I watched an interesting lecture from Chomsky recently. Distorted Morality. It's not about economics, but about history. But I wonder if history is a lot like economics in a certain way. Being non-scientific the professional historian is not constrained to reject his intuitions or biases the way the scientist is. The scientist has methods that more oblige him to accept even uncomfortable truths. I think the economist is more like the historian.
Apparently in 1985 a poll was conducted of newspaper editors on what the most important story of the year was. They decided it was terrorism, particularly terrorism in the Middle East.
Chomsky first defined terrorism, then he asked us to consider the major terrorist events of the year. There were three that he says were way out front in terms of their severity and extent. They were as follows:
1-A bombing near a mosque in Beirut. Apparently ordered by the CIA it was a car bomb timed to go off as people left Friday prayers. It went off as planned and was devastating. Babies in beds far away were killed. Most of the victims were women and girls. The target was not one of the victims. 80 were killed.
2-The so called "Iron Fist" operations in occupied Southern Lebanon by Israel. These were just attacks on what Israel called terrorists in Lebanon which Israel was occupying despite a ruling from the Security Council to withdraw.
3-An Israeli bombing in Tunisia. Israeli attacks are with US weaponry. In the case of Tunisia, this was a US ally, so the US complied by failing to warn them and withdrawing the Sixth Fleet. The UN would immediately condemn the act as that of aggression, the supreme international crime (the US abstained).
But the AP in their discussions of the lead story of 1985 did not see fit to mention any of these terrorist actions. Instead they pointed to two other incidents.
1-The hijacking of the cruise ship Achille Lauro in which the disabled Jewish American Leon Klinghoffer was killed. This incident was said by the hijackers to be retaliation for the incident in Tunisia.
2-The hijacking of TWA flight 847 in which a US Navy diver was tortured and murdered.
Now, to me this is in a sense astonishing. The major terrorist events of the year clearly are American (Israel's actions aren't possible without American backing). Expert opinion (the leading members of the journalistic class, which are like the makers of history) is able to conclude that terrorism in the Middle East is the lead story of the year. Not because our country was responsible for so much terrorism. But because two Americans were killed in two separate incidents.
US terrorism is invisible. Invisible to the experts. And it's not like these things are being hidden. It's not difficult to determine what the major terrorist acts were. The experts still fail to see them and draw the proper connections.
What's going on here? One thing is obvious. These experts have incentives to see our government's actions in a favorable light. And there are no scientific constraints to prevent them from accepting a preferred opinion. It's not like you can do repeatable tests. There are not a lot of predictions to be confirmed. So given that they lack scientific constraints they are now free to indulge their incentives. And those incentives seem to just overwhelm them. The real world facts don't change anything.
History is like that generally. I happen to be persuaded of the view that Jesus Christ was probably a mythical character. I can't have a whole lot of confidence in that view because ancient history is not an exact science. But I've read related books. I've searched for material that rebuts the mythical arguments. I find that they don't really address the key issues. The VAST bulk of the rebuttals are like the following: Historians do not see it that way.
That's true. But like I say, history is not science. In science I can make non trivial predictions and compel unwilling people to accept a position even if they have a preference against it. This is precisely what happened regarding the Big Bang Theory. The scientific community was generally predisposed against it. Big names advocated a steady state model. But the predictions and testing were compulsory.
So consider the field of economics. Once again it's not a science. But this time, unlike the lead story of terrorism in 1985, the facts are not right on the surface. If the historian can so easily ignore reality when the facts are easy to see what should we expect of the economist? His response to biases and incentives will be even worse. Because tests can't be controlled predictions can never really be confirmed.
So let's take supply side economics. If you give rich people more money they'll invest, create jobs, and the rising tide lifts all the boats. Let's cut regulation, cut taxes, give the rich more and see how it goes. And so we tried it. What happened? You couldn't ask for a bigger colossal failure. We got the tons of money in the pockets of the rich part. That other part where benefits are enjoyed by everyone else? Didn't happen.
But that's OK says the neoliberal. Maybe we didn't de-regulate enough. Maybe we didn't cut taxes enough. Let's double down says the tea party crowd. Let's do it even more. You can't be sure it didn't work because you can't control for every variable.
