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Scholar Behind Viral 'Oligarchy' Study Tells You What It Means - 0 views

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shared by Javier E on 19 Mar 15 - No Cached
  • Let's talk about the study. If you had 30 seconds to sum up the main conclusion of your study for the average person, how would you do so? I'd say that contrary to what decades of political science research might lead you to believe, ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups -- of economic elites and of organized interests.
  • People mean different things by the term oligarchy. One reason why I shy away from it is it brings to mind this image of a very small number of very wealthy people who are pulling strings behind the scenes to determine what government does. And I think it's more complicated than that. It's not only Sheldon Adelson or the Koch brothers or Bill Gates or George Soros who are shaping government policy-making. So that's my concern with what at least many people would understand oligarchy to mean.
  • What "Economic Elite Domination" and "Biased Pluralism" mean is that rather than average citizens of moderate means having an important role in determining policy, ability to shape outcomes is restricted to people at the top of the income distribution and to organized groups that represent primarily -- although not exclusively -- business.
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  • Talk about some examples of policy preferences that the majority holds that the government is not responsive to. Financial reform -- the deregulatory agenda has been pursued, somewhat more fervently among Republicans but certainly by Democrats as well in recent decades. Higher minimum wage. More support for the unemployed. More support for education spending. We'd see, perhaps ironically, less liberal policies in some domains like religious or moral issues. Affluent people tend to be more socially liberal on things like abortion or gay rights.
  • When did things start to become this way? It's possible that in earlier eras, that we don't have data for, that things were better. But in the time period that we do have data for, there's certainly no such evidence. Over time responsiveness to elites has grown.
  • Given your findings, what do you make of the great sense of persecution that people at the top appear to feel in recent years? Is there a phenomenon you came by that speaks to this, and does that perpetuate the cycle of policy moving in their direction? It's certainly not something our study or data has addressed. But it's part of an effort to defend, in the face of growing inequality, their advantages and wealth.
  • sometimes non-rich people favor an agenda that supports the rich. For instance, middle class tea partiers want low taxes on the highest earners, just as Steve Forbes does. Isn't that still democracy at work, albeit in an arguably perverse way? Yes, absolutely. I think people are entitled to preferences that conflict with their immediate interests -- narrowly conceived interests. That may be an example of that. Opposition to the estate tax among low-income individuals is another. But what we see in this study is that's not what this is happening. We don't look at whether preferences expressed by these different groups are consistent or inconsistent with their interests, narrowly conceived. We just look at whether they're responded to by government policy-makers, and we find that in the case of ordinary Americans, they're not.
  • What are the three or four most crucial factors that have made the United States this way? Very good question. I'd say two crucial factors. One central factor is the role of money in our political system, and the overwhelming role that affluent individuals that affluent individuals and organized interests play, in campaign finance and in lobbying. And the second thing is the lack of mass organizations that represent and facilitate the voice of ordinary citizens. Part of that would be the decline of unions in the country which has been quite dramatic over the last 30 or 40 years. And part of it is the lack of a socialist or a worker's party.
  • Your study calls to mind something that Dennis Kucinich, the former congressman, said years ago during the recession. He essentially said the class war is over and the working class lost. Was he right? I mean, for now, it certainly seems like it. The middle class has not done well over the last three and a half decades, and certainly has not done well during the Great Recession. The political system responded to the crisis in a way that led to a pretty nice recovery for economic elites and corporations.
  • what kind of data do you use to test this theory and how confident are you in the conclusions? What we did was to collect survey questions that asked whether respondents would favor or oppose some particular change in federal government policy. These were questions asked across the decades from 1981 to 2002. And so from each of those questions we know what citizens of average income level prefer and we know what people at the top of the income distribution say they want. For each of the 2,000 possible policy changes we determined whether in fact they've been adopted or not. I had a large number of research assistants who spent years putting that data together.
  • A new political science study that's gone viral finds that majority-rule democracy exists only in theory in the United States -- not so much in practice. The government caters to the affluent few and organized interest groups, the researchers find, while the average citizen's influence on policy is "near zero."
  • TPM spoke to Gilens about the study, its main findings and its lessons.
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Cognitive Bias and Public Health Policy During the COVID-19 Pandemic | Critical Care Me... - 0 views

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  • As the coronavirus disease 2019 (COVID-19) pandemic abates in many countries worldwide, and a new normal phase arrives, critically assessing policy responses to this public health crisis may promote better preparedness for the next wave or the next pandemic
  • A key lesson is revealed by one of the earliest and most sizeable US federal responses to the pandemic: the investment of $3 billion to build more ventilators. These extra ventilators, even had they been needed, would likely have done little to improve population survival because of the high mortality among patients with COVID-19 who require mechanical ventilation and diversion of clinicians away from more health-promoting endeavors.
  • Why are so many people distressed at the possibility that a patient in plain view—such as a person presenting to an emergency department with severe respiratory distress—would be denied an attempt at rescue because of a ventilator shortfall, but do not mount similarly impassioned concerns regarding failures to implement earlier, more aggressive physical distancing, testing, and contact tracing policies that would have saved far more lives?
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  • These cognitive errors, which distract leaders from optimal policy making and citizens from taking steps to promote their own and others’ interests, cannot merely be ascribed to repudiations of science.
  • The first error that thwarts effective policy making during crises stems from what economists have called the “identifiable victim effect.” Humans respond more aggressively to threats to identifiable lives, ie, those that an individual can easily imagine being their own or belonging to people they care about (such as family members) or care for (such as a clinician’s patients) than to the hidden, “statistical” deaths reported in accounts of the population-level tolls of the crisis
  • Yet such views represent a second reason for the broad endorsement of policies that prioritize saving visible, immediately jeopardized lives: that humans are imbued with a strong and neurally mediated3 tendency to predict outcomes that are systematically more optimistic than observed outcomes
  • A third driver of misguided policy responses is that humans are present biased, ie, people tend to prefer immediate benefits to even larger benefits in the future.
  • Even if the tendency to prioritize visibly affected individuals could be resisted, many people would still place greater value on saving a life today than a life tomorrow.
  • Similar psychology helps explain the reluctance of many nations to limit refrigeration and air conditioning, forgo fuel-inefficient transportation, and take other near-term steps to reduce the future effects of climate change
  • The fourth contributing factor is that virtually everyone is subject to omission bias, which involves the tendency to prefer that a harm occur by failure to take action rather than as direct consequence of the actions that are taken
  • Although those who set policies for rationing ventilators and other scarce therapies do not intend the deaths of those who receive insufficient priority for these treatments, such policies nevertheless prevent clinicians from taking all possible steps to save certain lives.
  • An important goal of governance is to mitigate the effects of these and other biases on public policy and to effectively communicate the reasons for difficult decisions to the public. However, health systems’ routine use of wartime terminology of “standing up” and “standing down” intensive care units illustrate problematic messaging aimed at the need to address immediate danger
  • Second, had governments, health systems, and clinicians better understood the “identifiable victim effect,” they may have realized that promoting flattening the curve as a way to reduce pressure on hospitals and health care workers would be less effective than promoting early restaurant and retail store closures by saying “The lives you save when you close your doors include your own.”
  • Third, these leaders’ routine use of terms such as “nonpharmaceutical interventions”9 portrays public health responses negatively by labeling them according to what they are not. Instead, support for heavily funding contact tracing could have been generated by communicating such efforts as “lifesaving.
  • Fourth, although errors of human cognition are challenging to surmount, policy making, even in a crisis, occurs over a sufficient period to be meaningfully improved by deliberate efforts to counter untoward biases
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Eric A. Posner Reviews Jim Manzi's "Uncontrolled" | The New Republic - 0 views

www.tnr.com/...uncontrolled-jim-manzi social science policy science methods conservativism bureaucratic
shared by Javier E on 02 May 12 - Cached
  • Most urgent questions of public policy turn on empirical imponderables, and so policymakers fall back on ideological predispositions or muddle through. Is there a better way?
  • The gold standard for empirical research is the randomized field trial (RFT).
  • The RFT works better than most other types of empirical investigation. Most of us use anecdotes or common sense empiricism to make inferences about the future, but psychological biases interfere with the reliability of these methods
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  • Serious empiricists frequently use regression analysis.
  • Regression analysis is inferior to RFT because of the difficulty of ruling out confounding factors (for example, that a gene jointly causes baldness and a preference for tight hats) and of establishing causation
  • RFT has its limitations as well. It is enormously expensive because you must (usually) pay a large number of people to participate in an experiment, though one can obtain a discount if one uses prisoners, especially those in a developing country. In addition, one cannot always generalize from RFTs.
  • academic research proceeds in fits and starts, using RFT when it can, but otherwise relying on regression analysis and similar tools, including qualitative case studies,
  • businesses also use RFT whenever they can. A business such as Wal-Mart, with thousands of stores, might try out some innovation like a new display in a random selection of stores, using the remaining stores as a control group
  • Manzi argues that the RFT—or more precisely, the overall approach to empirical investigation that the RFT exemplifies—provides a way of thinking about public policy. Thi
  • the universe is shaky even where, as in the case of physics, “hard science” plays the dominant role. The scientific method cannot establish truths; it can only falsify hypotheses. The hypotheses come from our daily experience, so even when science prunes away intuitions that fail the experimental method, we can never be sure that the theories that remain standing reflect the truth or just haven’t been subject to the right experiment. And even within its domain, the experimental method is not foolproof. When an experiment contradicts received wisdom, it is an open question whether the wisdom is wrong or the experiment was improperly performed.
  • The book is less interested in the RFT than in the limits of empirical knowledge. Given these limits, what attitude should we take toward government?
  • Much of scientific knowledge turns out to depend on norms of scientific behavior, good faith, convention, and other phenomena that in other contexts tend to provide an unreliable basis for knowledge.
  • Under this view of the world, one might be attracted to the cautious conservatism associated with Edmund Burke, the view that we should seek knowledge in traditional norms and customs, which have stood the test of time and presumably some sort of Darwinian competition—a human being is foolish, the species is wise. There are hints of this worldview in Manzi’s book, though he does not explicitly endorse it. He argues, for example, that we should approach social problems with a bias for the status quo; those who seek to change it carry the burden of persuasion. Once a problem is identified, we should try out our ideas on a small scale before implementing them across society
  • Pursuing the theme of federalism, Manzi argues that the federal government should institutionalize policy waivers, so states can opt out from national programs and pursue their own initiatives. A state should be allowed to opt out of federal penalties for drug crimes, for example.
  • It is one thing to say, as he does, that federalism is useful because we can learn as states experiment with different policies. But Manzi takes away much of the force of this observation when he observes, as he must, that the scale of many of our most urgent problems—security, the economy—is at the national level, so policymaking in response to these problems cannot be left to the states. He also worries about social cohesion, which must be maintained at a national level even while states busily experiment. Presumably, this implies national policy of some sort
  • Manzi’s commitment to federalism and his technocratic approach to policy, which relies so heavily on RFT, sit uneasily together. The RFT is a form of planning: the experimenter must design the RFT and then execute it by recruiting subjects, paying them, and measuring and controlling their behavior. By contrast, experimentation by states is not controlled: the critical element of the RFT—randomization—is absent.
  • The right way to go would be for the national government to conduct experiments by implementing policies in different states (or counties or other local units) by randomizing—that is, by ordering some states to be “treatment” states and other states to be “control” states,
  • Manzi’s reasoning reflects the top-down approach to social policy that he is otherwise skeptical of—although, to be sure, he is willing to subject his proposals to RFTs.
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Science and gun violence: why is the research so weak? [Part 2] - Boing Boing - 1 views

boingboing.net/...guns.html social science results methods experiment test research modeling assumption global warming guns public policy
shared by Javier E on 10 Mar 13 - No Cached
  • Scientists are missing some important bits of data that would help them better understand the effects of gun policy and the causes of gun-related violence. But that’s not the only reason why we don’t have solid answers. Once you have the data, you still have to figure out what it means. This is where the research gets complicated, because the problem isn’t simply about what we do and don’t know right now. The problem, say some scientists, is that we —from the public, to politicians, to even scientists themselves—may be trying to force research to give a type of answer that we can’t reasonably expect it to offer. To understand what science can do for the gun debates, we might have to rethink what “evidence-based policy” means to us.
  • For the most part, there aren’t a lot of differences in the data that these studies are using. So how can they reach such drastically different conclusions? The issue is in the kind of data that exists, and what you have to do to understand it, says Charles Manski, professor of economics at Northwestern University. Manski studies the ways that other scientists do research and how that research translates into public policy.
  • Even if we did have those gaps filled in, Manski said, what we’d have would still just be observational data, not experimental data. “We don’t have randomized, controlled experiments, here,” he said. “The only way you could do that, you’d have to assign a gun to some people randomly at birth and follow them throughout their lives. Obviously, that’s not something that’s going to work.”
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  • This means that, even under the best circumstances, scientists can’t directly test what the results of a given gun policy are. The best you can do is to compare what was happening in a state before and after a policy was enacted, or to compare two different states, one that has the policy and one that doesn’t. And that’s a pretty inexact way of working.
  • Add in enough assumptions, and you can eventually come up with an estimate. But is the estimate correct? Is it even close to reality? That’s a hard question to answer, because the assumptions you made—the correlations you drew between cause and effect, what you know and what you assume to be true because of that—might be totally wrong.
  • It’s hard to tease apart the effect of one specific change, compared to the effects of other things that could be happening at the same time.
  • This process of taking the observational data we do have and then running it through a filter of assumptions plays out in the real world in the form of statistical modeling. When the NAS report says that nobody yet knows whether more guns lead to more crime, or less crime, what they mean is that the models and the assumptions built into those models are all still proving to be pretty weak.
  • From either side of the debate, he said, scientists continue to produce wildly different conclusions using the same data. On either side, small shifts in the assumptions lead the models to produce different results. Both factions continue to choose sets of assumptions that aren’t terribly logical. It’s as if you decided that anybody with blue shoes probably had a belly-button piercing. There’s not really a good reason for making that correlation. And if you change the assumption—actually, belly-button piercings are more common in people who wear green shoes—you end up with completely different results.
  • The Intergovernmental Panel on Climate Change (IPCC) produces these big reports periodically, which analyze lots of individual papers. In essence, they’re looking at lots of trees and trying to paint you a picture of the forest. IPCC reports are available for free online, you can go and read them yourself. When you do, you’ll notice something interesting about the way that the reports present results. The IPCC never says, “Because we burned fossil fuels and emitted carbon dioxide into the atmosphere then the Earth will warm by x degrees.” Instead, those reports present a range of possible outcomes … for everything. Depending on the different models used, different scenarios presented, and the different assumptions made, the temperature of the Earth might increase by anywhere between 1.5 and 4.5 degrees Celsius.
  • What you’re left with is an environment where it’s really easy to prove that your colleague’s results are probably wrong, and it’s easy for him to prove that yours are probably wrong. But it’s not easy for either of you to make a compelling case for why you’re right.
  • Statistical modeling isn’t unique to gun research. It just happens to be particularly messy in this field. Scientists who study other topics have done a better job of using stronger assumptions and of building models that can’t be upended by changing one small, seemingly randomly chosen detail. It’s not that, in these other fields, there’s only one model being used, or even that all the different models produce the exact same results. But the models are stronger and, more importantly, the scientists do a better job of presenting the differences between models and drawing meaning from them.
  • “Climate change is one of the rare scientific literatures that has actually faced up to this,” Charles Manski said. What he means is that, when scientists model climate change, they don’t expect to produce exact, to-the-decimal-point answers.
  • “It’s been a complete waste of time, because we can’t validate one model versus another,” Pepper said. Most likely, he thinks that all of them are wrong. For instance, all the models he’s seen assume that a law will affect every state in the same way, and every person within that state in the same way. “But if you think about it, that’s just nonsensical,” he said.
  • On the one hand, that leaves politicians in a bit of a lurch. The response you might mount to counteract a 1.5 degree increase in global average temperature is pretty different from the response you’d have to 4.5 degrees. On the other hand, the range does tell us something valuable: the temperature is increasing.
  • The problem with this is that it flies in the face of what most of us expect science to do for public policy. Politics is inherently biased, right? The solutions that people come up with are driven by their ideologies. Science is supposed to cut that Gordian Knot. It’s supposed to lay the evidence down on the table and impartially determine who is right and who is wrong.
  • Manski and Pepper say that this is where we need to rethink what we expect science to do. Science, they say, isn’t here to stop all political debate in its tracks. In a situation like this, it simply can’t provide a detailed enough answer to do that—not unless you’re comfortable with detailed answers that are easily called into question and disproven by somebody else with a detailed answer.
  • Instead, science can reliably produce a range of possible outcomes, but it’s still up to the politicians (and, by extension, up to us) to hash out compromises between wildly differing values on controversial subjects. When it comes to complex social issues like gun ownership and gun violence, science doesn’t mean you get to blow off your political opponents and stake a claim on truth. Chances are, the closest we can get to the truth is a range that encompasses the beliefs of many different groups.
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Why The CHIPS and Science Act Is a Climate Bill - The Atlantic - 0 views

