Money Is A Measure Of Nothing But Itself

TITLE: p3X6D9qsFiU CHANNEL: Unknown DATE: ---TRANSCRIPT--- Welcome to Current Affairs. My name is Nathan Robinson and I am the editor in chief of Current Affairs magazine. I am joined today by two professors of economics, J.W. Mason and Arjun Jayadev. They are the authors of the new book Against Money. It is available from the University of Chicago Press. Dr. Mason is associate professor of economics at John Jay College in the City University of New York. And Arjun Jayadev is professor of economics and director for the center of the study of the Indian economy at Azim Premji University in India. Welcome to the program.

Well, thanks for having us. We’re delighted to be here. All right, the title of this book is provocative. And I don’t know if there are many people who know how you could even be in the 21st century against money. Um, let me give you a little bit of I I guess the conventional perspective on money and I want you to tell me how it’s how people are thinking about this wrong. You know, um, the in a in our lives we have to obtain goods and services from other people. Um, we a barter system is inconvenient and inefficient. I don’t want to uh go to every coffee shop in town and offer them copies of Current Affairs and negotiate to see how many copies of Current Affairs will uh get me a latte. Um, and so we have money and money acts as a rough proxy measurement for how much we value things and therefore lubricates our transactions and enables us to all get what we want. I would say that that’s a fairly conventional perspective on money and it’s something you it’s a story you think you both think there’s something profoundly wrong with. So, tell us what’s wrong with it. I think you know, the story the story is is interesting and it’s really it’s kind of illuminating of the problem that we’re we’re trying to help solve with this book because you say, “Okay, I get the things that I need by paying money and if I didn’t have the use of money to do this, I would have to exchange something that I have for something of equal value that somebody else has. We would have to have a barter system and then it’s hard to find the person who wants the specific thing that you have to offer and so that would be inconvenient as you say.” But what’s interesting about this is it’s it’s as if we have we we are used to of course using money. That means that we have this sort of arms length exchange with somebody we don’t have any relationship with and we’ve got some notion of equal quantities of value. Different everything has a price tag and so when we imagine organizing our lives without money, we think we’d be doing exactly the same things as we do with money. Exchanging things with strangers for things of equal value except we wouldn’t be using money to do it. So, we imagine the way we’ve organized our lives around money is the only possible way to organize them and it would just be inconvenient to do that without money. Yes. But of course there are actually lots of other ways that we get things that we need from people. All of us grew up in families where we got many things that we needed from our parents and other caregivers that nobody exchanged money for and that nobody there was no notion of quantitative equivalence. There’s nothing that you were giving back to your parents of equal value to what they gave you. We exist in all sorts of institutions. We both teach classes. We work very hard to prepare and to interact with our students and hopefully they learn something from it. But there’s no in the classroom an exchange of anything for equal value. The fact that you’re not paying for a grade, the fact that you’re not paying for instruction from an instructor doesn’t mean you’re exchanging something else of equal value in some sort of arm length exchange. It means you have a relationship that allows you to cooperate and engage in this activity together in a way that is is hopefully productive for both of you, but doesn’t involve this notion that everything has a price tag and things have to exchange for equal prices. Mhm. So, one of the things we’re trying to say is that actually the alternative to money is not just a money-like exchange but without money. The alternative to money is all the other ways that we already organize our lives together, but we don’t see because our society is so shaped by this idea of money. Mhm. Dr. Jadhav? Yeah, so I wanted to add that um the title actually has three purposes. Okay. Against money. Um and Josh has talked about the third reason. In fact, we mentioned three reasons uh why we titled this against money. Uh the first one was actually against money in a very different way than um than we’ve you you’ve read it, which is against money as the way that standard economics thinks about it. As something which is as you said, you know, just in just a kind of substitute for barter. Money’s never been that. Money’s actually come from a very different place, from obligation. Come The his- history of money is different. And its purposes are different, and we’ve made a mistake in grafting on money as a kind of solution for the inconveniences of barter. And that has led to a very different way of thinking about economics. So, that’s one meaning of against money. We’re we’re against the way economists think And there’s a second way I think that we also want to speak about it, which is again a collapsing of the world of money and the world of things. So, we we often think of, you know, we talk