Theresa May has been busy setting rules on UK migration after Brexit. Freedom of movement was, of course, one of the contentious issues that led to Brexit in the first place. In this week’s Debunking Economics Podcast Phil Dobbie talks to Prof Steve Keen about the pros and cons of migration, where you draw the line and policies to manage it. Hosted on Acast. See acast.com/privacy for more information.

Fintech companies are all chomping at the bit to take market share away from banks. Right now they’re making inroads on services like currency transfers, but will they ever extend to offering full service banking, including lending. Unlikely, says Steve Keen, because banks use money creation to make profits. But, Phil Dobbie asks, if cryptocurrencies can be created from nothing, what's to stop other non-banks from developing new global currencies that negate the need for us to rely on traditional transactional banking? Hosted on Acast. See acast.com/privacy for more information.

Banks were bailed out during the financial crisis in 2008. In the US the Treasury bought billions in mortgage backed securities. In the UK half a trillion pounds was allocated to a bank rescue package. The government took a 58 percent stake in RBS and remains a significant shareholder to this day. The industry that paid fat cat salaries through dodgy loans was saved by taxpayers. So, as long as they know they are ‘too big to fail’, what’s to stop banks continuing to adopt risky practises in the race for short term financial gain? Phil Dobbie talks to Prof Steve Keen about how to moderate the behaviour of banks for the good of society. Hosted on Acast. See acast.com/privacy for more information.

House prices have started to fall in Australia. In Sydney they’ve fallen 10 percent in a year – Steve Keen isn’t alone in predicting they’ll fall as much again, at least. He tells Phil Dobbie that we’re already seeing the consequences of the fall, with Australian GDP falling. But will it lead to a recession. Could the consequences really be called a crisis, or will the economy absorb the shock? And, beyond Australia, which other countries are carrying unsustainable levels of household debt? Hosted on Acast. See acast.com/privacy for more information.

One for our listeners, Pieter Verhoeven, suggested we look at steady state economics and the post-growth economy.Can society continue to prosper without the need, or ability, for economic growth. Since the late sixties the Club of Rome has been arguing that we will need to curb growth or deplete the world’s resources. How would we adapt. Phil points to changes made to use resources more effectively – but does that mean we just consume more as a result? What needs to change if we are to accept the findings in Limits to Growth and what would life be like in a zero growth economy? Hosted on Acast. See acast.com/privacy for more information.

According to NASA ninety-seven percent of climate scientists believe that climate change is the result of human activities. Only one US President doesn’t agree, denying that climate change even exists. But a group of central bankers met recently to decide whether they had a role to play in fixing the mess we’re making of the planet. In today’s Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether central banks have contributed to the problem, and how far they’d have to shift their reasoning if they want to turn around and be helpful. Hosted on Acast. See acast.com/privacy for more information.

In the UK we’ve privatised the railways, coach companies, the banks, power, airports, Royal Mail, water, BNT, car companies – there’s not much left to sell. But how are these privatised companies working out for us? Phil Dobbie talks to Prof Steve Keen about the arguments for and against privatisation. Obviously, too much in state hands is also problematic – so where is the happy compromise? Hosted on Acast. See acast.com/privacy for more information.

Multinationals have an uncanny ability to avoid tax. In this edition, Phil Dobbie and Steve Keen talk about how big corporates use transfer pricing to pay the least tax possible, and attempts to try and get them to pay the right amount. But where should the tax be applied – where products are made or where they are consumed. At the moment, it’s often somewhere in central America. Perhaps moves like the governments Digital Services Tax are a step in the right direction – or should we look at how China approaches the problem? Hosted on Acast. See acast.com/privacy for more information.

President Trump looks set to step up the tariff battle against China as he embarks on the fruitless task of eradicating their $380 billion trade deficit. With no peace talks on the horizon its very likely his administration will impose a 25% tariff on all Chinese imports. Meanwhile, we’ve seen the US dollar reach multi-year highs, the Renminbi falling to new lows and the Chinese stock exchange shedding foreign investors by the bucket load. So, can China survive this battle? Hosted on Acast. See acast.com/privacy for more information.

John McDonnell has proposed that all companies over a certain size would be required to transfer equity into an inclusive ownership fund, which would issue shares to people working for that company. So, is this a good idea? Will it make companies more effective, or is it an example of extreme socialism. Steve Keen says its as socialist as Germany. Hosted on Acast. See acast.com/privacy for more information.

