Monday Message Board

Back again with another Monday Message Board.

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

17 thoughts on “Monday Message Board

  1. IV. There is no such thing as an isolated system.”

    “The Idea of Entropy Has Led Us Astray
    Let’s stop hustling as if the world is running toward disorder.

    …” The energy-driven reduction of entropy is easy to demonstrate in simple laboratory experiments, but more to the point, stars, biological populations, organisms, and societies are all systems in which energy is routinely harnessed to generate orderly structures that have lower entropy than the constituents from which they were built. There is nothing physically inevitable about increasing entropy in any of these systems.

    “Thermodynamic theories served a society committed to laissez-faire competition.

    “In almost every erroneous overextension of the first and second laws, one word marks the crux of the error. The laws refer to an isolated system. The idea is that nothing enters or leaves, comes or goes, without being accounted for. We can create models of isolated systems in a laboratory, but even these are only approximations—and not only, as our first thought might be, because a bit of energy is bound to sneak away. They are inevitably approximate also because our world is brimming with energy: There is residual heat that can never be perfectly removed. There is energy sequestered in nuclei by stars and cosmic radiation left over from the Big Bang. There is a ubiquitous energetic fizz of quantum pair production, which may be responsible for driving the universe’s accelerating expansion. And certainly, in everyday life, outside the hermetic enclosures of a laboratory, we are never even close to the realm of isolated systems.

    “For these reasons, we might consider adding a law. The first and second we’ve just seen, and the third slot is taken by the relation between temperature and entropy, so let’s call this the fourth law of thermodynamics:

    “IV. There is no such thing as an isolated system.”**

  2. Strong words from Steve Keen re Nordhaus;

    “This is a prediction, not of a drop in the annual rate of economic growth – which would be significant even, at the lower bound of 0.2% – but a prediction that the level of GDP will be between 0.2% and 2% lower, when global temperatures are 2°C higher than pre-industrial levels, compared to what they would have been in the complete absence of global warming.”

     “… this work could soon be exposed as the most significant and dangerous hoax in the history of science.”

    The appallingly bad neoclassical economics of climate change
    Steve Keen 

    Published: 01 Sep 2020

    William Nordhaus was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Mirowski, 2020) in 2018 for his work on climate change. His first major paper in this area was ‘World Dynamics: Measurement Without Data’ (Nordhaus, 1973), which attacked the pessimistic predictions in Jay Forrester’s World Dynamics (Forrester, 1971, 1973) on the grounds, amongst others, that his predictions were not firmly grounded in empirical research:-
        -“” The treatment of empirical relations in World Dynamics can be summarised as measurement without data … Not a single relationship or variable is drawn from actual data or empirical studies. (Nordhaus, 1973, p. 1157; italics in original, subsequent emphases added)”

        “There is no explicit or apparent reference to data or existing empirical studies. (Nordhaus, 1973, p. 1182)

        “Whereas most scientists would require empirical validation of either the assumptions or the predictions of the model before declaring its truth content, Forrester is apparently content with subjective plausibility.(Nordhaus, 1973, p. 1183)

        “Sixth, there is some lack of humility toward predicting the future. Can we treat seriously Forrester’s (or anybody’s) predictions in economics and social science for the next 130 years? Long-run economic forecasts have generally fared quite poorly … And now,without the scantest reference to economic theory or empirical data, Forrester predicts that the world’s material standard of living will peak in 1990 and then decline. (Nordhaus, 1973, p. 1183)””

    After this paper, Nordhaus’s own research focused upon the economics of climate change. One could rightly expect, from his critique of Forrester, that Nordhaus was scrupulous about basing his modelling upon sound empirical data.

    One’s expectations would be dashed. Whereas Nordhaus characterized Forrester’s work as ‘measurement without data’, Nordhaus’s can be characterized as ‘making up numbers to support a pre-existing belief’: specifically, that climate change could have only a trivial impact upon the economy. This practice was replicated, rather than challenged, by subsequent Neoclassical economists – with some honourable exceptions, notably Pindyck (2017), Weitzman (2011a, 2011b), DeCanio (2003), Cline (1996), Darwin (1999), Kaufmann (1997, 1998), and Quiggin and Horowitz (1999).

    The end product is a set of purported empirical estimates of the impact of climate change upon the economy that are utterly spurious, and yet which have been used to calibrate the ‘Integrated Assessment Models’ (IAMs) that have largely guided the political responses to climate change. DeCanio expressed both the significance and the danger of this work very well in his bookEconomic Models of Climate Change: A Critique:-
        – “”Perhaps the greatest threat from climate change is the risk it poses for large-scale catastrophic disruptions of Earth systems … 

        “Business as usual amounts to conducting a one-time, irreversible experiment of unknown outcome with the habitability of the entire planet.