about uh GDP or other kinds of uh monetary objects, and we sort of imagine a real object behind that, right? So, [clears throat] we think when we talk about GDP that we’re talking about often goods and services or some tangible real kind of physical stuff and often it really is about just monetary flows. So, we often conceive of the world against money in the second sense of the the term against money. And that again, I we we contend is actually a really bad mistake because we confuse things in the world with things in money. Then finally there’s this third sense of against money which Josh talked about where we’d like to transcend the the kind of imagination that the only way to to organize world the world in production is through money. In fact, there’s so much that we do that isn’t that. Now, I I I think some of what you’re saying may be a little difficult for people because you’re you are going beyond what you know, a lot of what we talk about when we’re lefties is redistributing wealth or health care spending and you’re sort of taking us deeper on a theoretical level and start to think, well, hang on. What do the numbers even mean? Right? What are we talking about when we talk about finance? What are we talking about when we when we measure things? And it seems to me like Dr. Jayadev, what what you’ve just said there is um it’s not just we often critique GDP and say that it doesn’t capture this or that. But you’re almost saying that it’s it’s kind of an incoherent concept. You say at one point that money is a measure of nothing but itself. Which is I think I can’t think of a better name for that than a mind [ __ ] [laughter] People are like, what do you mean? It’s it’s kind of circular. Could you could you explain a little a little bit by what you mean by trying by money measures nothing but itself or or or this this incoherence of GDP as a as a as a concept even? Well, let’s put it this way. When we measure something a price of something, you see something that has a price tag that has a very specific meaning in our lives. That tells you how many dollars or how many, you know, euros or whatever you’re using, how much money you have to pay to get that thing. And there’s a lot of price tags in the world around you, so you know, I can, you know, for [snorts] the same, um, you know, amount of money I could give to get one copy of Against Money, I could get, you know, eight cups of coffee or however many, you know. So, there’s an equivalence between one copy of the book and eight eight cups of coffee. But that is true in our particular in one particular setting where we have all these prices. If you ask, “Well, what is what is the thing that makes the coffee eight coffees equivalent to the book? What is What is the substance What is the quantity that is equal in eight cups of coffee and one book?” The answer is there isn’t anything. The only equivalence is the fact that here and now they trade at those prices. In a different setting, in a different country, at a different time period, the prices would be different. And there’s no way of saying there’s some there’s some underlying quantity that the book has eight of and the cup of coffee has one of that we could measure in some other time and place um that that that would have different prices. Uh, every different price system defines a different set of values. And this is this is important for a couple of reasons. One, on a sort of intellectual level, we’re it stops us from going down a lot of blind alleys where you have these efforts to say, “Well, what was the per capita GDP of the Roman Empire?” And you come up with these completely fantastical numbers that don’t refer to anything. It’s an enormous waste of intellectual labor and it gives us a really distorted picture of the past because it’s just like line goes up, when actually the changes that have happened are much more complex than that. Um, the other thing is that this this way of thinking kind of shapes the kinds of the way we organize our life in a very concrete way, because prices dictate the decisions that people make. And this is part of the point we want to make that changes in the monetary system, changes in the financial system, are going to change prices. Let’s say changes if you a high interest rate matters a lot for certain kinds of spending. It matters when you’re buying a house. It doesn’t matter as much when you’re buying a book. And so a change in the interest rate, which is fundamentally coming from the monetary system, is going to change the relative price of houses and books. It’s going to change how much of our collective activity we spend producing houses and how much we spend producing books. So if we if we think that the price is just a measurement of something that is right there in the coffee or in the book, we don’t see the ways in which actually it is the monetary system, the financial system that is changing those prices and and shaping the choices that we can make. So I I want to just pick up on the point that you asked about GDP. Mhm. You know, and I think it’s important for us to to spend a little time on this because um you know, you’re right, you know, we spend a lot of time thinking about okay, look, GDP’s gone up at this and then we never actually interrogate what that is. And you know, if you ask any person who’s a national accountant, uh they will tell you that it really refers to monetary values being exchanged across some production boundary which they have agreed upon and which therefore um is really