A few weeks back Jean Claude Juncker suggested that the Euro should be established as a reserve currency to challenge the reliance on the US dollar. In this podcast, Phil Dobbie asks Prof Steve Keen if there is a realistic chance of that ever happening, and why did the US dollar become the reserve currency in the first place? Given that Steve is not a supporter of the Euro, because its existence distorts the ability of sovereign states within the EU to control their own economies, is there a better alternative that Europe could provide if it wanted to challenge the dominance of the mighty US dollar? Hosted on Acast. See acast.com/privacy for more information.

Today William D Nordhaus and Paul Romer were announced as joint winners of the Noble Prize for Economic Science. Yes, science! Neither would qualify for the profession's newest award, to be launched next year, simultaneous to the Noble award ceremony. In this podcast Professor Steve Keen talks to Phil Dobbie about the launch of the ‘Nobble Prize for Economics’ for those with barking mad assumptions that have (or will) pervert the course of economics for some time. Steve suggests Ben Bernanke would be a notable contender as well as, of course, Milton Friedman. Hosted on Acast. See acast.com/privacy for more information.

It’s often argued, by politicians and business owners, that higher wages cut into company profits, which is bad for the economy. Yet, lower wages cuts spending, and that’s worse for the economy. In this podcast Phil Dobbie asks how much more productive the economy would be if we saw a smaller difference between low wage earners and the filthy rich. Hosted on Acast. See acast.com/privacy for more information.

One of the reasons people voted for Brexit was to “take control of our borders”. Around the world, western leaders are echoing a similar message. It seems migrants are viewed more as a drain on resources than a boost to the economic output of a country. At the other end of the spectrum, there are some who argue that the world should have complete labour mobility and, if people could live where they wanted, then world GDP would double. Phil Dobbie asks Prof Steve Keen where this the optimum point on the spectrum. Is labour mobility a good thing or a bad thing? Hosted on Acast. See acast.com/privacy for more information.

A new law in New Zealand prevents foreign buyers from acquiring homes in there. It’s a response to rising house prices which, the government claims, is being driven by New Zealanders being outbid by people from overseas. Home ownership in New Zealand is now at its lowest level since 1951. So, will the plan work? Phil Dobbie asks Prof Steve Keen. Hosted on Acast. See acast.com/privacy for more information.

The spread of yield between short and long term US Treasuries is narrowing. It could even invert, meaning the yield is higher on short term Treasuries than long dated ones. This is precisely what happened prior to every US recession – so does that mean another is on the way. A listener to the podcast wrote asking why yield curve inversion is such a reliable indicator of recession, if indeed it is? Phil Dobbie gives a quick explanation of what yield curves are, and Prof Steve Keen gives his reasoning on why it is flattening in the US right now. And does it mean a recession is on the way? Hosted on Acast. See acast.com/privacy for more information.

Robinson Crusoe lives on a desert island with Man Friday. There’s no need for money. But then Woman Saturday comes along, selling goods that both men want to acquire, and they devise the concept of money, which she quickly grabs the lions share of. Next, they discover a large village on the other side of the island. How does that change the value of their three-person economy when they introduce an island-wide currency? Then, when they find a neighbouring island with a very productive economy, what is their money worth now? Phil Dobbie takes Prof Steve Keen through a series of hypotheticals, to understand the role money plays, right from its origins. Hosted on Acast. See acast.com/privacy for more information.

He is running the only country in the G7 to see economic growth accelerate right now. His followers support him however much mud is slung his way. World leaders seem to be know towing to his demands for better trade deals, even though some would argue it smacks of protectionism. So, is Donald Trump doing a good job for America. In this edition of the Debunking Economics podcast Professor Steve Keen describes the US as a Mad Max economy – he tells Phil Dobbie the benefits will be short lived. Listen to find out why. Hosted on Acast. See acast.com/privacy for more information.

Governments have been using the terms ‘fiscal conservatism’ and ‘austerity’ to bring down government spending. Often it’s meant transferring government commitments (like on education) to private or individual spending (like student loans). Phil Dobbie asks Prof Steve Keen if this a sensible way to encourage growth. If we accept that more spending by government increases the availability of money for people to spend, where do you draw the line? Isn’t there a risk that the government does too much, crowding out the activities of the private sector? Hosted on Acast. See acast.com/privacy for more information.

