Economics has met the enemy, and it is economics

[Dauphin]

Queen Elizabeth's power didn't come from her money, it came from being the ****ing queen.

She's not the ****ing queen, if her "virgin" motif is true.

[Dauphin]

Well, I think the poorest in the UK have average lifespans longer than nobles in tudor times. They have access to more, better quality and more varied food, they have access to technology vastly superior to what was available in those times and travel options. They have access to much better education, even than the rich.

I suspect, the social mobility of the poor now is vastly superior to what it was in Tudor times.

The argument goes that Britons in World War II under rationing had better diets than today though. Mainly because they didn't have access to crappy foods (e.g fast food joints or other sugar and salt laden produce etc).

[Sava]

The argument goes that Britons in World War II under rationing had better diets than today though. Mainly because they didn't have access to crappy foods (e.g fast food joints or other sugar and salt laden produce etc).

More people smoked back then.

[giblets]

(I cheated and actually used "mean of the third quintile" in place of median, since I only saw median data back to 1975.)

This website says that median household income was $8734 in 1970:

http://www.1970sflashback.com/1970/Economy.asp

So it looks like you were pretty close.

[Fake Boris]

OK fine. My question is, then, so what? Economists know that these parameters can change over time. It's not a big deal, largely because econometrics aren't yet sophisticated enough to estimate those parameters well in the first place. Physicists can measure the speed of light with many significant digits. Economists frequently can't get more than zero.

Yes, and that's the point. Economy is the major source and inspiration of public policy discourse, and economists aren't doing enough to restrict this influence to what economy really says. Why, would you say? Because there's a clear benefit in not doing it, duh. (Yes, "hermetic scholastic" = "ivory tower").

And the fact that econometrics couldn't do it is a huge deal. The premise of economy was based on a shift from a land based economy to an industrial one. We are shifting from industrial to service/information, and the foundations very seriously need to be rethought.

Is this a fancy way of saying "ivory tower"?
1) This is true over short intervals but virtually disappears over long ones - the inflation rate faced by the rich and the poor over, say, a 100-year span are necessarily similar.

Why?

2) The typical argument is over the stagnation of median household income - but we can show that stagnation didn't happen without resorting to arguments about the correctness of CPI. We can show it from a direct comparison. That is the evidence that CPI is flawed. "Product quality is incorrectly measured" is a hypothesis to explain how it might be flawed. "The employees at the Bureau of Labor Statistics are all incompetent and did the surveys wrong" is another [much less plausible] hypothesis.

Then why are you proposing a thought experiment to prove that we would choose today's products over those of the 70s?

3) We can, of course, do the same process to directly compare e.g. the 10th percentile of household income - but I bet it would give the same answer, that the real value of the 10th percentile of household income in 2010 is greater than the real value of the 10th percentile of household income in 1970.

I don't understand why you're saying this.

[Kuciwalker]

Yes, and that's the point. Economy is the major source and inspiration of public policy discourse, and economists aren't doing enough to restrict this influence to what economy really says. Why, would you say? Because there's a clear benefit in not doing it, duh. (Yes, "hermetic scholastic" = "ivory tower").

1) The values of many of these parameters frequently don't actually matter. For policy, it's useful just to know the sign, and have some idea that it's not close to zero.

2) "Economists", individually or as a group, have no power whatsoever to prevent politicians misusing their research. If you doubt this, look at how climate scientists, who are extraordinarily unified, have utterly failed to impose their consensus on the polity.

Another example is the near-universal consensus among economists in favor of free trade. They have been lobbying for it for literally centuries, ever since Adam Smith. And their efforts haven't been in vain - the reductions in tariffs they have effected produce enormous gains in social welfare - but we are still a long way from free trade.

And the fact that econometrics couldn't do it is a huge deal. The premise of economy was based on a shift from a land based economy to an industrial one. We are shifting from industrial to service/information, and the foundations very seriously need to be rethought.

No one designed the economy; its foundations were discovered, not invented.

Why?

If they didn't the level of consumption inequality would rise far beyond what is plausibly possible. Bill Gates is not physically capable of consuming goods and services in the same proportion to his income as, say, someone making minimum wage.

2) The typical argument is over the stagnation of median household income - but we can show that stagnation didn't happen without resorting to arguments about the correctness of CPI. We can show it from a direct comparison. That is the evidence that CPI is flawed. "Product quality is incorrectly measured" is a hypothesis to explain how it might be flawed. "The employees at the Bureau of Labor Statistics are all incompetent and did the surveys wrong" is another [much less plausible] hypothesis.

Then why are you proposing a thought experiment to prove that we would choose today's products over those of the 70s?

That is the "direct comparison" that I mentioned. That is what showed that their real values are not equal.

3) We can, of course, do the same process to directly compare e.g. the 10th percentile of household income - but I bet it would give the same answer, that the real value of the 10th percentile of household income in 2010 is greater than the real value of the 10th percentile of household income in 1970.

I don't understand why you're saying this.

I was just pointing out that not only has the real median household income not stagnated, but it hasn't for the poorer percentiles either. Essentially all portions of the income distribution are earning more real value each year than the same portion was in 1970.

[Fake Boris]

Kuci, you have awarded yourself the rolleyes award.

1) Climate scientists have just as much trouble as economists turning their knowledge into policy? C'mon.

2) I agree wrt to free trade. The issue is that economists totally disregard that often it's a glorified word for pillaging. And that free trde arbitration tribunals has a nasty tendency of shortchanging popular will (by defining necessary subsidies and welfare as "unfair" competition).

