@RJack --
"I was kicking this idea around at work today, and couldn't find any examples. I've heard it several times, and didn't really question it. However, when looking at historians dissertations, they seem at best split on this."
The idea that inequality leads to societal change in an ebb and flow-type manner goes back to Plato and was noted in Schumpeter's History of Economic Analysis (page 53), which is free here: http://digamo.free.fr/schumphea.pdf [BTW, that book is practically required reading for anyone who wants to have a serious discussion about economic theories. If you don't know where you came from, you can't know where youare going.]
It's probably best articulated in Durant's "Lessons of History", which is really just a companion to the 11-volume "The Story of Civilization".
As for particular revolutions, usually people point to the French one as the best modern example, but inequality of some kind is almost a predicate for revolution itself. In contrast, Britain solved similar inequality issues in the 19th Century (read your Dickens) with changes in its laws.
Note that Vilfredo Pareto's famous 80/20 rule is another variation on this theme -- he observed that stable societies generally had that sort of wealth distribution (power laws baby!) and that when they went away from it they become unstable.
Here's my belated contribution to your collection of websites: http://unlearningeconomics.wordpress.co ... iscipline/
Economic Fallacies
@dragon: That website is hilariously dated and/or flat incorrect.
from here:
http://online.wsj.com/article/SB1000142 ... %3Darticle
"Thirty-five states have abolished asset tests for most food-stamp recipients."
Apparently mine is one of them... Getting hungry just thinking about it. :p
from here:
http://online.wsj.com/article/SB1000142 ... %3Darticle
"Thirty-five states have abolished asset tests for most food-stamp recipients."
Apparently mine is one of them... Getting hungry just thinking about it. :p
Wow, "that" website is actually, like, multiple "official" sites (both federal and at least one state that has abolished the asset test). You really gotta know the system to work it, I guess. Sad how many working families probably went to the website and said "whelp I guess I don't qualify". I briefly looked into it for a family member at one time, and it seems they might have qualified.
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Riggerjack
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@ dragline: I read your link, and I have to ask:
Why do you think it is that economists should be blamed for the economy?
I know it sounds a bit silly on the surface, but really, the left loves to beat up on economics in general. Personally, I always thought the dismal science was dismal because it did such a good job of refuting most leftist ideas.
But it is just a soft science, subject to the whims and delusions of people in masses. We don't blame Psychology for the crazy people, why blame economists for the economic failures?
Now I completely agree with the author of you post that most of modern economics is simply navel gazing disguised as math, but then most advanced math is pretty easily characterized as navel gazing.
" Financial crises are actually (unfortunately) relatively frequent occurrences with clear, discernible patterns drawing them together. " the pattern changed after Keynes. It used to be a deep V shape, and now it's a sharp drop and shallow recovery, with the possibility of a second wobble, for the infamous double dip recession. I don't blame Keynes BTW, Keynesianism is based on a part of one book written to address a (at that time) unique disaster. If you read the rest of his works, there some real gold there.
Unfortunately the genie is out of the bottle, and despite never actually working, Keynsian "fixes" are the default approach to down turns. Not because it is sound, but because it frees politicians to do what they want to do: spray money at their cronies with abandon and glee. "never let a crisis go to waste."
As to the economics of the French Revolution: Prerevolution, the whole of the taxes were passed onto the middle and lower classes, I remember a figure of 60% from a high school history class. But the fact of the matter is that wealth inequality wasn't nearly the problem that corruption and famine were.
From: http://en.wikipedia.org/wiki/Causes_of_ ... Revolution
"Since it was one of the major trading nations, France needed to raise most of its tax revenue internally, rather than through customs tariffs. Taxes on commerce consisted of internal tariffs among the regions of France. This set up an arbitrary tax-barrier (sometimes, as in Paris, in physical form) at every regional boundary, and these barriers prevented France from developing as a unified market. Collections of taxes, such as the extremely unpopular salt tax, the gabelle, were contracted to private collectors ("tax farmers"), who, like all farmers, preoccupied themselves with making their holdings grow. So, they collected, quite legitimately, far more than required, remitted the tax to the State, and pocketed the remainder. These unwieldy systems led to arbitrary and unequal collection of France's consumption taxes.
