for getting elected
"It's the economy stupid!" - a political consensus for getting elected
"Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist" - Kenneth Boulding
"Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist" - Kenneth Boulding
"Capitalism has defeated communism. It is now well on its way to defeating democracy." - David Korten
"Capitalism has defeated communism. It is now well on its way to defeating democracy." - David Korten
Feb 252018

Money doesn’t grow on trees! Now any child knows that. It’s apples, pears and other fruit that grow on trees.
Money comes out of bank accounts and ATM’s or from shops which ask you if you want to take cash out.

Yes, but who puts it there in the first place? And who decides how much to make and where exactly to put it?

That’s what we want to know, especially when we hear that there isn’t enough money to go around, to fund all the social, health and educational needs of society.

Under-employment and insufficient sales growth tell us that it’s not that there aren’t enough people to do things and it’s not that there isn’t enough stuff to buy. What we have now is over-capacity, and not enough money!

And money is supposed to facilitate exchange, be the go-between between goods and services. So what’s going on and where do we find that place where the money is made?

Well the answer is deceptively simple, money is just made up! It does not need to be produced like any other commodity; it doesn’t require any resources at all, just a simple decision as it turns out, and a few keystrokes! (see diagram A below for full details)

So we should really be relieved that a paucity of money is easily remedied, just make or decide more. We know they can do that as a lot of it is going on (it’s called printing money quantitative easing*).

Then there’s just the question of who gets it. Well, poor people need it more than rich people, how else can they access an entitlement to a decent standard of living?

But (I hear you say) won’t more money just push up prices? Yes, if there are not enough goods and services to go around, but at the moment there is too much to go around.

But what about having to earn an income, what happens to the maxim:
– a decent wage for a hard day’s work!

Diagram A

Maybe that will need to be sacrificed and replaced by:
– a decent living in a decent society.




* Printing money is generally considered taboo by most economists. Quantitative easing is a means of creating money but only for banks and financial institutions. It’s like the central bank lending them the printing press or a bigger “make money” key.

Oct 312017

While we watch the ongoing and ever growing battle between the economic, market driven imperative and civil rights (which includes the right to health, education and a clean environment), there is also a growing call to democratise economics and thus try to level the playing field and rebalance the influence of economics and democracy on our daily lives..

The neo-classical purists see any interference with market principles and the invisible hand as necessarily leading to sub optimal outcomes – the model proves that! Unsurprisingly the neo-classical ideology itself has come under increasing scrutiny* since the GFC of 2008 which was hardly an optimal outcome for the millions who lost savings, homes and a livelihood.

But can one really defeat the primacy of homo economicus, which has so captured and indoctrinated our thinking and discourse, by increasing democratic participation in the economy? I fear not. For is this not just that old worn out argument between centralised planning versus free markets?

I am not arguing against democratic institutions establishing parameters which protect society and the environment against harmful economic practices. But this can only be properly achieved if democracy and civil rights are themselves first extricated from economics, not further intertwined. Only then will civil rights and all they encompass be properly determined through democratic processes, uncorrupted by economic considerations.

As long as we see every aspect of life as an economic utility, as long as we still use terms such as “labour market”, “human capital”, “financial products” and treat land as a commodity, we are operating inside the economic paradigm. Whatever features we introduce into our economic system just become other economic utilities with a price subject to demand and supply. We hear it routinely from politicians who can hardly talk about anything without declaring the economic cost attached. Hence we pit jobs against the environment, turn a blind eye to human rights abuses in support of foreign trade.

Mainstream economics with its complex mathematical modelling is already impenetrable for the ordinary citizen and indeed many business people and professionals who like to justify their decisions and prognostications using economic modelling.

So let’s not add more species to the already impenetrable forest; instead let’s start by removing those exotic species which contaminate the field that has now become an economic jungle encroaching upon and consuming almost every other aspect of our lives.

So how do we identify which species are exotic?

I propose a simple starting point: economic activity is concerned with the production, distribution and consumption of goods and services. While the range of goods and services is enormous they all have some common attributes in that they are designed to meet human needs and can rightly be traded in the market place. In general their economic value is at a maximum at the point of purchase and subsequently declines over time, sometimes quickly and completely in the case of food, sometimes over long periods in the case of furniture, capital equipment or buildings.

What is not produced by human effort, cannot be rightly traded in the market place or does not deteriorate over time does not satisfy these requirements to be an economic commodity, hence it probably qualifies as an exotic species.

Land is not a product but a pre-existing foundation for all human existence.  The “purchase” of land is a misnomer as it cannot be removed, dismantled or in any way consumed. The true definition of land “purchase” is an assignment of rights or entitlement to occupy, farm, mine etc. Stewardship and not ownership was once widely understood and practiced. The assignment of rights over land (just as over the seas) are a legitimate issue of public interest since the right (productive, sustainable) or wrong (wasteful, degrading) use of land and sea affects everyone.

Labour is not itself a product, but the human means by which products are created. To place labour and the human being at the disposal of the market is called slavery.

Money is of course not a product but a social construct. While it has assumed various outer forms throughout history (beads, seeds, metal coins, paper notes etc. and now simply electronic digits), its purpose is to facilitate trade or confer credit (in the form of loans) or gifts (in the form of grants or benefits that do not need to be repaid.

So what would this mean if land returned to the commons and was only available for use or under public licence and in the public interest? No more land speculation!

What if everyone had a right to a basic universal income independent of their employment status? The myth of employment for all would be finally discarded in a world currently oversupplied with goods and services and undersupplied with effective demand.

What if new money (original credit) could only be created by government authority (debt free) rather than by banks? What is quantitative easing anyway?