www.theatlantic.com/...671095 policy industrial energy research science technology
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  • Over the next five years, the CHIPS Act will direct an estimated $67 billion, or roughly a quarter of its total funding, toward accelerating the growth of zero-carbon industries and conducting climate-relevant research, according to an analysis from RMI, a nonpartisan energy think tank based in Colorado.
  • That means that the CHIPS Act is one of the largest climate bills ever passed by Congress. It exceeds the total amount of money that the government spent on renewable-energy tax credits from 2005 to 2019
  • And it’s more than half the size of the climate spending in President Barack Obama’s 2009 stimulus bill. That’s all the more remarkable because the CHIPS Act was passed by large bipartisan majorities, with 41 Republicans and nearly all Democrats supporting it in the House and the Senate.
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  • When viewed with the Inflation Reduction Act, which the House is poised to pass later this week, and last year’s bipartisan infrastructure law, a major shift in congressional climate spending comes into focus. According to the RMI analysis, these three laws are set to more than triple the federal government’s average annual spending on climate and clean energy this decade, compared with the 2010s.
  • Within a few years, when the funding has fully ramped up, the government will spend roughly $80 billion a year on accelerating the development and deployment of zero-carbon energy and preparing for the impacts of climate change. That exceeds the GDP of about 120 of the 192 countries that have signed the Paris Agreement on Climate Change
  • By the end of the decade, the federal government will have spent more than $521 billion
  • the bill’s programs focus on the bleeding edge of the decarbonization problem, investing money in technology that should lower emissions in the 2030s and beyond.
  • The International Energy Association has estimated that almost half of global emissions reductions by 2050 will come from technologies that exist only as prototypes or demonstration projects today.
  • To get those technologies ready in time, we need to deploy those new ideas as fast as we can, then rapidly get them to commercial scale, Carey said. “What used to take two decades now needs to take six to 10 years.” That’s what the CHIPS Act is supposed to do
  • The law, for instance, establishes a new $20 billion Directorate for Technology, which will specialize in pushing new technologies from the prototype stage into the mass market. It is meant to prevent what happened with the solar industry—where America invented a new technology, only to lose out on commercializing it—from happening again
  • Congress has explicitly tasked the new office with studying “natural and anthropogenic disaster prevention or mitigation” as well as “advanced energy and industrial efficiency technologies,” including next-generation nuclear reactors.
  • The bill also directs about $12 billion in new research, development, and demonstration funding to the Department of Energy, according to RMI’s estimate. That includes doubling the budget for ARPA-E, the department’s advanced-energy-projects skunk works.
  • it allocates billions to upgrade facilities at the government’s in-house defense and energy research institutes, including the National Renewable Energy Laboratory, the Princeton Plasma Physics Laboratory, and Berkeley Lab, which conducts environmental-science research.
  • RMI’s estimate of the climate spending in the CHIPS bill should be understood as just that: an estimate. The bill text rarely specifies how much of its new funding should go to climate issues.
  • When you add CHIPS, the IRA, and the infrastructure law together, Washington appears to be unifying behind a new industrial policy, focused not only on semiconductors and defense technology but clean energy
  • The three bills combine to form a “a coordinated, strategic policy for accelerating the transition to the technologies that are going to define the 21st century,”
  • scholars and experts have speculated about whether industrial policy—the intentional use of law to nurture and grow certain industries—might make a comeback to help fight climate change. Industrial policy was central to some of the Green New Deal’s original pitch, and it has helped China develop a commanding lead in the global solar industry.
  • “Industrial policy,” he said, “is back.”
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Why Partisans Can't Explain Their Views - NYTimes.com - 0 views

www.nytimes.com/...-cant-explain-their-views.html politics partisan extremism knowledge ignorance discourse
shared by Javier E on 20 Oct 12 - No Cached
  • we have grown so accustomed to this divide that we no longer flinch at the brazen political attacks on either side — even when the logic underlying these attacks is hard to fathom.
  • attack ads work, in large part, because we don’t understand them. Statements take advantage of a fact about human psychology called the “illusion of explanatory depth,” an idea developed by the Yale psychologist Frank Keil and his students. We typically feel that we understand how complex systems work even when our true understanding is superficial.
  • it is not until we are asked to explain how such a system works — whether it’s what’s involved in a trade deal with China or how a toilet flushes — that we realize how little we actually know.
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  • we report on experiments showing that people often believe they understand what is meant by well-worn political terms like the “flat tax,” “sanctions on Iran” or “cap and trade” — even when they don’t.
  • The real surprise is what happens after these same individuals are asked to explain how these policy ideas work: they become more moderate in their political views — either in support of such policies or against them. In fact, not only do their attitudes change, but so does their behavior
  • asking people to justify their position — rather than asking them to explain the mechanisms by which a policy would work — doesn’t tend to soften their political views. When we asked participants to state the reasons they were for or against a policy position, their initial attitudes held firm. (Other researchers have found much the same thing: merely discussing an issue often makes people more extreme, not less.)
  • asking people to “unpack” complex systems — getting them to articulate how something might work in real life — forces them to confront their lack of understanding.
  • rarely is anybody — candidate or voter — asked to explain his or her positions. American political discourse, in short, is not discourse at all.
  • The answer implied by our research is not that we should all become policy wonks. Instead, we voters need to be more mindful that issues are complicated and challenge ourselves to break down the policy proposals on both sides into their component parts. We have to then imagine how these ideas would work in the real world — and then make a choice: to either moderate our positions on policies we don’t really understand, as research suggests we will, or try to improve our understanding. Either way, discourse would then be based on information, not illusion.
  • whether or not we citizens make this effort, our leaders should. We should demand that Mr. Obama and Mr. Romney explain how in addition to why.
  • We have a problem in American politics: an illusion of knowledge that leads to extremism. We can start to fix it by acknowledging that we know a lot less than we think.
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Ryan, Romney and the Veil of Opulence - NYTimes.com - 0 views

opinionator.blogs.nytimes.com/...the-veil-of-opulence fairness ignorance disadvantages opulence
shared by Javier E on 14 Aug 12 - Cached
  • Nowadays, the veil of ignorance is challenged by a powerful but ancient contender: the veil of opulence. While no serious political philosopher actually defends such a device — the term is my own — the veil of opulence runs thick in our political discourse. Where the veil of ignorance offers a test for fairness from an impersonal, universal point of view — “What system would I want if I had no idea who I was going to be, or what talents and resources I was going to have?” — the veil of opulence offers a test for fairness from the first-person, partial point of view: “What system would I want if I were so-and-so?”
  • Those who don the veil of opulence may imagine themselves to be fantastically wealthy movie stars or extremely successful business entrepreneurs. They vote and set policies according to this fantasy. “If I were such and such a wealthy person,” they ask, “how would I feel about giving X percentage of my income, or Y real dollars per year, to pay for services that I will never see nor use?
  • the veil of opulence operates only under the guise of fairness. It is rather a distortion of fairness, by virtue of the partiality that it smuggles in. It asks not whether a policy is fair given the huge range of advantages or hardships the universe might throw at a person but rather whether it is fair that a very fortunate person should shoulder the burdens of others. That is, the veil of opulence insists that people imagine that resources and opportunities and talents are freely available to all, that such goods are widely abundant, that there is no element of randomness or chance that may negatively impact those who struggle to succeed but sadly fail through no fault of their own. It blankets off the obstacles that impede the road to success. It turns a blind eye to the adversity that some people, let’s face it, are born into. By insisting that we consider public policy from the perspective of the most-advantaged, the veil of opulence obscures the vagaries of brute luck.
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  • If there’s one thing about fairness, it is fundamentally an impartial notion, an idea that restricts us from privileging one group over another. When asking about fairness, we cannot ask whether X policy is fair for me, or whether Y policy is fair for someone with a yacht and two vacation homes. We must ask whether Z policy is fair, full stop. What we must ask here is whether the policy could be applied to all; whether it is the sort of system with which we could live, if we were to end up in one of the many socioeconomic groupings that make up our diverse community, whether most-advantaged or least-advantaged, fortunate or unfortunate
  • This is why the veil of ignorance is a superior test for fairness over the veil of opulence. It tackles the universality of fairness without getting wrapped up in the particularities of personal interest. If you were to start this world anew, unaware of who you would turn out to be, what sort of die would you be willing to cast?
  • In the interest of firming up the game, in the interest of being fair, the N.F.L. decided long ago to give the worst teams in football the best shot at improving their game.
  • The question of fairness has widespread application throughout our political discourse. It affects taxation, health care, education, social safety nets and so on. The veil of opulence would have us screen for fairness by asking what the most fortunate among us are willing to bear. The veil of ignorance would have us screen for fairness by asking what any of us would be willing to bear, if it were the case that we, or the ones we love, might be born into difficult circumstances or, despite our hard work, blindsided by misfortune.
  • Society is in place to correct for the injustices of the universe, to ensure that our lives can run smoothly despite the stuff that is far out of our control: not to hand us what we need, but to give us the opportunity to pursue life, liberty and happiness.
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Establishment Populism Rising - NYTimes.com - 0 views

