I’m following up Henry Farrell’s post on the superiority or otherwise of economists, and Krugman’s piece, also bouncing off Fourcade et al, with a few observations of my own, that don’t amount to anything systematic. My perspective is a bit unusual, at least for the profession as it exists today. I didn’t go to graduate school, and I started out in an Australian civil service job in the low-status[^1] field of agricultural economics.
So, I have long experience as an outsider to the US-dominated global profession. But, largely due to one big piece of good luck early on (as well as the obligatory hard work and general ability), I’ve done pretty well and am now, in most respects, an insider, at least in the Australian context.
I’ve also followed an approach, strongly deprecated in US academia, of writing lots of papers on many different topics. has exposed me to a lot of different subfields of economics, each with their own status hierarchy and criteria for what counts as good work.
My conclusion from this experience is that the obvious problems of academic macroeconomics aren’t unique to that field (in fact, as Krugman points out, the sharp divisions within the field make it unusually open in some ways). In many parts of economics, the status rankings and evaluation criteria are driven much more by internal and aesthetic factors than by empirical validity or policy relevance.
There’s a big arbitrary element to all this. If the seminal (sic) paper by the recognised smartest guy (sic) in the field formulated the core problem in a particular way, his (sic) grad students will learn and propagate that way of doing things, and will vigorously resist any alternative approach, even a purely technical reformulation. They have, after all, a lot invested in the idea that they have learned something valuable that no one else really understands.
If you want to see the mentality at first hand, and have a strong stomach, take a dive into the cesspool that is Economics Job Market Rumors. I should mention that my distaste for EJMR is fully reciprocated. The idea that an understanding of economics combined with attention to actual events is more useful than mastery of a highly specialised bag of tricks is totally antithetical to the ethos of the site (unsurprisingly, they hate Krugman even more than they hate me). In a less extreme form, that’s true of the econ profession in general, as the Fourcade et al piece shows.
[^1]: At least in the international profession, dominated by US norms and values. Until recently in Australia, a large proportion of policy-oriented economists got their start in this field, and policy work, in turn has a status it lacks in the US.
John Quiggin 
There are those who produce value, those who manipulate value and those who study value. Economists as a class straddle all three activities. This probably accounts for our inability to decide what we really think of economists.
Different field entirely, but we have similar problems in my own.
In practice (and of course, I’m generalizing fairly grossly) the most useful techniques for improving the quality of software are, in order:
1) manual inspections.
2) manually-devised tests, possibly scripted.
3) computer-generated tests.
4) formal proofs of correctness.
The same topics, ordered by number of papers published in the academic literature:
1) formal proofs of correctness.
2) computer-generated tests
3) Manually generated tests.
4) manual inspections.
The (short) book, by G. Debreu (1959), titled Theory of Value, doesn’t include the category “economists” at all. (Psychologists, sociologists, accountants, lawyers, medical doctors, physicists, marketing, historians, politicians, ……also don’t get a mention.)
@Ernestine Gross
That’s irony right?
“They hate Krugman even more than me.”
Is this in jest? Interested to follow sucb a debate. I recall K defending you from some US demolition job coupla years ago.
@Robert Merkel
I take your point about software. However, you have left out an important list point. (Easy enough to do when blogging quickly).
I think a very interesting phase arrives when end users are let loose on a complex system. They find both stupid and clever ways to inadvertantly or deliberately break, circumvent or exploit bits (or all) of a system. I suppose that is why we have beta tests.
Clearly a real world test is more comprehensive than any testing phase and designed tests. End users add both unanticipated stupidity and unanticipated cleverness and inventiveness into the mix. End or total world conditions add more complexity also.
I reckon economic theory and practice must suffer from the same thing. The real world is always more complex than any model. The most complex varaiable of all seems to be the independent intelligence, animal spirits and volitional agency of real world users of a system be it a computer system or an economic system. It’s also the case that a theory of an economic system which gets any exposure enters into the system and changes the system; not just by simple addition but very possibly by unleashing new emergent phenomena.
You second list kind of implies (and I agree) that easy or unmessy or pure problems get studied more than difficult, messy applied problems. The reasons are clear enough.
Thanks for the short biography John. Makes sense. I’ve met a few other natural resource economists and they also seemed well grounded in reality even if the supply demand models they presented looked dodgy.
Regarding the EJMR, it feels not so much indigestible as just weird/vaccuous especially when you compare it a more traditional academic blog like ‘The Conversation’. But then I don’t understand selfies and facebook either, take my understanding of Big Brother from Orwell rather than Channel 9, and I dislike the idea of writing off large slabs of the younger generations as gormless as students I’ve had are anything but.
You are right about other academic disciplines being similarly siloed, arguably to the point that many practitioners see their discipline is all that matters in the world. This is probably helped by the need to sell your soul these stays just to stay in the academic game and to do that well self belief verging on self-delusion may help a bit.
