
Protesters who are trying to upend the “fantasy world” of economics - mgunes
http://www.washingtonpost.com/news/storyline/wp/2015/01/05/the-protesters-who-are-trying-to-upend-the-fantasy-world-of-economics/
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eastbayjake
> “It makes no sense! It’s like, they’re measuring how many commodities are
> bought and sold in a year, but the point isn’t the commodities, you know?
> It’s the hours of labor.”

This is a flawed, Marxist labor theory of value that can't explain why an
artisanally-made handbag that takes 120 man-hours to produce still is valued
less than a Coach/Prada/LV handbag that was machine-manufactured with no human
labor. I really don't understand these people -- but then again, theory not
matching up with reality has never been a problem for Marxism's adherents, has
it?

~~~
rayiner
Your statement ironically exemplifies the value judgment that the protestor is
talking about. Neo-classical economics says that the _price_ of a good or
service is a function of supply and demand. It says nothing about "value."
Some people have the tendency of conflating the two, but it's nothing that
falls out of the mathematics.

Simple example. You have a company. What's the "value" of your receptionist?
Well how do you measure that? Simple: get rid of her, and have your developers
answer the phones. The decrease in productivity from that is the value of her
position, and it's independent of how many or few people could do the job. The
_price_ of her services is a lot lower, and based on the cost of hiring
someone else to do the same thing. There's a strong drive in our society to
conflate the two, but they're mathematically distinct. Is it Marxist to point
out the fact that a capitalist society rewards people based on their
fungability rather than the value of their service? Yes, but that doesn't make
it wrong.

Rant: the older I get, the more I think that "value" (our social evaluation of
worth) should be based on nothing more than hours of labor. An hour of labor
from someone with a 130-IQ might carry a higher price on the market than an
hour of labor from someone with a 90-IQ, but that doesn't mean our society
should perceive the former as being more "valuable." Because at the end of the
day, each person is giving up the same hour of life on this earth God gave
him.

~~~
TrainedMonkey
'An hour of labor from someone with a 130-IQ might carry a higher price on the
market than an hour of labor from someone with a 90-IQ, but that doesn't mean
our society should perceive the former as being more "valuable."'

And an hour of time of a person who studied hard, got good grades, and went
through college should be compensated same as high school dropout? Your logic
while nice in a "we are all equal fairy tale" way, immediately breaks down
society because it devalues education, intelligence, and hard work
tremendously.

~~~
mreiland
No it doesn't, it devalues effectiveness. You can argue that all of those
things make you effective, and while that's true, lets make sure we're on
point here.

It devalues effectiveness, not education.

~~~
TrainedMonkey
That is a good generalization.

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DanielBMarkham
Oh boy, people protesting a science.

I'm the first guy in line to cut into economics. To me it's just astrology for
people who know calculus. Or, as one wag put it, How many economists does it
take to reach a conclusion?

But having said that, the practitioners themselves are just as aware of the
problems of the "science" as anybody else. I'm also not crazy about Jungian
psychotherapy, but you don't see me protesting outside the psychiatrist
conventions.

While I may disagree with methodology, and I may even argue politically about
policy implications based on conclusions various sciences reach, I remain
convinced by the Charity Principle that these folks are working in good faith.
What I'm seeing here are people who don't want other people in positions of
authority because they disagree with their conclusions. This looks
uncomfortably like an ecclesiastical dispute.

So as bad as economics and economists look? These protesters look worse.
Terrible thing.

~~~
dmix
> I'm also not crazy about Jungian psychotherapy, but you don't see me
> protesting outside the psychiatrist conventions.

Economics is much more political than psychiatry, and most other sciences. As
you stated, maybe due to it's lack of hard science. So it doesn't surprise me
that there are activists doing this.

Whether it will actually influence the top economists who have politicians
ears, and to a lesser extent overall academia, is the big question.

~~~
tsotha
From that perspective I agree with the protesters, though I'm coming from the
right of the mainstream instead of the left. Economics, particularly that of
the academic variety, seems like an exercise in starting with a view of the
world and fitting the data to it instead of the other way 'round.

But I agree with DanielBMarkham in that economists are generally working in
good faith (though I have my doubts about Krugman). It's just not very easy to
see your own biases.

~~~
DanielBMarkham
I have a guilty pleasure: I enjoy watching economists. I read the financial
opinion columns, and I enjoy the policy debates. But that's just because I
like watching smart people argue. Economics is a great place to watch this.

Krugman looks to me like a political shill, not an economist (Somebody said
once that most of his columns should start with "Fools!") He'll say something
outrageous, and then over the next several days other economists will try to
sort it all out. Many times it's just political bickering, but there have been
times where it looks like he's crossed the line: I see folks who don't do
politics try to come out publicly and reason with him. It's most always a
mistake. The more they pile on the more he revels in it.

Having said that, I'm fine with him continuing to opine. The dangerous thing
I'm seeing is politicians who don't seem to be responsible for anything:
everything they do is based on experts somewhere who are more than willing to
back them up on whatever decision they make. The real discussion we should be
having here is the role of academia and the role of elected leaders in a
democracy. That's where the lines are blurring, and that's the reason you see
well-meaning (but perhaps not-so-well-educated) folks protesting who can work
the job of basically "a guy that tells me things I didn't know". It's because
they view professors as some sort of priesthood that decides what the policy
should be. That's not true -- and it should never be true.

~~~
DanielBMarkham
For example, in today's reading:
[http://www.realclearmarkets.com/articles/2015/01/12/krugmans...](http://www.realclearmarkets.com/articles/2015/01/12/krugmans_wrong_about_the_volckerreagan_inflation_triumph_101480.html)

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greggyb
Ignoring content and ideology. If mainstream economics is so demonstrably
flawed, the best way to make the point is not to childishly disrupt
conventions and speeches, nor to make personally-directed attacks at
individuals. The best way to "protest" the flaws would be to consistently and
professionally refute the flaws and falsehoods.

