Wednesday, 19 October 2016

On the Clash Between Pluralism and Diversity

Coming back from intense weekends with Rethinking Economics people in the beautiful Peak District has raised a whole range of questions for me, again illustrating my cynical qualms about the entire movement. I'll go into those issues in a further post. For now, I wanna discuss the relationship between diversity and pluralism, as understood in the context of economic ideas. 

Monday, 17 October 2016

The Use and Abuse of 'Neoclassical Economics'

This is a post about words and wording rather than content. But since words and language matter for how we understand the object in consideration, the distinction doesn't really hold. But I believe it conveys the intention; I wanna talk about the misuse of the word 'Neoclassical'  not primarily the contents or methods or elements that characterises it.

Nothing drives me more insane than the awkward and mistaken use of 'Neoclassical' to capture the mainstream practice of contemporary economics. Critics of its contents loudly and indignantly call for change, but stubbornly and mistakenly brand this mainstream economics 'Neoclassical'. In the midst of their intellectual confusion, they add insult to injury by loosely treating it as a catch-all for whatever bad idea they happen to disagree with.

Saturday, 15 October 2016

Ellenberg and the Magnificient World of Math

Jordan Ellenberg is the prolific mathematician at University of Wisconsin-Madison, whose Slate columns and best-seller How Not To Be Wrong - The Hidden Maths of Everyday Life* has captured more than my own heart (see interviews by NPRThe Guardian and for more media coverage). 

Before the first fifty pages were over, he had already re-awakened my teenage spirit (the hatred towards certain math problems that I probably never entirely let go of), strawmanned a blogger I adore (Dan Mitchell), discussed the Laffer curve and sparked nationalist interest by naming his first chapter "Less than Sweden". Moreover, he reminded me of something mind-blowing a friend once told me, and disproved Steve Keen's seemingly bulletproof attack on neoclassical economics (pp. 47-48) by refering to an early-19th century mathematician (Augustin-Louis Cauchy, famous for introducing the notion of limit into mathematics).

In other words, he had me at hello.

Tuesday, 11 October 2016

Obama's Mindblowing Contradictions Pt. 2

This post is a continuation of Barack Obama's horribly inaccurate piece in The Economist ("The Way Ahead") the other day, where I decided to pick about 12 points where he is seriously mistaken or internally contradictory. It's quite an astonishing read, and rather patronising to see how the leader of the free worlds thinks so lowly of his subjects (the first post is found here: "Obama's Mindblowing Contradictions Pt. 1")

Monday, 10 October 2016

And the Nobel Prize in Economics goes to...

Every year I get equally excited ("Eurovision for Economists"...?), and every year these two seriously annoying things happen:
  1. Some pundit tells me that it isn't really a Nobel Prize but only the Swedish Central Bank's prize in honour of Alfred Nobel. As if I didn't know that. The importance of a prize comes from how people treat it; and economists/media treat the Swedish Riksbank Prize as a Nobel Prize, giving an awful lot of attention to the winner and his/her research. Hence, it matters. Grow up. 
  2. Someone will downplay the importance of the prize, either argue that we also need prizes for sociology, gender studies, psychology and political sciences, or that even Hayek argued against the institution of the prize, because it confers authority on economists in very unhelpful ways. 

Sunday, 9 October 2016

Obama's Mindblowing Contradictions Pt. 1

I'm stunned. Speechless, even. And clearly suffering from some emotional roller-coaster syndrome. First, I find that the New York Times published an Op-ed by McCloskey last month, praising capitalism and markets. Someone at NYT must have been asleep at the wheel (I'm sure Krugman is furious...). Then I see the Hillary-Wikileaks-so-called-'Scandal' that she secretly dreams of free trade "powering growth and opportunity to every person in the hemisphere". (Now Krugman surely had a heart attack).

Thursday, 6 October 2016

Immigration and Romer

Like many economists, I have this love-hate relationship to disputes over immigration and so I tend to stay away from them (admittedly, I do occasionally write about them: see here and here). My reasons for this are fairly simple; the topic is controversial in a tainted and unhelpful way, but mostly because the disputes mainly lie outside the scope of economics (namely culture, politics, political sovereignty etc). When economists point to some economic aspect of immigration, or some economic process affected by immigration, proponents or opposers take that as firm evidence one way or another, and entrench their political views further. Hardly useful and not exactly something I happily contribute to. As Greg Mankiw pointed out a few years ago, in his wildly controversial article Defending the One Percent:

Monday, 3 October 2016

Romer, Macro and the Blogosphere

There are few economics articles I laugh my way through; Shake my head in disbelief, cry out in frustration or harass everyone about the naivity of some defunct economist's argument all happens quite a lot - but Paul Romer's The Trouble With Macroeconomics had me laughing on every other page. If you're like me, a sucker for sarcasm, I'm sure you'll love it to.

Wednesday, 28 September 2016

Economic Pluralism is Like Teenage Sex

Despite the clickbait nature of the title, I am actually trying to make a serious point here. Stay with me, OK?

The failure to understand that the history of economic disputes contains a variety of competing theories from many schools of thought, is one of the major shortcomings by the ruling mainstream. It implicitly and explicitly assumes its untouchable position in the Ivory tower of academia, flat-out ignoring the history of ideas or frankly anything that doesn’t involve insane amounts of fairy-tale equations and the intersection of two made-up curves.