comes out of some conventions that have been chosen by a group of people for good reason. And we know, you know, we take you know, we criticize this and say it doesn’t include care labor or it doesn’t include these things. Now, of course you expand that there’s so many things that are choices that are made uh to to to put into the into this that we often um you know, completely completely miss certain uh certain things because we just assume that that refers to goods and services. I’ll give you a concrete example about the US. Mhm. Um you want to speak about the the consumption bubble. I think that’s a Oh yeah, this is this is a yeah, this is a nice example of how this this way of thinking distorts our our our perceptions of the world. You know, if you talk to a lot of people, if you look at the national accounts, you’ll see that the amount of the share of GDP going to consumption or the share of people’s income that’s being spent on consumption has increased a lot over our lifetimes, you know, maybe it went from somewhere in, you know, below 60% in 1980 up to 70, 80% in more recent years. You know, and and people say, “Well, what’s going on? Why are people consuming so much more? Are they more short-sighted? Are they more impatient?” Or other people say, “Well, it’s because the cost of living has gone up or it’s because of inequality and people are competing.” But if you look under the hood, what you’ll find is that um almost all of that increase is is what we call third-party healthcare spending. In other words, Medicare, Medicaid, employer-provided health insurance. In our national accounts, all that stuff is treated as private consumption. So, in the national accounts, the government provides health insurance and healthcare through healthcare for somebody through the Medicare system. The national accounts say, “Oh, that person got a check and they chose to spend it. They chose to consume it in the form of healthcare services.” So, our national accounts are telling us this story where private consumption is rising and rising. When what’s really happening is that social provisioning of healthcare through the public sector is what’s actually rising. And so, this this sort of effort this you know, and again, maybe with good reasons, maybe with bad reasons, but the construction of the national accounts makes our world look like it is more organized through markets and and private payments than it actually is. This this social sector of the economy becomes sort of invisible. Um but there’s all sorts of choices. As Arjun said, you know, or in the early days, some of the founders of our national accounting system said, “Well, we should exclude uh military spending because it’s not actually producing anything.” And there was a real debate about this. And obviously, the outcome was that we do include military spending in our measure of economic output. Other people have said, “Well, we should include, you know, care labor in the home.” But there we don’t include it. And you know, there’s reasons for these choices, but the thing that we are measuring, we call GDP, is is the product of those choices. We’ve got money payments that are being made, and we decide some of these correspond to production, some of them correspond to private consumption, and others don’t. And it’s those choices that you’re measuring, not some object out there in the world. Now, it it strikes me that you are not just making the arguments that you are in challenging our default understanding of money for reasons of clarifying economic theory, but because you both believe that our mistaken understandings of what money is, how it comes about, what it measures, lead us to make policy choices that are irrational, lead us to make mistakes in the way we understand how to solve social problems. I want you to talk a little bit more about how reconceptualizing money helps us to more rationally find solutions to the problems that we see in the world. Sure. Maybe we I can just start by saying um you’re right. It’s not primarily to you know, to to think about theory, but we’re both economists and we were trained in a particular way. And and this book came about with really trying to straighten out ourselves out a little bit in thinking about money and you know, the way it maps onto the real world debates. So, let’s just let me just give you a very concrete example of how thinking wrongly about what money is and what money does has extremely important impacts. And in fact, I think maybe one of the most important impacts, and that’s how we really actually got started in this which is the question of debt. Okay, and there’s a big chapter on debt in in in in the in the book. And the way that we conceptualize debt and, you know, rising debt-to-income ratios, whether it’s of a household of of of of a country, is we say, “Look, a country just borrowed too much relative to its income, right?” And it’s it’s just a stock of all the borrowing that it has had over this period, and since it’s so large, it has to cut back. And, you know, it’s a set of very nice little morality tale we tell. But by we, you mean people in general, not not Not not us specifically, but, you know, let’s say let’s say that was the kind of understanding of the people um who forced austerity, right? In fact, that this was just, you know, in in in um in Southern Europe, it was just the result of people uh over-borrowing and not having the capacity and all of those kind of things. But if you actually look at what happens to the debt