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TYR on choice and action

by Metatone Sun Sep 23rd, 2012 at 06:21:53 PM EST

I've written about Learned Helplessness in our current political ideologies, but The Yorkshire Ranter has blogged a far more cogent description:

Economic reality is yesterday's political choice » The Yorkshire Ranter

Economics is an agenda-setting system. Here's a working example - Noah Smith engaging Robert Gordon (who is in his turn drinking from the poisoned well of Tyler Cowan). Gordon's big idea is that y'know how things aren't so great? Well, they're always going to be awful, so there's nothing can be done about it! And therefore, we don't need to discuss any action and shut up.

He argues this for the following reasons. One, he thinks technological progress is slowing down. Two, he thinks the US labour force won't grow as fast as it did. Three, educational attainment has "plateaued", based on the OECD PISA comparison. Four, high income inequality means structurally weak demand from the "consumer" (aka labour) sector. Five, globalisation. Six, the environment. Seven, "debt" of whatever sort.

Well, the first of these is an arguable proposition. Personally, I can think of plenty of people who are convinced that technical progress is accelerating, others who think it is slowing down, and still others who think (like David Harvey) that it is illusory or even undesirable. I would argue that both the declinist and Kurzweil-ist views are wrong for the same reason: they are both exercises in cherry-picking the data. Singularitarians love computing and sometimes genetics, because both fields give you an instant optimism hit. Declinists prefer to pick problems that remain unsolved and projects that failed, because that's what their prior assumptions are set to. Both views are dependent on prior value judgments.

But I have a more subtle and useful critique. Economists tend to think technology is exogenous. Historians of technology couldn't disagree more. In their view, technical progress happens through learning-by-doing. This has an important corollary - you learn nothing by being unemployed except that it sucks, and a set of survival strategies that aren't much use except in the context of being on the dole. Technology is, in part, endogenous, and therefore it is influenced by macroeconomic policy.


Go read it all, it's essential reading.

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"It's not our fault that everything's going to hell. It's economics! Science! Well, almost science."
by Colman (colman at eurotrib.com) on Mon Sep 24th, 2012 at 05:56:35 AM EST


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Sep 24th, 2012 at 06:01:41 AM EST
[ Parent ]
That is an exaggeration.

Well, the "dismal" is fine. It's "science" that's a prevarication.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 24th, 2012 at 06:04:05 AM EST
[ Parent ]
Economics is not a science. These assholes wouldn't know a science if it bit them on the ass.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Mon Sep 24th, 2012 at 07:58:05 AM EST
[ Parent ]
Don't you know? Economics is a branch of moral philosophy. One with a very selective sense of morality.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 24th, 2012 at 10:54:02 AM EST
[ Parent ]

But the interesting point here is how a succession of political choices, which were all originally sold as being economic requirements, are now recycled as being structural economic forces in themselves. As such, it turns out, they explain the problems of the day entirely, and get rid of the need for further political choices. A structural force is very often nothing else than an unrespectable political choice.

TINA

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Sep 24th, 2012 at 07:48:10 AM EST
I don't think it really takes away from his point, but economists, in fact, rarely think of technology as exogenous. In fact, most of the arguments in economics today about the pros and, mostly, cons, of austerity, coming from all sides of the debate, deal with how much or how little we think productivity will suffer due to high unemployment and whether it is worth the trade off. So that was a  bit of a straw man he is throwing out there for you to chew on in this piece.
by santiago on Tue Sep 25th, 2012 at 11:58:07 AM EST
The long term rate of technical progress seems to be largely exogenous. The geographical distribution of technological innovation is anything but.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Sep 28th, 2012 at 01:53:39 PM EST


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