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How right the Keynesians are gonna be?

by das monde Mon Nov 3rd, 2014 at 11:28:53 AM EST

I was writing a comment to the diary "LQD: How Depressingly Right We Have Been", but the quotation became substantially long even abbreviated. Hence this diary.

There was another recent diary, on Krugman's argument about GDP growth and limiting carbon emissions. A couple of Krugman's posts sparked steady reaction from the Post Carbon Institute and such. I noticed an ongoing series of articles from one blog, particularly. It mixed edgy enmity towards Krugman and liberals with eventually some relevant line of thought.

Sufficient Liberal Stories -- The Krugman Function Part 4 -- Transition Milwaukee

On the face of it, Paul Krugman appears entirely confident in the future of the American way of life and the growth of a globally inclusive economy. He is similarly confident in our ability to address climate change by running that economy on renewable energy.

This needs two significant qualifications. First, it is unclear whether this is what Krugman hopes, or what he expects [...] Second, Krugman's optimism is clearly dependent on the ability of political liberals to get wrong-headed, fuzzy-thinking conservatives out of the way [...]


Let's summarize the story he tells in Conscience of a Liberal, a story which underwrites most of his political and economic commentary: during the Great Depression of the twentieth-century liberal thinkers like John Maynard Keynes and political leaders, mainly Franklin Delano Roosevelt, figured out how the economy "really works."  The lesson of the Great Depression was the peril of unrestrained markets and the way they could concentrate wealth to the point that there weren't enough people who could afford industrial products being made.  The New Deal, in contrast, taught us the value of high-taxation and government spending, which together solved what liberals have come to believe is the only real threat to economic growth and prosperity for all: namely aggregate demand -- consumers with the means to buy industrial products, take out loans, and keep the economy rolling along.  Put stimulus money in the hands of average consumers or create good jobs by way of infrastructure spending, liberals argue, and you can increase aggregate demand and jump-start the economy just as it was jump-started during the Great Depression [...]

The post-war years  added another layer of confirmation to this theory.  Liberal economists often refer to the economic boom of the fifties and sixties as "the Great Compression," as top wages were compressed down, towards the middle, by high taxation, on the one hand, while lower wages were compressed up by government programs and strong labor unions, on the other hand.  There was, at the time, substantial agreement among the two major parties in the United States that the key to long-term economic growth and political stability could be based roughly on Keynesian insights and would feature policies that insured relative wage equality and strong investment in the common good [...]  The results were spectacular: the American economy grew quickly but steadily, the wealth was spread throughout all of society, and the American Dream thrived.

Sounds like music to the "Depressingly Right" diary so far, and for a few more paragraphs.
While it is true that the conservative illiterati show no signs of getting out of the way of this liberal good sense, there is in principle no reason why another half-century of growth and prosperity is not within our grasp. As Krugman puts it, describing the post-war boom, "if they could do it then, we should be able to repeat their achievement." The issue is one of politics, and thus of insight, belief, and choice, and not, within Krugman's fictive universe, any sort of larger, structural or immovable objects.
Fictive universe?
... we take Krugman's statement, "if they could do it then, we should be able to repeat their achievement," and turn it into a question instead: If they could do it then, why couldn't we do it again? This of course may seem to the liberal onlooker like a rhetorical question. But what happens if we take it seriously and try to answer it? Why might we not be able to "do it again?" What differences are there between the Great Depression and the 2008 crash? How would our world be different from the post-war era, even if we did implement the same policies once again? Simply asking the question, I think, begins to show the fundamental weakness of Krugman's argument [...]
Is it that simple, really? After some cheap babble, the blogger comes up with one obvious consideration:

Consider just this one difference: in 1945 the United States was sitting on the world's largest and most easily accessible supply of crude oil, with plenty of other natural resources to accompany it [...] As an oil exporter throughout World War II, our cheap and plentiful energy in the United States not only made our own industrial projects easy to fuel (in great contrast to the eventual energy starvation of the German and Japanese industrial machines), our oil brought in massive amounts of revenue. The rebuilding of Europe after the war only further boosted the U.S. oil industry [...] while at the same time the rising demand aided in the development of American and European oil interests in the Middle East.

This situation of oil creating revenue for the United States, and an inflow of the dollars with which oil has been traded, has long since reversed, our three million barrel a day increase in production notwithstanding. While we used to lend the world dollars so that it could buy our oil, now we borrow money from other nations in order to buy their oil. Instead of an oil-led positive trade balance of the mid-twentieth century, in 2011 $327 billion of our total trade deficit of around $564 billion can be attributed to oil imports [...]

