[HN Gopher] The worldly turn: A return to economics that studies...
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The worldly turn: A return to economics that studies the real world
Author : galaxyLogic
Score : 38 points
Date : 2022-01-19 21:09 UTC (2 days ago)
(HTM) web link (aeon.co)
(TXT) w3m dump (aeon.co)
| UIUC_06 wrote:
| "The law of supply and demand" is never going to fit everything
| the way the law of gravity does. It's a rough guideline that
| applies to artificial models better than it does to the real
| world.
|
| It seems like economists need to admit it when a minimum wage law
| don't have the effect they think it "should" instead of
| stubbornly insisting they're right.
|
| However, you can tell a "journalist" wrote this...
|
| >Isaiah Andrews, one of these new 'empiricists', won the 2021
| John Bates Clark Medal - the most distinguished economics prize
| in the United States. Andrews has worked on the problem of
| publication bias - whereby research that confirmed prior beliefs
| could have a better chance of being accepted by academic journals
|
| I don't see what this has to do with supply & demand.
| "Confirmation bias" is more of a social science study area, not
| economics.
|
| > In 2020, the UK government appointed Mark Carney - a former
| governor at the Bank of Canada and the Bank of England - as
| climate change adviser. Carney was quick to declare the problem
| to be essentially a mispricing of the cost of emitting carbon.
| Neither Sunstein nor Carney are experts in climate economics, let
| alone climate change.
|
| Whatever "climate economics" is and how it differs from just
| "economics."
|
| > The problem is one I call 'free lunch thinking'. Milton
| Friedman popularised the saying that there was 'no such thing as
| a free lunch', yet his worldview was that, if government just
| stepped back - didn't spend money solving problems, didn't
| trouble itself with regulation, and left all the messy decisions
| around how to organise society to the 'market' - things would hum
| along and we'd all get richer magically. _That sounds a lot like
| a free lunch._. [italics added]
|
| No, it's not "free lunch thinking." It's describing how laws
| work. It's not magic if you turn on the burner under the
| teakettle and the water gets hot.
|
| > Yet there is no reason why adhering to the scientific method of
| basing conclusions and world views on observable facts should be
| more challenging in economics than in physics. Except that the
| incentives are against it. If you have a dogmatic neoclassical
| view of how the world works, you'll always have a solution to the
| economic problem of the day.
|
| Actually, there IS a reason: in physics you can do experiments
| quite easily, and in the social sciences and economics, you
| can't. Thus _Freakonomics_ and successor books focus on "natural
| experiments," like the two school districts in Canada whose
| boundaries seem to be randomly drawn. Minimum wage increases in
| one state or city are not a natural experiment.
| ur-whale wrote:
| > in physics you can do experiments quite easily, and in the
| social sciences and economics, you can't.
|
| Which is exactly why neither are actual science.
| huitzitziltzin wrote:
| The sections of this article which are descriptions of current
| work being done by several Clark medal winners are reasonably
| accurate and fair summaries.
|
| The rest is a complete mess written by someone who is uninformed
| at best. The discussion of tobacco taxes and the discussion of
| wages in the Premier League are both particularly bad. Please
| don't take it seriously as a description of what's going on in
| the field or what the current problems are.
|
| When I teach my freshman undergrads supply and demand in two
| weeks I will make very clear to them that we do not have that
| much empirical support for the claim that minimum wages increase
| unemployment and that it is an unsettled question. This is the
| first college-level economics class they will take in our
| department and I am going to make sure they understand that
| point. I would be willing to bet that nearly every one of my
| colleagues teaching similar classes throughout the US and abroad
| will do the same when they discuss minimum wage policies.
| osclarto wrote:
| I graduated with an econ BSc from a Russel Group University in
| the UK, it was definitely not made clear where and where not
| there was actual empirical evidence for the conclusions of the
| neoclassical modelling we were taught. The state of syllabi
| around the world is a total embarrassment.
| assbuttbuttass wrote:
| This is a good article. But it's too kind to contemporary
| economics. Contemporary economics especially neoliberalism is
| simply a pseudo-scientific justification for crushing workers
| rights globally and maximizing profits for those at the very top.
|
| Economists told us for decades that wages are tied to
| productivity, when all the data points in the exact opposite
| direction. Economists told us that opening up developing
| countries' markets would result in their development and increase
| in standard of living. How's that going in 2022?
| adlorger wrote:
| Hasnt the economic story of 2020-2022 so far has not been "lets
| see what happens when we open up" but rather "lets see what
| happens when we close down"?
|
| How does 2022 so far imply to you negative evidence of "here's
| what happens when you open economies?" I am sincerely curious.
| WalterBright wrote:
| > Economists told us for decades that wages are tied to
| productivity, when all the data points in the exact opposite
| direction.
|
| That's because the data is based on salary and wages, when the
| _actual_ number used needs to be "total compensation". Total
| compensation also includes so-called "employer paid" benefits.
| It includes other costly mandates required by regulation.
|
| The other problem is productivity increases are very uneven.
| Productivity for some jobs has gone way up, for others it has
| not changes. The latter are not going to see compensation
| increases if their individual productivity did not rise.
| chisquared wrote:
| > How's that going in 2022?
|
| It's brought hundreds of millions of people out of poverty [0],
| drastically increased their life expectancies [1], and
| significantly improved their chances of making it to adulthood
| [2].
|
| For more, see https://www.gapminder.org.
|
| [0]
| https://www.gapminder.org/tools/#$model$markers$line$encodin...
|
| [1]
| https://www.gapminder.org/tools/#$model$markers$line$encodin...
|
| [2]
| https://www.gapminder.org/tools/#$model$markers$line$encodin...
| galaxyLogic wrote:
| "... the academic review of published work on the minimum wage,
| which opponents of the minimum wage use most frequently in
| defence of their position, had actually said it couldn't find
| strong evidence that the minimum wage caused unemployment"
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(page generated 2022-01-21 23:01 UTC)