Do Economists Understand the Economy?

Discussion in 'IntroSpectrum' started by Mcg-, Apr 5, 2009.

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  1. Mcg-

    Mcg- New Member

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    The recent collapse of the economic system - and how it seemed to literally come from out of nowhere - has led me to wonder whether our experts really understand how the economy functions.

    Do current economic ideas capture the current economic reality?

    It would seem to me, that with all their predictive models, real-time stats approaches, and super computers working on these things - SOMEONE (or almost everyone) ought to have seen this coming a mile away.

    Yet financial stars for 50 years went bust practically overnight. And the economy is sinking. The impact began in the property and capital markets and is now making its way into the labour markets - people are losing their jobs.

    So basically, because of this massive failure - I'm not so sure that current economic ideas are accurate.



    Some point to lone individuals who corrected the result accurately - economic collapse. But where these people simply crying wolf all the time and then the wolf happened to come, or did they only predict a collapse at THIS SPECIFIC TIME. The latter is more convincing to me.

    Also, even if someone predicted collapse, it could still be fluke.

    An accurate model must both have predicted the current collapse, where the economy was, and where it is going accurately. Anything else is a failure of theory.

    (/wonders if illrich still has a job in biotech)
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  2. Radium

    Radium f k

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    i think that the job environment changing from labor-based to skill-based took away a large safety net that would have caught most problems before they could snow-ball into larger and harder to defeat problems

    the nature of labor has changed

    this new labor is less conducive to the nature of capitalism, or perhaps not thick skinned enough. or our society has not changed with this new labor and has yet to adequately fasten along its mane
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  3. Volaticus

    Volaticus Anarcho-Capitalist

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    Ludwig von Mises Institute - Homepage
    LewRockwell.com

    Most modern economists have been drinking Lord Keynes Kool-aid for years. Austrian economics has accurately predicted the results of every market-intervention since the 1920's. However, market intervention continues because it is in the best interests of the interventionists to do so.
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  4. SIZZLA

    SIZZLA New Member

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    sure, some... Nicholas georgescu roegen, joan robinson, john kenneth galbraith... herman daly.



    i like roegen because he pressed the idea that the first two laws of thermodynamics are key... an ecconomy consumes... use up energy and admits waist. so, it cant last forever!
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  5. Mcg-

    Mcg- New Member

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    i agree with this.
    Basically, I don't think the shift in labour forms is inherently worse, just worse in relation to current political-legal order as currently conceived. New systematic ways of thinking of these things that are both accurate and true are needed, and guide the ship towards a gentle passage are needed. We can't afford to be surprised again.

    It will be interesting to see what happens to the EU. The way power is divided over there, into a quazi-state form, it will be interesting to see if it will be able to survive the dangers of the unknown (which are always the true test of any political order, not when there is smooth sailing) or if it will be torn apart. Also many states constitutions are rather new (unlike the US), we will see if these tools are as strong and grounded as they should be.
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  6. Mcg-

    Mcg- New Member

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    you would think that those who have the foresight to conceive of ideas that can both describe and predict reality, would have the foresight and knowledge to make their ideas become dominant over decades?

    failure of action over time signifies a failure of ideas.
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  7. SIZZLA

    SIZZLA New Member

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    not if your not the one with the money and the power...
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  8. Volaticus

    Volaticus Anarcho-Capitalist

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    Apologia from the state intellectuals is a powerful force to delude the public. It is the Austrian School that consistently points out that the Emperor has no clothes, yet state academia has woven illusionary finery for his majesty. We are constantly told that the problems with the market stem from deregulation and lack of oversight, and so most people tend to accept that the solution is more regulation and more oversight, when the reality is that the market suffers from constant interference, creating market distortions that result in bubbles and the business cycle. We wouldn't see the boom-bust cycle if it weren't for government manipulation of the market. The solution is to maintain a laissez-faire policy. Nothing else will work.
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  9. Mcg-

    Mcg- New Member

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    and surely if the Austrian school knew the truth, they would have both the foresight and knowledge to overcome the state intellectuals by now.
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  10. Radium

    Radium f k

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    McGirth you remember way back when we were arguing about what I had proposed as the end-of-labor?

    I said this was a certainty sooner or later

    the reasons are

    businesses want to eliminate unnecessary costs and in doing so seek forms of producing products more and more efficiently. for example machines replacing factory workers in assembly lines. so there is this underlying current that moves more and more towards finding cheaper labor at all times through development of capitalism.

    this can be seen in 3 stages

    1 labor stage where all products are produced physically/manually by people

    2 skills stage where all products are produced by machines/cheap foreign labor and people now simply provide services or oversee services of these products

    3 leisure stage where virtually all products and overseeing of products are done by machines

    leisure stage presupposes the human desire to maximize leisure. that is, products and technology have always sought to increase leisure and will naturally continue to do so unimpeded to the point where human services and labor are no longer necessary en-masse to maintain society.

    so the 2 driving forces beneath the economy are actually

    1. the desire for businesses (product makers) to reduce costs of labor and therefore paring away labor gradually over time and...
    2. the human desire for leisure which naturally seeks out living whilst doing the least amount of labor to achieve this

    working together they would seem to unavoidably seek out a leisure stage where there is no economy (no labor) at all

    anyway right now I would say we are in the skills stage and moving naturally towards the leisure stage (supposing the world doesnt explode before we get there)

    we just havent really adapted into that yet. i think the structure of our society is still very much fundamentally like the labor stage. we must find a way to create a working force of thinkers instead of laborers. have not done this yet.
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  11. Volaticus

    Volaticus Anarcho-Capitalist

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    You beg the question.
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  12. TheReturn

    TheReturn Life of the Party

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    This is a great post. I actually was thinking about this same thing myself a few months back, and how it would be if there was no labor, no need for money, etc. If everything was made by machines, there would be no need for the traditional job, so what would people do all day?