in debt-to-income ratio, either of an individual of a of a household or of um a country, it’s dependent on many other things, including the interest rate, inflation rates, growth rates. So if you treat monetary uh um values as evolving by themselves, you actually get to understand what it is that’s contributing to the rise in a debt-to-income ratio, all right? So this might seem like just extremely arcane stuff, but what does it turn out? It turns out that often, it’s not the question the the rise in debt-to-income ratios is not about borrowing, it’s not about profligacy. It’s simply about interest rates being very high relative to inflation. So, you know, so and that that can actually lead to much more impactful um changes in your debt-to-income ratio. And that, in fact, was really kind of central to the European story. So if you want to say something where misunderstanding, you know, what causes changes and assuming that it’s borrowing rather than, you know, just kind of changes um and evolution of of monetary variables leads you to undertake really, really bad decisions, which is, you know, austerity uh through and through leads to a generation of people losing, you know, any capacity for for increasing their welfare. And of course, all the political and nastiness that follows. You know what Yeah, that’s right. I mean, a lot of the case for austerity has hinged on this idea that debt is just a record of how much you spent. And if you have a debt problem, you have a spending problem, and you need to spend less. And that’s where we, you know, we have these austerity programs that have destroyed so many lives in so many countries. And yet, if you look at the numbers, and it’s very straightforward, you often see that this it’s a monetary story. It’s not a spending story. You know, if you look at, you know, again, Southern Europe, you can see, well, actually, the debt rises after the crisis, not before the crisis, because of rising interest rates. It’s not because of government spending too much. Um, I could give you more examples if you want, or we can move on to your next question. No, I I just I if you have other cases in in which you feel like this um uh [clears throat] this false conception, this this error that is that is at the heart of your book is is leading us to make irrational irrational choices, I’d be interested. Yeah, well, let’s take another example, which I which is the question of foreign investment, which we had to cut a lot from the book, so we don’t we don’t talk about this in the book, but I think it’s a good illustration of the broader principles. Um, you know, the idea that foreign direct investment, or we call them sometimes capital flows, is something that uh poorer countries really need is a very widespread one. And people hear the term capital flows, and they sort of conflate the monetary transactions that are actually happening in some notion of capital as physical factories, machines, knowledge. So, you say, do you need capital inflows? Do you need foreign investment? Well, of course you do. Don’t you need better factories to develop? Don’t you need better machinery and and and so on to develop your country? And yet, what’s actually happening here, the when we talk about foreign investment, we talk about capital flows. There are no machines moving across the border. All that are happening are monetary transactions. When you talk about foreign direct investment, what that actually means is that somebody outside your country has bought a claim in your country that gives them control over production in your country. That is the technical definition of foreign direct investment. It’s a financial transaction that gives somebody outside your country control over a business within your country. Now, sometimes that might mean that they’re opening a new business and importing machines to run it. It could, but it nothing that’s not intrinsic in the notion of foreign direct investment. But it But people think of it that way because they don’t make this separation that we’re stressing between the monetary side, the financial claims of ownership, and the real things that we actually use in production. And so you get this idea, “Oh, we really need all of this foreign investment in order for our country to develop.” When you’re really saying, “We really need foreigners to own Mhm. [clears throat] our country.” Well, I let me let me ask you this then. It would seem that the implication of what you’ve just said there is not just that foreign investment is often misconceived as bringing a bunch of machines and things into a country to help build an industry there when rather it is the assertion of a property right, but also that in general uh when say a capitalist entrepreneur says, “I have built a business because I put up the capital for the business and I, you know, I I built it because I provided the capital.” Um the the capital [laughter] itself that the capitalist puts up um is not necessarily that they, you know, hauled something in that they allowed you to mix it in, but they allowed but the fact that they allowed it. The the the the proper the the fact that they own the money or they [laughter] and they are willing to let it be used to do something. Can you can you talk about how reconceptualizing money should change our understanding of what capitalist capital is and what the capitalist does? Yeah, you know, we actually I mean it’s very nicely put because we sometimes prefer the term capital owner to capitalist. There’s a nice