Debunking Economics - the podcast

In this week’s Debunking Economics podcast, Phil Dobbie and Prof. Steve Keen dive into the global water crisis under the banner “Trouble on the Waterfront.” They explore the paradox of Earth’s abundant water supply versus the tiny fraction that is actually accessible, highlighting UN figures that show billions still lack safe drinking water and sanitation. From the UK’s tight margins between renew...

Foreign aid is shrinking fast. The UK has cut its commitment from 0.7% of national income to 0.3%, the US has scrapped USAID and axed 80% of its projects, and overall global aid is down by more than a quarter in just five years. That’s less than 0.2% of the world economy — smaller than Walmart’s turnover — even as the Gates Foundation warns that cuts have already reversed decades of progress in ch...

So, what does it mean to be Austrian? And we are not talking about wearing Lederhosen every weekend, going on long hikes through the mountains and eating schnitzel. Instead, the focus in this podcast is on the Austrian school of economics. They are two very different things, The country has moved on, but the theory remains. This week Phil and Steve look at the principles of Austrian economics – wh...

The early days of Bitcoin its proponents argued that this could be the global currency to replace fiat money. Governments the world over were issuing too much currency, leading to inflation, whilst imposing arbitrary regulations that would be impossible once authorities lost control of money. Steve says for that to work Bitcoin would need to be capable of the instantaneous transactions we are used...

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 pu...

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.  I...

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 phen...

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 s...

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...

Before he was the UK Prime Minister at war with the Nazis, Winston Churchill ws the UK’s Chancellor. He played it very straight, with a preoccupation with balancing the budget. He also took the Uk back onto the Gold Exchange, despite warnings from Keynes that the move would be deflationary. In 1928 he reinforced his neoclassical credentials, saying very little additional employment and no permanen...

In UK politicians of all persuasions agree that foreign investment I s important to add to the growth of the UK economy. Steve says you have to have foreigners buying into the UK to counter the currency losses from a sizeable balance of trade deficit. But a lot of that investment will see profits being repatriated back overseas. And then there’d the overseas investment in UK bonds and shares. Andy...

recent spoke at a meeting of Jeremy Corbyn’s new venture – Your Party. Steve gave a presentation on how governments can spend more without worrying about the deficit, provided it was done sensibly. The argument that the private sector buying up government bonds will crowd out investment in other initiatives is bunkum. The private sector can still borrow for investment, perhaps benefiting from the...

During the pandemic central banks had no choice but to buy up government bonds. There were just so many of them being issued. That’s why the UK’s quantitative easing program totalled more than £900 billion during 2020-1. Recently, the bank – like other central banks the world over – are trying to unwind these huge additions to their balance sheet. Recently the Bank of England slowed down the pace...

You would assume that government spending is largely designed to help those on lower incomes. The NHS was designed to ensure free healthcare for all. The same for public education. And for welfare payments. So, I theory, the more the government spends, the more wealth is transferred to lower incomes. This week Phil and Steve explore the idea that rising government deficits actually help the rich.&...

After the war the European economy was humming along, with growth rates of 5 percent or more. Now Germany’s forecast to grow by just 0.1 percent. Allowing for population growth and inflation and it’s an economy in decline. Steve says part of the problem is the assumption that rising government debt is bad for the economy – the old neoclassical belief that if the government spends, it crowds o...

Copyright and IP rights has always been notoriously difficult to protect. Does it become impossible with the rise of AI? The ideas presented to you through your favourite AI engine come from somewhere whose ideas are being used to support an argument. Or, if you create an artwork that is analysed and used to create other artworks, has copyright been infringed, or is what we would have traditionall...

We keep hearing about the productivity gains from AI. This week Phil asks Steve about the difference between productivity for a company versus the societal benefits. For example, AI and robots might do a job more efficiently than a human, but it’ll chew up energy in the process, and the human will still be consuming energy as well, unless robots start killing us off. So, this revolution might...

The small number of technologists who increasingly control the planet’s wealth and political and social agenda are, it seems, big supporters of UBI. Elon Musk is at the forefront of this push. And why wouldn’t he be? His vision is a future of unbounding economic growth, in which the work of humans is almost completely replaced by robots, leaving us all plenty of time to pursue interests, enga...

18th century economist Richard Cantillon theorised that new money added to the economy always reaches the wealthiest people first. If there’s a lot of it, the extra supply will push up prices, but the rich won’t feel it, they’ll just create it. The impact down the track is that the poor, surviving with the same money as before, get hit with the higher prices.  Phil suggests that wouldn’t...

Phil and Steve pick up from last week’s discussion about the merits of central planning. Last time they talked about how big companies, like Walmart in the US, plan centrally, yet free marketeers have a problem with that sort of coordination being applied to the free market. This week Phil asks how you can ensure that government planning can ensure resources are allocated effectively. For example,...

In one of his many walks around his neighbourhood Phil has been listening to a book, The People's Republic of Walmart , by Leigh Phillips & Michal Rozworski. Basically, a contrarian economist and a journalist teaming up together. Could such a combination ever really work? The book highlights how part of Walmart’s success story was its meticulous central planning, in contrast to Sears, a busine...

Lesotho (pronounced ,li-su-tu0 is a small African nature that President Trump  threatened with 50% tariffs, describing as a country nobody had ever heard of. Maybe that’s enough for his disciples to dismiss the hardship tariffs will place on the country, where youth unemployment is rife and the minimum wage is US$100 per month. Phil says twenty years ago America was trying to help c...

There is a huge reliance on data to aid decision making – whether it’s Investors wanting to know where to move money, central banks pretending to understand the economy, governments making policy decisions or companies planning for their future. Sadly, data collection faces two challenges. One is a lack of sufficient government spending. As Steve points out, perhaps Texas would be more p...

In real terms the amount the UK spends on healthcare has risen from £500 in 1970 to £3,000 per person today. That’s a massive increase, but the payback has been that we are living 10 years longer. Ask people if they would be prepared to spend 10% of their income to live ten years longer, most would say yes. Yet we have a real problem in having the government spending more on healthcare. As always,...

Financial markets don’t like it when governments announce plans to spend more money. That’s why there’s concern over Donald Trump’s Big Beautiful Bill, which will add, by some accounts, $4 trillion to the US budget deficit over the next decade. Steve Keen says it’s not a problem. Banks buy up the bonds and the central bank ensures they have the liquidity to do so.  In which case, why are...