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John Quiggin

Mental health and mental fitness

by John Quiggin on August 2, 2022

Until now, I’ve always thought about mental health as the absence of mental illness, much as I have typically thought about the absence of physical illness. In both cases, health is the default state or unmarked category.

But as I have gone through the Covid pandemic, and become more pessimistic about the state of the world, I have reached the view that a better analogy is with physical fitness. That is, something that requires sustained effort to achieve and maintain, and is rarely fully achieved.

In particular while I have previously thought about depression as a mental illness, it’s difficult now to distinguish it from ordinary sadness. My congenital optimism now seems more like delusion. Maintaining mental balance is now hard work.

Not surprisingly, I’m not the first to come up with this idea. Searching for “mental fitness” produces lots of hits, mostly fairly recent. The majority are boosterish, introducing and promoting the idea, rather than acknowledging the difficulties associated with it. Nevertheless, I’m hoping to get some useful suggestions. I’d be interested in readers thoughts.

PS: illustrating one of the difficulties of maintaining physical fitness, I came off my bike the other day and broke my wrist. So I’m attempting to blog by dictation. It’s a challenging mental exercise

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Conferences, Covid, Climate

by John Quiggin on July 28, 2022

As borders reopen and Covid-related restrictions are relaxed, lots of academics are celebrating the return of in-person conferences. I’m not one of them. Although I miss a lot of aspects of conferences, I’ve tried to avoid indoor meetings since the pandemic began, and there’s no reason to change that yet. And with the climate disaster getting worse all the time, I want to minimise, or at least reduce, air travel.
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The Kosovo precedent

by John Quiggin on July 22, 2022

In the early days of the Ukraine invasion, one of the main lines pushed by Putin’s defenders was that the expansion of NATO posed a threat to Russia and that Ukraine was about to join. This didn’t stand up to even momentary scrutiny. The Baltic States had been members since 2004 without doing anything to threaten Russia.

And while Ukraine’s constitution included a goal of joining NATO, Zelenskiy was describing this as a ‘remote dream’ even before the invasion took place, and clearly indicated willingness to abandon the idea in return for peace.

But there is an important sense in which NATO shares responsibility for this disaster. The US intervention in Kosovo, including the bombing of Belgrade, was undertaken by NATO, to avoid the need to get the support of the UN Security Council, where Russia had a veto. This was a substantial breach of international law, followed by a much bigger breach in the invasion of Iraq.

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When I first found out that the UK Treasury proposes to issue Non-Fungible Tokens (NFTs) as part of a general push to make Britain a world centre for crypto-currency, I assumed that this was a Boris Johnson stunt. The obvious model is El Salvador, where Johnson-style demagogue Nayib Bukele has made Bitcoin legal tender, with results ranging from disappointing to disastrous depending on who you read.

It turns out, however, that the source of the push is Rishi Sunak, until recently Chancellor of the Exchequer and now the favourite to become Prime Minister when Johnson leaves office. I don’t know anything about Sunak, but assumed on the basis of his job title that he would be a believer in “sound money”, hostile to, or at least sceptical of dodgy innovations like crypto.

I’m not fully on top of the issue yet, and would welcome clarifications from anyone better informed. It appears that Sunak is at least as confused as I am, and is pushing different, contradictory proposals.

The first to emerge, in 2021, was the idea of a central bank digital currency (CBDC). Such a development, would, in my view be kryptonite for crypto as it now exists, providing all the supposed benefits with none of the energy waste, scams and volatility we now observe. A CBDC would have radical implications which are still being discussed. In particularit, in effect, allow households and businesses to bank directly with the central bank, rather than holding digital deposits in existing banks. If successful enough, it could amount to nationalisation of the banking sector.

Unsurprisingly, banks and their advocates hate this idea. Here’s a critique from the Cato Institute, pointing to the likelihood that a CBDC would “give the central bank and the politicians that set its mandate the tools to much more easily manipulate economic activity.” https://www.cato.org/commentary/why-sunak-should-think-twice-about-central-bank-digital-currency pointing

It looks as if the predictable opposition of the UK financial sector has killed off the CBDC idea. Instead, Sunak has been pushing proposals to put the UK at the centre of the existing crypto market. Strikingly, it’s the dodgiest forms of crypto (NFTs and “stablecoins”), that are being pushed hardest.