By making their vehicle a protest rather than a rigorous intellectual
deconstruction, at best the message is that they can't come up with more than
catchy slogans and loaded (unbacked) statements. I have not done significant
research beyond the article linked, which includes no reference to supporting
and more rigorous arguments produced by this group.

Factually, there is huge variation in the economics profession and the claim
"Neoclassicism is essentially the standard for 95 percent of the graduate
departments in the country." is simply not true. There are many academic foci
in economics and a healthy dialogue among proponents of different viewpoints.
There is also a vast network of blogs published by both academic economists
and amateurs (connotation = non-professional, but well educated on the topic)
treating the topic in a more casual tone.

Lastly, the representation of neoclassical economics presented is a straw man,
and an uninspired one at that:

>the fantasy world of neoclassical economics — a faith-based religion of
perfect markets, enlightened consumers and infinite growth that shapes the
fates of billions.

This is the model (excepting infinite growth) typically taught in introductory
economics courses of all types. It is not taught as an actual representation
of the world (though even as simplified as the models in Intro Micro/Macro
carry a great amount of explanatory value over a naive interpretation of
matters economic), but as a framework within which the basic principles of
economics can be taught. A rough equivalent would be protesting a physics
conference because the solar system model of an atom is not representative of
reality.

~~~
bjourne
It seems like every time there is a demonstration, no matter the subject,
someone complains that it is childish and that they should spend their time
doing something constructive instead. Maybe post on their Facebook page or
something...

> I have not done significant research beyond the article linked, which
> includes no reference to supporting and more rigorous arguments produced by
> this group.

So.. because you are to lazy to look up whether they have made good arguments
you assume that they haven't?

> A rough equivalent would be protesting a physics conference because the
> solar system model of an atom is not representative of reality.

No. That would imply that they are cranks and you have no evidence of that.
It's like you already have made up your mind on what to think without
listening, which is kind of why they have to resort to demonstrations in the
first place. :)

~~~
greggyb
>>I have not done significant research beyond the article linked, which
includes no reference to supporting and more rigorous arguments produced by
this group.

>So.. because you are to lazy to look up whether they have made good arguments
you assume that they haven't?

Because I was at work and had limited time, I was limited to the resources
linked in the article, which included a very non-rigorous page which is more
concerned with its manifesto and self-congratulatorily declaiming the
"mainstream." I also had the content of the conference they were protesting,
and the quotes in support of their views.

The conference, as others have pointed out numerous times covered some pretty
heterodox views to begin with, and that it was their choice of target as
representative of the mainstream implies a naive understanding of what is and
is not mainstream economics.

The quotes of the protesters and the economics these quotes represent are not
heterodox so much as well-refuted theories, again, as others have covered
numerous times in other comments.

>>A rough equivalent would be protesting a physics conference because the
solar system model of an atom is not representative of reality.

>No. That would imply that they are cranks and you have no evidence of that.
It's like you already have made up your mind on what to think without
listening, which is kind of why they have to resort to demonstrations in the
first place. :)

I have laid out above my reasoning for not putting merit toward their academic
rigor. I, personally, loathe the "economics" put forth as support for popular
political policy of the day, so I came into the article sympathetic to the
thesis. Every element of the article and supporting evidence I was able to
find based on my limited time during work pointed to the conclusions that I
drew.

Finally, it is clear without needing further research that they do clearly
hold the belief that the following quote is representative of mainstream
economics:

"the fantasy world of neoclassical economics — a faith-based religion of
perfect markets, enlightened consumers and infinite growth that shapes the
fates of billions."

This belief is a strawman caricature of an introductory economics model. To
declaim mainstream economics based on this understanding is hopelessly naive
and is exactly akin to declaim modern physics because of the solar system
model of an atom (another 101-level model which is an un-nuanced but accurate
in broad strokes model used to introduce new students to a field).

Whether the quotation above is central to their argument, or tangential, my
comparison holds. Further, the case is much stronger that the quotation above
_is_ of primary concern to their argument, which only strengthens any critique
based on it.

I appreciate your feedback on how to come off less dismissive of the original
article.

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Mikeb85
The problem with economics is that its trying to make sense of the single most
dynamic, difficult problem ever contemplated. Its basically an attempt to
model the entire world's behaviour.

There's 7 billion people in the world, we're all connected in various ways,
and we all buy, sell, engage in work and other economic activities multiple
times per day. Oh and nothings reproducible, so good luck trying to recreate
experiments.

That's one huge model to attempt to simulate.

And if any programmer/engineer thinks they're smarter than the people
currently working on these problems, I'm sure some hedge fund will pay you
millions to 'solve' the problem of modeling economics.

~~~
arca_vorago
As a matter of fact, it's something I've thought about (large model economic
et al simulation) for quite some time. It was only recently after my work with
"big data" in a genetics lab that I think it might actually be doable.

I also think part of the problem is that it's the blood-sucking octopus
entities that pay all the money normally for such development and then use it
to sharpen their fangs on the public.

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javajosh
If these people are concerned about "growth and limits to growth" then why are
they heckling economists and not lobbying for putting birth control drugs in
our water supply? Is an economist is really needed to tell anyone that growth
is bad when it causes an overwhelmingly destructive externality? The thing is
that people don't want to be convinced of the link between economic activity
and climate change. And yes, perhaps the high priests of money are indeed the
right group to give mainstream credence to the (economic) downside of climate
change.