This oily point is neither a Nobel-worthy rocket science, nor an obvious negligence. Without much ado about Krugman's intellectual consistency, it is indeed remarkable that this important factor is not openly discussed in high public circles. Possibly, the issue is too important for the public...

The quoted article basically gives a reason why the policy elites might have been abandoning Keynesian economics. It is not what is reasoned directly:

But to the question, "Why can't we repeat this achievement?" a rather obvious and pressing answer should therefore be vying for attention: the energy used to fuel it last time will no longer be available in the quantities and at the price it was the first time round; the cheap domestic oil that fueled this great expansion peaked in 1971 may have foreshadowed a reversal in national; this dark cloud undermined our national confidence, perhaps, and it, as much as anything else, may have led to the radical conservative take-over of the Republican Party, which, we should bear in mind, orchestrated an eventual landslide in popular sentiment as we collectively recoiled from Carter's call for moderated lifestyles built around conservation [...]
Rather, the true argument comes soon with a picture:
The economic expansion that Krugman and other mainstream liberals expect can and will put the country "back on track," would not only require lots of oil; it will require steadily increasing supply of energy at the very moment we are facing the likelihood of a plateau and, eventually, permanent declines. A quick glance at the record of global C02 emissions, which quadrupled during the era idealized by Krugman and Reich suggests that "getting back on that track" should be avoided at all costs.

Should be avoided at all costs is a strong statement without further analysis. But perhaps - perhaps - in those 70s of the Club of Rome report, the planet elites might have decided indeed that years of peace and prosperity should eventually be avoided... at all costs. That would explain the basically unopposed march of Chicago school economics, gradual abandoning the Keynesian economics, wussiness or duplicity of liberal leaders (and even the geopolitical changes) as a Kabuki play.

... that is what Krugman argues: he implies that equality, and a few related policy choices is all that is required, at least in the United States, for us to achieve the same sort of positive economic results that we have enjoyed in the past; that equality is a sufficient condition for the economic situation he'd like to see; that if we simply reinstitute policies of equality, good economic times will follow.
The implication is that the other necessary factor of requisite resources overwhelms the equality prerequisite. Or even, equality is not the way to deal with the resource limits - we rather revive our primate instincts for inequality? Is this what Thatcher meant with "There Is No Alternative"?

Display:
Isn't the infrastructural work required to massively reduce emissions precisely the sort of thing that is ideal as useful Keynesianism? Or are we just going to naively draw a curve into the future and make up a story?

This seems to be assuming that growth requires more carbon, which doesn't appear true.

by Colman (colman at eurotrib.com) on Mon Nov 3rd, 2014 at 11:56:52 AM EST
Why is it so hard to understand this!?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 12:05:43 PM EST
[ Parent ]
Because there's an ideology that wants a return to a "simpler" age and is willing to defend its inevitabily.
by Colman (colman at eurotrib.com) on Mon Nov 3rd, 2014 at 12:12:51 PM EST
[ Parent ]
As usual, the intelligence and facts are being fixed around the policy...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 12:15:52 PM EST
[ Parent ]
Is there really, though (I mean significantly so - a couple of odd people can always be found)?

Much of what constitutes GDP no longer adds real value. Yet we work ever longer hours and wreck ever more of our ecology to keep increasing it. Pointing out that absurdity is hardly an ideology wanting to return to a simpler age.

By all mean have that massive program, I've been calling for it for years. I still reckon that consumption would better drop in the West if we are going to have a fighting chance.
Actually, forget that: even with this, I don't believe that there is any chance at all to get the needed reduction in environmental impact in time, so there will need to be active restoration for decades or even centuries down the line.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Nov 3rd, 2014 at 01:06:09 PM EST
[ Parent ]
We're confusing real material impacts with GDP which is a purely monetary measure.

Sure, we'll be poorer in real terms or we will see inflation in the prices of, say, fossil energy. But who cares?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 01:07:43 PM EST
[ Parent ]
I think a significant part of the creation of the Church of GDP was driven by the conscious policy, at least here in the US, to sever as much of the population from the land as possible.  Land became corporate, food became an industrial product, and the food on your table became just another buy-in of the consumerist creed to drive GDP.
by rifek on Sat Nov 8th, 2014 at 10:16:08 PM EST
[ Parent ]
Why is it so hard to understand this!?