I think that that distinction is important that one of the things that capital gives you is a veto right, right? And it’s you can direct things in a particular way or you don’t have to direct things. Now, I just want to go back one step to the foreign direct investment question. Um why do countries want foreign direct investment? Often it is that the the need for a different currency, the dollar, you know, so that they can actually, you know, manage some of their their trade balances. So, it’s a different kind of way of thinking about it rather it’s about monetary operations as opposed opposed real operation. But coming back to this question of capital ownership and capitalist Uh yes, so so one of the things we want to assert is often in the monetary world all that’s being exchanged are claims and that’s the really that you have to to keep in mind that you know, when someone says that they have um that they have capital, what they have is often a ownership right that we’ve given for whatever reason over a stream of income. And to be clear clear, this ownership right should be unpacked a little bit. If you are a shareholder in a business, you don’t own the business. You have a certain property right that entitles you to a certain stream of payments from that business and a certain degree of input into the selection of the the executives of that business, you know, obviously a small shareholder very little, a big shareholder very much. But it’s not you don’t own the business and you don’t provide capital in the sense of machinery or or equipment to the business. What you do is you You a monetary right that allows you to make certain claims against that business, to demand a dividend payment, and to also potentially vote out the executive if you’re big enough shareholder. And obviously, by asserting these rights, you can limit what the business can do. A business that pays out more in dividends has less available for other to activities. If you remove the executive, you’re going to do one who makes different choices. But the ability The fact that you have these legal rights does not mean that you have contributed anything to this business. It doesn’t mean that you are providing the machinery, and we have this very deep confusion in our language between the person who exercises these ownership rights against the business and the actual physical tools that the business uses, and we call them both capital. And yet, in reality, they they are they are very different things. Help me understand this more. Um let’s uh tell tell me more about uh about uh how we should better understand what capital is and what a capitalist does. All right. So, I think I I mean, this is There is a chapter on capital in the book, as well. And I think it was one of our fun chapters. Um just as we said, you know, austerity was one of the kind of important kind of uh markers to for us to think about it. The other big marker was uh Piketty’s book, you know, uh Capital in the 21st Century, which got many people thinking. But uh Piketty and others actually have this kind of conception at the background when they talk about capital as means of production. Right. And as stuff that you actually is used to produce other stuff. And that has a very kind of productivist orientation, and you know, so there’s a very different kind of imagination. Um Capital, though, when you actually measure it, is actually monetary values of various sorts, which are capitalized values of of claims, right? And these two things don’t need to go together at all. Right? You know, and one of the things that we actually find quite often, which is quite amusing is how hard economists have to try to take a capital flow and imagine or try to produce machines or means of production below them. This is what um uh you know uh things like the Penwell tables and others actually try to do. So, there is two conceptions I think we need to really keep apart because we can conflict them all the time which is capital is machines and means of production and capital or you know, whatever housing stock or whatever it is and the monetary which are claims. I think those two things are the Right. Then they then they too if you ask, you know, this is one of the big things in this, you know, the Piketty book which was one of our starting points here, you know, he and and to be fair to him he’s moved away from this conception since but in that book he really says, well, the reason the wealthy grow wealthier is because they own useful productive things, machines and so on and they use the the output of those to buy more machines which produce more stuff and so on and so on. No, this stuff it’s a process where you saved your income, you accumulated it in the forms of concrete stuff and then you had more generation by generation. And it’s just not as a factual historical matter, that’s not how the share of the wealthy has grown at all. What actually happens is that people have some sort of claim on production in the form maybe of corporate stock or ownership of land and the value of that claim that they already exercise gets greater over time. If you own land in a in a major city, the value of that land is likely to go up over time and you are going to become wealthier. And this this has nothing to do with saving, it has nothing to do with accumulation, it’s exactly the same land but your your wealth goes up because the relative value of that land relative to other other things has increased. And if you look again, if you you know, and a lot