        “Given the magnitude of the stakes, it is perhaps surprising that much of the debate about the climate has been cast in terms of economics … 

        “Nevertheless, it is undeniably the case that economic arguments, claims, and calculations have been the dominant influence on the public political debate on climate policy in the United States and around the world … It is an open question whether the economic arguments were the cause or only an ex post justification of the decisions made by both administrations, but there is no doubt that economists have claimed that their calculations should dictate the proper course of action. (DeCanio, 2003, pp. 2–4)””

    The impact of these economists goes beyond merely advising governments, to actually writing the economic components of the formal reports by the IPCC (‘Intergovernmental Panel On Climate Change’), the main authority coordinating humanity’s response, such as it is, to climate change. The blasé conclusions they reach – such as the following from the 2014 IPCC Report (Field et al., 2014) – carry far more weight with politicians, obsessed as they are with their countries’ GDP growth rates, than the much more alarming ecological warnings in the sections of the Report written by actual scientists:-
       – “Global economic impacts from climate change are difficult to estimate. Economic impact estimates completed over the past 20 years vary in their coverage of subsets of economic sectors and depend on a large number of assumptions, many of which are disputable, and many estimates do not account for catastrophic changes, tipping points, and many other factors. With these recognized limitations, the incomplete estimates of global annual economic losses for additional temperature increases of ∼2°C are between 0.2 and 2.0% of income. (Arent, Tol, et al., 2014, p. 663; emphasis added)”

    “This is a prediction, not of a drop in the annual rate of economic growth – which would be significant even, at the lower bound of 0.2% – but a prediction that the level of GDP will be between 0.2% and 2% lower, when global temperatures are 2°C higher than pre-industrial levels, compared to what they would have been in the complete absence of global warming. This involves a trivial decline in the predicted rate of economic growth between 2014 and whenever the 2°C increase occurs, even at the upper bound of 2%.

    “Given the impact that economists have had on public policy towards climate change, and the immediacy of the threat we now face from climate change (Amen et al., 2008; Gills,2020; Gills & Morgan, 2019), this work could soon be exposed as the most significant and dangerous hoax in the history of science.

    Fictional empirics …”

  3. A bleg from a member of the League of Bad Male Cooks (patron: Alfred, King of the West Saxons). Recipes using an oven uniformly tell you to heat the oven up first before putting in the food. Is this genuinely useful, or an atavistic hangover from the days when stoves were fired with wood or coal and hot all the time? Mrs Beeton and her competitors first published their manuals back then. I speculate that when gas and then electric ovens came in that start from cold, it was easier to say “heat up the oven” than rewrite the recipes. It’s different with frying and grilling, where initial searing is needed to seal in meat juices.

  4. Preheat the oven. With modern ovens it takes like 5 minutes. But it still matters. You want an oven roast to sizzle and seal first and then turn it down after half an hour or so. Cake timings are based on starting at the correct temperature. Part of cooking is chemistry, quite literally. The application of the right heat(s)to the right ingredients for the right time(s).

    Tons of recipes on-line. Follow them exactly. Then you have a baseline. If your oven is “slow” you will learn by repetition how to fine tune each recipe for your oven. Don’t forget to translate degrees F to degrees C as required. Fan-forced temps are “different” from non-fan-forced temps: same temperature but fan-forcing transfers the heat to the cooked item faster.

  5. It would be hard to give cooking time advice for ovens with varying heating speeds without heating up requirement. Any oven that has no historical value will of course tell you when it is done heating up by turning on some lamp or something like that :-). Other than that, many things (read: all my pre-made meals) can be cooked just the same without heating up the oven before.

  6. Speaking of olden times, Morrison’s threat to build a gas generator has drawn criticism from all directions with the only positive being that he has ruled coal out.

  7. KT2, thanks for the alert and link to Steven Keen’s paper.
    Not sure why Keen’s critique runs under the heading ‘neoclassical’. Isn’t the problem that the economic impact is measured in GDP terms?
    Keen does not criticise the Computable General Equilibrium model. I could find only one reference to a CGE paper. I have to look it up.

  8. Wow.
    175yrs to another president of exception -alism?

    “”Scientific American Endorses Joe Biden

    “We’ve never backed a presidential candidate in our 175-year history—until now

    By THE EDITORS | Scientific American October 2020 Issue

    …” Trump also keeps pushing to eliminate health rules from the Environmental Protection Agency, putting people at more risk for heart and lung disease caused by pollution. He has replaced scientists on agency advisory boards with industry representatives. In his ongoing denial of reality, Trump has hobbled U.S. preparations for climate change, falsely claiming that it does not exist and pulling out of international agreements to mitigate it. The changing climate is already causing a rise in heat-related deaths and an increase in severe storms, wildfires and extreme flooding.