Three things:

  1. "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!". Add to those numerous beneficiaries of the fossil fuel industry those who actually do understand the problems with continued reliance on hydrocarbons but don't care about the consequences and go to great efforts to deny and spread uncertainty about the problem. This leads us to:

  2. The massive PR campaign funded by these people and the stultifying effect it has had on public opinion. This is buttressed by the deliberate strategies employed to make politics repugnant and drive down participation and all of the hot button 'social issues' such as abortion, gay marriage, gun control, etc. which has served to distract and divide in addition to polarizing. This brings us to:

  3. The whole structure of 'inverted totalitarianism' that has grown up in the USA but which has been 'globalized' right along with its chief instrument - financialization. The USA and the UK have the improved, post-modern apparatuses of a pre-WWII totalitarian state such as Nazi Germany or the Soviet Union, but without a supreme leader. Instead we have a vastly improved form of oligarchy where the individual players in the political system are irrelevant and replaceable and power is exercised by corporations through the financial sector and through the military/security state/mainstream media complex. The top leadership positions in this oligarchy are similarly replaceable and the potential candidates are sufficiently aware of the common interests of the oligarchy so as to create a stable system.    


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Nov 3rd, 2014 at 01:20:42 PM EST
[ Parent ]
by Metatone (metatone [a|t] gmail (dot) com) on Tue Nov 4th, 2014 at 05:07:41 AM EST
[ Parent ]
Any interpolation is an approximation. Corrections could go both ways, or be barely significant.

The question of how much energy or carbon emissions does growth require is a fair one. Surely, marginal efficiency improvements while growing are possible. The whole world might repeat the Swedish feat of cutting emissions by 20% in 20 years, while growing by 60% (even if nominally). But ever marginal efficiency improvements do not mean that we can achieve a radically adequate target (even if wrong-headed, fuzzy-thinking opposition is out of the way). The Post-Carbon institute writes in the second reply to Krugman:

Paul Krugman and the Limits of Hubris -- Post Carbon Institute

Energy efficiency can often be improved, but such improvements are subject to the law of diminishing returns: the first five percent of improvement is cheap, the next five percent costs more, and so on.

In any case, the issue deserves more analysis and political discussion -- and wider demonstration of Swedish-type improvement.

by das monde on Tue Nov 4th, 2014 at 08:00:43 AM EST
[ Parent ]
Efficiency scales badly -the first steps are often massively profitable, then zero cost, then increasingly more expensive, and subject to jevrons paradox in any case -

This does not hold true for just wholesale switching energy input into the economy. Building a hundred x - reactors, windmills, dams, whatever -is cheaper on a unit basis than building ten. So as long as the underlying resource is sufficient, no problems.

by Thomas on Tue Nov 4th, 2014 at 10:04:13 AM EST
[ Parent ]
Because it's not actually true?

The official ET line is 'Do renewables, raise taxes to redistribute wealth, and everything will be fine."

Consider the possibility that perhaps there's more involved, and the post-war boom was created by a number of distinct circumstances that either don't apply now or only apply partially. Specifically:

  1. A relative energy glut leading to cheap energy. (I'll agree with the premise of the original piece here. I think it makes a difference - but I'll add that this not only makes economic activity possible, it also creates faith in the future, because it's possible to believe that your business isn't going to get the rug pulled out of it. It's much harder to believe that now, because the oil price crash is temporary and renewables aren't fully established yet.)

  2. Good local infrastructure that can make use of available resources. The US freeway system made it easier to think about shipping physical items nationally. Globalisation hadn't happened yet, so the economic activity stayed inside the US and Europe. This gave labour more local bargaining power, which raised wages. Now that globalisation has happened, labour competes internationally, which is very bad for everyone.

  3. A research-led culture in science and engineering, supported by trophy-project national policy (see also Manhattan Project, Internet, Concorde, the Space Program, and others). This is a huge deal. It was deliberately created during WWII, nurtured further during the Cold War, and then it was thrown away during the financialisation of the 80s.

  4. Low-hanging fruit in science and engineering. Aerospace, nuclear power, and computing (after Turing) were relatively accessible. Today we have quantum computing, which is hard, fusion, which is hard, and wacky hypothetical starship drives, which are somewhere between really, really hard and impossible.

  5. A compliant population inspired to consume by propaganda marketing. This is still true today. But because of the wage squeeze personal wealth has crashed for most of the population.

