Umm, send this to peer review. Here's the link to Góes actual paper(http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf) published as an IMF working report which doesn't even have the backing of the IMF/managers/etc. I doubt it'd get published if reviewed. Really, out of the centuries of data they could have pulled in, they chose to use 1980 through 2012? Return on the capital is not ~1%....flawed assumptions, flawed model IMHO. Amazing that WSJ parades it as if it were peer reviewed fact. Then again, I'm not an expert. I only did mathematical modeling for HPC systems, not economies.
Piketty's book was not peer-reviewed, but as it's often the case in all fields you first publish a bunch of peer-reviewed articles on a subject and then you summarize and clarify stuff putting together a book.
So the book itself might not be peer-reviewed, but many of the findings within are
> Readers might think nonfiction books are the most reliable media sources there are. But accuracy scandals haven't reformed an industry that faces no big repercussions for errors.
And scientific content in most economists is zero.
It's 80% ideology + 20% math used to prove their point based on ideological assumptions.
Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes.
And then they get in bed with power, as advisors, ministers, etc -- talk about the worse case of "conflict of interest" compared to any other scientific field.
Well, maybe except doctors in the 70s working for the tobacco industry.
This is actually an argument which is pretty core to Austrian economics. They're dismissive of most traditional aggregate models basically because they think they aren't accurate enough to qualify as scientific. Generally Austrians are sort of dismissed as a cult, but IMO they have a pretty compelling explanation of how the Fed's attempts at price level stabilization helped cause the Great Depression. I'm not an economist or someone who has really studied this, though.
> Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes.
I think present-day economics is at the point where the science of history was at the end of the 19th - the beginning of the 20th century, i.e. most of them still believe that they somehow can predict the future based on past economic events, the same as some historians believed they they could predict our future based on past events from our history. Popper (among others) proved in his "The Poverty of Historicism" (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism) why "scientific prediction" is a futile thing.
What economics tries to bring new to the table is math (or what they consider as math), apparently that should make us laymen believe that what they're doing is more than crystal-ball guessing.
sadly that 80/20 can be applied to other controversial issues as well if not the conflict of interests of being in bed with politicians or corporate interests.
outside of hard sciences its difficult for even some in the field to know what is and and what isn't at times, the chance for the layman is near zero. hence when I tend to dismiss anything backed with politician ranting
It is a classic conspiracy theory to say that most of a scientific field is a fraud from (political) ideology.
(That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.)
I'd be interested if you can back that up? (With non ideological sources, of course.)
Edit: Considering the numbers, there are going to be some true conspiracy theories... and mass hypnosis from unverifiable things like psychology (Freud, Jung, etc). The burden of proof is still on the one presenting the conspiracy theories.
Edit 2: And of course, some sciences are experimental and use the scientific method. Some are largely historical (palaeontology, economics, etc). That doesn't counter my point either.
>That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.
Kind of like there have been hundreds of thousands of Freudian psychoanalysts (considered scientists) in the 20th century until now?
Or how people consider (and increasingly clinics embrace) homeopathists as doctors and scientists? With their own educational programs, journals and everything too.
In any case there's nothing special about many people working in a field that makes them automatically proper scientists.
To begin with, the term "science" is ambiguous.
It can refer to empirically or axiomatically verifiable, experimental, scientific-method following fields, which is what is actually "science" (e.g. physics, chemistry, mathematics, biology, etc.) and whatever ad-hoc field of study one can come up with.
The first is sometimes called "hard sciences" to differentiate them from the more "lax" and "anything goes" ones.
Now, the second type could still be a productive (if informal) field of inquiry and argumentation and insight. I'm all for continental philosophy for example.
But it's not scientific in the way engineering or physics is. Not even close.
The "Academy of Science" in most countries includes philosophers for example. And they do get Ph.D degrees and everything. They never verify anything, and they can hold totally conflicting views and still be "valid" and well established. Would you consider them "scientists"?
If not, are you a conspiracy theorist?
It's naive to believe that the way a society names some practices is also revealing about the essence of those practices.
So you lack references (without an ideological angle) that dismiss economics as a science -- which I asked after?
That some sciences can't use the scientific method (do experiments etc) like some parts of geology, don't counter my point. [Edit: Unless your point really is that you dismiss palaeontology et al in an equal way, too?]