Time to re-establish a sovereign space for homo politicus.


*Along with the call to democratise economics is the push to pluralise the academic discipline of economics. This will be considered in a future sketch.

Oct 302017

It is easy to become bamboozled by economic jargon and disenchanted by the failure of economic theory to explain or predict events in the real world. Economic theorists contributed (sometimes unwittingly) to this when they attempted to elevate their theoretical models to the status of scientific theory, often by using mathematical equations to suggest rigour or precision.

My aim is to present brief and straightforward ideas on the subject of economics for further consideration and debate.

What is economics really about?

All economic activity is bounded by two conditions or parameters: Nature on the one side, and public policy or legislation on the other.

One might say that Nature provides the foundation in terms of physical resources to meet our physical needs while legislation and public policy set the parameters or constraints under which natural resources may be exploited. What is true of primary production will also apply to all forms of secondary production as well as human services. Whereas Nature is the foundation for the production of physical goods, human talent and skills, both physical and intellectual, provide the basis for human services.

Of course human talent and skills are also involved in the production of physical products and manifest in the organisation of labour and the application of technology.

What Is important here is that the boundary inputs or conditions, Nature, human talent and skills and the regulatory framework, are not themselves within the economic process. Why is this important?

  • Everything that is produced within the economic process assumes the character of a commodity and can be bought and sold. The buying and selling of labour (still deemed quite appropriate in current economic and political theory!) is a left over form of slavery when the whole person could be bought and sold.
  • The fact that land, which is itself not a product of the economic process, can be bought and sold leads to huge distortions within the economy. Land was once considered part of the commons and “land ownership” a form of stewardship on behalf of society. Today the owner of land may degrade it through bad management or simply do nothing with it, thus depriving society of a potential resource. A change in zoning can confer sudden wealth on the owner which effectively amounts to a claim on the rest of society!
  • The buying and selling of public policy in the form of political favours is a corruption of the political process, although it effectively continues due to the widespread entanglement of government in the economic process. The current political debate is increasingly about economic development (jobs, jobs, jobs!) at the cost of social justice and environmental sustainability.


In summary

The economic process has to do with production, distribution and consumption of commodities (goods and services). Land and natural resources only enter this process at the point of extraction or cultivation for the market. Labour and the application of human talent is also not a product of the economic process and to treat it as such by referring to a “labour market” is a leftover from earlier forms of slavery.

The role of money, capital or credit and its relation to economic activity is of critical importance and will be the subject of a separate sketch.

Karl Polanyi spoke of 3 Fictional Commodities: labour, land and capital, declaring that because none of these have been produced for the market place, they do not qualify as commodities and should not be treated as such.

I suggest that the mistreatment of these Fictional Commodities is a major contributor to the economic chaos that is gripping the global economy today.



Oct 172017

On this page I offer ideas and perspectives on issues affecting contemporary society. Economics, economic development, globalisation, social justice, human rights, international finance, employment, income distribution,and of course environmental concerns are major themes on the political and cultural landscape.

I welcome your reflections, questions and comments.

Human society – a developmental perspective
There was a time in human history when the world and nature was considered a revelation of the divine. Tribal life was ordered accordingly. The great early civilisations were built around a theocratic structure where priest kings mediated between the heavenly and earthly worlds.
All human activity was subsumed under this overarching principle. Remnants of this societal form continue even today.
During the Greco-Roman culture beginning around 500BC a new principle emerged which recognised the civic state and democratic participation of citizens. The democratic principle was born to stand alongside a theocracy which would continue to claim a “higher standing” right up into our times. The battle for pre-eminence between church and state can be found throughout history since those early days.
During the 16th century the development of a new scientific method emphasising empirical facts paved the way for ground-breaking technological achievements and the beginnings of the Industrial Revolution in Europe. With the growth of industry came a massive expansion of trade and economic activity and our lives today are largely characterised by the accomplishments of technology and industry. This economic paradigm which sees the market place as the primary ordering principle in society is the hallmark of neoclassical economic theory.
A study of the economic development in modern history* will show how the market place has progressively claimed land and human labour as commodities which can be bought and sold like any other commodity. In fact according to the neoclassical view nothing exists which cannot be traded or “monetised” including money itself!
The battle for pre-eminence between the civic state (citizens’ rights and public policy based on democratic principles) and the economic order can be followed in the media on a daily basis. Religious life has been largely consigned to the private sphere having only limited bearing on social and economic affairs.
Since the recent disaster of the Global Financial Crisis and an impending environmental catastrophe due to the spread of industrialisation, the struggle is intensifying to tame the economic behemoth which continues to assert that growth is the only way forward.
Are human rights and environmental protection necessarily opposed to our economic wellbeing? Is our spiritual / cultural life of no consequence when it comes to understanding the issues of our times?

The ancient theocratic states were led by priest kings who claimed divine inspiration in shaping social affairs. While the character, scope and intensity of this social form has many variations, primacy is given to a divine order.
The contest between a religious and secular ordering of society has also assumed many forms and in various guises continues into our time. We might summarise by stating that in western societies the religious dimension has largely retreated into the individual private sphere, while the democractic principle occupies the public space.

The legal recognition of corporations as having rights (legal personhood) has enabled the economic sector to assume extensive powers and influence in virtually every aspect of society, threatening to eclipse civil rights and environmental protections. Just watch the news headlines for examples of the struggle underway. I borrow the term “Econocracy” from the book of the same title by Joe Earle, Cahal Moran and Zach Ward-Perkins.

*See Karl Polanyi – The Great Transformation for a discussion on Land, Labour and Money which he describes as the three “fictional commodities”.