    Joe Biden, in contrast, comes prepared with …”

  9. Yesterday (Sep 15) on ABC RN Drive, Patricia Karvelas explored the PM’s gas lead economic recovery, interviewing:
    * Keith Pitt, Minister for Resources, Water and Northern Australia;
    * Bruce Robertson, The Institute for Energy Economics and Financial Analysis.

    I thought it was an excellent counterpoint from PK to Minister Pitt, referencing former Australian Chief Scientist Penny Sackett saying it was too late for Australia to use gas as a transition fuel and meet its climate targets.

    In the interview with Bruce Robertson (starting from time interval 07:18), he highlighted the futility/stupidity of the PM’s gas plan, suggesting that subsidising the already contracting gas industry is flogging a dead horse.

  10. I hope you are archiving JQ. 65yrs hence what will your exam questions look like as compared to “Economic Theory Examination Committee:
    M. Friedman, chairman; F. H. Knight; D. G. Johnson.”?


    by Irwin Collier

    Economic Theory Examination Committee:
    M. Friedman, chairman; F. H. Knight; D. G. Johnson.

    There were 13 examinees for Economic Theory I. These included Zvi Griliches (who incidentally blew the top off the curve according to Friedman’s grades) and Walter Oi.

    Griliches Interview with Alan Krueger and Timothy Taylor from June 21, 1999.
    Memorial blogpost for Walter Oi by Steve Landsburg on December 26, 2013

    There were 2 examinees for Economic Theory II.

    Economic Theory I
    Preliminary Examination
    Winter, 1955
    [Milton Friedman’s answers in square brackets]

    Time: 4 hours.

    Write your number and not your name on your examination paper. Please be brief in your replies.

    Q1. (30 points) Indicate whether each of the following statements is True, False, or Uncertain and justify your answer briefly.
        1. [False] Production of a commodity occurs under conditions of fixed proportions. The supply curve for A shifts to the right. It is to the advantage of the owners of A that expenditure on A shall have represented a small part of total costs.
         2. [False] A firm will not carry on production at a given level of output, if one factor exhibits increasing average returns at that output level.
        3. [appears to be False with True crossed out] When a firm is in equilibrium, the ratio of the price of a factor to the marginal physical product of the factor determines the marginal cost of production.
    4. [True or Uncertain] If the demand for output is perfectly elastic, a decline in the price of factor A will always increase the demand for factor B unless A and B are perfect substitutes (only two factors employed).
    5. [True] If the demand for output is less than perfectly elastic, a decline in the price of A may either increase or decrease the demand for factor B.
        6. [False] If a monopsonist is not a monopolist, it is possible to construct the monopsonist’s demand curve for a factor.[False]
        7. If all the factors used by a firm are paid the value of their marginal products, the sum of the payments will equal the total receipts of the firm.
        8. [False] If all factors are paid the value of their marginal products, it would not be possible to increase total real output of the economy by any change in the allocation of factors.

    Q2. (15 points) In an article on the British tobacco industry, the Economist remarked:-“…

  11. Tracking Keen, day 17:

    Title The appallingly bad neoclassical economics of climate change
    Published in Globalizations, September 2020
    DOI 10.1080/14747731.2020.1807856
    Authors Steve Keen

    This research output has an Altmetric Attention Score of 1478.

    In context:

    Altmetric has tracked 15,865,263 research outputs across all sources so far.

    Compared to these this one has done particularly well and is in the 99th percentile: it’s in the top 5% of all research outputs ever tracked by Altmetric.

  12. It will be interesting to see how the new (to me) phenomena of trans[racial identity] is handled. The right wing reaction is predictable but what will left leaning people think ? A prominent American black academic and activist was recently outed as being 100% not black genetically. She has apologised and now claims to be transblack. Normally cultural appropriation is frowned upon, however there is a parallel with transgender and that is allowed. I think gender and racial identity do not precede birth , they are mostly acquired identities – physical traits are only part of that .Just as someone can always have felt they are in the wrong gender so can they feel they are another racial or cultural identity and be allowed to change. From what I can see it looks like there is a lot of negative reaction to this from the left . I know a guy who grew up in an aboriginal community who identifies as culturally black but he has made no attempt to change his physical body ,although his acquired dress and grooming habits do affect his overall look accordingly. I can vouch for the fact that he is culturally more aboriginal than white, I have known him a long time.

  13. Years ago, any hint of black ancestry attracted a range of opprobrium – ‘touch of the tar brush’ etc. Yet the same mob now accuse those identifying as Aboriginal as not being black enough.

