Towards a new Economics?

[thriftyandboringinohio]

I found this article interesting

https://www.edge.org/response-detail/26756

...If market capitalism was the brief product of happy coincidences confined in space and time to the developed world of the 19th-20th centuries, (but that were no longer true under 21st century technology) what would our world look like if there were no system to take its place? I have been reluctantly forced to the conclusion that if technology had killed capitalism, economic news would be indistinguishable from today’s ...

... we should expect that because there is ...no known alternative to market capitalism, central banks and government... will be under increased pressure to keep up the illusion that market capitalism is recovering ....giving birth to an interim “gimmick economy”...

...Capitalism and Communism which briefly resembled victor and vanquished, increasingly look more like Thelma and Louise; a tragic couple sent over the edge by forces beyond their control. What comes next is anyone’s guess and the world hangs in the balance. ...

[jk]

Re: Towards a new Economics?

I found this article interesting

https://www.edge.org/response-detail/26756

i found some ideas of interest but a lot of false profundity hiding behind jargon. the question he begins with is, as you point out, certainly worth pondering: how would we know if capitalism died but our commercial and social structures somehow lumbered on? if these structures themselves don't instantiate capitalism, what is the nature of the system which they constitute?

in some ways this is the mirror of the question: was the industrial revolution, and the early part of the informational revolution, just an anomaly which produced a transient reduction in inequality? and produced a transiently existing system which looked kind of like theoretical capitalism, with its perfect competition [enhanced by trust busting] and perfect knowledge [not]?

certainly competition these days is mostly between 2-5 mega-competitors in whatever field you care to name. regulatory capture has created near monopolies in a lot of products and services, allowing for extra-high profit margins. productivity has risen but wages have not.

so we've moved from [kind-of] capitalism to oligarchy with oligopolies spouting the rhetoric of capitalism.

[thriftyandboringinohio]

Re: Towards a new Economics?

i found some ideas of interest but a lot of false profundity hiding behind jargon. the question he begins with is, as you point out, certainly worth pondering: how would we know if capitalism died but our commercial and social structures somehow lumbered on? if these structures themselves don't instantiate capitalism, what is the nature of the system which they constitute?

in some ways this is the mirror of the question: was the industrial revolution, and the early part of the informational revolution, just an anomaly which produced a transient reduction in inequality? and produced a transiently existing system which looked kind of like theoretical capitalism, with its perfect competition [enhanced by trust busting] and perfect knowledge [not]?

certainly competition these days is mostly between 2-5 mega-competitors in whatever field you care to name. regulatory capture has created near monopolies in a lot of products and services, allowing for extra-high profit margins. productivity has risen but wages have not.

so we've moved from [kind-of] capitalism to oligarchy with oligopolies spouting the rhetoric of capitalism.

Thanks jk, those are great points.

I liked the author's idea that a) software fits the economists definition of a public good, and b) software is starting to perform a great deal of work once performed by professional labor.
The implication is that labor is rapidly losing the ability to charge for routine work done with pen and paper.
Examples abound, like drawing up a lease for a rental property. I no longer hire an attorney to do that, I just grab one on-line for free and use it.

These kinds of articles intrigue me. Around here we discuss things like ZIRP and negative interest and huge equity P/E ratios and derivative positions of astronomical notional value with long chains of counter party risk. Much of this stuff should never happen within a free market economy as we've understood them for the last hundred years. They not only do happen, but they persist far longer than anyone expects.

All this makes me suspect we are shifting into some new and different kind of economy.
I like articles that explore whether or not this might be happening, and what sort of economy might be developing.

[shiny!]

Re: Towards a new Economics?

Thanks jk, those are great points.

I liked the author's idea that a) software fits the economists definition of a public good, and b) software is starting to perform a great deal of work once performed by professional labor.
The implication is that labor is rapidly losing the ability to charge for routine work done with pen and paper.
Examples abound, like drawing up a lease for a rental property. I no longer hire an attorney to do that, I just grab one on-line for free and use it.

These kinds of articles intrigue me. Around here we discuss things like ZIRP and negative interest and huge equity P/E ratios and derivative positions of astronomical notional value with long chains of counter party risk. Much of this stuff should never happen within a free market economy as we've understood them for the last hundred years. They not only do happen, but they persist far longer than anyone expects.