Bottom line is you need a combination of circumstances to create a boom. Spending tax money on its own probably won't do it, because the money will either flow out of the country, or it will end up pushing up prices of essentials (e.g. rents from property) without creating new kinds of economic activity.

There's certainly a case for Keynesian pump priming which can create infrastructure (physical and intellectual) that can sow the seeds for a boom in a decade or two. But it's not an instant fix, and it needs policy decisions that understand the return will take a while.

Obviously we've had the opposite of that, with financialised policies destroying future growth prospects. But I don't think throwing money at the problem ten years ago would have done any more than provided a quick and very temporary growth blip.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Nov 4th, 2014 at 09:31:11 AM EST
[ Parent ]
But why would we need a boom? Economically, that is. We need people to find valuable employment, which could be made easier by resource constraints (forcing a return to processes using more manpower in order to save on resources), and for people to have a decent standard of living, which in the West is purely a distributional issue: we produce more than we need, many times over.

Politically, it may be different. It is true that the only recent episode of major drop in inequality came on the back of a boom (although one has to be cautious with regards to the direction of causality there - probably both ways), or rather the bounce from an awful nadir.

But the point of the Keynesian program is not a boom -I do believe we need to reduce total consumption in the West- but for everyone to be employed and to address unsustainability. If we have a system that can only function with strong growth it is bound to struggle mightily (for example, when population starts dropping fast worldwide).

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 5th, 2014 at 05:54:19 AM EST
[ Parent ]
Some say that the human nature is either to go up (learn, grow, advance) or to go down (slide, decline, weaken). A stationary phase is not appreciated.

With today's political economy, substantial growth is needed just to hide gaps between rentiers and the rest.

by das monde on Wed Nov 5th, 2014 at 06:06:08 AM EST
[ Parent ]
Let's go up in quality.
It does not have to be in quantity.

Also, don't confuse human nature and the West. Egypt was going mostly sideways for millennia.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 5th, 2014 at 06:42:23 AM EST
[ Parent ]
To even have a sensible conversation about this you need to redefine all your terms.

"Poorer in real terms", "reduce total consumption", "valuable employment" all sounds terrible if you're embedded within the prevailing worldview.

by Colman (colman at eurotrib.com) on Wed Nov 5th, 2014 at 06:49:51 AM EST
[ Parent ]
The US economy has always been based on booms and busts, fueled by fraudulent financing that is eventually caught out.  It really doesn't know any other way to operate.  1946-1973 was a one-generation exception based on conditions that are gone and aren't coming back.
by rifek on Sat Nov 8th, 2014 at 10:29:06 PM EST
[ Parent ]
The german stimulus in 2009 had a lot of green aspects. or at least green painting.
by IM on Mon Nov 3rd, 2014 at 12:06:47 PM EST
[ Parent ]
The Energiewende could have been a terrific Keynesian stimulus, but they messed it up by making consumers pay for it, which gave them an excuse to kneecap it subsequently.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Mon Nov 3rd, 2014 at 05:02:32 PM EST
[ Parent ]
Of course, all of Germany's investment must be financed by user fees because Schäuble has a black ink fetish.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 05:05:22 PM EST
[ Parent ]
Colman:
Isn't the infrastructural work required to massively reduce emissions precisely the sort of thing that is ideal as useful Keynesianism?

Welcome to reality! It's so fucking obvious you could explain it to a 5 year old in a few minutes.

Meanwhile, back at Ranchero Oblivio...

How do you spell car-dash-again? Kan she twerk?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Nov 3rd, 2014 at 08:04:26 PM EST
[ Parent ]
There is one other factor: the exponential growth of financial obligations. Creditors, bond holders are above democracy, governments, presidents. I just read in Lithuanian media that the president Grybauskaite profited handsomely from the "crisis" 6.625% bonds of the former (conservative) government. Is this a common practice for the modern presidents, royals?

We have thus at least four interacting factors:
(1) Economy - which should follow Keynes and prosper;
(2) Democracy - which should guard affluence prospects for all;
(3) Compound interest - obscure while the economy is growing in a good tempo;
(4) Resource limitations - threaten to halt the requisite growth.

When the GDP growth (be it nominal) is anemic, the economy is in trouble if only because the financial interest becomes highly parasitic.

How different is the factor (3) now from the 1930s? Creditors for the public were not that strong, organized?

