Post # 2021 If we avoided the word “economics”

What if economics is unnecessary to understand economy? If we had no discipline of economics we might have common sense about the economy, the pragmatic relations of humanity and society to the material world in all its manifestations. “Economics” has been aligned with elite needs from its early use just after Wealth of Nations as the nation became an instrument of wealth centralization rather the good of the whole.

“Economy” goes back to the Greeks.  “Economics”, probably from Alfred Marshal, early 1800’s, was an attempt to  – by adding “ic” to be scientif- ic. (Economic and economics do no occur in Wealth Of Nations. The adjective “economical” does a few times  in the sense of austere management. “Economy occurs a few times, always in the context of a specific: “the economy of the rich” , “The economy of private people”, and a few times as “political economy”. 

(From Wikipedia – The discipline was renamed in the late 19th century primarily due to Alfred Marshall from “political economy” to “economics” as a shorter term for “economic science”. At that time, it became more open to rigorous thinking and made increased use of mathematics, which helped support efforts to have it accepted as a science and as a separate discipline outside of political science and other social sciences)

Interesting to imagine if accounting had been taken as the basis for understanding the economy rather than  economics .

As it is, economics has been a force for fragmentation (“separate discipline outside the other social sciences”) making it hard to understand the economy in all its relations between society, people and the material world). 

Economics has a strong tendency to be pulled into ideologies.

We miss out on common sense about how to make a good world, and we are left with  fighting fragmentation of social thought.

Post # 2020. Which scenario?  will economics help manage the choice?

Provocation # 171 which scenario?  will economics help manage the choice?

As the political situation deteriorates we can foresee several possible groupings of interests

1. The Democratic party of the professional class (The Clinton grouping)

2. The disaffected: economically injured or threatened. Ferguson, et al, described)

3. The progressives:  Scandinavian style  social democracy and identity politics.

4. The Catastrophe grouping: global heating, tech replaces workers, government is broken and illegitimate, collapse of food production.

5. The holders of assets.

How will mainstream economics play among these four? Can it help manage the choice, or will it simply work to maintain continuity and existing momentum?  

Seems to me like a serious opportunity for economics.

Post # 2019 Could the problem be capitalism?

Provocation #170
What if the problem is capitalism?
Without safeguards the dynamics of the rich having better access to market information and cheaper credit means those with capital continue to get richer. Simple dynamics at play. To keep this excess manageable safeguards must be continually active, but increasing complexity keeps the dynamics hidden.

The counter measures to capital excess have lost out. A ruined planet ecologically and a ruined society moving back toward feudalism are the result.

Capitalism started early, with herders, breeding cattle, a new head From which comes cap, capital. Ever since the powerful have owned the surplus output of society, its capital. But they needed workers. No more. Any new job is a target for algorithmic development.

Now what? The best rationale for capitalism might be that it is the best way so far invented to create and support an elite without which governance is impossible. Of course the downside is that the insatiable quest for capital ownership leaves the people vulnerable and the planet a mess. Lots of new thinking needed. Or are we stuck with momentum we can’t change? Are we all just pretending?

#2018 Why Trump won. Economic more than identity

The Economic and Social Roots of Populist Rebellion: Support for Donald Trump in 2016
Thomas Ferguson, Benjamin Page, Jacob Rothschild, Arturo Chang, and Jie Chen∗

at

https://www.ineteconomics.org/uploads/papers/WP_83-Ferguson-et-al.pdf

Important.

ABSTRACT This paper critically analyzes voting patterns in the 2016 U.S. presidential election. Using survey data from the American National Election Survey and aggregate data on Congressional districts, it assesses the roles that economic and social factors played in Donald J. Trump’s “Populist” candidacy. It shows the hollowness of claims that economic issues played little or no role in the campaign and that social factors such as race or gender suffice to explain the outcome. While agreeing that racial resentment and sexism were important influences, the paper shows how various economic considerations helped

post # 2018. Economics and world management.

provocation #  169. Economics and world management.

The world definitely needs managing – or some equivalent. Everything overlaps. Specialties don;’t work. The world is one but specialties divide it. Is there any path for economics that will make it a partner in world management? Or are we locked in to an economics that serves academic departments, quantifying bureaucracies and career management?

A management approach  would start with an understanding of what the world and its parts are, how they got that way, and what can happen, and then engage to help make the world move toward an ecology which can support the people. A management approach would be very negative toward those who saw the world as a game to be played for private gain, but realistic about the need for leadership with a  perspective that requires education and rewards.

I realize that I have become increasingly skeptical about the ability of humanity to do this. The question then reverts back to: what is the best use of our time given actual conditions?

Mandatory sequestering? Possible. Unlikely. Many overlapping jurisdictions. Economics could help sort these out. Unlikely. Possible. 

——

Note. The argument about the anthropocene is that humanity created this mess by sucking too hard and becoming dependent on stored energy. Andreas Malm in his Fossil Capital argues that such a perspective fails to notice that it wan’t humanity, it was some humans, resisted by others, who built our energy dependent society. To see the climate and energy dilemma as caused by human nature is hopeless. To see that some of us, from hunter gatherers on, resisted suggests that we are not up against human nature, but confronting the character of some in their   exploitation others. 

