Tag Archives: Phil Lawn

Immigrants are People too

This post is written colloquially and comes from a comment I lifted from Bill’s Blog by Phil Lawn. I’ve spaced it out for clarity and left it outside of a massive block quote because it does indeed deserve a post of its own. Over to Phil.


For all those people who like to label anyone who sings the praises of low immigration as racist, immigration is a policy.

Immigrants are people. High immigration of mainly white people (deliberately) would be racist.

Low immigration of people regardless of their colour or religion would not. A low immigration policy favouring refugees (people in need) is not anti-immigrant.

Image from Animated Stats. The UK is #1.

I also dislike the fact that a high immigration intake of skilled people insidiously deprives many countries of the people they so badly need. Since a strong country should be able to produce the quantity and quality of stuff it requires (some international trade needed to alter the mix of goods), every country has as many people as it needs.

After all, every working person is both a producer and a consumer and thus adds nothing in net terms to the people already in a country. It simply comes down to a country appropriately educating/training and utilising the people it already has.

If people think Australia needs more skilled people, that is an admission that Australia’s education/training and employment policy is failing.

It also reflects that the wages on offer for some jobs are not high enough to attract people to take them on. Why do the ‘leave things to market forces’ advocates turn to the government every time they can’t get people to work for them?

A simple solution – offer higher wages. Once upon a time, when workers were better represented (unions and institutional wage setting), employers in this situation were forced to raise wages to obtain labour.

No wonder there is no wage growth anymore and certainly no wage growth while a country is importing hordes of skilled migrants, as Bill has pointed out.


We will let Bill have the last word ostensibly to demonstrate this is neither racist nor anti-immigratory.

The problem is that governments have not been prepared to use their fiscal capacity to ensure everyone has a job and so the labour supply has outstripped labour demand.

Australian Economists and Modern Money Theory

Australian economists and others are finally entering the public discussion on Modern Money(tary) theory.  It is welcome.  Below are the tweets that inspired this post (re-post).  The post itself comes from Andrea Terzi whom you can follow on twitter @ndrea_terzi.

Australian Real Progressives has previously dealt with many misconceptions about Modern Money(tary) theory.  Australian audiences should have discussions with Bill Mitchell, Martin Watts, James Juniper, Phil Lawn, Rohan Grey and Steven Hail to discover the nuance and complexities of Modern Monetary Theorists and how it differs from ‘smart traditionalists‘.  Hopefully, the post below goes some way to addressing the differences.


The Civilized Money View (aka MMT, or Modern Monetary Theory) has historical precedents:

First, the notion—developed by Adam Smith—that the wealth of a nation is measured not by monetary values, but by its capacity to produce goods and services.

Second, the notion of money—developed by John Maynard Keynes—that any modern state claims the right to declare what money is.

While Smith’s concept hints to full employment as the primary policy objective, Keynes’s concept hints to the management of money as instrumental to reach such objective. Furthermore, MMT explicitly recognizes that the currency itself is a public monopoly.

This leads to an appreciation of the monetary system fundamentally different from the traditional Monetarist-Keynesian paradigm.

What follows is a summary of eight key differences between these two models: the Monetarist-Keynesian paradigm (MK) and the Civilized Money View (or MMT)

1.
MK – The central bank controls the money supply indirectly through its power to control the monetary base.

MMT – The private sector uses bank deposits as money, and bank deposits are not directly controlled by the central bank: they get created by government spending and bank loans.

2.
MK – Because the central bank controls the money supply, it also controls the nominal interest rate in the money market.

MMT – Because it is the monopolist of money, the central bank controls the interest rate.

3.
MK – The long-term nominal interest rate is determined by private preferences about real saving and investment, as well as by inflation expectations.

MMT – The central bank has the power to control the interest rate at any maturity: the interest rate is a purely monetary phenomenon.

4.
MK – A monetary expansion can expand output and employment temporarily and yet, at some point, it generates inflation.

MMT – Any operation by which the central bank buys or sells financial assets does not make the private sector any richer and has little or no consequence on private spending decisions.

5.
MK – Government decisions are largely driven by short-term personal goals of politicians, and thus the management of money should be the responsibility of an independent institution with a long-run horizon.

MMT – While monetary policy can only set interest rates, fiscal policy is much more powerful, since any deficit of the public sector generates an equivalent financial surplus of the private sector, and thus affects spending decisions.

6.
MK – Taxes serve the purpose of financing government spending.

MMT – Because government spending takes resources off the private sector and simultaneously generates income and wealth in the private sector, it will cause inflation from excess demand unless a sufficient amount of taxes is levied on the private sector.

7.
MK – If the government spends more than its tax revenue, it must borrow funds from the private sector, and this reduces funding to the private sector.

MMT – Unless it loses its power to define what money is, the government is the currency issuer: It faces no funding constraint, and it must spend or lend first, before the economy has the funds needed to pay taxes and buy government debt.

8.
MK – Price stability is a precondition for economic growth and job creation.

MMT – A government deficit of a size that matches the private sector’s desire to accumulate financial savings is a precondition for full employment.

This post is Creative Commons Attribution-Noncommercial-Share Alike 2.5 Switzerland License and I dare say any other country as well. It first appeared here via Franklin College’s Andrea Terzi.

I felt it was that important it had to be shared with a larger audience.  Of note is that the MK paradigm mentioned throughout is the traditional current orthodox neoclassical approach used in mainstream economics today.

Phil Lawn: Understanding Natural Resources

Phil Lawn

It is critical that economists build into their models what ‘production’ and ‘consumption’ actually involves. Production does not involve the creation of anything (first law of thermodynamics). It involves the rearrangement of matter-energy – the physical transformation of natural resources through the agency of capital and labour – whereby use value is added to the natural resources we extract from the ecosphere. Consumption involves the disarrangement of matter-energy, where upon we destroy the use value embodied in the matter-energy that subsequently exists in the form of ‘goods’. Ultimately, when all goods have been directly consumed or have depreciated through use, the output of the economic process is waste that returns to the ecosphere. – Phil Lawn

You can hear Phil expand upon this at the Sustainable Prosperity Conference in Adelaide January 2020