Funding the Future

In this podcast, I talk with my old friend and Tax Justice Network co-founder John Christensen about something economics rarely discusses, which is who controls our attention?

Our time is limited. So is our capacity to think, read, listen, understand other people and make sense of the world. That makes attention a scarce economic resource, and modern capitalism has become extraordinarily good at capturing it.

Adverti...

Who really creates wealth in our economy? Is it the people who own businesses, property and financial assets, or the people who actually do the work? In this episode of my series on Understanding Economics, I argue that work is the foundation of economic value. Without human effort, care and creativity, money would still exist, but there would be very little worthwhile to buy with it. That raises some important que...

The Bank of England has held interest rates at 3.75%, but three members of its Monetary Policy Committee wanted an immediate increase. With inflation rising again, the threat of higher interest rates is very real, and the Bank say they may well raise rates soon.

But would raising interest rates actually tackle the inflation we now face?

The problem is that much of this inflation is being driven by disrupted energy supplies, food pr...

Does creating more money cause inflation? We are repeatedly told that “money printing” inevitably pushes prices higher. But that claim misunderstands both how modern money works and what actually causes inflation.

Governments create money when they spend. Commercial banks create money when they lend. Both processes happen every working day. If creating money automatically caused inflation, modern economies would be perm...

The old age pension triple lock is under attack again. The Financial Times wants it scrapped. The Resolution Foundation wants it ended. The Tony Blair Institute says it is unaffordable. But they are all looking at the wrong pension subsidy to criticise.

The UK spends around £154 billion a year on state pensions. The accumulated additional cost attributed to the triple lock is estimated at around £16 billion. That money has helped p...

Interest rate markets are in turmoil. Government bond yields are rising, inflation fears are growing, and financial markets are demanding higher returns. But there is a problem: centuries of interest-rate history suggest that what is happening now is highly unusual.

In this video, I look at Bank of England research tracing interest rates back more than 700 years. The long-term trend is striking. Both nominal and real interest rates...

What if one of the biggest problems with conventional economics is that it misunderstands human beings?

Mainstream economic theory frequently starts from the assumption that people pursue their own self-interest. But that is not how most of us actually live. We care for our families, our friends and our communities. We also recognise obligations towards people we will never meet.

I call this economic empathy.

In this video in my&nb...

John Kenneth Galbraith was one of the great economists of the twentieth century. In The Culture of Contentment, published in 1992, he offered a warning about what happens when prosperous people use democracy to protect their own economic security while ignoring those excluded from it.

More than 30 years later, that warning deserves another hearing.

In this Funding the Future podcast, John Christensen and I discu...

Inequality is about much more than the difference between what one person earns and another. It is about income, wealth, opportunity, security and, ultimately, power.

In this episode of Understanding Economics, I explain what inequality is, why wealth is distributed much more unequally than income, and how inequality can become self-reinforcing. Someone who has enough income to save can accumulate wealth. That wealth can generate f...

We need a revolution because nothing seems to be working as it should.

People have lost confidence in the government, the NHS is under strain, utilities and many private companies deliver dire services, charities don't seem to be solving the problems they have been set up to address, and universities aren't meeting students' needs, and yet the organisations responsible continue to survive while those they should serve are deeply di...

Has capitalism failed? Or is the real problem with the particular form of capitalism that has dominated Britain and much of the Western world since the 1980s?

In this video, I argue that we need to distinguish capitalism from neoliberal capitalism. The post-war form of capitalism existed alongside strong government, organised labour, public services and regulation. It was constrained by ...

What makes a successful Prime Minister? Britain has had plenty of political leaders in recent years, but how many have really understood what governing the country requires?

I argue that a successful Prime Minister needs three essential qualities.

First, they must understand the country they govern. They need to recognise why people are dissatisfied, what they fear, what they hope for and what they expect the government and a Prime...

The Great Discomfort is coming. A financial crisis could expose just how fragile middle class security has become.

For decades, millions of people have been encouraged to believe that a professional job, a growing pension fund and an increasingly valuable home would provide lasting economic security. But what happens if all three assumptions fail at once?

Stock markets are at extraordinary levels. The AI boom has many of the charac...

Poverty is not a fact of nature. It is a political choice.

The UK considers a person to be living in poverty when their income is below 60% of median household income, after tax and housing costs. On that measure, at least 14.2 million people, including 4.5 million children, are in poverty today. That is about one in every five people, according to the Joseph Rowntree Foundation's most recent estimate.

The proof that poverty is a c...

Why has buying a home become so difficult for young people in Britain?

In this Funding the Future podcast, I talk to my son James about the extraordinary generational divide in housing.

When I was 25, I bought a three-bedroom flat in London for £28,500 with a deposit of just £250. Young people today can face house prices approaching £300,000 or considerably more, while being expected to find deposits of many tens of thousands of po...

In this latest video in my Understanding Economics series, I look at an idea economics has been missing for the last forty years, and it is one of the ideas that matters most: resilience. The big deal is not growth, nor efficiency. It is, instead, the ability to withstand shocks and adapt when things change.

Resilience means preparing for hard times while things are still going well.

It means knowing what to do when circu...

October has an extraordinary history of sudden financial crashes.

Six of the eight largest falls in Dow Jones history happened in October, including 1929, 1987, 1997 and 2008.

Couple that fact with Bank of England Governor Andrew Bailey warning this week that markets face a high risk of a disorderly correction.

His concern is not abstract. Valuations are stretched, meaning markets are priced far above what fundamentals justify, and...

Why should pensioners and people dependent on social security pay the price when bond investors demand higher returns?

That is the question raised by the latest turmoil in government bond markets.

The Financial Times argues that governments should heed the warning from bond investors, avoid interfering with market prices and confront rising pension and social-security costs instead, making the most vulnerable pay for a crisis not o...

Why are we never allowed to have enough?

Modern economies constantly encourage us to want more: more possessions, more consumption, more experiences and often more debt. Advertising tells us that something is always missing and that buying it might finally make us happier.

But does having more actually improve our lives?

In this video, I ask whether there comes a point when our material needs have been met, and additional cons...