Sunday, 25 September 2016

Love, the Efficient Market Hypothesis and Berkson's Fallacy

Waking up the day after a late-night out always makes me slightly melancholic... which obviously means we're discussing the Efficient Market Hypothesis (EMH). The EMH is this decades old idea about the perfect efficiency of asset markets, arguing that all (publicly) available information is already priced into any asset. In other words, it's impossible to "beat the market" since the market at any given moment is correctly priced.

Tuesday, 20 September 2016

Adam Smith, LTV and Scottish Whisky

Being back in Glasgow, passing by the Adam Smith statue from time to time, reminded me of an argument I once found in Larry White's The Clash of Economic Ideas, an amazing book published by Cambridge back in 2012. It's one of the absolute best books on modern (20th and 21st century) economic thinking (perfect supplement for any course on the History of Economic Thought). It covers, as its title would suggest, the disputes between economists over the ideas they have held, briefly yet comprehensively. A must-read for anyone who cares two straws for economic thinking. 

Monday, 19 September 2016

The Good, the Bad and the Ugly

is the title of Mervyn King's first chapter in his recently published The End of Alchemy (Mervyn King is the former Governor of the Bank of England). I yet have a few hundred pages left, so the review post will have to wait. However, since my professor during first day of classes brought up King's book as a must-read for this semester, the allegory is aptly and affectionately made.

My professor's intro lecture for this course on the Government & the Economy included fairly well-defined areas of exactly these elements: The Good, the Bad and the Ugly. Since we're on King already, let's start with the Good:

Saturday, 17 September 2016

Travels and Privilege

So my friend linked me this ranting leftie post ("Your Obsession With Travels Sure Feels Classist To Me") during my exams in Sydney and I finally got around to comment on it. The case is this: since being able to travel abroad or backpack the world or go on family trips requires money, and since money is a social privilege that some poor people don't have, talking about one's adventures is oppressive, showing your pictures is distasteful, publishing them on instagram is classist (whatever that really means...).

Tuesday, 13 September 2016

How Inequality Causes Ill Health

Newsflash: it doesn't. But people still believe it.

Regardless, courtesy of some girl at Glasgow Uni Fresher's Fair - whom my friend fancied enough to ask on a date - here's the argument:

In Public Health research circles, there's this infamous observation called 'The Glasgow Effect' which shows how indicators such as life expectancy, mortality rates, morbidity, acute sickness or ill health are worse in Glasgow than many other places - even when controlling for all kinds of things. Compared to historically and culturally similar cities such as Liverpool or Manchester, the effect still persists. Sometimes, it is even given as a within-Glasgow-inequality example, showing how life expectancy drops almost linearly for every stop on the Glasgow subway.

Sunday, 11 September 2016

Unintended Consequences of Income Taxation

From one ranting to another, here's one that really makes my hatred for the state burn: Income Taxation. And not only or even primarily for the intended and obvious effects of states confiscating other people's just property, meddling their juicy fingers in other people's business, but for the unintended consequences

Thursday, 8 September 2016

Two Questions People On the Left Can't Answer

A favourite pastime of mine is making fun of my friends on the left. Most of the time it is a sign of affections, a bleeding-heart inspiration that I share with McCloskey, to reach out to my deceived friends on the left and convince them to maybe, just maybe reconsider - be provocative, and never ever apologize. About six months ago, I was relaying some entertaining Venn diagrams from the AEI that puts lefties' convictions in awkward positions. Today I have a few more, namely two questions lefties can’t answer without abandoning their own principles or running into serious academic and political problems. Here we go:

Monday, 5 September 2016

Why Econ Matters Most of All

I'm in the habit recently of telling everyone that Economics matters most of all. Needless to say, this infuriates pretty much every non-economist that I know, either shaking their heads at my lunacy or openly accusing me of economism.

Let me explain what I mean.

Economics is many things, particularly a way of thinking. This way of thinking, radically opposed to the charge of 'economism' (that says we're just reducing everything to monetary costs, favouring the 1% etc.), involves a few things: opportunity costs and what they mean; the inevitable scarcity of life and the positive time preference that come from that; and marginality, meaning that we compare incremental units of goods or services (or feelings) rather than entire categories at once. Do have a quick look at the links, for the best education of your life. 

Saturday, 3 September 2016

Charlie Söderberg and the Stories We Tell

The Stories We Tell is the title of one of my favourite journal articles, written by David Colander in 1995 and published by JEP. Not for its conclusions, but for illustrating the dissonance between what economists are doing and students are learning. Obviously fuelling my passion for Rethinking and their stated goals.

Therefore, attending Charlie Söderberg's lecture i Malmö two days ago was quite delightful. I laughed in recognition, had a few "aha"-moments and a veritable avalanche of inspiration. Söderberg is an entrepreneur and lecturer, quite famous by Swedish standards for his appearances in the reality-TV show Lyxfällan - a show everyone knows about.

Tuesday, 30 August 2016

The Mistakes We Make

Lately I have been on a thematic killing spree, publishing controversial material enclosed in antagonizing language left and right: harsh words over feminism (with more coming Thursday), state crimes and environmentalism. In complete lack of humility I'll follow up with the Climate Change debate as it should be.

I'm also thinking a lot about signalling. Once you start analyse things through the lens of signalling, most incomprehensible and sacrosanct behaviour becomes understandable - like climate activists. The prime example of short-term, economically illiterate social signalling.

Saturday, 27 August 2016

If Men Were Angels

"If Men Were Angels", wrote the contributor to the American constitution James Madison in 1788, "no government would be needed". Indeed, if men were angels, any government would be flawlessly run. But as long as men are not angels, the standard interpretation has been that a government violently keeping us all in check is required for life not to be unimaginably terrible.