Live from the Gamma Quadrant: The Big Idea – Whatever: "You’ve got books on the physics of Star Trek...:
Live from the Gamma Quadrant: Manu Saadia: The Big Idea – Whatever: "You’ve got books on the physics of Star Trek...
'Live long and prosper.'
'The needs of the many outweigh the needs of the few, or the one.'
'Make it so.'
‘Logic is the beginning of wisdom, not the end.’
'I'm a doctor, not a bricklayer.'
'You can stop it!' 'Stop it? I'm counting on it!'
Over the past century Star Trek has woven itself into our socio-cultural DNA. It provides a set of cultural reference points to powerful ideas, striking ideas, beneficial ideas that help us here in our civilization think better--even those of us who are economists.
Over at Project Syndicate: The Poverty of Right-Wing Piketty Criticism: In The Baffler, Kathleen Geier recently attempted a roundup of conservative criticism of Thomas Piketty’s new book Capital in the Twenty-First Century. The astonishing thing to me is how weak the right’s appraisal of Piketty’s arguments has turned out to be.
J. Bradford DeLong on May 31, 2016 at 05:47 AM in Economics: History, Economics: Inequality, History, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (1)
So there I was, sitting here trying to think about how I am going to teach "wealth maldistribution as a market failure"--that is, how when the distribution of wealth does not accord with utility and desert, the market economy's price-rationing of goods and services--and its assignment of jobs--can and does go really badly awry. This is a bad thing. But it is not quite right to call it a market failure: it is, the market thinks, a market success...
As the very sharp Jacob Levy wrote back in 2008:
There's no modern work to teach alongside Theory of Justice and Anarchy, State, and Utopia that really gets at what's interesting about Burkean or social conservatism.... Any book plucked from the past that was concerned with yelling "stop!" tends to date badly to any modern reader who does not think he's already living in hell-in-a-handbasket... talks about how everything will go to hell if the [Jim Crow] South isn't allowed to remain the South.... Oakeshott['s]... "Rationalism in Politics" end[s] up feeling faintly ridiculous by the time he's talking about women's suffrage.... I might say Schumpeter, Capitalism, Socialism, and Democracy, and Kristol, Two Cheers for Capitalism, but the former isn't really distinctively conservative enough and I'm not sure the latter is a classic.
In my view, you go with Polanyi's The Great Transformation--which gets the rational kernel inside the mystical conservative shell--or you go home.
And this is apropos today because Nick Kristof is writing more bilgewater for the New York Times:
J. Bradford DeLong on May 29, 2016 at 06:39 AM in Economics: History, History, Long Form, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (7)
Live from High Above the Former Iron Curtain: The very sharp Dani Rodrik:
Dani Rodrik: The Politics of Anger: "Perhaps the only surprising thing about the populist backlash that has overwhelmed the politics of many advanced democracies...
...is that it has taken so long.... Politicians’ unwillingness to offer remedies for the insecurities and inequalities of our hyper-globalized age... create[s] political space for demagogues with easy solutions... Ross Perot... Patrick Buchanan... Donald Trump, Marine Le Pen, and sundry others.... [In] the first era of globalization... mainstream political actors had to downplay social reform and national identity because they gave priority to international economic ties. The response... [was] fatal.... Socialists and communists chose social reform, while fascists chose national assertion. Both paths led away from globalization to economic closure (and far worse). Today’s backlash most likely will not go quite so far....
Still, the conflicts between a hyper-globalized economy and social cohesion are real, and mainstream political elites ignore them at their peril.... The internationalization of markets for goods, services, and capital drives a wedge between the cosmopolitan, professional, skilled groups that are able to take advantage of it and the rest of society... an identity cleavage, revolving around nationhood, ethnicity, or religion, and an income cleavage, revolving around social class. Populists derive their appeal from one or the other.... You can barely make ends meet? It is the Chinese who have been stealing your jobs. Upset by crime? It is the Mexicans.... Terrorism? Why, Muslims.... Political corruption? What do you expect... [from] big banks?... Establishment politicians are compromised... by their central narrative... [of] helplessness... [which] puts the blame... on technological forces... and globalization... as inexorable.... Mainstream politicians... [must] offer serious solutions.... The New Deal, the welfare state, and controlled globalization (under the Bretton Woods regime)... gave market-oriented societies a new lease on life... not tinkering and minor modification of existing policies that produced these achievements, but radical institutional engineering...
