What I’ve been reading

Gregory Claeys, Marx and Marxism, a better than expected take on where Marxism came from and how Marx’s different intellectual periods fit into his life.  One of the better introductions to Marx, noting that it does not stress issues of economic theory.

Tarjei Vesaas, The Ice Palace.  Not well known in the United States, but still one of the better Norwegian novels.  Short, readable, concerns a boy who goes missing.

Peter Cozzens, The Earth is Weeping: The Epic Story of the Indian Wars for the American West.  Very good overall history of the post-Civil War campaigns against Native Americans, still highly relevant for understanding American foreign policy, and attitudes toward guns, among other things.

David Olusoga, Black and British: A Forgotten History.  A very strong work about race relations on the other side of the Atlantic.  I had not known that “Ob-La-Di, Ob-La-Da” is Yoruba for “life goes on.”  The song as a whole was intended by Paul McCartney as a parable of the possibility of West Indian assimilation and it was a direct response to Enoch Powell.  Definitely recommended.

Linda Yueh’s What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today’s Biggest Problems, is probably the closest we will come to having an updated version of Robert Heilbroner.

Joshua Keating, Invisible Countries: Journeys to the Edge of Nationhood looks at Abkhazia, Kurdistan, Somaliland, Liberland, and a Mohawk reservation straddilng the U.S.-Canada border, as well as a Pacific Island that might disappear.  An interesting book for fans of alternative governance arrangements.

I’ve now see the page proofs for Steven Pearlstein’s Can American Capitalism Survive?: Why Greed is Not Good, Opportunity is Not Equal, and Fairness Won’t Make Us Poor.  His view is not mine, but if you want his view this book is the place to get it…


What continues to amuse is that "what would the great economists do" is thought to be of any importance at all. Do we have any evidence of what economists think or recommend being important? In a micro context they can't agree if raising minimum wage is good or bad. In a macro sense they can't agree on anything at all (and don't tell me that the "free trade" stuff is an agreement in any actually revenue neutral framework, or that economists have been even remotely non-autistic in looking at the idea of labor mobility between industries). So, great societies and cultures suceed, we know that. Economics now looks to be like accounting but politicized. Common sense should rule: education should be valued, hard work is good, thrift is good ( although economists can't bring themselves too admit it). Paper napkin Krugman ("wonkish")/ ISLM models are a joke and can be manipulated to suppoer any policy prescription whatsoever. What do economists think? Or the 12 "greatest" economists? Honestly who the fuck cares?

"Economics now looks to be like accounting but politicized."

I think you unjustly impugn Accounting.

indeed. Economists are unable to predict anything, but they can give you plenty of reasons why something happened, depending on their politics.

Here are the 2 deep insights in micro:

1. Rank ordering by preference creates prices, which creates markets.
2. Overall P/Q function slopes makes sense in a universe with scarcity.
3. Consumption utility functions are not linear.
4. Optimizing on thse ideas gives you a pretty good model of small parts of the economy.

That's it.

Here are the deep insights in macro:

There are no deep insights in macro, except things stolen from micro.

I mean, I can kind of agree with some of the spirit of this post. But "2 deep insights" followed by....4 deep insights. Talk about (problem) micro...

"We’re missing a key tenet of Adam Smith’s wealth of nations: without trust and social capital, democratic capitalism cannot survive" - is it that you don't agree we need them, or is your view that we're not losing them?

The sentence you're quoting isn't saying either of the options you gave. Let's reword:

The key tenet of Adam Smith's Wealth of Nations is:

"Without trust and social capital, democratic capitalism can't survive."

We are missing that key tenet.

well, right, I think we are. but Tyler says "His view is not mine" - so I am asking in what way his view differs

The problem is the idea that economists (or anyone else) can "solve problems". This is a deeply wrong idea. Problems in societies are solved by cultures. Economists can optimize societies. Estimated effect is +/- 10%. And yes clearly really dumb policies can take the downside to a large number. Nothing can move the upside but culture, education, rule of law, etc. History makes this clear.

Physicists and engineers have no issue with solving problems. If economists and other members of the soft sciences can't do that they belong in entertainment, not academia.

what problems do Physicists solve?

"In the Venn diagram of 'economics' and 'interesting,' Steven Pearlstein occupies the (tiny) overlapping area in the middle." Malcolm Gladwell

Not David Koch approved?

The horror.

The Earth Is Weeping is a sweeping, definitive history of the battles and negotiations that destroyed the Indian way of life even as they paved the way for the emergence of the United States we know today.

