Benefits of blogging, part 2

Although I’m among the least tightly focused economists in the academic world, I’ve published almost nothing on macroeconomics – even the few things I have done have not taken a standard macro perspective. So, in the absence of blogging, I think it’s safe to say my name would never have appeared in a Berkeley Graduate Core Macro exam.

Of course, there’s a Gerschenkron-style ‘advantages of backwardness’ story here. Having learned old-style Keynesian macro, and seen it come to grief with the inflationary outburst of the early 1970s, I kept waiting for a macro research program that would both explain the Keynesian Golden Age* I grew up in and show how to restore it in a more sustainable way. None of the contenders of the past thirty years (monetarist, new classical, real business cycle, New Keynesian, central bank eclectic) seemed very promising to me, so I left the field alone.

Now, with no intellectual capital invested, it’s easy for me to pronounce the efforts of the last three decades to be largely misdirected. The harder task will be to identify and get active in the new research program that should succeed it. The work of Akerlof and Shiller is obviously a good place to start.

* Not golden for everyone, of course. Full employment really meant full employment for men, many (not all) poor countries missed out altogether, and environmental costs were often disregarded. But it was precisely during the last years of the Golden Age (the 1960s) that these issues came to the top of the agenda. In my more utopian moments, I dare to hope that, with economic liberalism behind us, we can make big progress on these and other issues.

20 thoughts on “Benefits of blogging, part 2

  1. “Full employment really meant full employment for men.”

    I guess you really mean white men there, and no doubt full employment of white males in places like Australia included people doing many jobs they simply won’t do now. Personally, apart from that one statistic (unemployment of white males), I can’t think of any major non-imaginary reason the 60s were better than now, so despite the complaints, I think the last 30 years of economic (and social) progress were great. That includes things like employment — even in the middle of a recession, we still have a higher rate of work force participation than the 60s. If previous economic policies meant that more white males happen to become unemployed, yet everyone else was better off, that’s a pretty good trade-off in my books. Thus I can’t see how you can “restore” what was never better than now.

  2. Conrad, more women are unemployed now than in the 1960s, and there are far more couple households with no wage-earner.

    The difference in employment is due to higher female participation rates. These reflect mainly social changes that began in the 60s and technological/demographic changes that make it easier to run a household without a fulltime homemaker. I don’t think economic liberalism deserves any credit for this.

  3. conrad, I’d guess from your remarks you weren’t around during the “golden age”. I was. There were a number of important differences between then and now.

    Firstly, most of the jobs that you believe people won’t do now don’t actually exist anymore. (I’m thinking about street sweeping, rubbish collection, various forms of hard physical labour.) This is a mixed blessing, I guess.

    Secondly, it was actually possible for a bloke doing a menial job for the basic wage to support a family in frugal comfort without his missus having to work. (Except, of course, around the house. Again, this is a mixed blessing.)

    Thirdly, if you didn’t like your job, you could tell your boss to bash it and be back in work within a week. This, unfortunately, is no longer possible.

  4. David,

    no, I wasn’t around in the sixties. Alternatively, since most people that don’t happen to be male and white are probably better off now (often massively so), it means most of the population is better off. Blacks even get to vote now, and females can actually work almost any job they feel like without too much discrimination. If more of them want to work because of this, and hence more qualify as being unemployed who can’t find work that want it, then so be it. It’s still good in my books.

    However, I do agree that attributing these great things entirely to economic liberalism is a tough call, although it is easy to find examples where it helped immensely. For example, just think where Australia would be without Keating. We’d still have a semi-fixed currency, there would be tariffs on almost everything, and the labour market would be a disaster.

  5. JQ – is this the same golden age when we were on a gold standard and when government was far less involved in our day to day lives?

  6. A couple of weeks ago I was listening to a Radio National Podcast when I when I went for my morning run. It was titled the ‘Conservatism and the Crisis: A Transatlantic Trilemma’. (In the eighth Ruttenberg lecture, presented for the Centre for Policy Studies in London, Professor Niall Ferguson outlines the ideological predicament faced by conservatives today.)

    He suggested that conservatives could only achieve 2 out of the three goals:

    1)Economic and Social Stability.
    2)Globalisation/Competitive market and the economic growth this produced.
    3)Small Government.

    This presents conservative side of the political spectrum with a dilemma as to which two to pick in the current economic period of dislocation.

    I’m not that convinced about his thesis but if we use his model, you prefer the 2 & 3 verses 1 & 3, which I think described the post war period. Do you think social stability can be disregarded as a political goal?