There was a time when universities embraced a diversity of thought – something that’s critical in a discipline as embryonic as economics. With so many neo-classic economists caught by surprise with the 2008 financial crisis, many would welcome alternatives to the models that served them so badly. Yet, in this podcast, Prof Steve Keen suggests to Phil Dobbie that the crisis seems to have made the university sector even more adamant to stick to mainstream theory and push aside anybody suggesting there might be a better way of looking at it all.  Hosted on Acast. See acast.com/privacy for more information.

In this podcast Prof Steve Keen and Phil Dobbie revisit the velocity of money, with a focus on how increasing credit is a major determinant in why the speed of money transfers has been slowing markedly since the eighties. But, it’s not just that. As Steve observes, its part of a complex system. Far more complex than Friedman’s MV=PY equation. We also include comments from listeners who listened to the first podcast on this topic. Hosted on Acast. See acast.com/privacy for more information.

There’s the theory that the supply of money is a major contributor to the rate of inflation. Prof Steve Keen says the central banks have spent the last ten years unsuccessfully trying to demonstrate as much. The need for money to be issued to cover government debt has often been levelled as a cause of inflation and a reason for the austerity measures that have been so prevalent in the last decade. Nobody wants to end up like Zimbabwe, right? In this podcast Phil Dobbie asks Prof Steve Keen what’s the real cause of inflation, if it’s got little to do with the supply of money. Is it the cost-push argument? If so, why is inflation reluctant to rise back up to pre-financial crisis levels? Hosted on Acast. See acast.com/privacy for more information.

We’re seeing an increase in the rate of ice loss in Antartica – another sign that global warming is worsening, whilst the world’s leader do little to mitigate the problem. In fact, one of those leaders has said it’s all a hoax. But if we had a unified impetus to do something about it could we device economic systems to change our behaviour and resolve the problem? That’s a question Phil Dobbie puts to a jaded Prof Steve Keen who believes we must undergo the shock before we take the problem seriously. So far, the shocks haven’t been pronounced enough. And, whichever way you look at it, the solution will involve compromising our living standards. Hosted on Acast. See acast.com/privacy for more information.

The speed of growth in an economy and the rate of inflation is driven by how much money is in circulation and how quickly its changing hands. Steve Keen says we need to add the change in debt to Milton Friedman’s formula. As he discusses with Phil Dobbie, that would explain why the velocity of money has decreased since the eighties, even though the supply has been up and down, along with economic growth and inflation. So how important is the velocity of money and why is it frequently ignored? Hosted on Acast. See acast.com/privacy for more information.

Sweden is quickly moving towards a cashless economy. According to their central bank cash payments are now less than 2 percent of GDP and less than 15 percent of retail transactions. Phil Dobbie asks Prof Steve Keen whether we could eventually go cashless? He’s very sceptical. His fear is that the people who would control the monetary system probably wouldn’t understand how money works. And what if the IT systems fail? Hosted on Acast. See acast.com/privacy for more information.

They’re having the best of times. They’re having the worst of times. The US economy seems to be going gangbusters whilst Europe’s growth has stalled and, possibly, is starting to wane. So why the disparity between the two? Prof Steve Keen says it is al to do with the contrasting economic policies – the expansionary approach of President Trump versus the austerity measures of Europe. Phil Dobbie asks whether this means the growth will continue, or could it all come crashing down for the US? Hosted on Acast. See acast.com/privacy for more information.

Ask a conventional economist about household debt and they’ll say it’s not an issue. The money you spend on repayments won’t be spent on shopping, but whoever gets that money will spend it and keep it circulating. Phil Dobbie asks Prof Steve Keen whether, in that case, debt matters. Listen in to hear Steve’s explanation on why it does matter, and why high mortgage debt slows down the economy. Hosted on Acast. See acast.com/privacy for more information.

Western economies are struggling to see growth anywhere near the levels before the global financial crisis. Japan has been struggling with zero growth, or worse, for years. So, what’s the cause of the slowdown and will we ever see high growth ever again? More to the point, why the growth obsession. Are there better ways of measuring the health of an economy? And what’s the downside of being too focused on economic growth? Phil Dobbie puts all these questions to Prof Steve Keen in this edition of the Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

A meltdown seems to be happening in the Italian economy. Steve Keen tells Phil Dobbie that it’s the failings of the Maastricht Treaty coming home to roost. Does this mean that Italy could be on the verge of pulling out of the Euro, if not the EU completely? Wouldn’t it make their country bankrupt? And what can the ECB do to try and resolve the situation. In this podcast we look through the potential outcomes in crisis evolving in Italy. Hosted on Acast. See acast.com/privacy for more information.