    The accepted criteria are;
    – That a an Aboriginal person is descended from Aborigines;
    – That the person identifies as being Aboriginal; and
    – That the person is accepted as being Aboriginal by the community.

  14. James,

    how are you?? I hope all is well! I used to pipe up now and again on Samefacts.

    So, I was wondering … at some point, I saw on Samefacts a link to a website which had science-based arguments for when one meets with climage change deniers. It addressed various kinds of uncertainties. It looked really very useful, and I probably saved the link somewhere, but if I could remember where, I’d remember the site too most likely. Oopsie.

    Do you happen to remember it? I searched around a bit but, I could not find it.

    But don’t search – just if you remember it off the top of your head. It’s my problem.

    So, so many things keep piling up. I keep hearing in the news about all these people who are home bc of the virus and they’re re-organizing this and that, repairing things, etc … here? No. Ain’t happening. The only thing that’s helped with that is that now that all news sources are obsessed with the virus, I am much less interested in news. Helps with some of the clutter.

    Take care,

  15. “At the extreme are companies who will only hire people who do extensive work for free… in the form of contributing to open source projects. That is a whole other discussion, involving both feared-by-the-right terms like privilege and feared-by-the-left terms like unpaid”

    From Moz of Oz at the work from home topic. Guess I’m that weird left right hybrid then, as the expectation to do unpaid work before getting a job annoys me to no end in both regards.
    That expectation – just to get an entrance level job, just hit me myself. I was applying for a crappy temporary contract BA job in public administration, doing administrative task regarding refugees roundabout. So I enter the job interview with my excellent MA in intercultural stuff and a disability applying part-time*, just to be essentially told why did you even apply since you didn’t do any volunteering work in particular not regarding refugees.

    * So both the legal protections against being rejected over lower qualified candidates and a limited level of functioning that suggest just doing a degree full time is enough of an occupation was very much implied. Well no problem apparently, you can just make up BS criteria, to give the job to some social work BA.

    Should add that in general, over here public administration is all about formal qualification, so this was completely out of line with what would typically be valued most. As a practical “bonus” besides excluding me, it also excludes almost everyone routed in the cultures of the people that is ultimately administrated upon, since organized volunteering tends to be a very western thing.

    Back to the less personal. Doing volunteering, in particular the kind of volunteering to look good on a CV type is very much both potential exploitation undermining the creation of proper jobs and a class thing, nobles oblige. In the worst case – as with those high school graduate teaches for one year in some third world country programs, people pay handsomely to experiment on some third worlders, who apparently don’t deserve a proper teacher.

    There is a similar internal US version of that as well. At least it involves recent BA´s from elite schools, not high school graduates as well as some pay- Teach for America. The disgusting gist remains the same. People who lack the theoretical qualification one would expect from a teacher – a graduate degree and who have no intention whatsoever to stay in that job to a point where they have enough practical experience to become useful descend upon perceived “problem” students for two years. Somehow, because the upper class people are doing it, that is supposed to be some sacrifice for society, creating thumbs up from recruiters for the real 1% er jobs/graduate programs. To me, volunteering quite often is a form of self-fulfillment where people get volunteered upon.

    Side note: At the meeting spot for people with mental health issues I spent quite some time. We get lots of volunteers, most of them students. And it’s alright to me, they are doing useful things. It is still a give and take regarding the young student volunteers in particular- they can experiment doing things they would not be allowed to do in a paid job at that stage in their lives, but not at a level of authority that would make that dangerous. Most of them invest quite a lot of energy, time and preparation.

    We also once had someone with a stipend. As typical with those stipends, who always end up getting paid to upper middle class or richer kids who don’t need them, it required some volunteering. So he spent there maybe 4 hours for 3 days. He joined a couple of tabletop games and talked a bit. Then he got his got a certificate confirming that he did some volunteering.

    A bit of an extreme case I admit, but just checking some box with as little effort as possible seems to be the norm among all people I’ve ever encountered that had some of those political party stipends (they are a thing here, every party gets some budget according to votes that can only be used for stipends to college students).

  16. Hix, the landcare group I’m part of occasionally gets youf who are in some program that requires volunteer work. I assume it’s Duke of Edinburg or some such thing, but 99% of them behave as you describe – turn up, do the minimum possible, then disappear. We’re not resourced or empowered to do more than confirm to their keepers that they turned up, so our focus is on stopping them from damaging what we do.

    We also occasionally “compete” with people doing legally mandated community work during our cleanups, and unsurprisingly those folk pick up not just less rubbish per hour, but less rubbish per metre travelled.

    There’s no way to fix that within the system we have now. Proper supervision of motivated workers requires incentives as well as paid supervision, which capitalism inherently can’t provide for unpaid work. The best we get is negative incentives – the beatings will pause while you do unpaid work.

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