David F. Ruccio — Global rentier capitalism

… as the authors of the new report from the United Nations Conference on Trade and Development have explained, there is a growing concern that

increasing market concentration in leading sectors of the global economy and the growing market and lobbying powers of dominant corporations are creating a new form of global rentier capitalism to the detriment of balanced and inclusive growth for the many.

And they’re not just talking about financial rentier incomes, which has been the focus of attention since the global meltdown provoked by Wall Street nine years ago. Their argument is that a defining feature of “hyperglobalization” is the proliferation of rent-seeking strategies, from technological innovations to mergers and acquisitions, within the non-financial corporate sector. The result is the growth of corporate rents or “surplus profits.”...

What happens when economists assume away asymmetry, especially of market power.

Occasional Links & Commentary
Global rentier capitalism
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Cameron K. Murray — A random physicist takes on economics

Short appreciation of Jason Smith's A Random Physicist Takes on Economics. He likes it.

Jason Smith, a random physicist, has a new book out where he takes aim at some of the core foundations of microeconomics. I encourage every economist out there to open their mind, read it, and genuinely consider the implications of this new approach.

Go get it now. It only costs a few bucks.

Fresh Economic Thinking

A random physicist takes on economics
Cameron K. Murray

James Kwak — Economics 101, Economism, and Our New Gilded Age

In policy debates and public relations campaigns, however, what you are more likely to hear is that a minimum wage must increase unemployment—because that’s what the model says. This conviction that the world must behave the way it does on the blackboard is what I call economism. This style of thinking is influential because it is clear and logical, reducing complex issues to simple, pseudo-mathematical axioms. But it is not simply an innocent mistake made by inattentive undergraduates. Economism is Economics 101 transformed into an ideology—an ideology that is particularly persuasive because it poses as a neutral means of understanding the world.

Overextension of the scope of the model. The scope is determined by the assumptions, and the more restrictive the assumptions, the more limited the and the less realistic the model.

Economism is a logical fallacy used rhetorically to persuade through mathiness. It's not science but persuasion that amounts to sophistry. Intelligent economists know this. Those who don't realize it are unintelligent. So take you pick between liar and moron.

Baseline Scenario
Economics 101, Economism, and Our New Gilded Age

James Kwak | Associate Professor of Law at the University of Connecticut School of Law