(Or are you arguing that 80% of most everything which aren't based on mathematical proofs are bad?)
Edit: This is an innocent question about getting references to strong claims that a science has 0 "scientific content". I know some people whose integrity and intelligence I trust, which later went the academic track in economics. That gave in total 4 down votes -- but still without a reference?
I have no references but common sense. Popper gave the best tool I know to differentiate between proper science and quackery, namely falsification. In order to a theory to be falsifiable, there must be a way to prove the theory incorrect. For example, if I see that the newtonian equation for force, acceleration and mass (F = ma) does not hold, in some circumstances, I am able to falsify the theory.
Now, maybe the most fundamental assumtion of economics is that people are utility maximizers. I see no way how this can be falsified. How can I make a choice that proves I was not maximizing my utility?
This, in itself, is enough for me to be confident that economics is not (yet) a proper science, but a bastard of ideology and mathematics.
Again, is it then also reasonable to dismiss palaeontology as having 0 "scientific content", since it can't use the scientific method either?
This is an honest question.
(And I am no economist, but afaik, the economists note that "homo economicus" is a simplification. Most every science use simplified models, especially in the first university courses.)
Experiments are generally needed to "falsify" claims in physics, chemistry etc. Those are experimental sciences, which can use the scientific method. Mathematics et al can falsify "on paper".
Palaeontology, economics and many other sciences can't do either. Why can you dismiss one out of hand, but not the others?
(I have written this quite obvious point 3-4 times now.)
Edit: Your own wikipedia reference have a link to the "scientific method". You should read it. Well worth the trouble. It is arguable the basis for most everything we know about the world.
To be honest, I do not know what you mean by scientific method and I have not made any claims about scientific method. I have made a distinction based falsifiability. Falsifiability does not need experiments, but _observations_.
You have written your "obvious" point now a few times, but you have not written a single unfalsifiable claim of palaeontology or any of the many other sciences you claim that exists.
My hypothesis is simple, _anything_ that claims being a science but makes unfalsifiable claims, is quackery. You see, this hypothesis itself is falsifiable, all you need to make is give a single unfalsifiable claim of a respectful science to prove this hypothesis false. So can you give _one_ example of palaeontology that is unfalsifiable?
(Mathematics does not claim to be a science in popperian sense.)
It is good to look up the scientific method before arguing about Popper.
(Hint: It is in the first sentence of the second paragraph on Popper's wikipedia page. Also, your own link had the term as a related link.)
Enough for me, bye.
Edit: Another hint, Popper was amongst others professor of "logic and scientific method" at the University of London. It is also noted on his Wikipedia page. In short, you argue Popper without understanding what Popper argued about.
I am not quite sure why you want to stick with the scientific method. I brought one very specific idea of Popper, falsification, that I think is relatively ideologue free and very useful to separate science from pseudoscience. And which happens to say that there are fundamental parts of economics that remind much more pseudoscience than proper science.
This discussion is _extremely_ easy to bring forward. All you need to do is to tell _one_ properly scientific theory outside economics that is not falsifiable. If you can't do that, we can hopefully agree that economics is one of the rare species that seem to have some (questionable) scientific credibility without too strong foundation on falsifiable thinking.
"Sceintific method" and falsifiability are not the same. Popper's criterion does not even mention this method and for all I know this is something only people in the US learn (on the other hand, many Americans do not seem to be familiar with the concept of falsifiability).
Paleontology as a whole could not possibly be falsified but a paleontological theory could. E.g. if a paleontologist claimed that certain species lived in a certain period then discovery of a fossil for these species but dated outside this period would falsify such a claim.
Re your point about Palaeontology -- the same goes for economics (and much of astrophysics, for that matter). Which was my point.
(The rest isn't relevant for my point and I am not really an expert. So just post a reference if I'm totally wrong. Popper isn't the last word in the philosophy of science anymore, either.)
"Scientific method" only discussed in US and not relevant to Popper? :-) As I wrote to Beefield, in the end:
Hint: [The scientific method] is in the first sentence of the second paragraph on Popper's wikipedia page.
...
Another hint, Popper was amongst others professor of "logic and scientific method" at the University of London. It is also noted on his Wikipedia page. In short, you argue Popper without understanding what Popper argued about.