I find it alarming that here we are, more than one a half decades into the twenty-first century, and the wisdom and true knowledge that is state-of-the-art as far as political economy is concerned is still to be found in the writings of John Maynard Keynes and Karl Polanyi...
J. Bradford DeLong on May 28, 2016 at 02:29 PM in Economics: Growth, Economics: History, Economics: Inequality, Economics: Macro, History, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: Across the Wide Missouri, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (9)
Live from the Log Cabin: Via [Sidney Blumenthal], Honest Abe had some choice words for today's Republicans who claim that "religious liberty" means "the right of bosses to make their customers and their employees follow their religion":
Sidney Blumenthal: "Throughout the war, Copperheads, the Northern Peace Democrats, and Confederates...
Prakash Loungani: Rebel with a Cause:
The triumph of markets over the state appeared almost complete in the early 1990s. The collapse of the Soviet Union and the fall of the Berlin Wall had discredited the role of the state in commanding the economic and political life of citizens. The political scientist Frank Fukuyama proclaimed in 1992 that the spread of democracy and capitalism around the globe would henceforth make history somewhat ‘boring.’ Among economists, markets—already held in fairly high regard—gained further esteem. Prominent left-leaning economists like Larry Summers admitted to a ‘grudging admiration’ for such champions of the global spread of free markets as Milton Friedman.
The extremely-sharp Branko Milanovic asks a very good question that I had never considered before:
Branko Minanovic: Economic Reflections on the Fall of Constantinople: This Sunday, May 29 marks the anniversary of the Fall of Constantinople in 1453...
...Thinking of... what is called (somewhat inaccurately) the Eastern Roman Empire, led me to two, I hope interesting, observations. First, why did the Industrial Revolution not happen in the Eastern Roman Empire?... There are many answers... from... ‘barbarians at the gate’... inability to incorporate lower classes... ‘dead hand’ of a rising military bureaucracy... slavery: cheap labor that provided no incentive for the use of labor-saving machines... [to] those who... thought, like Moses Finley and Karl Polanyi, that Roman institutions did not contain at all the seeds that could have led to capitalist development.... Constantinople become the capital in 330 AD... and that lasted for another 800 to 900 years with no interruption. (That is, if we want to date the end of the Roman Empire in 1204 when Byzantium was conquered by the Crusaders). Wasn’t there enough time to find out if ancient institutions could become capitalistic? Eight or nine centuries seems plenty.
Live from Over the Canadian Rockies: Janelle Bouie puts his trust in the wisdom of the American people...
Janelle Bouie: Donald Trump’s cable news-baiting strategy is backfiring: "If the media didn’t make Trump popular—if it’s actually done the reverse—then how did he win the Republican primary?...
Hoisted from 2006: Main Currents of Marxism: Back in the early 1970s, Leszek Kolakowski tells English historian E.P. Thompson what he thinks of him:
Socialist Register (1974): Your letter contains some personal grievances and some arguments on general questions. I will start with a minor personal grievance. Oddly enough, you seem to feel offended by not having been invited to the Reading conference and you state that if you had been invited you would have refused to attend anyway, on serious moral grounds. I presume, consequently, that if you had been invited, you would have felt offended as well and so, no way out of hurting you was open to the organizers.
Now, the moral ground you cite is the fact that in the organizing Committee you found the name of Robert Cecil. And what is sinister about Robert Cecil is that he once worked in the British diplomatic service. And so, your integrity does not allow you to sit at the same table with someone who used to work in British diplomacy.
O, Blessed Innocence!
