How far are we willing to go in accepting the corporate takeover of just about everything. In Britain public utilities were sold off, so companies could profit from selling resources whilst minimising maintenance of facilities. Phil asks the question how Britain’s water infrastructure is in such a state of repair in an industry that makes £13 billion per year. Then there’s the moves to strangle publicly funded media and privatise the funding of health. But it gets worse. Britain’s freeports are local areas run jointly by local authorities of local business. Democracy has become just another seat at the table. And there’s a proposal from, one consortium for a new town in Britain that is run by a corporation where residents sign a contract for services. No local democracy. Such towns already exist in many parts of the world. Is that the conclusion - we privatise everything and we are all at the whim of big business. Elon Musk is already working on how to create your artificial best friend. Hosted on Acast. See acast.com/privacy for more information.
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47:34
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47:34
Oh Canada!
Several listeners have written in to get Steve’s views on the path being taken by Mark Carney to rescue the Canadian economy. Initially it looked like the country was rebounding strongly from the pandemic, but in the last couple of years the growth has slowed and then declined. That was before President Trump hit them hard with tariffs and then said he’d like them to become part of the US. In some ways he is trying the same approach as the UK – to balance the operational side of government spending but inventing in infrastructure beyond that balanced operational budget. That would be fine if a large chunk of that investment wasn’t going to defence. There’s also very little attention to the most fundamental issue for Canada unaffordable housing. Proudly the most unaffordable in the world. Hard to get people to spend when a huge chunk of their income is disappearing into mortgage payments.There’s another fundamental problem with Carney’s approach. As Steve points out, it almost every policy it relies on outside influence, rather than domestic resolutions. Hosted on Acast. See acast.com/privacy for more information.
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46:45
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46:45
Wages, jobs and inflation
This week Phil and Steve look at cost-plus inflation, driven by rising wages. Right now its being given as the reason that services inflation is remaining sticky and that’s why many central banks are reluctant to reduce interest rates. Steve says it’s a far more sensible assumption than the neoclassical belief, promulgated by Milton Friedman, that inflation is always and everywhere a monetary phenomenon.It's not just workers who can put prices up, of course. Companies can increase their margins, and we saw a fair bit of that post-COVID. Burt what of the tech-driven future, where wage negotiations will be harder. Basically, we’ll be lucky if we have a job. Does that mean the tech bros call the shots and wage driven inflation will be a thing of the past? Hosted on Acast. See acast.com/privacy for more information.
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45:10
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45:10
Narrow economies vs broad economies
Is it fair enough to totally write off Ricardo’s theory of competitive advantage? Certainly, President Trump isn’t an advocate, using tariffs to protect America’s domestic industries from those countries that produce stuff cheaper. A broad economy, producing a range of products and services, is preferably to a narrow one, reliant on one or two key exports, which is what Ricardo advocated. But in support of Ricardo, some of the narrowest economies, like Australia, have some of the highest levels of GDP per capita. It seems to work for resource-based economies, so far. But could they be even richer? Phil and Steve discuss Ricardo and economic complexity in the age of Trump’s tariff agenda. Hosted on Acast. See acast.com/privacy for more information.
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47:18
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47:18
Reeves has all the wrong ideas
The UK Labour party has struggled to forge a recovery for the beleaguered economy. Rachel Reeves is intent on reducing the government deficit. Her first attempt involved increasing the National Insurance contributions made by businesses – in effect, raising a payrolls tax. In short, a reason for companies unsure about recruiting in a slow growth economy to err on the side of caution. Now, there’s talk of tax rises. Steve and phil talk about the impact on growth of added more to the consumer’s tax burden, and the impact it’ll have on money in circulation. Then there’s the confusing idea of increasing savings as though that’ll drive investment which will add to economic growth. That might be the case if the money was invested in new businesses, rather than inflating share prices and other financial instruments, which all deflect money from the real economy. Hosted on Acast. See acast.com/privacy for more information.
Economist Steve Keen talks to Phil Dobbie about the failings of the neoclassical economics and how it reflects on society. Hosted on Acast. See acast.com/privacy for more information.
New Zealand