1996. Trump

We all need to take a principled stand. The Democrats when in power let the country slide, climate got worse, inequality expanded, there was no critical thinking, only coping. Obama, for all his excellent qualities (the right never gave him credit for good family life) seemed to dodge the key issues and failed to develop the Democratic party. The Republican party, has descended into a mess. I remember people like The Young Republicans, trained in brutality  and lying   in  60’s and  now are a major fact of political life and have no interest in good government, only in using  the game of destroying the government with their weird notion that good could come from this. I just see the outcome as us all covered in blood.

But  Trump  goes beyond just an extrapolation from the recent past.  a culmination of trends, merges a bully with a world full of weapons – and the situation is deteriorating.

Trump only understands bullies – whom he admires – and those who can be beaten, the losers in his game – whom, if not scared into supporting his plans, then are  to be marginalized.

His approach to the world now: china and Russia being characterized as enemies – is really stupid. We are witness to a total de-profressionalization of diplomacy and economics.  and most other spheres of life and government.  I don’t care how pissed off your are but we need to build better, not tear apart. It is just too dangerous.We could lose that fight, and even winning leaves a less civilized world. When Trump won the  election Russia was a minor player on the world stage His actions gave it credibility and importance it did not have. His approach to China, which in many ways is quite sane, he turned into an enemy to be squeezed. We should be looking for ways to partner with China, not compete. We share many problems and could work them together. Russia now, with the participation of Russia in the election of Trump, has become much harder, especially as Trump treats them as a world player.

His language, posture, attitude, are demeaning of the country and the presidency. He has no sense of decorum, of grace, of compassion, of interest. He seems to know very little history, nor interested in art or culture beyond glitz.

So we have the problem, how to respond. My sense is that electoral politics takes too long an we are hemmed in by checks and balances and view of government from the Constitution that no longer serves the kinds of problems we now face – and might just become irrelevant through entropy of decay.  How can we do better?

1995.Current economics supports careers, not insight

provocation # 128. Current economics supports careers,  not insight

When I was studying physics and working half-time in the physics labs at Caltech I was hit almost daily with news about new experiments and theories. News traveled fast. If it was really exciting, an afternoon physics colloquium would be called and a few hundred, some obviously from other departments, would gather to hear  the story and examine the details as much as they were accessible.  The whole field felt like a living organism, each part of the periphery aware of the other parts. There was a broad agreement as to what had been achieved, and what remained as serious or interesting problems. 

There is a very interesting article about Keyes and his critique of economics, which  is devastating, and solid.  The article  asks, why do we keep making the same mistakes  ( in this case assuming  that a few variables can adequately describe the infinite variety of economic causes.). Why is there no accountability in economics and we continue of a disproven path? 

(Keynes’ critique of econometrics — still valid after all these years,  rwer.wordpress.com · by Lars Syll · March 30, 2018

Since I do a lot of reading I discover, over and over,  that there is (almost) no thought  about the current state of society and economics which isn’t already in print. The range and quality is amazing. But we don’t make use of it, we don’t harvest it,  and move on. Economics more than most fields, stays in a narrow band of readings and writings. 

If we don;’t step outside the narrow  lines, how can we expect to be creative? Two examples.

Bernard Harcourt writes The Illusion of fFee Markets, looking in  exquisite detail of the policing of the early markets in Paris (think of Stendhal’s novels)  show that regulation of markets and law started as merged, operating around private property. “If you don’t use the right font on your tomatoes sign three days in jail.” He discovers that markets arise through regulations. 

Second, the idea that capitalism starts with capital which is the output of breeding cattle could give rise to rethinking what capital is, who owns it and how society relates to it.

Most economics papers will not use a single word that moves outside the normal boundaries of mainstream economics, using  no vocabulary that cross the lines of conventional economic writing . “The impact of land tax policy on productivity in the upper Niger delta.”  No mention of the impact on people, on the land, on corruption, on climate. 

If we don’t read and think out of the normal lines of a field,  creativity is thwarted just as we seriously need it.

Like writing about climate change: which most people assume by now  is a serious problem, yet most papers and books coming from social thought (sociology, history, politics) are written that ignore it, staying stuck in the narrow band in which the researcher normally operates. Even papers that deal directly with climate are long on policy proposals, short on implementation.The same seems true in economics. A whole issue of many current economics journals often have not a single article that relates the content to larger issues of climate, corruption,  or future jobs, to say nothing about the lack of insight into the impact of economics on quality of lives. Considering both economics and climate change as two examples of the same thing, helps clarify the dynamics (or lack of them).