HP is kind enough to share what expert opinion is on economics. The key to the success of places like South Korea has been neoliberalism, says HP. All of this is so obvious and such a standard position amongst economists that HP has difficulty even talking with me about it. If you're going to deny this you might as well deny global warming. It's very difficult to even bother to take the time to talk with flat earthers and 9-11 truthers.
Sure, I deny that South Korea followed the neoliberal model. But to do so HP is quick to point out that I must rely on heterodox economists not the mainstream ones. Like the South Korean economist Ha-Joon Chang.
But then look at the facts Chang puts on the table. He did grow up in South Korea (now he teaches at Cambridge). He tells us that South Korea had aggressive restrictions on imports. That's a radical violation of neoliberal principles. They put restrictions on citizens that attempted to invest overseas rather than in internal South Korean companies. The penalty was kind of severe. Death. They would frequently intervene in company affairs, taking over companies, sometimes firing the management team, then restructuring the company and sometimes turning it back over to market forces. They would acquire foreign currency and use it for the purchase of only one type of goods. Technologically advanced industrial products. Using that money to even buy foreign cigarettes was illegal.
Chang isn't mainstream!! OK. Where is he wrong on the facts? Are these claims he makes all lies? HP doesn't even try to deny the facts. Chang is out of step with orthodoxy. That's what matters.
Expert opinion does matter. I'm not saying it doesn't. I'm also not saying that my own economic conclusions aren't subject to this defect. For instance you could point to the fact that the US economy was subjected to Keynsian stimulus following the recession and you could say it doesn't seem to have resolved things and I can always say the stimulus wasn't big enough.
The point is economics is not science. In science we have better means of overriding a bias. In economics we don't. So trusting a scientific consensus is different from trusting an economic consensus. The economic consensus matters less. Therefore I am justified in relying more on my evaluation of the evidence in the case of economics than I would be in the case of a science, like global warming. For our expert journalistic class it seems they miss things even when it should be obvious. Economists are similarly unconstrained by scientific methods. They should be viewed similarly.
18 comments:
I half agree, half disagree with you here. I agree that economics is not a hard science. It certainly can't run independent parallel experiments like say, chemistry can. But - and here is the important distinction - neither can environmental science.
In other words, my argument that economics is a science is really to say that it is equivalent as a science to environmental science. If you accept environmental science to be atleast a soft science, then so is economics. They both have predictive power, and they both involve highly mathematical and data driven models.
You claim that economics can be filled with bias and presuppositions. Well that is the same argument many conservatives make about environmental scientists. They also make the argument that European environmentalists want to push global warming legislation out of jealousy and a desire to slow down the American economic engine (sure, it would harm Europe economically as well, but it would harm the United States more and that is the important part!). In the United States, on the other hand, the global warming push is really a cover for leftists to get their radically intrusive government fingers all over the private sector, in order to redistribute wealth. Some of these arguments are actually quite persuasive (see here), others less so - but it's the same claim. If you really think that you can build an environmental model without any preconceived biases, you haven't really studied the issue that carefully.
Here is the main difference between us Jon, as I see it: when someone offers you an argument like this, you feel like you have to have an answer for it. In fact, you feel like you have to have an answer for EVERY fundamental belief you believe in. I don't. I am not here to win master debater of the universe. I am here to learn the most I can, with the most efficient use of my time as possible. I don't reinvent the wheel. I use what other people have spent their lives thinking about, and I build on it. I take academic consensus seriously. When I see arguments like that, I just dismiss them out of hand. Environmental scientists tell me with high consensus that global warming is real and dangerous - I take their word for it.
If I had to reinvent the wheel every time, I wouldn't learn as much. I would waste alot of my time learning something in far more detail than I need to - and I'd miss the really relevant stuff. I'd rather think about cutting edge policy issues. Not whether socialism or capitalism is the way to go. That's been settled.
Here is another difference between us: you think two laymen can actually come to conclusions that are contradictory to the (soft) scientific consensus. I don't. Take any issue in economics, environmental science, evolutionary science, archeology, etc. and take the heterodox views: socialism, global warming deniers, creationists, and the view that dinosaurs didn't exist. Now lets leave out economics for now: do you really think two non-trained laymen can - with a high likelihood of being right - come to conclusions that global warming is NOT happening, or man made? That creationism is the real history of our ancestors? That dinosaurs didn't exist? I dont!
