H is for Half-Life

Part H in The Insiders Economic Dictionary Half-life: In physics, the time it takes for half the mass of a radioactive element to decay into the next-lower isotope or element, typically ending in a stable and inert element such as lead. By extension, the time it takes for an economic theory or ideology to lose half its influence, e.g. as Marxist value theory, Henry George’s Single Tax, Keynesian income theory, Chicago School monetarism, or most recently, neoliberalism. In international relations, the time it takes for an industrial creditor nation to dissipate half of its economic advantage and free lunch. Have-nots: People who have debts instead of wealth. Hubris: A Greek term meaning overgrowth or proliferation, an addiction to power involving abusive behavior toward ...

F is for FIRE sector

Part F in The Insider's Economic Dictionary Factoid: A hypothesis, rumor or story so consonant with peoples’ preconceptions that it is accepted as a fact or working assumption, even though it often is made up a priori. Among the most notorious examples are the ideas of diminishing returns, equilibrium, that privatized ownership is inherently more efficient than public management, and that trickle-down economics works. (See Junk Science.) Factor of production: Labor and capital are the two basic factors of production, creating value. Many classical economists also treated land as a factor of production, but it is rather a property right. It is needed for production, like air, but as a legal right it becomes an institutional opportunity to charge rent, via a ...

E is for Earned Income

Part E in The Economics Insiders Dictionary. Earned income: Wages or profits earned by labor or capital for their role in producing goods and services. As such, earned income excludes economic rent and interest, which are property and financial returns that must be paid out of profits and wages. Ebitda: An acronym for earnings before interest, taxes, depreciation and amortization. A more colloquial term is cash flow. Economic rent: See Rent, economic. Economist: Originally a member of the Physiocratic School (L’Économistes) founded by Francois Quesnay who developed the Tableau Économique as the first formal national income statement. They sought to replace France’s proliferation of excise and income taxes with a land tax” (l’impôt unique), on the logic that the sun and other forces of ...

D is for Debt

Part D in The Economic Insider's Dictionary Debt: Only pure assets and equity ownership exist without corresponding debt. For financial saving, one party’s saving deposit, loan or credit appears as another party’s debt on the opposite side of the balance sheet. (Even net worth appears on the liabilities side of the balance sheet.) Debt bondage: The obligation of debtors to provide their own labor and/or that of family members to creditors to carry the interest and principal charges on loans or other financial claims. In today’s postindustrial economy this obligation takes the form of homeowners and employees spending their working lives paying off their mortgages and other personal debts in an attempt to improve or merely to maintain their economic position. Debt drag: ...

C is for Camouflage

Part C in The Insider's Economic Dictionary Camouflage: A cloak of artificial attractiveness or even of invisibility. Financial debt-claims on the economy’s income and assets camouflage themselves as wealth, although the financial tactic is to strip it. (See Euphemism and Parasite.) Capital: From Latin caput, “head,” as the political seat of government, society’s guiding intelligence or brain. Economically, the term is used ambiguously to represent two antithetical forms of capital. Physical capital in the form of tools, machinery and buildings are means of production evaluated by the cost of producing or acquiring them. Finance capital represents the rentier claims on these means of production and their revenue. Its dynamics tend ultimately to strip the means of production via the claims of compound ...

B is for Bailout

Part B to the Insider's Economic Dictionary Bailout: Reimbursement to speculators and savers of losses incurred by bad loans, investments or deposits in banks that fail. The effect of this moral hazard is to preserve financial control in the hands of the economy’s wealthiest 10 percent, “making them whole” by shifting the loss onto the bottom 90 percent of the population in order to benefit those at the top of the pyramid (see Rentier and Oligarchy). Balance of payments: Every country has offsetting trade and financial movements. And as in any balance sheet, every country’s payments are in overall balance by definition. The balance of payments is an accounting statement of international credits or inflows such as export receipts, the run-up of ...

The Insider’s Economic Dictionary – Part A

Part A to the Insider's Economic Dictionary. The Antidote to Euphemism The fallacies that lurk in words are the quicksands of theory; and as the conduct of nations is built on theory, the correction of word-fallacies is the never-ending labor of Science. … the party in this country, one of whose great aims was, at one time, the perpetuation of slavery, owed much of its popular vote to the name Democracy. – S. Dana Horton, Silver and Gold (1895) Now, it is clear that the decline of a language must ultimately have political and economic causes . . . It becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish ...

E Peshine Smith: A Study in Protectionist Growth Theory and American Sectionalism

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NY University, PhD, 1968, Michael Hudson Peshine Smith (1814 - 82) was probably the most sophisticated of the pre-Civil War protectionists. What he attempted was no less a task than to transform protectionist economic thought from a body of disparate and often self-contradictory parts into an integrated doctrine of economic growth, and to develop political economy as a quantitative engineering science. Read the rest of my dissertation (PDF 11mb)

Escape Economics Review

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PAUL CRAIG ROBERTS reviews my book in Escape from Economics. Hudson is totally outside the matrix in which economists imprison themselves. Hudson doesn’t live in the artificial reality of economists or shill for corporations and Wall Street. A person can learn a lot from Hudson. His book, Trade, Development and Foreign Debt (2009) explains how foreign trade and economic development have been used to concentrate economic power in the hands of dominant nations. What is really going on is covered up with do-good verbiage and formal models. In reality, trade and development are ways to colonize countries that think they are independent. (Another good book on this subject is Michel Chossudovsky’s The Globalization of Poverty.) Perhaps the best place to ...

Krugman's attack on my review of Samuelson

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I have recently republished my lecture notes on the history of theories of Trade, Development and Foreign Debt {2}. In this book I provide the basis for refuting Samuelson's factor-price equalization theorem, IMF-World Bank austerity programs, and the purchasing-parity theory of exchange rates. These ideas were lapses back from earlier analysis, whose pedigree I trace. In view of their regressive character, I think that the question that needs to be asked is how the discipline was untracked and trivialized from its classical flowering? How did it become marginalized, taking for granted the social structures and dynamics that should be the substance and focal point of its analysis? As John Williams quipped already in 1929 about the practical usefulness of international trade ...