The Fatalism behind Economic Theory

Part 6 of my series on politicizing climate doomism.

Discussed in this Article

Promotion of doomism through fatalistic arguments such as “crowding out”, “natural unemployment”, “capital flight”, and “fiscal responsibility”, and others. Also discussed is the historical and political context of why these narratives still exist, and what their purpose is.

Previous and Future Parts to this series.

In part one of this series, I talked about how solution denial promotes fatalism on climate change. I then discussed how a well known climate scientist wrote a book on how doomism is the main barrier to climate change, and then argued that he was (unwittingly) promoting doomism in it through illegitimate solution denial.

In part two, I looked at “human nature” arguments that can either overtly promote fatalism, or do so in more subtle ways. I looked at climate psychology and showed that some of the doomism narratives discussed in climate psychology research on doomism can be traced back to ExxonMobil.

This shined light on the politics behind the “psychology” of narratives such as cost benefit analysis (jobs vs nature), free riders (we are locked in by self interest, so are doomed), guilt tripping (personal carbon footprint calculators), and how they promote doomism.

In part three, I gave a bit of history of colonialism’s role in objectifying the environment, then discussed examples of class consciousness and the domino theory mentality that promotes doomism.

In part four, I talked about how the carbon tax was a more subtle form of solution denial, as it has been shaped to limit the framework of solutions, as well as having the pricing systematically underestimated.

Then I talked about how ExxonMobil intentionally promoted the regressive carbon tax, and speculated that it was probably because it would likely get backlash, which is what happened in France with the yellow vests. The conclusion I made here was that the carbon tax was not seen as a solution anymore because poor people have to suffer for it to work.

In part five, I discussed the history of solutions proposed, since the 1970s. Both by ExxonMobil, and the scientific community. These solutions suggested that and then uncovered the fact that a strong Green New Deal was suggested as early as 1983. I talked about solution denial in the NYT and decided that I don’t understand the effect of social media on doomism.

Now we are up to part six. I want to get into more subtle forms of doomerism that exist in undergraduate education in economics, political science and perhaps other fields. This part will be on economics. Part seven will be a special one on democracy. Part 8 may be on strategy, communication, or optimism. I’m not sure yet.

Note that I have been writing a lot of articles on solutions as well, about urban sprawl, public transport, the fast fashion industry, and freedom of thought. Even the UBI. These chapters and others like them will make up the bulk of my book once it’s completed. Many corrections and criticisms are welcome.

Removing Politics from the Answer to the Question

Let’s start by doing some philosophy of science. According to most philosophers and scientists, there’s no agreed upon definition of what science is. There are, however, some likely necessary conditions for something to be considered as “science”. One is that you actually try to answer the questions that you ask.

I make the claim that the economics curriculum in undergraduate has been deliberately shaped in a way that limits the ability to answer their own questions.

This is a bold claim to anyone outside of my echo chamber. So let me explain by looking at the definition of economics in the first year undergraduate textbook:

Economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. The key word in this definition is choose. Economics is a behavioral, or social, science. In large measure, it is the study of how people make choices.

If you ask where I-phones come from, or where the pencil was made, you will get limited answers, because economics starts by restricting the answer to the behavioral aspect.

Now, one immediate rejoinder here is that economists can go out and study political science, psychology, and sociology, and anthropology, and philosophy, history, and a bunch of other fields. So, by doing this, you don’t just limit your answer to the behavior aspect, if you ask, “why is there a recession?”

The first problem with this objection to this is that those other fields suffer from the exact same problem, but to a lesser extent. The other ones, like political economy, are funded far less than mainstream economics. Another bold claim. I’ll provide evidence for that in the future.

My opinion is that these techniques of making people limit the answer to the questions they ask are much stronger in economics. So let me talk about the experiences here.

I consider most economists to be more knowledgeable to me, overall. But that doesn’t stop them from answering the question of “why is there wealth inequality” with a typical apolitical answer that goes something like “well the econometrics study I did says some amount of inequality was caused by income tax cuts in the 1980s” instead of “because people in our profession reduced the bargaining power of workers by coming up with a theory that makes unemployment seem like a necessary evil.” Both are legitimate propositions. Both are testable. Both are true.

The answer that doesn’t mention the political part is the one that I typically get. A reason for this is found in a survey of graduate students at economics departments done in 1987. They asked what is most important to succeed in your career, to what's the least important. Over 50% said math and problem solving is “very important”. Nothing wrong with that. However, when it came to “thorough knowledge of the economy”, only 3% said it was very important.

