By Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney, and author of the book Debunking Economics. Cross posted from Steve Keen’s Debtwatch.
Several correspondents have just told me that some of Greg Mankiw’s students at Harvard are staging a walkout from his first year class. They’ve written an open letter to Mankiw to explain why:
Read more...By Sell on News, a global macro equities analyst. Cross posted from MacroBusiness
Having just watched the second episode of All Watched Over By Machines of Loving Grace by my favourite documentary maker Adam Curtis, in which he tells the “story of how our modern scientific idea of nature, as a self-regulating ecosystem, is actually a machine fantasy”, I am once again struck by what an absurd body of ideas, or more accurately, self delusions, much of modern economic prejudice-masquerading-as-theory is.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Store clerk in transsexual shop: “Oh, look who’s back… are you going to buy something this time, or are you just curious?”
Tobias Funke: “Well, I guess you could say that I’m buy-curious!”
– Tobias Funke, Arrested Development
Mitch Hurwitz, the creator of Arrested Development – possibly the best comedy show ever produced for television – once said that the funniest things about people are their blind spots. We all possess these psychological blind spots and yet we usually have no idea. Caught up in our own little worlds we see or hear one thing while just about everyone else sees or hears something else. Just like poor, confused Tobias Funke – except, hopefully, in most instances a little less extreme.
Read more...My last pop at New Zealand’s regulatory set-up mentioned New Image International, the company that uses multi-level marketing techniques to sell Colostrum as a miracle cure. The New Image product pitch is a generic hoax, as explained last time out:
…major warning signs include:
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I found this video by the Institute for New Economic Thinking, in which a number of prominent economists discussing the use of models, more than a bit frustrating, with Jamie Galbraith’s comments at the very end a notable exception.
Mainstream fetishizes the use of models.
Read more...Readers gave high marks to Andrew Dittmer’s summary of a dense but very important paper by Claudio Borio and Piti Disyatat of the BIS and asked if he could produce more of the same.
While Andrew, a recent PhD in mathematics, has assigned himself some truly unpleasant tasks, like reading every bank lobbying document he could get his hands on to see what their defenses of their privileged role amounted to, he has yet to produce any output from these endeavors that are ready for public consumption.
However, I thought readers might enjoy one of Andrew’s older works.
Read more...A Reply to Robert Murphy’s ‘Have Anthropologists Overturned Menger?
By David Graeber, who currently holds the position of Reader in Social Anthropology at Goldsmiths University London. Prior to this he was an associate professor of anthropology at Yale University. He is the author of ‘Debt: The First 5,000 Years’ which is available from Amazon
Last week, Robert F. Murphy published a piece on the webpage of the Von Mises Institute responding to some points I made in a recent interview on Naked Capitalism, where I mentioned that the standard economic accounts of the emergence of money from barter appears to be wildly wrong. Since this contradicted a position taken by one of the gods of the Austrian pantheon, the 19th century economist Carl Menger, Murphy apparently felt honor-bound to respond.
In a way, Murphy’s essay barely merits response. In the interview I’m simply referring to arguments made in my book, ‘Debt: The First 5000 Years’. In his response, Murphy didn’t even consult the book; in fact he later admitted he was responding at least in part not even to the interview but to an inaccurate summary of my position someone had made in another blog!
We are not, in other words, dealing with a work of scholarship. However, in the blogsphere, the quality or even intention of an argument often doesn’t matter. I have to assume Murphy was aware that all he had to do was to write something—anything really—and claim it rebutted me, and the piece would be instantly snatched up by a right-wing echo chamber, mirrored on half a dozen websites and that followers of those websites would then dutifully begin appearing across the web declaring to everyone willing to listen that my work had been rebutted. The fact that I instantly appeared on the Von Mises web page to offer a detailed response, and that Murphy has since effectively conceded, writing an elaborate climb-down saying that he had no intention to cast doubt on my argument as a whole at all, only to note that I had not definitively disproved Menger’s, has done nothing to change this. Indeed, on both US and UK Amazon, I have seen fans of Austrian economics appear to inform potential buyers that I am an economic ignoramus whose work has been entirely discredited.