Sorry, I don't see how it does. Could you show an example of a falsifiable economic theory? Thanks for the hint by the way, but it looks like a non sequitur to me. How does it follow that I don't know something from the Popper's job title?
To be fair, there are falsifiable economic theories. For example some theories regarding market failures, like the adverse selection in asymmetrical information markets[1]. We _could_ observe that there is a market that fulfills the criteria for market of lemons, but prices lemons and cherries distinctively.
My issue with economics is that some of the deep core assumptions (utility maximization, strong form of efficient markets etc.) violate so egregiously the falsifiability test.
So you give up on my point regarding experimental sciences (which was what Popper was about) and the rest -- like economy, palaeontology etc?
The scientific method is what is used by the experimental ("hard") sciences. Do you really not know this?
This is the start of the second paragraph of Popper's wikipedia page, defining what he wrote about:
"Popper is known for his rejection of the classical inductivist views on the scientific method, in favour of empirical falsification: A theory in the empirical sciences can never be proven, but it can be falsified, meaning that it can and should be scrutinized by decisive experiments. ..."
Popper even was a professor of logic and the scientific method...
I am sorry, I have to soon assume I'm being trolled here.
Edit: You can e.g. also see the discussion of Popper's work here, where it is also discussed explicitly that he argues about how the scientific method works: http://plato.stanford.edu/entries/popper/#GroHumKno
You ignored that I argued your questions about Popper is not relevant for my point [edit: if nothing else, that argument also applies to astrophysics, archaeology, history, etc], so your dismissal here forces me to dismiss you as a serious debater.
Economy, palaeontology, archaeology, history and astrophysics can use computer models, look for data in the nature etc. Those can disqualify hypotheses. But you can't use the normal scientific method.
I asked for references to disqualify economics (which aren't from obvious idealogical sources) -- none are presented. That tells me all I need to know.
I don't need the epistemology of Popper or the more modern philosophers of science for my argument -- there is a difference between experimental sciences and the rest. The point is: To disqualify one of these sciences because it isn't hard, you need to explain why don't also disqualify the rest of them.
If arguing about Popper and the scientific method is really your interest and not trolling, go ask an expert instead of asking me for what you can find here: https://en.wikipedia.org/wiki/Scientific_method
>To disqualify one of these sciences because it isn't hard, you need to explain why don't also disqualify the rest of them.
All of them should be disqualified as well, with the exception of astrophysics which IS a hard science. Who said it isn't? Just because you can't directly observe from nearby a remote star to falsify your hypothesis etc doesn't mean you can't look at its energy emissions, radiation shifts due to speed, gravity effects to nearby bodies from its mass and volume etc. And a lot of astrophysics stuff related to composition of matter, nuclear reactions in a star, etc. are just plain physics. Not to mention when it cames to planets in the solar system, astrophysics very much can go (send probes etc) and gather empirical evidence directly.
History is no more "scientific" than economics -- both are ideological battlefields, where each thing is seen through the prism of the current preferences in each practitioner's era and circles.
Regarding palaeontology and archaeology both are full of BS too, but in the spectrum of hard vs soft sciences are closer to hard sciences than economics or history are, mostly the parts dealing with description and taxonomy of findings rather than their wild theorizing.
Hmm, fusion and particle physics might be too well known and _relatively_ simple that energy output and spectra can say what happens? You might be correct regarding astrophysics, especially since they do have many billions of examples to study.
Regarding your judgements on the rest of the fields, I'd really see better support for your claims. They will all look different with time, that is what research is, but dismissals of thousands of really smart people's work just need better motivation.
Some people just don't have much of an ideological connection to religion, sports or politics. At a minimum, I doubt that the departments in a majority of the world's economy departments have the same agenda. :-)
>So you lack references (without an ideological angle) that dismiss economics as a science -- which I asked after?
That's the best you could deduce from my comment?
For starters, given the main claim I made (that economics is not a science), and considering that whether is true or false is under question, the last thing one could logically ask for, regarding that, would be citations.
For who would make those?
Surely not physicists or mathematicians, etc. (since it's not their job). And surely not economists for it IS their job.
If my claim was true, economists admitting it would be like homeopathists or freudian psychoanalysts saying their fields are non-scientific. It just ain't gonna happen, or it will be marginal at best.
Ever more profoundly though, should we actually evaluate arguments, or only think pre-made thoughts coming to us by way of citations?