www.nytimes.com/...blishment-populism-rising.html economics social science theory populism jobs income inequality
shared by Javier E on 04 Mar 15 - No Cached
  • If we had the same income distribution in the United States that we did in 1979, the top 1 percent would have $1 trillion less today [in annual income], and the bottom 80 percent would have $1 trillion more. That works out to about $700,000 [a year for] for a family in the top 1 percent, and works out to about $11,000 a year for a family in the bottom 80 percent.
  • The lion’s share of the income of the top 1 percent is concentrated in the top 0.1 percent and 0.01 percent. The average income of the top 1 percent in 2013, according to data provided by Emmanuel Saez, a Berkeley economist, was $1.2 million, for the top 0.1 percent, $5.3 million, and for the top 0.01 percent, $24.9 million.
  • In other words, any attempt to correct the contemporary pattern in income distribution would require large and controversial changes in tax policy, regulation of the workplace, and intervention in the economy to expand employment and to raise wages.
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  • To counter the weak employment market, Summers called for major growth in government expenditures to fill needs that the private sector is not addressing:In our society, whether it is taking care of the young or taking care of the old, or repairing a lot that needs to be repaired, there is a huge amount of very valuable work that needs to be done. It’s much less clear, to use a modern phrase, that there’s a viable business model for getting it done. And I guess the reason why I think there is going to need to be a lot of reflection on the role of government going forward is that, if I’m right, that there’s vitally important work to be done for which there is no standard capital business model that will get it done. That suggests important roles for public policy.
  • the report calls for tax and regulatory policies to encourage employee ownership, the strengthening of collective bargaining rights, regulations requiring corporations to provide fringe benefits to employees working for subcontractors, a substantial increase in the minimum wage, sharper overtime pay enforcement, and a huge increase in infrastructure appropriations – for roads, bridges, ports, schools – to spur job creation and tighten the labor market.
  • Summers also calls for significant increases in the progressivity of the United States tax system.
  • He advocates aggressive steps to eliminate “rents” — profits that result from monopoly or other forms of government protection from competition. Summers favors attacking rents in the form of “exclusionary zoning practices” that bid up the price of housing, “excessively long copyright” protections, and financial regulations “providing implicit subsidies to a fortunate minority.”
  • Signaling that he now finds himself on common ground with stalwarts of the Democratic left like Elizabeth Warren and Joe Stiglitz, Summers adds, “Government needs to try to make sure everyone can get access to financial markets on an equal basis.”
  • Summers supports looking past income inequality to the distribution of wealth. During our conversation, he pointed out that “a large fraction of capital gains escapes taxation entirely” through “the stepped up basis at death.”
  • The idea that an economy could suffer from a persistent shortage of demand is an enormous switch for Summers or anyone who had been adhering to the economic orthodoxy in the three decades prior to the crisisin 2008. Baker goes on to argue that Summers “now recognizes that the financial system needs serious regulation.”
  • Many of the policies outlined by Summers — especially on trade, taxation, financial regulation and worker empowerment — are the very policies that divide the Wall-Street-corporate wing from the working-to-middle-class wing of the Democratic Party. Put another way, these policies divide the money wing from the voting wing.
  • Summers has forced out in the open a set of choices that Hillary Clinton has so far avoided, choices that even if she attempts to elide them will amount to a signal of where her loyalties lie.
  • “The core problem,” according to Summers, is thatthere aren’t enough jobs, and if you help some people, you can help them get the jobs, but then someone else won’t get the jobs. And unless you’re doing things that are affecting the demand for jobs, you’re helping people win a race to get a finite number of jobs, and there are only so many of them.
  • he is “all for” more schooling and job training, but as an answer to the problems of the job marketplace, “it is fundamentally an evasion.”
  • Summers’s analysis of current economic conditions suggests that free market capitalism, as now structured, is producing major distortions. These distortions, in his view, have resulted in gains of $1 trillion annually to those at the top of the pyramid, and losses of $1 trillion every year to those in the bottom 80 percent.
  • Summers’s ascendance is a reflection of the abandonment by much of the party establishment of neo-liberal thinking, premised on the belief that unregulated markets and global trade would produce growth beneficial to worker and C.E.O. alike.
  • Larry Summers, who withdrew his candidacy for the chairmanship of the Federal Reserve under pressure from the liberal wing of the Democratic Party in 2013, has emerged as the party’s dominant economic policy strategist. The former Treasury secretary’s evolving message has won over many of his former critics.
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  • Instead of self-confident and self-centered answers, the author humbly asks fundamental questions: What is economics? What is its meaning? Where does this new religion, as it is sometimes called, come from? What are its possibilities and its limitations and borders, if there are any? Why are we so dependent on permanent growing of growth and growth of growing of growth? Where did the idea of progress come from, and where is it leading us? Why are so many economic debates accompanied by obsession and fanaticism?
  • The majority of our political parties act with a narrow materialistic focus when, in their programs, they present the economy and finance first; only then, somewhere at the end, do we find culture as something pasted on or as a libation for a couple of madmen.
  • most of them—consciously or unconsciously—accept and spread the Marxist thesis of the economic base and the spiritual superstructure.
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  • He tries to break free of narrow specialization and cross the boundaries between scientific disciplines. Expeditions beyond economics’ borders and its connection to history, philosophy, psychology, and ancient myths are not only refreshing, but necessary for understanding the world of the twenty-first century.
  • Reality is spun from stories, not from material. Zdeněk Neubauer
  • Before it was emancipated as a field, economics lived happily within subsets of philosophy—ethics, for example—miles away from today’s concept of economics as a mathematical-allocative science that views “soft sciences” with a scorn born from positivistic arrogance. But our thousand-year “education” is built on a deeper, broader, and oftentimes more solid base. It is worth knowing about.
  • Outside of our history, we have nothing more.
  • The study of the history of a certain field is not, as is commonly held, a useless display of its blind alleys or a collection of the field’s trials and errors (until we got it right), but history is the fullest possible scope of study of a menu that the given field can offer.
  • History of thought helps us to get rid of the intellectual brainwashing of the age, to see through the intellectual fashion of the day, and to take a couple of steps back.
  • “The separation between the history of a science, its philosophy, and the science itself dissolves into thin air, and so does the separation between science and non-science; differences between the scientific and unscientific are vanishing.”
  • we seek to chart the development of the economic ethos. We ask questions that come before any economic thinking can begin—both philosophically and, to a degree, historically. The area here lies at the very borders of economics—and often beyond. We may refer to this as protoeconomics (to borrow a term from protosociology) or, perhaps more fittingly, metaeconomics (to borrow a term from metaphysics).
  • stories; Adam Smith believed. As he puts it in The Theory of Moral Sentiments, “the desire of being believed, or the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires.”
  • “The human mind is built to think in terms of narratives … in turn, much of human motivation comes from living through a story of our lives, a story that we tell to ourselves and that creates a framework of our motivation. Life could be just ‘one damn thing after another’ if it weren’t for such stories. The same is true for confidence in a nation, a company, or an institution. Great leaders are foremost creators of stories.”
  • contrary to what our textbooks say, economics is predominantly a normative field. Economics not only describes the world but is frequently about how the world should be (it should be effective, we have an ideal of perfect competition, an ideal of high-GDP growth in low inflation, the effort to achieve high competitiveness …). To this end, we create models, modern parables,
  • I will try to show that mathematics, models, equations, and statistics are just the tip of the iceberg of economics; that the biggest part of the iceberg of economic knowledge consists of everything else; and that disputes in economics are rather a battle of stories and various metanarratives than anything else.
  • That is the reason for this book: to look for economic thought in ancient myths and, vice versa, to look for myths in today’s economics.
  • is a paradox that a field that primarily studies values wants to be value-free. One more paradox is this: A field that believes in the invisible hand of the market wants to be without mysteries.
  • Almost all of the key concepts by which economics operates, both consciously and unconsciously, have a long history, and their roots extend predominantly outside the range of economics, and often completely beyond that of science.
  • The History of Animal Spirits: Dreams Never Sleep
  • In this sense, “the study of economics is too narrow and too fragmentary to lead to valid insight, unless complemented and completed by a study of metaeconomics.”17
  • The more important elements of a culture or field of inquiry such as economics are found in fundamental assumptions that adherents of all the various systems within the epoch unconsciously presuppose. Such assumptions appear so obvious that people do not know what they are assuming, because no other way of putting things has ever occurred to them, as the philosopher Alfred Whitehead notes in Adventures of Ideas.
  • I argue that economic questions were with mankind long before Adam Smith. I argue that the search for values in economics did not start with Adam Smith but culminated with him.
  • We should go beyond economics and study what beliefs are “behind the scenes,” ideas that have often become the dominant yet unspoken assumptions in our theories. Economics is surprisingly full of tautologies that economists are predominantly unaware of. I
  • argue that economics should seek, discover, and talk about its own values, although we have been taught that economics is a value-free science. I argue that none of this is true and that there is more religion, myth, and archetype in economics than there is mathematics.
  • In a way, this is a study of the evolution of both homo economicus and, more importantly, the history of the animal spirits within him. This book tries to study the evolution of the rational as well as the emotional and irrational side of human beings.
  • I argue that his most influential contribution to economics was ethical. His other thoughts had been clearly expressed long before him, whether on specialization, or on the principle of the invisible hand of the market. I try to show that the principle of the invisible hand of the market is much more ancient and developed long before Adam Smith. Traces of it appear even in the Epic of Gilgamesh, Hebrew thought, and in Christianity, and it is expressly stated by Aristophanes and Thomas Aquinas.
  • This is not a book on the thorough history of economic thought. The author aims instead to supplement certain chapters on the history of economic thought with a broader perspective and analysis of the influences that often escape the notice of economists and the wider public.
  • Progress (Naturalness and Civilization)
  • The Economy of Good and Evil
  • from his beginnings, man has been marked as a naturally unnatural creature, who for unique reasons surrounds himself with external possessions. Insatiability, both material and spiritual, are basic human metacharacteristics, which appear as early as the oldest myths and stories.
  • the Hebrews, with linear time, and later the Christians gave us the ideal (or amplified the Hebrew ideal) we now embrace. Then the classical economists secularized progress. How did we come to today’s progression of progress, and growth for growth’s sake?
  • The Need for Greed: The History of Consumption and Labor
  • Metamathematics From where did economics get the concept of numbers as the very foundation of the world?
  • mathematics at the core of economics, or is it just the icing of the cake, the tip of the iceberg of our field’s inquiry?
  • idea that we can manage to utilize our natural egoism, and that this evil is good for something, is an ancient philosophical and mythical concept. We will also look into the development of the ethos of homo economicus, the birth of “economic man.”
  • All of economics is, in the end, economics of good and evil. It is the telling of stories by people of people to people. Even the most sophisticated mathematical model is, de facto, a story, a parable, our effort to (rationally) grasp the world around us.
  • Masters of the Truth
  • Originally, truth was a domain of poems and stories, but today we perceive truth as something much more scientific, mathematical. Where does one go (to shop) for the truth? And who “has the truth” in our epoch?
  • Our animal spirits (something of a counterpart to rationality) are influenced by the archetype of the hero and our concept of what is good.
  • The entire history of ethics has been ruled by an effort to create a formula for the ethical rules of behavior. In the final chapter we will show the tautology of Max Utility, and we will discuss the concept of Max Good.
  • The History of the Invisible Hand of the Market and Homo Economicus
  • We understand “economics” to mean a broader field than just the production, distribution, and consumption of goods and services. We consider economics to be the study of human relations that are sometimes expressible in numbers, a study that deals with tradables, but one that also deals with nontradables (friendship, freedom, efficiency, growth).
  • When we mention economics in this book, we mean the mainstream perception of it, perhaps as best represented by Paul Samuelson.
  • By the term homo economicus, we mean the primary concept of economic anthropology. It comes from the concept of a rational individual, who, led by narrowly egotistical motives, sets out to maximize his benefit.
  • the Epic of Gilgamesh bears witness to the opposite—despite the fact that the first written clay fragments (such as notes and bookkeeping) of our ancestors may have been about business and war, the first written story is mainly about great friendship and adventure.
  • there is no mention of either money or war; for example, not once does anyone in the whole epic sell or purchase something.5 No nation conquers another, and we do not encounter a mention even of the threat of violence.
  • is a story of nature and civilization, of heroism, defiance, and the battle against the gods, and evil; an epic about wisdom, immortality, and also futility.
  • Gilgamesh becomes a hero not only due to his strength, but also due to discoveries and deeds whose importance were in large part economic—direct gaining of construction materials in the case of felling the cedar forest, stopping Enkidu from devastating Uruk’s economy, and discovering new desert routes during his expeditions.
  • Even today, we often consider the domain of humanity (human relations, love, friendship, beauty, art, etc.) to be unproductive;
  • Even today we live in Gilgamesh’s vision that human relations—and therefore humanity itself—are a disturbance to work and efficiency; that people would perform better if they did not “waste” their time and energy on nonproductive things.
  • But it is in friendship where—often by-the-way, as a side product, an externality—ideas and deeds are frequently performed or created that together can altogether change the face of society.19 Friendship can go against an ingrained system in places where an individual does not have the courage to do so himself or herself.
  • As Joseph Stiglitz says, One of the great “tricks” (some say “insights”) of neoclassical economics is to treat labour like any other factor of production. Output is written as a function of inputs—steel, machines, and labour. The mathematics treats labour like any other commodity, lulling one into thinking of labour like an ordinary commodity, such as steel or plastic.
  • Even the earliest cultures were aware of the value of cooperation on the working level—today we call this collegiality, fellowship, or, if you want to use a desecrated term, comradeship. These “lesser relationships” are useful and necessary for society and for companies because work can be done much faster and more effectively if people get along with each other on a human level
  • But true friendship, which becomes one of the central themes of the Epic of Gilgamesh, comes from completely different material than teamwork. Friendship, as C. S. Lewis accurately describes it, is completely uneconomical, unbiological, unnecessary for civilization, and an unneeded relationship
  • Here we have a beautiful example of the power of friendship, one that knows how to transform (or break down) a system and change a person. Enkidu, sent to Gilgamesh as a punishment from the gods, in the end becomes his faithful friend, and together they set out against the gods. Gilgamesh would never have gathered the courage to do something like that on his own—nor would Enkidu.
  • Due to their friendship, Gilgamesh and Enkidu then intend to stand up to the gods themselves and turn a holy tree into mere (construction) material they can handle almost freely, thereby making it a part of the city-construct, part of the building material of civilization, thus “enslaving” that which originally was part of wild nature. This is a beautiful proto-example of the shifting of the borders between the sacred and profane (secular)—and to a certain extent also an early illustration of the idea that nature is there to provide cities and people with raw material and production resources.
  • started with Babylonians—rural nature becomes just a supplier of raw materials, resources (and humans the source of human resources). Nature is not the garden in which humans were created and placed, which they should care for and which they should reside in, but becomes a mere reservoir for natural (re)sources.
  • But labour is unlike any other commodity. The work environment is of no concern for steel; we do not care about steel’s well-being.16
  • Both heroes change—each from opposite poles—into humans. In this context, a psychological dimension to the story may be useful: “Enkidu (…) is Gilgamesh’s alter ego, the dark, animal side of his soul, the complement to his restless heart. When Gilgamesh found Enkidu, he changed from a hated tyrant into the protector of his city. (…)
  • To be human seems to be somewhere in between, or both of these two. We
  • this moment of rebirth from an animal to a human state, the world’s oldest preserved epic implicitly hints at something highly important. Here we see what early cultures considered the beginning of civilization. Here is depicted the difference between people and animals or, better, savages. Here the epic quietly describes birth, the awakening of a conscious, civilized human. We are witnesses to the emancipation of humanity from animals,
  • The entire history of culture is dominated by an effort to become as independent as possible from the whims of nature.39 The more developed a civilization is, the more an individual is protected from nature and natural influences and knows how to create around him a constant or controllable environment to his liking.
  • The price we pay for independence from the whims of nature is dependence on our societies and civilizations. The more sophisticated a given society is as a whole, the less its members are able to survive on their own as individuals, without society.
  • The epic captures one of the greatest leaps in the development of the division of labor. Uruk itself is one of the oldest cities of all, and in the epic it reflects a historic step forward in specialization—in the direction of a new social city arrangement. Because of the city wall, people in the city can devote themselves to things other than worrying about their own safety, and they can continue to specialize more deeply.
  • Human life in the city gains a new dimension and suddenly it seems more natural to take up issues going beyond the life span of an individual. “The city wall symbolizes as well as founds the permanence of the city as an institution which will remain forever and give its inhabitants the certainty of unlimited safety, allowing them to start investing with an outlook reaching far beyond the borders of individual life.
  • The wall around the city of Uruk is, among other things, a symbol of an internal distancing from nature, a symbol of revolts against submission to laws that do not come under the control of man and that man can at most discover and use to his benefit.
  • “The chief thing which the common-sense individual wants is not satisfactions for the wants he had, but more, and better wants.”47
  • If a consumer buys something, theoretically it should rid him of one of his needs—and the aggregate of things they need should be decreased by one item. In reality, though, the aggregate of “I want to have” expands together with the growing aggregate of “I have.”
  • can be said that Enkidu was therefore happy in his natural state, because all of his needs were satiated. On the other hand, with people, it appears that the more a person has, the more developed and richer, the greater the number of his needs (including the unsaturated ones).
  • the Old Testament, this relationship is perceived completely differently. Man (humanity) is created in nature, in a garden. Man was supposed to care for the Garden of Eden and live in harmony with nature and the animals. Soon after creation, man walks naked and is not ashamed, de facto the same as the animals. What is characteristic is that man dresses (the natural state of creation itself is not enough for him), and he (literally and figuratively) covers52 himself—in shame after the fall.53
  • Nature is where one goes to hunt, collect crops, or gather the harvest. It is perceived as the saturator of our needs and nothing more. One goes back to the city to sleep and be “human.” On the contrary, evil resides in nature. Humbaba lives in the cedar forest, which also happens to be the reason to completely eradicate it.
  • Symbolically, then, we can view the entire issue from the standpoint of the epic in the following way: Our nature is insufficient, bad, evil, and good (humane) occurs only after emancipation from nature (from naturalness), through culturing and education. Humanity is considered as being in civilization.
  • The city was frequently (at least in older Jewish writings) a symbol of sin, degeneration, and decadence—nonhumanity. The Hebrews were originally a nomadic nation, one that avoided cities. It is no accident that the first important city57 mentioned in the Bible is proud Babylon,58 which God later turns to dust.
  • is enough, for example, to read the Book of Revelation to see how the vision of paradise developed from the deep Old Testament period, when paradise was a garden. John describes his vision of heaven as a city—paradise is in New Jerusalem, a city where the dimensions of the walls(!) are described in detail, as are the golden streets and gates of pearl.
  • Hebrews later also chose a king (despite the unanimous opposition of God’s prophets) and settled in cities, where they eventually founded the Lord’s Tabernacle and built a temple for Him. The city of Jerusalem later gained an illustrious position in all of religion.
  • this time Christianity (as well as the influence of the Greeks) does not consider human naturalness to be an unambiguous good, and it does not have such an idyllic relationship to nature as the Old Testament prophets.
  • If a tendency toward good is not naturally endowed in people, it must be imputed from above through violence or at least the threat of violence.
  • If we were to look at human naturalness as a good, then collective social actions need a much weaker ruling hand. If people themselves have a natural tendency (propensity) toward good, this role does not have to be supplied by the state, ruler, or, if you wish, Leviathan.
  • How does this affect economics?
  • us return for the last time to the humanization of the wild Enkidu, which is a process we can perceive with a bit of imagination as the first seed of the principle of the market’s invisible hand, and therefore the parallels with one of the central schematics of economic thinking.
  • Sometimes it is better to “harness the devil to the plow” than to fight with him. Instead of summoning up enormous energy in the fight against evil, it is better to use its own energy to reach a goal we desire; setting up a mill on the turbulent river instead of futile efforts to remove the current. This is also how Saint Prokop approached it in one of the oldest Czech legends.
  • Enkidu caused damage and it was impossible to fight against him. But with the help of a trap, trick, this evil was transformed into something that greatly benefited civilization.
  • By culturing and “domesticating” Enkidu, humanity tamed the uncontrollable wild and chaotic evil
  • Enkidu devastated the doings (the external, outside-the-walls) of the city. But he was later harnessed and fights at the side of civilization against nature, naturalness, the natural state of things.
  • A similar motif appears a thousand years after the reversal, which is well known even to noneconomists as the central idea of economics: the invisible hand of the market.
  • A similar story (reforming something animally wild and uncultivated in civilizational achievement) is used by Thomas Aquinas in his teachings. Several centuries later, this idea is fully emancipated in the hands of Bernard Mandeville and his Fable of the Bees: or, Private Vices, Publick Benefits. The economic and political aspects of this idea are—often incorrectly—ascribed to Adam Smith.
  • Here the individual does not try anymore to maximize his goods or profits, but what is important is writing his name in human memory in the form of heroic acts or deeds.
  • immortality, one connected with letters and the cult of the word: A name and especially a written name survives the body.”77
  • After this disappointment, he comes to the edge of the sea, where the innkeeper Siduri lives. As tonic for his sorrow, she offers him the garden of bliss, a sort of hedonistic fortress of carpe diem, where a person comes to terms with his mortality and at least in the course of the end of his life maximizes earthly pleasures, or earthly utility.
  • In the second stage, after finding his friend Enkidu, Gilgamesh abandons the wall and sets out beyond the city to maximalize heroism. “In his (…) search of immortal life, Gilgamesh
  • The hero refuses hedonism in the sense of maximizing terrestrial pleasure and throws himself into things that will exceed his life. In the blink of an eye, the epic turns on its head the entire utility maximization role that mainstream economics has tirelessly tried to sew on people as a part of their nature.81
  • It is simpler to observe the main features of our civilization at a time when the picture was more readable—at a time when our civilization was just being born and was still “half-naked.” In other words, we have tried to dig down to the bedrock of our written civilization;
  • today remember Gilgamesh for his story of heroic friendship with Enkidu, not for his wall, which no longer reaches monumental heights.
  • the eleventh and final tablet, Gilgamesh again loses what he sought. Like Sisyphus, he misses his goal just before the climax
  • is there something from it that is valid today? Have we found in Gilgamesh certain archetypes that are in us to this day?
  • The very existence of questions similar to today’s economic ones can be considered as the first observation. The first written considerations of the people of that time were not so different from those today. In other words: The epic is understandable for us, and we can identify with it.
  • We have also been witnesses to the very beginnings of man’s culturing—a great drama based on a liberation and then a distancing from the natural state.
  • Let us take this as a memento in the direction of our restlessness, our inherited dissatisfaction and the volatility connected to it. Considering that they have lasted five thousand years and to this day we find ourselves in harmony with a certain feeling of futility, perhaps these characteristics are inherent in man.
  • Gilgamesh had a wall built that divided the city from wild nature and created a space for the first human culture. Nevertheless, “not even far-reaching works of civilization could satisfy human desire.”
  • Friendship shows us new, unsuspected adventures, gives us the opportunity to leave the wall and to become neither its builder nor its part—to not be another brick in the wall.
  • with the phenomenon of the creation of the city, we have seen how specialization and the accumulation of wealth was born, how holy nature was transformed into a secular supplier of resources, and also how humans’ individualistic ego was emancipated.
  • to change the system, to break down that which is standing and go on an expedition against the gods (to awaken, from naïveté to awakening) requires friendship.
  • For small acts (hunting together, work in a factory), small love is enough: Camaraderie. For great acts, however, great love is necessary, real love: Friendship. Friendship that eludes the economic understanding of quid pro quo. Friendship gives. One friend gives (fully) for the other. That is friendship for life and death,
  • The thought that humanity comes at the expense of efficiency is just as old as humanity itself—as we have shown, subjects without emotion are the ideal of many tyrants.
  • The epic later crashes this idea through the friendship of Gilgamesh and Enkidu. Friendship—the biologically least essential love, which at first sight appears to be unnecessary
  • less a civilized, city person is dependent on nature, the more he or she is dependent on the rest of society. Like Enkidu, we have exchanged nature for society; harmony with (incalculable) nature for harmony with (incalculable) man.
  • human nature good or evil? To this day these questions are key for economic policy: If we believe that man is evil in his nature, therefore that a person himself is dog eat dog (animal), then the hard hand of a ruler is called for. If we believe that people in and of themselves, in their nature, gravitate toward good, then it is possible to loosen up the reins and live in a society that is more laissez-faire.
  • For a concept of historical progress, for the undeification of heroes, rulers, and nature, mankind had to wait for the Hebrews.
  • Because nature is not undeified, it is beyond consideration to explore it, let alone intervene in it (unless a person was a two-thirds god like Gilgamesh). It
  • They practiced money lending, traded in many assets (…) and especially were engaged in the trading of shares on capital markets, worked in currency exchange and frequently figured as mediators in financial transactions (…), they functioned as bankers and participated in emissions of all possible forms.
  • As regards modern capitalism (as opposed to the ancient and medieval periods) … there are activities in it which are, in certain forms, inherently (and completely necessarily) present—both from an economic and legal standpoint.7
  • As early as the “dark” ages, the Jews commonly used economic tools that were in many ways ahead of their time and that later became key elements of the modern economy:
  • Gilgamesh’s story ends where it began. There is a consistency in this with Greek myths and fables: At the end of the story, no progress occurs, no essential historic change; the story is set in indefinite time, something of a temporal limbo.
  • Jews believe in historical progress, and that progress is in this world.
  • For a nation originally based on nomadism, where did this Jewish business ethos come from? And can the Hebrews truly be considered as the architects of the values that set the direction of our civilization’s economic thought?
  • Hebrew religiosity is therefore strongly connected with this world, not with any abstract world, and those who take pleasure in worldly possessions are not a priori doing anything wrong.
  • PROGRESS: A SECULARIZED RELIGION One of the things the writers of the Old Testament gave to mankind is the idea and notion of progress. The Old Testament stories have their development; they change the history of the Jewish nation and tie in to each other. The Jewish understanding of time is linear—it has a beginning and an end.
  • The observance of God’s Commandments in Judaism leads not to some ethereal other world, but to an abundance of material goods (Genesis 49:25–26, Leviticus 26:3–13, Deuteronomy 28:1–13) (…) There are no accusing fingers pointed at
  • There are no echoes of asceticism nor for the cleansing and spiritual effect of poverty. It is fitting therefore, that the founders of Judaism, the Patriarchs Abraham, Isaac and Jacob, were all wealthy men.12
  • about due to a linear understanding of history. If history has a beginning as well as an end, and they are not the same point, then exploration suddenly makes sense in areas where the fruits are borne only in the next generation.
  • What’s more, economic progress has almost become an assumption of modern functional societies. We expect growth. We take it automatically. Today, if nothing “new” happens, if GDP does not grow (we say it stagnates) for several quarters, we consider it an anomaly.
  • however, the idea of progress itself underwent major changes, and today we perceive it very differently. As opposed to the original spiritual conceptions, today we perceive progress almost exclusively in an economic or scientific-technological sense.
  • Because care for the soul has today been replaced by care for external things,
  • This is why we must constantly grow, because we (deep down and often implicitly) believe that we are headed toward an (economic) paradise on Earth.
  • Only since the period of scientific-technological revolution (and at a time when economics was born as an independent field) is material progress automatically assumed.
  • Jewish thought is the most grounded, most realistic school of thought of all those that have influenced our culture.17 An abstract world of ideas was unknown to the Jews. To this day it is still forbidden to even depict God, people, and animals in symbols, paintings, statues, and drawings.
  • economists have become key figures of great importance in our time (Kacířské eseje o filosofii dějin [Heretical Essays in the Philosophy of History]). They are expected to perform interpretations of reality, give prophetic services (macroeconomic forecasts), reshape reality (mitigate the impacts of the crisis, speed up growth), and, in the long run, provide leadership on the way to the Promised Land—paradise on Earth.
  • REALISM AND ANTIASCETICISM Aside from ideas of progress, the Hebrews brought another very fundamental contribution to our culture: The desacralization of heroes, nature, and rulers.
  • Voltaire writes: “It certain fact is, that in his public laws he [Moses] never so much as once made mention of a life to come, limiting all punishments and all rewards to the present life.”21
  • As opposed to Christianity, the concept of an extraterrestrial paradise or heaven was not developed much in Hebrew thought.19 The paradise of the Israelites—Eden—was originally placed on Earth at a given place in Mesopotamia20 and at a given time,
  • The Hebrews consider the world to be real—not just a shadow reflection of a better world somewhere in the cloud of ideas, something the usual interpretation of history ascribes to Plato. The soul does not struggle against the body and is not its prisoner, as Augustine would write later.
  • The land, the world, the body, and material reality are for Jews the paramount setting for divine history, the pinnacle of creation. This idea is the conditio sine qua non of the development of economics, something of an utterly earthly making,
  • The mythology of the hero-king was strongly developed in that period, which Claire Lalouette summarizes into these basic characteristics: Beauty (a perfect face, on which it is “pleasant to look upon,” but also “beauty,” expressed in the Egyptian word nefer, not only means aesthetics, but contains moral qualities as well),
  • THE HERO AND HIS UNDEIFICATION: THE DREAM NEVER SLEEPS The concept of the hero is more important than it might appear. It may be the remote origin of Keynes’s animal spirits, or the desire to follow a kind of internal archetype that a given individual accepts as his own and that society values.
  • This internal animator of ours, our internal mover, this dream, never sleeps and it influences our behavior—including economic behavior—more than we want to realize.
  • manliness and strength,28 knowledge and intelligence,29 wisdom and understanding, vigilance and performance, fame and renown (fame which overcomes enemies because “a thousand men would not be able to stand firmly in his presence”);30 the hero is a good shepherd (who takes care of his subordinates), is a copper-clad rampart, the shield of the land, and the defender of heroes.
  • Each of us probably has a sort of “hero within”—a kind of internal role-model, template, an example that we (knowingly or not) follow. It is very important what kind of archetype it is, because its role is dominantly irrational and changes depending on time and the given civilization.
  • The oldest was the so-called Trickster—a fraudster; then the culture bearer—Rabbit; the musclebound hero called Redhorn; and finally the most developed form of hero: the Twins.
  • the Egyptian ruler, just as the Sumerian, was partly a god, or the son of a god.31
  • Jacob defrauds his father Isaac and steals his brother Esau’s blessing of the firstborn. Moses murders an Egyptian. King David seduces the wife of his military commander and then has him killed. In his old age, King Solomon turns to pagan idols, and so on.
  • Anthropology knows several archetypes of heroes. The Polish-born American anthropologist Paul Radin examined the myths of North American Indians and, for example, in his most influential book, The Trickster, he describes their four basic archetypes of heroes.
  • The Torah’s heroes (if that term can be used at all) frequently make mistakes and their mistakes are carefully recorded in the Bible—maybe precisely so that none of them could be deified.32
  • We do not have to go far for examples. Noah gets so drunk he becomes a disgrace; Lot lets his own daughters seduce him in a similar state of drunkenness. Abraham lies and (repeatedly) tries to sell his wife as a concubine.
  • the Hebrew heroes correspond most to the Tricksters, the Culture Bearers, and the Twins. The divine muscleman, that dominant symbol we think of when we say hero, is absent here.
  • To a certain extent it can be said that the Hebrews—and later Christianity—added another archetype, the archetype of the heroic Sufferer.35 Job
  • Undeification, however, does not mean a call to pillage or desecration; man was put here to take care of nature (see the story of the Garden of Eden or the symbolism of the naming of the animals). This protection and care of nature is also related to the idea of progress
  • For the heroes who moved our civilization to where it is today, the heroic archetypes of the cunning trickster, culture bearer, and sufferer are rather more appropriate.
  • the Old Testament strongly emphasizes the undeification of nature.37 Nature is God’s creation, which speaks of divinity but is not the domain of moody gods
  • This is very important for democratic capitalism, because the Jewish heroic archetype lays the groundwork much better for the development of the later phenomenon of the hero, which better suits life as we know it today. “The heroes laid down their arms and set about trading to become wealthy.”
  • in an Old Testament context, the pharaoh was a mere man (whom one could disagree with, and who could be resisted!).
  • RULERS ARE MERE MEN In a similar historical context, the Old Testament teachings carried out a similar desacralization of rulers, the so-called bearers of economic policy.
  • Ultimately the entire idea of a political ruler stood against the Lord’s will, which is explicitly presented in the Torah. The Lord unequivocally preferred the judge as the highest form of rule—an
  • The needs of future generations will have to be considered; after all humankind are the guardians of God’s world. Waste of natural resources, whether privately owned or nationally owned is forbidden.”39
  • Politics lost its character of divine infallibility, and political issues were subject to questioning. Economic policy could become a subject of examination.
  • 44 God first creates with the word and then on individual days He divides light from darkness, water from dry land, day from night, and so forth—and He gives order to things.45 The world is created orderly— it is wisely, reasonably put together. The way of the world is put together at least partially46 decipherably by any other wise and reasonable being who honors rational rules.
  • which for the methodology of science and economics is very important because disorder and chaos are difficult to examine scientifically.43 Faith in some kind of rational and logical order in a system (society, the economy) is a silent assumption of any (economic) examination.
  • THE PRAISE OF ORDER AND WISDOM: MAN AS A PERFECTER OF CREATION The created world has an order of sorts, an order recognizable by us as people,
  • From the very beginning, when God distances Himself from the entire idea, there is an anticipation that there is nothing holy, let alone divine, in politics. Rulers make mistakes, and it is possible to subject them to tough criticism—which frequently occurs indiscriminately through the prophets in the Old Testament.
  • Hebrew culture laid the foundations for the scientific examination of the world.
  • Examining the world is therefore an absolutely legitimate activity, and one that is even requested by God—it is a kind of participation in the Creator’s work.51 Man is called on to understand himself and his surroundings and to use his knowledge for good.
  • I was there when he set heavens in place, when he marked out the horizon on the face of the deep (…) Then I was the craftsman at his side.47
  • There are more urgings to gain wisdom in the Old Testament. “Wisdom calls aloud in the street (…): ‘How long will you simple ones love your simple ways?’”49 Or several chapters later: “Wisdom is supreme; therefore get wisdom. Though it cost all you have, get understanding.”50
  • examination is not forbidden. The fact that order can be grasped by human reason is another unspoken assumption that serves as a cornerstone of any scientific examination.
  • then, my sons, listen to me; blessed are those who keep my ways (…) Blessed is the man who listens to me, watching daily at my doors, waiting at my doorway. For whoever finds me finds life and receives favor from the Lord.
  • the rational examination of nature has its roots, surprisingly, in religion.
  • The Lord brought me forth as the first of his works, before his deeds of old. I was appointed from eternity, from the beginning, before the world began. When there were no oceans, I was given birth, when there were no springs abounding with water, before the mountains were settled in place,
  • The Book of Proverbs emphasizes specifically several times that it was wisdom that was present at the creation of the world. Wisdom personified calls out:
  • The last act, final stroke of the brush of creation, naming of the animals—this act is given to a human, it is not done by God, as one would expect. Man was given the task of completing the act of creation that the Lord began:
  • MAN AS A FINISHER OF CREATION The creation of the world, as it is explained in Jewish teachings, is described in the Book of Genesis. Here God (i) creates, (ii) separates, and (iii) names [my emphasis]:
  • Naming is a symbolic expression. In Jewish culture (and also in our culture to this day), the right to name meant sovereign rights and belonged, for example, to explorers (new places), inventors (new principles), or parents (children)—that is, to those who were there at the genesis, at the origin. This right was handed over by God to mankind.
  • The Naming itself (the capital N is appropriate) traditionally belongs to the crowning act of the Creator and represents a kind of grand finale of creation, the last move of the brush to complete the picture—a signature of the master.
  • Without naming, reality does not exist; it is created together with language. Wittgenstein tightly names this in his tractatus—the limits of our language are the limits of our world.53
  • He invented (fictitiously and completely abstractly!) a framework that was generally accepted and soon “made into” reality. Marx invented similarly; he created the notion of class exploitation. Through his idea, the perception of history and reality was changed for a large part of the world for nearly an entire century.
  • Reality is not a given; it is not passive. Perceiving reality and “facts” requires man’s active participation. It is man who must take the last step, an act (and we
  • How does this relate to economics? Reality itself, our “objective” world, is cocreated, man himself participates in the creation; creation, which is somewhat constantly being re-created.
  • Our scientific models put the finishing touches on reality, because (1) they interpret, (2) they give phenomena a name, (3) they enable us to classify the world and phenomena according to logical forms, and (4) through these models we de facto perceive reality.
  • When man finds a new linguistic framework or analytical model, or stops using the old one, he molds or remolds reality. Models are only in our heads; they are not “in objective reality.” In this sense, Newton invented (not merely discovered!) gravity.
  • A real-ization act on our part represents the creation of a construct, the imputation of sense and order (which is beautifully expressed by the biblical act of naming, or categorization, sorting, ordering).
  • Keynes enters into the history of economic thought from the same intellectual cadence; his greatest contribution to economics was precisely the resurrection of the imperceptible—for example in the form of animal spirits or uncertainty. The economist Piero Mini even ascribes Keynes’s doubting and rebellious approach to his almost Talmudic education.63
  • God connects man with the task of guarding and protecting the Garden of Eden, and thus man actually cocreates the cultural landscape. The Czech philosopher Zdeněk Neubauer also describes this: “Such is reality, and it is so deep that it willingly crystallizes into worlds. Therefore I profess that reality is a creation and not a place of occurrence for objectively given phenomena.”61
  • in this viewpoint it is possible to see how Jewish thought is mystical—it admits the role of the incomprehensible. Therefore, through its groundedness, Jewish thought indulges mystery and defends itself against a mechanistic-causal explanation of the world: “The Jewish way of thinking, according to Veblen, emphasizes the spiritual, the miraculous, the intangible.
  • The Jews believed the exact opposite. The world is created by a good God, and evil appears in it as a result of immoral human acts. Evil, therefore, is induced by man.66 History unwinds according to the morality of human acts.
  • What’s more, history seems to be based on morals; morals seem to be the key determining factors of history. For the Hebrews, history proceeds according to how morally its actors behave.
  • The Sumerians believed in dualism—good and evil deities exist, and the earth of people becomes their passive battlefield.
  • GOOD AND EVIL IN US: A MORAL EXPLANATION OF WELL-BEING We have seen that in the Epic of Gilgamesh, good and evil are not yet addressed systematically on a moral level.
  • This was not about moral-human evil, but rather a kind of natural evil. It is as if good and evil were not touched by morality at all. Evil simply occurred. Period.
  • the epic, good and evil are not envisaged morally—they are not the result of an (a)moral act. Evil was not associated with free moral action or individual will.
  • Hebrew thought, on the other hand, deals intensively with moral good and evil. A moral dimension touches the core of its stories.65
  • discrepancy between savings and investment, and others are convinced of the monetary essence
  • The entire history of the Jewish nation is interpreted and perceived in terms of morality. Morality has become, so to speak, a mover and shaker of Hebrew history.
  • sunspots. The Hebrews came up with the idea that morals were behind good and bad years, behind the economic cycle. But we would be getting ahead of ourselves. Pharaoh’s Dream: Joseph and the First Business Cycle To
  • It is the Pharaoh’s well-known dream of seven fat and seven lean cows, which he told to Joseph, the son of Jacob. Joseph interpreted the dream as a macroeconomic prediction of sorts: Seven years of abundance were to be followed by seven years of poverty, famine, and misery.
  • Self-Contradicting Prophecy Here, let’s make several observations on this: Through taxation74 on the level of one-fifth of a crop75 in good years to save the crop and then open granaries in bad years, the prophecy was de facto prevented (prosperous years were limited and hunger averted—through a predecessor of fiscal stabilization).
  • The Old Testament prophesies therefore were not any deterministic look into the future, but warnings and strategic variations of the possible, which demanded some kind of reaction. If the reaction was adequate, what was prophesied would frequently not occur at all.
  • This principle stands directly against the self-fulfilling prophecy,80 the well-known concept of social science. Certain prophecies become self-fulfilling when expressed (and believed) while others become self-contradicting prophecies when pronounced (and believed).
  • If the threat is anticipated, it is possible to totally or at least partially avoid it. Neither Joseph nor the pharaoh had the power to avoid bounty or crop failure (in this the dream interpretation was true and the appearance of the future mystical), but they avoided the impacts and implications of the prophecy (in this the interpretation of the dream was “false”)—famine did not ultimately occur in Egypt, and this was due to the application of reasonable and very intuitive economic policy.
  • Let us further note that the first “macroeconomic forecast” appears in a dream.
  • back to Torah: Later in this story we will notice that there is no reason offered as to why the cycle occurs (that will come later). Fat years will simply come, and then lean years after them.
  • Moral Explanation of a Business Cycle That is fundamentally different from later Hebrew interpretations, when the Jewish nation tries to offer reasons why the nation fared well or poorly. And those reasons are moral.
  • If you pay attention to these laws and are careful to follow them, then the Lord your God will keep his covenant of love with you, as he swore to your forefathers. He will love you and bless you and increase your numbers.
  • Only in recent times have some currents of economics again become aware of the importance of morals and trust in the form of measuring the quality of institutions, the level of justice, business ethics, corruption, and so forth, and examining their influence on the economy,
  • From today’s perspective, we can state that the moral dimension entirely disappeared from economic thought for a long time, especially due to the implementation of Mandeville’s concept of private vices that contrarily support the public welfare
  • Without being timid, we can say this is the first documented attempt to explain the economic cycle. The economic cycle, the explanation of which is to this day a mystery to economists, is explained morally in the Old Testament.
  • But how do we consolidate these two conflicting interpretations of the economic cycle: Can ethics be responsible for it or not? Can we influence reality around us through our acts?
  • it is not within the scope of this book to answer that question; justice has been done to the question if it manages to sketch out the main contours of possible searches for answers.
  • THE ECONOMICS OF GOOD AND EVIL: DOES GOOD PAY OFF? This is probably the most difficult moral problem we could ask.
  • Kant, the most important modern thinker in the area of ethics, answers on the contrary that if we carry out a “moral” act on the basis of economic calculus (therefore we carry out an hedonistic consideration; see below) in the expectation of later recompense, its morality is lost. Recompense, according to the strict Kant, annuls ethics.
  • Inquiring about the economics of good and evil, however, is not that easy. Where would Kant’s “moral dimension of ethics” go if ethics paid? If we do good for profit, the question of ethics becomes a mere question of rationality.
  • Job’s friends try to show that he must have sinned in some way and, in doing so, deserved God’s punishment. They are absolutely unable to imagine a situation in which Job, as a righteous man, would suffer without (moral) cause. Nevertheless, Job insists that he deserves no punishment because he has committed no offense: “God has wronged me and drawn his net around me.”94
  • But Job remains righteous, even though it does not pay to do so: Though he slay me, yet will I hope in him.95 And till I die, I will not deny my integrity I will maintain my righteousness and never let go of it; my conscience will not reproach me as long as I live.96
  • He remains righteous, even if his only reward is death. What economic advantage could he have from that?
  • morals cannot be considered in the economic dimension of productivity and calculus. The role of the Hebrews was to do good, whether it paid off or not. If good (outgoing) is rewarded by incoming goodness, it is a bonus,99 not a reason to do outgoing good. Good and reward do not correlate to each other.
  • This reasoning takes on a dimension of its own in the Old Testament. Good (incoming) has already happened to us. We must do good (outgoing) out of gratitude for the good (incoming) shown to us in the past.
  • So why do good? After all, suffering is the fate of many biblical figures. The answer can only be: For good itself. Good has the power to be its own reward. In this sense, goodness gets its reward, which may or may not take on a material dimension.
  • the Hebrews offered an interesting compromise between the teachings of the Stoics and Epicureans. We will go into it in detail later, so only briefly
  • constraint. It calls for bounded optimalization (with limits). A kind of symbiosis existed between the legitimate search for one’s own utility (or enjoyment of life) and maintaining rules, which are not negotiable and which are not subject to optimalization.
  • In other words, clear (exogenously given) rules exist that must be observed and cannot be contravened. But within these borders it is absolutely possible, and even recommended, to increase utility.
  • the mining of enjoyment must not come at the expense of exogenously given rules. “Judaism comes therefore to train or educate the unbounded desire … for wealth, so that market activities and patterns of consumption operate within a God-given morality.”102
  • The Epicureans acted with the goal of maximizing utility without regard for rules (rules developed endogenously, from within the system, computed from that which increased utility—this was one of the main trumps of the Epicurean school; they did not need exogenously given norms, and argued that they could “calculate” ethics (what to do) for every given situation from the situation itself).
  • The Stoics could not seek their enjoyment—or, by another name, utility. They could not in any way look back on it, and in no way could they count on it. They could only live according to rules (the greatest weakness of this school was to defend where exogenously the given rules came from and whether they are universal) and take a indifferent stand to the results of their actions.
  • To Love the Law The Jews not only had to observe the law (perhaps the word covenant would be more appropriate), but they were to love it because it was good.
  • Their relationship to the law was not supposed to be one of duty,105 but one of gratitude, love. Hebrews were to do good (outgoing), because goodness (incoming) has already been done to them.
  • This is in stark contrast with today’s legal system, where, naturally, no mention of love or gratefulness exists. But God expects a full internalization of the commandments and their fulfillment with love, not as much duty. By no means was this on the basis of the cost-benefit analyses so widespread in economics today, which determines when it pays to break the law and when not to (calculated on the basis of probability of being caught and the amount of punishment vis-à-vis the possible gain).
  • And now, O Israel, what does the Lord your God ask of you but to fear the Lord your God, to walk in all his ways, to love him, to serve the Lord your God with all your heart and with all your soul, and to observe the Lord’s commands and decrees that I am giving you today for your own good? To the Lord your God belong the heavens, even the highest heavens, the earth and everything in it. Yet the Lord set his affection on your forefathers and loved them….
  • the principle of doing good (outgoing) on the basis of a priori demonstrated good (incoming) was also taken over by the New Testament. Atonement itself is based on an a priori principle; all our acts are preceded by good.
  • The Hebrews, originally a nomadic tribe, preferred to be unrestrained and grew up in constant freedom of motion.
  • Human laws, if they are in conflict with the responsibilities given by God, are subordinate to personal responsibility, and a Jew cannot simply join the majority, even if it is legally allowed. Ethics, the concept of good, is therefore always superior to all local laws, rules, and customs:
  • THE SHACKLES OF THE CITY Owing to the Hebrew’s liberation from Egyptian slavery, freedom and responsibility become the key values of Jewish thought.
  • Laws given by God are binding for Jews, and God is the absolute source of all values,
  • The Hebrew ideal is represented by the paradise of the Garden of Eden, not a city.116 The despised city civilization or the tendency to see in it a sinful and shackling way of life appears in glimpses and allusions in many places in the Old Testament.
  • The nomadic Jewish ethos is frequently derived from Abraham, who left the Chaldean city of Ur on the basis of a command:
  • In addition, they were aware of a thin two-way line between owner and owned. We own material assets, but—to a certain extent—they own us and tie us down. Once we become used to a certain material
  • This way of life had understandably immense economic impacts. First, such a society lived in much more connected relationships, where there was no doubt that everyone mutually depended on each other. Second, their frequent wanderings meant the inability to own more than they could carry; the gathering up of material assets did not have great weight—precisely because the physical weight (mass) of things was tied to one place.
  • One of Moses’s greatest deeds was that he managed to explain to his nation once and for all that it is better to remain hungry and liberated than to be a slave with food “at no cost.”
  • SOCIAL WELFARE: NOT TO ACT IN THE MANNER OF SODOM
  • regulations is developed in the Old Testament, one we hardly find in any other nation of the time. In Hebrew teachings, aside from individual utility, indications of the concept of maximalizing utility societywide appear for the first time as embodied in the Talmudic principle of Kofin al midat S´dom, which can be translated as “one is compelled not to act in the manner of Sodom” and to take care of the weaker members of society.
  • In a jubilee year, debts were to be forgiven,125 and Israelites who fell into slavery due to their indebtedness were to be set free.126
  • Such provisions can be seen as the antimonopoly and social measures of the time. The economic system even then had a clear tendency to converge toward asset concentration, and therefore power as well. It would appear that these provisions were supposed to prevent this process
  • Land at the time could be “sold,” and it was not sale, but rent. The price (rent) of real estate depended on how long there was until a forgiveness year. It was about the awareness that we may work the land, but in the last instance we are merely “aliens and strangers,” who have the land only rented to us for a fixed time. All land and riches came from the Lord.
  • These provisions express a conviction that freedom and inheritance should not be permanently taken away from any Israelite. Last but not least, this system reminds us that no ownership lasts forever and that the fields we plow are not ours but the Lord’s.
  • Glean Another social provision was the right to glean, which in Old Testament times ensured at least basic sustenance for the poorest. Anyone who owned a field had the responsibility not to harvest it to the last grain but to leave the remains in the field for the poor.
  • Tithes and Early Social Net Every Israelite also had the responsibility of levying a tithe from their entire crop. They had to be aware from whom all ownership comes and, by doing so, express their thanks.
  • “Since the community has an obligation to provide food, shelter, and basic economic goods for the needy, it has a moral right and duty to tax its members for this purpose. In line with this duty, it may have to regulate markets, prices and competition, to protect the interests of its weakest members.”135
  • In Judaism, charity is not perceived as a sign of goodness; it is more of a responsibility. Such a society then has the right to regulate its economy in such a way that the responsibility of charity is carried out to its satisfaction.
  • With a number of responsibilities, however, comes the difficulty of getting them into practice. Their fulfillment, then, in cases when it can be done, takes place gradually “in layers.” Charitable activities are classified in the Talmud according to several target groups with various priorities, classified according to, it could be said, rules of subsidiarity.
  • Do not mistreat an alien or oppress him, for you were aliens in Egypt.140 As one can see, aside from widows and orphans, the Old Testament also includes immigrants in its area of social protection.141 The Israelites had to have the same rules apply for them as for themselves—they could not discriminate on the basis of their origin.
  • ABSTRACT MONEY, FORBIDDEN INTEREST, AND OUR DEBT AGE If it appears to us that today’s era is based on money and debt, and our time will be written into history as the “Debt age,” then it will certainly be interesting to follow how this development occurred.
  • Money is a social abstractum. It is a social agreement, an unwritten contract.
  • The first money came in the form of clay tablets from Mesopotamia, on which debts were written. These debts were transferable, so the debts became currency. In the end, “It is no coincidence that in English the root of ‘credit’ is ‘credo,’ the Latin for ‘I believe.’”
  • To a certain extent it could be said that credit, or trust, was the first currency. It can materialize, it can be embodied in coins, but what is certain is that “money is not metal,” even the rarest metal, “it is trust inscribed,”
  • Inseparably, with the original credit (money) goes interest. For the Hebrews, the problem of interest was a social issue: “If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest.”
  • there were also clearly set rules setting how far one could go in setting guarantees and the nonpayment of debts. No one should become indebted to the extent that they could lose the source of their livelihood:
  • In the end, the term “bank” comes from the Italian banci, or the benches that Jewish lenders sat on.157
  • Money is playing not only its classical roles (as a means of exchange, a holder of value, etc.) but also a much greater, stronger role: It can stimulate, drive (or slow down) the whole economy. Money plays a national economic role.
  • In the course of history, however, the role of loans changed, and the rich borrowed especially for investment purposes,
  • Today the position and significance of money and debt has gone so far and reached such a dominant position in society that operating with debts (fiscal policy) or interest or money supply (monetary policy) means that these can, to a certain extent, direct (or at least strongly influence) the whole economy and society.
  • In such a case a ban on interest did not have great ethical significance. Thomas Aquinas, a medieval scholar (1225-1274), also considers similarly; in his time, the strict ban on lending with usurious interest was loosened, possibly due to him.
  • As a form of energy, money can travel in three dimensions, vertically (those who have capital lend to those who do not) and horizontally (speed and freedom in horizontal or geographic motion has become the by-product—or driving force?—of globalization). But money (as opposed to people) can also travel through time.
  • money is something like energy that can travel through time. And it is a very useful energy, but at the same time very dangerous as well. Wherever
  • Aristotle condemned interest162 not only from a moral standpoint, but also for metaphysical reasons. Thomas Aquinas shared the same fear of interest and he too argued that time does not belong to us, and that is why we must not require interest.
  • MONEY AS ENERGY: TIME TRAVEL AND GROSS DEBT PRODUCT (GDP)
  • Due to this characteristic, we can energy-strip the future to the benefit of the present. Debt can transfer energy from the future to the present.163 On the other hand, saving can accumulate energy from the past and send it to the present.
  • labor was not considered degrading in the Old Testament. On the contrary, the subjugation of nature is even a mission from God that originally belonged to man’s very first blessings.
  • LABOR AND REST: THE SABBATH ECONOMY
  • The Jews as well as Aristotle behaved very guardedly toward loans. The issue of interest/usury became one of the first economic debates. Without having an inkling of the future role of economic policy (fiscal and monetary), the ancient Hebrews may have unwittingly felt that they were discovering in interest a very powerful weapon, one that can be a good servant, but (literally) an enslaving master as well.
  • It’s something like a dam. When we build one, we are preventing periods of drought and flooding in the valley; we are limiting nature’s whims and, to a large extent, avoiding its incalculable cycles. Using dams, we can regulate the flow of water to nearly a constant. With it we tame the river (and we can also gain
  • But if we do not regulate the water wisely, it may happen that we would overfill the dam and it would break. For the cities lying in the valley, their end would be worse than if a dam were never there.
  • If man lived in harmony with nature before, now, after the fall, he must fight; nature stands against him and he against it and the animals. From the Garden we have moved unto a (battle)field.
  • Only after man’s fall does labor turn into a curse.168 It could even be said that this is actually the only curse, the curse of the unpleasantness of labor, that the Lord places on Adam.
  • Both Plato and Aristotle consider labor to be necessary for survival, but that only the lower classes should devote themselves to it so that the elites would not have to be bothered with it and so that they could devote themselves to “purely spiritual matters—art, philosophy, and politics.”
  • Work is also not only a source of pleasure but a social standing; It is considered an honor. “Do you see a man skilled in his work? He will serve before kings.”170 None of the surrounding cultures appreciate work as much. The idea of the dignity of labor is unique in the Hebrew tradition.
  • Hebrew thinking is characterized by a strict separation of the sacred from the profane. In life, there are simply areas that are holy, and in which it is not allowed to economize, rationalize, or maximize efficiency.
  • good example is the commandment on the Sabbath. No one at all could work on this day, not even the ones who were subordinate to an observant Jew:
  • the message of the commandment on Saturday communicated that people were not primarily created for labor.
  • Paradoxically, it is precisely this commandment out of all ten that is probably the most violated today.
  • Aristotle even considers labor to be “a corrupted waste of time which only burdens people’s path to true honour.”
  • we have days when we must not toil connected (at least lexically) with the word meaning emptiness: the English term “vacation” (or emptying), as with the French term, les vacances, or German die Freizeit, meaning open time, free time, but also…
  • Translated into economic language: The meaning of utility is not to increase it permanently but to rest among existing gains. Why do we learn how to constantly increase gains but not how to…
  • This dimension has disappeared from today’s economics. Economic effort has no goal at which it would be possible to rest. Today we only know growth for growth’s sake, and if our company or country prospers, that does not…
  • Six-sevenths of time either be dissatisfied and reshape the world into your own image, man, but one-seventh you will rest and not change the creation. On the seventh day, enjoy creation and enjoy the work of your hands.
  • the purpose of creation was not just creating but that it had an end, a goal. The process was just a process, not a purpose. The whole of Being was created so…
  • Saturday was not established to increase efficiency. It was a real ontological break that followed the example of the Lord’s seventh day of creation. Just as the Lord did not rest due to tiredness or to regenerate strength; but because He was done. He was done with His work, so that He could enjoy it, to cherish in His creation.
  • If we believe in rest at all today, it is for different reasons. It is the rest of the exhausted machine, the rest of the weak, and the rest of those who can’t handle the tempo. It’s no wonder that the word “rest…
  • Related to this, we have studied the first mention of a business cycle with the pharaoh’s dream as well as seen a first attempt (that we may call…
  • We have tried to show that the quest for a heaven on Earth (similar to the Jewish one) has, in its desacralized form, actually also been the same quest for many of the…
  • We have also seen that the Hebrews tried to explain the business cycle with morality and ethics. For the Hebrews,…
  • ancient Greek economic ethos, we will examine two extreme approaches to laws and rules. While the Stoics considered laws to be absolutely valid, and utility had infinitesimal meaning in their philosophy, the Epicureans, at least in the usual historical explanation, placed utility and pleasure in first place—rules were to be made based on the principle of utility.
  • CONCLUSION: BETWEEN UTILITY AND PRINCIPLE The influence of Jewish thought on the development of market democracy cannot be overestimated. The key heritage for us was the lack of ascetic perception of the world, respect to law and private…
  • We have tried to show how the Torah desacralized three important areas in our lives: the earthly ruler, nature,…
  • What is the relationship between the good and evil that we do (outgoing) and the utility of disutility that we (expect to) get as a reward (incoming)? We have seen…
  • The Hebrews never despised material wealth; on contrary, the Jewish faith puts great responsibility on property management. Also the idea of progress and the linear perception of time gives our (economic)…
  • the Hebrews managed to find something of a happy compromise between both of these principles.
  • will not be able to completely understand the development of the modern notion of economics without understanding the disputes between the Epicureans and the Stoics;
  • poets actually went even further, and with their speech they shaped and established reality and truth. Honor, adventure, great deeds, and the acclaim connected with them played an important role in the establishment of the true, the real.
  • those who are famous will be remembered by people. They become more real, part of the story, and they start to be “realized,” “made real” in the lives of other people. That which is stored in memory is real; that which is forgotten is as if it never existed.
  • Today’s scientific truth is founded on the notion of exact and objective facts, but poetic truth stands on an interior (emotional) consonance with the story or poem. “It is not addressed first to the brain … [myth] talks directly to the feeling system.”
  • “epic and tragic poets were widely assumed to be the central ethical thinkers and teachers of Greece; nobody thought of their work as less serious, less aimed at truth, than the speculative prose treatises of historians and philosophers.”5 Truth and reality were hidden in speech, stories, and narration.
  • Ancient philosophy, just as science would later, tries to find constancy, constants, quantities, inalterabilities. Science seeks (creates?) order and neglects everything else as much as it can. In their own experiences, everyone knows that life is not like that,
  • Just as scientists do today, artists drew images of the world that were representative, and therefore symbolic, picturelike, and simplifying (but thus also misleading), just like scientific models, which often do not strive to be “realistic.”
  • general? In the end, poetry could be more sensitive to the truth than the philosophical method or, later, the scientific method. “Tragic poems, in virtue of their subject matter and their social function, are likely to confront and explore problems about human beings and luck that a philosophical text might be able to omit or avoid.”8
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How Reliable Are the Social Sciences? - The New York Times - 1 views