Note. The current world chaos is the product of the organization of wealth  and population that increasingly marginalize many and, despite Steven Pinker style thinking, the living conditions of an increasing number (maybe all of us if we include the ethos in which we live, the moral climate) are seriously deteriorating.

Post # 2017. Expanding the scope of economics?

Provocation 168. How to expand the scope of economics.

In the spirit of provocation..

Economics advanced by making assumptions that treated most of society as external to economics, but it turns out, as it has, that the dynamics of society profoundly affect the mainstream neo-classical economic model: ownership, wealth: interest, politics, people’s state of mind and taste, new inventions, state of the earth. How can we now bring the externalities back in to the thinking of current economics?

In a simple way economics started with a broad interest in society , Adam Smith, Ricardo, Malthus, and then in the mid 1800’s (and many others, see the flow in for example The Edinburg Review), then succumbed to formalism and math, looking scientific with equilibrium and “rational” economic man, and with these narrowing its scope of interest. But now, with a society in disarray because it is undone by the things economics (the understanding of an economy) excluded (people, politics, earth), the trend is back toward needing good narratives of what happened – and maybe even to what could happen. Since economics aligned itself with, even advanced, the dominance of models and formalism, what can economics do now to reorient its thinking around the issues of consequence – the interface between society and nature?
——————

Physics friend “ Physics models are relevant to circumstances which never change. Economics make models that sort of work – until circumstances change.”

The following from Andreas Malm’s essential book, Fossil Capital.

Re climate: “We are looking always at the impact of climate on society. It should be the other way – looking at the impact of society on climate.”

“The traditions of the dead are breathing down necks of the living, leaving them with two choices: smash their way out of business as usual – and the heavier the breath, the more extreme the measures must be – or succumb to an accumulated, unbearable destiny.”

Knock knock economics. Anybody home?

Post #2016 Bill Gates capital serving memo on climate change.

Gates Memo has today (Oct 17) My plan for fighting climate change.
Climate change and the 75% problem
gatesnotes.com · by Bill Gates

 
Bill Gates makes a proposal. I think we need to be very critical and get him to take himself more seriously. The errors and omissions of logic are representative of why we are not doing well with global heating. He is trying to maintain the capital investment leading to profit paradigm.

To prevent the worst effects of climate change, we need to get to zero net greenhouse gas emissions in every sector of the economy within 50 years

Zero gross or net (why does he put in net), even if totally eliminated now would not lead to preventing climate warming. What is already in the air and the oceans will still work its rapid destructive effects.

To stop the planet from getting substantially warmer, we need breakthroughs in how we make things, grow food, and move people and goods—not just how we power our homes and cars.

So if the planet will get “substantially warmer” (I wonder what exactly he means by substantial, uncomfortable or unlivable?) anyway we need much more than those things .Is there a sub text here? I think so. The ones he names are all problems that can be solve, maybe, by new innovations..

All of that new consumption translates into tangible improvements in people’s lives. It is good for the world overall—but it will be very bad for the climate, unless we find ways to do it without adding more greenhouse gases to the atmosphere.

He means prior innovations. But is it for the good of the world? It is important to know the arguments here. It produced wars, slavery, colonial empires, and a dickensonian world for many (and still does ). Could we actually stop more greenhouse gas? Solar and wind still require materials that need to be mined, or manufactured. I think the logic here is to set up the framework for more investment that can pay off to investors. Ah, so he goes on..

This is undoubtedly a tough problem. It is not obvious what the big breakthroughs will look like. Most likely we will need several solutions to each challenge. That is why we need to invest in lots of research and development, across all five areas, now.

Notice the problems become investment targets even though the sum does not equal limiting climate change and in fact each undertaken vigorously would, at least in the beginning . contribute to warming. Remember, there may not be any after the short run. We only have minus a few years to fix the system. He continues;

Personally, I’m part of a group of investors in a private fund called Breakthrough Energy Ventures (BEV), which is putting more than $1 billion into helping promising companies take great ideas from the lab to market at scale. We’re using the five grand challenges I mentioned above as the framework for our investments. Every idea we’re supporting is designed to solve one of them—and our mission is about to get a big boost from a new partnership in Europe.

Ah notice that these are not public service investments, they are money people investing in a future productive use of their wealth in a system that is already concentrating wealth. One possibility of course is tht the world’s wealthy unite in imposing a new paradigm of money, economy, life style, equality, and environmental remediation. Interesting to think of but nothing in what he says suggests that possibility. (If you know of any such discussions lease let me know).

Because energy research can take years—even decades—to come to fruition, companies need patient investors who are willing to work with them over the long term. Governments could in theory provide that kind of investing, but in reality, they aren’t great at identifying promising companies and staying nimble to help those companies grow.

Years? Where is he with the numbers? protecting investors’ investments in payoff but certainly not engaging with the seriousness of the problem.

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.

———

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 .