A rejoinder to this is that the survey is from 1987. That economics has changed since then. My intuition is that this rejoinder is correct, but the change is often vastly overstated.

Theory vs Democracy

A friend of mine has described the effect of early economics education as “econ brain”, which is the effect of saying we “can’t have nice things”, because economics says so. This is often the lesson learned from first year undergraduate economics education.

A few professional economists I have talked to have told me that “these are all useful tools”, and that the “real economics comes later”. On the first point, I argue that they are useful as a propaganda weapon of class warfare. One response to this is to call me a conspiracy theorist. On the second point, if the real economics comes later, then why do you keep saying that we can’t have nice things?

The claim that me or anyone else with these views is a “conspiracy theorist” is half right. I do say that many such tools are conspiracies. But there’s nothing to theorize about. This is because the only conspiracies I'm interested in typically are ones where there’s rock solid evidence for them. Examples of these are typically leaked memorandums. Such as the victory memo, or the Powell memo.

You can go look at work done by Naomi Oreskes, or Clara Mattei, and see that a lot of what is still taught in economics education today was refined as a conspiracy, sometimes as far back as the 1920’s, and perhaps earlier. The conspiracy was to destroy the labour movement, through harsh austerity. Oreskes' work has a lot of breadth compared to Mattei. But Mattei has far more depth. It’s more relevant to work with Mattei here.

So let’s start by examining her thesis, and the evidence of conspiracy. The central argument of her book is that:

The main objective of austerity was the depoliticization of the economic—or, the reinstallation of a divide between politics and the economy—after the wartime political landscape had dissolved it. In practice, the reinstallation of this divide took three forms.

Depoliticization refers to the state’s backing off of economic pursuits, which in turn allowed for (1) relations of production (owners versus labor) to revert to the command of impersonal market forces—while also suffocating any political contestation of such wage relations, or of private property. There was more to depoliticization, however. The following pages will show that depoliticization also meant (2) exempting economic decisions from democratic scrutiny, especially by establishing and protecting “independent” economic institutions; and (3) promoting a concept of economic theory as “objective” and “neutral” and thereby transcending class relations—the sort of omniscience that was the foundation for one of austerity’s ends: building consensus.

Her definition of austerity is a triple of monetary austerity, which “entails a curtailment of credit in the economy, and it primarily coincides with a rise in interest rates”. This so called “dear money” policy, in which money is harder to come by, increases the cost to the government of borrowing money, and thus limits its expansionary projects.

Then there’s fiscal austerity, which “takes the form of budget cuts, especially welfare cuts, and regressive taxation“.

Industrial austerity “refers to an imposition of industrial peace, i.e., non-contested, hierarchical relations of production. Such “peace” is of course the basis of capital accumulation, as it secures property rights, wage relations, and monetary stability in the long run.“

Let’s make a note of the fact that under Mattei’s definition of austerity, the word fully describes the policies of every government I’ve lived under in my lifetime. Yet the phrase seems to have dropped out of lingo over the last decade. What we have now is something called the “cost of living crisis”. This phrase is another useful tool, because it prevents people from understanding that these costs are a political phenomenon.

If the media was critical, it would be rephrased as the “price gouging crisis” or perhaps the “austerity crisis”, because price gouging exists, and the general public relates and understands to this as It reminds them of how they are getting ripped off, every single day!

Let me give some examples of conspiracies noted in her book, that are either still taught in undergraduate economics today, or are discussed in the mainstream media:

The “crowding out” argument is used to say we cannot have nice things. In current economic theory, it essentially says there's a finite amount of money and interest rates will go up if governments use too much of the money. Therefore the private sector won’t get loans from the banks due to the high interest rates. This conspiracy was described in the 1920s:

To sell their recipes, the austerity advocates leaned heavily on a “crowding out” argument—a battle horse of the British Treasury that the British delegates shared during the conference discussions: “Since there is not enough capital to go round, which is to have it governments or private industry? . . . The more capital is absorbed by Governments, the less is available for private industry. . . . Which is likely to use capital more productively, governments or private industry? The answer is in favor of private industry”

Here’s the league of nations talking about how to convince the rest of the world about how to get them to understand fiscal responsibility:

The League of Nations had addressed the necessity of “keeping expenditure within income,” balancing expenditure out of revenue: “This principle must be clearly brought home to the peoples of all countries; for it will be impossible otherwise to arouse them from a dream of false hopes and illusions to the recognition of hard facts”

This was necessary to teach the “hard facts” to the working class. As Mattei discusses, WW1 had the effect of getting them to understand that they can create money to massively expand the economy for their own interests. The expansion of public spending was a social tipping point in both world wars, it seems. Perhaps the increase in government expansion creates a feedback loop of increased understanding of what can be accomplished with public money. The more you spend, the more you realize that it's possible to spend more.