The elites today have a definite interest in materialization of their ridiculous financial positions. Not letting others to have or enjoy anything is possibly becoming the most realistic way to maintain their relative "worth". And if they have silent Malthusian scare that there won't be enough to share, they are surely not interested in a new Keynesian expansion. Keynesian aspirations are pretty revolutionary then.

by das monde on Tue Nov 4th, 2014 at 07:32:49 AM EST
[ Parent ]
There are economies that are substantially following the Keynes 'euthanasia of the rentier' disideratum. Most of them are BRICS, where government controled public banking is predominant and there is cheap credit for needed infrastructure and industry. This, of course, is anathema to western oligarchies and their minions such as the IMF and the World Bank. It is not just the different stages of development that is responsible for the differing growth rates between the BRICS and the 'developed world'.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 4th, 2014 at 09:29:13 AM EST
[ Parent ]
... Or perhaps it is. When the "mature" economies were "developing", they too had government-led infrastructure investment.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Tue Nov 4th, 2014 at 09:59:09 AM EST
[ Parent ]
For values of 'development' equal to 'maximized looting potential'?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 4th, 2014 at 02:44:00 PM EST
[ Parent ]
That would be a predatory layer of the global economic ecosystem - if only the pray were allowed to run faster.
by das monde on Tue Nov 4th, 2014 at 06:58:21 PM EST
[ Parent ]
The actual emergence of "developing" countries such as China and Brazil clears up one thing I was unsure about : whether profits from colonialism was a necessary step for a country to become "developed".

The lesson I get is that there are many paths to development, but they all require intelligent government to stimulate capital flows.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Nov 5th, 2014 at 04:02:50 AM EST
[ Parent ]
Do you mean to imply that China and Brazil are not developing off the spoils of colonial plunder?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 5th, 2014 at 08:45:57 PM EST
[ Parent ]
... You can't call it colonialism without force. That's just diluting the language. Words have meaning, and just because someone is doing something you don't like, you don't get to tag it with any random label picked out of the bin of evils.
by Thomas on Wed Nov 5th, 2014 at 10:36:38 PM EST
[ Parent ]
You mean to imply that there is no force involved in China's acquisition of raw materials from the American colonies?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 6th, 2014 at 12:24:36 PM EST
[ Parent ]
Russia, China are just adopting the force of Western rules, precedents. See Kosovo and Crimea, for example.
by das monde on Thu Nov 6th, 2014 at 06:32:33 PM EST
[ Parent ]
If we describe the relationship of Brazil with amazonia and China with Tibet, inner Mongolia and Turkestan as colonial.

And there can be much said for that description.

Also: russia and siberia and how the west was won.  

by IM on Fri Nov 7th, 2014 at 04:01:53 AM EST
[ Parent ]
The Prudent Bear: Malthus was just 220 years early (Martin Hutchinson)
The average earnings of U.S. men between 25 and 34 with only a high school diploma have fallen 25% since 1979, according to Census Bureau data. Women in the same category have done better, but their earnings also have fallen. Given that GDP per capita has risen 73% in real terms since 1979 on World Bank data, those are shocking statistics. Their implication is that the value of the labor of people with ordinary skills has gone into a deep decline even as the country and the world has gotten richer. In other words, Thomas Malthus' gloomy prophecies, written in 1798, were not wrong. They were merely early.

[...] If a Malthusian problem were to occur, we would expect it to occur first in the rewards of modestly skilled people in the world's highest-cost labor markets, because their work is most easily substitutable and can be undercut by emerging market labor. That appears to be what is happening. In the U.S. at least there is a supply surplus of modestly-skilled workers, driving down wages. Since the labor-participation rate in the workforce has dropped sharply since 2008, and these statistics include only workers who are employed, there is clearly a major supply-demand imbalance.

A provoking clutter talk on globalization, financialization, resources, technology follows.
There is another solution: drastic reduction of population (over whatever period is necessary to accomplish this through incentives and without coercion). If the world's population were one billion instead of eight billion, the amount of land and resources available per unit of labor would be octupled and the environmental damage caused by production would be reduced by seven-eighths. Similarly, the amount of capital available per worker would be greatly increased (albeit probably not by a factor of eight), while the knowledge base per worker would octuplet (although the rate of adding to it wouldn't). With labor suddenly scarce, even at the modestly skilled level, the returns to labor would be greatly increased.
That must be the arithmetic.
by das monde on Thu Nov 6th, 2014 at 09:50:28 AM EST
[ Parent ]
Yes, yes, we all know you're a fan of population reduction new-world-order type conspiracy idiocy.