A month ago I wrote:
"You are not doing enough in the way of promiscuous link-sluttage", my conscience says to me, occasionally. "You are not doing enough in the way of making people who come to your weblog aware of very smart people whom they ought to be paying attention to--but are not. You have an obligation not only to punch up, but to extend a hand down--to promote people who, by accidents of chance and historical contingency, are just as smart (or more) and are as (or more) worth reading as you are."
"So what can I do?" I say.
Comment of the Day: Lee Arnold: Why is it that Tocqueville, Keynes, and Polanyi are still "it" as far as policy-relevant useful social theory is concerned?: "I sometimes think about your question...
...and I think that the answer is because we still remain in their era, but we don't know it.
Live from the Great Transformation: Why is it that Tocqueville, Keynes, and Polanyi are still "it" as far as policy-relevant useful social theory is concerned? They all wrote long, long ago now...
Must-Read: Jeremiah Dittmar and Ralf R Meisenzahl: The Protestant Reformation, Economic Institutions, and Development: "Origins of growth: How state institutions forged during the Protestant Reformation drove development...
Alexis de Tocqueville: Democracy in America: Book II Chapter 20:
I have shown how democracy favors the growth of manufactures and increases without limit the numbers of the manufacturing classes; we shall now see by what side-road manufacturers may possibly, in their turn, bring men back to aristocracy. It is acknowledged that when a workman is engaged every day upon the same details, the whole commodity is produced with greater ease, speed, and economy.
Today's Economic History: John Maynard Keynes (1919): To Jan Smuts: "Ruthless Truth-Telling": "My book [The Economic Consequences of the Peace] is completed and will be issued in a fortnight's time...
I have never understood the people who say that we should not count the disutility generated by the fact that the poor envy the rich in the social welfare function when solving our societal optimization problem.
And I have also never understood the ferocity of their adverse reaction to the reply: "Well, if we are not going to count the disutility generated by envy, we should also not count the utility generated by spite."
From a decade ago...
Daniel Davies: No Riff-Raff: "Entering into the Brad DeLong Eat The Rich Controversy...
Paul Krugman (1996): The Spiral of Inequality: "If calling America a middle-class nation means anything...
it means that we are a society in which most people live more or less the same kind of life. In 1970 we were that kind of society. Today we are not, and we become less like one with each passing year.
Ever since the election of Ronald Reagan, right-wing radicals have insisted that they started a revolution in America. They are half right. If by a revolution we mean a change in politics, economics, and society that is so large as to transform the character of the nation, then there is indeed a revolution in progress. The radical right did not make this revolution, although it has done its best to help it along. If anything, we might say that the revolution created the new right. But whatever the cause, it has become urgent that we appreciate the depth and significance of this new American revolution—and try to stop it before it becomes irreversible.
Hoisted from 2010: James Scott, "Legibility," Flavius Apion, Anoup, the Emperor Justinian, Robin of Locksley, Rebecca Daughter of Mordecai, King Richard, and Others..: Cato Unbound: James Scott: The Trouble with the View from Above.: A comment:
In 542 AD the late Roman (early Byzantine?) Emperor Justinian I wrote to his Praetorian Prefect concerning the army--trained and equipped and paid for by the Roman State to control the barbarians and to 'increase the state.' Justinian was, Peter Sarris reports in his Economy and Society in the Age of Justinian, upset that:
certain individuals had been daring to draw away soldiers and foederati from their duties, occupying such troops entirely with their own private business.... The emperor... prohibit[ed] such individuals from drawing to themselves or diverting troops... having them in their household... on their property or estates.... [A]ny individual who, after thirty days, continues to employ soldiers to meet his private needs and does not return them to their units will face conﬁscation of property... 'and those soldiers and ﬁoderati who remain in paramonar attendance upon them... will not only be deprived of their rank, but also undergo punishments up to and including capital punishment.
J. Bradford DeLong on May 15, 2016 at 03:17 PM in Economics: Growth, Economics: History, Economics: Inequality, History, Philosophy: Moral, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (1)
Andrew McAfee: What will future jobs look like?: "The writer George Eliot cautioned us that, among all forms of mistake...
