The biggest theoretical issue in macroeconomics is “what causes unemployment”. As discussed in the last post, the classical answer, that unemployment is caused by problems in labor markets, is obviously wrong as an explanation of the simultaneous emergence of sustained high unemployment in many different countries. Unemployment is a macroeconomic problem.
The central macroeconomic policy issue, then, is “what, if anything, can macroeconomic policy do to move the economy back to full employment”. If you accept that, under current conditions of zero interest rates, there’s not much positive that can be done with monetary policy[1], and you stay within the bounds of mainstream policy debate, this question can be restated as “how effective is expansionary fiscal policy” or, in Keynesian terms, “how large is the fiscal multiplier in a depression”.
Perhaps these heebie-jeebies are mine and mine alone, but the parallels between this Sasha Issenberg piece
The Obama campaign embedded social scientists from the Analyst Institute among its staff. Party officials knew that adding new Democratic voters to the registration rolls was a crucial element in their strategy for 2012. But already the campaign had ambitions beyond merely modifying nonparticipating citizens’ behavior through registration and mobilization. It wanted to take on the most vexing problem in politics: changing voters’ minds. … as campaigns developed deep portraits of the voters in their databases, it became possible to measure the attributes of the people who were actually moved by an experiment’s impact. … An experimental program would … develop a range of prospective messages that could be subjected to empirical testing in the real world. Experimenters would randomly assign voters to receive varied sequences of direct mail—four pieces on the same policy theme, each making a slightly different case for Obama—and then use ongoing survey calls to isolate the attributes of those whose opinions changed as a result.
It was the morning of June 15th, and Guy Burckhardt woke up screaming out of a dream. It had been a monstrous and incomprehensible dream, of explosions and shadowy figures that were not men and terror beyond words. He shuddered and opened his eyes. Outside his bedroom window, a hugely amplified voice was howling. Burckhardt stumbled over to the window and stared outside. There was an out-of-season chill to the air, more like October than June; but the scent was normal enough — except for the sound-truck that squatted at curbside halfway down the block. Its speaker horns blared: “Are you a coward? Are you a fool? Are you going to let crooked politicians steal the country from you? NO! Are you going to put up with four more years of graft and crime? NO! Are you going to vote straight Federal Party all up and down the ballot? YES! You just bet you are!” Sometimes he screams, sometimes he wheedles, threatens, begs, cajoles … but his voice goes on and on through one June 15th after another.
are a little more immediate than I would like.
I’m bullish about how experimentalism can improve democratic practice, when it happens under conditions of rough power equality. But it can equally be used to improve techniques of manipulation. One of the big themes of Pohl’s 1950s science fiction (The Space Merchants, “The Wizards of Pung’s Corners”) was how unpleasant the world could become if advertising actually worked. We may be about to find out if he’s right.
Following up my previous post, I want to look at the main areas of disagreement in macroeconomics. As well as trying to cover the issues, I’ll be making the point that the (mainstream) economics profession is so radically divided on these issues that any idea of a consensus, or even of disagreement within a broadly accepted analytical framework, is nonsense. The fact that, despite these radical disagreements, many specialists in macroeconomics don’t see a problem is, itself, part of the problem.
I’ll start with the central issue of macroeconomics, unemployment. It’s the central issue because macroeconomics begins with Keynes’ claim that a market economy can stay for substantial periods, in a situation of high unemployment and excess supply in all markets. If this claim is false, as argued by both classical and New Classical economists, then there is no need for a separate field of macroeconomics – everything can and should be derived from (standard neoclassical) microeconomics.