Peasants were also required to pay a tenth of their income or produce to the church (the tithe), a land tax to the state (the taille), a 5% property tax (the vingtième), and a tax on the number of people in the family (capitation). Further royal and seigneurial obligations might be paid in several ways: in labor (the corvée), in kind, or, rarely, in coin. Peasants were also obligated to their landlords for: rent in cash (the cens), a payment related to their amount of annual production (the champart), and taxes on the use of the nobles' mills, wine-presses, and bakeries (the banalités). In good times, the taxes were burdensome; in harsh times, they were devastating. After a less-than-fulsome harvest, people would starve to death during the winter."
"in a civil lawsuit, judges required that both parties pay a bribe (called, with tongue-in-cheek, the épices, the spices); this, effectively, put justice out of the reach of all but the wealthy."
"These problems were all compounded by a great scarcity of food in the 1780s. A series of crop failures caused a shortage of grain, consequently raising the price of bread. Because bread was the main source of nutrition for poor peasants, this led to starvation. Contributing to the peasant unrest were conspiracy theories that the lack of food was a deliberate plot by the nobility.[21] The two years prior to the revolution (1788–89) saw meager harvests and harsh winters, possibly because of a strong El Niño cycle [22] caused by the 1783 Laki eruption in Iceland.[23]
The Little Ice Age also affected farmers' choices of crops to plant; in other parts of Europe, peasant farmers had adopted the potato as its staple crop. The potato had been introduced to France during the 16th century and despite resistance had largely supplanted the turnip and rutabaga in France.[24] Despite encouragement from individuals like Antoine Parmentier and Louis XVI, grain was still a much more popular staple crop in France. This was partially because potatoes were seen as more difficult to transport and store than grain.[25]
In 1789, a normal worker, a farmer or a laborer, earned anywhere from fifteen to thirty sous per day; skilled workers received thirty to forty. A family of four needed about two loaves of bread a day to survive. The price of a loaf of bread rose by 67 percent in 1789 alone, from nine sous to fifteen.[citation needed] Many peasants were relying on charity to survive, and they became increasingly motivated by their hunger. The "bread riots" were the first manifestations of a roots-based revolutionary sentiment. Mass urbanization coincided with the beginning of the Industrial Revolution, and more and more people moved into French cities seeking employment. The cities became overcrowded with the hungry, destitute, and disaffected, an ideal environment for revolution."
To be sure, there are parallels to be drawn between pre-revolution France and modern America, but income inequality doesn't seem to be nearly as strong as the indebtedness, monocrop farming/environmental issues, and popular ideas of justice.
Why do you think it is that economists should be blamed for the economy?
I know it sounds a bit silly on the surface, but really, the left loves to beat up on economics in general. Personally, I always thought the dismal science was dismal because it did such a good job of refuting most leftist ideas.
But it is just a soft science, subject to the whims and delusions of people in masses. We don't blame Psychology for the crazy people, why blame economists for the economic failures?
Now I completely agree with the author of you post that most of modern economics is simply navel gazing disguised as math, but then most advanced math is pretty easily characterized as navel gazing.
" Financial crises are actually (unfortunately) relatively frequent occurrences with clear, discernible patterns drawing them together. " the pattern changed after Keynes. It used to be a deep V shape, and now it's a sharp drop and shallow recovery, with the possibility of a second wobble, for the infamous double dip recession. I don't blame Keynes BTW, Keynesianism is based on a part of one book written to address a (at that time) unique disaster. If you read the rest of his works, there some real gold there.
Unfortunately the genie is out of the bottle, and despite never actually working, Keynsian "fixes" are the default approach to down turns. Not because it is sound, but because it frees politicians to do what they want to do: spray money at their cronies with abandon and glee. "never let a crisis go to waste."
As to the economics of the French Revolution: Prerevolution, the whole of the taxes were passed onto the middle and lower classes, I remember a figure of 60% from a high school history class. But the fact of the matter is that wealth inequality wasn't nearly the problem that corruption and famine were.