To give a contemporary example, economists like Shamubeel & Selena Eaqub have pointed out that the “crowding out” is coming from the private finance sector. Their interest is in houses, not businesses. Mariana Mazzucato says that research and development expansion has a “crowding in” effect, as it creates a symbiotic relationship between public and private money.

The central bank was constructed as a disciplinary tool in Britain that still exists today. We call it “independent”. What is the bank independent from? The answer is democratic control from the public. An influential British economist explained it back then:

“The Government must answer criticism, for its tenure depends on popular support.” The central bank, on the other hand, “is free to follow the precept: ‘Never explain; never regret; never apologise’”

The use of the word “independent” is a particularly disempowering word. To use it carries a smack of cultural arrogance, but it also promotes technocratic ideology. These policy experts know better than you, so be silent and listen to them, is the message.

Now, you shouldn’t go too far and distrust experts automatically. This is clearly a big problem right now. We see Trump attacking universities overseas, and Seymour doing it in smaller doses here. But to use the very word “independent” goes too far in the other direction.

It is silly to even presuppose that there is such thing as an “independent” institution. The inhabitants of institutions are dependent on the cultural values and beliefs of its inhabitants.

Unfortunately it is often used to describe the Climate Change Commission, and other institutions. I don’t think the Commission is independent, because it doesn’t have a policy to reduce consumerism. The lack of funding for historians of industrial psychology could have played a big role in making them overlook that variable.

The Italian economists were a bit more class conscious than the British ones. You don’t become a fascist bootlicker without being a little bit of a control freak. As Umberto Ricci put it in 1908:

“It is the honest desire of any good theorist of political economy that theoretical constructions be deemed not merely a luxury of the intellect, but necessary to explain and forecast events, and essential to tame men”

You might think that this kind of language doesn’t exist today. That it's become a bit more euphemistic and subtle. While I’ve never seen talk about “taming men”, the more austerity focused technocrats in the European Union spelt out how fiscal austerity has a disciplinary effect quite blatantly:

“[A] decrease in government employment reduces the probability of finding a job if not employed in the private sector, and a decrease in government wages decreases the worker’s income if employed in the public sector.” In both cases, they note, “the wage demanded by the union for private sector workers decreases, increasing profits, investment, and competitiveness” (Alesina and Ardagna 2010).

Marxists told me about this. It’s called the “reserve army of labour”. At the time, similar notions were explained on why the Greek economy had to be destroyed, by the German Finance minister Wolfgang Schäuble. He explained this to Yanis Varoufakis, the Greek finance minister at the time.

I said to him, “Would you sign this?” I said, “Let’s take off our hats as finance ministers for a moment. I’ve been in politics for five months. You’ve been in politics for forty years, you keep barking in my ear that I should sign it. Stop telling me what to do. As human beings. You know that my people now are suffering a grave depression. We have children at school who faint as the result of malnutrition. Advise me on what to do, don’t tell me what to do, as somebody with forty years, a Europeanist, somebody who comes from a democratic country, Wolfgang to Yanis, not finance minister to finance minister.”

To his credit, he looked out of the window for a while, and he turned to me and he said—Well, the question that I’d actually asked him was, “Would you sign this?” And he turned around and said, “As a patriot, I wouldn’t.” Of course the next question was, “So why are you forcing me to do it?” He said, “Don’t you understand? I did this in the Baltics, in Portugal, in Ireland, you know. We have discipline to look after, and I want to take the troika to Paris.”

It’s darkly amusing that Schäuble was frustrated at a government official not understanding the obviousness of why half of Europe had to be disciplined with austerity.

Exaggerating Capital Flight

Another narrative that makes people feel hopeless is that we cannot tax wealth, because it would result in capital flight, and lost tax revenue. The first objection is that austerity is currently producing flight of skilled workers. This is pointed out in a scoop article:

“ Right now, an estimated 191 New Zealanders are leaving this country every day, for what they regard as greener pastures elsewhere.”