  7. Personal attack deleted. You’re banned for 24 hours. Come back when you’ve learned some manners

  8. Has the world grown old with the boomers or vice versa?
    The world population has doubled, much of ecology smashed and as much of the science seems as gross as brilliant.
    It’s the same sense as back then. Great things achieved, yet
    opportunities wasted and still the best of scarce resources wasted on crap. ‘sixties Vietnam; twenty first century South West Asia. Sixties N bombs, nowadays surveillance tech, genetics and nano tech.
    On the whole it seems about a draw. But that’s only for me, clutching to the comfortable illusion that the best of the good times will stay long enough to be able to make it to worm feed status without too much trouble in the lead-up.
    The years have gone yet, but the standard of living is in fact high enough to compensate for the loss of youth.
    During the Howard/Cheney years, the problem became not wealth, but the fear that tech would be used with media bolstering to create a kind of private Dr.Haneeef/Gitmo universe, for one and all, for every person, perhaps a kind of internalised stalinism or fascism.
    Watching Insight on the refugees last night, you see the fearful thing about our era is its capacity to hold on to and recycle really atavistic ideas.
    Macarthyism in the ‘fifties seems the template for that sort of politics, even now.
    So what will “wake up my mind” as we live in “little boxes, little boxes” and the forests have long since been “turned into a tree museum”, the wood chopped down so as to “put up a parking lot”, constructed as ppp infrastructure; “acres and acres of tar and cement”, as “the days break, and the nights fall and drift into time”.
    And “how many cannonballs must fly” before the microscopically repeated from earlier times, nonsenses of the last decade, are finally given up for the bad jokes they are.
    For,”the times, they are a changin”.

  9. I agree with JQ and David Irving (2 and 3). It didnt take two incomes to pay off the house in the 60s and it didnt take throwing the kids early into childcare to do it (and it probably didnt mean workers worked longer hours).

  10. #1.

    Id like to put economic liberalism behind us as well…its the cause of the growing economic inequality in many industrialised nations since the 1970s. The “economic liberalism” of the past three decades has been economic liberalism for the minority and growing servitude for the majority.

    What point if the minority get very wealthy if the middle classes slide down to lower incomes and lower incomes slide into poverty and unemployment is chronically higher. Yet the media assaults us with advertising for things many cannot afford (the gleaming new kitchen, the rendered facades, the massive extensions filled with extraordinarily expensive lounge suites and home entertainment systems – that we are not at home long enough to enjoy) and meanwhile the wealthy keep telling us we’ve never had it so good…and if we want to keep our jobs, we will agree to casual contracts and extra work with no extra pay, further imposing on social and family lives and getting away with all sorts of unethical treatments of the labour force simply because they can when unemployment is higher.

    Conrad…have a good look over the manicured garden wall…

  11. Id like to comment that I know why economics is called the dismal science.

    You watch economic policies over twenty or thirty years dismantle satisfactory systems (public transport, public education, public health) and provide little to no investment in the same out of some entirely mistaken view that private merchants abound who will deliver satisfactory substitutes….they dont and you watch the ensuing mess as prior systems degrade without adequate repair, replacement or provision in future planning needs, and you wonder how much worse our infrastructure will be allowed to get.

    Its enough to make you feel dismal..

  12. “Conrad…have a good look over the manicured garden wall…”
    Sure, at least compared to the 60s, I see higher rates of education, longer life expectancies, higher work-force participation, a work-force that includes women, a work-force that includes minority groups, less workplace accidents and death, far higher levels of wealth, greater personal freedoms (including it being far easier to move countries if you don’t like the Australian garden wall), welfare for single mothers so they don’t have to giver their children up, better and higher quality housing etc. Oh, and white baby-boomer males (and a few others) that keep on saying the 60s was so much better.

  13. 12# And white boomer females Conrad. I can see your thoughts Conrad but no data comparison between 1960s and now. Do you see a fairer share of GDP? Do you see the persistently higher unemployment and casual and underemployment employment. Do you see the rising household debt levels? Do you see that single mothers are worse off in real terms than they were in the 1960s? You obviously dont see that it takes two to pay off a mortgage and the younger generation has basically been priced out of home ownership and rents are through the ceiling. Look closer Conrad. Nice of you to tell people they are better off. I would suggest there would be quite a few who would disagree with you.

  14. I’m heaps better off (financially) than I was in the 60s. I’m 40 years older, better educated, and well paid because of it.


    There are a lot of people who were better off then than they would be now. I’m particularly thinking of those who would have had jobs as unskilled or semi-skilled labourers, clerks, typists, etc: all those occupations which no longer exist. Also, the bottom end of the labour market is being squeezed.

  15. John, if I may reply to Conrad by saying that during the 1960s & 1970s there was less wage disparity between blue collar and white collar workers than today, not to mention job security.

  16. Michael – there has been some discussion that in terms of quality of life, and other psychological constructs of well being, people are more concerned with issues of parity rather than absolutes. This makes sense within the context of a social primate where status roles are significant. What counts, in the end, is how people feel about their lives. As an aside – when I worked in medical research it was a noted anomaly that those in Australia with the worst health often thought of themselves as without health problems.

  17. Prof, I just read that Berkely exam link (bit slow…)
    That didnt take long at all for you to make it into his exam. That is a benefit of blogging. Could you ask that Berkely Prof for his marking guide?

  18. Nice reminiscing Quiggin. Just remember, there are always winners and losers and all good things eventually come to an end.

    It is this simple.

  19. JQ

    Akerlof and Shiller are great fun but I will put my money on the Sante Fe Institute and Miller and Page.

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