French protests reflect the dysfunctional architecture of the common currency

The social instability in France is now spreading throughout Europe. Already there are mass protests in Spain and Portugal, Belgium, Italy, and Albania. In France, initially students began protesting over conditions in the schooling system, but the grievances and parties involved have broadened out and the increasingly chaotic scenes in Paris have spread out to the main cities of France. I was a teenager when the 1968 protests spread across the world and part of the anti-war movement at the time. We had great hopes that we would overthrow the Western capitalist model and while some positive outcomes came out of the widespread unrest, the protests failed to achieve the primary aim, and, in some cases, increased oppression (for example, they helped Nixon split the Democrats, prompted the Warsaw-Pact invasion in Czechoslovakia, and saw hundreds of students in Mexico slaughtered by the state forces at the – Tlatelolco massacre – to name some of the negative outcomes). It was a different time and the issues were somewhat different. What the current social unrest tells me is that segments of the population are rebelling after the years of dysfunctional government policies constrained by the unworkable fiscal rules that were designed to support the common currency. In 1996, I was invited as a guest of the European Commission to speak at a conference in Firenze about the plans for currency integration. I predicted at that meeting that the design outlined in the Maastricht Treaty was unworkable and would collapse in time. I was vilified by the other participants and the EC technocrats. I think what is going on now tells me that the predictions were accurate.

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Australian labour market – further deterioration and there is worse to come

The labour market contraction that I have been signalling for the last three months continued in September. The rising unemployment rate and the declining employment levels are all down to the work of the RBA and its ridiculous interest rate increases. Given the lag in interest rates impacting on the real economy, the current labour market results are probably reflecting two rate hikes ago and since then the RBA has hiked two further times pursuing their zealous ideological agenda. The situation will thus get worse as these rate hikes finally start impacting. Meanwhile, the inflation rate is being driven by factors that rising unemployment will not directly address. It really demonstrates the destructive New Keynesian logic, which is one of the worst aspects of the neoliberal era. The Australian Bureau of Statistics (ABS) released the latest labour force data today (October 15, 2026) – Labour Force, Australia – for September 2026 – which showed that the labour market deteriorated further in September. The results are terrible – a weakening demand-side and the declining participation masking the damage to unemployment. Had the labour force not shrunk the unemployment rate would have risen to 5 per cent rather than the official rise of 0.1 point to 4.7 per cent. Thus, both hidden unemployment and official unemployment rose in September. The broad labour underutilisation rate (the sum of unemployment and underemployment) rose 0.1 point to 11.0 per cent, which means that 11 per cent of the available and willing workforce is not working in one way or another and that doesn’t include the 55 thousand extra workers who left the labour force. The reality makes a farce of the RBA’s claims that the labour market is tight. The RBA is sabotaging the economy for no acceptable reason.

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Kyoto Report 2026 – 3

This weekly report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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Are the traditions of Japan consistent with an increasing GDP growth obsession – Part 1?

I know I am venturing into the world shared by sociologists, cultural anthropologists, cultural historians, and economists in the current research that I am pursuing. The question is whether traditional Japanese values are compatible with a mainstream ideology that pursues ever increasing GDP growth as a goal, if not a reality. The current Japanese government is pursuing what they previously referred to as a ‘high pressure’ growth strategy and aim to end the decades of low GDP growth deflation which has become embedded in the psyche of the corporate and household sector. This strategy is running into severe constraints, not the least coming from the demographic shifts that will see the population shrink to around 105 million by 20250 (from 123 million currently). In past posts I have suggested that Japan represents an ideal model to demonstrate how a degrowth strategy would work to maintain essential material prosperity yet reduce the nation’s ecological footprint. I am now looking into whether the degrowth notion has roots in the traditional cultural values of the nation. This is my first report (Part 1) on that theme.

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Japan – Tracing the decline in construction employment since 1980

In this blog post, I am continuing my work on examining the constraints in the Japanese infrastructure sector that would reduce the effectiveness of the fiscal expansion that the current government is proposing as a strategy to kickstart the economy and lift productivity. One approach is to decompose employment changes in the sector into the demand-side and supply-side components, which helps us assess whether there is a shortage of spending or a shortage of workers. The data shows two unambiguous patterns. First, construction employment is driven strongly by government spending on infrastructure. When that wanes, activity plummets. Second, in recent years, the overwhelming reason employment in the sector is declining is due to a contraction of labour supply. Taken together, while it is a relatively straightforward path to stimulate the industry – increase public investment spending, the supply constraints make that approach difficult to implement. This will bear on the effectiveness and outcomes of the current fiscal expansion proposed by the Takaichi government in Japan.

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Kyoto Report 2026 – 2

This weekly report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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Is a high-pressure economy strategy in Japan viable?

I am currently working on developing models that help evaluate the constraints on fiscal expansion in Japan arising from the ageing workforce in the construction sector. The current government under Ms. Takaichi is pursuing what they call a “responsible proactive fiscal policy” that aims to utilise large-scale public investment spending to crowd-in private investment expenditure and create a high-pressure economy, where productivity growth is enhanced. The strategy also involves significant fiscal reform – moving away from single-year fiscal cycles (obsessing about primary surpluses) to a long-term, multi-year spending plan that provides certainty to the non-government sector. The combined public-private investment blueprint proposes to spend ¥370 trillion in the period to 2040 across 17 strategic sectors. Most mainstream commentary is focused on the implications of the increase in public debt arising from the proposals (given that the government still unnecessarily matches net spending increases with debt issuance) for bond market yields and whether the government will run out of money. An irrelevant focus! However, the intent of the plan can be contested given the need to reduce the ecological footprint of all nations. But even if we ignore that issue, the practicalities of the proposal can be contested within a Modern Monetary Theory (MMT) framework based on resource availability.

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Kyoto Report 2026 – 1

This weekly report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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RBA Monetary Policy Board member refutes on-going claims from the RBA governor about unemployment

On September 22, 2026, a member of the Monetary Policy Board of the Reserve Bank of Australia (RBA) gave a speech – A Wage-price Spiral: What are the Chances? – at Melbourne University. The tenor of his presentation was that despite the constant recent claims about wages pressures emanating from a labour market that is too tight and driving the current inflationary episode, there was no evidence to support the claims. That is a position that I have been arguing for over the last several years in countering the mainstream narratives. But, interestingly, and shockingly, on the same day, the RBA governor gave a speech to the right-leaning Committee for Economic Development of Australia (CEDA) – Fireside Chat at the Committee for Economic Development of Australia (CEDA) – where she claimed that unemployment had to rise towards 5 per cent (from its current level of 4.5 per cent) because the labour market was too tight and driving business costs and inflation. The extraordinary juxtaposition of these views is one thing. But the governor’s continual claims that the current inflationary pressures are sourced from the labour market defies the evidence and clearly is intended to give her cover for further interest rate rises.

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Australian labour market – full-time jobs decline as unemployment continues to rise

The labour market contraction that I have been signalling for the last two months continued in August. The Australian Bureau of Statistics (ABS) released the latest labour force data today (September 24, 2026) – Labour Force, Australia – for August 2026 – which showed that the labour market deteriorated further in August, in that full-time employment growth was negative and unemployment rose. I suspect, however, that the September release will show some revisions to the data given the changes that the ABS are making to its survey collection model (see below). Overall, there are now 10.8 per cent of available labour not being used (either unemployed or underemployed), which makes a farce of the RBA’s claims that the labour market is tight. There is substantial scope for more job creation given the slack that is present.

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