In other words, to me, not only is discussing non-mainstream views a distraction, it's also a waste of time. You simply can't solve those issues as a laymen.
Take industrial policy in South Korea as an example: I don't deny that industrial policy occurred. It's like our China discussion, everybody agrees that industrial policy is occurring in China. The question is: is industrial policy helping or HURTING China's economic growth.
In a world where you can't run independent parallel experiments, how would you go about answering such a question? Of course, your linguist friend would like to just make a correlation argument: 90% of countries that are rich, went through industrial policy - hence industrial policy works. But it's not that simple. For one, what about countries that tried industrial policy and failed? Argentina is a famous example. But there are many others. What about countries that didn't try industrial policy and succeeded? Hong Kong is a famous example, but there are others. What about intracountry comparisons: like areas in China that tried industrial policy vs areas that had free trade with no restrictions. Brad DeLong makes the case that areas that had truly free free-trade grew faster than areas with industrial policy. What about other factors that could have harmed or helped economic growth during industrial policy or without it, are they overshadowing the data?
So even in China, where we have much stronger historical data and are actually living during the relevant point in history, it's a lot murkier than your linguist friend presents. In fact, these issues are so complicated and intertwined that one can easily make this ones Phd dissertation - and even then, it wouldn't be exhaustive enough.
Your solution though is to double-down: read all the heterodox economists you can, read all the mainstream economists you can, brush up on history, and spend hours and hours on this....to hopefully, get to the 'real' truth - that economists, for nefarious reasons or not, either innocently missed because of their preconceived biases, or were intentionally trying to cover up because of self-interest in some form or another.
My solution is far simpler: I look at my right flank, left flank, and if both point in the same direction, it's settled. I move on. I use Brad DeLong in my rebuttal to you because he satisfies so many of the requirements one would look for in an objective search into such issues. He is a tenured professor at a highly respected university (UC Berkeley). He is widely considered an expert in economic history. In other words, this falls within his area of expertise. He is also a person who has no moral qualms against admitting when government has a real role to play in the economy. If industrial policy worked, I don't see why he would be afraid to say so? As I start to see more and more economists making the same argument, the issue becomes settled in my mind.
Couple of points of clarification: first, I highly encourage you to dig deeper into these issues. I try to always learn the WHY in addition to the WHAT (which is why I have been able to give standard defenses of the anti-industrial policy view). But for me the WHY is really a secondary issue - for you, you feel like you have to have the full proof argument else you can't swallow it. Second, I am not saying this means you are necessarily wrong in your conclusions. I am making a probabilistic argument here: I think the odds are that you are wrong - but you could be right. Just as the creationist and the global warming denier may be right. But I don't think I am qualified to really make that call. Those debates - what qualifies as a reasonable debate and what doesn't - are really for the experts to decide.
HP -
In other words, my argument that economics is a science is really to say that it is equivalent as a science to environmental science. If you accept environmental science to be atleast a soft science, then so is economics. They both have predictive power, and they both involve highly mathematical and data driven models.
I am sympathetic to the underlying point you are trying to make here. But (and you knew a "but" was coming) I would be cautious to lump these two together. The environment *must* work according to the laws of physics. Economics, and I don't think I overstate, is susceptible to human rationality - or as the case may be human irrationality.
As a tangential note - I am meta-physical determinist so in principle human behavior is predictable. But I digress a bit
Sorry for my delay. I've been on vacation.
First point. On environmental science I'm going to side with Paul. Global warming is a matter of physics. Of course it's complicated, so unanimity may not happen. But you've got powerful tools to compel people to accept counter intuitive things, which is not the case in economics.
Let me put some facts on the table with regards to how the consensus on global warming was formed. Greenhouse effects are well understood physical phenomenon. That's been around for decades or longer. Based on that and solar effects it's possible to make predictions about global temperatures. Models were created. Back in the 70's a majority in the scientific community was expecting global warming, but large segments of the scientific community were not on board. We didn't have the test data to confirm the predictions of the models.