Don't remember if any government on the North American continent actually engaged in armed combat against African slaves, killing them, their wives and children. Currently the plight of the slave descendants is a continuous feature of daily American life while the native Americans are ignored or swindled by the Great White Father.

Slave descendants are present in almost every city in America. Native Americans for the most part live in reservations established by the US Government many years ago and are largely out of sight and out of mind. Two very different societies with respect to visibility.

What's visibility got to do with it? You're an ignoramus.

'Don't remember if any government on the North American continent actually engaged in armed combat against African slaves, killing them, their wives and children.'

The owners of those African slaves were the ones that exercised that privilege (well, not armed combat - slaves were of course forbidden any access to weapons), as the government in the U.S. is generally prevented from casually destroying a citizen's property without compensation.

Native Americans were never treated as property.

Yeah, slaves were treated as property, an asset. Native Americans were considered vermin, a liability. The owner of a cock-a-poo treats it, a pet, much better than a rat, vermin. You're just as much of an ignoramus as Alan Goldhammer.

What would Douglas North do? Here's a statement from North's Wikipedia page: Eventually, society becomes overwhelmingly urban. This final stage of development specialization requires increasing percentages of the resources of the society to be active in the market so that the transaction sector becomes a large share of gross national product. Highly specialized forms of transaction organizations emerge at this stage. Globalized specialization and division of labor demand institutions to ensure property rights even when trading in neighboring countries enabling capital markets to develop "with credible commitment on the part of the players."

Wikipedia: North theorizes that all transaction costs are rooted in information asymmetries between the parties to an exchange. Hence, each person must expend resources ascertaining the qualities of the good she is buying and enforcing the terms of the trade. Because these costs pose such a large barrier to economic growth, a central function of political and economic institutions is control them, often by disincentivizing fraud, theft, and other socially detrimental behaviors. Yet those who command the political system will structure these institutions to maximize their personal benefit, rather than the social benefit, so transaction costs will not always be minimized by existing institutions.

Is blockchain the solution to the dilemma of ever increasing transaction costs?

Yesterday, Trump refused to sign the G-7 statement, tweeting that Trudeau is "dishonest and weak".

Cade Metz is the NYT tech reporter, and he is very good. Here is Metz on the dangers of super AI: https://www.nytimes.com/2018/06/09/technology/elon-musk-mark-zuckerberg-artificial-intelligence.html What would super AI do? What if we let super AI not only drive our cars and fight our wars, but run our economy? Which of the twelve economists listed by Ms. Yueh would likely have the greatest influence with super AI? Would it be Hayek or Marx? I've observed before in my comments the Libertarian-Authoritarian Axis. Nature abhors a vacuum.


In case you haven't heard, they are publishing a complete Hebrew Bible translation with commentary by Robert Alter, coming in December. He has already done most of the OT piecemeal at this point, but still it's noteworthy nonetheless.


Been listening to The Beatles since 1970. Just a few days ago I happened to hear Ob-La-Di, Ob-La-Da. This time though, due to changes in pop culture, I heard "... life goes on, bruh".

Yehu's book is well written but in terms of an introduction to economics a more worthy sucessor to Heilbroner is New Ideas From Dead Economists . Of course ideologically they are poles apart

I read the free pages of Yeuh's book about Solow and she looks at Japan, which includes a few errors/problems. Maybe these two pages are a fluke but...

1) "...since the economy crashed in the early 1990s..." The stock market crashed at the end of 1990 at which point the housing/land markets gradually deflated over many years.

2) "Japan's growth has been between 0 and 1 percent since the early 1990s and productivity growth has been poor." From 1991 to 2017, Japan has had 1.0% growth per year and from 2003 to 2007, growth was 2.0% per year. Growth was also 1.4% per year from 2013 through 2017.

3) "... the real economy hasn't benefited sufficiently [from Abenomics which began in early 2013].

Japan's growth from 2008 to 2012 was 0% per year and from early 2013 through 2017 was 1.4% per year during the Abenomics years.

4) Yehu writes that Japan's growth fell sharply in spring of 2014 and that "This mirrored 1997 when the sales tax sent had sent the economy into recession, revealing an underlying weakness in demand." First, Yehu didn't mention that growth increased just as much in the summer of 2014 as it fell in spring 2014 resulting in no net effect on growth. Second, the Asian currency crisis occurred just as the sales tax increased in April 1997, but she doesn't mention this either.

5) Yehu says Japan's gross debt at 240% is a reminder of a weak economy but the important *net* debt is between 70% and 125% depending on how that is measured.

Sorry, that should be Yueh.

Love The Ice Palace — but it’s a girl who goes missing, no?

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