A reasonable comment. What matters is the effect in aggregate. Denmark, and Norway do seem to be nicer places to live in aggregate than New Zealand to me, despite some higher taxes. The data reflects that it takes fairly big tax changes to get more than a few millionaires to leave behind their social networks and relationships.

During his first presidency, Trump complained about people in Norway not wanting to migrate to shithole countries. One of those shithole countries was America.

“Why are we having all these people from shithole countries come here?...The US should instead bring more people from countries such as Norway.”

It’s fitting to bring this remark up again today, as there’s a big pool of talented international students that have been locked out of America. It’s not unreasonable to think that boosting research and development in NZ would draw in a lot of skilled scientists, as well as funding the ones that have been kicked out of work.

On the next comment in the scoop article, things go wrong:

That said, there is overseas evidence of a link between a net wealth tax and significant levels of capital flight. There’s a reason why the number of OECD countries with a wealth tax has shrunk from 12 to 5 over the past 20 years. Norway’s experience – where its expected revenue gains were well outweighed by its losses via capital flight – is a sign that creating more fairness in the tax system will almost certainly come with a price tag.

It doesn’t really matter if there's less taxes returned, because we can just use the government to create money. You don’t need tax revenue to do that. To the uninitiated, this sounds like an absurd comment. It sounds like I'm saying that you can just print money into existence, without needing any tax revenue to pay for it. So the next question to ask is “what is the catch?”

Well, you can create large amounts of money. I am saying that. The catch is that I would also say is that if you create a significant amount, you’d start to get a lot of inflation.

But note how I say "significant amount”. The current economy has a lot of underemployment and unemployment, and low taxes on rich people and professionals. Raising taxes on those people would offset some inflation caused by lots of credit creation. The amount of credit creation to fill Norway’s lost revenue is very insignificant.

Also, a lot of the capital is already flown. If you're reading this article, there’s a chance that you’ve returned more tax to the government than those Irish start ups like Meta. Does anyone care if landlords go overseas?

There are cases where capital flight, more accurately described as the vengeance of the virtual senate of international investors, may be something to worry about. In poor countries like Zambia, and Ecuador, yes. Economist Grace Blakeley gives examples of how the bargaining power of these states is sometimes no match for corporate multinationals. Mattei gives an early example of how Mussolini’s economy was attacked by currency speculators, for not being tough enough in his austerity. The strongman was not so strong after all, and he caved.

I trust their judgement on these matters. But the IMF also points to examples of how Iceland managed to implement capital flow restrictions after its financial crisis in 2008. The difference here is that Iceland is a rich western country, and Zambia is not.

So the limits on capital flight here are not tax revenue. There are lots of factors, but the main one is probably power dynamics. In my personal judgement, I think that a wealth tax of 10% on over $5 million is reasonable as a test for power dynamics. This could increased and later on.

In summary, the purpose of a wealth tax isn’t to gain tax revenue, but to combat the power of the wealthiest. A steep progressive income tax needs to be used to combat the power and elitism of the professional managerial class, which we should remember were instrumental in implementing neoliberalism.

The Naturalness of Employment

Creativity in the human species is observed in all cultures, therefore we might think of it as natural. Why not make sure everyone has enough money to nurture their creative talents? That was the argument I discussed in my article on the UBI.

Now I want to discuss a concept called the NAIRU (Non Accelerating Inflation Rate of Unemployment). It is sometimes known as the “natural rate of unemployment” to the truly zealous. Paul Krugman once compared people who challenged the NAIRU theory to “scientists who disputed evidence of damage to earth’s ozone layer”.

Simply stated, the NAIRU says that if you try to reduce unemployment below a certain threshold, you will get lots of inflation. What is the threshold of inflation that’s determined? About 4-5% according to the treasury. Consider the following analogy from the economist, Tcherneva:

Suppose you heard that, in a strong economy, the optimal level of children who wanted to but were unable to receive primary and secondary education was 5 percent; or that there was a natural level of starvation equal to 5 percent of the population; or that 5 percent of people would ideally remain without shelter. Modern societies have arrived at the moral position that policy should do all it can to eradicate illiteracy, hunger, and homelessness.