All this makes me suspect we are shifting into some new and different kind of economy.
I like articles that explore whether or not this might be happening, and what sort of economy might be developing.

Increasing automation and robotics are going to make many more jobs obsolete. When one robot can do the work of 250 people, how much can people adapt? You can only retrain so many factory workers to do data entry or become software engineers. No, too many well-paid blue- and white-collar workers have become Walmart greeters and waitresses. Politicians can promise that they will bring the jobs back, but they can't. They can bring the companies back, perhaps, but those closed plants that used to employ thousands, when they reopen might only employ a few dozen people to supervize the automated systems. Most of those great factory jobs are gone forever.

We did the big shift from agrarian jobs to manufacturing jobs, then manufacturing jobs devolved to lower-paying "service economy" jobs. Since the financial crash, minimum wage entry-level jobs are too often the only jobs people can get anymore. Now, software and automation are gradually making human labor obsolete.

This trend is going to force a major rethinking about "work" - about determining the value of human beings as separate from our ability to "earn a living." If we get to a point where say, half the population will never have a job, and the other half will do their jobs in 3 hours per day, we will need an economic system that gives everyone a decent standard of living regardless of their ability to work. Some countries are toying with the idea of paying everyone a basic unconditional income that doesn't end if they get a job. Switzerland has it on an upcoming referendum.

The philosophy of "those who don't work don't eat" might go the way of the dodo. We might have billions of people living marginal lives in poverty, or billions of people with more time to spend in creative, beautiful ways.

[jk]

Re: Towards a new Economics?

Increasing automation and robotics are going to make many more jobs obsolete. When one robot can do the work of 250 people, how much can people adapt? You can only retrain so many factory workers to do data entry or become software engineers. No, too many well-paid blue- and white-collar workers have become Walmart greeters and waitresses. Politicians can promise that they will bring the jobs back, but they can't. They can bring the companies back, perhaps, but those closed plants that used to employ thousands, when they reopen might only employ a few dozen people to supervize the automated systems. Most of those great factory jobs are gone forever.

We did the big shift from agrarian jobs to manufacturing jobs, then manufacturing jobs devolved to lower-paying "service economy" jobs. Since the financial crash, minimum wage entry-level jobs are too often the only jobs people can get anymore. Now, software and automation are gradually making human labor obsolete.

This trend is going to force a major rethinking about "work" - about determining the value of human beings as separate from our ability to "earn a living." If we get to a point where say, half the population will never have a job, and the other half will do their jobs in 3 hours per day, we will need an economic system that gives everyone a decent standard of living regardless of their ability to work. Some countries are toying with the idea of paying everyone a basic unconditional income that doesn't end if they get a job. Switzerland has it on an upcoming referendum.

The philosophy of "those who don't work don't eat" might go the way of the dodo. We might have billions of people living marginal lives in poverty, or billions of people with more time to spend in creative, beautiful ways.

the problem is that people with low incomes can't buy very much. we're back to the scenario in which henry ford gave his workers a big pay hike so that they could afford to buy his cars. except now we're approaching this on a system-wide basis. i suppose this is really gary shilling's case for "good deflation," the kind where prices go down because of increased productivity. but we can't all be walmart greeters with no one to greet. someone has to be the customer. not that long ago the u.s was the consumer of last resort - but that was in the context of the home equity atm bubble. perhaps an emerging minimalist ethic will allow adaptation. [anyone hear of "mr. money mustache"? the new yorker did an interesting profile on him not long ago.]

even "free goods" like google search are supported by ads, and ads are supported by entities which sell things. someone has to buy.

[jk]

Re: Towards a new Economics?

here's the solution: just cater to the upper 5% of the population.

the ultimate status symbol will be human servants- downton abbey, upstairs-downstairs were visions of the future


edit
AFTER writing the above, i came to this passage in the linked article:

In May, the company will roll out its Royal Genie program — essentially a personal servant for the highest spenders on board. Royal Genies will research their guests’ preferences even before they come aboard and come up with surprises like in-room drinks with their favorite vodka or Scotch.

[Woodsman]

Re: Towards a new Economics?

here's the solution...