...prophesy is the most gratuitous. The person that we would all acknowledge as her 20th-century counterpart, Yogi Berra, agreed. He said, 'It's tough to make predictions, especially about the future.'
I'm going to ignore their cautions and make one very specific forecast. In the world that we are creating very quickly, we're going to see more and more things that look like science fiction, and fewer and fewer things that look like jobs. Our cars are very quickly going to start driving themselves, which means we're going to need fewer truck drivers. We're going to hook Siri up to Watson and use that to automate a lot of the work that's currently done by customer service reps and troubleshooters and diagnosers, and we're already taking R2D2, painting him orange, and putting him to work carrying shelves around warehouses, which means we need a lot fewer people to be walking up and down those aisles.
Comment of the Day Robert Waldmann: DeLong on Hayek, Smith, and Smith: "I will be contrarian...
...(1) On The Road to Serfdom. Science progresses as people develop testable hypotheses, test them and reject them. Like _Leviathan, The Road to Serfdom presented a plausible (if pessimistic) hypothesis which turned out not to correspond to reality.
J. Bradford DeLong on May 12, 2016 at 08:02 AM in Economics: Growth, Economics: History, History, Philosophy: Moral, Political Economy, Politics, Streams: (Monday) Smackdown Watch, Streams: Comment of the Day, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (4)
Updated from: Live from Over the Rocky Mountains: I see that the War on Nate Silver has broken out again, with another article less appetizing than bilgewater in The New York Times, written by Jim Rutenberg:
Still more recently--as in Tuesday--the data journalist Nate Silver... gave Hillary Clinton a 90 percent chance of beating Bernie Sanders in Indiana. Mr. Sanders won by a comfortable margin of about five percentage points.... The lesson [from Eric Cantor's defeat] in Virginia, as the Washington Post reporter Paul Farhi wrote at the time, was that nothing exceeds the value of shoe-leather reporting, given that politics is an essentially human endeavor and therefore can defy prediction and reason...
Nate has his comment: Nate Silver Being Smart and Bringing the Snark: "Do You Know What 'Polling' Is? It's Talking to Voters in a Structured Way to Reduce Bias"
And Justin Wolfers says:
The utility of any object... pleases the master by perpetually suggesting to him the pleasure or conveniency which it is fitted to promote.... The spectator enters by sympathy into the sentiments of the master, and necessarily views the object under the same agreeable aspect. When we visit the palaces of the great, we cannot help conceiving the satisfaction we should enjoy if we ourselves were the masters, and were possessed of so much artful and ingeniously contrived accommodation....
Cardiff Garcia: Welcome to AlphaChat, the business and economics podcast of the Financial Times. I'm Cardiff Garcia....
First up on the show is Brad DeLong, an economist and economic historian at the University of California at Berkeley. He is also the coauthor of the New Book: Concrete Economics: The Hamilton Approach to Economic Growth and Policy. We are going to be discussing this book in a forthcoming episode of Alphachat-Terbox, our long-form sister podcast segment. But for this I have asked Brad to choose three under appreciated moments in economic history, and to give us the lessons we should learn from those events. I do not know what Brad's chosen. I will be learning along with you.
Brad: Thanks for common on AlphaChat.
Brad DeLong: Thank you very much.
J. Bradford DeLong on May 10, 2016 at 08:49 AM in Economics: Finance, Economics: Growth, Economics: History, Economics: Macro, History, Long Form, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (2)
DeLong Garcia Alphachatterbox Transcript: Brad DeLong on Hamiltonian economics
[Cardiff Garcia] Hey everyone, welcome to Alphachatterbox, the long form business economics and tech podcast of the Financial Times.
I'm Cardiff Garcia, and our guest today is Brad DeLong, an economist and economic historian at the University of California Berkeley. He also writes a popular blog, and he’s the co-author, along with Steven Cohen, of a new book called Concrete Economics: The Hamilton Approach to Economic Growth and Policy, and that is the topic of this edition of Alphachatterbox. Brad DeLong, welcome back.