So economics being a siloed is hardly unique and a criticism per se.
However I cant say I’ve come across anything as strange as EMJR, which does strongly suggest that there is a toxic culture dominating US Economics as you indicate (and possibly its siblings Finance and Business Management – university reorganization may be a good indicator here) and on this count is different/special to other academic disciplines.
The Foucade extracts I’ve read suggest Economics is indeed different to other social sciences. So I suspect this difference in self perception reflects badly on economics but I’m still not sure how objective my impression is?
Afterall psychology which would also claim preeminence of a sort has analogous divisions (Freud, behaviourists, etc. who seem to be also somewhat at war with one another and their psychiatrist cousins). And Psych has also had some very dark sides to it – e.g. soviet era creeping schizophrenia, eugenics and IQ. So maybe its just a phase Economics is going through.
As to one discipline being superior there is a possible precedent Though I am a biologist firstly I would not dispute physics/maths as being the preeminent disciplines for describing the universe with the rest of hard science being derivative to varying degrees.
Still the article is another piece to add to growing literature supporting the gut feeling that outsiders especially have that there is something very wrong with modern economics, we really cant trust its practitioners particularly finance and investment advisors and need to think seriously about finding the best way to finance our retirements.
I took a look at EJMR when Elinor Ostrom won the pseudo-Nobel. It was… informative.
Which reminds me of Sir Ernest Rutherford’s famous quote: “All science is either physics or stamp collecting.”
I think the “problem” with many academic economists is physics envy. Hence they construct very elaborate, and in many case elegant, mathematics, which unfortunately are usually predicated on some not easily testable hypothesis. As Piketty said in the first few pages of “Capital”, most economists should worry more about sociology and less about mathematics.
Tools developed and/or promulgated by economists with their “superior stats” that I know of that are flawed:
– Tobit regression (no model-checking abilities, no extension beyond gaussian data)
– Incremental cost effectiveness ratios (a non-1-to-1, non-monotonic multivariate function with a discontinuity at the key point of inspection, that has infected health economics even though no uncertainty calculation or statistical comparison can be done)
Ideas still popular with economists that the rest of the academic world has given up on or that are obviously patent bullshit, but commonly popular with politicans:
– global warming denialism
– IQ
– analyzing fiat currency as if it were a gold standard (which gives politicians the lie “money doesn’t grow on trees”)
– debt/gdp ratios
dsquared turns up on the Farrell thread to give a really good example of what I consider to be the problem with economists’ so-called statistical advantage. He informs some poor dilettante that statistics all boils down to analyzing residuals. This is patently untrue: modern statistics all boils down to analyzing likelihoods, and in a single restricted (classical) case this process can be done more efficiently and intuitively through residuals. This has been a well known fact since McCullagh and Nelder in 1984 (1973?) and is the basis of all of modern epidemiology, the insurance industry, educational research, and pharmaceutical science since, well, Kaplan and Meier, I would guess. But economists still work in a normally distributed, Gaussian framework (try explaining survival analysis to an economist – even a health economist – and watch their brain boil). Yet economists are still talking about residuals …
The foundations of claims to economists’ success through merit (their much-vaunted “quant”) are based on a very shallow understanding of the depth and breadth of modern statistics, and the ways in which it is used outside of economics or, indeed, outside of academia. It shows how insular and inward-thinking economics is.
Perhaps there is a perpetuation of a particular “kind” of economi(cs/st) by the MSM, in part because it fitted the MSM’s broader narrative of the wonders of a free market. Working backwards, a newbie economist would gain the attention of their more experienced peers (yeah, I know, that means they aren’t peers, precisely, but let me run with this) if they concentrate upon the sort of problems which the MSM find endlessly important to promote, the promoted solution being to leave it to the free market. It would explain a lot.
This does happen in other fields, although it tends to run as a fad rather than a long term trend. Think of “Chaos Theory”, and “Fractals”, in the 1980’s, showing that even the quintessentially abstract field of dynamical systems could bubble up into the public consciousness, spurring the next generation to put some effort into this field. Then the fizz fizzed, the bubbles popped, and mathematics was geek-ness once more. Meanwhile, people continued to research chaos in dynamical systems, its value undiminished, if less understood by the public at large. Wavelets had a brief encounter with fame, too. Useful though they are in many fields, the public at large has little scope for appreciating that.
Economics is a bit different. The business section of the newspapers, and the articles devoted to policy analysis and critique, guarantee that economics is always in the public eye, decade after decade. That makes economists important, in a way which other research specialists are not. The MSM have made a choice: they have essentially chosen the subset of economic theory which is most aligned to promulgation of the free market view of the world. Actual economics as an academic pursuit presumably has a much broader reach in terms of the kinds of models of the (economic) world it explores, and presumably there is some room in the academy for what the MSM would see as heretical.
It is all a guess 🙂
There’s nothing wrong with a bit of physics envy, provided it includes not only the concise mathematical specification part but also the subject to empirical refutation part.