Because the latter is not scientific either -- one needs to evaluate citations too. And no, peer review is not infallible in that either (in case one thinks citations are some golden truth they can always accept because they're peer reviewed. In fact a good majority of papers even in hard sciences have been found in meta-studies to be reproducible and others plain wrong (the so-called reproducability crisis).
Assuming it it the same and worse in economics, which is not a hard science, already makes most of my point.
>> If my claim was true, economists admitting it would be like homeopathists or freudian psychoanalysts saying their fields are non-scientific. It just ain't gonna happen, or it will be marginal at best.
You do realize that is how the creationists argue about the biology academics? :-(
The problem is that to show something completely wrong (a year or two ago, you'd probably have linked to Picketty?) is a good way to make a career.
If you want to make a better argument for your position, go to post modernists or some other of the political sciences which generally have disappeared ten years later.
You could make a point, which I'd agree with, that your position is stronger than a conspiracy theory, there are too many precedents. But to dismiss a field of research, you really need better support.
>> should we actually evaluate arguments, or only think pre-made thoughts coming to us by way of citations?
Far outside our areas, that is a good heuristic...
About your references:
* Stephen A. Marglin seems to argue that the small society might be better. It is an interesting and important point. E.g. communism works OK in a village, but not for larger areas. Afaik, he don't present an alternative? (No one thinks the present democracy or capitalism is perfect, we just haven't found anything better.)
* "The Puzzle of Modern Economics: Science or Ideology?" got good reviews, but only by five readers. This seems to be a good overview:
"Is [economy] a.) dangerous mathematical formalism, b.) free market ideology, or c.) a vital guide to practical action? The correct answer, he concludes, is d.) all of the above"
Well, that isn't exactly controversial, is it? :-)
* Dani Rodrik seems to argue about when economy is a useful tool? It don't support that zero scientific content claim, either.
>You do realize that is how the creationists argue about the biology academics? :-(
You do realize that I don't care who else argues something in a particular way in another domain, as long as an argument is correct in another domain!
>The problem is that to show something completely wrong (a year or two ago, you'd probably have linked to Picketty?) is a good way to make a career.
Not really. To piss on your own field, is a good way to be considered a pariah, a conspiracy theorist, a nut job etc. Not many grants coming to the self-doubting economist, and policy advisor positions either.
>But to dismiss a field of research, you really need better support.
Like self-deprecating citations from practitioners in the field?
(Even if expecting that is illogical to begin with -- since economics is what puts food on their table --, you'd be surprised how many economists have written self-deprecating critiques about economics)
>> To piss on your own field, is a good way to be considered a pariah, a conspiracy theorist, a nut job etc. Not many grants coming to the self-doubting economist, and policy advisor positions either.
You can say the same for any research area.
>> Like self-deprecating citations from practitioners in the field?
You know yourself that you can find that for most fields. I know I've heard it for biochemistry (regarding over relying on computer modelling for evaluating molecules, a long time ago; I have no idea what people to do now).
It is normal and necessary introspection about what you are doing -- "Do we do the right things? Are we going in a good direction?"
I don't think conspiracy theory is the right word for it. The world isn't ever that neat :)
His statement, when you refine it appropriately (which is not always done in an online forum), only presupposes that most people of the field who are visible to the public are "either idiots, fanatics or crooks".
I wouldn't phrase it quite so strongly (and for what it's worth, the grandparent didn't either), but it's easy to see why that would happen. Since economics is mostly about money, even slightly bending the public's perception on what scientific economic consensus is can have an extreme payoff via influencing public policy. So a lot of money is spent on trying to do so (virtually all of the so-called "think tanks"), much more and on a much more consistent basis than in any other science. So even from first principles, without any evidence, you have to logically expect economics to be worse than other sciences at delivering a rational truth.
As for evidence, I wonder what you would even accept as a "non-ideological source"?
All that said, it's not like the economics profession is an entirely lost cause. There are people like Dean Baker and James Galbraith who manage to occasionally bring alternative voices to the public.
>> I wonder what you would even accept as a "non-ideological source"?
Since no references, which I asked for, have been presented at all, that is not an interesting problem...
>> the grandparent didn't [phrase it strongly] either
Uh, "scientific content in most economists is zero." is not strong?
