Post # 2015. Global heating and economics.

provocation # 167 Global heating and economics.

Is there any realistic hope for dealing with climate? A few interviews show that many people have a very inaccurate understanding of what’s up. For Example, a car with a full tank of gas. What happens to the gas as the tank is used for driving. The question was “How much exhaust does your car produce from a tank of gas. Some answers:

A:(Person with a new Lincoln)I have a good new car and there seem to be no exhausts, not like my old car where you could see them.

A: (Hybrid Prius Owner. )None.

A:(several year old Ford)I don’t know, I guess a cup full. I don’t see any.

The reality is that a tank of gas, let’s say ten gallons, as it burns combines the carbon in the fuel with oxygen and the result is each gallon of gas, which weighs about 6 pounds produces out the tailpipe about 20 pounds of co2, or 200 pounds that will now be suspended in the air along with the exhaust from the two billion vehicles in use, close to a quarter of a ton for each time we fill up the tank.

(The following from https://www.fueleconomy.gov/feg/contentIncludes/co2_inc.htm

How can 6 pounds of gasoline create 19 pounds of Carbon dioxide? It seems impossible that a gallon of gasoline, which weighs about 6.3 pounds, could produce 20 pounds of carbon dioxide (CO2) when burned. However, most of the weight of the CO2 doesn’t come from the gasoline itself, but the oxygen in the air. When gasoline burns, the carbon and hydrogen separate. The hydrogen combines with oxygen to form water (H2O), and carbon combines with oxygen to form carbon dioxide (CO2).

CO2 molecule with one carbon atom (atomic weight 12) and two oxygen atoms (atomic weight of 16 each)A carbon atom has a weight of 12, and each oxygen atom has a weight of 16, giving each single molecule of CO2 an atomic weight of 44 (12 from carbon and 32 from oxygen). Therefore, to calculate the amount of CO2 produced from a gallon of gasoline, the weight of the carbon in the gasoline is multiplied by 44/12 or 3.7. Since gasoline is about 87% carbon and 13% hydrogen by weight, the carbon in a gallon of gasoline weighs 5.5 pounds (6.3 lbs. x .87). We can then multiply the weight of the carbon (5.5 pounds) by 3.7, which equals 20

Everyone on earth should know this.

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Global warming and economics. Nordhaus got rave reviews for winning the Nobel. It is always mentioned that he discusses climate, but reading through some of his papers and book, the focus is on carbon tax. And he is honest about how long it will take, but he doesn’t then react with “ok, here is what needs to happen. Most recent interview, from the NYT few days ago.

The New York Times https://www.nytimes.com/2018/10/13/climate/nordhaus-carbon-tax-interview.html

“One of my very, very few disappointments in Obama when he was president is that he did not come out in favor of carbon tax. I’m sure he did the political calculus on this. He should have come out and talked not just about climate change and its dangers but how to use a carbon tax to fix it. He was a great speaker a great educator but this is one where he let us down, I think.”

The implication that a carbon tax would fix it is confusing people The reality is that if we stopped ALL carbon fuel use tomorrow, Tuesday, ALL, We would still face a devastating future from climate heating and its consequences for agriculture, migrations, and wars, all leading to the dislocation of people from their current circumstances of trying to live.

The interviewer asks: “How do you think a carbon tax could get bipartisan support? Nordhaus responds:

“Things change over the long run. What is toxic or opposed in one generation gradually becomes accepted in the next. Social security took a long time. It was opposed for many, many decades but since Reagan is has been widely accepted.”

Again the interviewer: Do we have enough time to avoid the warming that will bring severe and damaging effects of climate change?

It’s not going to happen in time for 1.5 degrees. It’s very unlikely to happen for 2 degrees. We’d have to be very pessimistic about the economy or optimistic about technology for 2 degrees. If we start moving very swiftly in the next 20 years, we might able to avoid 2 degrees, but if we don’t do that, we’re in for to changes in the Earth’s system that we can’t begin to understand in depth. Warming of 4, 5, 6 degrees will bring changes we don’t understand because it’s outside the range of human experience in the last 100,000 to 200,000 years. We’ve been going backward for the last two years. Maybe we can stop going backward and start going forward.