opinionator.blogs.nytimes.com/...liable-are-the-social-sciences psychology science research knowledge brain science
shared by kaylynfreeman on 01 Mar 18 - No Cached
  • How much authority should we give to such work in our policy decisions?  The question is important because media reports often seem to assume that any result presented as “scientific” has a claim to our serious attention.
  • A rational assessment of a scientific result must first take account of the broader context of the particular science involved.  Where does the result lie on the continuum from preliminary studies, designed to suggest further directions of research, to maximally supported conclusions of the science? 
  • Second, and even more important, there is our overall assessment of work in a given science in comparison with other sciences.  The core natural sciences (e.g., physics, chemistry, biology) are so well established that we readily accept their best-supported conclusions as definitive. 
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  • While the physical sciences produce many detailed and precise predictions, the social sciences do not.  The reason is that such predictions almost always require randomized controlled experiments, which are seldom possible when people are involved.  For one thing, we are too complex: our behavior depends on an enormous number of tightly interconnected variables that are extraordinarily difficult to  distinguish and study separately
  • Without a strong track record of experiments leading to successful predictions, there is seldom a basis for taking social scientific results as definitive
  • our policy discussions should simply ignore social scientific research.  We should, as Manzi himself proposes, find ways of injecting more experimental data into government decisions.  But above all, we need to develop a much better sense of the severely limited reliability of social scientific results.   Media reports of research should pay far more attention to these limitations, and scientists reporting the results need to emphasize what they don’t show as much as what they do.
  • Given the limited predictive success and the lack of consensus in social sciences, their conclusions can seldom be primary guides to setting policy.  At best, they can supplement the general knowledge, practical experience, good sense and critical intelligence that we can only hope our political leaders will have.
  • How much authority should we give to such work in our policy decisions?  The question is important because media reports often seem to assume that any result presented as “scientific” has a claim to our serious attention.
  • Without a strong track record of experiments leading to successful predictions, there is seldom a basis for taking social scientific results as definitive
  • our policy discussions should simply ignore social scientific research.  We should, as Manzi himself proposes, find ways of injecting more experimental data into government decisions.  But above all, we need to develop a much better sense of the severely limited reliability of social scientific results.   Media reports of research should pay far more attention to these limitations, and scientists reporting the results need to emphasize what they don’t show as much as what they do
  • our policy discussions should simply ignore social scientific research.  We should, as Manzi himself proposes, find ways of injecting more experimental data into government decisions.  But above all, we need to develop a much better sense of the severely limited reliability of social scientific results.   Media reports of research should pay far more attention to these limitations, and scientists reporting the results need to emphasize what they don’t show as much as what they do.
  • Social sciences may be surrounded by the “paraphernalia” of the natural sciences, such as technical terminology, mathematical equations, empirical data and even carefully designed experiments. 
  • Given the limited predictive success and the lack of consensus in social sciences, their conclusions can seldom be primary guides to setting policy.  At best, they can supplement the general knowledge, practical experience, good sense and critical intelligence that we can only hope our political leaders will have.
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Where We Went Wrong | Harvard Magazine - 0 views