I think other, more final solutions are in the works. I just finished this article in the Times about the staggering increase in suicides. When I correlate it with another recent article about the life expectancy of poorly educated whites, I'm immediately reminded of the tut-tutting articles about suicide, alcoholism, and diminishing life expectancy in late Soviet and post-Soviet Russia. Only the Russian press reported their sad conditions with seemingly more accuracy than our own paper of record.

Remember the Mort Sahl joke about the Times? “World Ends: Women and Minorities Hardest Hit.” I have to wonder what Mort might think of this little piece of journalistic malpractice? The Times reports on a study indicating suicides in men are 400% that of women but the writer and editors run the lede as:

"Suicide in the United States has surged to the highest levels in nearly 30 years, a federal data analysis has found, with increases in every age group except older adults. The rise was particularly steep for women.

U.S. Suicide Rate Surges to a 30-Year High"

Is it amateur hour at the Times? Why bury the lede and frame the data to show the problem is worse in women than in men? Why say female suicides have jumped 63% and male suicides only 43% when without context that means nothing? Why lead with the relative numbers and bury the absolute?

Unless the reader makes it all the way down to the very last graf they might never know that "..men over 75 still have the highest suicide rate of any age group" — 38.8 per 100K in 2014, compared with just 4 per 100K for female."

Why would the Times downplay the horror this bodes for men in particular and our society in general and take the view that it's women who suffer most? Why not reference the staggering statistic that men kill themselves at a rate 4 times that of women at the top of the story instead? The callous disregard for the lives of males is even more disheartening than the disregard for the facts. Be incompetence or malfeasance, but something must account for the editorial decision to misrepresent a study where suicides in men are 400% that of women as indicative of some jump in the suicide rate for middle-aged women. The data indicate a particular steep increase for men, not women.

And what the hell is with the charts? Does the Times give a shit about representing data clearly and accurately? The lines are supposed to suggest a relative increase or decrease in rates but end up doing more to confuse and mislead us away from the ugly reality shown in the data that men have been blowing their brains out at a rate of 4 times that of women for decades.

I think it also shows something particularly ugly about the editors and the Times that they frame the data to de-emphasize the victims of this mental health epidemic and most depressing temporal marker of life in 21st Century America. And they have the nerve to talk about "Bernie Bros?" Shameless propagandists. Thank goodness no one has to pay to read this rag.

[jk]

Re: Towards a new Economics?

i was also reminded of the soviet/russian decline in life expectancies post the dissolution of the ussr. i'm not as critical as you are of the times' report on the suicide statistics. men have ALWAYS committed suicide more than women. that's because they don't screw around - if they decide to do it they are very good at choosing genuinely lethal means to accomplish that end. so that's not NEWS, which is about changes and novel events. it would be like publishing an article that men have more alcoholism and women more depression. they could publish that article every day.

[shiny!]

Re: Towards a new Economics?

men have ALWAYS committed suicide more than women. that's because they don't screw around - if they decide to do it they are very good at choosing genuinely lethal means to accomplish that end.

jk, why do you think women are more half-hearted about attempting to take their own lives? Do the mental and physical biological factors that make women able to bring new humans into the world and nurture them, also make it harder to relinquish their connection to life, no matter how badly it sucks? Perhaps timidity in this application is biologically hardwired? There are always outliers in a bell curve of behavior, but I'm talking about the majority in the middle.

[jk]

Re: Towards a new Economics?

jk, why do you think women are more half-hearted about attempting to take their own lives? Do the mental and physical biological factors that make women able to bring new humans into the world and nurture them, also make it harder to relinquish their connection to life, no matter how badly it sucks? Perhaps timidity in this application is biologically hardwired? There are always outliers in a bell curve of behavior, but I'm talking about the majority in the middle.

i gather that in the recent statistics the life expectancy of white women actually dropped a month. the causes were alcohol, drugs and suicide. so maybe they're upping their suicide game. in general, though, people coming to e.r.'s for suicide attempts are either teenage or 20-something girls who cut their wrists or took an o.d. [and probably vomited it up]. suicide completers who go to the morgue are middle aged guys who shot or hung themselves, or did it with their car exhaust.

as to why middle aged women don't do it as much, i can only speculate. i think women may have more social supports. we know that unmarried men have shorter life expectancies than married men, while marriage doesn't affect women's life expectancies - probably related.