>> All that said, it's not like the economics profession is an entirely lost cause. There are people like Dean Baker and James Galbraith who manage to occasionally bring alternative voices to the public.
Why do you assume that "alternative voices" are better than the research consensus of a field?
(Yes, I make myself intentionally stupid here. I realize the answer probably is because you like the alternative voices better...? :-) )
>> Since economics is mostly about money, even slightly bending the public's perception on what scientific economic consensus is can have an extreme payoff via influencing public policy.
Certainly you'll find paid research in any field with policy influences. Smoking comes to mind. Please make it likely that most of the [economy] field is corrupt, as the GP argued?
There was no talk of "idiots and fanatics" in the comment you replied to, hence the "not phrase it so strongly" part.
> Why do you assume that "alternative voices" are better than the research consensus of a field?
It's not an assumption, it's a conclusion from my period of digging into that stuff ;-)
(And it's also not that all alternative voices are always better. It's that there are flaws in the economic research consensus that are clearly visible to an interested outsider who sees the alternative voices and listens to them equally.)
The clearest and most painful example of this is that in the face of close to a decade of extremely clear evidence (in the form of comparing the Eurozone to other advanced economies, mostly), most economists discussing fiscal matters still make no distinction between governments that are monetarily sovereign and those that aren't.
It should be natural to assume that there's likely a qualitative distinction to be made between governments that can go bankrupt and those that cannot - there might be reasons why that isn't so, but then one needs to make an argument.
So you get things like the once famous Reinhart & Rogoff paper about government debt ratios - which has been thoroughly discredited, but even the people doing the discrediting typically didn't point out the problem of ignoring monetary sovereignty.
> Certainly you'll find paid research in any field with policy influences. Smoking comes to mind. Please make it likely that most of the [economy] field is corrupt, as the GP argued?
I assume you would assign the "smoking" issue to the field of medicine. Which percentage of research in medicine would you expect to be closely related to public policy? Which percentage in economics?
What you write there is interesting, you should have led with that. :-) Could you give me some pointers?
Coming from Sweden, we have a consensus culture. That makes it possible for the media and the politicians to whip up a frenzy and change the acceptable opinions. The point is, you don't have to dig so deep to find official lies. Quite a few of the whistle blowers are economists. I do believe a large subset in the profession have integrity.
>> I assume you would assign the "smoking" issue to the field of medicine. Which percentage of research in medicine would you expect to be closely related to public policy? Which percentage in economics?
Let me put it like this -- Sweden recently got a professor (instated by the government) in the state defence research arm, specialized in gender. He tends to write articles supporting whatever the government likes... :-)
Regarding research -- smoking was not public policy, but purely company interests. All of health questions regarding choices of medicine, treatments and diet are interesting to lots of interest groups. (And age verification of young people was a big thing in Sweden regarding the immigration -- the international research consensus was thrown out...)
The national economy researchers are much fewer. But there are also quite a variation internationally on how politically influenced academics are. Also, what is sensitive in some countries can be researched in others with e.g. a different infrastructure.
In my native Sweden, the health research is probably more interesting to influence than the economic departments at universities. The political parties are interested in the economists. The big corporations don't really care, they talk to the parties directly. (Corporatism, yes..)
>> There was no talk of "idiots and fanatics" in the comment you replied to, hence the "not phrase it so strongly" part.
The statement "scientific content in most economists is zero" needs that the practitioners are either idiots, crooks or fanatics.
But sure, I'll back down here. A group of people studying a subject without any feedback and internal tests can go crazy, obviously. coldtea used the example Freudians. You might use post modernists too -- any group with a common preconceived opinion about how the world works might become a cult.
There is just to much precedent in the crazier part of academia for my argument.
Still, to dismiss an old field of research needs damn good support.
For those who reads french language -- Piketty sometimes publishes articles in Le Monde. I would be really curious to know what people here think about these publications. I am not entirely sure how to interpret them.
Why did they select 1980 - 2012. This is narrow. I'm not an economist but I can see an attempt to compare 12 years of selective data against 200 years of data is suspicious.
I'm curious - does anyone else think that the equality that matters is equality in material outcomes? I think that would be such a boring world. The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other. I think the developed world has made monumental strides on these fronts, which are spreading around the world too. (Even though, of course, there is still work to be done).