www.harvardmagazine.com/...montage-where-we-went-wrong DeLong prosperity roots 20th century social history economic Galbraith contingent choice public growth crisis culture policy economics
shared by Javier E on 07 May 23 - No Cached
  • John Kenneth Galbraith assessed the trajectory of America’s increasingly “affluent society.” His outlook was not a happy one. The nation’s increasingly evident material prosperity was not making its citizens any more satisfied. Nor, at least in its existing form, was it likely to do so
  • One reason, Galbraith argued, was the glaring imbalance between the opulence in consumption of private goods and the poverty, often squalor, of public services like schools and parks
  • nother was that even the bountifully supplied private goods often satisfied no genuine need, or even desire; a vast advertising apparatus generated artificial demand for them, and satisfying this demand failed to provide meaningful or lasting satisfaction.
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  • economist J. Bradford DeLong ’82, Ph.D. ’87, looking back on the twentieth century two decades after its end, comes to a similar conclusion but on different grounds.
  • DeLong, professor of economics at Berkeley, looks to matters of “contingency” and “choice”: at key junctures the economy suffered “bad luck,” and the actions taken by the responsible policymakers were “incompetent.”
  • these were “the most consequential years of all humanity’s centuries.” The changes they saw, while in the first instance economic, also “shaped and transformed nearly everything sociological, political, and cultural.”
  • DeLong’s look back over the twentieth century energetically encompasses political and social trends as well; nor is his scope limited to the United States. The result is a work of strikingly expansive breadth and scope
  • labeling the book an economic history fails to convey its sweeping frame.
  • The century that is DeLong’s focus is what he calls the “long twentieth century,” running from just after the Civil War to the end of the 2000s when a series of events, including the biggest financial crisis since the 1930s followed by likewise the most severe business downturn, finally rendered the advanced Western economies “unable to resume economic growth at anything near the average pace that had been the rule since 1870.
  • d behind those missteps in policy stood not just failures of economic thinking but a voting public that reacted perversely, even if understandably, to the frustrations poor economic outcomes had brought them.
  • Within this 140-year span, DeLong identifies two eras of “El Dorado” economic growth, each facilitated by expanding globalization, and each driven by rapid advances in technology and changes in business organization for applying technology to economic ends
  • from 1870 to World War I, and again from World War II to 197
  • fellow economist Robert J. Gordon ’62, who in his monumental treatise on The Rise and Fall of American Economic Growth (reviewed in “How America Grew,” May-June 2016, page 68) hailed 1870-1970 as a “special century” in this regard (interrupted midway by the disaster of the 1930s).
  • Gordon highlighted the role of a cluster of once-for-all-time technological advances—the steam engine, railroads, electrification, the internal combustion engine, radio and television, powered flight
  • Pessimistic that future technological advances (most obviously, the computer and electronics revolutions) will generate productivity gains to match those of the special century, Gordon therefore saw little prospect of a return to the rapid growth of those halcyon days.
  • DeLong instead points to a series of noneconomic (and non-technological) events that slowed growth, followed by a perverse turn in economic policy triggered in part by public frustration: In 1973 the OPEC cartel tripled the price of oil, and then quadrupled it yet again six years later.
  • For all too many Americans (and citizens of other countries too), the combination of high inflation and sluggish growth meant that “social democracy was no longer delivering the rapid progress toward utopia that it had delivered in the first post-World War II generation.”
  • Frustration over these and other ills in turn spawned what DeLong calls the “neoliberal turn” in public attitudes and economic policy. The new economic policies introduced under this rubric “did not end the slowdown in productivity growth but reinforced it.
  • the tax and regulatory changes enacted in this new climate channeled most of what economic gains there were to people already at the top of the income scale
  • Meanwhile, progressive “inclusion” of women and African Americans in the economy (and in American society more broadly) meant that middle- and lower-income white men saw even smaller gains—and, perversely, reacted by providing still greater support for policies like tax cuts for those with far higher incomes than their own.
  • Daniel Bell’s argument in his 1976 classic The Cultural Contradictions of Capitalism. Bell famously suggested that the very success of a capitalist economy would eventually undermine a society’s commitment to the values and institutions that made capitalism possible in the first plac
  • In DeLong’s view, the “greatest cause” of the neoliberal turn was “the extraordinary pace of rising prosperity during the Thirty Glorious Years, which raised the bar that a political-economic order had to surpass in order to generate broad acceptance.” At the same time, “the fading memory of the Great Depression led to the fading of the belief, or rather recognition, by the middle class that they, as well as the working class, needed social insurance.”
  • what the economy delivered to “hard-working white men” no longer matched what they saw as their just deserts: in their eyes, “the rich got richer, the unworthy and minority poor got handouts.”
  • As Bell would have put it, the politics of entitlement, bred by years of economic success that so many people had come to take for granted, squeezed out the politics of opportunity and ambition, giving rise to the politics of resentment.
  • The new era therefore became “a time to question the bourgeois virtues of hard, regular work and thrift in pursuit of material abundance.”
  • DeLong’s unspoken agenda would surely include rolling back many of the changes made in the U.S. tax code over the past half-century, as well as reinvigorating antitrust policy to blunt the dominance, and therefore outsize profits, of the mega-firms that now tower over key sectors of the economy
  • He would also surely reverse the recent trend moving away from free trade. Central bankers should certainly behave like Paul Volcker (appointed by President Carter), whose decisive action finally broke the 1970s inflation even at considerable economic cost
  • Not only Galbraith’s main themes but many of his more specific observations as well seem as pertinent, and important, today as they did then.
  • What will future readers of Slouching Towards Utopia conclude?
  • If anything, DeLong’s narratives will become more valuable as those events fade into the past. Alas, his description of fascism as having at its center “a contempt for limits, especially those implied by reason-based arguments; a belief that reality could be altered by the will; and an exaltation of the violent assertion of that will as the ultimate argument” will likely strike a nerve with many Americans not just today but in years to come.
  • what about DeLong’s core explanation of what went wrong in the latter third of his, and our, “long century”? I predict that it too will still look right, and important.
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Nobel in Economics Given to Angus Deaton for Studies of Consumption - The New York Times - 1 views

