Bookblogging: The end

Nigel Lawson’s autobiography is pretty good.

I can’t recommend it because I haven’t read it, but Samuel Brittan might be a good place to look for a pro-Thatcher perspective on her economic policy. From his website:

“The Thatcher govemments economic policy”, in D. Kavanagh and A. Seldon (eds) (1989) The Thatcher effect. Oxford: Oxford University Press, pp. 1-37,

which is reproduced in:

Capitalism with a human face. Aldershot: Edward Elgar. (1995)

http://www.samuelbrittan.co.uk/pub.html

Damned that formatting!

“Every crisis is an opportunity”—while this is a truism that’s probably actually true,

Actually, it’s a cliche that bears no resemblance to the way people actually respond to crises.

I’ve said before and I’ll say again, there’s no obvious reason to expect a change in thinking just because there’s a worldwide crisis. It doesn’t impact substantially on the social strata from which I would guess that most economists spring, and if any recovery leaves a lot of people worse off than before then that doesn’t necessarily change anything provided that it’s still highly possible for people with good educational qualifications to thrive. I don’t see that this

three decades in which market liberals have pushed policies based on ideas of efficiency and claims about the efficiency of financial markets have not produced much in the way of improved economic performance, but they have led to drastic increases in inequality, particularly in the English-speaking world.

is likely to be the way such people see it at all: they’ll say that economic performance has improved and as for inequality, well, who cares?

After all, it depends what you think a healthy economy looks like – if your view of same can encompass large numbers of people remaining in poverty provided there’s economic growth then why should economists think growing inequality is of any importance, and why shouldn’t they view the recent collapse just as they view any other stutter which requires a market correction? Isn’t the hegemonic view quite likely to be that what the crisis really means is that wealthy countries can no longer afford welfare states, because dismantling key parts of those states is likely to be the major political response?

Or maybe not. But absent powerful union organisation, it’s hard to see where the social force is coming from that’s going to stand in the way of that view in practice.

John, in terms of the economics professoriate coming to terms with reality, there are a few things to consider. First, even before the crash, (for the USA) economic growth in the 80’s was less than in the 70’s; the 90’s saw less than in the 80’s, and the 00’s less than in the 90’s. In short, the rolling out of neoliberalism did *not* improve economic growth in the USA, overall. It was associated with increasing inequality and stagnation of wages for half or more of the workers in the USA. IMHO that was deliberate, but at the very least it didn’t seem to bother the neoliberal advocates.

Second, as has been well documented by DeLong, Krugman, Cassidy and Mark Thoma, a unique feature of the economics professoriate is that one doesn’t have to go to academic rejects for sheer BS; the elite departments are full of people who publicly and blithely says all sorts of stuff. That’s not a good sign in a discipline.

Third, IMHO a major but ignored factor is the power of the economic elites. The economists might like to think that changes in their field are due to their own brainpower, but I notice that they’ve paralleled changes in the political sphere. It’s got to be veeeeeeeery convenient for the economic elites to have ‘unbiased’, ‘scientific’ support for what they want to do; this will not change.

perhaps in line with your first adage would be some advice that delong repeats:

make young economists study more economic history. more kindleberger. more manias, panics, and crashes.

it’s part of getting the next generation focused on the empirical and away from the siren-song of the a priori. (sure; we all love the a priori. but economists have proven, again and again, that they simply can’t be trusted with it. now–stop whinging; it’s your own fault. we let you play with a priori models, and what did you do? you broke things. now we have to take them away, until you can show that you are mature enough to play with them safely.)

One shotgun blast is just not enough.

21st century econ

more on power relationships and less moron’s in power

a little more (dynamics) action, please

I see no reason to pretend that mainstream economists arguing for market fundamentalism are rigorous or logically consistent. Certainly a nonrigorous argument is that (1) macroeconomics needs microfoundations and (2) DSGE models with representative agents and one produced commodity are microfounded.

I have never figured out whether Quiggin is intending to tell the story of mood swings (among the general public or economists) or of something more serious.

If the public doesn’t buy it at large, then why is Teddy Kennedy’s seat in trouble?

Because independent MA voters are fed up with Democratic fecklessness, and want action on the economy that has concrete benefits outside of Wall Street banks. Why do they think this can be accomplished by electing a trickle-down tea partier who opposes recovering bailout funds from Wall Street banks, and is almost certainly a vote against any jobs bill? Ah, now that can lead into all sorts of explorations of our two-party system, the human need to assign blame, and whether there’s been a recent increase of lead in Massachusetts drinking water.

Joshua, because American voters are the sort of fools who can forget a near-miss at the Great Depression II in a year. Because American voters are the sort of fools who can hold up signs ‘keep government out of my medicare’.

And because the American political system is so frikkin’ corrupted that the only alternatives to GOP evil is Democratic corruption; that we indeed have a system which gives trillions to bankers while spitting on everybody else, and a media which supports that very strongly – they know where their advertising dollars come from.

JoB, if you could please write in legible English, I could understand you so much better.

As for ‘best candidate’, there are two problems – first, most people don’t know who the best candidate is; they’re voting for party. Second, the GOP guy will without doubt vote the GOP line – have you really not noticed the near-100% discipline the GOP Senate has exhibited this year?

“…above all telling about those not competitive enough to get named as serious contenders.”

Null syntax, please correct.