of people have tried to do this very carefully, if you look historically, why is the share of wealth, which is obviously one face or one of the things that we call capital, um so much larger relative to income than it was a generation ago, it’s all capital gains. It’s all that the existing claims on production have become more valuable. And that is in part because the share of output that’s flowing to profits, the income of capitalist has gone up. If you own the shares in a business and the business decides we can get away with paying less in wages and now we’re going to pay more in dividends, your the value of your shares is going to go up and that sort of process explains a lot of the increase in wealth. It has nothing to do with accumulation or or increases in output. And the other thing of course is on the financial side, uh the same income flow might be worth more or less depending on how it’s discounted. We when interest rates are low obviously, when then the flow of income in the future will be worth more. If people are more confident about the future, if there’s less perception of risk, lots of things can happen that can make the same flow of income more valuable today. And those are the stories that explain the rise in wealth over time, not some kind of increased savings and accumulation of useful things. So for those of us who are concerned about the concentration of wealth as as Piketty obviously is, what implications does this reconceptualization have for us? Well, you know, I think it in fact makes it even more urgent but also in some sense more freeing. You know, if you believe that that capital owners are becoming wealthier because they’re actually productively deploying their capital to you know, increase the income of society and that’s and they’re getting some reward from that maybe outside. You’re in a different world than when you say look, all they’ve got is is claims and those claims have got a higher value. And that is something to worry about if not actually being more quote unquote productive. I think it actually strengthens the concerns that people may have about about it. And you know, you also have a a kind of, shall we say, parallel flow of, uh, you know, people talk about financialization and there’s a whole, uh, bunch of probably uh progressive economists who have been thinking about that. Their work informs this in some sense because they’re actually saying, “Look, what is really happening is not that capital has become more productive or more, quote unquote, deserving of the returns, but that the financial system has and has found ways of making new claims which allow and and the claims have worked in such a way that the returns to these people have become more and more concentrated as a result.” Mhm. Right, let me just sharpen that point a little bit. You know, the people who took this sort of orthodox economics view, you know, for them the story becomes one about technology and people like Larry Summers in the wake of Piketty’s book were writing, “Oh, well, what’s changed in the technology that makes it much easier to substitute, you know, machines for human labor?” And that’s really why the wealthy are getting so much wealthier because it’s easier for them to just accumulate more means of production. They don’t need labor as much. So, you look to technology and you’ve got some story about But, from our point of view, in the this is about two things. It’s about distributional conflict within the firm. It’s not the change in the organization of production, it’s who who gets the results. And then it’s about the financial system and the value that gets put on on income claims. And so, you can say if you if you want a different distribution of wealth, you don’t have to think about like a whole different way of organizing production, you can say, “What’s happened that gives workers less leverage, less ability to claim output?” And what’s um what’s happened and and, you know, shareholders more ability to claim output? And I think if you look and and I think that’s a it’s a much more productive political conversation. It’s saying, “Actually, we don’t need to we don’t need to look for some sort of technological theory that’s that’s that’s responsible for this. It’s the same kind of political distributional conflicts that we’re very familiar with that explains this rise in in in in uh wealth relative to income. Now, uh just finally here, um you know, uh Professor Jayadev, I’m I’m new to your work, but um Professor Mason, I I’ve read uh you in Jacobin for a long time, and um uh one of the things I’ve always appreciated and I’m excited to see what we’ve got a book of kind of economic theory that draws together another threads in your writing, cuz one of the things I’ve always appreciated is your willingness to, you know, challenge from the perspective of someone who is actually an expert in economics, uh the you know, conventional wisdom about economics. You’ve written articles on, you know, this idea of homo economicus, on uh you’ve written I uh in fact a a great piece that I said all the time about rent control and how, you know, the typical view of of rent control as uh as economically destructive is wrong. So, I’m wondering if we could conclude here if going beyond the the book, if you could tell us uh if you need to tell us um uh an idea, a conventional notion that people have about economics, another one that is that is wrong um and that people should rethink what they are what they are told or what they may read in