Posts Tagged ‘economics’

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Economics as a moral science

November 1, 2013

INGRID ROBEYNS: For a while I have been working on a paper on democracy, expert knowledge, and economics as a moral science. [The financial crisis plays a role in the motivation of the paper, but the arguments I’m advancing turn out to be only contingently related to the crisis]. One thing I argue is that, given its direct and indirect influence on policy making and for reasons of democratic accountability, economics should become much more aware of the values it (implicitly or explicitly) endorses. Those values are embedded in some of the basis concepts used but also in some of the assumptions in the theory-building.

The textbook example in the philosophy of economics literature to illustrate the insufficiently acknowledged value-ladenness of economics is the notion of Pareto efficiency, also known as ‘the Pareto criterion’. Yet time and time again (for me most recently two days ago at a seminar in Oxford) I encounter economists (scholars or students) who fail to see why endorsing Pareto efficiency is not value-neutral, or why there are good reasons why one would not endorse the Pareto-criterion. Here’s an example in print of a very influential economist: Gregory Mankiw.

In his infamous paper ‘Defending the One Percent’ Mankiw writes (p. 22):

“Discussion of inequality necessarily involves our social and political values, but if inequality also entails inefficiency, those normative judgements are more easily agreed upon. The Pareto-criterion is the clearest case: if we can make some people better off without making anyone worse off, who could possibly object?”

Continue at Out of the Crooked Timber HERE

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Radical Centrism: Uniting the Radical Left and the Radical Right

April 16, 2013

Pragmatic Centrism Is Crony Capitalism.

Neoliberal crony capitalism is driven by a grand coalition between the pragmatic centre-left and the pragmatic centre-right. Crony capitalist policies are always justified as the pragmatic solution. The range of policy options is narrowed down to a pragmatic compromise that maximises the rent that can be extracted by special interests. Instead of the government providing essential services such as healthcare and law and order, we get oligopolistic private healthcare and privatised prisons. Instead of a vibrant and competitive private sector with free entry and exit of firms we get heavily regulated and licensed industries, too-big-to-fail banks and corporate bailouts.

There’s no better example of this dynamic than the replacement of the public option in Obamacare by a ‘private option’. As Glenn Greenwald argues, “whatever one’s views on Obamacare were and are: the bill’s mandate that everyone purchase the products of the private health insurance industry, unaccompanied by any public alternative, was a huge gift to that industry.” Public support is garnered by presenting the private option as the pragmatic choice, the compromise option, the only option. To middle class families who fear losing their healthcare protection due to unemployment, the choice is framed as either the private option or nothing.

In a recent paper (h/t Chris Dillow), Pablo Torija asks the question ‘Do Politicians Serve the One Percent?’ and concludes that they do. This is not a surprising result but what is more interesting is his research on the difference between leftwing and rightwing governments which he summarises as follows: “In 2009 center-right parties maximized the happiness of the 100th-98th richest percentile and center-left parties the 100th-95th richest percentile. The situation has evolved from the seventies when politicians represented, approximately, the median voter”.

Excerpt from a text written by Ashwin at Macroeconomic Resilience. Continue HERE. Image via Wiki

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The Fundamental Units: A Microscopic View of the World Economy

April 12, 2013

The lowest domination coin from each of the world’s currencies imaged by the Advanced Engineered Materials Group at the National Physical Laboratory, using an Alicona infinite focus 3D optical microscope. These are small low resolution versions from orginals containing over 400 million pixels.

“The economic system, which has raised to such notorious prominence in recent years because of its obvious impact on our lives, is a complex structure whose functioning is increasingly necessary to understand and, as much as possible, to predict or even control. In this sense, and in response to the dominance of macroeconomics in the discourse of the media, the artist chooses a microscopic view of the world economy. The Fundamental Units, a series that begins with the works produced by Horrach Moyà Gallery for this exhibition, is an exploration of the lowest denomination coins from the world’s currencies using an infinite focus 3D optical microscope at the National Physical Laboratory in Teddington (UK). The images obtained with the microscope have been combined to form an extremely detailed large scale reproduction of the least valuable coins from Australia, Chile, the Euro, Myanmar and the Kingdom of Swaziland. In these images the humble metal acquires a planetary dimension and is displayed as the atoms that shape the global economy”. – Pau Waelder, Curator