I’m on the executive committee of SASE, the Society for the Advancement of Socio-Economics, which means that I plug their annual conference every year around this time. This year, the conference theme is States in Crisis, and is taking place from June 27-June 29 in Milan, Italy. The conference’s main target group is economic sociologists, but there’s a good mix of people from other social science disciplines, including political science. If you’re interested, you have two weeks to submit paper or panel proposals …
When econbloggers aren’t arguing about cyborgs, they spend a fair bit of time arguing about the state of (mainstream) macroeconomics[1], that is, the analysis of aggregate employment and unemployment, inflation and economic growth. Noah Smith has a summary of what’s been said, which I won’t recapitulate. Instead, I’ll give my take on some of the issues that have been raised (what follows is inevitably monkish wonkish)
It’s been a while since Chris and I have talked about our various photo projects and since many people like to use the New Year as a starting point for novel endeavors, I thought I would post about it while it is still 2012. I am talking about the idea of taking and sharing a photo with some regularity. Both Chris and I have participated in Project 365 (or the Photo-a-Day project) where you do this daily. It has been a fantastic experience for both of us. But since a daily commitment can be overwhelming for some (for most, in fact), I suggest trying a photo a week (Project 52 – 2013). I have started a new group on Flickr for this and will post a theme for each week. (There are similar groups on Flickr that do not have a theme and the daily project rarely has a theme.) Since many people now have a camera on their phones that they presumably have with them all the time, the technical aspect of this project should be less of a burden than even just five years ago. And thanks to various apps, uploading and sharing has become less of a hassle as well.
Why do this? Lots of reasons as Chris and I have both discussed in the past. To recap just a few, in no particular order: [click to continue…]
New Left Project has a wonderful interview with Noam Chomsky on work, learning and freedom. It really brings out the more attractive anarchist side of Chomsky’s personality and politics. He’s particularly eloquent on the importance of spontaneous play for children’s development and how this is being crowded out in societies like ours (a theme, incidentally of James C. Scott’s recent Two Cheers for Anarchism). Recommended.
The re-emergence of gun control as an issue in the US has led to a fair bit of discussion of Australian experience. As is now normal on any issue, the political right has relied on Fox News factoids bearing no relation to the truth. But even for those seeking accurate information, it hasn’t been easy. AFAIK, there is no good place to go for an accurate summary of an issue that evolved in Australia over several decades. So, I’ll offer my own, based largely on recollection but with links where I can find them.
The latest issue of Jacobin is now online, and it’s fantastic. Before I give you some highlights, let me make a pitch: subscribe or donate to Jacobin. I’m a contributing editor, so I’m biased. But I know I’m not alone in saying it’s one of the newest, freshest magazines around. It was founded by an undergrad in his dorm room (seriously). But, hey, Trotsky was 25 (or 26?) when he led the St. Petersburg Soviet in 1905 and Martin Luther King was 26 (or 25?) when he led the Montgomery Bus Boycott. So who knows where this can go? In any event, subscribe, donate, help out. [click to continue…]
I just love econobloggers, with their capacity for Swiftian satire. Dry as dust, yet clearly having a laugh, they aim to reel in the poor saps who are take them seriously, but they are big enough to continue to play along, making as if they really mean it. Until now, I’d thought of Tyler Cowen, Bryan Caplan and, perhaps, even Arnold Kling as being the true masters of the genre. But I’m pretty sure that Noah Smith surpasses them all with a new blog on The Rise of the Cyborgs. Smith does a really excellent job of pretending to be keen on the robot-human future he imagines. So, for example, we get
artificial eyes and ears would replace all input devices [i.e. actual eyes and ears]. You would never need a television screen, a phone, Google Goggles, or a speaker of any kind. All you would need would be your own artificial eyes. You could play video games in perfect, pure augmented reality. Imagine the possibilities for video-conferencing, or hanging out with friends half a world away! And why stop there? If you wanted, you could perceive the buildings around you as castles, or the inside of a spaceship. The whole world could look and sound however you wanted.
But understandably, he feigns enthusiasm most successfully about the prospects for the economy:
… cyborg technologies have the potential to improve human productivity quite a bit, as my examples above have hopefully shown. Humans who can store vast amounts of knowledge and expertise, who can directly interface with machines, and who can make themselves more well-adjusted and motivated at the touch of a (mental) button will be valuable employees indeed, and will prove useful complements to the much-discussed army of robots.
Indeed, employers could make it a condition of employment that workers undergo the necessary cyber-modifications! Actually, I think Smith missed a trick there, by failing to imagine how this might affect workplace dynamics. Oh well, I expect someone will be along to explain how such contracts would be win-win. Brilliant.
Yesterday, the President of the University of Rhode Island issued a new statement on the Erik Loomis controversy:
Over the past several days we have heard from many individuals concerning statements made or repeated by Professor Erik Loomis. Many writers forcefully expressed serious concern about his statements and many others expressed very strong support for Professor Loomis, especially in regard to his First Amendment right to share his personal opinions. In the statements at issue, Professor Loomis did not make it clear that he was speaking solely as an individual, and that the views he expressed were his alone and did not reflect the views of the University of Rhode Island. This was the rationale for our original statement.