Joh Madden sent us a message saying he wants to understand, in simple terms, why the interest payments on public debt are not a problem. He points out how it is used to justify austerity because it intuitively makes sense to waste less money on paying interest. He wants to know why this interest is not a problem, and what if the money which the public owes keeps rising? Hosted on Acast. See acast.com/privacy for more information.

Economic theory is based on the blatantly false assumption that perfect competition can be achieved when everyone has access to perfect information. So, if we strive to get closer to that ideal can we assume that the economy will function better? That’s a question Phil Dobbie puts to Prof Steve Keen – and, without wishing to give away the entire answer – it would be correct if we were striving for a perfect view of the future. For that we need a time machine. Till then this basic concept of economics will forever be flawed. Hosted on Acast. See acast.com/privacy for more information.

Karl Marx got a lot right, but he was wrong about the need to a revolution. In this podcast Prof Steve Keen explains how, if Marx had followed his own theories, he would have realised that there wasn’t a need for a shift to socialism. In this free 36 minute podcast Phil Dobbie talks with Steve about the basis of Marx’s theory, from the Labour Theory of Value through to Use Value and Exchange Value. The conclusion, says Steve, is that “the increasing organic composition of capital (as Marx called it) has no implications for the rate of surplus, has no implications for the rate of profit”. So, no need for a revolution after all. Hosted on Acast. See acast.com/privacy for more information.

Central banks like to control inflation using monetary theory (managing the cost of borrowing) as their way to control inflation and unemployment and avoid recessions. Whereas Keynes argues that government spending is the way to avoid recessions – pump prime the economy and “she’ll be right mate”. In this week’s podcast Phil Dobbie asks Prof Steve Keen if monetary policies ever worked – and isn’t there a danger of fiscal policy racking up too much debt? Hosted on Acast. See acast.com/privacy for more information.

With Mark Zuckerberg being probed by the US government recently, and similar hearings being held in the UK, there’s been a lot of discussion lately about whether the Internet giants wield too much power. In this edition of the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen why we don’t treat them as monopolies, and force their break-up into smaller, competing operators. Steve doesn’t agree. He says the problem is, such a move would force prices up, rather than down. But it’s not just a question of price, surely? Hosted on Acast. See acast.com/privacy for more information.

Land, is of course, heavily constrained. In this podcast Phil Dobbie asks Professor Steve Keen whether enough value is placed on it and the influence it has on the broader economy. Housing speculation is an obvious example of how land values distort the economy. If it was left to pure market forces what are the damaging impacts on broader society and just how far should the government intervene? Hosted on Acast. See acast.com/privacy for more information.

It’s hard to support everything Vladamir Putin does – he probably was involved in the attack in Salisbury. If not, there are lots of other violations of human rights we can point to. But he does have a lot support in Russia. To understand why, you need to understand the recent past, what Russia is trying to achieve and the role of foreign powers in distracting them from their path. Today on the Debunking Economics podcast, a quick history lesson of a country that has struggled through false theories and bad advice to arrive at a point where it could finally integrate with the rest of the world – that’s if someone doesn’t blow it up first. Hosted on Acast. See acast.com/privacy for more information.

In this podcast series Prof Steve Keen has repeatedly argued the importance of keeping an economy in surplus. But, Alex Howlett, a regular listener and Patreon supporter, asks why this might be. He suggests a trade deficit is a good thing, because it suggests companies overseas are willing to accept your currency. The more currency you generate, the more you can buy. To a point. Phil Dobbie asks Steve, what’s wrong with Alex’s hypothesis? Hosted on Acast. See acast.com/privacy for more information.

One of our podcast listeners, Arjen, asks the question, “Why don't you recommend a full-reserve banking system instead of fractional reserve? There would be much less debt in such a system and a smaller role for the central banks.” Phil Dobbie puts the question to Prof Steve Keen, and struggles to understand why the text book explanation of fractional reserve banking is wrong, wrong, wrong. Hosted on Acast. See acast.com/privacy for more information.