From: http://en.wikipedia.org/wiki/Causes_of_ ... Revolution
"Since it was one of the major trading nations, France needed to raise most of its tax revenue internally, rather than through customs tariffs. Taxes on commerce consisted of internal tariffs among the regions of France. This set up an arbitrary tax-barrier (sometimes, as in Paris, in physical form) at every regional boundary, and these barriers prevented France from developing as a unified market. Collections of taxes, such as the extremely unpopular salt tax, the gabelle, were contracted to private collectors ("tax farmers"), who, like all farmers, preoccupied themselves with making their holdings grow. So, they collected, quite legitimately, far more than required, remitted the tax to the State, and pocketed the remainder. These unwieldy systems led to arbitrary and unequal collection of France's consumption taxes.
Peasants were also required to pay a tenth of their income or produce to the church (the tithe), a land tax to the state (the taille), a 5% property tax (the vingtième), and a tax on the number of people in the family (capitation). Further royal and seigneurial obligations might be paid in several ways: in labor (the corvée), in kind, or, rarely, in coin. Peasants were also obligated to their landlords for: rent in cash (the cens), a payment related to their amount of annual production (the champart), and taxes on the use of the nobles' mills, wine-presses, and bakeries (the banalités). In good times, the taxes were burdensome; in harsh times, they were devastating. After a less-than-fulsome harvest, people would starve to death during the winter."
"in a civil lawsuit, judges required that both parties pay a bribe (called, with tongue-in-cheek, the épices, the spices); this, effectively, put justice out of the reach of all but the wealthy."
"These problems were all compounded by a great scarcity of food in the 1780s. A series of crop failures caused a shortage of grain, consequently raising the price of bread. Because bread was the main source of nutrition for poor peasants, this led to starvation. Contributing to the peasant unrest were conspiracy theories that the lack of food was a deliberate plot by the nobility.[21] The two years prior to the revolution (1788–89) saw meager harvests and harsh winters, possibly because of a strong El Niño cycle [22] caused by the 1783 Laki eruption in Iceland.[23]
The Little Ice Age also affected farmers' choices of crops to plant; in other parts of Europe, peasant farmers had adopted the potato as its staple crop. The potato had been introduced to France during the 16th century and despite resistance had largely supplanted the turnip and rutabaga in France.[24] Despite encouragement from individuals like Antoine Parmentier and Louis XVI, grain was still a much more popular staple crop in France. This was partially because potatoes were seen as more difficult to transport and store than grain.[25]
In 1789, a normal worker, a farmer or a laborer, earned anywhere from fifteen to thirty sous per day; skilled workers received thirty to forty. A family of four needed about two loaves of bread a day to survive. The price of a loaf of bread rose by 67 percent in 1789 alone, from nine sous to fifteen.[citation needed] Many peasants were relying on charity to survive, and they became increasingly motivated by their hunger. The "bread riots" were the first manifestations of a roots-based revolutionary sentiment. Mass urbanization coincided with the beginning of the Industrial Revolution, and more and more people moved into French cities seeking employment. The cities became overcrowded with the hungry, destitute, and disaffected, an ideal environment for revolution."
To be sure, there are parallels to be drawn between pre-revolution France and modern America, but income inequality doesn't seem to be nearly as strong as the indebtedness, monocrop farming/environmental issues, and popular ideas of justice.
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secretwealth
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secretwealth
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That's all over the cover of his book, he certainly makes sure you know it. I have no idea what they gave it to him for, and don't care enough to investigate and have an opinion whether or not he "deserved" it. I'm not calling Krugman dumb, or economically illiterate, I'm saying he does violence to economics in that book.
I am no eminent economist, but his theory of money printing "stimulus" didn't pass the smell test for me. (Much as I wish it did, as I would prefer the outcome of him being correct to what I think is likely to happen.) As a matter of fact, I found it downright offensive because it is so ridiculously dangerous. Although, I did find his discussion of Europe's problems pretty good.
After I read the book someone on the forum someone posted a link with Taleb discussing AntiFragile. In that interview Taleb specifically calls out Krugman on this, for more learned reasons than I had, but confirming my "gut feeling".
Today I go pick up Black Swan at the library...and look forward to AntiFragile.
I am no eminent economist, but his theory of money printing "stimulus" didn't pass the smell test for me. (Much as I wish it did, as I would prefer the outcome of him being correct to what I think is likely to happen.) As a matter of fact, I found it downright offensive because it is so ridiculously dangerous. Although, I did find his discussion of Europe's problems pretty good.
