By Michael Hoexter
[Part I] [Part II] [Part III]
“De-Growth”: A Serious Proposal
Lately, climate scientists have stepped into the gap where economists have generally feared to tread and have suggested that intentional “de-growth” is the only hope to stop the rising emissions associated with economic development and growth. No news to anyone who follows developments in climate science, the earth’s climate is facing tipping points beyond which a recognizable human civilization will be almost impossible to maintain due to the expansion of inhospitable or entirely uninhabitable climate zones, destruction of existing human settlements by water and weather, and the destruction of co-evolved species (including food) upon which we depend. The target of a maximum of 2 degrees Celsius rise in global temperature has been chosen as a difficult-to-achieve but also permissive target, which some think should be 1.5 degrees or less. One way or the other global warming gas emissions, still on an upward trajectory, need to be reduced and the current upward trend reversed almost immediately. Climate scientists understandably have been impatient with the response of the social sciences and policymakers to the threats they see present and emerging.
By Kian Lua*
Money is a quintessential aspect of our society, however rarely would someone ponder upon and seek to understand what money really is or how it functions in the economy. There are several stories or theories about the origin, nature and functions of money, and both mainstream orthodox and heterodox have different views of how money work. Understanding the nature and function of money is crucial in shaping effective theories of money as well as sound economic policies. In the traditional mainstream perspective, money is neutral in the long run. It serves as a medium of exchange and measure of value. The central bank controls the supply of money, government obtains money from households and firms to spend and excessive government spending would lead to inflation. In the heterodox view however, money is not neutral. It is a unit of account and always a debt. The government as the sovereign issuer of the currency does not have budgetary constraints. It can spend as much as it needs to achieve full employment and price stability. The nature of money and its implications to policy-making will now be examined.