Thoughts from the Renegade Economists
Links to current headlines
Films and interviews
The Renegade Economist Broadcasts
Our one-day workshop
The current instalment of news and views from the Renegade Economist.
Please keep your questions coming in – contact@renegadeeconomist.com
Get the Flash Player to see this player.
Popularity: 79% [?]
The life expectancy gap between rich and poor people in England is widening, despite years of government and NHS action, a hard-hitting National Audit Office report reveals today.
Popularity: 6% [?]
The life expectancy gap between rich and poor people in England is widening, despite years of government and NHS action, a hard-hitting National Audit Office report reveals today.
Popularity: 6% [?]
An interview on Newsnight with Jeremy Paxman, Gillian Tette, Hugh Hendry and the economist Jeffrey Sachs.
Popularity: 10% [?]
The Renegade Economist team presents an opportunity to learn what’s about to happen in the domestic and global economy, and …
Popularity: 91% [?]
I fully support land tax reform, but I think Fred is wrong to play down monetary reform. Fred talks in this video about monetary reformists becomming obsessed with monetary reform, but his outright rejection of the notion comes across as making him seem just as obsessed about fiscal reform. Just because one reform is necessary, doesn’t mean the other isn’t also necessary.
Fred argues that the main cause of boom and bust is the tax system funnelling funds into land speculation. I think that’s pretty much spot on. High taxes on productive work, particularly among high earners, and low flat-rate capital gains tax, with nothing beyond Council Tax to depress land prices, incentivises land speculation and disincentivises productive work.
But our inflationary banking system is what makes so much money available for that speculation. More and more debt money enters the system in loans, and it’s this money that drives up the land prices during the speculative booms. Under-valuing inflation through the use of the CPI, and the ridiculous policy of deliberately aiming for price inflation in the first place, directly contribute to the speculative booms and the following busts that we experience.
Regardless of conspiracy theories, it’s a fact that the fractional reserve banking system is inherantly sensitive to government interference, specifically the interest rate-setting power of the Bank of England. My personal solution would be to abolish that power to dictate interest rates. Banks would not have been lending so cheaply if the government (or pseudo-governmental independant agency – whatever the Bank of England technically is) hadn’t forced them to do so. Let the market decide how much credit it needs and the price for it. We don’t need some monetary overlords telling us how much we should pay for our loans, particularly since they’ve demonstrated that they can’t handle the job
Monetary and fiscal reform go hand in hand. The relative contribution of each is irrelevant, since it’s not like we can only reform one or ther other. The tax structure and the forced inflation reinforce each other, with that interplay being what increases the severity of the speculative booms. Reform of both policies are necessary if we want a sustainably-productive, prosperous future.
Banking system has always been able to make money available to land market. Inflationary banking system makes problems worse, but it is not the root cause for problems. Land market is a very strong connection between financial capital and production. If this link is weaken or cut off, real economy will not suffer from speculation nor economic rent. Instead the power and money will flow there where it is earned and all true wealth created: into production of goods and services, wages and real caiptal.
[...] In last week’s discussion with the Renegade Economist, Fred Harrison made a somewhat bizarre comment regarding monetary [...]
I entirely concur with what Mike writes above.
I also think the Renegade Economist makes a huge mistake in talking about ‘conspiracy theorists’ in such simplistic terms (and I’ve written a short explanation why here).
That being said, the site is excellent and the talks give much stimulation for thought on this vital subject – keep up the great work everyone!
T.
Unfortunately those that heavily endorse monetary reform tend to be conspiracy theorists.
Its essential that academics such as Fred cut out this intellectual cul de sac and focus and the key issue: land rental reform. Once you sort out this economic hefalump the banking problem sorts itself out.
It must be remembered that rising land prices allow more credit to be purchased; not vice versa. The banks are just used by land speculators as a way to force others into more debt.