www.nytimes.com/...us-deaton-nobel-economics.html nobel economics consumption choice individual
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  • “To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the Royal Swedish Academy of Sciences said in announcing the economics prize, the last of this year’s Nobels. “More than anyone else, Angus Deaton has enhanced this understanding.”
  • “Simple ways of looking at the world are often the basis of policy, and if the statements are wrong, then the policy may be wrong also,” said the economist Janet M. Currie, a Princeton colleague. “He’s always had a concern for trying to capture the complexity of the real world.”
  • Economics before the 1980s relied on the assumption that the people represented by a large economic aggregate behaved in roughly the same way, not because that made sense but because accounting for diversity was too hard.
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  • “What he’s shown is that you do learn a great deal more by looking at the behavior that underlies the aggregates,”
  • Professor Deaton said he hoped “carefulness in measurement” would be his legacy. He said his mentor, Richard Stone, a Cambridge professor who won the Nobel in economics in 1984, had ingrained in him the importance of good data. “I’ve always wanted to be like him,” Professor Deaton said. “I think putting numbers together into a coherent framework always seemed to me to be what really matters.”
  • His work also is marked by an insistence that theories must explain these more complicated sets of facts. “A good theoretical account must explain all of the evidence that we see,” Professor Deaton wrote in a 2011 essay on his life in economics. “If it doesn’t work everywhere, we have no idea what we are talking about, and all is chaos.”
  • “There’s a fair amount of policy agnosticism that comes from this — it emphasizes more the heterogeneity of outcomes,” Professor Rodrik said of Professor Deaton. “He’s somebody with quite a sharp tongue, and he’s often had as his target people who make very strong statements about this policy or that policy.”
  • Proponents of foreign aid programs are a frequent target. Professor Deaton has argued that such investments often undermine local governance and the development of institutions necessary to sustain development.
  • “Life is better now than at almost any time in history,” he wrote in the opening lines of his 2013 book “The Great Escape,” a popular account of his work. “More people are richer and fewer people live in dire poverty. Lives are longer and parents no longer routinely watch a quarter of their children die.”
  • He counts climate change and increased economic inequality in developed nations as threats to this progress.
  • He has noted in other work that inequality occurs naturally because of divergent luck, but he has said that the growing gaps in recent years pose a new economic and political challenge.
  • “I think inequality has gone past the point where it’s helping us all get rich, and it’s really becoming a serious threat,” he said
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A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia. - NYTimes.com - 0 views