    If machines/robots/nanotech or whatever handled everything from the simplest manufacturing to the most complex surgeries, if the labor cost was removed from the good's cost, and there was no company trying to profit off of material costs, there would be no reason to have a currency, and we would almost live in a kind of utopian society.

    Even the innate greed of human nature would have no place, because what good is controlling the system if you don't get the money it generates because it doesn't generate any money? What I mean is, would one position be more desirable than another in the world under these circumstances, or would this truly be "equality"? If there is no money, and everyone has access to the same quality goods at no cost, what is the advantage to gain from things like war?

    Interesting to think about. This all ties into my entire philosophy of less government is better and if everything were ideal, there would be no need for government, but of course in our time, some government is necessary for things like military protection and foreign policy, etc.
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  13. Radium

    Radium f k

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    Well I think if you look at the progress of humanity there has been a very real push towards maximization of leisure. We started in nature naked and savage, preyed upon by animals and at mercy to the weather and the seasons, the hot and the cold. Chased every step by disease and death, little by little we have been pushing to make our lives easier to bear with every year and day of our human history.

    This seems to be what we are doing all of this (civilization, society, government, medicine, economies) for. We have just been trying to make life more leisurely. This is our most base guiding instinct as a species and thus the strongest guiding force to all human systems and inventions.

    *tying this back in with McGirth;s thread*

    I think this is where many different takes on economies have failed. That is, they have failed to consider this underlying human drive towards leisure as the ultimate purpose for economy. Common takes are based on greed as being the purpose for economy when in reality there is a deeper force driving the system.

    Keeping this in mind we can see that Capitalist economy, driven by the desire to maximize leisure, necessarily shifts from labor based to skill based and as yet we are currently maladapted for this change.
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  14. Volaticus

    Volaticus Anarcho-Capitalist

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    Automation will not lead to post-scarcity.
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  15. Radium

    Radium f k

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    {An accurate model must both predict the where a thing was, and where it is going accurately. Anything else is a failure of theory}

    going slightly off i was re-reading this thread and realized how powerful this line of thinking is. this rule applies to absolutely everything like the god or king of things in this universe
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  16. Radium

    Radium f k

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    ok?
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  17. Mcg-

    Mcg- New Member

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    radium. i think leisure is probably one of the drives of the consumers of technology, but not of its producers. I'm not seeing how everything is reducible to it.
    also i remember reading something about how in the cave-man hunter days, people actually had more leisure.

    honestly though, if you really wanted to you or anyone else coudl spend 100% of their time in leisure. on welfare and do nothing, or live in a shelter and do nothing.
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  18. Radium

    Radium f k

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    yhhh

    1 how can you argue that desires of consumers are not also inseparably linked to the desires of producers?

    do producers not exist to firstly to meet the desires of the consumers? do products not exist to be consumed? is this not their purpose? arent the desires of humans what determines what will be produced? do humans not desire leisure? maximum leisure?

    2. McGirth

    thats a...

    very exxagerated (streeeeeettcchhh) point of view

    dont you think? Dont prisoners in jails also therefore live the most "leisurely" according to your point of view. why i mean... they have everything they could ever need right there for free! ah how leisurely the life of a prisoner in jail.

    i think you knew what I meant by my use of the term leisure especially considering that I directly linked it to removal of labor and the things people dont like and have been trying to avoid through our history as a species (like disease, being preyed upon by other animals, at mercy to the weather, average human life-span being 30 years)

    2 things

    I assumed you would know what I was getting at all together but you didnt

    or

    you did realize what I was getting at but constructed this argument anyway for some reason

    anyway I dont think being hunted by tigers your whole life and then dieing at age 28 to pneumonia as really that leisurely. human history would seem to agree considering we did everything in our power to try to stop living that way
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  19. Radium

    Radium f k

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    you ever see that movie... fantastic planet?
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  20. Mcg-

    Mcg- New Member

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    1- lets say i am a pillow maker. I make pillows to make $$, i don't make them for your comfort. Desire for leisure linked through market function to producers, yes. But then that hardly makes it a fundamental drive.

    2-i was merely drawing out the idea that humans fundamentally seek leisure to its absurb consequences. And your quite right, according to this view, taken to the extreme, prison is fantastic.
    This is according to your view. Your saying leisure = removal of labour and freedom from disesase, etc.

    i think you added the live a long life part (freedom from disease, etc). Not sure if that relates directly to leisure per se.

    let me put it this way. If i gave you a choice to never work again, be at 100% leisure all the time, would you take it? keep in mind that this choice would mean that you would live a nice long life, free from disease, but you would be literally NOT ALLOWED TO LABOUR at all. Marx said people have a fundamental need to work, i'm pretty sure he's right.
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