I am an ecological economist, ecologist, writer and philosopher with very broad research interests including the application of evidence in public policy formulation, taxation economics, environmental economics, gender economics, and the history and philosophy of economics. After spending about 10 years as an ecologist/evolutionary biologist, mostly working for government conservation agencies and then working in the private sector, I went back to uni and studied economics and philosophy.
I’m Co-founder and Economist at the Castlemaine Institute where I work on economic development, climate change adaptation and mitigation, circular economics and much more.
I’m also the Wellbeing Lead at the Centre for Policy Development, a public policy research institute, where I work on integrating alternative measures of progress into government decision making. I’m also an honorary fellow at the School of Social and Political Sciences at the University of Melbourne.
I can be contacted at warwick.smith [at] castlemaineinstitute.org.au, Twitter: @RecoEco, or connect with me on LinkedIn (please add a message introducing yourself if I don’t already know you).
Hello, and thank you for writing this very useful blog. The connections between human systems and natural ecosystems are both fascinating and critically important for good environmental policy and viable decision-making.
Dear Warwick. I want to thank you truly from the bottom of my heart for your posts (I’ve only just found you so have lots of reading to do). I am an Australian woman in my 50’s and knew in the depths of me that the household budget analogy was wrong but wasn’t educated in this regard to understand why. You have helped enormously. I will keep reading and learning but I have a request. Is there already (or can you make one) an accurate analogy of how a country’s budget works to explain to the older, less educated people to help counter the household budget one? As you know the more learned someone is, the better informed they are. I would love to spread your common sense and knowledge to people who are only getting their news from the MSM. I am sorry for the length of this but it’s something I am passionate about. Thank you.
I’m sorry it’s taken me so long to reply but I never seem to look at this page. Just came here to update something. Thanks so much for your your comments.
In terms of alternative analogies to the household budget, it’s a question I’ve thought a lot about but not really resolved. Warren Mosler uses the analogy of coupon created by parents to pay their children for doing chores. The kids are required to pay a certain number of coupons per week for their room and board. If they don’t pay they are punished. This is the equivalent of tax. Do the parents need to get the coupons from their children before they can spend more? Of course not.
It would be better to have a more everyday analogy to use – I’m still thinking about it.
If you haven’t already, I recommend reading Mosler’s little book which can be purchased in hardcopy or downloaded free from his web site:
Click to access 7DIF.pdf
Warwick, you asked me to contact you after my comment to your article, ‘Cabinet Papers 1990: Lessons from the Recession we Didn’t Have to Have’.
I’ve sent an email to your hotmail account. Would love to read or hear a detailed account of your views of the recession. If you don’t get my message, you can contact me with the address listed above:
warwick.jss [at] gmail.com
Hi Warwick , I would like to send you my submission to super review
Please do, I’d love to read it. My email address is above in the “About”. I haven’t written one yet but I still plan to.
Neobanks are basically banks with no physical branch places, offering clients with monitoring, financial savings, payment solutions and fundings on a electronic and also entirely mobile framework. Some examples of neobanks are Chime, Simple and also Varo.
I listened to your lecture on this topic that is on the web. Your view about how the economy “works” with government spending is essentially the same as my view. I would boldly claim that the reason for that coincidence of views is just that we are both looking at the same reality. Why I’m writing you is motivated from your comment in a your previous response to “Caroline” above:
“In terms of alternative analogies to the household budget, it’s a question I’ve thought a lot about but not really resolved.”
This is something I’ve also given a great deal of thought about and have resolved at to my satisfaction. It is a great relief that I now clearly understand why. I agree completely with your conclusion, but I believe you (and others with the same understanding) need a better way to make their case clear. I’m not sure mine will be a clearer explanation for you, but thought at least I would send it to you for any comment/criticism. It does take a little time to get through it.
I have found it very difficult to get “real” economists in the US to comment and criticize it. I’ve explained it using an explanation of what I’ve called “The fundamental monetary constraint” which I’ve written about on my web site. There are two separate writing efforts, which essentially duplicate the same information, but in two different stylistic ways. Possibly you will find one more accessible than the other:
These essays first explain the problem that the “monetary constraint” causes for an economy–and then, secondly discuss ways that have evolved historically to overcome the problem. The (amazingly not considered) monetary constraint imposes a constraint on private money exchange that for each individual, that their amount produced must equal their (own same) amount consumed. Since that is virtually never generally the case, especially in a modern economy with some that produce far more than they can consume, it leaves someone–for example “government” to enable additional consumption by spending that must virtually always exceed tax revenues, to make up the total lack of balance by the private economy. And to be most effective that “tax money” needs to come from the ones that produce much more than they consume: i.e. “The rich”. Not those who consume more than they produce. This will unavoidably always increase public debt over time.
In short, government is one entity (along with a few others) that makes up for extra demand that is required in an economy to allow people in private sector to sell what they produce, when some produce much more than they consume. Some means needs to provide other consumers with money to make up the imbalance. If (over time) everyone consumed only what they themselves produced, no such government imbalance would be required or desirable.
I would love to get any comments or feedback from you. Or ask any further questions.
Boulder Creek, California, USA