www.nytimes.com/...-leap-in-employment-rate-.html safety net work subsidies transport children education scandinavia
shared by Javier E on 18 Dec 14 - No Cached
  • It is a simple idea supported by both economic theory and most people’s intuition: If welfare benefits are generous and taxes high, fewer people will work. Why bother being industrious, after all, if you can get a check from the government for sitting around
  • The idea may be backward.
  • Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries.
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  • The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment.
  • In Denmark, someone who enters the labor force at an average salary loses 86 percent of earnings to a combination of taxes and lost eligibility for welfare benefits; that number is only 37 percent in the United States. Yet the percentage of Danes between the ages of 20 and 59 with a job is 10 percentage points higher than in the United States.
  • In short, more people may work when countries offer public services that directly make working easier, such as subsidized care for children and the old; generous sick leave policies; and cheap and accessible transportation. If the goal is to get more people working, what’s important about a social welfare plan may be more about what the money is spent on than how much is spent.
  • There are countless differences between Northern European countries and the rest of the world beyond child care policies and the like. The Scandinavian countries may have cultures that encourage more people to work, especially women.
  • In Scandinavian countries, working parents have the option of heavily subsidized child care. Leave policies make it easy for parents to take off work to care for a sick child. Heavily subsidized public transportation may make it easier for a person in a low-wage job to get to and from work. And free or inexpensive education may make it easier to get the training to move from the unemployment rolls to a job.
  • In the United States, the major policies aimed at helping the working poor are devised around tax subsidies that put more cash in people’s pockets so long as they work, most notably through the Earned-income tax credit and Child Tax Credit.
  • There is a solid correlation, by Mr. Kleven’s calculations, between what countries spend on employment subsidies — like child care, preschool and care for older adults — and what percentage of their working-age population is in the labor force.
  • Collectively, these policies and subsidies create flexibility such that a person on the fence between taking a job versus staying at home to care for children or parents may be more likely to take a job.
  • , it could mean that more direct aid to the working poor could help coax Americans into the labor force more effectively than the tax credits that have been a mainstay for compromise between Republicans and Democrats for the last generation.
  • wages for entry-level work are much higher in the Nordic countries than in the United States, reflecting a higher minimum wage, stronger labor unions and cultural norms that lead to higher pay
  • The employment subsidies Mr. Kleven cites surely help coax more Scandinavians into the work force, Mr. Greenstein agrees, but shouldn’t be viewed in isolation.
  • Every country has a mix of taxes, welfare benefits and policies to promote work that reflects its politics and culture. In the large, diverse United States, there is deep skepticism of social welfare programs and direct government spending, along with a greater commitment to keeping taxes low.
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Who Wants a Depression? - NYTimes.com - 1 views

www.nytimes.com/...an-who-wants-a-depression.html politics economics deficit monetary policy rich interest bias social science
shared by Javier E on 12 Jul 14 - No Cached
  • before the financial crisis, many economists — even, to some extent, yours truly — believed that there was a fairly broad professional consensus on some important issues.
  • class interests also operate through a cruder, more direct channel. Quite simply, easy-money policies, while they may help the economy as a whole, are directly detrimental to people who get a lot of their income from bonds and other interest-paying assets — and this mainly means the very wealthy, in particular the top 0.01 percent.
  • The really big losers from low interest rates are the truly wealthy — not even the 1 percent, but the 0.1 percent or even the 0.01 percent. Back in 2007, before the slump, the average member of the 0.01 percent received $3 million (in 2012 dollars) in interest. By 2011, that had fallen to $1.3 million — a loss equivalent to almost 9 percent of the group’s 2007 income.
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  • there’s also a much more direct reason for those defending the interests of the wealthy to complain about easy money: The wealthy derive an important part of their income from interest on bonds, and low-rate policies have greatly reduced this income.
  • Before the financial crisis, many central bankers and economists were, it’s now clear, living in a fantasy world, imagining themselves to be technocrats insulated from the political fray. After all, their job was to steer the economy between the shoals of inflation and depression, and who could object to that?
  • It turns out, however, that using monetary policy to fight depression, while in the interest of the vast majority of Americans, isn’t in the interest of a small, wealthy minority. And, as a result, monetary policy is as bound up in class and ideological conflict as tax policy.The truth is that in a society as unequal and polarized as ours has become, almost everything is political. Get used to it.
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3 ways companies could offer more father-friendly policies that will help women - 1 views