In physics, string theory, despite a pool of new maths, some new lingo and even a bunch of new invisible dimensions, has produced no new testable consequences and will be regarded leerily until it does produce and pass a few solid tests.
@bjb
“As Piketty said in the first few pages of “Capital”, most economists should worry more about sociology and less about mathematics.”
Interestingly the same charge of narrow minded analysis has also been levelled at Piketty himself.
See http://yanisvaroufakis.eu/2014/12/03/discussing-thomas-pikettys-inequality-treatise-with-andrew-mazzone-video/
The basic message is when you analyse his limited proposals (as distinct from documenting the problem of inequality) Piketty is still just a freshwater neoclassical.
In economics academic market in the US, the hierarchy
of universities in extremely rigid. Unless you come from
a degree from a top ten schools, you are extremely unlikely
to get a job there. Not so in hard sciences. And unlike hard
sciences, that little prize from the Scandinavian Central
Banks is extremely concentrated in the US.
In Australia, on the other hand, England still rules. If you
had a job in England, you are still a royalty in Australia.
Tapen
@Jim Birch
“In physics, string theory, despite a pool of new maths, some new lingo and even a bunch of new invisible dimensions, has produced no new testable consequences”
Somewhat, but this ignores all the majority of very weird (commonsense wise though not mathematically) physics models that have proved testable. These have generated a lot of remarkable predictions for example the lifespan and size of stars and the age of the earth….which are consistent with other very different information sources like radioactive isotope ratios…and led to the semiconductor revolution.
So to focus on the shortcomings/immaturity of one aspect of physics as a rationale for defending economics which feels flawed at its core feels a bit of a stretch to me.
As to ‘physics envy’ my attitude to physics comes from having to apply Brownian motion (an Annus Mirabilis product) applied to a biological problem and learn how simplicity and stunning the explanatory model is.
Thus I’d suggest a modification here. Economist trying to emulate how Physics is approached as a scientific method – I agree there is nothing wrong with that. But if Physics envy equates to claiming brilliant insight without having done the hard work of finding deeper unified concepts or creating an ersatz Nobel so you can share the limelight in Scandinavia? I’m afraid that is more akin to how D grade celebrities operate like the ‘famous for being famous’ Kardashians.
Now of course the latter is hyperbolic/extreme and conversely I would be the first to agree that economics has developed many great empirical insights (e.g. discounting). Separately double entry book keeping has proved a brilliant tool which innumerable hard science disciplines have adapted to their own purposes reflecting the conservation of matter and energy e.g. environmental science use for nutrient and pollutant loading calculations.
What bothers me still though is such things as the following:
– the inability of the economics profession to reform in light of the near cataclysm of 2008
– its lack of ability to conceptualize the human and financial economies as systems within a larger global scheme e.g. treatment of environmental disasters and nuisances, externalities or not at all.
– its general inability to incorporate into its framework self evidently dysfunctional and destructive human behaviours and institutions which degrade society as identified by the old political economists.
Aspiring to mimic the substance of physics is one thing, erecting a superstructure which is an ersatz copy is something else.
@Donald Oats
Your thoughts look pretty good to me.
@Donald Oats
Your guess is pretty spot on.
Surely you mean “they hate Krugman even more than they hate me” ?
Krugman is one of the few other bloggers worth reading.
@kevin1
Is that Econ job rumours website a website about ecnomics or some kind of PUA site? I read a few threads and it seems steeped in the language of the PUA scene (bros, alphas, etc).
Which is interesting because the men’s rights movement (and especially the weirdo MGTOW subbranch) is founded on a theory of sexual politics called “hypergamy” that is straight out of Chicago School Eco (“it’s economics 101 dude, supply and demand”). What a coincidence! Not.
Also check out this comment about Roubini by a jealous PUA over there:
Not a real economist. See his CV (hint: It’s not in LaTeX).
Hint: being able to write LaTeX doesn’t make you a real anything, though bragging about it makes you look kind of silly. Physics envy at its very finest.
kevin1 and John Street:
‘They hate Krugman even more than me’ should be read as an abbreviation of the sentence ‘They hate Krugman even more than they hate me’; the sentence ‘They hate Krugman even more than I hate Krugman’ (not what John Quiggin meant) should be abbreviated ‘They hate Krugman even more than I’ (or ‘They hate Krugman even more than I do’).
@John Street
OK, now I get it.
This remark through me also. But then I figured it out. It has two possible meanings.
1. They hate Krugman more than I hate Krugman.
2. They hate Krugman more than they hate me.
I assume that the second meaning is the intended one. But I found myself fixated on the first interpretation for a while. I was scratching my head.
Doh!
threw not through
Do you admire John Kenneth Galbraith? His books are my favourites on economics. He was of course also an agricultural economist. And I like his observation that the thing people hate to do most is actually think.