Incidentally, I think even though (as Piketty claims) inequality may be increasing, the average person (certainly in developed nations, but also in developing ones) has also been unimaginably enriched over the past 200 years. By any ethically relevant standard (access to food, shelter, heating, technology, entertainment), we live unbelievably fortunate lives. This when our ancestors a mere 3-4 generations ago were unspeakably poor.
The danger is where inequality in rates of improvement in material outcomes leads to inequality in moral outcomes. To borrow some rather loaded language, the more the 1% can buy themselves legal advantage, the more unjust the world becomes. If the rate of legal advantage is affected by the absolute difference between the 1% and the 99% (which I'd argue is demonstrably true - beyond a certain point you've got regulatory capture, but even before then, paid legal representation is the lever that matters here), then it's trivially true that a more materially unequal world is more morally imbalanced in the absence of a somewhat socialist government.
Yes, the poorest and the average now are doing better than they were. That doesn't make defensible the disparity in gains between the richest and the rest.
I think the historical record is against this. Specifically: before the liberal revolution--the liberal idea that all humans are equal, which was truly revolutionary--it would have been unimaginable for a member of the peasantry to even claim equality with some lord, let alone build a legal case and have it heard. Again, it's far from perfect today, but better on many fronts. I imagine that differences will continue (they're unavoidable) but the mechanisms to cope with injustice will get better.
By what mechanism? I'd say that the historical record is specifically in support of this. Civilisations start out relatively equal, inequality increases over time as wealth concentrates in elites, then they collapse either to revolution or war, reset, and start again. What evidence do we have to support the idea that we should draw a line up and to the right?
Maybe more correctly: the vast majority of humanity was equal in its wretchedness, poverty, ill-health, and violence; the vast majority of people led miserable, hungry, precarious, uninteresting lives.
Again, I'm not saying we've done all we can do. I'm not saying that many of the rich don't behave reprehensibly. I'm not saying we can't do better. But the question is: How? How can we do better most effectively? I don't think the answer is 'tax global wealth and redistribute' a la Piketty--because that's not what enriched us so over the past 200 years.
So yes, it has gone up and to the right, especially in most recent history--though, because of human folly, there is no guarantee that it will continue to do so.
This is a misconception and not what the alluded revolutionary idea is quoted by in the declaration of human rights. All humans are created equal, and I'm sure that modifier was put in not by accident, even though I couldn't explain the difference.
Point in case, one conclusion seems to be that humans are precisely not equal to each other, everybody's worth is equally indeterminate. Edit: I am biased to say this because human worth is specifically mentioned in this context in the German Grundgesetz (foundation of the law) where it's called Wuerde (dignity) and encompasses more than the capitalist idea of material value.
Extreme material inequality can't be explained by some people performing better, so it's pretty obvious that it is unjust. How can unjust distribution of the material wealth be moral?
How can you morally justify that some people have to work more than 40 hours per week to be able to barely scrape by, while others can just enjoy their lives luxuriously without working at all.
Oh and in fact, poor people in western societies today have it worse than 20, 30 years ago.
How extreme can material inequality get before it's a problem? Well the Walton family have the same amount of money (wealth) as the bottom 160 million Americans. How much more extreme does it have to get before it doesn't become the issue?
Money is immaterial?!? As Homer Simpson once said (to his brain): "money can be exchanged for goods and services" - like healthcare, education, important stuff....
Is your idiocy also material? Maybe you should have it removed.
EDIT: Joking aside, the knowledge how to work a job is valuable, but immaterial. Undernourishment is often a matter of lack of the knowledge how to extract resources from the environment. Of course a lot of wealth is attained by theft. But what's theft of ideas, are ideas material wealth? Sure I'm talking semantics, I try to understand you. I don't assume you are totally wrong, I just tend to assume that my language faculty is sufficient to follow involved arguments. Often erroneously, but therefor I'm skeptic of others as well. I suppose the distinction between material and immaterial is largely immaterial, and the difference between abstract and concrete best hidden from conversation.
>I just tend to assume that my language faculty is sufficient to follow involved arguments
Spoiler alert - it's not. You didn't even use the right form of skeptic; you should have written 'skeptical.' Besides being a non-sequitur, your analogy is fatally flawed. It presupposes that it is possible to steal ideas, when in fact it is only possible to copy them. Furthermore, every homeless person knows how to extract resources from the environment: throw a brick in somebody's window and steal their stuff. Resources extracted. If by 'extract resources' you mean 'get a job and be a law-abiding citizen' then I question whether you have ever tried to rebuild a life from absolutely nothing while staying inside the confines of the law. It might be harder than you think.