theconversation.com/es-that-will-help-women-154155 men women research stigma education brain science
shared by cvanderloo on 23 Mar 21 - No Cached
  • Family-friendly policies such as flextime, telecommuting and a compressed workweek have been seen as supporting women’s traditional roles and hence as more needed for women to take advantage of.
  • some studies show men’s usage has been stigmatized and discouraged – and may even hurt their careers.
  • Companies could overcome these stereotypes and fears by encouraging men to take advantage of these types of family-friendly policies and by proclaiming that there’s no penalty if the reason is to take on more domestic responsibilities.
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  • Yet research shows that men who take parental leave become equal partners in raising their children, beyond the time they take off before or after a baby is born.
  • In many countries where parental leave is mandated, such as Canada and across Europe, leave can be shared between men and women any way parents like. Data show that mothers typically take the majority of that leave, while fathers take very little.
  • Research shows that in nations that foster a culture that rewards overtime work, men do less housework and women do more.
  • Employers need to encourage men to use them, without fear of repercussions, for the policies to be successful.
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North Carolina passes law banning new science from guiding coastal policies - 0 views

now.msn.com/-from-guiding-coastal-policies science politics public motivated reasoning law
shared by Javier E on 04 Aug 12 - Cached
  • North Carolina has banned using recent science to guide policy making. House Bill 819, which passed today after the governor let the deadline to stop it slip, restricts all sea-level predictions used for policy-making to be based on "historical data," effectively sending science back to 1900. The law will prevent policy-makers from using a recent study by the state's Coastal Resources Commission (CRC) which predicted the sea level will rise by 39 inches in the next century.
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The New York Times > Magazine > In the Magazine: Faith, Certainty and the Presidency of... - 0 views

www.nytimes.com/...17BUSH.html Bush presidency faith certainty openness crisis culture policy
shared by Javier E on 11 May 14 - No Cached
  • The Delaware senator was, in fact, hearing what Bush's top deputies -- from cabinet members like Paul O'Neill, Christine Todd Whitman and Colin Powell to generals fighting in Iraq -- have been told for years when they requested explanations for many of the president's decisions, policies that often seemed to collide with accepted facts. The president would say that he relied on his ''gut'' or his ''instinct'' to guide the ship of state, and then he ''prayed over it.''
  • What underlies Bush's certainty? And can it be assessed in the temporal realm of informed consent?
  • Top officials, from cabinet members on down, were often told when they would speak in Bush's presence, for how long and on what topic. The president would listen without betraying any reaction. Sometimes there would be cross-discussions -- Powell and Rumsfeld, for instance, briefly parrying on an issue -- but the president would rarely prod anyone with direct, informed questions.
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  • This is one key feature of the faith-based presidency: open dialogue, based on facts, is not seen as something of inherent value. It may, in fact, create doubt, which undercuts faith. It could result in a loss of confidence in the decision-maker and, just as important, by the decision-maker.
  • has spent a lot of time trying to size up the president. ''Most successful people are good at identifying, very early, their strengths and weaknesses, at knowing themselves,'' he told me not long ago. ''For most of us average Joes, that meant we've relied on strengths but had to work on our weakness -- to lift them to adequacy -- otherwise they might bring us down. I don't think the president really had to do that, because he always had someone there -- his family or friends -- to bail him out. I don't think, on balance, that has served him well for the moment he's in now as president. He never seems to have worked on his weaknesses.''
  • Details vary, but here's the gist of what I understand took place. George W., drunk at a party, crudely insulted a friend of his mother's. George senior and Barbara blew up. Words were exchanged along the lines of something having to be done. George senior, then the vice president, dialed up his friend, Billy Graham, who came to the compound and spent several days with George W. in probing exchanges and walks on the beach. George W. was soon born again. He stopped drinking, attended Bible study and wrestled with issues of fervent faith. A man who was lost was saved.
  • Rubenstein described that time to a convention of pension managers in Los Angeles last year, recalling that Malek approached him and said: ''There is a guy who would like to be on the board. He's kind of down on his luck a bit. Needs a job. . . . Needs some board positions.'' Though Rubenstein didn't think George W. Bush, then in his mid-40's, ''added much value,'' he put him on the Caterair board. ''Came to all the meetings,'' Rubenstein told the conventioneers. ''Told a lot of jokes. Not that many clean ones. And after a while I kind of said to him, after about three years: 'You know, I'm not sure this is really for you. Maybe you should do something else. Because I don't think you're adding that much value to the board. You don't know that much about the company.' He said: 'Well, I think I'm getting out of this business anyway. And I don't really like it that much. So I'm probably going to resign from the board.' And I said thanks. Didn't think I'd ever see him again.''
  • challenges -- from either Powell or his opposite number as the top official in domestic policy, Paul O'Neill -- were trials that Bush had less and less patience for as the months passed. He made that clear to his top lieutenants. Gradually, Bush lost what Richard Perle, who would later head a largely private-sector group under Bush called the Defense Policy Board Advisory Committee, had described as his open posture during foreign-policy tutorials prior to the 2000 campaign. (''He had the confidence to ask questions that revealed he didn't know very much,'' Perle said.) By midyear 2001, a stand-and-deliver rhythm was established. Meetings, large and small, started to take on a scripted quality.
  • That a deep Christian faith illuminated the personal journey of George W. Bush is common knowledge. But faith has also shaped his presidency in profound, nonreligious ways. The president has demanded unquestioning faith from his followers, his staff, his senior aides and his kindred in the Republican Party. Once he makes a decision -- often swiftly, based on a creed or moral position -- he expects complete faith in its rightness.
  • A cluster of particularly vivid qualities was shaping George W. Bush's White House through the summer of 2001: a disdain for contemplation or deliberation, an embrace of decisiveness, a retreat from empiricism, a sometimes bullying impatience with doubters and even friendly questioners.
  • By summer's end that first year, Vice President Dick Cheney had stopped talking in meetings he attended with Bush. They would talk privately, or at their weekly lunch. The president was spending a lot of time outside the White House, often at the ranch, in the presence of only the most trustworthy confidants.
  • ''When I was first with Bush in Austin, what I saw was a self-help Methodist, very open, seeking,'' Wallis says now. ''What I started to see at this point was the man that would emerge over the next year -- a messianic American Calvinist. He doesn't want to hear from anyone who doubts him.''
  • , I had a meeting with a senior adviser to Bush. He expressed the White House's displeasure, and then he told me something that at the time I didn't fully comprehend -- but which I now believe gets to the very heart of the Bush presidency.
  • The aide said that guys like me were ''in what we call the reality-based community,'' which he defined as people who ''believe that solutions emerge from your judicious study of discernible reality.'' I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ''That's not the way the world really works anymore,'' he continued. ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors . . . and you, all of you, will be left to just study what we do.''
  • ''If you operate in a certain way -- by saying this is how I want to justify what I've already decided to do, and I don't care how you pull it off -- you guarantee that you'll get faulty, one-sided information,'' Paul O'Neill, who was asked to resign his post of treasury secretary in December 2002, said when we had dinner a few weeks ago. ''You don't have to issue an edict, or twist arms, or be overt.''
  • George W. Bush and his team have constructed a high-performance electoral engine. The soul of this new machine is the support of millions of likely voters, who judge his worth based on intangibles -- character, certainty, fortitude and godliness -- rather than on what he says or does.
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The M.I.T. Gang - The New York Times - 0 views

www.nytimes.com/...paul-krugman-the-mit-gang.html economics theory social science Keynes
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  • what distinguishes M.I.T. economics, and why does it matter? To answer that question, you need to go back to the 1970s, when all the people I’ve just named went to graduate school.
  • At the time, the big issue was the combination of high unemployment with high inflation. The coming of stagflation was a big win for Milton Friedman, who had predicted exactly that outcome if the government tried to keep unemployment too low for too long; it was widely seen, rightly or (mostly) wrongly, as proof that markets get it right and the government should just stay out of the way
  • Or to put it another way, many economists responded to stagflation by turning their backs on Keynesian economics and its call for government action to fight recessions.
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  • At M.I.T., however, Keynes never went away. To be sure, stagflation showed that there were limits to what policy can do. But students continued to learn about the imperfections of markets and the role that monetary and fiscal policy can play in boosting a depressed economy.
  • And the M.I.T. students of the 1970s enlarged on those insights in their later work. Mr. Blanchard, for example, showed how small deviations from perfect rationality can have large economic consequences; Mr. Obstfeld showed that currency markets can sometimes experience self-fulfilling panic.
  • This open-minded, pragmatic approach was overwhelmingly vindicated after crisis struck in 2008. Chicago-school types warned incessantly that responding to the crisis by printing money and running deficits would lead to 70s-type stagflation, with soaring inflation and interest rates. But M.I.T. types predicted, correctly, that inflation and interest rates would stay low in a depressed economy, and that attempts to slash deficits too soon would deepen the slump.
  • The truth, although nobody will believe it, is that the economic analysis some of us learned at M.I.T. way back when has worked very, very well for the past seven years.
  • But has the intellectual success of M.I.T. economics led to comparable policy success? Unfortunately, the answer is no.
  • True, there have been some important monetary successes. The Fed, led by Mr. Bernanke, ignored right-wing pressure and threats — Rick Perry, as governor of Texas, went so far as to accuse him of treason — and pursued an aggressively expansionary policy that helped limit the damage from the financial crisis. In Europe, Mr. Draghi’s activism has been crucial to calming financial markets, probably saving the euro from collapse. Continue reading the main story 215 Comments
  • On other fronts, however, the M.I.T. gang’s good advice has been ignored. The I.M.F.’s research department, under Mr. Blanchard’s leadership, has done authoritative work on the effects of fiscal policy, demonstrating beyond any reasonable doubt that slashing spending in a depressed economy is a terrible mistake, and that attempts to reduce high levels of debt via austerity are self-defeating. But European politicians have slashed spending and demanded crippling austerity from debtors anyway.
  • Meanwhile, in the United States, Republicans have responded to the utter failure of free-market orthodoxy and the remarkably successful predictions of much-hated Keynesians by digging in even deeper, determined to learn nothing from experience.
  • being right isn’t necessarily enough to change the world. But it’s still better to be right than to be wrong, and M.I.T.-style economics, with its pragmatic openness to evidence, has been very right indeed
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How to Get It Wrong - NYTimes.com - 2 views

www.nytimes.com/...get-economic-policy-wrong.html economics policy bias social science
shared by Javier E on 16 Sep 14 - No Cached
  • economics needs rethinking in the wake of a disastrous crisis, a crisis that was neither predicted nor prevented.
  • it’s important to realize that the enormous intellectual failure of recent years took place at several levels. Clearly, economics as a discipline went badly astray in the years — actually decades — leading up to the crisis. But the failings of economics were greatly aggravated by the sins of economists, who far too often let partisanship or personal self-aggrandizement trump their professionalism. Last but not least, economic policy makers systematically chose to hear only what they wanted to hear. And it is this multilevel failure — not the inadequacy of economics alone — that accounts for the terrible performance of Western economies since 2008.
  • Hardly anyone predicted the 2008 crisis, but that in itself is arguably excusable in a complicated world.
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  • More damning was the widespread conviction among economists that such a crisis couldn’t happen. Underlying this complacency was the dominance of an idealized vision of capitalism, in which individuals are always rational and markets always function perfectly.
  • In what sense did economics go astray?
  • But would it have mattered if economists had behaved better? Or would people in power have done the same thing regardless?
  • assuming away irrationality and market failure meant assuming away the very possibility of the kind of catastrophe that overtook the developed world six years ago.
  • while economic models didn’t perform all that badly after the crisis, all too many influential economists did — refusing to acknowledge error, letting naked partisanship trump analysis, or both.
  • starting in the 1980s it became harder and harder to publish anything questioning these idealized models in major journals. Economists trying to take account of imperfect reality faced what Harvard’s Kenneth Rogoff, hardly a radical figure (and someone I’ve sparred with) once called “new neoclassical repression.”
  • If you imagine that policy makers have spent the past five or six years in thrall to economic orthodoxy, you’ve been misled. On the contrary, key decision makers have been highly receptive to innovative, unorthodox economic ideas — ideas that also happen to be wrong but which offered excuses to do what these decision makers wanted to do anyway.
  • The great majority of policy-oriented economists believe that increasing government spending in a depressed economy creates jobs, and that slashing it destroys jobs — but European leaders and U.S. Republicans decided to believe the handful of economists asserting the opposite. Neither theory nor history justifies panic over current levels of government debt, but politicians decided to panic anyway, citing unvetted (and, it turned out, flawed) research as justification.
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California leads fight to curb climate change | Environmental Defense Fund - 0 views

www.edf.org/...eads-fight-curb-climate-change
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  • Ten years after the passage of AB 32, California extended and strengthened the limit on greenhouse gas emissions with the passage of SB 32 in 2016. The state raised its goal for greenhouse gas emissions to 40 percent below 1990 levels by 2030.
  • California is now demonstrating impressive outcomes from the implementation of its climate policies. After the first decade of AB32 implementation, California's economy is growing while carbon pollution is declining.
  • Expanding the scope of its climate policies, the centerpiece of which is a cap-and-trade program that was extended until 2030.
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  • Playing a climate leadership role. In September 2018, the state organized the Global Climate Action Summit, a gathering of world leaders representing governments, the private sector and indigenous people in what became a momentous occasion for subnational climate action, as major companies and jurisdictions lined up to declare or reiterate their climate commitments.
  • Fast-tracking emissions reductions to benefit public health through policies that work in concert with cap and trade.
  • Establishing complementary policies, incentives, and market rules that help the state transition to a low-carbon, clean energy economy through promoting renewables and modernizing and automating energy options in the state.
  • Partnering with other regions and stakeholders, including indigenous peoples, to share California's lessons and experiences from the state's early adoption of comprehensive climate and energy policies. Oregon, for example, is poised to model its carbon pricing program on California’s experience, and is interested in eventually linking to California’s carbon market.
  • California could take further action by codifying an ambitious midcentury greenhouse gas reduction target to ensure continued momentum on climate action.
  • By taking bold action California is a leader on climate change. Hallmarks of its success are strong government leadership, accelerated investment in clean energy, and rapid growth of businesses that contribute to the advancement of the low-carbon economy.
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