As I’ve argued in the past, the fact that something as provably valueless as Bitcoin is now an accepted part of the financial system is evidence that any claims about the efficiency of financial markets are indefensible. The same can now be said about the idea that the UK Conservative party stands for sound economic management.

Following up my initial response to Lane Kenworthy, I decided to approach the question from a different direction and ask “Would we be better off without corporations?”. That is, I’d like to consider a society in which all large enterprises were publicly owned. To be clear, I’m talking about corporations in the ordinary sense of the term, with large numbers of shareholders and employees, not about the (relatively recent) use of company structures to produce tax benefits and limited liability for small businesses. There would still be room for owner-operated private businesses, worker-controlled co-operatives, partnerships and perhaps some other forms of business I haven’t thought about.

I won’t get into disputes about whether this would constitute socialism, except to say that it would be radically different from any version of capitalism we’ve seen so far.I’m also going to reverse the burden of proof implicit in Kenworthy’s approach. I start from the assumption that the expansion of corporate power under the neoliberal (or market liberal) policy package of privatisation, financialisation and deunionisation that has prevailed since the 1970s has been bad for most of us.

Given that neoliberalism is a term that’s often used loosely, I’ll try to be more specific about the adverse effects that can be tied specifically to the resurgence of corporate power.

The most obvious is the growth in inequality that has coincided with the rise of neoliberalism and corporate power. Virtually every aspect of neoliberal policy reform from increasing capital mobility to union-busting to flattening of tax scales has contributed to increased inequality. Moreover, they all reinforce each other.
?So, if we can do without for-profit corporations without incurring significant economic costs, we should.

I started looking at this on a sector-by-sector basis but then realised I would need to write a whole book in reply. So, over the fold, some disorganized thoughts
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Would Democratic Socialism be Better?

by John Quiggin on July 5, 2022

(Reposted, as I previously forgot to open comments)

I’ve just received a copy of Lane Kenworthy’s latest back Would Democratic Socialism be Better (Shorter LK: “capitalism, and particularly social democratic capitalism, is better
than many democratic socialists seem to think”).

The book is a follow-up to his Social Democratic Capitalism, which made the case that the USA would be better off moving to a Nordic model of social democracy.

I’m hoping to make a longer response soon, but I thought I’d begin by summing up the argument as I see it, and the reasons I’m unconvinced.

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The three-party system in France and Australia

by John Quiggin on June 6, 2022

For a while now I’ve been arguing the political crises in the developed world can be understood as the breakdown of a two (dominant) party system in which power alternated between hard (Thatcher) and soft (Clinton) versions of neoliberalism (or market liberalism), with two sides drawing respectively on the votes of the racist/authoritarian right (Trumpists) and the disaffected left (environmentalists, socialists/social democrats etc) who had nowhere else to go, even if they were entirely unsympathetic to the market-liberal version of capitalism.

As the failures of neoliberalism have become more evident, there’s no longer enough support to maintain two neoliberal parties, so the natural outcome is a three-party system, with Trumpists, neoliberals and a left coalition, all of roughly equal size. In political systems set up for two parties, this creates a lot of instability.

When I looked at this in 2016, it seemed that the biggest losers were soft neoliberal parties, typically nominally socialist or social democratic, which had embraced austerity in the wake of the GFC. Prime examples were PASOK (which gave its name to the process of Pasokification), the French socialists under Hollande and the Dutch Labour party. More recently, though, hard neoliberal parties have also been replaced by the Trumpist right (as in France) or simply swallowed by Trumpism, as in the paradigm case of the US Republicans.