That’s my thinking too. Why would 5% of the population need to waste their talents just to control inflation? One way of implementing price controls in order to avoid inflation was discussed by Mattei. In the aftermath of the great war, Italy did experience a lot of inflation. This was combatted through an interesting political system. It’s called democracy:

On July 6 the government rushed to pass a decree that authorized prefects and mayors to pass price controls with abatements up to 50 percent. Article 6 of the decree specified: Article 6 of the decree specified: “the just-price is determined on the basis of prices that are fixed locally by public bodies and consumer cooperatives.” Prices were no longer determined by impersonal market forces; they were suddenly an output of democratic decision-making.

Of course, you could say that wanting democracy is like wanting world peace. So let's deal with Tcherneva's arguments.

Tcherneva believes that her version of a job guarantee would provide a job for everyone who wants one, while also controlling inflation. The way it works is through a buffer stock mechanism. Consider food. During droughts, food might become scarce. If it does, we get inflation. To combat this, the government might build silos and store food in them. Doing so ensures that silos are drained during droughts, but topped up during strong harvests. The price is made stable by storing enough food to handle any drought.

The same principle underlies the job guarantee. Jobs are guaranteed. You get a job in the public sector during a recession, and can move out of the public sector during good times. The price of a job is the floor price set by the government. Building these kinds of stabilizers (and many others) are of extreme importance, considering that we are on the precipice of an ecological catastrophe.

Mainstream economists I talk to make objections about how low unemployment would realistically go. They say that people who want work but don’t want to move may still be unemployed.

Ok, but I think the counterpoint to this is that the densification of cities (which desperately needs to happen) would provide work to people of many skill sets, and the work is in their city. So they don’t have to move. We are talking about building houses, data analysis of traffic flows, unearthing streams, creating permeable pavement surfaces, and so on. Rebuilding the train networks and subsidizing regenerative agriculture would perhaps create more accessible work for those in rural areas.

The Technical Argument against the NAIRU (optional)

This section is a brief summary for those that are interested in the academic argument against the NAIRU. It is discussed in more detail by economist Bill Mitchell. He claims that the NAIRU was a fraud from the beginning. Despite being repeatedly argued as having no theoretical basis for the last four decades or so, the idea is still accepted by at least a third of economists in a 2020 survey.

Mainstream economists who believe in it only focus on what is called “structural unemployment”. This phrase describes unemployment that comes from skill mismatches between workers and what industry wants, and regulations.

In actuality, recessions can cause long term unemployment, due to what’s called "hysteresis”, which means a delayed effect. In this context, we are talking about the delayed effect of a recession. Such unemployment is called “cyclical unemployment”. During recessions, what happens is a part of the work force drops out. Part of it is due to the increased power of employers. The unemployment rate goes down over time during the recovery, but it takes a while. A full recovery never happens, as some workers lose skills, and stay unemployed for a long time.

The “natural” rate of unemployment therefore is limited to accounting for inflation from only one type of employment, which is the structural kind that arises between skill mismatches. It does not account for the hidden unemployment caused by a previous recession.

The Automation of Jobs?

Another depoliticized argument that I don’t see much in economics, but do see in the media, is that automation is going to get rid of jobs. Somehow, improving technology is actually worse for people. This argument comes around every time there’s some hype around technology. The last time it was for AI.

As Dean Baker notes, this argument was given at the same time that central banks have tried to increase unemployment due their belief in the natural rate of unemployment. What does it tell you about a society that worries about automation, instead of raising the following questions:

Why can’t a single decision made at the central bank increase employment?

If technology allows people to make twice as much steel per hour, why cant we working half as much to make the same amount?

These questions should naturally arise whenever claims about automation job loss are made. To be fair, some do. But everyone should know these things.

Free Market Fundamentalism

Anat Shenker-Osorio , a consultant on political communication writes in Don’t Buy It that:

We characterize our economy as if it were a wild teenager—always on the brink of major disaster, acting recklessly, without regard to consequences. Just who does this economy think he is?

Examples of likening the economy to something natural, most often a body, abound. From conservatives, we’d expect this approach—it accords with and indeed trumpets exactly what they want us to believe.

Such language of the natural order of things is used by free market fundamentalists. The purpose of this political ideology is explored by Noami Oreskes, over a hundred year period. The way it turns people into doomers is by presenting the economy as governed by the laws of supply and demand, (with few exceptions), and wealth creators as “entrepreneurs” rather than “capitalists”, who create wealth for the economy by market forces. The message of such a scenario is that it’s impossible to do anything, because the free market is what determines your position in life.