Can we do better? Chandran Nair’s Sustainable State makes a serious attempt. He lays out the logic for a single state with the authority to make major decisions. But he too does not lay out a political or violent process that could actually create such a state.

`Is there any group of wise people who could call for a global shift to such governance now? The US Declaration of Independence reads:

 

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

 

Would it be possible to run the process backward? “When in the course of human event it becomes necessary to renew the bonds…”?. Global heating and economics

Post # 2014. Trump, unemployment and economics.

Provocation # 165.  Trump, unemployment and economics.

The argument is made that things like GDP, obviously flawed, nevertheless make possible graphs and computational models. In physics, basic assumptions, almost always get closer to the core of the phenomena. Weights falling in a frictionless vacuum for example. But in economics the assumptions , allowing for modeling, are basic distortions of the phenomena.

We tend to think that such assumptions are innocent, mere good faith attempts to help make economics scientific. But clarifying the models obscures the phenomena and makes science as well as public policy much more difficult.

This has serious consequences. Trump puts forth in all his public appearances that unemployment is at an all-time low and major news just quotes it as fact. Most economists know this is false but don’t go to the media with fuller pictures. The result is, Trump is moving closer to actual reelection. Economics, instead of being innocent and remote from society, is enmeshed in the flow of events.

post 2013. Early lock-in?

Are we now in a kind of early lock-in to nations and corporations and elite structures of inheritance, education and rewards? I sense a shift in atmosphere, rather than an easy to describe shift in consciousness and categories. The West seems riddled with lack of leadership. The past looms. Europe seems small and the US seems rapidly weakening and uneducated. Note that nation comes from natal, to be born, and hence is a racial/cultural term, and corporations based on corpus, body, also draws on the mythical and organic power of old concepts. Lots to think about .

post # 2012 Retrospective on economics’ failure to engage.

In retrospect people will ask – why did economics keep supporting the system, or at best making small tweaks (tax rates, bank reserves ) but nothing capable of doing the obvious: modeling and discussing what needs to be done to stop the momentum toward crises, to prepare for a post crisis world.The critiques of what’s wrong in society, the economy or economics are good, but stop short of proposing actions.

There is widespread agreement that the .01% have too much wealth which has been achieved through a combination of policies and taxes, but are there any proposals on how to get it back in a timely fashion capable of preventing disasters? Or is there the widely shared understanding that anything done to recalibrate the system would lead to cascading side effects that would bring the system down anyway?

Who does some interesting thought experiments? For example,

“As of this date no house can be sold for more than was paid for it.”

There is of course no way yet this could be done. But lets imagine and learn from the imaginings.

Immediate consequences are easy to imagine. Buying a house as an investment rather than as a place to live would cease. Totally unfair for example for people who have owned heir house for a long time and paid very little for it. Draconian? Messy. Yes. But are not the consequences of not doing anything radical also going to be very messy, maybe even messier? I think we learn from such experiments.

Look at the curves: global temperatures, population, adaptation of automation, lack of living wages, civil strife, student debt, bad management of the overall production process: raw materials, manufacturing, disposal – all terrible, and mutually reinforcing.

There is a tendency to avoid social engineering (mechanical socialism soviet style), but forget that the US Constitution was a social invention, now not going so well. Part of the goal of that invention was to create a system impossible to change (especially redistribution of property). So we are up against the limits of that design. Can the invention of America and the Constitution be redesigned?

Good background is Garry Wills’ book, Inventing America.
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Re E.O.Wilson. From
https://harvardmagazine.com/breaking-news/james-watson-edward-o-wilson-intellectual-entente

Will we solve the crises of next hundred years? asked Krulwich. “Yes, if we are honest and smart,” said Wilson. “The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology. And it is terrifically dangerous, and it is now approaching a point of crisis overall.” Until we understand ourselves, concluded the Pulitzer-prize winning author of On Human Nature, “until we answer those huge questions of philosophy that the philosophers abandoned a couple of generations ago—Where do we come from? Who are we? Where are we going?—rationally,” we’re on very thin ground.

Post # 2011. How do we get to a more inclusive economics?

Provocation 164. Beyond economics.

 

Economics fails to look at key social phenomena: capitalism, ownership, quality of life, preferences, political power. In the few cases that reach outside to social consequences, the symptoms are discussed by not core consequences.