Following recent elections in France and Australia, I thought I’d take another look
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Russia and the end of nuclear power

by John Quiggin on May 21, 2022

Of the 50-odd nuclear plants currently under construction, around 1 in 3 are Russian VVER designs, being built by Rosatom. Sanctions on the supply of all kinds of electronics mean that few of these will be completed on time, if ever. in promoting sales, Russia has relied heavily on concessional financing through Sberbank, which is also sanctioned. That’s going to make future sales just about impossible, and create big difficulties in fulfilling existing commitments.

With the exception of the EPR money-pit, the only remaining large reactor design still in the market is China’s Hualong One. Given the experience with Russia, buyers outside China may well be cautious about this option.

So, if there is any chance for new nuclear, it rests with Small Modular Reactors, none of which actually exist (there are small reactors, but they aren’t modular, that is, mass-produced).

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The Thirty-Nine Steps

by John Quiggin on May 13, 2022

At the end of The Thirty-Nine Steps (the John Buchan novel that largely created the spy thriller genre), the hero is about to give the signal for arrest of a ring of German spies. But their pose as ordinary middle class Englishmen is so convincing that they persuade him to join them as a fourth for bridge. Fortunately, a sudden movement alerts him to their true identity and he comes to his senses, blowing his whistle to call in the waiting police.

I’m reminded of this whenever I look at the political scene in the United States. The Republicans have made it obvious that if the votes in the 2024 election go the wrong way for them, the result will be overturned and their candidate (most likely Trump) will be installed. If they win under the existing rules, they will change them to ensure that no Democrat is ever elected again. Yet everyone is pretending that the situation is normal, trying to work out whether (for example) Roe v Wade is a trump card, and if so, who holds it.

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The Four-Day Week

by John Quiggin on May 4, 2022

I just got invited to put a short entry on the 4-day week in the 2nd edition of the Encyclopedia of HRM . It’s over the fold


Four Day Week

The five-day working week and the two-day weekend, have been standard for so long, it is hard for many to imagine anything different. But, as a normal way of working, it dates back only to the middle of the 20th century. Before that, Saturday was a normal working day in Western countries and only Sunday, the Christian Sabbath, was normally taken as a day of rest.

The advent of the weekend, and the associated standard workweek of 35 to 40 hours was the culmination of a long series of reductions in working hours from the peak, of 70 hours or more reached in the early 19th century. At the time, it was expected that these reductions would continue, as technological progress reduced the labour input needed to produce any given volume of output.

Reductions in annual hours, through increases in vacation time and other forms of leave continued during the middle decades of the 20th century,. However, with the increase in the bargaining power of employers which began with the neoliberal ‘counter-revolution’ in the 1970s, progress towards reduced working hours halted and was, in many cases, reversed.

The shock of the pandemic has created conditions for a resurgence of interest in reduced working hours and, particularly, the idea of a four-day week. The pandemic exacerbated existing disillusionment with working arrangements, and showed that alternatives are possible. As a result, a phase of experimentation has begun.

Proposals for a four-day week differ regarding the associated change in working hours. At one extreme, some proposals leave weekly hours unchanged, compressing five days’ work into four. At the other, daily working hours are unchanged, and the number of hours in the standard working week is reduced by 20 per cent.

It’s also necessary to consider whether a four-day week should take the form of a three-day weekend, extended to include Mondays (or perhaps Fridays). One alternative is an extension the rostered day off prevailing in some parts of the building industry, where all workers have one day off each fortnight, but the number rostered on any given day is constant. Another option, drawing on the experience of the pandemic would be a core 3-day week (Tuesday to Thursday) with workers having either Friday or Monday off.

One way or another it seems that the four-day week is now firmly on the policy agenda.

John Quiggin

References and selected further readings

Quiggin, J. (2022), ‘There’s never been a better time for Australia to embrace the 4-day week’, The Conversation, 14 February https://theconversation.com/theres-never-been-a-better-time-for-australia-to-embrace-the-4-day-week-176374,

Schor, J. (1993) The Overworked American: The Unexpected Decline of Leisure, Basic Books,

Return of the Easter Bilby

by John Quiggin on April 18, 2022

In one of my earliest posts on CT, I mention the great Australian divide on Easter confectionary: bilby (cute endangered marsupial) vs bunny (voracious alien pest). It’s been a while since I’ve seen Easter bilbies on sale, but they were back this year, helping to raise funds for wildlife presentation In typical Twitter fashion, the pro-bilby group has divided on the question: Ears first or tail first.