The University of Rhode Island strongly believes that Constitutionally protected rights to free expression are the foundation of American democracy, and central to our mission of imparting knowledge and promoting the exchange of ideas. It is our conviction that Professor Loomis’s personal remarks, however intemperate and inflammatory they may be, are protected by the First Amendment, as are the views of those who have contacted us in recent days.
David M. Dooley, Ph.D.
President
University of Rhode Island
Many thanks to all of you who signed our statement and wrote individual emails and letters to URI administration.
It’s too damn late for you to do much online shopping, but if it weren’t, I’d recommend my friend Josh Glenn’s book, Unbored: The Essential Field Guide to Serious Fun, for the kids. His book is better than that boring old Daring Book For Girls and Dangerous Book For Boys, or whatever they were called. I’m glad to see that Josh’s title is selling healthily without me giving it an appropriate pre-X-Mas boost. But you might file away Unbored as a notion, for a later occasion. Or check out Josh’s series on Radium Age SF. Healthy stuff, in large doses!
If you need it by Christmas, and you want to support someone who is also my friend, you might gift someone Adam Roberts, I Am Scrooge: A Zombie Story for Christmas, available on Kindle. An “I Am Legend” “Christmas Carol” mash-up, you will quickly perceive. I was hoping for more of a plummy, Dickens voice. But Roberts went for a Lemony Snicket-y thing, I should say. Nothing wrong with that! But I assure you that his fake horrors-of-Christmas etymologies are not the real deal. Mine are!
All this talk of arming teachers and training children to rush psychopaths who are outfitted with machine guns semi-automatic weapons reminds me of a moment in high school. But first, a recap.
In the wake of the Newtown killings, writers on the right have suggested we should teach children to turn on their assailants, rushing them en masse. Here’s Megan McArdle writing in The Daily Beast:
I’d also like us to encourage people to gang rush shooters, rather than following their instincts to hide; if we drilled it into young people that the correct thing to do is for everyone to instantly run at the guy with the gun, these sorts of mass shootings would be less deadly, because even a guy with a very powerful weapon can be brought down by 8-12 unarmed bodies piling on him at once.
McArdle is a libertarian. You know, the type who believes you can’t derive Rawlsian-style social justice from self-interested premises—that shit would never work—but that you can adduce from those very same premises a mass death instinct of the sort that powered the Red Army to victory against the Nazis. When it comes to public goods, libertarians think we’re all free riders; in the face of crazed killers, we’re all comrades. [click to continue…]
My annual kind-of-tradition continues this year, to the protests of all our long suffering readers. Thoughts on evidence, disagreement, knowledge and related matters follow, in suitably opaque and allusive style …
On not believing in Canada
I remember clearly when I first started along the road that led me to where I am today – the unfashionable and lonely position of an adult man, educated and well-travelled, who doesn’t believe in the existence of Canada. I was a kid at Sunday School, and the vicar was trying to talk to an awkward class of hard-nuts and smart-asses about the general concept of faith in the absence of empirical evidence.
“What about Canada?”, he asked us all, his thick Welsh accent muffled slightly by an impressive crop of nostril hair. “You’ve never been to Canada! You’ve never seen Canada! You’ve never even met anyone who’s been to Canada! But you believe in Canada, don’t you, Davies?”.
He cast his gaze around the room, having to swivel his neck a bit as something like a dozen of us were called “Davies”. I elected myself as the spokesman and made what seemed to be the obvious response: [click to continue…]
, for the kids. His book is better than that boring old Daring Book For Girls and Dangerous Book For Boys, or whatever they were called. I’m glad to see that Josh’s title is selling healthily without me giving it an appropriate pre-X-Mas boost. But you might file away Unbored as a notion, for a later occasion. Or check out 
, available on Kindle. An “I Am Legend” “Christmas Carol” mash-up, you will quickly perceive. I was hoping for more of a plummy, Dickens voice. But Roberts went for a Lemony Snicket-y thing, I should say. Nothing wrong with that! But I assure you that his fake horrors-of-Christmas etymologies are not the real deal. Mine are!