Now why don't you state an actual case and attempt to support it with some actual evidence, instead of making these half-baked connect-the-dots insinuations that rely on the reader's imagination to fill in the yawning chasms in what I shall charitably call your reasoning?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 6th, 2014 at 12:29:10 PM EST
[ Parent ]
Just showing what is optically visible. Why should I care for more?

Your zero ratings are hilarious.

by das monde on Thu Nov 6th, 2014 at 06:24:20 PM EST
[ Parent ]
What is "optically visible"?

There is still growth of the world population. It has slowed down,but it is still growing. Even the brutal one child policy of the chinese has just slowed their population growth.

There is no "population reduction".

by IM on Fri Nov 7th, 2014 at 04:11:49 AM EST
[ Parent ]
That talk is visible. Should be interesting how that develops. Population would be already falling in the West if not for the immigration. And it is falling in some regions. The population is growing in a limited number of urbanized environments. It would not take much to squeeze that... especially with ongoing economic pressures.

Surely, the null hypothesis (no attention to Malthus, just dumb political, social-economic dynamics) cannot be rejected at the 5% level. But so were the assumptions of a Thanksgiving turkey.

by das monde on Fri Nov 7th, 2014 at 04:43:54 AM EST
[ Parent ]
Population would be already falling in the West if not for the immigration.

That isn't a bad thing, though.

by IM on Fri Nov 7th, 2014 at 05:04:11 AM EST
[ Parent ]
Population sans immigration is falling because birth rates has been on a steady decline in the west since around 1880 (France even earlier). Again, hard to fit with resource constraints or Malthusian planning.

Oh, btw you asked earlier about typical children per women before industrialisation. Looking at Gapminder you have most nations between five and seven and all but two between four and eight.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Nov 7th, 2014 at 05:17:47 AM EST
[ Parent ]
Matt Ridley argues in "The Rational Optimist" that population waves follow economic cycles, not resource limits. The cycles sensitively protect the limits, I guess.

The influence of industrialization on birth rates is definitely not artificial - but it could be analyzed (not necessarily publicly), artificially enhanced if some interest exists.

by das monde on Fri Nov 7th, 2014 at 08:04:35 AM EST
[ Parent ]
Short term, yes there are fewer kids during crisis and more during booms. But that has little effect on longterm population size.

Or does Ridley back it up with more then the catchphrases he uses at his blog?

Because his blog was not reassuring.

The Rational Optimist

Yet, bizarrely, however much things improve from the way they were before, people still cling to the belief that the future will be nothing but disastrous. In this original, optimistic book, Matt Ridley puts forward his surprisingly simple answer to how humans progress, arguing that we progress when we trade and we only really trade productively when we trust each other. The Rational Optimist will do for economics what Genome did for genomics and will show that the answer to our problems, imagined or real, is to keep on doing what we've been doing for 10,000 years -- to keep on changing.

Progress through trade. So what is his view on progress?

Greens take the moral low ground

The OECD's economic models behind the two scenarios project that the average person alive in 2100 will be earning an astonishing four to seven times as much money - corrected for inflation - as she does today. That's a 300-600% increase in real pay. This should enable posterity to buy quite a bit of protection for itself and the planet against any climate change that does show up. So we are being asked to make sacrifices today to prevent the possibility of what may turn out to be pretty small harms to very wealthy people in the future.

By contrast, the cost of climate policies is already falling most heavily on today's poor. Subsidies for renewable energy have raised costs of heating and transport disproportionately for the poor. Subsidies for biofuels have raised food prices by diverting food into fuel, tipping millions into malnutrition and killing about 190,000 people a year. The refusal of many rich countries to fund aid for coal-fired electricity in Africa and Asia rather than renewable projects (and in passing I declare a financial interest in coal mining) leaves more than a billion people without access to electricity and contributes to 3.5 million deaths a year from indoor air pollution caused by cooking over open fires of wood and dung.

Let the rich people of the future worry about ecology! They can buy it, they will have so much money! And poor people in Africa needs more coal!

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Nov 7th, 2014 at 08:55:32 AM EST
[ Parent ]
The impact of economic cycles is not controversial thus. If a longer (or lower) phase of static population is desirable, why not make a longer and deeper economic crisis as we can?

I thought of writing a diary on Ridley's "The Rational Optimist" some 2 years ago. Now I do not have it by hand. Some of the green moral bashing was there already. His article at WIRED is a summary enough. There is a lot of commentary out there, from Bill Gates to George Monbiot.

Yeah, the population was growing furnished as never, things were improving dramatically (until a few years ago) - thanks to...