[Brad DeLong] Yes, yes. Thank you very much. Very glad to be "here", wherever "here" is, in some metaphysical kind of sense.
J. Bradford DeLong on May 10, 2016 at 05:28 AM in Economics: Growth, Economics: History, Economics: Inequality, History, Long Form, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (3)
Comment of the Day: David Cloutier: The Economist as...?: The Public Square and Economists: "This is a wonderful piece...
Live from the RSF Fieldhouse: Looks like this question on the final was a little too much of a curveball:
Across the bay and 60 miles south from Avicenna to the town of Tall Stick, home of Crony Capitalism University with 10,001 students. The 10,001 students at CCU do two things with their money over the school year:
The CCU administration imposes a Pigovian tax on BMW rentals by its students, in order to make their well-being as great as possible. It spends the revenue collected from the tax distributing free gourmet pizzas (at a cost of $40/pizza) to the CCU students in their dorms.
Let me pick up on some threads we’ve already heard this afternoon.
Let me provide a complementary, but I think supportive, perspective on what was going on with Morgenthau versus Marshall in Washington DC in the three or four years after World War II. Possibly my story will have some lessons for the present and the future. But possibly it will not.
Perhaps the most fruitful way to look at the debate between Morgenthau and Marshall that was carried on--largely below the surface, largely without explicit confrontation--at the end of WWII is that it was an attempt to figure out how to resolve call it two historical problems: the problem of European military culture, and the problem of modern industrial war.
J. Bradford DeLong on May 09, 2016 at 04:36 PM in Economics: Growth, Economics: History, Economics: Macro, History, Long Form, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (1)
Over at Equitable Growth: Noah Smith asks a question:
Which of Hayek's ideas are now widely accepted? I can't think of any. https://t.co/byp4vG7QLk— Noah Smith (@Noahpinion) May 9, 2016
I agree with Milton Friedman:
Milton Friedman: "Friedrich von Hayek was a great economist..."
Hayek's great contribution is this: Competitive markets without externalities populated by well-informed self-regarding rational individuals generate highly productive outcomes because the market has powerful emergent properties that make it an extremely powerful and incentive-compatible societal mechanism for eliciting the revelation, aggregation, and transmission of information about resources, capabilities, needs and desires. Read MOAR
My paper for the Notre Dame conference on "public intellectualism" is finally making its way through the publication process...
Sit down some evening and watch the news on the TV, or scan the magazine covers in the supermarket, or simply immerse yourself in modern America...
A. Elements of Public-Square Gossip
If you are like me, you will be struck by the extent to which our collective public conversation focuses on seven topic areas:
Now out of these seven topic areas, the first six are found not just in our but in other societies as far back as we have records. They are common in human history as far back as we have been writing things down, or singing long story-songs to one another around the campfire.
What, after all, is the story of Akhilleus, Hektor, and Agamemnon in Homer’s Iliad but a combination of (1), (4), and (6)?3
J. Bradford DeLong on May 08, 2016 at 10:48 AM in Economics: History, History, Information: Better Press Corps/Journamalism, Information: Internet, Long Form, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Tuesday) Hoisted from Archives, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted, Weblogs | Permalink | Comments (8)
In the early 1990s, that the rapid growth of the Japanese economy would continue...
In the early 1990s, that the rapid privatization of Russian industry was more likely than not to set up a favorable political dynamic that would lead to very rapid economic and political recovery in Russia...
In the early 1990s, that centrist bipartisan coalitions were possible...
In the early 1990s, that NAFTA's encouragement of FDI in Mexico would outweigh portfolio diversification and cause the peso to strengthen...
In the mid-1990s, that the U.S. unemployment rate would not be able to drop below six percent without generating rising inflation...
At the end of the 1990s, that Clinton-era deficit elimination efforts would endure...
In the mid-2000s, that central banks had the tools, the skill, and the political will to stabilize economies at high levels of employment and low levels of inflation, and thus that fiscal policy and financial institutions policy no longer had any compelling stabilization policy role to play...