@kevin1
Sorry for the ambiguity on this. Of course I mean, “more than they hate me”
@Tapen Sinha
I think Anglophilia has just about died in econ departments, but it’s amazingly strong in university management.
@faustusnotes
As the OP shows, I’m happy to criticise my fellow economists, but some attention to facts is still necessary. The suggestion that climate denialism is popular among economists is wrong
http://www.smh.com.au/federal-politics/political-news/tony-abbotts-new-direct-action-sceptics-20131027-2w9va.html#ixzz2j4Nc5im9
https://johnquiggin.com/2010/07/19/economists-and-climate-change/
Judges should spend a weekend in jail. What’s the equivalent for economists? Their experience of the non-academic economy is often limited to random summer jobs they took as students. So they may understand fast food, telemarketing, supermarket shelf-filling and beach lifeguarding better than mines, factories, farms and banks. In particular, they will not have been allowed anywhere near the decision-making of rent-seeking plutocrats.
The Fourcade piece is very interesting. I’ve only skimmed it but it but what I picked out is that economic deals with money and value management. People who deal in money usually make more money, excess money builds a sense of superiority, hence economists fell superior to the other social sciences not the least because their’s is a more quantitative field.
” Human life is messy, never to be grasped in its full complexity or shaped
according to a plan: people act in unanticipated ways, politics makes its own demands,
cultures (which economists do not understand well) resist”
I argue that Economics separation from and sense of superiority to the broad field of social sciences is its primary failing. The assumption that social complexity cannot be quantified into the economic model is blatantly false and is an expression of academic laziness in consequence to the cloud of superiority that economists are enveloped.
Economics and the Social Sciences are as separate as Cosmology was from Physics some years ago. It was not until the two sciences began to see similarities in their fields and began to actively mingle that they saw that their two fields were fully intertwined and resolution of unanswered questions could not be resolved without a full appreciation of each other’s scientific knowledge.
So it is with Economics, which I have argued is flawed as is any algorithm will be where half of the parameters are missing. The economic models are routinely criticised for their exclusion of externalities as was Dr Steven Chu was at pains to demonstrate in his press club talk yesterday. it is said that air pollution issues can only ever be properly resolved by filtering the gas flow through the board room before expulsion. But there are many vital factors that economists fail to factor into the models.
There are so many factors the feed into the performance strength of any community that may be recognised by economists, but not quantified in a manner that can be used to determine the true value of political decision making.
Factors such as: quality of life; depth of philosophy; standard of education pertinence of the knowledge base; co-operative structure; connections; foresight; overall degree of automation; applied new technology; and quality of environment,…on one side of the ledger and age and health; standard of living; racial intolerance/ religious zeal; nature of government; defence/degree of insecurity; cost of crime; no of hierarchical tiers in organisations; age of technology cost of R&D; and environmental protection cost, on the other side.
These and many more are all economic parameters that need to be quantified in a manor that allows them to factored into decision making in a manner other than in ideological or rhetorical form. Failure to complete the scientific mission by economists only serves the aspirations of those who seek to manipulate society for personal gain fully against the interests of the community. Economics will remain a divisive science as long as Economists feel superior, separate themselves from the full body of social knowledge.
Following on from BillB’s comments, my major criticism of economics is a lack of reflectiveness – economics, as we see it in public discourse, is poorly defined (what is it? Where does it begin and end? How is economics distinguished from society or ecology?), and does not question its own assumptions.
If John Quiggin or any other economist could point out to me a well known, orthodox economics text that problematises the relationship of economics and patriarchy, I would be prepared to rethink. Until then, I will continue to think that orthodox economics is a discipline dominated by wealthy white adult males (as Fourcade et al demonstrate), who project their unquestioned assumptions on to the rest of us.
The economist magazine was blogging about “the pause” as a serious issue last year, john. That magazine itself is a late convert. The Wall Street Journal still disputes the science. The Cato institute, AEI and pretty much every other think tank connected with the Chicago school reject or minimize it. It’s telling don’t you think that the economics field can only escape this accusation by going “no true Scotsman” on these organizations? Even supposed experts like Tol are off the rails, withdrawing his name from a recent IPCC report publicly because it was too alarmist. I am sure I hardly need to tell you what comes up if I search for climate change at EJMR, which you seem to think reflects somehow on your profession as a whole.
It is a serious embarrassment for the field that for so long its right wing representatives have been carrying water for those movements. The technical quality of the work done by economists on the topic is also pretty low, and I think this is because as a field economics has been unwilling to face up to conflicts in basic principles underlying much of the field. E.g, the dispute over discount rates after the release of the stern report… Surely you guys can come to an agreement about how to value saving for future generations? Apparently not…
@John Quiggin
“The suggestion that climate denialism is popular among economists is wrong”
Though I am unaware of any survey, I would also doubt the majority of economists at least in this country are climate change deniers in the sense of say the Koch Bros, Lundgren, the Tea Party, IPA and Maurice Newman. Conversely there are many who clearly take climate change seriously – Ross Garnaut, Ross Gittins, Steve Keen being local examples. Overseas Stern and friends and ‘Prosperity without Growth’ Tim Jackson. Separately are financier Jeremy Grantham and George Soros who put money where there public positions are. And conventional economists can be cooperative with ‘outsiders – a current example is exchanges between Canadian ecological economist Peter Victor and Tim Jackson.
