In one way, that’s a pity because the key point of the book is the idea of opportunity cost – the true cost of anything, for us as individuals, and for society as a whole, is what you must give up to get it. More precisely, it’s the best alternative available to us.
Harry’s post was all about opportunity cost – what would be the best use of $1.6 trillion in public funds. However, the discussion was inevitably enmeshed in the complexities and inequities of US education, while comments making broader arguments about opportunity cost reasoning weren’t discussed in detail.
One of those broader arguments is the idea that, thanks to Modern Monetary Theory, there’s no need to worry about such questions. In the “chartalist” reasoning underlyng MMT, the fact that governments can issue their own sovereign currency means that there is no need to “finance” public spending by taxation; rather taxation is a tool used to manage aggregate demand so as to keep the economy fully employed but not at a point where excess demand creates inflation. That (essentially correct) position can easily slide into the (only subtly different, but radically mistaken) view that governments can spend money on anything they like with no need for any increases in taxes or cuts in other spending.
As I will argue over the fold, a correct version of MMT makes no such claim. Unfortunately, while avoiding the error themselves, a lot of MMT theorists have not shown much willingness to set their more naive followers straight.
I’ll be doing the Sydney launch of my new book, Economics in Two Lessons at Gleebooks tomorrow (Thursday 27 June). I’ll be talking to the always insightful Peter Martin, so it should be a great event. Details here.
Last night’s Brisbane launch, at Avid Reader with Paul Barclay (ABC Radio, Big Ideas) was very successful
A number of comments on the Folau case have made the point that Folau failed to pay attention to the terms of his contracts with Rugby Australia  and also with GoFundMe, with the implication that he has only himself to blame for the outcome .
That’s a cute debating point, but it’s not one that should be used by those of us concerned with protecting workers’ rights. The use of contractual terms to constrain what workers say and do outside working hours is a misuse of the power of employers and a danger to free speech on issues of all kinds. The fact that we don’t like Folau’s use of this freedom shouldn’t lead to a retreat from the principle that, within very broad limits, what we do and say in our own time is no business of the boss.
The issue with GoFundMe is less problematic: funding a legal dispute is not obviously part of the site’s mission. But we should be wary of the idea that Internet platforms should be able to set whatever terms of service they like and interpret them as they wish.
fn1 As with just about everything in this case, the exact status of the contract is a matter of dispute
fn2 neither is this much-mocked request by two layabouts for money to fund a trip to Africa that is beyond the resources of the mother who is currently working two jobs to support them in idleness)..
Facebook’s announcement that it is launching a #cryptocurrency called Libra raises two questions. Will Libra compete with the most famous cryptocurrency, #Bitcoin ? And what is a cryptocurrency anyway?
Ultimately, the crucial part of the name is “crypto.” What Bitcoin and Libra have in common is a desire to avoid the constraints of government regulation of financial markets by burying their operations in layers of technological mystery. These aspirations, brought together in the term “fintech,” reflect the market libertarianism that dominated both the technology and finance worlds in the heady days of the 1990s, and persisted even after the global financial crisis of 2008. It remains to be seen whether such aspirations will flourish in the current, much less favourable environment
Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link