Twigs and branches

by John Quiggin on March 26, 2022

A new Twigs and Branches post, open for comments on any topic. The usual rules on civil discussion apply.

Nuclear power and the Ukraine war

by John Quiggin on March 21, 2022

Putin’s invasion of Ukraine has upended all kinds of certainties, created new possibilities, and closed off old ones. We can certainly see this in relation to nuclear power. Here are a few developments related to the war

  • Russia’s capture of the Chernobyl plant, and the associated fire, have raised new concerns about nuclear safety
  • Belgium has announced that its planned closure of a nuclear plant will be deferred, possibly until 2035, in order to reduce reliance on Russian oil and gas. There have been hints that Germany might do something similar
  • Finland has cancelled its proposed Fennovoima nuclear plant which was to be built using Rosatom’s VVER technology. Coincidentally, a few days ago, the Olkiluoto EPR plant was connected to the grid, twelve years late and way over budget

My guess is that the need to wean Europe off Russian gas over the next few years will outweigh enhanced concerns about safety.

On the other hand, the implications for new nuclear power are unambiguously bad. Projects started now can’t come in time to help with the transition from Russian gas, and the safety concerns will add to cost

Looking ahead, no one will want to deal with Rosatom any time soon, and Chinese proposals are also coming under more scrutiny. The cost over-runs on EPR plants create huge difficulties there also. These come together in Hinkley C (EPR) where hte UK government is trying to push China’s CGN out of the project, but having trouble attracting private finance to replace it.

The great remaining hope is Small Modular Reactors, most notably those proposed by Nuscale. But this hope has been around for a long time, with the arrival date always about 8 years in the future.

Time for the four-day week ?

by John Quiggin on February 18, 2022

For more than a century after the achievement of the eight hour day (around 1850) in Australia and New Zealand standard hours of week were reduced steadily, with the shift to a five day week, annual leave and more. But progress came to a halt with the resurgence of neoliberalism in the 1980s. I’ve been writing about the need for shorter weekly hours, more holidays and so on ever since, mostly with no apparent impact.

But the pandemic may have changed things, if only by making us all feel more exhausted than ever. After I published this piece in The Conversation advocating a four-day week, I was deluged with interview requests. It’s not perfect, and some of the most striking turns of phrase are the editor’s, not mine. But it seems like a good way to start the discussion.

Summers stumbles

by John Quiggin on February 9, 2022

There’s been a lot of debate lately about whether tightening of anti-trust legislation might be a useful response to inflation. Underlying this question is that of the relationship between monopoly and inflation more generally. The dominant view among mainstream/neoclassical economists seems to be that there is no such relationship. That view is stated by one of the most prominent mainstream theorist, Larry Summers as follows

There is no basis in economics for expecting increases in demand to systematically [cause] larger price increases for monopolies or oligopolies than competitive industries.

Summers goes on to describe the opposite view as ‘anti-science’.

Readers of this blog will be devastated to learn that Summers is dead wrong. It’s quite straightforward to show, in a simple neoclassical model, that imperfect competition amplifies the inflationary effects of demand shocks. Here’s a paper I’ve just written with my colleague Flavio Menezes which makes this point using the concept of the strategic industry supply curve. The same result can be presented, less elegantly in our view, using the standard tools of comparative statics to be found in any intermediate microeconomics test.

We also show that, contrary to a suggestion by Elizabeth Warren, imperfect competition is likely to dampen the impact of cost shocks. There isn’t, however, any equivalence here. Warren’s background is in law, and she isn’t making a claim just observing that monopoly power might be a problem. The distinction between cost shocks and demand shocks is unlikely to have been relevant to her, whereas it should have occurred immediately to a leading theorist like Summers.

I’m not sure about the lessons from all this. For me, it’s to think carefully before making dogmatic statements from authority. If all experts agree on something, we should say so, but be careful to make sure we are right.