But there is I suggest a another problem that I have seen evidence for repeatedly – a softer but still crippling version ‘cognitive dissonance’.
Its been plain to I’d guess 95% of environmental scientists since the 1972 Stockholm Environment conference (which led to UNEP) that our industrial economic system is not sustainable. I remember discussing with a colleague/friend/teacher in 1988 what would happen to CO2 emissions if China kept growing/going the way it was….well here we are.
But economists in the majority still appear, as they did back then, to either directly oppose efforts to analyse the detail (limits to growth/resource constraints and sustainability, keep environmental issues in the externality box, or claim economics (instruments) is the ultimate solution to real risks (Climate change) while failing to consider the problem holistically given you cant separate climate change from economic growth from all the other ecology/sustainability issues.
So in the real world you repeatedly get evidence of no substantive change. e.g.
– In 2005 I remember listening to one Lord Robert May, physicist, ecologist and expat Aussie and retiring president of the Royal Society of London here warning us based on early Ecological Footprint analysis, that we had 10 years to change our society/economic system or reap the whirlwind. He was talking about both Climate Change and everything else. Now here we are in December 2014 – 5 minutes to midnight as it were – and all that is on the agenda is the Lima farce recycling Copenhagen 2009.
– Tim Jackson’s book came out in the mid 2000s – an excellent deconstruction of the problem and recognition of the need to change the economic system – but where are we now? He had only vague recommendations for action – 35 years after Stockholm!!!!!! – and despite this good work his sponsor, UK Sustainable Development Authority has been wiped off the map a few years later.
– In 2012 we had the farce of Rio20+. Unlike the original Rio 1992 which echoed Stockholm 1972 – what did we get? Growth growth growth growth under the oxymoronic banner ‘Green Growth’ – probably created by the same spinners that created ‘Climate Change Adaptation’ (we cant change the economic system because it is governed by immutable laws so we will just have to adapt to all the impacts).
– A few months back we has a local conference on precisely the solution http://www.ies.unsw.edu.au/about-us/news-activities/2014/03/addicted-growth-how-move-steady-state-economy-australia. It was nice to be among fellow true believers, but there were bugger mainstream economists at would should have sold out the Acer Arena.
The bottom line is this. Taking the above and similar experiences as indicators of change I have to conclude there has been great technical progress e.g. photovoltaics, but the evidence that the economics, finance and business communities is waking up in any statistically significant sense is still lacking. Sure there are token bits like the Guardian’s sustainable business section. But when you look at the two movements side by side there still appears to be this disconnect reflecting underneath an inability of even the progress economics community to adjust their world view or at least address the cognitive dissonance – let alone these weird Masters of the Universe type which rightly cause John so much grief.
The only thing that would convince me otherwise would be resolutions at Economics Society conferences saying something to the effect of:
“While the discipline of Economics is useful for many things it has failed miserably to address the real threats facing Australian and Global civilization and its natural life support system and in the last 30 years has actually made things worse. Therefore we economists are removing ourselves temporarily from the resources and environment debates which is in the end a political and philosophical, as we have little on balance to offer and our current concepts are too easily used to justify the unjustifiable.
During our absence we will endeavour to reorganise our discipline, purge it of the lazy thinking, self interest and pandering to vested interest that currently characterizes it and work collectively to find a unified theory of sustainable economics which does not fatally wound the planetary biosphere.
(Ha ha just kidding)”
I’d like to think we only need economists if we are to continue with growth and consumption maximisation .From that base economists can help politicians convince people that resourses are scarce and then justify the politicians social engineering efforts .Economists and politicians are in a small power generation loop.
Since we already know how to easily supply the basics of life to everyone on Earth ,and that beyond basics happiness is unrelated to wealth ,what we need more of in the big room are sociologists ,philosophers ,ethicists, anthropologists, etc, not economists. Then we may have a chance of getting on with the task eventually. As long as we keep pretending resources are scarce, everyone is selfish , and economics is amoral- the carnage wont abate.
J.Q. – it is good to see you acknowledge the role of luck in your life .This is not often done but luck always plays a role. The fashion today is to put success in total down to determination and giftedness. In our entrepreneurial world we want to believe the myth that reward is always going to be proportional to effort/ability.
