Debunking Economics - the podcast

Phil and Steve discuss the escalating global energy crisis and Australia’s precarious response. They critique the government’s move to lower fuel prices by cutting excise taxes and GST, arguing that while it offers short-term relief to the working class, it fails to address the critical issue of supply and consumption. The conversation highlights a significant vulnerability: Australia maintains only a 30-day onshore reserve of petroleum, far below the International Energy Association's 90-day requirement. Steve warns that a total depletion of diesel reserves could lead to a domestic famine, as the nation's food distribution rely almost entirely on trucking. To mitigate future shocks, they explore the necessity of strategic rationing, the potential for a "carbon coupon" parallel currency, and the urgent need for a massive, publicly funded shift toward electrification. Hosted on Acast. See acast.com/privacy for more information.

In this episode of the Debunking Economics podcast, Phil Dobbie and Steve Keen explore the core of economic theory: the definition of value. They contrast the classical cost of production theory with the neoclassical focus on subjective utility, arguing that while neoclassical models often fail mathematical rigor, the cost-plus approach reflects how real firms operate. The pair discusses the critical role of innovation and market segmentation, noting that while competition typically forces margins back toward production costs over time, elite brands like Ferrari can maintain high markups by intentionally limiting supply and occupying unique segments where value is tied to exclusivity. Ultimately, they conclude that while short-term utility and innovation drive initial pricing, the long-term evolutionary dynamic of capitalism is anchored by the actual costs of production. Hosted on Acast. See acast.com/privacy for more information.

This week Phil and Steve examine the concept of compound interest and its inextricable link to exponential growth in a world with finite resources. They discuss how interest was historically viewed as a sin—the crime of usury—across major religions until the industrial revolution provided the physical growth and energy consumption necessary to support such financial claims. The duo highlights the systemic risk posed by the expectation of permanent improvement in living standards, noting that while interest rates may not have an inherent limit, the biosphere certainly does. Hosted on Acast. See acast.com/privacy for more information.

Phil points out that the US is likely to spend $1.5 trilion on defense/offense spending this year. Acknowledging that sovereign currencies can essentially create money to fund defense, doesn’t there get a point where too much is just too much? A significant portion of this expenditure flows to major defense contractors like Lockheed Martin and Northrop Grumman, often resulting in "corporate welfare" where increased military budgets are prioritized over social welfare. Steve says that while money creation is theoretically limitless for the US, the real-world constraint lies in physical production capabilities and the availability of essential materials like rare earth elements, which are largely refined in China. This strategic dependence on foreign resources, combined with the inflationary pressures that can arise from massive government spending, suggests that a nation's ability to sustain a war is ultimately determined more by its domestic manufacturing capacity and resource security than by its purely financial reserves. Hosted on Acast. See acast.com/privacy for more information.

This week Phil and Steve dive into the mechanics, ethics, and economic consequences of a Windfall Tax.

The discussion starts with the UK’s energy levy on North Sea oil and gas producers, questioning why these taxes are often temporary "clunky" fixes rather than permanent structural policies. They explore the fundamental disconnect between international corporate profits and the national resources they exploit, comparing the UK's approach to the nationalized success of nations like Saudi Arabia, Kuwait, and Norway.

The conversation expands beyond fossil fuels to ask: Should the same logic apply to the "tech bros" of Silicon Valley or the banking sector, both of which benefit from network effects and central bank policies that create massive profit "windfalls" without a corresponding increase in production costs?

Hosted on Acast. See acast.com/privacy for more information.