the op-ed pages of the Wall Street Journal. And you Professor Well, I think there’s one that’s pretty far-reaching, including on the issue of rent control, which is that prices normally reflect costs. And I think this is this is a very a sort of almost a default assumption that people don’t think about and it’s a very convenient assumption for many people’s point of view, that when we see the price of something in a market, that broadly normally reflects the cost of producing it. And of course, that is true for some things in some kinds of markets, but there are many other cases where it’s not, where prices are very far removed from costs, and that’s especially true where you’ve got very long-lived assets, so the cost a lot of the cost of production are far in the past. And then, the price today may have almost nothing to do with with how what those costs were. And obviously, a very prominent example of that is um housing, where houses, you know, here in in New York City, where we’re located, where I live, and where, you know, the average how home is the average unit of housing about 80 years old. So, the cost of building that is just not a factor in the amount that that’s going to rent for today. And for instance, if you look today, you say, “Well, what are the costs for a landlord?” The biggest item is is going to be debt service on the how much they borrowed in order to take ownership of that thing. So, landlords say, “Well, I can’t pay my bills because, you know, I I don’t have much of a margin. You know, if you limit the rents, if you freeze the rents, I’m not going to be able to pay my bills.” Which is sort of true. It’s true because they have so much debt that they voluntarily incurred because they thought the value of the building was going to go up. But, it’s not about the cost of producing housing services. So, I think this is this is a case that goes right back to our book, but it has broader application. And it goes, you know, to discussions of greedflation and sort of the economic argument for regulating prices. People who oppose price regulation will almost always implicitly or explicitly say, “Well, you know, the price is just the cost of production, and if you limit the price, you’re going to get less stuff.” But again, although that is true in some cases, we should really be conscious of the fact that it’s much less true than than the textbooks would have us believe. Um um So, I my choice is something that um I think that people hold quite uh strongly, but I think we let people to to uh rethink is that um This is maybe a little bit wonkish, but that there’s something that that’s well defined called the potential output of an economy. Uh And the reason I’m I’m thinking about this right now is that we’re going undergoing through two investment surges, which I’ll speak about in a in a second, but there is this idea that somehow, um you know, the macroeconomy is being managed around this well-known path of uh of growth and that all macroeconomists have to do is kind of adjust a couple of levers to make sure that we’re not running the economy too hot or too cold and that that may you know have its own kind of shall we say dynamics but that’s really what we should be thinking about but I want to suggest that one of the things that our book and our thinking in the last few years has has brought me to to believe is that the economy is a much more open-ended process and an open-ended activity than we you know we we think about and the proof of this is that we often undertake investments without knowing what the future is going to be. We’ve seen this now now with two different sorts of technology two two different sorts of investment the AI boom on the one hand and green technology on the other. We don’t know what is going to happen to output as a result we don’t we’re not going to we certainly don’t have any notion of the potential output of the economy. And why is this important? I think it’s important because economic economic thinking forces us to believe that the possibilities of economic change are much smaller than they actually are and that in fact the way that the world works is often partly through through the backstop of finance and other kinds of things which we talk in the book but also partly because of an open-ended exploration of the possibilities of social coordination and if you have that vision of the way to think about the economy it’s a very very different set of possibilities that are open to you. Mhm. Well, I I do think that people even even people whose um interest or knowledge of economics is uh you know fairly casual uh should pick up your book because it is it is mind expanding. It is challenging. It is and it it’s also written I think in a way that is fairly accessible to non-economists even though it’s published with an academic press and yeah there’s so many so many fascinating and challenging ideas in this and so I do recommend that our listeners and readers pick up this new this new book against money is a product of a great deal of thought and research I’m very excited to see it come out because preservation I mean if you just did a book that summarized you know so much of as I say draw together a lot of the threads of your thought now now we have it it’s in our hands and it’s real good so congratulations to you both and thank you for coming on the program to explain some of your ideas to our listeners and readers today. Thank you so much. Thanks very much. 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