After I read the book someone on the forum someone posted a link with Taleb discussing AntiFragile. In that interview Taleb specifically calls out Krugman on this, for more learned reasons than I had, but confirming my "gut feeling".
Today I go pick up Black Swan at the library...and look forward to AntiFragile.
To be fair, the Nobel Prize for economics is fake. It's not a real Nobel Prize like the others and was established and endowed by Sweden's central bank Sveriges Riksbank. It's not even actually called the Nobel Prize, but the Nobel Foundation just calls it "The Prize in Economics" and its official name is "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel".
http://en.wikipedia.org/wiki/Nobel_Memo ... c_Sciences
Not sure if this says something against Krugman and his political view specifically as the prize went to Hayek, Friedman and many other "right" (as opposed to "left") economists, giving them credibility that way. It may say something about the credibility issues of the field itself.
http://en.wikipedia.org/wiki/Nobel_Memo ... c_Sciences
Not sure if this says something against Krugman and his political view specifically as the prize went to Hayek, Friedman and many other "right" (as opposed to "left") economists, giving them credibility that way. It may say something about the credibility issues of the field itself.
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Riggerjack
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- Joined: Thu Jul 14, 2011 3:09 am
Truth be told, I'm surprised it took this long before someone brought Krugman into this.
Krugman is a professional columnist, who has the econ nobel. One would think one thing has something to with the other, yet that is clearly not the case. He hasn't been an economist in ages, and his columns are more about obfuscation than enlightenment. I say this, because he has directly contradicted his work for which he got the prize in his columns.
He is a talking head for the left, pushing an agenda he knows is destructive for bigger issues. I'm guessing getting invited to the right parties is his idea of bigger issues. His econ work that he got the prize for, was navel gazing about international trade. He was all for it, until he got the times column, then it was suddenly unfair.
Here's a quote from Steven Landsburg about his finer work:
"Paul Krugman, apparently relying on the stupidity of his readers, opens with this quote:
“At some point, Washington has to deal with its spending problem,” Speaker John A. Boehner of Ohio said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Then Krugman comments as follows:
22 years, huh? Indeed, Boehner was elected in 1990, and entered the House at the beginning of 1991. So what kind of can-kicking was going on during his first, say, decade in office? Here’s the picture:
Hmm — it sort of looks as if the US was sharply reducing its debt during the presidency of a guy named, I don’t know, Bill something or other.
See what he did there? Boehner says something about spending; Krugman responds with an irrelevant chart depicting debt, and hopes you won’t notice he’s completely changed the subject.
And on he drones:
OK, joking aside, this is important. Republicans have invented a history in which it has been fiscal irresponsibility all along — and far too many centrists have bought into the premise. The reality is that we had low debt and no fiscal problem before Reagan; then an unprecedented surge in peacetime, non-depression deficits under Reagan/Bush; then a major improvement under Clinton; then a squandering of the Clinton surplus via tax cuts and unfunded wars of choice under Bush…
The problem here is that debt is not a measure of fiscal (ir)responsibility. If you buy a kayak you can’t afford, you’re equally irresponsible whether you take cash from your pocket, or make a withdrawal from your savings account, or put it on your credit card.
Fiscal irresponsibility is measured by ill-advised spending. And unfortunately, we can’t just pull up a graph showing the timepath of ill-advised spending, because we’re bound to have legitimate differences of opinion about which spending is ill-advised.
Krugman finesses that problem by a) talking about something other than spending and b) pretending this is relevant to Boehner’s remarks, which unambiguously are about spending. Presumably he’s learned over the years that his readers are too dumb to notice the bait-and-switch."
You can find this and more at: http://www.thebigquestions.com/2013/02/ ... re-stupid/
Steven Landsburg's blog is more fun in the comments section than most blogs are in direct content. There is legitimate discussion going on there from the secular to religious, left, right, and libertarians, yet it's civil with real points being made.
Krugman is a professional columnist, who has the econ nobel. One would think one thing has something to with the other, yet that is clearly not the case. He hasn't been an economist in ages, and his columns are more about obfuscation than enlightenment. I say this, because he has directly contradicted his work for which he got the prize in his columns.
He is a talking head for the left, pushing an agenda he knows is destructive for bigger issues. I'm guessing getting invited to the right parties is his idea of bigger issues. His econ work that he got the prize for, was navel gazing about international trade. He was all for it, until he got the times column, then it was suddenly unfair.