[shiny!]

Re: Towards a new Economics?

i gather that in the recent statistics the life expectancy of white women actually dropped a month. the causes were alcohol, drugs and suicide. so maybe they're upping their suicide game. in general, though, people coming to e.r.'s for suicide attempts are either teenage or 20-something girls who cut their wrists or took an o.d. [and probably vomited it up]. suicide completers who go to the morgue are middle aged guys who shot or hung themselves, or did it with their car exhaust.

as to why middle aged women don't do it as much, i can only speculate. i think women may have more social supports. we know that unmarried men have shorter life expectancies than married men, while marriage doesn't affect women's life expectancies - probably related.

Interesting. Approximately 1 in 4 middle-aged American women are taking antidepressants. Do more middle-aged women seek treatment for depression than do men? Or doctors prescribe more antidepressants to women then they do men? Either way, women are drugging their pain while men stuff it until they can't anymore. It's a sad state of affairs.

[jk]

Re: Towards a new Economics?

Interesting. Approximately 1 in 4 middle-aged American women are taking antidepressants. Do more middle-aged women seek treatment for depression than do men? Or doctors prescribe more antidepressants to women then they do men? Either way, women are drugging their pain while men stuff it until they can't anymore. It's a sad state of affairs.

the men drug it with alcohol which, unfortunately, tends to worsen depression a day or two after the brief euphoric buzz.

[Milton Kuo]

Re: Towards a new Economics?

I think it also shows something particularly ugly about the editors and the Times that they frame the data to de-emphasize the victims of this mental health epidemic and most depressing temporal marker of life in 21st Century America. And they have the nerve to talk about "Bernie Bros?" Shameless propagandists. Thank goodness no one has to pay to read this rag.

It is no mistake: it's been that way for decades. The New York Times and others of the so-called liberal press have skewed stories and ideas in a way to promote a certain agenda for a long time now. There is some legitimacy to some rather right-wing people about a predominantly liberal press that distorts the truth.

The recent cause celebre I'm constantly reading about is about the gender wage gap and the lack of women in STEM fields where the blame is focused on sexism or other imagined wrongdoings. I've found that the liberal press (I know these people are not liberals in the traditional sense of the word) somehow seem to control the media and they keep repeating a meme over and over until people finally accept it (most of the population) or give up and tune out. Isn't that what Goebbels said? "If you tell a lie big enough and keep repeating it, people will eventually come to believe it."

The press no longer reports the news; they attempt to make the news.

Until I caught on to the the strange bias in the news, I had always wondered why people who supported legalized abortion called it a Pro-Choice stance, which is somewhat easily confused with a Pro-Life stance. [Haha, I confused the two positions as I was typing them.]

[vt]

Re: Towards a new Economics?

Is Socialism the ultimate Oligarchy?

Is Fascism (National Socialists) Socialism that only tolerates large non government entities that work with them?

There are elites and corruption in Capitalism and Socialism.

The creative destruction of Schumpeter combined with non corrupt private enterprise and non corrupt government that regulates fairly with little red tape gives the greatest chance for the ideal economic system. In my humble opinion of course.

[LazyBoy]

Re: Towards a new Economics?

Until I caught on to the the strange bias in the news, I had always wondered why people who supported legalized abortion called it a Pro-Choice stance, which is somewhat easily confused with a Pro-Life stance. [Haha, I confused the two positions as I was typing them.]

I never found this confusing and I don't think it requires media bias. It's basic marketing. Pro-Choice sounds better than Anti-Life or Pro-Abortion or "I like killing babies". You could just as easily ask why they say Pro-Life instead of Anti-Choice or "I want to control your reproductive system". The groups chose those names not the media.

I find these names more confusing: "The Patriot Act", "Right to Work Laws", "Citizens United", and "The Internet Freedom Act."

But regarding liberal media spin, this one does confuse me: Why does the liberal media call the "Affordable Care Act" "Obamacare"? I assume the Right started it to associate it with a hated (in some circles) president. So now it's said like a swear word, as in "We don't want no Obamacare." Why does the liberal media go along with this, when "Affordable Care Act" would serve the liberal agenda better?