Fair points, except I was thinking of technological supremacy, specifically the ability to build an aqueduct and that has to come before. It's supposed to be a metaphor for mind over matter and the asymmetry of life that has to be tolerated. Toll~ literally means to account, more or less, so I am not saying bigcorp exploitation was acceptable.
On skeptical, German has different grammar, but we share a large part of the vocabulary. Sometimes I have problems learning Idioms, other times I am unwilling to accept them because I think they are corrupt. I like talking semantics. Of course, the grammar has to be fit for that, so thank you. And please stop insulting other people on here. Don't take anything I say too serious, I am just bored and trying to get into a conversation, which is sad enough.
Piketty isn't really talking about "inequality in material incomes" so much as a theory that a small proportion of dynasties tends to accuulate such a large proportion of national resources that the economy ceases to operate like a competitive market and becomes a means for those holding the majority of the wealth to extract rent from those holding the diminishing remainder.
That can be a problem even if you find some inequality unproblematic or even regard some level of inequality as morally necessary to reward endeavour and ingenuity and encourage economic growth, and is a problem for progress in the future even if the baseline standard of living in developed countries is very acceptable by historical standards.
There are of course limitations to how accurate his theory is, not least because much of public policy has been designed to avoid it happening.
Nearly every assumption in this argument of Piketty's is flawed. Is it only the rich that have capital? What about human capital? What about creative destruction--the entry of new market players? Don't the rich (and their children) often squander their capital? More to the point: look at the evidence of the many rich people around us. Did they build this wealth by banking on r > g, or by putting idea upon idea and creating something new?
The book attempts to address these in rather more detail than can be managed here, but human capital isn't likely to get you to the ranks of fabulously wealthy without the backing of VCs and their already fabulously wealthy LPs, and wealthy dynasties are generally much better at structuring their portfolios to avoid being wiped out by "creative destruction" than smaller business owners. Piketty argues that our concept of "the rich" is heavily shaped by lists which are biased towards those who create companies because their wealth is much easier to estimate than the diversified portfolios of family dynasties, and that distinguishing between the two isn't easy either (Warren Buffet, for example, is entirely self-made but has done so entirely through disproportionately successful bets on r > g rather than creating something new, and many of the entrepreneurs that have succeeded by creating and marketing something new take the eminently sensible decision to diversify those riches and become rentiers to let their fortunes continue to grow later in life). Whether he's right or wrong about the composition of the rich in general, it's pretty obvious the HN concept of the rich is skewed towards the Zuckerbergs we can aspire to emulate rather than the Koch brothers we can't.
I agree with you: it is a long book, with more problems than can be enumerated and discussed here, but key amongst them is the idea that inequality--the Gini coefficient--matters above all else, and particularly matters more than the absolute improvements in living standards that we (most of us) have experienced in recent centuries. I don't think one's goal should be to enter the ranks of the 'fabulously wealthy'. Anyway, by definition, there will always be a bottom 10% or 20%.
I'm pretty sure that only a minority of rich people are really in the ideas and creation business. If you live in Silicon Valley it might appear different, but globally speaking, the rich tend to fall into the categories of (a) inherited wealth, (b) upper management, (c) non-hard-science knowledge worker types (finance and lawyers).
Yes, r > g is only an aspect for (a), but the Piketty argument also has to be understood as a warning bell. After all, wealth and the resulting political influence make it easier to ensure that mostly (a)-types ever get into (b)- and (c)-positions in the first place. (And the tendency for this has always existed and exists today, just look at the university system in most countries for evidence.)
If you look at things over 200 years we are doing much better but I think it's more important to look at it generation by generation. For example, growing up I will have had a comfortable life - going into adulthood supposedly my generation will be the first (no idea when that data goes back to) to do worse than it's parents. So throughout my life I will become less comfortable. It seems like we've now reached a point where the poor ACTUALLY become poorer and the rich become richer,
> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.
But in practice these things are to some extent dependent on equality (or at least less disparity) in material outcomes.