The Heritage Foundation lists five experts on “energy and environment,” two of whom are economists, one claiming publications in major economics journals. The entire shebang is headed up by Stephen Moore, also an economist. Fifty percent of the Heritage Foundation’s spin doctors for anti-AGW myth are economists. The other three are a lawyer, an engineer and a journalist. If you do a search on “economics” at DeSmogBlog it’s remarkable how many right-wing anti-AGW institutions include the word “Economics” in their name. Hmm, I wonder why that might be?
@sunshine
I also note that J.Q. mentioned effort, ability and luck. It is true in one sense that all of these play a role in success. However, when you look at it closely, ability endowment is luck too. If one has the genotype and thence the phenotype to be say an opera singer or a marathon runner or a mathematician then this is luck too. Looking further, effort comes from the ability to work hard. Where does this ability to work hard come from but a confluence of inherited ability and environmental facilitation? It is luck again.One hundred percemt of all achievements are therefore serendipity. The notion of merit and praise is meaningless in the moral sense. (Note 1.)
It is possible for people to work hard and not benefit from the hard work. This happens even at a physical level. Research now shows different genes which govern how some people benefit from aerobic work and improve in fitness much more than others. No doubt similar issues exist at intellectual and psychological levels. Some people will benefit from the work more than others due to genotype and phenotype.
Thus the moral rationale for giving rewards based on meritocracy is no stronger than the rationale for giving rewards based on aristocratic birth. However, there is a functional rationale for rewarding on a meritocratic basis rather than an aristocratic basis. Meritocratic promotion benefits society as a whole more than aristocratic promotion. The greatest good of the greatest number is achieved by promoting ability and competence.
Note 1: All of this appears to question the notion of free will and the apportionment of moral praise or moral blame for “choices” made. I tend to come down on the side that free will is a fond illusion we have. There is really no free will. Whether the universe is deterministic or probabilistic it is easy to see that neither determinism nor probability give adequate grounds for assuming or deducing free will.
A postscript about the failure of economic instruments, and by implication economic theory, as the environmental management tool to stop climate change.
20 years ago Carbon Trading a’la Kyoto was touted as the great saviour. The reality though is here shown yet again to be somewhat different.
http://www.theguardian.com/environment/2014/dec/11/lima-climate-talks-fail-agreement-single-paragraph-deal
20 years on and its looking like its worse …. though really what has emerged is the recognition that you cant have your cake and eat it too. And the rich and powerful just want to keep eating irrespective of the cost. Doh! The fact is you simply cant rip off finite planet ‘resources’ and expect things to magically equilibrate ot a happy Pareto mode according to some economics ersatz ‘Law’.
I still pray I am proved wrong about Lima. But the evidence of Doha, Copenhagen, Durban, Rio20+, Bali etc. etc. says Paris next year will be another fizzer and the only source of possible change is the utopian hope of angry population mobilised against the politicians and other shysters who would destroy us for short term gain using economics as a theological construct for justifying inaction.
Economic self interest appears in fact the greatest block to sustainability.
I would not be too pessimistic, Newtonian. It is tempting to predict the future by looking to the past, but I suggest that we should look around rather than back to see what will happen. If you saw the Dr Steven Chu talk you would have heard of just how much parallel action effort is underway. Underway to the extent that leaders are becoming followers.
You are, however, right, I believe, in your comment on economics. But here again is immense opportunity. There is a staggering amount of scientific research and engineering innovation underway, unleashed by the expectation and the need for new technologies, and consequently the consumer demand for better new things in the energy and transport fields.
So there is also an immense opportunity for innovation in the field of economics. The message…………………………economics GENIUS WANTED.
It is time to shelve Marx, and Keynes, bin Kayek and Friedman. Economics desperately needs a UNIFIED model for the future, a model that properly quantifies and values our human efforts in relation to the real world with all of its advantages and limitations.
There is the prospect here for an integrated University team of scientists, economists, social scientists and engineers, to develop the basis for properly managing our future world. The need is so great that if not a single institution steps up to the challenge then they should all be given a massive FAIL.
Current politics remind me of an old Milligan/Goons joke.
“..and suddenly, nothing happened – but it happened suddenly, mind you.”
Nothing has been suddenly happening for 20 or more years on carbon emissions amelioration. Nothing is still suddenly happening. The same goes for doing something about unemployment and under-employment. Nothing has also been suddenly happening for over twenty years on this issue.
I expect nothing to keep happening suddenly until something starts happening suddenly. This something will be nothing good and nothing intended. But it will happen suddenly, mind you.
Some believe emissions will peak by mid century with no abatement effort whatsoever. This is sometimes discussed on the Judith Curry blog. Oil and gas will be economically depleted by 2050 and it’s hard to see coal replacing them. A likely emissions trajectory is between ICPP scenarios RCP 2.6 and 4.5, not the extreme versions that have emissions increasing to 2100.
http://naturedocumentaries.org/4546/21st-century-temperature-precipitation-scenarios/
Therefore if the climate conferences achieve nothing all is not lost. The world will be hotter regardless but whether the global economy survives depend on whether we adapt. That’s the bit I’m more worried about.