A few examples: Steve Keen’s revising economic models feels bloodless, absent people, or Stiglitz/ Ocasio-Cortez who raise key issues but do not discus core causes. As if we can fix inequality or climate within the framework of normal econ speak.

Core causes not discussed: capitalism, class structure: A few own the leading edge of society’s innovation, and they hold on to ownership for their own benefit. Society can create innovation and create new wealth but society is organized so only a few really benefit. The rest are asked to put in labor in order o survive , and are now being replaced by automation and algorithms, and are expected to spend their dwindling income on things sold by the few.

Economics does not look at the most important phenomena. There are things we need to be thinking about, does economics encourage, or at least support such thinking, or does it dull us? Is economics so ideologically model bound , sealed away from social phenomena, that it can’t discuss them? Because of this avoidance it also acts as a barrier to inquiry. And society, absent serious economic inquiry. A simple example.a carpenter working on a house here gets a ticket for sliding ing through a stop sign, not having come to a “complete stop.”. The cost is $350. He doesn’t have it. It is almost a week’s pay. Rob the poor to keep taxes low. He loses his license fr failure to pay, can’t show up on the job and immediately is given eviction on his house. The policeman giving the ticket is on a quota incentive system, his salary needs to be paid. Income to the county means keeping taxes on property lower. Isn’t this an aspect of economy we need to understand ?
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Highly recommend Roberto Unger’s last lecture of the spring quarter at Harvard Law. He opens to a discussion with the class, gets off to a slow start but very worth the time.

Unger https://youtu.be/Y4CCl6vVHkM

His view includes that we are in a counterrevolutionary period and progressives have no program, having dropped the ball after the New Deal.

Post #2009. Need to change more than economics.

We need  to admit that new economic thinking cannot occur without adding some political modeling and ideas. This is because the economics we have is part of a political regime that favors the one percent, creates inequality, ruins the environment and furthered the division of the country in ways that create voting  out of anger and despair and potential violence. The result is a dysfunctional  government that ignores the serious issues and governs through  the theater of hyping the wrong issues.  Our economics supports a dysfunctional government.

Post #2008 Constraints within economics prevent engagement.

What are the self-imposed constraints on new economic thinking?

The purpose of science is to give as best we can a picture of relevant reality. It is not the results of applying a method to a problem only because the problem is tractable with the method. Aa Aristotle made clear, each un known has is appropriate method.The first criteria is to pick a good enough example of the problem that, if understood, would actually throw light on the problem, not just on the method.

Economics seems to operate under extreme constraints on what it can or should study. Big data can find the tiny fraction of you that correlates with the tiny fraction in many others, but it cannot find the Plato or Bob Dylan in you. So big data misses lots that is relevant to actual humans. The admonition to grad students and tenure seekers to find a good data set might be good careerism but bad science.

If we accept the constraints, like keeping economics separate from politics or the other social sciences, how can we live up to the challenge for new economic thinking? New economic thinking probably requires introducing new aspects of reality, new “variables”, into the discussion. To introduce new methods without considering new aspects of reality probably can’t bring us very far and reflect a conservative – “things have to change in order to remain the same” approach, which might provide an important clue as to the motive for the slow movement of new economic thinking.

Constraints emerge because we stay within assumptions that we do not violate:

The assumption of capitalism.
The assumption that ownership is not a legitimate category of economics
The lack of discussion of the caste system that divided us into owners and workers, labor and capital.The legitimacy of corporations

Economics bypasses all the interesting categories of how the day is spent by an unemployed spouse, by the retired, trust fund babies, artists choosing poverty, those filling out time to retirement by playing videos at their desks, adventurers. We don’t look at the content – much of which is not “economic”- of the lifestyles of the one percent.

Why do we stay within these constraints?

Good manners?
Not wanting to shake up colleagues?
Fear of consequences to career?
Fear of destabilizing society?

Put another way: the world needs managing of the relationship between humanity and the globe, which needs to be a mix if economics, ecology, politics, philosophy, historical understanding, dealing with human nature and civil society. Is economics up for it, or is it holding on to old assumptions that help prevent any integrated approach?

Is there a better way to frame the question?

