Ryan Research Newsletter 11/15/21
1.) Gript Interview: Economics of the Irish Revolution
One of the key debates during the early decades of the Irish state after the 1921 Treaty was how to establish the foundations of an independent economic and financial system. Gript’s Matt Treacy invited me to chat about the debates in the revolutionary leadership, how the first Cumann na nGaedhael government more or less jettisoned any ambition to break away from the British imperial economic system as it pertained to Ireland, and how subsequent efforts by Fianna Fáil after 1932 were frustrated by the banking and commercial elite until they turned to overseas investment rather than Irish led industrial development. I center all these points around the economic ideas of Arthur Griffith and the school of nationalist economics.
2.) Nationalist & Industrial Economic Policy Lectures
The more I study economic ideas, and less mainstream ones especially, I feel the need to catalog them. There are great thinkers and genres of ideas that are disconnected and hard to find. I’ve compiled a series of lectures that each analyze a core component of a nationalist and industrial economic policy program. The lessons from each can be used by any nation for their national economic development.
3.) My Questioning of Eric Weinstein’s Inflation Measurement Idea
A notable thinker and investor, Eric Weinstein, has invaded the economic discipline to pontificate that it has been completely and utterly wrong on inflation for a long time. His prominence among Silicon Valley tech circles, cryptocurrency fandoms, and right-leaning politics enable him to garner a platform to be heard and have influence. Recently, The University of Chicago invited him to a seminar where he could elaborate his theory and take questions. He used this as a jumping-off point to once again criticize the field of economics and suggest his ideas have merit because…well…the field of economics is now inviting him to talk. In a series of back and forth comments, I questioned Weinstein about his theory and its application. He allegedly developed the correct theory on measuring inflation in 1996 and has never produced any publications and data that articulate the correct inflation numbers. He quibbled with me that it was because it is too costly and he would need a budget of $600m to do it. Aside from his squirming, nerd filibusters, etc. it becomes obvious that his marketing of the theory has an obvious flaw. He says 1.) we don’t properly measure inflation 2.) He has never applied his theory to properly measure inflation 3.) he says that the current regime manipulates inflation measurement because it is too high. Somehow Weinstein knows and doesn’t know what the real inflation numbers are. This is a glaring contradiction. Expanding it further, having any perspective of economic theory collapses if one doesn’t know the proper methods of measurement. How can one be a capitalist, marxist, supply-sider, monetarist, MMTer, etc. if those theories are not tied to cause and effect measured by a metric like inflation? Thus the only logical position for Weinstein to take is extreme neutrality. Instead, he engages in polemics and contradictions. I’m not opposed to the hypothesis that inflation measurement methods are not optimal, entrenched centers of power seek to manipulate data, or that economic academia is a sterile group of non-critical thinkers. I’m opposed to someone crowding the space of dissident economists through unserious claims that aren’t backed up by evidence that distract people away from serious critiques.
4.) Easy Diagram to Understand MMT
I put together a diagram that explains a simplified equation of inflation. It is derived from Modern Monetary Theory (MMT) but utilizes the Quantity Theory of Money (QTM). The QTM states that MV = PY as in the money supply times velocity of money equals the general price level times the real output of the economy. The mainstream view of this holds V and Y constant, so the conclusion is that the money supply directly increases or decreases the price level. While this makes intuitive sense, I take umbrage at the over-simplification. MMT reveals that the direction of capital affects the real output or GDP. New issuances of currency into the money supply through specific investment directions could actually increase the GDP. If we take my below equation then we can see that, as the money supply rises proportionally with GDP, inflation is unchanged. This might not be orthodox MMT but I don’t care. It is teaching a larger truth that MMT accepts and ultimately the utility of MMT as a school of thought in economic might be temporary as the nationalist school of political economy returns with gravitas. The nationalist school overlaps with MMT, since the crux of MMT is the sovereignty of the currency issuer, but has a much deeper history and wider expanse of policies.
5.) My Bitcoiner to MMTer Story
I told a little story about the observations I made in the bitcoin community that ultimately converted me from the perspective of an anarcho-capitalist Austrian schooler to one that is best approximated as MMTer by today’s hype cycle. It involved taking the bitcoin economic theory as seriously as liberal or marxist economic theory. I combined this study with real-world practical evidence as to how the theory was working outside of the imagination. Ultimately, bitcoin theory collapses in on itself and is nothing more than a mutation of the general global neoliberal theory that it acts as a faux-alternative to.
6.) Shakespearian Economics
Many people don’t know that Adam Smith’s “invisible hand” was a direct allusion to Macbeth by Shakespeare. Fewer people know that Shakespeare used the “invisible hand” as a metaphor for evil deeds committed in the darkness of night. For fun and in homage to Smith, I took a quote, “money by vile means”, from Shakespeare’s Julius Ceasar to elaborate on another concept of monetary theory in economics.
7.) Throwback Article: CBDCs
I wrote this article a while ago to discuss the growing development of central bank digital currency (CBDC) across the world. I introduce the concept and explain the key aspects to consider. Economists that study monetary theory must familiarize themselves with the technology and the implications of that technology related to CBDCs. In addition, Marcelo Prates works as a lawyer at the Central Bank of Brazil and wrote a fantastic explainer on designs for CBDC. Finally, Rohan Grey, a professor at Willamette, offers a significant critique of rushing into CBDC without proper care given to privacy and civil rights.