We’ve talked a lot on the Debunking Economics podcast about how energy is the only real driver of an economy, so the performance of an economy is driven by the availability of the resource and how efficiently it is captured. Phil Dobbie asks Professor Steve Keen if that means countries with the most energy resources should be the most effective producers of goods, with a healthy trade surplus. If that’s the case, why doesn’t Saudi Arabia make very much? And could nations embracing renewable energy efficiently become net exporters if their governments invested wisely? Hosted on Acast. See acast.com/privacy for more information.

Britain’s productivity levels are 17 percent lower than the rest of the G7. A French worker could take Friday off and still beat the output of a British worker. So, does that mean we mean a more educated workforce? Could we improve the productivity of the UK if everyone was just that little bit smarter? Phil Dobbie puts that question to Professor Steve Keen in a discussion that goes full circle – from the need to focus more on vocational topics, to the potential benefits of studying topics that have no vocational leaning at all. Hosted on Acast. See acast.com/privacy for more information.

Many people it seems have turned to cryptocurrencies as a way of side stepping banks – a technology that will challenge their dominance and democratise the supply of money. Others look to fintech as a means of cutting out the established finance sector, putting investors and borrowers together, cutting out the middleman. But are they kidding themselves? In this edition of the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether they’ve ignored some of the key roles banks perform. And what about the regulator? Isn’t there still a need for regulation? Hosted on Acast. See acast.com/privacy for more information.

We know there is growing discontent around the world about the distribution of wealth and, it seems, financial crises can make the problem worse. In this edition of the Debunking Economics podcast Phil Dobbie asks Prof. Steve Keen why the boom bust nature of capitalism accentuates the wealth divide and what can be done to remedy the problem. Hosted on Acast. See acast.com/privacy for more information.

Just how much control does a country have over its own economy? We’ve seen wage growth stifled by international competition and the decimation of manufacturing in the West. Yet Trump and Brexit voters are pushing an agenda to take control of their economies – will they win? Phil Dobbie asks Steve Keen what actually has to happen if we are to have control of our economic destiny – and our regulations - at a time of increasing international trade and the continued growth of major corporations. Hosted on Acast. See acast.com/privacy for more information.

We often hear the argument that house prices have risen so much because there’s a lack of supply. Politicians argue that if more land was released to developers more homes would be built and the affordability issue would be fixed. Prof Steve Keen, meanwhile, has argued that it is the willingness of banks to offer massive mortgages that has pushed prices to high. In this podcast Phil Dobbie asks whether supply is still an important factor in the equation. They also discuss how geography and land-use influences prices, who meets the external costs of housing and our appetite for bigger, better houses. Hosted on Acast. See acast.com/privacy for more information.

The Oxford Review of Economic Policy devoted its entire latest edition to rebuilding macroeconomic theory. That sounds like an acknowledgement that the theories that have guided the profession for decades might be flawed. Perhaps, you might think, it will explain why the global financial crisis happened, why growth has been so slow to pick up and why wages have stagnated. But, as Prof Steve Keen explains to Phil Dobbie, the papers do little other than tweak the edges of conventional theory. It’s far from a fundamental rethink, and some of the basic errors of economics – such as the assumption that the economy will always return to equilibrium – remain unchallenged. Hosted on Acast. See acast.com/privacy for more information.

Boris Johnson has, once again, argued that money saved in fees to the EU can be used to fund better healthcare in Britain. His argument assumes the government is run like a household budget, ignoring the ability to create money. Yet we are familiar with the idea of money creation, with central banks injecting millions, or billions in the US, into the economy through bond purchases. Phil Dobbie explores the disconnect between quantitative easing and government austerity programs. He asks Prof Steve Keen, if a central bank creates money, why not simply inject it into the government’s coffers? Hosted on Acast. See acast.com/privacy for more information.

Migration is often blamed for unemployment. The fear that there are too many migrants stealing jobs has almost certainly helped with the rise of UKIP and the election of President Trump. But is there any value in this far right rhetoric, or is conventional economy theory right for once – that migrants create demand that facilitates more jobs and adds to the economy. And are we getting so lost in the migration and employment debate that we’re missing a far bigger concern – the number of people on the planet. Hosted on Acast. See acast.com/privacy for more information.

The collapse of Carillion is down to poor management but, as Phil Dobbie discusses with Prof Steve Keen, it’s also down to a company that took risks because it was raking in so much money from the public sector. In this discussion they look at where you draw the line between government insourcing and outsourcing. The problem is, says Steve, governments have lost the expertise to know what to outsource and when. It’s the blind buying from the greedy. Hosted on Acast. See acast.com/privacy for more information.