Just waiting for Don's comments.
On Dec 27, 6:18 am, archytas <nwte...@gmail.com> wrote:
> I used to expect my students to be able to think critically so as to
> be able to tolerate the ambiguity the models should inspire if they
> are not taken as gospel. I'd expect my better students to be able to
> do more than liturgy - a bit like the following:
>
> Ten Principles of Responsible Economics
>
> 1) In theory, rational people think at the margin. In reality, these
> people are a fiction that exist only in mathematical models
>
> You are not a "rational" actor—not in the economic sense of the term.
> The newcomer to economics, well-intentioned as she is, surely wants to
> be rational in the everyday sense. Having learned from her textbook
> that, without qualification, to be rational is to be a self-interested
> utility-maximizer, she learns to emulate such behavior. So begins the
> process of learning to deprecate non-market values—which are
> "irrational," after all—and rely exclusively on self-interest to
> justify and understand action. This naive economism's implicit
> justification for selfishness is that acting in one's self-interest at
> the margin is "only rational." Inside the fictional world of an
> economic model, this is tautologically true. Outside of it, we still
> call that sociopathic greed.
>
> 2) In theory, there is no difference between self-interest and greed.
> In reality, economists aren't typically trained in moral philosophy
>
> Spend enough time studying economics, and you might eventually feel
> greed become empty of meaning. You've learned that acting in your own
> self-interest is not only rational but virtuous—it creates better
> outcomes for everyone—and surmised that greed is perhaps merely an
> expression of envy or an atavism from a benighted age of religious
> taboo. You would be wrong. In the real world, greed exists. As a crude
> approximation: acting in your own self-interest just means "not
> shooting yourself in the foot." You can think of greed as shooting the
> other guy in the foot so you can get away with his wallet.
>
> 3) In theory, voluntary trade can make everyone better off. In
> reality, it's often not so voluntary, makes some people better off
> while making others worse off, and empowers the beneficiaries to make
> sure they get to keep their gains
>
> "Free market" reforms generally improve aggregate outcomes while
> increasing inequality, so that poverty increases even as overall
> wealth does. Basic economic analysis treats distribution as a
> secondary concern—it assumes that once the market maximizes benefits
> in the aggregate, the political system can ensure that they'll be
> redistributed in an equitable way. But as we've been learning all too
> well, with greater wealth comes greater control over the political
> system.
>
> 4) In theory, markets are usually a good way to organize economic
> activity. In reality, "markets in everything" has a way of sliding
> into "everything into markets"
>
> There's a difference between thinking about a real-world interaction
> as if it were a market—market analysis—and transforming that real
> interaction into an actual market—marketization. The latter is a
> natural seduction once you've gained some facility with the former,
> and some people seem to reflexively think organizing any activity as
> an actual market would be an improvement over the status quo. We can
> think of these people as blowtorch-wielding pyromaniac children
> playing in a barn, but they are not, of course, actually blowtorch-
> wielding pyromaniac children playing in a barn.
>
> 5) In theory, market models assume that the existing distribution of
> wealth is just. In reality, poor people exist
>
> Hiding in plain sight in many marketization proposals is something of
> a dirty little secret: When you apply an idealized market model to the
> messiness of reality, some people, those without enough purchasing
> power to enter the market in the first place, will have to go without
> in the name of efficiency. Famine, thirst, and lack of access to
> education can be effective market solutions.
>
> 6) In theory, people respond to incentives. In reality, different
> people respond differently to different incentives, and not always the
> way you hoped for
>
> "Pay for performance" is sold as "more money for better results" but
> typically results in "gaming the metrics to get that cash money now."
> The people who respond best to monetary incentives are the people who
> value money the most, not necessarily the people who value education
> or innovation or whatever you'd like them to value the most. Such
> incentive schemes also tend to result in sacrificing long-term or
> substantive success in favor of superficial short-term gain.
>
> 7) In theory, governments can sometimes improve market outcomes. In
> reality, sometimes sometimes means often
>
> Real markets are always imperfect and intrinsically tend toward
> monopoly, a market failure. Introductory textbooks make note of such
> market failures, but typically only in a way that makes them seem like
> outliers. They are in fact the norm.