In the decades that followed satellites were able to read the surface temperatures to confirm or disconfirm the models. Some of the data was not tracking the predictions, so of course firm conclusions could not be drawn. Then something happened. An error in the data collection was discovered. The satellites were not following the predicted course and were not meausuring temperatures at the time of day expected. In other words they thought they were measuring parts of Africa at noon. In fact the data were from 5 pm local time. So the corrections were made and guess what? The test data matched the predictions of the models extremely accurately.
And that was it. A huge shift in support of the global warming consensus formed. The prior skeptics were converted to believers. That's the beauty of science.
In what conceivable way could economic predictions be similarly confirmed or disconfirmed? I'm not saying economic predictions can't be made. I think they can be made. And it is the REPEATED failure of neoliberal predictions that has prompted me to switch my point of view. But I'm sitting here recongizing that even these failures do not prompt changes in the way climatologists have been compelled to change. So from my perspective it's worth considering why that is.
Supporters of status quo always questiong the motives of the scientists. So the fact that right wingers pooh pooh the environmental science is not at all surprising. They did the same to Galileo and Darwin. But that rings rather hollow to people that understand the nature of science. Galileo told the Church to look through his telescope and explain the moons orbiting Jupiter. They weren't orbiting Earth. What's up with that? They can question his motives all day long, but the predictions and tests speak for themselves.
But you don't want to re-invent the wheel. You want to trust the experts. My point is that in certain fields of study where we lack the mechanism to correct error you are just led to absurd conclusions. Economics is not science and neither is history/journalism. What's the top story of the year for 1985? Terrorism in the middle east. Why? According to the experts it's the fact that two Americans were killed. That's an absurdity, and the absurdity is not hard to see.
Under those conditions the layman must be a skeptic. You point to science and say that in science a layman should trust the experts. That's my whole point. Economics is not science. Orthodoxy is not good enough.
So let's go back to South Korea. You are now not denying that industrial policy occurred. I'm not exactly sure what you mean by that statement, but in your comments I linked to you seemed to be saying that the path to prosperity for South Korea was neoliberalism. Not only that, but that this truth was so obvious that to deny it was to deny all of mainstream economic thinking. This is a fundamental truth (for economic experts).
Chang says the opposite. What S Korea did was a fundamental violation of neoliberal principles. Everything I point to that they did would be something you and the experts would advise against. The response I hear from you is not that Chang is wrong. It's that he's heterodox. Chomsky is not wrong either. The problem is that he's a linguist (I notice your recent blog post on economics from your favorite English Literature expert, but we'll leave that aside).
You can't tell me that S Korea DIDN'T impose protective tariffs for key infant industries, compel the private sector to pursue the development of products that they weren't interested in pursuing, restrict capital movements, etc. What you can say is that Chang is heterodox.
Chang is not a heterodox scientist. He is a heterodox economist. Being a heterodox scientist would be different. The reason is we expect science to put heterodox claims to the test. That's feasible with science, including climate science. That's not true in economic
How many failures is it going to take? It seems that none will ever be enough and the prescription for the present economic woes in the US is more of the failed neoliberal policies that got us into the mess in the first place.
Let me just re-state your method for testing things. You say sure, 90% of countries that got rich did it by violating neoliberal policies. But on the other hand Argentina tried that and it failed. And Hong Kong succeeded with neoliberalism. So we don't know what to conclude.
Is that an accurate depiction of your view? Suppose 90% of smokers died of lung cancer. We really don't know that smoking is related to lung cancer because on the other hand 10% died of other causes. We must throw up our hands and say we don't know what to make of links between smoking and lung cancer. Really?
Are you comfortable with the fact that the top performing economies in the world are doing it by violating neoliberalism and DeLong's response is that they would have done even better without it? At what point does that sound like excuse making? Suppose people that exercised 30 minutes a day had longer, healthier lives. DeLong looks at these top performers and says they're doing it wrong. Sure, they're doing fine, but if they'd only eaten more and exercised less they'd be in an even better spot. What would it take to disconfirm this?