Here's a quote from Steven Landsburg about his finer work:
"Paul Krugman, apparently relying on the stupidity of his readers, opens with this quote:
“At some point, Washington has to deal with its spending problem,” Speaker John A. Boehner of Ohio said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Then Krugman comments as follows:
22 years, huh? Indeed, Boehner was elected in 1990, and entered the House at the beginning of 1991. So what kind of can-kicking was going on during his first, say, decade in office? Here’s the picture:
Hmm — it sort of looks as if the US was sharply reducing its debt during the presidency of a guy named, I don’t know, Bill something or other.
See what he did there? Boehner says something about spending; Krugman responds with an irrelevant chart depicting debt, and hopes you won’t notice he’s completely changed the subject.
And on he drones:
OK, joking aside, this is important. Republicans have invented a history in which it has been fiscal irresponsibility all along — and far too many centrists have bought into the premise. The reality is that we had low debt and no fiscal problem before Reagan; then an unprecedented surge in peacetime, non-depression deficits under Reagan/Bush; then a major improvement under Clinton; then a squandering of the Clinton surplus via tax cuts and unfunded wars of choice under Bush…
The problem here is that debt is not a measure of fiscal (ir)responsibility. If you buy a kayak you can’t afford, you’re equally irresponsible whether you take cash from your pocket, or make a withdrawal from your savings account, or put it on your credit card.
Fiscal irresponsibility is measured by ill-advised spending. And unfortunately, we can’t just pull up a graph showing the timepath of ill-advised spending, because we’re bound to have legitimate differences of opinion about which spending is ill-advised.
Krugman finesses that problem by a) talking about something other than spending and b) pretending this is relevant to Boehner’s remarks, which unambiguously are about spending. Presumably he’s learned over the years that his readers are too dumb to notice the bait-and-switch."
You can find this and more at: http://www.thebigquestions.com/2013/02/ ... re-stupid/
Steven Landsburg's blog is more fun in the comments section than most blogs are in direct content. There is legitimate discussion going on there from the secular to religious, left, right, and libertarians, yet it's civil with real points being made.
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secretwealth
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jacob
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Going into the wilderness, is it useful to your survival to discuss whether the way the grass grows or the way the ground is muddy is fair; or whether the sun would look better if it was red or blue? I don't think so, because the grass, the ground, and the sun doesn't care what you think. They're just there. And they are a certain way and you can't change that.---Unless you're a developer with a bulldozer...but you're not.
So rather than wasting time arguing about what THEY OUGHT TO BE, complaining about the gnats, the cold, and the rain, figure out what THEY ARE and then figure out how to predict them in order to diminish whatever unpleasant effects they may have on you. In my opinion, this is a much better use of your energies.
TL;DR: Stop whining and bring a bug spray next time
So rather than wasting time arguing about what THEY OUGHT TO BE, complaining about the gnats, the cold, and the rain, figure out what THEY ARE and then figure out how to predict them in order to diminish whatever unpleasant effects they may have on you. In my opinion, this is a much better use of your energies.
TL;DR: Stop whining and bring a bug spray next time
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Riggerjack
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@ dragline: I dug into schumpeter's work, it's a difficult read, for a few reasons. Paragraphing would be nice, and most of what he's saying is critiques and references to other's works. While I agree with his methods, and his conclusions, I won't be likely to dedicate years of reading to understand the full body of knowledge he is then criticizing.
Pg 53 was just him calling Plato a commie/fascist, and I couldn't agree more. Further reading thru the bibliography, I couldn't find much support for the income inequality=revolt argument, either.
With all due respect and courtesy to Plato, is a Greco-Roman philosopher the best case for income inequality causing revolt? I'm not saying that people have changed much in 2500 years, but states and societies have. Plato's strength and weakness was logic. While he may have interesting things to say nowadays, he suffered from not enough information to extrapolate a relevant critique of today's society.
(I can't believe I just wrote that paragraph, as history is a primary tool of analysis for me. But think of what Plato had to work with: scrolls and oral histories of very limited volume, and zero empirical evidence. Logic can only take you so far from there.)
As for Dickens, a good read, but up there with "General Hospital" for an accurate assessment of the daily life of the times.