It was neither capitalism nor communism that made possible the progress and pathologies (total war, the unprecedented concentration of global wealth, planetary destruction) of the modern age. It was coal, followed by oil and gas. The meta-trend, the mother narrative, is carbon-fuelled expansion. Our ideologies are mere subplots. Now, with the accessible reserves exhausted, we must ransack the hidden corners of the planet to sustain our impossible proposition [...]

As the philosopher Michael Rowan points out, the inevitabilities of compound growth mean that if last year's predicted global growth rate for 2014 (3.1%) is sustained, even if we miraculously reduced the consumption of raw materials by 90%, we delay the inevitable by just 75 years. Efficiency solves nothing while growth continues.

If we are really concerned about humanity and ecology, there is a necessity to face the planetary challenges freshly, without reliance on upsetting political mechanisms, white swan optimisms, "good for all" wishes. What difference would you really want to make?
by das monde on Fri Nov 7th, 2014 at 09:36:05 AM EST
[ Parent ]
Should have qualified, crisis in low birth countries results in lower birth rates during the crisis and often a bump afterwards. In all likelihood this is postponing births within a generation. This pattern can as far as I know not be seen in high birth countries. I tested Gapminder for known disasters in high birth countries and could not find a pattern there, though of course disasters can also affect the record keeping.

To check the theory of continous economic crisis in low birth countries decreasing population, I checked Japan. (Other good candidates for the hypothesis is welcomed.) Birth rates were declining through the 70s and 80s reaching 1.6 before the 90s crisis hit. They then decline even steeper to 1.3 but are now increasing.

I also checked where Italy is going with its famous low birth rates (around 1.2 at the turn of the millenium). Since crisis struck and GDP/capita started going down, birth rates has gone up and are now at 1.5.

Crisis also postpones the generational shift in high birth countries if it increases child mortatlity, as the shift depends heavily on the decrease of child mortality, in particular first child survival.

So as a conspiracy theory, global economic crisis to decrease global population seems rather hamfisted. In particular since the curves were pointing in the right direction before the crisis and there is a significant risk that birth rates in high birth countries will go down slower as a result, giving a higher world population then if there had been no crisis.

Also a real conspiracy has better tools with a proven track record to decrease world population: in high birth countries, decrease child mortality through affordable and good medicine and promote economic opportunities outside the home. In low birth countries give women a lot of economic opportunities if they don't have kids and stick them with most (or all) of the responsibility if they do have kids. This way leads to slower growth in hgih birth countries and decreasing population in low birth countries. And it actually works.

So if there is a conspiracy at work, it is incompetent.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun Nov 9th, 2014 at 09:16:25 AM EST
[ Parent ]
Italy and other ~1.5 rate countries would not be the focus of global population control. They would be role models even with 0.2 recoveries.

Competency in population control must be a tricky business. A lot depends on how much experience the conspirators would have. If the task group was just formed in the 20th century, more direct and clumsy attempts are expected. If wars, famines are the natural methods of whatever elites, some PR maneuvers are needed to distance the public from the normal civilized peace and prosperity of the post-WWII years.

So I have to assume that the conspirators have a taste for empirical data gathering, trying out various modes of economic crises (and perhaps confusing youngsters about relationship building, etc). All that could be just a starter for some directly competent action. A period of social-political chaos would be much more effective with a majority of population in economic straits already. The next two years should add more clarity.

by das monde on Sun Nov 9th, 2014 at 07:23:24 PM EST
[ Parent ]
Italy and other ~1.5 rate countries would not be the focus of global population control. They would be role models even with 0.2 recoveries.

But it is the 1.2-2.1 countries where you get lower birth rates from economic crisis. Or at least I thought so, Italy is a counterexample. In high birth countries wars, famines and economic crisis delays the shift to low birth, thus stretching out the period of increase.

With policies that are effectively working towards a larger population by undermining the decrease in the remaining high birth countries, I don't see any evidence of a conspiracy for lower population. And when it comes to the different calls for lower population you seem prone to read, similar calls when it comes to colored or otherwise underclass populations has been going on for at least a hundred years, ever since birth rats started to go down in Europe. So no evidence there either.

Do you have anything that actually points towards the existence of such a conspiracy?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Nov 10th, 2014 at 08:34:41 AM EST
[ Parent ]
The apparent ignorance of the subject in politics, public media looks manufactured for me. As with other (numerous) elephants in political rooms, the ignorance probably means something else than the smart deciders have no notice whatsoever. The strange general silence is already some evidence. As for the Icke-y signaling, I follow only the commotion around the Georgia guidestones.

