How Economics Found Science …and Lost its Subject Matter
And other great things I found on the internet this week
How Economics Found Science …and Lost its Subject Matter. (Me at INET)
One way economists describe their discipline to themselves has proven beguilingly seductive since it was codified by Lionel Robbins 90 years ago — that economics is the science of scarcity and that it is, therefore, paradigmatically about trade-offs. So ingrained is this approach that my questioning it may come as a shock. But that is my purpose here. As Mark Twain apparently didn’t say, “it’s not what you don’t know that gets you into trouble, but what you know for sure that just ain’t so.” Indeed, I show this approach has become a kind of counterfeit metaphysics — a means by which practice becomes increasingly thoughtless and alienated from economic reality whilst practitioners affect rigor and insightfulness.
Me at INET (The Institute for New Economic Thinking)
Podcast of the month
Totally loved this podcast, in so many ways.
Death by wellbeing — with Tyson Yunkaporta
One of my chats with Tyson Yunkaporta. He’s a funny guy and came up with the title.
The idea of targeting government policy on wellbeing is a great opportunity to do things differently and better. Alas the way we're doing it, wellbeing means little and its presence in policy is rather like the theme at a ball. The New Zealand government tells us that it's targetting wellbeing in its budget, but if you look closely it's doing nothing of the kind. It tells us that its wellbeing budget has five 'themes' or priorities, but where did they come from? Did research or any other serious endeavour determine that? Not a bit of it. It was government spin.
Some of the themes — for instance relating to childhood — seem likely to correlate with wellbeing, but the wellbeing impacts of the new policy is not measured so we’ll never know either whether this priority was well chosen or how to improve its efficacy. Other priorities — like “innovation” for chrissake — are a simple rebadging. They'd be in a non-wellbeing themed budget.
You can also download the audio from this link.
Something to reflect on as you go to vote …
Speaking of elections …
There’s much talk of how social media is destroying our democracy. I think mainstream media was doing a pretty good job of that long before social media. My go-to factoid to order on this point is that the average length of Presidential soundbites on network news in the US went from 48 seconds to 9 seconds from 1968 to 1988. But of course, things are being taken very much further online today. (The ABC wouldn’t be quite as bad as this, but it wouldn’t be far behind.) I didn’t read all of this long article, but enough to get the picture.
Nukes and Scottish Independence
If I were Scottish, I’d want to have some nukes around right now. In fact as the world goes multi-polar, I feel increasingly anxious relying on American nukes here. But that’s another topic.
Life among the sociopaths (brought to you by Fruitcake watch®)
Quite a story — and a blast from the past. From a time long ago when not only had George W. Bush not become President but Tucker Carlson was a journalist.
In pondering the relationship between governors and the prisoners over whom they have power of life and death, I find myself remembering the single worst thing I ever heard about President Bush. It was something Bush, then governor of Texas, said to a reporter during his first presidential campaign. The reporter in question was Tucker Carlson—hardly a hostile figure—and Carlson reported it in Talk magazine in 1999. It was about Karla Faye Tucker, a convicted murderer whose execution Bush, as governor, had refused to stay. Here is what Carlson wrote (as quoted in National Review, another source hardly known to be hostile toward Republicans):
In the week before [Karla Faye Tucker’s] execution, Bush says, Bianca Jagger and a number of other protesters came to Austin to demand clemency for Tucker. “Did you meet with any of them?” I ask. Bush whips around and stares at me. “No, I didn’t meet with any of them,” he snaps, as though I’ve just asked the dumbest, most offensive question ever posed. “I didn’t meet with Larry King either when he came down for it. I watched his interview with [Tucker], though. He asked her real difficult questions, like ‘What would you say to Governor Bush?’ ” “What was her answer?” I wonder. “Please,” Bush whimpers, his lips pursed in mock desperation, “don’t kill me.”
Environmental vapourware
Environmental issues are existential (or will be if we don’t blow ourselves up — of which more below). But we just love deploying our subconscious to work out how to react. Thus great efforts are given to kerbside recycling which makes little environmental sense. 90% of the plastic in the ocean comes from poor waste disposal in low-income countries. If we cared about it we’d do something — or at least target our actions on the problem. Instead, just as Fox News boss Chet Collier put it, “Viewers don’t want to be informed; they want to feel informed,” we target our actions on feeling like we’re doing something, and it’s much easier to do that with a bit of environmental theatre. Like banning single-use plastic bags in our own shops.
Likewise we desperately need to expand nuclear energy — the safest and cleanest form of energy at scale we have — but it’s yukky and scary, so let’s just pretend we’ll solve intermittency and all that stuff.
In any event something similar seems to be happening with hydrogen. Here’s a short article by former Victorian Regulator General and generally good guy Ron Ben-David:
There’s much talk these days about ‘clean green’ hydrogen and how it can replace natural gas. But something doesn’t add up. There seems to be no realistic pathway to the wide-spread uptake of hydrogen. …
While current gas appliances can function with a small blend of hydrogen, there is an upper limit. … This means the quantity of hydrogen in the gas network can rise from zero to, say, 10 per cent with little disruption.