The top performers violate neoliberalism and the worst performers stick to it. In the 60's and 70's growth in African countries was pretty good. Between 1.5 and 2%. Not tearing it up, but not terrible either. They had tariffs protecting infant industries and similar policies. About 1980 that changed. The IMF entered the picture and demanded austerity measures. Tariffs were closed. Budgets needed to be balanced. Cuts in government expenditures. The whole gamut. What happened? Growth didn't just stop. It fell. Infant industries were wiped out. Over the last 30 years growth in these countries has rebounded slightly to where they've managed 0.2%.
Had the top performers (China, S Korea, Japan, the US, Britain, Singapore, Taiwan) been more like the bottom performers (Congo, Nigeria, Haiti, Jamaica, Nicaragua) they'd have been better off says DeLong. Seems absurd. But DeLong is mainstream.
I can't sit here and believe black is white and up is down. If looking to the right and left and just saying you're going with orthodoxy means I have to say black is white I can't do it. I wouldn't expect mainstream science to tell me black is white. But mainstream media/journalism/history has told me black is white. They can get away with it because they are not scientific.
Jon,
Let me make something clear here. I am here referring only to the "soft" sciences: specifically, fields of study that involve high levels of math, models that attempt to make predictions, but still lack the ability to make controlled experiments (ie not hard sciences). So history and the media certainly does NOT quality (in fact, they never even claimed to qualify - when have you heard historians refer to their profession as a science? It's a liberal art! ). So your analogies to historians and the media are not equivalent.
Paul's point only matters when looking at the output: with economics, you expect the variance of their predictions to be wider. But the data inputs are about the same. In fact, you can argue economics also has a gain vis-a-vis environmental science: economics has more data to play with and are closer to controlled experiments. Want to try two nearly opposite scenarios: look at North and South Korea. East and West Germany. Hong Kong vs China. etc. Environmental science has no such near control groups. We can nitpick about a percent difference here or there, but I don't see how you can call one a science and not the other.
Regarding your models: that's exactly the same thing economists say. I'm not here talking about fringe models, but census models. There are core beliefs economists believe as well. Not definitive enough? Well, the environmental science models are anything but "definitive" - you can still find famous environmental scientists that disagree with the final conclusions of the consensus. It's not as if their models are anything close to the hard sciences.You don't think economics can change its mind? What do you think happened with the John Maynard Keynes revolution? The Milton Friedman revolution? These were fundamental changes. Data centric changes (I'm curious - do you even know what these changes brought forth?). Changes that are still with the economics community today (for example, just yesterday Paul Krugman gives Milton Friedman props in having the foresight to see the Euro problem today: see here).
But here - my point is stronger than the mere "economics is a science argument". My point is more about humility. This stuff isn't easy. Look at how Jon has a hard time understanding the basics of the living wage, see here. Jon is a smart guy. Well read. Open minded. And interested in coming to the right conclusions. Yet he comes to the table with preconceived notions that even a liberal economists wouldn't accept.
Or let's take the China and industrial policy argument. Jon reads a book by a linguist who seems to be making a valid argument - without knowing much about economics, his story seems to makes sense to Jon. But then, when you dig into it, you see that economists interpret the China situation very differently. It seems that areas in China that didn't follow the industrial policy framework, and indeed followed free unrestricted free trade grew faster than those that did follow industrial policy. But does this convince Jon - nope!
Or take Latin America. Again - Jon reads a linguist and believes that Latin America is following the neoliberal framework and failing (nevermind what actual, you know, economists are crediting for Latin Americas failure - see here and here). But then, come to find out that Argentina - with the prodding of alot of the pro-industrial policy crowd - adopted industrial policy and what happened - failure. Jon's response? To ignore it - and then defend his decision to ignore it.
Regarding South Korea, I wrote above: "Take industrial policy in South Korea as an example: I don't deny that industrial policy occurred. It's like our China discussion, everybody agrees that industrial policy is occurring in China. The question is: is industrial policy helping or HURTING China's economic growth."
In other words, I don't deny that South Korea implemented industrial policy. The question is: did it on net hurt or help them. Economists have made arguments that this HURT them - same as the argument DeLong is making with China.
