REVIEW ESSAY–The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory by Philip Pilkington Marc Morgan

Book review.

American Affairs

REVIEW ESSAY–The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory by Philip Pilkington

Marc Morgan | research economist at the World Inequality Lab of the Paris School of Economics.

Brian Romanchuk — Book Review: The Reformation In Economics

Philip Pilkington published "The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory" in 2016. It is an ambitious book, outlining the structural flaws of mainstream economic theory. He discusses the potential replacement theory, but this reconstruction is somewhat overshadowed by the deconstruction.

Bond Economics
Book Review: The Reformation In Economics
Brian Romanchuk

See also

Occasional Links & Commentary
Economics as religion?
David F. Ruccio | Professor of Economics, University of Notre Dame

Lars P. Syll’s Blog
Economics as a religion
Lars P. Syll | Professor, Malmo University

Philip Pilkington — The Reformation in Economics: Table of Contents [forthcoming book]

So, my book is super close to being finished (I know… I keep saying that…). And I have an agent currently considering it. They have said that they want this to be published as a popular book which is exactly what I’m going for (think: Steve Keen’s Debunking Economics although my book is an entirely different creature).

Anyway, none of this is set in stone and we’ll have to see if it plays out according to plan. In the meantime, however, I’ve finished the Table of Contents which might give readers of the blog a feel for what the book is likely to contain. I would imagine that people will quickly see that there is nothing like this on the market at the moment. And yet the people that I have run the drafts by confirm that it is very internally coherent. This is not a free-for-all by any stretch.

Fixing the Economists
The Reformation in Economics: Table of Contents
Philip Pilkington

Philip Pilkington — The Continued Relevance of Tax-backed Bonds in a Post-OMT Eurozone

In a policy note published last year by the Levy Institute, Philip Pilkington and Warren Mosler argued that the eurozone sovereign debt crisis could be solved by national governments without the assistance of the European Central Bank (ECB) and without their leaving the currency union, through the issuance of a proposed financial innovation called “tax-backed bonds.” These bonds would be similar to standard government bonds except that, should the country issuing the bonds not make its payments, the tax-backed bonds would be acceptable to make tax payments within the country in question, and would continue to earn interest.

In the current policy note, Pilkington examines the continued relevance of the bond proposal in light of changes that have taken place with respect to ECB policy since the original proposal was made, as well as the case made by Ireland’s finance minister that tax-backed bonds would violate current Irish law (and, by implication, the law in other eurozone countries). He also outlines some changes made to the initial proposal in response to constructive criticisms received since its publication, and briefly notes another area in which the proposal might be utilized—outside the eurozone. His conclusion? That tax-backed bonds remain a valid policy tool, one that can be implemented at the national rather than at the federal level, and a stepping stone to solving the eurozone’s economic problems.

The Levy Institute
The Continued Relevance of Tax-backed Bonds in a Post-OMT Eurozone
Philip Pilkington

Philip Pilkington — What is a Liquidity Trap?

Perhaps the worst thing that can happen to a term in any language is that it loses completely its meaning and becomes a sort of floating signifier that can attach itself to any old nonsense. Such is the case today with the term “liquidity trap”.

Fixing the Economists
What is a Liquidity Trap?
Philip Pilkington

JW Mason comments at FB

I don't care for Krugman's use of the term either, but he is closer to Keynes than this rather confused post.

Keynes gives a precise meaning for "liquidity trap": A situation in which changes in the relative quantities of more and less liquid assets do not change their relative price. This occurs when interest rates have fallen sufficiently that the pool of "bull speculators" is exhausted -- i.e., there are no longer market participants who believe that interest rates will be lower in the future. If all market participants expect a future rise in interest rates, and hence a capital loss on bond holdings, the premium required to hold bonds will prevent any further fall in rates. Thus, the essence of the Keynesian liquidity trap is a consensus among participants that future interest rates will not be lower than current rates.

(This argument cannot even be stated in the language of contemporary economic models, based on uniform "rational" expectations.)

Keynes' liquidity trap has nothing to do with the premium on safe assets, as captured by measures like the TED spread. It is a story about the importance of expectations, and specifically the importance of a *diversity* of expectations about future interest rates.