If networks increase the hydrogen content, there will be widespread appliance failure. So that’s not going to happen.
And of course, millions of retail gas customers won’t instal hydrogen appliances until they have access to hydrogen.
Nuclear barbarians
As William Tucker wrote in the late seventies, “The correct word for the environmental vision is not clean or soft. It is genteel.” And the truth is we will see tomorrow, society will continue, and it's our duty to pass it down to posterity.
So, what if we focused on society first? What if we refused to play the moral blackmail game of “climate trauma” and “climate anxiety” but instead focused on ingenuity and civic virtue? What if the only way to save the environment is to focus on improving civic life? To do that we need to rethink energy, development, culture, and political possibility. We need to raise our thinking to meet the dignity of our task, not default to the level of our basest fears. Fear freezes; duty rallies.
I liked this passage a lot, though the whole post seemed to smack of the usual vices of political partisanship — ungenerosity to the other side and what I call ‘motivated impatience’. That involves the assumption that because you have a powerful critique of what’s wrong, you must know how to fix it. You know, the way we have an increasingly powerful understanding of cancer and, having done so can cure it.
Andrew Sullivan hyperventilates about wokedom, but makes a good point
The attacks on Hume, Jefferson and Kant, moreover, refer to single sentences or asides that represent some of the lazy bigotries of the past. … And so one wonders if the same standard would apply to every philosopher in the past — way beyond the Enlightenment.
Well, one doesn’t wonder very much … because the bad faith of so much critical theory is a feature and not a bug. The goal is not to see the truth, but to gain power in order to impose their truth. And to accuse you of hate if you dare to demur.
Few examples demonstrate this better than Karl Marx, one of the most repellent anti-Semites and racists of the 19th century.
The biography of Marx I read a while back left me with a higher opinion of Marx’s character than Sullivan, but his basic point is well made.
Tim Harford on the limitations of ‘Nudge’
Why don’t people have enough retirement savings? Because they are impatient and find it hard to save rather than spend. Why are so many greenhouse gases being emitted? Because it’s complex and tedious to switch to a green electricity tariff.
If your problem is basically that fallible individuals are making bad choices, behavioural science is an excellent solution. If, however, the real problem is not individual but systemic, then nudges are at best limited, and at worst, a harmful diversion. …
Behavioural scientists themselves are clear enough that nudging is no real substitute for a carbon price — Thaler and Sunstein say as much in Nudge. Politicians, by contrast, have preferred to bypass the carbon price and move straight to the pain-free nudging.
Nudge enthusiast David Cameron, in a speech given shortly before he became prime minister, declared that “the best way to get someone to cut their electricity bill” was to cleverly reformat the bill itself. This is politics as the art of avoiding difficult decisions. No behavioural scientist would suggest that it was close to sufficient. Yet they must be careful not to become enablers of the One Weird Trick approach to making policy.
This Noah Smith piece piqued my interest, but I’ve not got round to reading it yet
John Mawurndjul: stunning paintings
If you’re in Melbourne in the next week, check out John Mawurndjul’s paintings near the corner of Exhibition St and Flinders’ Lane. They’re magnificent. Closes May 12.
Ukraine
From a pro-Russian correspondent
My friend Ingolf Eide sent me two articles on the situation in the Ukraine war from Gilbert Doctorow. Ingolf advises that “he's pro-Russia but I've always found him to be pretty sober and realistic. I thought they might be of interest to you because they provide such a clear alternative take”. One documents how relatively well Russian consumers seem to holding up in the face of Western sanctions.
The other provides a more sanguine estimate of how the war is going (if you’re pro-Russian that is). I’ll let you click through for that. I don’t know how much, if at all he’s right, but it’s worth reminding ourselves how myopic our own sources of news and commentary can be in the West — as they were on WMDs in Iraq for instance.
The latest variation on Russia’s possibly escalating towards WWIII by using tactical nuclear weapons is a reaction to President Putin’s vague threat of a ‘lightning quick’ response to any sign of Western powers becoming co-belligerents by their deeds in support of Ukraine. Curiously, the threat was deemed to mean precisely tactical nuclear attacks, not the launch of the new Sarmat hypersonic and ABM-evading ICBMs, or the dispatch of the deep-sea drone Poseidon to wash away Washington, D.C. in a nuclear explosion caused tidal wave. In any case, the assortment of devastating new weapons systems at Russia’s disposal seems to be ignored by our policy experts. They have settled on just one, about which they speculate endlessly.
The virtual world bubble in which the U.S. foreign policy community exists and flourishes is a disaster waiting to happen. Who will heed the wake-up call of John Mearsheimer and the few policy experts who hold up the Realpolitik standard?
I plan to listen to this — but haven’t yet
Speaking of a nuclear holocaust?
Branko Milanovic on Russia rebuilding its industrial capacity in autarky
From the economic point of view this forced experiment will be interesting to observe since, as I mentioned, nothing similar in modern history has ever happened, but I do not think that it will be very much fun for the participants.
Meanwhile …