Regarding my test for industrial policy: let's compare it to tax-cuts. Jon is like the right-winger who reads a book that gives a simple fact: when taxes were cut, aggregate tax revenue went up. This has happened in 90% of the situations. That's it, Jon concludes - tax cuts are a way to raise revenue! Wait a minute say the economists - it's alot more complicated than your simple causation entails. You have to control for population growth. You have to account for economic growth. You have to account for external factors. Nonsense says Jon - all of that funky economics models is junk science - look at what's obvious! Hold on says the economist: look at countries that cut taxes with no population or economic growth, their tax revenue shrunk! Nonsense says Jon - this movie director says you are wrong. Wait - say the economists: what about countries that were encouraged to cut taxes to raise revenue, did so, and revenue actually grew less (but still grew) than before the tax cuts. What about states within the country that didn't cut taxes where tax revenue grew further! Nonsense, says Jon - all of you economists are out to screw Mr Productive. You really are hacks for socialists groups trying to impose socialism on the United States. But, the economist retorts - what about the fact that the vast majority of economists agree that tax-cuts (at these levels) do not increase revenue? Meaningless says Jon - first, they are not a science, second, I have this one fringe economist that agrees with me as well, he is an Austrian economist - so what if he is not respected by mainstream economists!
Oh wait - this actually describes Jon fairly well. It wasn't long ago that Jon was deeply enthralled with the Austrian school of economics. He stayed up at night worrying about monetary policy. Inflation. And the evils of the fed. All of that was high on Jon's mind. And he argued those positions with the same amount of assurance and certainty that he does now: but then, that's my point. When you try to reinvent the wheel and dismiss the experts in the field, you expect to do just as Jon has done: bounce around to and fro from theory to theory, never to really settle on anything.
HP and Jon - unrelated to the topic but both of you seem to provide links to previous conversations fairly frequently. Does blogger have a tool to search for posts, or do you save bookmarks to various discussion, or do yous manually do the search?
Not a big deal, just curious. I wish, and maybe the do and I don't know about it, that the various blogging sites had tools to easily search personal posts/comments.
HP's methodology apparently is to just link to random posts, as follows. Here's proof that Jon doesn't know what a living wage is. Here's proof that Jon doesn't understand basic economics. You check the links and scratch your head. Then HP builds the illusion of consensus by doing things like this.
I don't use tools or bookmarks. I just try to recall where the conversation was and I often use the search box on the top of the page here. These things stick with me pretty well when I'm actually involved in the argument.
HP - w/ the following (and this is semi tongue in cheek but semi-serious as well)
Jon is like the right-winger who reads a book that gives a simple fact: when taxes were cut, aggregate tax revenue went up. This has happened in 90% of the situations. That's it, Jon concludes - tax cuts are a way to raise revenue! Wait a minute say the economists - it's alot more complicated than your simple causation entails. You have to control for population growth. You have to account for economic growth. You have to account for external factors. Nonsense says Jon - all of that funky economics models is junk science - look at what's obvious! Hold on says the economist: look at countries that cut taxes with no population or economic growth, their tax revenue shrunk! Nonsense says Jon - this movie director says you are wrong. Wait - say the economists: what about countries that were encouraged to cut taxes to raise revenue, did so, and revenue actually grew less (but still grew) than before the tax cuts. What about states within the country that didn't cut taxes where tax revenue grew further! Nonsense, says Jon - all of you economists are out to screw Mr Productive. You really are hacks for socialists groups trying to impose socialism on the United States. But, the economist retorts - what about the fact that the vast majority of economists agree that tax-cuts (at these levels) do not increase revenue? Meaningless says Jon - first, they are not a science, second, I have this one fringe economist that agrees with me as well, he is an Austrian economist - so what if he is not respected by mainstream economists
This comes across to me as undercutting you argument for economics as a soft-science. Or perhaps your case is to illustrate just how "soft" it is :-)
Being less tongue in cheek. W/ regards to the following
Paul's point only matters when looking at the output: with economics, you expect the variance of their predictions to be wider. But the data inputs are about the same
No impactful issues with what you are saying. Though to clarify my position, at the moment, I do not think the inputs are about the same. I think in economics the inputs include assumptions and/or pre-conditions that involve, possibly, data where the confidence level in them is less than the inputs of environmental science.