The problem with free market fundamentalism is that no one knows what a free market is. What is considered to be a free market today, is different from what would be considered to be a free market two centuries ago. Child labour laws to prevent kids working long hours in the coal mines, or regulations to stop bakers putting metal in the bread, are not really considered to be questionable anymore. Most self proclaimed free market fundamentalists support these regulations, though the ones back then didn’t.

So here is a brief description of how the capitalist economy actually works, as it currently exists. It is one that is centrally planned by massive corporations, corporate lawyers, and state institutions that largely serve corporate interests.

For example, entire global supply chains are often monitored and quantified from a single location in the fast fashion industry. The central bank’s raise and lower interest rates to control the economy.

Consider this thing called the law. Sometimes you apply it when it serves corporate interests, and sometimes you don’t when it doesn’t. Intellectual property rights are used as law to protect corporations from competition in the free market, so it's used there.

On the other hand, consider the regulatory standards bill that’s been talked about lately. If you look at it, the bill argues in favour of cost-benefit-analysis as a justification for state spending.

No one will ever take this law seriously if it passes. You could use it to get rid of state subsidies for the airline industry, or you could use it to fund public transport. A serious cost benefit analysis justifies this. But the problem is that cost benefit analysis always seems to be based on made up numbers, and they almost always favour the rich. That’s how these laws work in practice. By making up numbers.

The correct description of current capitalism is therefore not as a free market economy, but as a largely centrally planned economy. To no surprise, it has been planned in the planners interests.

At the political level, it could be described as a plutocracy with fascist characteristics. More on that in part 7.

Fiscal Irresponsibility (optional)

It is remarkable that the Climate Change Commission still considers that fixing the climate comes with an initial “cost”, which is apparently when public debt increases. In actual macroeconomic theory, public debt has an equal and offsetting private surplus. Similarly, a public surplus is offset by an equivalent level of private debt.

Domestic Private Balance + Domestic Government Balance + Foreign Sector Balance = 0 (source, Modern Monetary Theory Primer, Randall Wray, 3rd edition)

Because it is generally considered that the global financial crisis was caused by massive private debt (in the subprime mortgage market), then it is logically equivalent to say that it was also caused by not enough public debt. Have you ever heard anyone say such a thing?

The Climate Change Commission argues that the long term cost is reduced, of course. But costs from environmental destruction exist right now, and have for a long time. The costs of 5% unemployment, air pollution, water pollution, and urban sprawl are pretty hard to understate. I won’t go into them here, as I’ve already written about them.

The notion of “fiscal responsibility” has come into question recently as the Green party wants to ignore Treasury advice that we should limit public debt at all times to 90%, with a buffer of 40% for a rainy day.

That rainy day arrived a long time ago. One reason why a public debt limit might make no sense is that we have no private surplus limit. Which is the same thing as a public debt limit, given the above discussion. So why not just call it a private surplus limit instead? Because that doesn’t serve as a propaganda tool. Because it doesn’t imply that public debt is bad, and therefore that we cannot have nice things, like public transport.

Here is another reason why it doesn’t even make sense to have a limit on public debt. Because public debt is determined by much more than just credit creation. For example, if GDP growth rates are higher than the interest rate on public debt each year, then it’s possible for a government to deficit spend every single year while public debt goes down. This would happen if GDP is higher than the real interest rate.

Conclusion:

Econ101 is partially to blame for the current fatalistic attitudes towards politics that young people have, and its by design.

Bibliography

Books

Baker, D. (2016). Rigged: How globalization and the rules of the modern economy were structured to make the rich richer. Center for Economic and Policy Research.

Blakeley, G. (2019). Vulture capitalism: Corporate crimes, backdoor bailouts, and the death of freedom. Nation Books.

Case, K. E., Fair, R. C., & Oster, S. M. (2019). Principles of economics (13th ed.). Pearson.

Chang, H. J. (2010). 23 things they don't tell you about capitalism. Bloomsbury Press.

Conway, E. M., & Oreskes, N. (2023). The big myth: How American business taught us to loathe government and love the free market. Bloomsbury Publishing.

Mattei, C. E. (2022). The capital order: How economists invented austerity and paved the way to fascism. University of Chicago Press.

Mazzucato, M. (2013). The entrepreneurial state: Debunking public vs. private sector myths. Anthem Press.

Mazzucato, M. (2018). The value of everything: Making and taking in the global economy. Allen Lane.

