The catch-all category for my blogs reflecting my professional expertise as a full professor of economics.

The struggles to teach political economy and the aftermath – we all lost

I started my undergraduate studies in economics in the late 1970s after starting out as an Arts student in the early 1970s studying philosophy, politics, history, anthropology and statistics. The Vietnam War movement and other things interrupted my first years of studies and it wasn’t until the Federal government introduced the National Employment and Training (NEAT) scheme in 1974 that I was able to get some government support to resume my studies, this time as an economics student combining statistics, politics, law and economics. The major student rebellions of the late 1960s around the world had ended and the Monetarists had seized control of the academy, which led to major shifts in the way economics was taught. The world is much poorer as a result of these changes and the end-game problems of neoliberalism that we are all struggling with now – housing crises, welfare retrenchments, aftermath of privatisation and outsourcing, casualised labour markets offering poorly paid jobs with precarious outlooks, rising income and wealth inequality, and the climate crisis to name just a few of the individual crises that are now converging into the poly crisis we are enduring now – are directly related to the shifts in the economics profession in the 1970s. I was a student then young academic through this early period and when I read an article in the Australian Financial Review this morning (September 1, 2025) – Why my dad fought against ‘Albonomics’ at Sydney University (usually behind a paywall) – I could hardly believe what I was reading.

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Cryptocurrencies are not currencies

I often get asked about cryptocurrency. And I immediately become bored. The sort of claims that people have made about this phenomenon, which is historically just another speculative asset, are over-the-top to say the least. There are two realities that seem to be ignored. First, we already have mainstream digital money and have had for a long time, before cryptocurrencies emerged. For example, when the central banks credit reserve accounts held by commercial banks as part of the daily payments system clearing, digitial transactions take place. Similarly, when you go on-line and conduct some bank transactions shifting deposits to other owners (paying bills etc) you are using digital currency. Second, cryptocurrencies are not currencies nor are they money, which makes their name rather misleading. In fact, they are just another speculative, non-money asset that are not backed by anything so we say that the fair value is zero. There is an intermediate asset that has emerged – the so called – Stablecoin – which differs from cryptocurrencies, in that the asset is specifically pegged in some way to some national currency or basket of assets. However, the hype surrounding stablecoins is similar to that which has accompanied the evolution of cryptocurrencies, the point being that the ‘stable’ bit is not backed in anyway by any government guarantees. I also distinguish this class of non-monetary assets from the recent developments in central banking known as – Central Bank Digital Currency – which is really just an extension of the already myriad of digital transactions that central banks conduct every day.

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Productivity growth is not the only source of increases in material well-being for the majority

One of the issues that emerges when one is studying undergraduate macroeconomics is that there is a curious disregard for the role that income and wealth distribution play in determining the aggregate outcomes, that are at the centre of the study. Most students in my cohort didn’t think about that and the curriculum certainly didn’t encourage such digressions. For me, a student of Marx basically, I was extremely interested in the topic and read a lot outside the standard curriculum, which took me into the work of Sidney Weintraub and others, for example, who demonstrated how aggregate spending was not just influenced by income but also how that income was distributed. I have been thinking about this issue in relation to the way the Australian debate at present is being dominated by the productivity question and the imperative for a degrowth strategy to emerge. This thinking is also in relation to the Federal government’s – Economic Reform Roundtable – which they are running in Canberra this week, led by the Treasurer. The overarching theme is ‘Making our economy more productive’ so we can grow faster. Exactly the opposite of a discussion about degrowth.

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The Webbs knew more than a century ago that if you pay high wages you get high productivity

During the recent inflationary episode, the RBA relentlessly pursued the argument that they had to keep hiking interest rates, and then, had to keep them at elevated levels, well beyond any reasonable assessment of the situation, because wage pressures were set to explode. They claimed their business liaison panel was telling them that wages were becoming a problem despite the facts being that nominal wages growth was at record lows and real wages (the purchasing power of the nominal wages) were going backwards at a rate of knots. The RBA massaged that argument by adding that productivity was low and that there was no ‘non-inflationary’ space for wage increases as a result, as if it was the workers’ fault. Yesterday (May 28, 2025), the Productivity Commission (a federal agency that morphed out of the old – Tariff Board – published an interesting research report – Productivity before and after COVID-19 – which lays bare some of the misinformation that the corporate sector has been pumping into the public debate about productivity growth. In particular, it demonstrates that forcing workers to work longer hours undermines productivity growth, that work-from-home is beneficial, and the lack of investment in productive infrastructure by corporations is a major reason for the lagging productivity growth in Australia.

