Home
Todd Suomela's Library tagged → View Popular
Edge: ECONOMICS IS NOT NATURAL SCIENCE By Douglas Rushkoff
-
It's not. It's a product not of nature but of engineering. And to treat the market as nature, as some product of purely evolutionary forces, is to deny ourselves access to its ongoing redesign. It's as if we woke up in a world where just one operating system was running on all our computers and, worse, we didn't realize that any other operating system ever did or could ever exist. We would simply accept Windows as a given circumstance, and look for ways to adjust our society to its needs rather than the other way around.
-
In short, these economic theories are selecting examples from nature to confirm the properties of a wholly designed marketplace: self-interested actors, inevitable equilibrium, a scarcity of resources, competition for survival. In doing so, they confirm — or at the very least, reinforce — the false idea that the laws of an artificially scarce fiscal scheme are a species' inheritance rather than a social construction enforced with gunpowder. At the very least, the language of science confers undeserved authority on these blindly accepted economic assumptions.
Book Review - 'The Myth of the Rational Market,' by Justin Fox; and 'The Sages,' by Charles R. Morris - Review - NYTimes.com
THE MYTH OF THE RATIONAL MARKET A History of Risk, Reward, and Delusion on Wall Street.By Justin Fox
THE SAGES Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets By Charles R. Morris
Obfuscating Inequality « The Baseline Scenario
Will Wilkinson has gotten a lot of Internet love for his article “Thinking Clearly About Economic Inequality”, which argues that increasing inequality is not as bad as people like Paul Krugman make it out to be. I thought it was a rhetorically clever but deeply misleading attempt to blur the obvious issue – economic inequality is increasing – by looking at it through a dizzying array of qualifying lenses.
-
Wilkinson then tries to explain why increased income inequality does not translate into increased happiness inequality (although Steven and Wolfers actually say that it has translated into increased happiness inequality since the 1990s). There are two parts to this argument, but basically they collapse down to one. First, he says that the quality of budget-level products has increased faster than the quality of luxury-level products (like refrigerators), so that the differential in material comfort is decreasing for a given differential in monetary consumption. Second, he says that rich people are actually taxing themselves by spending huge amounts of money on “real estate with ocean views, or Ivy League diplomas, or goods like yachts” that do not provide value commensurate to their cost.
-
And here Wilkinson undercuts his own argument. He points to the relatively small practical difference between a $300 refrigerator and a $10,000 refrigerator, which is far bigger than the difference between no refrigerator and a refrigerator – which was the relevant difference maybe fifty years ago. Good point. But he also talks about how vanilla and pepper suffered the same fate – only much longer before. The lesson is that different products and services that people want change over time, and at different times, from being rare luxuries to being relative commodities. Just because one former luxury good is now a commodity good doesn’t mean there aren’t other valuable goods that many people cannot afford.
Jonathan Wolff: Greed is good (sometimes); but regulation is better | Education | The Guardian
But suppose you are buying meat that won't be supplied for 20 years? Still want to rely on the greed of the butcher? Thought not. By the time you have found out if he is cheating you, it will be too late to switch supplier. When there is a substantial time lag between purchase and consumption, as there is for pensions, savings schemes and sub-prime debt, the market loses its magic and the purchaser is vulnerable.
Sorry. No Internet Video for You | Minnov8: Minnesota Innovation in Internet and Web Technology
Op-Ed Columnist - The Market Mystique - NYTimes.com
-
But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.
The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.
-
Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.
To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.
But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.
FT.com / Comment / Analysis - Seeds of its own destruction
-
“Governments bad; deregulated markets good”: how can this faith escape unscathed after Alan Greenspan, pupil of Ayn Rand and predominant central banker of the era, described himself, in congressional testimony last October, as being “in a state of shocked disbelief” over the failure of the “self-interest of lending institutions to protect shareholders’ equity”?
-
How did the world arrive here? A big part of the answer is that the era of liberalisation contained seeds of its own downfall: this was also a period of massive growth in the scale and profitability of the financial sector, of frenetic financial innovation, of growing global macroeconomic imbalances, of huge household borrowing and of bubbles in asset prices.
- 1 more annotations...
Free Markets vs. "Free" Markets | Mother Jones
Objections to private student lending ignore ways that government could save money now, even when it couldn't save money at the start of the program. Everything changes, even the efficiency of government.
Angry Bear: Legal Protectionism: A New Mercantilism
"A modified version of mercantilism is alive and well...and it has been for some time. The game always has been trade. The question always has been: How do we game the system?"
Mentions China lowering taxes for foreign firms to less than the taxes for indigenous firms. This is not covered by WTO.
The Project on Law and Mind Sciences
The Third Conference on Law and Mind Sciences:
"The Free Market Mindset: History, Psychology, and Consequences"
At this year's conference, leading social scientists and legal scholars will present and discuss their research regarding the historical origins, psychological antecedents, and policy consequences of the free market ideology that has dominated legal discourse and lawmaking the last few decades.
Real Time Economics : Ignoring the Oracles: You Are With the Free Markets, or Against Them
It’s hard to tell what’s more striking about Raghuram Rajan’s 2005 presentation at the Kansas City Fed’s Jackson Hole symposium — the way many of the dangers he laid out came to pass, or the way he was attacked, and then discounted.
Mr. Rajan came to the conference, dedicated to soon-to-retire Fed Chairman Alan Greenspan, with strong bona fides as a pro market advocate.
Thomas Frank: The 'Market' Isn't So Wise After All - WSJ.com
But by and large the free-market medicine men seem determined to learn nothing from this awful year. Instead they repeat their incantations and retreat deeper into their dogma, generating endless schemes in which government is to blame, all sin originates with the Community Reinvestment Act, and the bailouts for which their own flock is desperately bleating can do nothing but harm.
And they wait for things to return to normal, without realizing that things already have.
Ross B. Emmett
I have also initiated a new research program–the history of the University of Chicago’s economics department during the period from the late 1920s to approximately 1980. One article on Chicago economics has already been published, and an eight-volume reprint collection entitled The Early Chicago Tradition in Economics, 1892-1945 appeared in 2001 under my editorship (published by Routledge). I am finalizing the manuscript of The Elgar Companion to the Chicago School, which contains a great set of essays by a broad range of scholars of Chicago economics.
Selected Tags
Related Tags
Sponsored Links
Top Contributors
Diigo is about better ways to research, share and collaborate on information. Learn more »
Join Diigo