I can accept that we may have a very good grasp idea of how economics might work if human beings were perfectly rational (and perhaps fully selfish?). And I can accept, even if for sake of discussion, that there is still a lot about the environment that we do not know. -stepped away for a bit and lost my train of thought- Anyhow - to make a long story short humans can "choose" to behave outside of the expected. Physics, at the non-quantum level, cannot.
I also think that personal biases have a larger impact on an economists prognostication (or interpretations) than it does for a scientist.
But as to not overstate my confidence level in the previous statement I am neither an economist nor environmental scientist so... read that as my personal biases if you wish.
Let me be clear that I am not trying to make the case that economists are unreliable. I do not hold that position.
Jon -
thanks for those links. Very funny!
HP, this is just an extremely unfair response. A lengthy reply simply means I need to go back and explain clearly what I'm saying and see if I can get you to address it. Things like "You don't think economics can change it's mind? What happened to Keynes?" Where did I say economists can't change their mind? Just a bizarre claim.
You point to a comment you made as if it shows I don't understand what a living wage is. Totally unfair because there's nothing in your comment to suggest that. Christian apologists do the same. They claim that I made various errors and point vaguely to other threads as proof. Most readers won't bother checking. They might assume I did make a mistake. This requires me to read and read and see if there's something to the charge. I don't see it. My time is wasted. The reader is misled. This is very unfair.
My view is not mainstream. That's clear. Your response is "Jon doesn't see things the way DeLong does. Can you believe this?" Yeah, since that's what I'm conceding and the whole point of this blog post is to explain why. Not sure what you are expecting.
How dare I ignore Argentina? How dare I defend it by saying that at some point blog comment sections must draw to a close. Am I supposed to respond to every single thing you put up? Am I never permitted to let something go and move on? And does that obligation fall to you as well? So we should stay here in this thread forever. Is that right?
That's fine if you want to follow consensus. What this blog post shows is it will lead you astray. But that's efficient in your view. Do as you will. But I also want to learn in an efficient way. And I also want to learn from my mistakes, including the acceptance of received wisdom that led me down erroneous paths for many years. Do as you think best and I will do the same.
To claim that my view is that complicating factors or alternative causes shouldn't be considered is once again false and unfair. I am not telling you that you shouldn't consider alternative causes. That's what we do all the time here. What I am saying is that insofar as those arguments are speculative we should consider that. We should also consider the bare facts we do know. We know that the rich countries violated neoliberalism. That has to be conceded as a fact. To say they would be better off without it may be true. But to some degree it is speculative. That needs to be acknowledged as well. You turn this into some sort of claim that I won't consider anything but the bare facts and act like I can immediately draw dogmatic conclusions from these facts. As if I don't recognize the limits of correlations. That's just a straw man.
You say on the one hand economists say X and Jon says Y. I find that all confusing. So for instance economists agree that tax cuts do not increase revenue. Jon says that's meaningless. Why would I say that's meaningless? I specifically have argued for the view that you put in the mouth of the economists. I say tax cuts have not increased revenue, at least for GW Bush.
As far as me changine my opinions, yeah, I'm guilty of that. Rather than dogmatically clinging to cherished beliefs I allow reality to inform my views. If that means my views are wrong I change them. I don't regard that as a vice.
One related point I'd like to make regarding the change in the consensus view. The period from 1945 to about 1980 was dominated by Keynsians. Since then free market capitalism has been the dominant view and has been more implemented world wide. Let's contrast the periods.
They Keynsian period was characterized by zero financial crises. Higher growth world wide. In the US higher employment levels, more equality, egalitarian growth.
The free market period has been characterized by repeated financial crises. Higher unemployment. Unequal economic growth. Lower economic growth.
Can the Chicago school roll out various complicated factors that absolve the free market theories? Sure. Am I saying I won't consider such claims? I'm not. But we do have to acknowledge the facts, stated above. This is an important point.
Hey Jon - just stopping by to say you can have the last word. I leave to Chicago tomorrow morning for 5 days of drinking, partying, and Rock N Roll!
When I come back, I would have likely forgotten every point I made here. So we can start afresh.
I see how you are. Ignoring my various points. I'll have to bookmark this page so I can point to it in the future as a good example of you dismissing arguments. Leaving a blog thread with questions unanswered? Outrageous!! :)
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