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Trump Administration appears to be kicking lots of own goals

Soon after the US President announced – Liberation Day tariffs – I wrote this blog post – US government is pinning its tariff hopes on some unlikely to be realised assumptions (April 7, 2025) – to help readers understand what logic there was, if any, in the decision by the American government to impose wide-ranging and seemingly random tariffs on the rest of the world. The only apparent logic was that his advisors thought that while the tariffs would variously increase the US dollar price on final goods and services available to US consumers via imports, the flood of global investment funds into US treasury bonds, as a result of the heightened global uncertainty would push the US dollar up and offset the tariff impacts on import prices, because all foreign goods would now be cheaper. We now have a few weeks of data available to see whether things are turning out as Trump and his advisors thought. The definitive answer to date is that the opposite trends are emerging which will see the burden of the tariffs borne by the US consumers and producers rather than the presumption of the Administration that the burden would be pushed onto the rest of the world, which would precipitate rapid change in the favour of the US. It seems at present that an ‘own goal’ is being kicked – and – probably a lot of them.

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Tariffs and more – Part 1

This week, Australia learned that old geopolitical relationships and so-called ‘free trade’ treaties mean little when it comes to US policy. The obsequious way our political class fawns after the US has been a constant sickening element of our national identity for as long as I can recall. When I was a child, we were told by our Prime Minister that Australia was “all the way with LBJ”, a foreign policy that took out nation, against all reason, into the Vietnam War. Now, the US President is demonstrating why a reliance on the US as a ‘good citizen’ of the world is a poor strategy for an advanced nation to adopt. The other interesting aspect of what is going on is that the world is once again entering an experiment that will provide knowledge about the impacts of ripping up free trade agreements and increasing barriers to entry. Theorising is one thing but now we have a practical experiment underway. This is Part 1 of a series on the current debate about tariffs.

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The decline of economics education at our universities

Economics courses at university in Australia have been under threat for several decades now and many specialist degrees have been abandoned by universities as student enrolments declined. When the federal government merged the vocational higher education institutions (Colleges of Advanced Education) with the universities in the late 1980s, traditional economics faculties were swamped with half-baked ‘business’ courses in management, HRM, marketing and whatever which then attracted the aspiring ‘entrepreneurs’ who were told by the marketing literature that they would be fast-tracking into management careers in the corporate sector. The reality was that these programs did not equip the students to do very much at all (perhaps erect marketing displays in supermarkets!) but the impact on economics programs was devastating. The most recent Reserve Bank of Australia (RBA) Bulletin published on January 30, 2025 contained an article which bears on this issue – Where Have All the Economics Students Gone?. I discuss some of the implications of the decline in student numbers in economics and the lack of diversity that existing programs have for societal well-being.

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Australian government tax cuts – the most vulnerable are being hoodwinked

I am still catching up after being away in the UK last week. I will reflect on that trip in another blog post. So, today, we have a guest blogger in the guise of Professor Scott Baum from Griffith University who has been one of my regular research colleagues over a long period of time. He indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he is going to talk about income tax cuts and cost of living relief. Over to Scott …

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Claims that mainstream economics is changing radically are far-fetched

I have received several E-mails over the last few weeks that suggest that the economics discipline is finally changing course to redress the major flaws in the curricula that is taught around the world and that perhaps Modern Monetary Theory (MMT) can take some credit for some of that. There has been a tendency for some time for those who are attracted to MMT to become somewhat celebratory, even to the point of declaring ‘victory’. This tendency is not limited to the MMT public who comment on social media and the like. My response is that we are probably further away from seeing fundamental change in the economics profession than perhaps where we were some years ago – after the GFC and in the early years of the pandemic (which continues). My answer reflects the incontestable fact that the make up of faculties within our higher education systems has not changed much, if at all, and the dominant publishing and grant awarding bodies still reflect that mainstream dominance. There is still a lot of work to be done and a lot of ‘funerals’ to attend (à la Max Planck).

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