3) The idea that economy was "discovered" is ridiculous. It was constructed and applied. You still haven't gotten out of your Fisher Price epistemology (look, it fits!)

4) If Bill Gates could not possibly consume his entire wealth, then it means that INFLATION IS A MEANINGLESS FIGURE FOR HIM, not that his condition is similar! Especially if his wealth is the result of some productivity gains (that he contributed to, I concur), since the point is to show that efficiency gains are not evenly distributed.

[Tupac Shakur]

2) I agree wrt to free trade. The issue is that economists totally disregard that often it's a glorified word for pillaging. And that free trde arbitration tribunals has a nasty tendency of shortchanging popular will (by defining necessary subsidies and welfare as "unfair" competition).

You're a ****ing ******.

[Kuciwalker]

Kuci, you have awarded yourself the rolleyes award.

1) Climate scientists have just as much trouble as economists turning their knowledge into policy? C'mon.

Do we have carbon taxes yet? Do we have any kind of policies in place that would credibly prevent global warming?

2) I agree wrt to free trade. The issue is that economists totally disregard that often it's a glorified word for pillaging. And that free trde arbitration tribunals has a nasty tendency of shortchanging popular will (by defining necessary subsidies and welfare as "unfair" competition).

Totally irrelevant. The point is that even though free trade has been the almost universal consensus of economists for hundreds of years they still haven't actually gotten it. And they've been trying really hard! Thus your accusations that economists aren't "doing enough" to support certain other policies their research suggests fall flat. They just aren't as influential as you think.

3) The idea that economy was "discovered" is ridiculous. It was constructed and applied. You still haven't gotten out of your Fisher Price epistemology (look, it fits!)

Don't you think that if we had designed the economy we would understand how it works? The economy existed for thousands of years before economists did, and the deliberate designs of policymakers and businessmen have very little influence on it looks like today.

4) If Bill Gates could not possibly consume his entire wealth, then it means that INFLATION IS A MEANINGLESS FIGURE FOR HIM, not that his condition is similar! Especially if his wealth is the result of some productivity gains (that he contributed to, I concur), since the point is to show that efficiency gains are not evenly distributed.

Not at all. If we assume that Bill Gates' personal consumption is not affected by changes in his wealth or income (a pretty reasonable assumption), then the rate of inflation (based on a basket of goods relevant to him) tells us the rate of growth of his personal spending. It is absolutely a measurable variable.

Also, obviously efficiency gains may not be evenly distributed. The point is that over extremely long time periods everything pretty much has to even out, because the alternative is that we end up Eloi and Morlocks. In many important ways, Bill Gates' life is much more similar to that of a janitor at Microsoft than to Andrew Carnegie's.

[Fake Boris]

So according to you:

1) Inflation is the same for Bill Gates and a teacher
2) Ecological thought has the same credence on public policy as ****ing economy
3) Economists have no influence, because instead of perfect free trade, they have merely convinced States to privatize education, dismantle welfare, reduce corporate taxes, replace public engineering expertise with PPPs, we've only got NAFTA and the EU, while at the same time persuading the public that a debt that grows more slowly than nominal GDP growth is "out of control" (not talking about the US, of course).

It's totally amusing that you are responding with statements that do not address my point, but demonstrate it. Inflation, according to you, is the same for everyone. You might as well say that math is the same for everyone. An epistemologist could believe you, but a teacher would laugh in your face.

[Fake Boris]

You're a ****ing ******.

I couldn't resist the temptation to click your post and confirm your predictability.

Last time you pretented to put up something meaningful, you were trying to argue against high speed rail because it requires expensive grade crossings. I must admit that even the stupidity of this has been fading. Thanks for the refresh.

[Kuciwalker]

So according to you:

1) Inflation is the same for Bill Gates and a teacher

No. Over the extremely long term (I said ~100 years) you can't observe a huge divergence in those inflation rates.

2) Ecological thought has the same credence on public policy as ****ing economy

No. Climate scientists as a group have had little success getting their preferred policies implemented, compared to how much success they think they need. This is despite the fact that climate science should be far better at proving strong empirical claims than economics; the reason is because voters and politicians are only weakly influenced by experts.

The conclusion is that economists don't deserve too much blame for not exercising their power to influence public policy, because they don't have much power in the first place.

edit: if by 'credence on' you actually meant 'relevance to', then answer is pretty much yes, at least according to the consensus of climate scientists.

3) Economists have no influence, because instead of perfect free trade, they have merely convinced States to privatize education, dismantle welfare, reduce corporate taxes, replace public engineering expertise with PPPs, we've only got NAFTA and the EU, while at the same time persuading the public that a debt that grows more slowly than nominal GDP growth is "out of control" (not talking about the US, of course).

The gains in free trade have come after literally centuries of concerted lobbying.

And since the study of economics started, we have seen far more state-run schools, far more corporate taxes, and far more welfare than before.

You might as well say that math is the same for everyone. An epistemologist could believe you, but a teacher would laugh in your face.

Um, you believe that mathematics is subjective, in the 2+2=5 sense?

[self biased]

summary?

[Kuciwalker]

Oncle Boris has no idea what he's talking about. He's not even wrong; he just doesn't have any kind of coherent thesis.

[Egbert]

summary?

blah, blah, blah

yes it is
No it isn't
Yes, ****
No, ****
Yes, ****
No, ****