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." -- Anatole France.
> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?
Maybe not directly, but...
> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.
Material outcomes demonstrably affect all of those things, and cannot avoid doing so, generally, because "material outcomes" are power, and power is fungible, and those are all important areas to which power is applied.
Tyler Cowen addressed this in an interview, saying that the inequality that "really matters" is the difference in your living standard versus your sister's husband[1].
> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?
You should not forget that inequality is not only about material outcomes. It is also about power to decide economic matters, such as how capital is invested. Shouldn't these matters be decided more equally by all members in society?
What people seem to care about is not net improvement, but relative improvement. It really comes down to if you feel like things aren't better because you are comparing them to other people. It's not right or wrong, it's just an impossibly moving target.
Agreed with you and k-mcgrady. I think maybe we will need to use more and more 'hacks' that make us aware that it's already reasonably good.
FWIW, Benjamin Friedman ('The Moral Consequences of Economic Growth') has great research that shows that when people stop feeling like they're advancing and participating in economic growth, moral and ethical ideals like open-mindedness, acceptance, tolerance, and democracy deteriorate, which is concerning.
Ah, economics. "There is little more than some apparent correlations the reader can eyeball in charts" - so, how does this compare to the actual standards of testing of competing theories in economy?
I'm not terribly surprised to find Mr. Goes has worked with the Cato Institute, one of a network of hundreds of policy think tanks worldwide under the Atlas Network and strongly tied to the Mont Pelerin Society with a very specific ideological agenda. Though it's curious Mr. Talley's brief note fails to mention those bona fides. Collectively, these institutions have been on the far side from truth on debates over tobacco, asbestos, leaded petrol and paint, the ozone hole, and now global warming.
This isn't to say that Mr. Goes' analysis is flawed, I've yet to look at it. But the glee with which it's being picked up by the Murdoch/Newscorp WSJ, and from a quick bit of DDGing, numerous bloggers and commentators, suggests a wee bit of bias could be present. The lack of substantive description of the study by Talley doesn't suggest much of strength either.
Certainly other IMF and World Bank economists have found Piketty credible.
It seems to me obvious that it is rich people who own shares and property. Therefore if total income from capital grows faster than total income from labour, the gap between rich and poor will grow.
But I have to admit I don't really understand theory behind the opposite view. In particular, the article says "the data shows changes in the savings rate are likely to offset most of the effects of an increase in capital share of national income".
Is this saying that poor people will save more as capital returns grow, and this mostly compensates poor people for the relatively slow growth in wages?
Many of these kind of "studies" need the author to have actually witnessed at least one or twice how a person, man,woman, children, opening a trash bag looking for food, and then they'd know how the face of a hungry human being looks like.
A big part of modern, first world ideology is that we think the problem is caring. That if only we understood, or cared, the world would be better. People need to care and understand transgender people, or people who have lacked education, or poor people. That if only they cared, we could fix the problem.
Dr Martin Luther King jr gave one of the most needed, most important speeches of all time. He had an emotional desire for humanity, a dream. A dream that, in many ways, changed the world. Unfortunately, ever since that time every issue has been approached with the same emotional bedrock, a dream. Very little has involved a real PLAN, or real measurement.
Thing is, caring, empathy and understanding don't fix problems, they highlight them certainly, but they don't provide fixes. People seem to confuse those two ideas - highlighting and solving - and we keep highlighting, when solutions seem the more important need.
caring creates problems that hinder performance - that's why we don't have people that care about us perform surgeries on us, because their emotions don't help.
The problems the world faces don't need more emotion, they need a more objective, result driven, rational response that we measure and change in response to results. This video I think introduces a lot of these ideas well. http://www.theatlantic.com/video/index/474588/why-empathy-is...
It's true that there are people who have an "if only people were nice" type of outlook on life, and that is indeed naive. The problem isn't that individual people are nasty, it's that the system is set up in a way that favours negative outcomes for many.
The only way to fix the system is politics, and a necessary condition for getting anything done in politics is for people to care.
That said, I agree with you that less complaining and more actual plans would be great. (And especially if the people who complain would then start supporting plans, even if it means that others call them "bad" words like "commie"...)
I don't understand why this has to be a dichotomy? Why cannot you be a caring, empathetic person, while also rationally maximizing efficiency of your actions? There are people like that.