Post # 2007. Numbers in physics and economics- the difference

Provocation #162 Numbers in physics and economics.

The fact of money as numbers is like catnip for the mathematically inclined. But for something to become a number subject to economic analysis it has to go through a very complex social process of culture building, trust, faith, shared intuition about the worth of something in dollar terms, and the growth of supporting institutions..
Physics is just the opposite.The numbers are given by nature. True, a social process of inventing physics is necessary to be able to see the numbers, but the numbers are not generated by a social process.

The result is that the potentially most interesting parts of economics are ignored: how trust develops, the interaction between the social and the physical worlds, how desires and needs are amplified by media, how style emerges, how preferences form (the Trojan Horse of a more human centered economics), for example the US style stand-alone house vs. the close structure of the European hill-towns. Reflexivity means dynamics of a social field, but people are treated as isolated with internal preferences a bit like Plato’s innate ideas.

Economics could be about how society works and how to manage the interactions between humans and environment more skillfully – but not if sych workings with all their complexity are not seen as a question.
Economics students are told “search for data bases” and apply math and create your career.

A a 50 to 150 million dollar severance package after sexual misconduct? This is a symptom, not the sex but the money, of a broken society. Does it get questioned? Or is it just the productive function working its logic and acquiesced to by economists?
I keep coming back to Tim Cook: where is the analysis that says his compensation is based on an adequate economic model of real contributions to Apple’s success? Its customers, for example, are able to use an iPhone because of an expensive education (yes, even a four year old has benefited from much of society allowing them to become customers), but that is treated by Apple as an external it can monetize without having to pay for it. Cook’s wealth is socially generated, privately consumed. This is crazy making – to wit, the current deteriorating state of society which is unnerving us all, and, as Stieglitz says, inequality will continue to get worse. As is often argued, being at the top of a large pyramid should pay more than being at the top of a small pyramid. but this ignores that the existence of both pyramids is the work of a whole society over a number of years. Even the increasing size of a hierarchy under the guidance of a leader pulls together people, ideas, and properties created by others. Each building block of an organization has a history before its incorporation.

“The economy is doing well but society is doing badly.” Employment and the stock market are up, but impact of new jobs on the environment is continuing to increase the stress.

It is all very interesting and very important. But the siloed contributions found in most economic journal articles do not touch on these issues. If you Google “guaranteed annual income and inflation” simple issues like increases in rents and befits to owners and banks are not discussed or brushed over quickly. “The amount of cash put into society by a GAI is small in comparison to the overall GNP.” The reality of a homeless person with their GAI check trying to rent when all the spaces are rented is not explored. It is all gobbledygook with grammatical but not empirical integrity. Lets strive to be more relevant and interesting.

Meanwhile global temperatures and effects ratchet upwards where physics numbers and economic numbers occupy the same space.

Post #2006. Society without economics?

If economics moved in the direction responding to much of the current critique in so many books and articles it would be much less mathematical-and more narrative. Could such a transition be made? Who would teach what? And when done, what jobs would there be? I think this refocus is needed if we are to help prepare society for tough times coming (The simultaneity of climate, inequality, authoritarian governments, automation, pollution impacts)

We have made an economics that helps the flow of financialization but is self contained. The result is that much of the critique, and lots of the posting on INET reflect this, uses the current vocabulary to critique the current practices. Is it possible with the economic vocabulary to construct alternative approaches that go beyond critique? The vocabulary we use is adequate to the financialization of the economy but that vocabulary, for example economic man and rational expectations mandate stripping out human concerns. A common example is talking about income in developing countries in terms like “Income has gone from $1.25 to 1.65 in the last decade, ” with no concern for the surrounding prices, availabilities, or general living conditions, as though 1.65 tells us that. Imagine a good reporter from Buzzfeed or an anthropologist telling us what they see. Even the idea of inequality is inequality in money terms, which might be different from inequality focused on an economy of quality of life, or family quality (employment is up, hooray. Both parents of little children can now go to work. Uh oh.) rather than consumer centered.

I think it is important to reflect on how all societies were until quite recently able to function without economics. What would happen if we just removed economics but not the economy (leaving in place accounting and all the material conditions which form the ensemble economists reify as “the economy”) from this society?
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