In the mid-2000s, that large, leveraged financial institutions had sufficient caution and sufficient control over their derivatives books that their derivative positions did not pose major systemic risk...
In the mid-2000s, that one significant threat to the world economy would come from the fact that in a crisis the shaky long-term finances of the U.S. social insurance state might provoke a collapse of confidence in the long-term value of the dollar...
In the mid-2000s, that there were significant equilibrium-restoring forces in the labor market...
In the late-2000s, that academic macroeconomics was not in that bad shape...
At the end of the 2000s, that there were expectational limits to old-line expansionary Keynesian policies that would manifest themselves relatively soon...
I think that is all the big ones...
J. Bradford DeLong on May 08, 2016 at 04:38 AM in Economics: Finance, Economics: Growth, Economics: History, Economics: Macro, Obama Administration, Philosophy: Moral, Political Economy, Politics, Streams: (Monday) Smackdown Watch, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (20)
James Ledbetter: Reviewing Eric Rauchway's Money Makers for Democracy Journal:
Eric Rauchway: The Money Makers: How Roosevelt and Keynes Ended the Depression, Defeated Fascism, and Secured a Prosperous Peace • Basic Books • 2015 • 336 pages • $28.99
In August 1933, as the effects of the New Deal’s better-known programs were beginning to ripple through the United States’s ravaged economy, Franklin D. Roosevelt and his economic advisers were trying to tackle a problem that was significant and yet, to the vast majority of Americans, obscure: what to do about the relationship between the dollar and gold. Even before his inauguration earlier that year, FDR had decided that there was an urgent need to raise the depressed prices of America’s crops, notably wheat and cotton; if he failed to accomplish that simple goal, it seemed entirely possible that an agrarian rebellion could erupt and destroy the country’s entire economic constitution.
Janelle Bouie: How Donald Trump happened: Racism against Barack Obama: "we’ve been missing the most important catalyst in Trump’s rise... Barack Obama...
I must say, this is absolutely fascinating:
"It wasn’t a primary. It was hell among the yearlings and the Charge of the Light Brigade and Saturday night in the back room of Casey’s Saloon rolled into one, and when the smoke cleared away not a picture still hung on the walls... just Willie, with his hair in his eyes and his shirt sticking to his stomach with sweat. And he had a meat ax in his hand and was screaming for blood. In the background of the picture, under a purplish tumbled sky flecked with sinister white like driven foam, flanking Willie, one on each side, were two figures, Sadie Burke and a tallish, stooped, slow-spoken man with a sad, tanned face and what they call the eyes of a dreamer. The man was Hugh Miller, Harvard Law School, Lafayette Escadrille, Croix de Guerre, clean hands, pure heart, and no political past. He was a fellow who had sat still for years, and then somebody (Willie Stark) handed him a baseball bat and he felt his fingers close on the tape. He was a man and was Attorney General. And Sadie Burke was just Sadie Burke..." -- Robert Penn Warren (1946): All the King's Men (New York: Houghton Mifflin Harcourt: 0156012952), pp. 96-97.
Comment of the Day: Robert Waldmann: A Comment on Henry Farrell commenting on Brad DeLong Commenting on Henry Farrell Commenting on Doug Henwood: "I didn't get the impression Brad claimed you are a Marxist...
J. Bradford DeLong on May 01, 2016 at 12:10 PM in History, Moral Responsibility, Obama Administration, Philosophy: Moral, Political Economy, Politics, Streams: (Monday) Smackdown Watch, Streams: Comment of the Day, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (1)
Must-Read: Adam Smith's "Invisible Hand" argument. It's not "markets are good". It is, instead, two moves:
Complicated processes involving the interactions of large numbers of humans have emergent properties and produce outcomes that often are not and cannot be understand as intended by any one of the humans whose actions led to the outcome.
Sometimes (often?) the emergent properties are those that we want to nurture and develop: as Bernard Mandeville first noted, one of the tasks of the clever statesman is to structure things so that the satisfaction of private vices does in fact yield public benefits.