Thank you for the recommendation of the lessons of history, I'll get a copy of the audio ebook, Monday, and listen at work.
Does anyone else have any examples of income inequality = violence/revolt?
Pg 53 was just him calling Plato a commie/fascist, and I couldn't agree more. Further reading thru the bibliography, I couldn't find much support for the income inequality=revolt argument, either.
With all due respect and courtesy to Plato, is a Greco-Roman philosopher the best case for income inequality causing revolt? I'm not saying that people have changed much in 2500 years, but states and societies have. Plato's strength and weakness was logic. While he may have interesting things to say nowadays, he suffered from not enough information to extrapolate a relevant critique of today's society.
(I can't believe I just wrote that paragraph, as history is a primary tool of analysis for me. But think of what Plato had to work with: scrolls and oral histories of very limited volume, and zero empirical evidence. Logic can only take you so far from there.)
As for Dickens, a good read, but up there with "General Hospital" for an accurate assessment of the daily life of the times.
Thank you for the recommendation of the lessons of history, I'll get a copy of the audio ebook, Monday, and listen at work.
Does anyone else have any examples of income inequality = violence/revolt?
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Riggerjack
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Jacob, You are absolutely right in that nothing past Adam Smith is likely to be practical in achieving ER.
I guess this is a personal vanity thread. I know there are people out there who disagree with me, and I want to know why. Not to convince them, but rather to test my own knowledge.
I didn't go to college, but I have listened to many professor's courses thru the wonder of the internet. I know there are holes in my knowledge, but you don't know, what you don't know.
Additionally, with social subjects in particular, Professors usually present someone else's ideas. Plato as presented, is not Plato's views debated. I find the debate/argument/combatative conversation style most effective in trying out ideas and thinking about how they fit into my body of knowledge.
I find that forums are an excellent medium for that, as you have time to look up support and can post that directly. You can also refer directly back to what was said, and take time to lay out your views. This is a geeky version of getting drunk and arguing around a campfire.
I'm aware that not everyone is comfortable with this style of communication, but for the most part, they don't make a second comment in a thread of this sort. I believe that most people on this thread have similar motivation, and are similarly refining their own ideas; with the exception of Secret_Wealth who seems to enjoy the snarky snipe from the sidelines. More power to him, the internet is great for getting what we are looking for, and not everyone needs more challenges.
I guess this is a personal vanity thread. I know there are people out there who disagree with me, and I want to know why. Not to convince them, but rather to test my own knowledge.
I didn't go to college, but I have listened to many professor's courses thru the wonder of the internet. I know there are holes in my knowledge, but you don't know, what you don't know.
Additionally, with social subjects in particular, Professors usually present someone else's ideas. Plato as presented, is not Plato's views debated. I find the debate/argument/combatative conversation style most effective in trying out ideas and thinking about how they fit into my body of knowledge.
I find that forums are an excellent medium for that, as you have time to look up support and can post that directly. You can also refer directly back to what was said, and take time to lay out your views. This is a geeky version of getting drunk and arguing around a campfire.
I'm aware that not everyone is comfortable with this style of communication, but for the most part, they don't make a second comment in a thread of this sort. I believe that most people on this thread have similar motivation, and are similarly refining their own ideas; with the exception of Secret_Wealth who seems to enjoy the snarky snipe from the sidelines. More power to him, the internet is great for getting what we are looking for, and not everyone needs more challenges.
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jacob
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http://en.wikipedia.org/wiki/Blind_men_ ... phant#Jain
I used to enjoy these discussions too...or at least be drawn to them like a moth to fire, but I think adopting the king's explanation (link above) is more useful for the purpose of understanding the behavior of the economy than googling data in support of one's opinion and then restating it.
Economic behavior is the result of all these various opinions applying market and political pressures according to their beliefs. As a direct result they change the political and economic environment. This in turn changes opinions. And so on.
I think what's obfuscating most discussions is sampling too broadly (the entire economy, the average person, wage, ...) and theorizing too narrowly (personal attitude towards personal vs tribal responsibility, short vs far terms, ...).
That's economic fallacy #1.
(In investment parlance that's like buying based on a personal belief that the price will go up without considering whether a majority still believes the same.)