>
> 8) In theory, there's a distinction between "positive" and "normative"
> economics. In reality, the positive is at once fictional and normative
> in effect
>
> Ostensibly, "positive" economics refers to the description of economic
> reality—the "is" questions–while normative economics deals with policy
> prescriptions—the "ought" questions. But in the context of
> neoclassical economics, the only reality we have access to is a set of
> rather crude idealizations—in a sense, we study the reality of a
> fiction—and since studying positive economics clearly has an effect on
> people's behavioral patterns, it is de facto normative.
>
> 9) In theory, models are just aids to reasoning—the map is not the
> territory. In reality, it's just so easy to reify
>
> Many lesser economists have a habit of justifying the strong modeling
> assumptions of economics by claiming they're "generally true" or
> excusing them with a wave of the hand and a "well, there are always
> exceptions, right?" This is a telltale marker of someone who takes his
> models too literally. Properly understood, the toy models of economics
> are tools for organizing thought, testing intuition, and generating
> sets of hypotheses to be tested against data—not objective
> descriptions of reality.
>
> 10) In theory, economics is a science. In reality, economics is a
> science the way Ayn Rand is a literary luminary
>
> To casually label economics a science is at best aspirational, at
> worst manipulative, at a minimum misleading. At the introductory
> level, the issue at stake is less one of methodology than of how
> deferential the layperson or novice should be to the authority of
> expert or policy entrepreneur appeal to economic theory. Skepticism is
> always a virtue. When evaluating claims based on simple economic
> models, it's self-defense.
>
> I would reward such scepticism with good marks - but more importantly
> try to help the unease of the quest of thinking for yourself. There
> is a point at which one needs to understand this form of scepticism is
> not relativism but about openness to and respect for evidence and
> other points of view. Most students can't get this far - and there is
> a long way to go to the kind of informal and defeasible logic that
> justifies the position. The 10 points here are from a US student.
> It's some way after this that an understanding of how much that is not
> fact is maintained as such through religious habituation in thought.
> The big question becomes how we differentiate dogma from reasoned
> action.
>
> On Dec 26, 12:00 pm, Allan H <allanh1...@gmail.com> wrote:
>
>
>
>
>
>
>
> > I must confess I am among them that do not know though I know there is a
> > connection between religion and economics,, I have never really been able
> > to express it with clarity.
> > Allan
>
> > On Mon, Dec 26, 2011 at 4:56 AM, Vam <atewari2...@gmail.com> wrote:
> > > So here's something... notwithstanding everything else in the
> > > background.
>
> > > Historically, coming of age through its animal and alpha culture, it
> > > was ( eastern ) religion that declared to man :
>
> > > " Do not be too concerned with raising power, great wealth and
> > > property. Raise enough to raise great virtues, great human beings,
> > > instead. " Humanity failed to heed the advice.
>
> > > Cut to the beginnings of modern age, with growth of science and East
> > > India Company, the economist declared :
>
> > > " Create great wealth. That alone serves to raise your greatness.
> > > Therein alone lies your greatest virtue. " Humanity readily took to
> > > the suggestion, largely because it gave free reign to its predatory
> > > instincts and alpha tendency.
>
> > > Until 20th Century, when economics has practically replaced religion.
>
> > > Cut to 21st Century, in times when we know that growing GDP infinitely
> > > is impossible because the environment is finite and sustainability
> > > limited... which of the two declarations better serves your concerns
> > > for humanity, environment and sustainability ?
>
> > > It is a Buddhist nation, one of the poorest, that still places
> > > economics in perspective. A 2010 survey confirms only 8% with Poor /
> > > Very Poor psychological well - being and about 55% with Good / Very
> > > Good. On first hand account, it has an environment that could be the
> > > envy of every other nation on the planet !
>
> > > I suspect, very few people actually know what religion and
> > > spirituality is all about !
>
> > >http://www.grossnationalhappiness.com/
>
> > > On Dec 23, 5:00 am, archytas <nwte...@gmail.com> wrote:
> > > > Vam is right (elsewhere) that I'm stuck in a rut on this - I often get
> > > > this way as there seems little to do other than bang one's head
> > > > against the walls of language. This isn't my particular rut as I
> > > > concluded long ago something not unlike Edward above. There are many
> > > > such critiques of
>
> ...
>
> read more »
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