Note that in this particular example, it is the (a) psychological home bias of merchants combined with (b) increasing returns in the agglomeration of economic activity that leads to the good outcome--and it is a good outcome for Amsterdam, not for Lisbon or Königsberg...
Adam Smith (1776): Wealth of Nations, Book IV, Chapter 2: "The capital which an Amsterdam merchant employs in carrying corn from Konigsberg to Lisbon...
Matt Bruenig: What Is Wealth?: "In 'Capital,' Piketty tracks as far back as he can the history of wealth inequality...
...which is also described as the history of inequality in the ownership of capital. In order to embark upon such a project, one must provide a definition of wealth and capital, which turns out to be a contentious undertaking.
Over at Equitable Growth: It is now six years since Olivier Blanchard called for "outlining the contours of a new macroeconomic policy framework". Yet what is that framework? Where is it? Who outlines it? And what processes will give it political traction?
Looking back to 2010:
Olivier Blanchard et al. (2010): Rethinking Macro Policy: "The global crisis forced economic policymakers...
...to react in ways not anticipated by the pre-crisis consensus.... Here the IMF’s chief economist and colleagues (i) review the main elements of the pre-crisis consensus, (ii) identify the elements which turned out to be wrong, and (iii) take a tentative first pass at outlining the contours of a new macroeconomic policy framework...
You can argue that the elements of such a framework are there. But they are disassembled, lying on the ground, disconnected. And as far as political traction, they are next to nowhere. Read MOAR at Equitable Growth
Debunking America’s Populist Narrative: BERKELEY – Listen to the dog-whistles—or, rather, dog-screams—of American politics this just-begun election season and this is what you hear: of Chinese and Mexicans together with Wall Street and lousy trade deals who outsourced factories and robbed you of your rightful good job, of Mexicans who come here willing to work for less and force you to listen to words in a Spanish you cannot understand, and of Muslims of whom you live in fear that their bombs will blow you to bits. These dog-scream undercurrents are scary, and scarier than usual. They are scary for foreigners who, by virtue of living in this world, find themselves not just in the room but in bed with the psychologically-unstable hyperpower elephant that is the United States. They are scary for Americans who thought or hoped or perhaps only wished that they lived in the Republic of George Washington, Abraham Lincoln, and Teddy and Franklin Roosevelt. READ MOAR
Live from the Mid-Twentieth Century: George Orwell: Wikiquote: "If one harbours anywhere in one's mind a nationalistic loyalty or hatred...
Live from La Farine: Duncan Black is anxious:
Duncan Black**: Hard to Kick the Habit: "Hope to be wrong, but suspect that team Clinton (very broadly defined)...
...will still be talking about BernieBros in September. I'm quite happy for Hillary Clinton to be the nominee, as I always thought she would be. I'm not happy with the months of 'we would have won it easy if not for these meddling kids who won't vote in November' rhetoric. Better figure out how to appeal to them. Stop calling them immature and stupid. The goal is to win, not to make early excuses for why you're going to lose.
Nah. After yesterday the word--and the obvious thing--is to stand down.
Mind you: The day will come when it will be time to gleefully and comprehensively trash people to be named later for Guevarista fantasies about what their policies are likely to do. The day will come when it will be time to gleefully and comprehensively trash people to be named later for advocating Comintern-scale lying to voters about what our policies are like to do. And it will be important to do so then--because overpromising leads to bad policy decisions, and overpromising is bad long-run politics as well.
But that day is not now. That day will be mid-November.
J. Bradford DeLong on April 27, 2016 at 10:06 AM in Economics: Growth, Economics: Inequality, Economics: Macro, Moral Responsibility, Obama Administration, Philosophy: Moral, Political Economy, Politics, Streams: (Monday) Smackdown Watch, Streams: Across the Wide Missouri, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (29)
Over at Equitable Growth: First, everybody needs to start here: Christina and David Romer: Senator Sanders's Proposed Policies and Economic Growth.