The overpopulation problem must have been predating Malthus on various local levels. Some elite lines could have developed natural or sophisticated competences hell knows when - though not particularly the Western, I may guess. On the other hand, wild booms and busts could be a viable less dirty way to reset populations for some time. If this economic mess has that deep meaning, something should follow still under Obama.

Let's take it easy:

by das monde on Mon Nov 10th, 2014 at 10:54:25 AM EST
[ Parent ]
The Prudent Bear: The Bear's Lair: Malthus was just 220 years early
Pointless environmental restrictions, such as New York State's ban on fracking, can be scrapped, maximizing blue-collar job opportunities and reducing energy costs for domestic manufacturing.

Fail...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Nov 6th, 2014 at 09:25:31 PM EST
[ Parent ]
And there is so much more.

The Prudent Bear: The Bear's Lair: Malthus was just 220 years early

With labor suddenly scarce, even at the modestly skilled level, the returns to labor would be greatly increased.

Yeah, when we had a world population of one billion labor was scarce and and returns to labor great.

The Prudent Bear: The Bear's Lair: Malthus was just 220 years early

The modestly skilled, both in the U.S. and in emerging markets, would be able, through mass robotization, to enjoy lifestyles of which their ancestors of today can only dream.

And then ecological footprint per capita could go on growing forever and ever.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Nov 7th, 2014 at 03:27:51 AM EST
[ Parent ]
He also says
Malthus' basic prediction of human starvation and misery was based on the maximum possible agricultural output increasing at an arithmetical progression while population increased at a geometric progression.
Malthus actually predicted that this will lead to either starvation or "vice", a category that included contraception. So, rather than being wrong, he has long been proved right.
by gk (gk (gk quattro due due sette @gmail.com)) on Fri Nov 7th, 2014 at 04:17:47 AM EST
[ Parent ]
Malthus: Most unfairly remembered economist
by IM on Fri Nov 7th, 2014 at 05:35:46 AM EST
[ Parent ]
"The modestly skilled, both in the U.S. and in emerging markets, would be able, through mass robotization, to enjoy lifestyles of which their ancestors of today can only dream."

Are we discussing a Asimov novel now?

by IM on Fri Nov 7th, 2014 at 04:18:09 AM EST
[ Parent ]
They can also die of hunger.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Nov 7th, 2014 at 04:31:50 AM EST
[ Parent ]
Robots never die of hunger. I have read all the novels! Third law!
by IM on Fri Nov 7th, 2014 at 05:02:35 AM EST
[ Parent ]
I mean the modestly skilled.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Nov 7th, 2014 at 08:48:49 AM EST
[ Parent ]
Keynesian policy with resource constraints can be studied in various contries during the second world war. Employment goes up, GDP goes up, inflation goes up. New goods per capita goes down, recycling goes up.

So we know that it can be done, and we know what happens. If it is impossible it is because of political constraints and it is far from obvious that those political constraints depends on resources. After all, full employment policies was also impossible before world war two due to political constraints.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Nov 5th, 2014 at 07:40:40 AM EST
With a well regulated banking sector and progressive taxation the economy can and did boom. With cheap or free state financing countries can create abundant, relatively cheap sources of renewable energy. But an unregulated financial sector is the most efficient means with which to extract wealth from a society by the elites. After about 1960 elite conservatives went for the jugular and got it with Ronald Reagan's election. Taxes and regulations were reduced and soon the money from finance overwhelmed the electoral system. It seems we are down a very deep well - head first.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 5th, 2014 at 11:06:43 AM EST
[ Parent ]
You can't have an exponential debt system without occasional jubilees. It's like designing a hot water system without a safety pressure valve!
Or a tenement building with no fire escape.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Thu Nov 6th, 2014 at 09:55:52 PM EST
[ Parent ]
Well, obviously we can and have. But then we can't prevent debt crises.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Nov 7th, 2014 at 12:56:20 AM EST
[ Parent ]
We could regulate too-risky loans, and thus convince investors to choose more salubrious channels for making profits than say the USA car loan bubble (which apparently is one of the next ones to pop).

The whole moral hazard thing is way out of whack, even an amateur economist can see that unless he's well paid not to.

In which case he wouldn't be an amateur any longer, but a Serious Person.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Nov 10th, 2014 at 03:40:40 PM EST
[ Parent ]


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