Tcherneva, P. R. (2020). The case for a job guarantee. Polity Press.

Wray, L. R. (2024). Modern monetary theory: A primer (3rd ed.). Palgrave Macmillan.

Journal Articles

Colander, D., & Klamer, A. (1987). The making of an economist. Economic Perspectives, 1(2), 95-111. https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.1.2.95

Geide-Stevenson, D., & La Parra-Pérez, Á. (2024). Consensus among economists 2020—A sharpening of the picture. The Journal of Economic Education, 55(4), 461-478. https://doi.org/10.1080/00220485.2024.2386328

Saborowski, C., Sanya, S., Weisfeld, H., & Yepez, J. (2014). Effectiveness of capital outflow restrictions (IMF Working Paper No. WP/14/8). International Monetary Fund. https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Effectiveness-of-Capital-Outflow-Restrictions-41269

Note: Following the onset of the global financial crisis in 2007-08 and the collapse of Iceland's three largest commercial banks — with very large short-term foreign liabilities (600% of GDP) — the government introduced comprehensive outflow restrictions in November 2008 to stabilize the exchange rate. Measures included restrictions on capital transactions for residents and nonresidents alike, such as bans on the movement of capital with some exceptions below ISK 10 million and on the conversion of offshore krona to foreign exchange. Foreign exchange transactions with respect to external trade remained unrestricted. The exchange rate stabilized shortly after restrictions were imposed.

Substack Articles

Renwick, D. (2025). Politicizing climate doomism part 1. Douglas Renwick Substack.

Renwick, D. (2025). Politicizing climate doomism part 2. Douglas Renwick Substack.

Renwick, D. (2025). Politicizing climate doomism part 3. Douglas Renwick Substack.

Renwick, D. (2025). Politicizing climate doomism part 4. Douglas Renwick Substack.

Renwick, D. (2025). Killing hope through solution denial. Douglas Renwick Substack.

Renwick, D. (2025). What is work? Douglas Renwick Substack.

Online News and Blog Articles

Brown, J. (2023). Against the mainstream: How modern monetary theory and the myth of millionaire tax flight challenge conventional wisdom. Brown Journal of Political Economy. https://www.brownjppe.com/projects-2/against-the-mainstream%3A-how-modern-monetary-theory-and-the-myth-of-millionaire-tax-flight-challenge-conventional-wisdom

Chomsky, N. (2003). Turning the tide: U.S. intervention in Central America and the struggle for peace. https://chomsky.info/2003____/

Hunt, T. (2025, June 17). Green Party's fiscal strategy is radical and they know it. Newsroom. https://newsroom.co.nz/2025/06/17/green-partys-fiscal-strategy-is-radical-and-they-know-it/

Treen, M. (2023, November 22). Migrant labour exploitation as an essential feature of late capitalism. Democracy Project. https://democracyproject.nz/2023/11/22/mike-treen-migrant-labour-exploitation-as-an-essential-feature-of-late-capitalism/

Varoufakis, Y. (2016, June 28). Full transcript of the Yanis Varoufakis Noam Chomsky NYPL discussion. Yanis Varoufakis. https://www.yanisvaroufakis.eu/2016/06/28/full-transcript-of-the-yanis-varoufakis-noam-chomsky-nypl-discussion/

Walsh, P. (2021, June 10). Google pays tax in NZ, Facebook doesn't. Can a heralded new global tax agreement change that? The Spinoff. https://thespinoff.co.nz/money/10-06-2021/google-pays-tax-in-nz-facebook-doesnt-can-a-heralded-new-global-tax-agreement-change-that

Historical Documents

American Petroleum Institute. (1998). Global climate science communications action plan. DocumentCloud. https://www.documentcloud.org/documents/2840903-1998-API-Global-Climate-Science-Communications/

Powell, L. F. (1971). Attack on American free enterprise system [Powell Memorandum]. Washington and Lee University School of Law.https://scholarlycommons.law.wlu.edu/powellmemo/

Galbraith's Formula for Deficit Sustainability:

Δd = -s + d* [(r - g) / (1 + g)]

Where each variable represents:

• Δd = The change in the debt-to-GDP ratio

• s = The primary fiscal surplus as a percentage of GDP (government revenues minus expenditures, excluding interest payments)

• d* = The initial or existing debt-to-GDP ratio

• r = The real interest rate on government debt

• g = The real GDP growth rate