Philip Pilkington: Monetary Policy and Metaphysics – How Economists Try to Naturalise Terrible Policies and Disappear Into Their Own Theories

Yves here. Philip Pilkington makes an interesting argument in this post, namely, that the method preferred among mainstream economists for managing the economy encourages investors to speculate in financial instruments rather than invest in real economy assets and projects.

Naked Capitalism
Monetary Policy and Metaphysics – How Economists Try to Naturalise Terrible Policies and Disappear Into Their Own Theories
Philip Pilkington

Rent-seeking has begun to replace productive contribution as the driver of GDP as shown by the increasing share of the financial sector and the declining share of manufacturing and industry. As Michael Hudson would say, finance capital is replacing productive capital.

Neil Wilson — Endogenous money matters - a summary

I think it is worth summing up Philip Pilkington's excellent post on why endogenous money matters.

3spoken
Endogenous money matters - a summary
Neil Wilson

Washington's Blog — Mainstream Economics is a Cult

Washington's Blog coming into the fold. Profusely quotes Steve Keen, Michael Hudson, Bill Black, and Philip Pilkington

Read it at WashingtonsBlog
Mainstream Economics is a Cult
Posted by WashingtonsBlog

Interestingly, Washington's Blog is reposted on a regular basis at Zero Hedge and less regularly at Naked Capitalism, kind of opposite ends of the spectrum.

Philip Pilkington — MMT to the Rescue in the the Eurozone?

Explains the policy note with Warren Mosler posted here earlier in the day.

Read it at Naked Capitalism
MMT to the Rescue in the the Eurozone?

by Philip Pilkington

Philip Pilkington and Warren Mosler co-author policy note on tax-backed bonds for the EZ

Levy Economic Institute of Bard College

POLICY NOTE 2012/4 | March 2012

Tax-backed Bonds—A National Solution to the European Debt Crisis

The root of Europe’s sovereign debt crisis can be found in the fact that investors are concerned that countries in the periphery might default, causing them to demand a higher yield on government bonds. What’s needed is a way of giving peripheral debt a high degree of safety while allowing peripheral countries to remain users of the euro.

A simple solution to this problem would be for peripheral countries to begin issuing a new type of government debt: the “tax-backed bond.” Tax-backed bonds would be similar to current government bonds except that they would contain a clause stating that if the country failed to make its payments when due—and only if this happens—the bonds would be acceptable to make tax payments within the country in question. This tax backing would set an absolute floor below which the value of the asset could not fall, assuring investors that the bond is always “money good,” leading to lower bond rates and thus ensuring that peripheral countries would not be driven to default.

Download:
Policy Note 2012/4
Associated Program:
The State of the US and World Economies

Author(s):
Philip Pilkington  Warren Mosler

Philip Pilkington: Falling for Behaviourism – The Neoclassicals Join a New Cult

Philip Pilkington takes out his knife again and cuts up Neoliberalism's assumptions. Deft job.

Read it at Naked Capitalism
Philip Pilkington: Falling for Behaviourism – The Neoclassicals Join a New Cult
by Philip Pilkington

Paul Davidson on global prosperity — Interview by Philip Pilkington

Paul Davidson is America’s foremost post-Keynesian economist. Davidson is currently the Holly Professor of Excellence, Emeritus at the University of Tennessee in Knoxville. In 1978 Davidson and Sydney Weintraub founded the Journal for Post-Keynesian Economics. Davidson is the author of numerous books, the most recent of which is an introduction to a post-Keynesian perspective on the recent crisis entitled ‘The Keynes Solution: The Path to Global Prosperity’.

Read it at Naked Capitalism
Navigating Global Prosperity: An Interview with Paul Davidson

Interview by Philip Pilkington

Philip Pilkington: The Upcoming Greek ‘Deal’ – Recognition of Reality or Complete Evasion of the Truth

Articulates the MMT economists position.

Read it at Naked Capitalism

The Upcoming Greek ‘Deal’ – Recognition of Reality or Complete Evasion of the Truth
by Philip Pilkington