@Ikonoclast
“Note 1: All of this appears to question the notion of free will and the apportionment of moral praise or moral blame for “choices” made. I tend to come down on the side that free will is a fond illusion we have. There is really no free will. Whether the universe is deterministic or probabilistic it is easy to see that neither determinism nor probability give adequate grounds for assuming or deducing free will.”
Exactly what ‘free will’ is has never been satisfactorily explained to me either. This has been frustrating. But then even the great Martin Gardiner, science journalist and commonsense skeptic par excellence once wrote he was convinced free will existed but he couldnt figure out what it was either. And Popper’s seems to have fudged the concept http://en.wikipedia.org/wiki/Karl_Popper#Free_will.
However on the related matter of probability and causality some light may be emerging, and of interest.
Recently for work I’ve been exploring the world of Bayesian Belief Networks in an effort to use them well and avoid abusing them (there is a great saying “With four parameters I can fit an elephant, and with five I can make him wiggle his trunk. Attributed to von Neumann by Enrico Fermi, as quoted by Freeman Dyson in “A meeting with Enrico Fermi” in Nature 427 (22 January 2004) p. 297. I wonder how often modeller economists who envy physicists overlook this piece of wisdom?)
Anyway this BBN exploration has led me to the discovery of Judea Pearl’s website. http://bayes.cs.ucla.edu/jp_home.html . Pearl is known as the father of Bayesian Belief Nets but their origin appears less known. BBNs in fact emerge from a deeper level, Pearl’s philosophical quest to understand causality. Many of the academic writings on this is are unfortunately replete with difficult to understand algebra. But on his group’s site Pearl includes two ‘soft’ powerpoint presentations that explain the origin of idea on causality and method especially as they relate to statistics and science and where this has led – in plain English more or less if you are familiar with how Bayes stuff works. My reaction to this findings was WOW!!!!!!!
Aside from explaining key questions about Bayes Nets his papers seem to explain the dispute between Bayesian and Frequentist schools of statistics. I still need some constructive discussion with some philosophically minded statistic expert but it looks provisionally like Pearl may have initiated the most important development in the scientific method since the roll out of Kuhn/Lakatos paradigms and Popper’s ideas on falsifiability.
Pearl’s framework for understanding causality doesn’t directly explain free will. But the resolution of what causality is seems very likely part of the puzzle – as any fan of Hugo Weaving’s Mr Smith in the Matrix (as well as Ze Merovingian with his outrageous John Cleese like French accent) will know – inexorable cause and effect being the flip side to whatever free will is.
How BBNs get past the old problem of us ‘feeling’ what free will is, is they provide a language which is partly algebraic but also partly symbolic to deal with and explore causality. The latter is centrally the net diagrams which are more that just any old flow chart.
Writing this made me wonder if Pearl had commented on Free Will – and sure enough http://www.forbes.com/2009/06/18/computers-free-will-opinions-contributors-artificial-intelligence-09-judea-pearl.html . But amazingly there is not a single comment posted on his site on the matter….which seems to reflect an even more profound lack of interest in things fundamental than even John has experienced.
@BilB
Sorry I am just a bit pissed after reading the Lima article and thinking about the clowns in our government especially the climate change traitor/ABC destroying/sell-out/blowing with the wind/ enemy of the people who would be treasurer – Malcolm Turnbull.
But you are right one should look for better things and smell the roses. And indeed I do.
Regarding your suggestion of ‘Genius Wanted’ that is possible as evidenced by Einstein’s and Newton’s Anni Mirabilis. However less well appreciated is that such people dont exist in isolation but as a community. Take Einstein’s as shown in the 5th Solvay conference photo http://en.wikipedia.org/wiki/Solvay_Conference
The point here is it will take more than just a genius to solvay the challenge posed by economics in its current dominant form.
I’ve mentioned a possible member of such a gathering above…Judea Pearl…causality not exactly being irrelevant to the point behind economic modelling and certainly he is interested in the issue http://www.mii.ucla.edu/causality/index.php?s=economics
Enjoy.
This is the most perceptive essay I have read recently.
http://philosophersforchange.org/2014/08/19/how-will-capitalism-end/
I think the author, Wolfgang Streeck, is bang on the money.
Most people are now increasingly giving up on analysis of broad fundamentals like “where is the whole system headed?” and are increasingly obsessing over minutiae, trivia, pop-economy and pop-sociology issues. Clearly, the central problem has become too hard, both intellectually and emotionally, for most people to grapple with. (1) There are still some like Wolfgang Streeck who will analyse in depth what is happening.
Note 1: People giving up like this are existentially correct. Our predicament has become absurd and impossible. Thus absorbtion in a specialist professional pursuit or in a hobby interest to the exclusion of almost everything else is individually rational and healthy.