For climate, people are afraid to change because thy cannot imagine the consequences on income and life circumstances. “It is not crazy to stay in a leaky canoe if you don’t have an alternative canoe.”

For climate that means inability to imagine a successful outcome as to how changes  would affect  jobs and living conditions. 

For economics it is the same.  A researcher taking the state of the standard economic  literature  and moving it a tiny notch toward rigor and data can get you through graduate school and into the major journals and a tiny step toward tenure. Writing about the recognized main issues of our time does not. 

Economics can’t  see interesting things outside as we only look for the past that created the present, not the pasts that could create other presents – when we need them like now.  We are  more afraid of change than driving over the cliff.

A recent article on  history of economics (The Return of Economic History?

booksandideas.net · by Guillaume Calafat) 

considers only mainstream histories that are looking for the factors that created the present, not the things that did not create the present but might help create a better future.

Perhaps the problem is “the”economic” in the title. If we don’t  read histories of archeology,the impressionists, philosophy, regulations  and the chemical industry, we can’t break out if we don’t try.  The way out is through the door, how come no one uses that method? 

I want to raise the idea that everyone might be  acting rationally, given their actual circumstances. Getting into grad school, keeping the house in the energy wasting suburbs – all reasonable. End of the world? Maybe just accept it. Maybe we just have to learn how to feed each other. 

1994. good economics we need

Provocation # 127 The good economics we need

Economics, if it were empirical, would be interested in the major economic phenomena some of which are:

Class (fruits of talent in one generation passed to the next in a frozen system)
Money (psychology of abstraction and desires)
Interest (as in shifting value of assets over time. The father has an interest in the pregnant wife)
Ownership (who does, who doesn’t, its basis)
Capital (surplus of production over cost)
Property (from what is proper to show rank in society)
Corporations (what is a body? A person?)
Individual (a social construct?)
Trade (CMC shifts to MCM across space and time)
Markets (where all that is made under many conditions is sold to many with a variety of motives, obscured by supply- demand without curiosity about where those come from)
Stock market (ownership problem)
Makers (workers)
Takers (capital owning rent extractors)
Quality of life (the output of the system)
Political regime (who decides?)

The problem is that the system, which ought to be feedback loops among all the terms aborts to ownership and wealth as outcome targets and leaves out quality of life and instead shifts to the feedback loops that maintain power and wealth in the hands of a small elite. Education, location of home, job entry, marriage, are all part of the narrow system we have, not the broad system we should have.

This would be ok if it didn’t lead to wars and environmental damage and broken hearts. But the current economy does. The economics that would help us get out of this mess does not yet exist. It would have to take seriously capital, ownership and politics and analyze all the feedback loops.

Most economic research seems to circle around the temple but not enter.

Your thoughts?

1993. school and prison

There are many good schools, many good teachers and many children learning and actually have a good time. But even the best schools a time feel like prison. I remember it from my own childhood and there are testimonies like Albert Schweitzer and Jean Pisget who wrote about their own difficult time with school and their yearning to escape. One of our local schools just got shut down because threatening language was discovered on the bathroom wall. It’s important to realize that even the best mannered and intended children learn a certain hostility to authority and its irrationalities through the process of going through the school system. Part of the awareness among children of the school – gun situation is that children are more tempted to express their hostility than they would in normal times. Over reacting will only make the problem worse if children see adults as being anxious, defensive and irrationally angry. Important to remember to that for the vast majority of children there is no outside that they are any longer allowed to vacate to. We do not have a child friendly, nor a society always thinking kindly toward parents nor teachers.

My own view is that putting more guns into the situation makes school feel like a bad western. Better is to have a society without guns so it feels more like a domestic comedy.

1952. Quote re from Climate Leviathan

Powerful book saying that we do not have any solution to climate change and that the elites are likely to organize it into a Hobbesian bureaucracy. . The challenge for us is what to do about it

Another critical stream of recent literature takes a darker view of the prospects for social and ecological transformation. In marked contrast to Klein, philosopher Dale Jamieson argues that the window of time for Blockadia-driven changes has already closed; the world is firmly committed to climate change. If we are to generate an ethical response to the Anthropocene, he claims, we must learn to accept where we stand historically, which is at the end of a period when climate science generated insights that could have led to dramatic political-economic change, but did not.”

Excerpt From

Climate Leviathan: A Political Theory of Our Planetary Future

Joel Wainwright and Geoff Mann

1950. Difference between economics and the economy

provocation # 126.

