They got the first part correct....as to the future...??

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They got the first part correct....as to the future...??

#1  Postby Macdoc » Apr 09, 2013 9:23 am

Time for economics to shed its fanciful past
15:12 4 April 2013
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Stephen Battersby, consultant
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Make way for the physicists! Economics is finally becoming an enlightened science, say new books by Mark Buchanan and James Owen Weatherall

SOMETHING is stirring amid the swamps of the dismal science. It speaks of brass beads and rice piles, of power laws and positive feedback, of phase changes, chaos and complexity. Resembling an actual science, it might come to have some bearing on the real world and help reduce future financial catastrophes. That is the main message of Mark Buchanan's new book, Forecast.

This new science is battling to escape the dominant theory of neoclassical economics. That "almost psychotic fantasy", as Buchanan puts it, is as absurd as a theory of weather that says storms do not exist. Its adherents see only equilibrium where there is dynamism, its edicts have made markets and the global economy more unstable.


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http://www.newscientist.com/blogs/cultu ... nance.html

I'm from Missourah on the ability to transform.....in full agreement on the description of the current morass. :coffee:
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Re: They got the first part correct....as to the future...??

#2  Postby epete » Apr 09, 2013 10:10 am

This isn't along the lines of "classical economics is against the laws of thermodynamics" shit, is it? Been reading a fair bit of woo regarding that lately. Fucking bollocks. (if it is that).
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Re: They got the first part correct....as to the future...??

#3  Postby Loren Michael » Apr 09, 2013 10:31 am

Eh. The fringe crackpots who say things that interested public policy figures like doesn't make a field useless. Politics and human biases ruin everything.

http://en.wikipedia.org/wiki/Climate_change_denial
http://en.wikipedia.org/wiki/Anti-vax
http://en.wikipedia.org/wiki/Body_memory
http://en.wikipedia.org/wiki/Intelligent_design

As with any other subject, many people are content to live their lives in ignorance of the fundamental nature of matter. Despite this ignorance, most people have detailed and strongly-felt predictions about the effects of policy and other changes in society regardless of whether they have ever consulted the existing literature.

There is a lot of usefulness in science for ruling out active nonsense. Economics (and other social sciences) are very good at this. Economics is very good at formalizing the weak, vague notions about how the world works that people hold in their brains, and then exploding the biggest contradictions. Economics is bad at settling disputes between the subtle, sophisticated versions of those notions.

I'm not sure what the drubbing of economics as a field serves. People are content to make economic observations. Does the cited support of a relevant economics study somehow make that observation less valid, or...?

I can understand the drubbing of phrenology. It's just not true. Do people believe economics is in the same boat?
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Re: They got the first part correct....as to the future...??

#4  Postby epete » Apr 09, 2013 10:40 am

I think "behavioural economics" is where it is all at. Actually applying science to economic behaviours, instead of creating just-so stories and justifications for this or that.
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Re: They got the first part correct....as to the future...??

#5  Postby Macdoc » Apr 09, 2013 10:49 am

Your comparison Loren is not apt.....better one might be Freudian psychoanalysis not phrenology.

The authors ( and they are not alone ) feel the understanding is deeply flawed. I share that view.

What I don't share is any sense that there will be applicable relief from that state.

In addition you list deniers - but those cases there is an established functional body of knowledge.

Neither the authors or myself think that is the case with economics.
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Re: They got the first part correct....as to the future...??

#6  Postby Loren Michael » Apr 09, 2013 12:31 pm

Macdoc wrote:The authors ( and they are not alone ) feel the understanding is deeply flawed. I share that view.


Which understanding is deeply flawed? People study the effects of any number of effects on the economy. Tariffs, inflation, monopolies...

What should we question and why?
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Re: They got the first part correct....as to the future...??

#7  Postby Loren Michael » Apr 09, 2013 12:46 pm

epete wrote:I think "behavioural economics" is where it is all at. Actually applying science to economic behaviours, instead of creating just-so stories and justifications for this or that.


Eh. Behavioral economics is significant, but I don't know why it should be considered more significant than, say, the study of monetary policy. They're interrelated and concerned about different aspects of the same big thing. One thing may inform the other, but as with any other field that studies things at radically different scales, at some levels you just have to start making assumptions.

In biology for example, protein folding is notoriously intractable. There are decent models of things that depend on protein folding though, by assuming that the folding just happens and then moving on. Does this mean that protein folding is where it is all at?
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Re: They got the first part correct....as to the future...??

#8  Postby epete » Apr 09, 2013 1:08 pm

probably a fair point. But ultimately all economics comes down to social interactions. Work out how people actually behave, instead of how economics/politicians would like to imagine people behave, and we will be on the way to some more sensible economic policy.
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Re: They got the first part correct....as to the future...??

#9  Postby Loren Michael » Apr 09, 2013 1:50 pm

I wouldn't conflate economics/politicians. The state of public policy is partially informed by economists, and understood by economists, but it's determined by politicians and the incentives underwriting their votes.

Better policy comes about through better political systems. Until the toxic incentive structures are addressed, bad policy happens irrespective of what economists say, as has always been the case.
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Re: They got the first part correct....as to the future...??

#10  Postby epete » Apr 09, 2013 1:56 pm

Problem is that economists generally don't "say". I think economists need to get a bit more radical and speak out like scientists speak out about global warming now.
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Re: They got the first part correct....as to the future...??

#11  Postby Loren Michael » Apr 09, 2013 2:35 pm

epete wrote:Problem is that economists generally don't "say". I think economists need to get a bit more radical and speak out like scientists speak out about global warming now.


That may be true... I tend to get the impression that people come pre-equipped with confident "understandings" about economics in ways that aren't mirrored with respect to, say, climate science. Sentiments like the ones in the OP aren't really there for climate scientists outside the US, I think.

Economics is counterintuitive in a way that other sciences aren't - everyone's an armchair economist - and it's further undermined by people actively mistrusting economists for (I believe) specious reasons. Economists should still speak up though, sure.
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Re: They got the first part correct....as to the future...??

#12  Postby GT2211 » Apr 09, 2013 5:15 pm

From article I see this:
No matter, say proponents: external shocks, from outside economics, are behind all those unfortunate events.
Not only have I not heard that. I'm not even sure what it means by saying its "outside economics". It seems untrue and jibberish.
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