I am posting this more detailed version of my reply not just to set the record straight, but because the whole question of the origins of money raises other interesting questions—not least, why any modern economist would get so worked up about the question
Read more...Wow, there is nothing like searching through your archives for an anecdote you want to recycle only to discover that the post you used it in pre-debunked the very same paper that you are now girding up to debunk.
A whole bunch of readers sent me either links to a paper “The Network for Global Control” by physicists Stefania Vitale, Stefano Battiston and James Glattfelder, or to reports on it (for instance, at PhysOrg, which I put on a black list because it has embarrassed me too many times before readers by reporting reverently on dubious studies). I pre-debunked a report on an earlier version of this paper, as reported in Inside Science, by Battiston and Glattfelder.
Let’s look at a breathless summary per PhysOrg:
Read more...Your humble blogger is a vocal opponent of placing undue faith in single metrics and methodologies, like placing a lot of weight in total cholesterol as a measure of heart disease risk. One of the most troubling examples is the totemic status of discounted cash flow based analyses. It’s a weird defect of human wiring that reducing a story about the future to a spreadsheet and then discounting the resulting cash flows (which means you are now layering a second story, about what you think reasonable investment returns will be over that time period) is treated as having a solidity and weight that simply is not there, a reality of its own that manages to take precedence over the murky future it is meant to help understand.
An article by physicist Marc Buchanan in Bloomberg gives a layperson’s summary of an important paper by Yale economist John Geanakoplos, and Doyne Farmer, a physicist at the Santa Fe Institute. It shows that the conventional use of discounted cash flow models over long time periods, as is often the case when discussing environmental impacts, is fatally flawed.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
What if all the world’s inside of your head
Just creations of your own?
Your devils and your gods
All the living and the dead
And you’re really all alone?
You can live in this illusion
You can choose to believe
You keep looking but you can’t find the woods
While you’re hiding in the trees
– Nine Inch Nails, Right Where it Belongs
Modern economics purports to be scientific. It is this that lends its practitioners ears all over the world; from the media, from policymakers and from the general public. Yet, at its very heart we find concepts that, having been carried over almost directly from the Christian tradition, are inherently theological. And these concepts have, in a sense, become congealed into an unquestionable dogma.
We’ve all heard it before of course: isn’t neoclassical economics a religion of sorts? I’ve argued here in the past that neoclassical economics is indeed a sort of moral system. But what if there are theological motifs right at the heart of contemporary economic theory? What does this say about its validity and what might this mean in relation to the social status of its practitioners?
Let us turn first to one of the most unusual and oft-cited pieces of contemporary economic doctrine: rational expectations theory.
Read more...Reader Valissa has taken to providing economist jokes in comments, but the members of the discipline so often seem eager to make themselves the object of ridicule that efforts like hers sometimes seem redundant.
The latest sighting is a remark by Scott Sumner, a professor of economics at Bentley University. As
Read more...I don’t know about you, but I’m suffering from debt ceiling/Eurozone mess fatigue and thought readers might enjoy a wee respite. This engaging presentation by Kevin Slavin provides some useful food for thought about how the use of algorithms are coming to literally reshape our world.
Read more...An article in the Wall Street Journal discusses a disturbing new trend: that of local police forces starting to use hand held face recognition devices. The implements allow for a picture taken at up to a five foot distance to be compared to images of individuals with a criminal record. They can also take fingerprints.
The story focuses on the civil liberties aspects, which are troubling enough and we’ll turn to them shortly.
Read more...This demonstration by Simon Singh is an intriguing little exercise of sorts. Hat tip Richard Smith:
Read more...By Jon Rynn, author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems. Cross posted from New Deal 2.0.
Between questionable science, health hazards, and exorbitant costs, there’s no fracking way that drilling for natural gas will solve our long-term energy issues.
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