That is an excellent essay, Ikonoclast. I am going to have to read it fully slowly later. My take away quote is
“The idea that less could be more is not a principle a capitalist society could honour”, that and that capitalism will choke on a heavy dose of itself.
One of the biggest problems that allows the situation to persist is the invisible nature of the problem. This is the solution territory of Hans Rosling’s “mind the gap software” which specialises in visually animating complex data and its transitions.
My call for an economics genius is really a call for a “conductor”, in the orchestral sense but for economics. The internet would never have developed had there not been many conferences of very dedicated and clever engineers and “Robert Merkels” who set about creating interconnection standards for data, systems, software and electronics, and over many years.
The economics dilemma is that there is a need for an unified data interconnection standard along with a system of parameters to allow a change in any one field to be reflected in every other field so that a model run will deliver a real conclusion, and which then can be view for its effects in the “mind the gap manner”. It is only when this is done that we will be able to spot the mechanisms of greed and bring to a halt before they distort the larger parts of the financial and commercial systems, and the environment as well. Truly effective and optimised taxation systems will never be possible until we have such clarity for the impacts of change.
So where I mention a conductor, I am talking about someone with the clarity of vision to provoke the development of economics modules in every field of endeavour to be universally compatible so that data can flow throughout the entire system automatically to enable truly valid analysis of proposed policy changes.
Th demonstrate I will use several controversial examples. Religious Zeal has an economic impact which can be quantified. Religion largely defines our “holidays” for instance. The number of times one stops to pray each day invokes a cost. But what is that cost. It cannot be measured simply in lost time. The is a human contentment factor which can enhance or detract from economic performance. There is a social cohesion factor. These and many other influences need to be part of the economic model if it is to be truly useful for policy development.
Another example is that or defense. Consider Australia, North Korea, and the Maldives, and the economic impact that each country’s defense structure has on its economy. There is no doubt that all factors complexify to deliver a quantifiable economic impact, an impact that can be predicted and analysed………….GENIUS WANTED…..
@BilB
I suspect we are at a point where neither a syncretist genius of the type required nor his/her work would be recognised except perhaps a century after the event. This is somewhat different from the intellectual situation of say the enlightenment to the 19th C. We are beyond the point where individual genius can achieve anything. The system has its own agency now and is well out of control. That’s just my own opinion though.
It,….has.., been a very long time since, present company aside, there was anyone to celebrate in the economics realm, but, heck, I’m a fool who thrives on hope, Ikonoclast.
http://www.thefamouspeople.com/economists.php
Mahammad Yunus was perhaps the most recent person to really shake the tree. Lots of contributors there but nothing truly profound. Call me a dreamer if you will but I am thinking that the potential collapse of civilisation at the very instant of its technological zenith, …..calls for…..profound.
We need a new way of doin’……it.
Could a couple of these socialised economists please explain to our treasurer why his latest (lazy) idea is smellier than twenty tonne of beached whale carcass after a couple of days in the sun?
Treasurer Joe Hockey has rung the bell again, this time to double down and slasha the razor is out to cut you and you and youse—again—because you didn’t bleed enough the first time ’round.
I want to say a very rude couple of words to Joe, but, alas, the first cut is the deepest, as they say, and my current mobile has died an ignomious and recent death, a replacement probably not in the Xmas budget, sadly. Besides, I might be needing a good reference from him to help with the job huntin’. Good on him though, for thinking of giving me some more competition in that sphere… 😦
Nobel Laureate economist, William Vickery, maintains:
“Economic theory proper, indeed, is nothing more than a system of logical relations between certain sets of assumptions and the conclusions derived from them. . . . The validity of a theory proper does not depend on the correspondence or lack of it between the assumptions of the theory or its conclusions and observations in the real world. . . . In any pure theory, all propositions are essentially tautological, in the sense that the results are implicit in the assumptions made.”
Paul Samuelson, another Nobel Laureate in Economics, says in support;
“In pointing out the consequences of a set of abstract assumptions, one need not be committed unduly as to the relation between reality and these assumptions.”
In contrast, Professor Michael Hudson notes:
“Such disdain for empirical verification is not found in the physical sciences. Its popularity in the social sciences is sponsored by vested interests. There is always self-interest behind methodological madness. That is because [professional] success requires heavy subsidies from special interests who benefit from an erroneous, misleading or deceptive economic logic. Why promote unrealistic abstractions, after all, if not to distract attention from reforms aimed at creating rules that oblige people actually to earn their income rather than simply extracting it from the rest of the economy?”
If the first two were used car salesmen they would sell you a rustbucket with a new coat of paint and sawdust in the sump. Professor Michael Hudson would advise you to test drive it and have a certified mechanical inspection.
The above quotes alone demonstrate that there is an enormous problem in neoclassical economics. Indeed, they show that neoclassical economics is nothing but one enormous problem.
Two republicans and a democrat. Saving the planet goes down two to one.
@John Quiggin
It was only ambiguous to those with poor grammar.