Lets start from the idea that economics is not the economy. Economics is a more or less adequate description and analysis of what an economy is. The economy is not a concept. It is a reality to be explored.

But is the economics we have the economics we want? Does it discuss capital, what it is and who owns it, Does it deal with property and why we have it? Does it deal with the skewed impact on people of corporations? Does it deal with class and how such divisions are maintained? Does it deal with the health of the land? Does it deal with the soundness of parenting? The happiness of children and their access to the world? Does it deal with incarceration for breaking property rules.

Perhaps there is an economics that we really want but don’t yet have that would better fit our feeling, our intuition, for what economics should be and would also be more objective, closer to reality.

What is clear is that the economics we really want is more objective, more real, than the economics we have, more objective even than the economics we usually think we want.

 

 

1949. Prices of things. Supply and demand does not describe a real system.

provocation 125

The nearly ubiquitous teaching tool in economics is the suppy-demand curve. The idea is that supply and demand will come into balance.

This is intuitive. The problem comes when it is treated as the core example of economics analysis, and thus to justify treating the economy as a precise system that self regulates and that government should stay away from modifying.
If we take prices in this way a physicist might argue that yes but, like a falling stone affected in its gravitational grip is also modified by the friction of air. Yes, but says the economist, we can measure that too so we have two measured things adding to each other.
But, says the physicist gravity is known, air friction is known. But in economics the way people make up their minds is a mix of supply demand and an infinite number of other factors few of which are known or knowable.

Can you give and Example?
Sure, here are several.

1. I once spent a year inside Hewlett Packard on a Harvard research grant. The task was to understand how HP worked, among other things, in the market.(I never heard the work “market” at HP.)

A typical sales meeting would never look at any supply demand curve but go like

A. “If we raise the price by X I think we can sell almost as many.”
B. Yes if we also add some new features.
C. Hey, our identity is being high-end, we can afford to have a higher prices and sell less because its like advertising. We must keep our image as high end quality all the way, no sacrifice of quality for price.
A. OK let’s go for twenty percent.
C. A little more caution. Fifteen.
A.Done.

———
Note that the supply demand analysis leaves out so many interesting considerations, the kinds of things that real societies run on, and creates an image of a market that looks rigorous hence rational hence like physics.

Second example.
I watch a neighbor and her husband buying a new car.
Yea, we need a new one, this one is on the edge. Costs of repair will go up (no numbers, not spread-sheets).
I like the Toyota X.
That’s good. Which model?
The one with the glass roof.
What if something falls on it?
These days glass is as strong as whatever it is they make the normal roof from.
OK.
But I like the one with the good sound system.
If that’s is important to you.
Well I like the glass roof too.
What does it cost?
32 thousand.
You think we can talk them down?
Bill at work has one and he said he got fifteen percent off.
Sounds good. What color…?
——
No comparisons hardly, no spread sheets, no listing out pro’s and cons. Mostly intuitive. This points to a different kind of society (maybe even more efficient and functional) than one filled with robotic accountants looking at prices and car details, such as the kind of rings on the pistons, or weight distribution.

The equilibrium in a demand supply situation leaves out that the price offered has a history. The rich person pays less interest. If we only add in that factor, the”other” equilibrium – wealth – shifts inevitably to the already wealthy. Why is one model equilibrium accepted and the other ignored?Supply and demand do not ad up to economic thinking.

1947. The meaning of rational

Here is the abstract of a new article in the journal of economic literature.

Markets and Manipulation: Time for a Paradigm Shift?†
Kaushik Basu*
There is a growing appreciation in economics that people have emotional vulnerabil- ities, commitments to social norms, and systematic irrationalities that impact their decision making and choice in the market place. The flip side of this is that human beings are susceptible to being manipulated by unscrupulous agents single-minded about marketing their services and wares. This paper reviews George Akerlof and Robert Shiller’s Phishing for Phools: The Economics of Manipulation and Deception, alongside other writings in the field, and discusses how this research agenda can be taken forward. The paper shows how this new research can shed light on the ubiq- uity of corruption in so many societies, and proposes ideas for controlling corruption

The implicit is that here is a model of rationality. The presumption is that it is analytical, quantitaive and precise. All else is irrational. Why should buying a car based on color, sound system and being like – or unlike – my neighbors, be irrational. Perhaps those are what rationality – service of thinking in the support of life really is. Economics tends to divide the world into  rational – good, and irrational – bad, in congruence with conventional opinion, which also appreciates rationality. . But by calling some things irrational that are life serving tens to support a market of quantities and the world of experts  rather than a market of creativity.