In short, you want to get to an understanding that explains WHY the other blind guys say it's like a rope, a pillar, or a fan respectively. Then rather than arguing for or against whether it's a rope, you take a step back and see that it might be something more complex, like a big animal.
I dunno ... maybe this arguing exercise is helpful... or entertaining. But I think it's just a first step to eventually step back and look at the bigger picture. E.g. first you spend a lot of time arguing with a lot of DIFFERENT people to realize where they "sit" (because that usually explains their "stand") ... however, this gets you nowhere near the truth. It's just zoology...collection opinions. Then you start to form a theory that explains all these people. How can they look at the same thing and yet see it differently? This is only possible if what they see if a limited part of a bigger concept. So you have a collection of limited parts and your job is to synthesize that into something bigger. Like how an MRI machine puts a bunch of 2D slices together to form a 3D picture.
I guess what I'm saying is that the main economic fallacy is an epistemological one. Of trying to find the best argument for whether the elephant is a rope or a tree respectively.
To put things in perspective, here's the economy's understanding of all this theorizing ... (from the link)
"Six blind elephants were discussing what men were like. After arguing they decided to find one and determine what it was like by direct experience. The first blind elephant felt the man and declared, 'Men are flat.' After the other blind elephants felt the man, they agreed."
I used to enjoy these discussions too...or at least be drawn to them like a moth to fire, but I think adopting the king's explanation (link above) is more useful for the purpose of understanding the behavior of the economy than googling data in support of one's opinion and then restating it.
Economic behavior is the result of all these various opinions applying market and political pressures according to their beliefs. As a direct result they change the political and economic environment. This in turn changes opinions. And so on.
I think what's obfuscating most discussions is sampling too broadly (the entire economy, the average person, wage, ...) and theorizing too narrowly (personal attitude towards personal vs tribal responsibility, short vs far terms, ...).
That's economic fallacy #1.
(In investment parlance that's like buying based on a personal belief that the price will go up without considering whether a majority still believes the same.)
In short, you want to get to an understanding that explains WHY the other blind guys say it's like a rope, a pillar, or a fan respectively. Then rather than arguing for or against whether it's a rope, you take a step back and see that it might be something more complex, like a big animal.
I dunno ... maybe this arguing exercise is helpful... or entertaining. But I think it's just a first step to eventually step back and look at the bigger picture. E.g. first you spend a lot of time arguing with a lot of DIFFERENT people to realize where they "sit" (because that usually explains their "stand") ... however, this gets you nowhere near the truth. It's just zoology...collection opinions. Then you start to form a theory that explains all these people. How can they look at the same thing and yet see it differently? This is only possible if what they see if a limited part of a bigger concept. So you have a collection of limited parts and your job is to synthesize that into something bigger. Like how an MRI machine puts a bunch of 2D slices together to form a 3D picture.
I guess what I'm saying is that the main economic fallacy is an epistemological one. Of trying to find the best argument for whether the elephant is a rope or a tree respectively.
To put things in perspective, here's the economy's understanding of all this theorizing ... (from the link)
"Six blind elephants were discussing what men were like. After arguing they decided to find one and determine what it was like by direct experience. The first blind elephant felt the man and declared, 'Men are flat.' After the other blind elephants felt the man, they agreed."
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secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
Jacob, I agree that the biggest problem with these kinds of discussions is epistemological--there are a lot of logical fallacies, moving goalposts, and moral assertions vs. non-normative descriptions--the kinds of things that, frankly, we're rigorously told to avoid in grad school (as much as I've grown disillusioned with academia, I do think doing a Ph.D. does wonders for the mind).
So I would say that I think the exact opposite of riggerjack: I think academia is probably a better place to discuss these issues, where there is less moral insistence and less tendency to change topics mid-stream. Internet forums are also a worrying trend, because they serve as echo chambers where the bandwagon fallacy encourages people to think that their opinion is more reliable because they've found others who agree with it.
I guess I kind of miss grad school. Time for another Ph.D.?
So I would say that I think the exact opposite of riggerjack: I think academia is probably a better place to discuss these issues, where there is less moral insistence and less tendency to change topics mid-stream. Internet forums are also a worrying trend, because they serve as echo chambers where the bandwagon fallacy encourages people to think that their opinion is more reliable because they've found others who agree with it.
I guess I kind of miss grad school. Time for another Ph.D.?