Paul Krugman weighs in, with another point for model-building as an intuition pump rather than as a filing system--if the model doesn't produce the results you want and think belong in your filing system, you should worry rather than simply throwing it out and getting another model. Plus a bunch of other issues--empirical, methodological, political, and--alas!--moral. Read MOAR
Comment of the Day: PGL: Links for the Week of April 24, 2016: "'In economics, stimulus spending ran aground on Robert Barro’s Ricardian equivalence theorem'...
...This is from Cochrane attack on Krugman (how he got it so wrong). Of course we know Cochrane is the one gets this theorem incredibly wrong as did Robert Lucas in his 2009 attack on Christina Romer.
Newt Gingrich started the practice of large-scale lying to the base as a thing: give to us and vote for us and once we have majorities we will save America and your life will be great! The long-term consequence is that the base regards the Republican political establishment and its infrastructure as con men and grifters out for a buck. That is, largely, accurate. What the base doesn't (yet) realize is that the "insurgents"--from Herman Cain and Ben Carson to Donald Trump and Rand Paul--are con men and grifters as well:
Mark Schmitt: The Dangerous Politics of Hard Promises: "Broken promises: That's a theme at the center of the campaign rhetoric of the two leading Republican candidates for president...
...Donald Trump and Ted Cruz, and a plausible explanation for the failure of the establishment candidates. At the center of Cruz's stump speech is a series of absolute promises, culminating in a pledge to 'utterly demolish ISIS'--and he has four different Super PACs that bear the name 'Keep the Promise' (the original, and I, II, and III, named like financing rounds in a hedge fund). Congressional Republicans promised in 2014 that they would repeal and replace the Affordable Care Act; defund Planned Parenthood; abolish the IRS; and humiliate, if not convict, Hillary Clinton over the Benghazi tragedy — all pledges they were unable to come even close to meeting. The conservative blogger Erick Erickson put it most succinctly: 'The Republican Party created Donald Trump, because they made a lot of promises to their base and never kept them.' In Trump's account, the Republicans failed out of incompetence, and he'll do better. Cruz's story is that they failed because they lacked his ideological spine.
Over at Equitable Growth: Typically smart thoughts by Paul Krugman on carbon pricing:
Paul Krugman: 101 Boosteris: "I see that @drvox is writing a big piece on carbon pricing...
...I don’t want to step on his forthcoming message, but what he’s said so far helped crystallize something I’ve meant to write about... ‘101 boosterism’... a takeoff on Noah Smith’s clever writing about ‘101ism’, in which economics writers present Econ 101 stuff about supply, demand, and how great markets are as gospel, ignoring the many ways in which economists have learned to qualify those conclusions in the face of market imperfections. His point is that while Econ 101 can be a very useful guide, it is sometimes (often) misleading.... My point is... even when Econ 101 is right, that doesn’t always mean that it’s... the most important thing.... Economists... delight in talking about issues where 101 refutes naïve intuition, but that doesn’t... mean... these are the crucial policy issues.... Read MOAR
J. Bradford DeLong on April 24, 2016 at 10:44 AM in Economics: Growth, Economics: Inequality, Philosophy: Moral, Political Economy, Politics, Science: Climate, Streams: (Monday) Smackdown Watch, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (6)
Live from the Gehenna That Was Europe in the First Half of the Twentieth Century: If you haven't read Adam Tooze, you very much need to do so...
Mossy Character: Adam Tooze Reading Group: "This came up in comments...
...who's interested in a reading group for Adam Tooze? Tooze has written two popular books, The Wages of Destruction, about the Nazi war economy, and The Deluge, about America's role in the world political economy 1916-31. Both are long, dense, and revelatory.
Google Ngram Viewer: https://books.google.com/ngrams/
The phrase: "political economy":
The Avengers: There are always men like you:
Loki: Kneel before me! I said: KNEEL!! Is not this simpler? Is this not your natural state? It’s the unspoken truth of humanity that you crave subjugation. The bright lure of freedom diminishes your life’s joy in a mad scramble for power. For identity. You were made to be ruled. In the end, you will always kneel.
Old German: Not to men like you.
Loki: There are no men like me.
Old German: There are always men like you.