Joshua Holmes@17: What I hear from people I know in MA is, overwhelmingly, simply discouragement. The Democratic leadership’s betrayal of its bases hit really deep. It’s not that anyone I know there has given up on wanting things like political accountability for financial crimes and exploits or decent health care that isn’t loaded with boobytraps and handouts for the people responsible for it being so bad now. It’s that there doesn’t seem to be a good way to translate that sort of wish into political power right now, just the long slog of primary challenges and all, and serious alternative building. Hegemony is hard, but at least some awareness from Gramsci and such provides a useful rebuttal to the stuff like “oh if you just cared enough to do anything it’d all get better”.

One reason is that social conservative independents are more willing to vote for a male Republican who posed nude for the epitome of media outlets conservatives hate, and who used his daughter’s American Idol appearance for his political campaign, but sends that daughter to a school run by a religious order, than for a law and order female Democrat. And libertarian independents are more willing to vote for a male Republican who posed nude for the epitome of media outlets conservatives hate, and who used his daughter’s American Idol appearance for his political campaign, but sends that daughter to a school run by a religious order, than for a law and order female Democrat. And Coakley, a party outsider who is not an ideal candidate in every way, has run a poor campaign.

I don’t know what Ceri is talking about. Have surveys shown that registered Democrats are voting for Brown? Almost everyone I know calls themselves an independent.

Bianca Steele, I didn’t say (and you didn’t ask :) ) but essentially everyone I know in MA is a Democrat, or at least tends to vote that way, and so the question for them is “Bother or not?” Not whether to vote for Brown – that’s not an issue for any of them – but whether the benefits of voting for Coakley are worth the obvious and foreseeable problems. The portion of the country given to moral monstrosity and therefore to supporting Republicans has a separate set of problems, which I’m not taking up at the moment.

If this works, please delete previous moderated comment…

Still don’t understand Ceri. They don’t want to vote for Coakley and would prefer the seat go to a Republican because she’s not progressive enough? Because she would like to crack down on Internet gambling?

These are registered Democrats? There’s really no reason to register with a party affiliation in this state unless you want help from your local pols or you want to make a statement.

I don’t want to sound condescending but maybe they’re confused by the media coverage. The morning after p1|| stuff is nonsense because when the Globe asked around, the only hospital that said it wouldn’t ever be constrained by religious conflicts was St. E’s.

Market economics also won’t go away because it servers extremely powerful interests that have investment into seeing that they continue. These zombies aren’t revived simply out of ignorance, but because they serve the purposes of the rich and powerful.

In the Zombie analogy, the oligarchy (or corpratocracy) serves as the mad scientist that unleashes the zombies screaming, “And now I will rule the world!!!!”

JQ

While I wish you and the book every success, I don’t think you’ve quite grasped that your book is precisely a product of that Keynes vs, Friedman cognitive carousel that has never reflected the economic history of the recent past, let alone post-WWII.

What I have learnt since the whole three-week long ‘GFC’ is that academic macroeconomists have a tin ear to the socio-political dynamics and events that are the world outside. Perhaps the reason macroeconomics is such an intellectual scandal is that it attracts people who want humanity to be puppets, with the macroeconomists pulling the strings. The reality is, the macroeconomists clearly do not have a clue.

erik

There are at least two reasons. The first is the laudable aim of making the logic/reasoning of economics analysis as water-tight as possible. The descent of all social science in the nineties and noughties into the abyss of post-structuralist obscurantism shows what can happen when ‘science’ relies too heavily on discursive exposition. The language of mathematical proofs transcends somewhat the flakiness that are other social sciences are often handicapped by.

But of course the substitution of mathematics for verbal exposition never totally escapes the pre-cognitive bias that post-structuralists so gleefully loved to hunt down and expose in the more vulnerable social sciences. In fact, the increasing mathematization of post-War economics was substantially motivated to remove economics – and thus economists – from the critical gaze, not only of hoi polloi, but other social scientists (and indeed all scholars), policy makers and so on. In 2010, the greatest anxiety of an applicant to a US Economics Ph.D program is their grade in Real Analysis, an advanced proof-based Pure Math course, which will be used to identify such phenomena as the optimal location for two ice-cream vendors to set up their stall on a beach.

Too often, Economics relies on flaky misappropriations of pure math, and even more so Applied Math; there are many WTF moments when the student sees equations familiar from Physics and Chemistry, such as Laplace’s equation, or even Samuelson’s work began in the 1940s using classical thermodynamics.

Now, of course this leads to the main criticism here; realism. But there is actually a great deal of economics that does tack harder towards realism that idealism. Theories are subject to sophisticated data sets, econometric analyses run, and empirical disconnects from theory are taken seriously. The problem is that discovering a disconnect between theory and data merely raises a flag for even more mathematical sophistication/tweaking of the model.

In defense of economics’ privileging of theory over data is the – quite reasonable, though far from infallible – argument that economic theory focuses on the optimal, so that the degree of sub-optimality revealed by the data can be identified, and policy-making or decision-making of individuals, firms, organizations, and so on can refine their decision/policy-making.

The second reason for this privileging of mathematical theory is the Nobel Prize, which is awarded for Economic Sciences. The lust for a Nobel Prize overs the entire field. Humanity would be well served by the Bank of Sweden no longer awarding the blasted thing.

If mainstream economists were to have no influence on the world, one would have no reason to pay any attention to them. They don’t care if what they say makes sense, much less if they are describing how capitalist economies actually operate.

But my main point is I see no reason to believe that a tradeoff exists between rigor and realism.