Text and Image via The Fundamental Units

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Bitcoin Explained: A short video looking at ‘Bitcoin’, a decentralized digital currency

April 11, 2013

Bitcoin is a decentralized digital currency based on an open-source, peer-to-peer internet protocol. It was introduced in 2009 by a pseudonymous developer, Satoshi Nakamoto. Bitcoins can be exchanged through a computer or smartphone locally or internationally without an intermediate financial institution. In trade, one bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

Bitcoin is not managed like typical currencies: it has no central bank or central organization. Instead, it relies on an Internet-based peer-to-peer network. The money supply is automated and given to servers or “bitcoin miners” that confirm bitcoin transactions as they add them to a decentralized and archived transaction log approximately every 10 minutes.

Text via Bitcoin Wiki

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The History of Debt

March 8, 2013

Throughout its 5000 year history, debt has always involved institutions – whether Mesopotamian sacred kingship, Mosaic jubilees, Sharia or Canon Law – that place controls on debt’s potentially catastrophic social consequences. It is only in the current era, writes anthropologist David Graeber, that we have begun to see the creation of the first effective planetary administrative system largely in order to protect the interests of creditors.

What follows is a fragment of a much larger project of research on debt and debt money in human history. The first and overwhelming conclusion of this project is that in studying economic history, we tend to systematically ignore the role of violence, the absolutely central role of war and slavery in creating and shaping the basic institutions of what we now call “the economy”. What’s more, origins matter. The violence may be invisible, but it remains inscribed in the very logic of our economic common sense, in the apparently self-evident nature of institutions that simply would never and could never exist outside of the monopoly of violence – but also, the systematic threat of violence – maintained by the contemporary state.

Excerpt from an article written by David Graeber at EuroZine. Continue HERE

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Can Territorial Morphology Determine Economic Success and Political Viability?

February 14, 2013

Do Norwegians feel curiously at home in Chile, and vice versa? Do South Africans have a strange affinity with Italians? And Filipinos with Maldivians? They should, at least if they’re map nerds: each lives in a country with a territorial morphology that closely resembles the other’s.

Although they’re on opposite sides of the globe Chile and Norway are each other’s type, morphologically speaking: elongated to the extreme.

From east to west, Chile on average is just 150 miles (240 km) wide, which is the distance from London to Manchester, or New York to Baltimore. But from north to south, it measures 2,700 miles (4,300 km), which takes you from London to Tehran; or New York to Los Angeles. This makes Chile the world’s most stretched-out country – 18 times longer than it is narrow.

The Five Types of Territorial Morphology sounds like a fun parlour game, at least in cartophile circles (is Portugal compact or elongated? Is or isn’t Somalia prorupt? Does New Zealand qualify as fragmented?) But there is a serious, geopolitical concern behind this attempt at classification. For a country’s shape has a profound impact on its economic success, and even its political viability.

Excerpts from an article written by Frank Jacobs. Continue HERE

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Wittgenstein’s Master: Frank Ramsey, the genius who died at 26

January 28, 2013

Frank Ramsey was 26 years old when he died after an operation at Guy’s Hospital in January 1930. In his short life, he had made lasting contributions to mathematics, economics and philosophy, and to the thinking of a number of his contemporaries, including Ludwig Wittgenstein.

When I taught at St Anne’s, Oxford during the 1980s, I was introduced by my colleague Gabriele Taylor to Ramsey’s sister, Margaret Paul, by then retired from teaching economics at Lady Margaret Hall college. As with anyone with some knowledge of the fields of enquiry Ramsey influenced, I was immediately recruited into helping with her research into his life and thought, though in a minor capacity; she had a formidable array of other helpers besides, from eminent philosophers like Taylor and PF Strawson onwards.

Frank Ramsey was 18 when Margaret was born, so her own memories of him were those of a little girl. A large part of her motivation in writing about him was to get to know him. In this quest she was equally tireless and scrupulous. Most aspects of his work require advanced technical competence, but she was determined to understand them; an afternoon at her house talking about him could be as gruelling as it was educative.

Excerpt from an article written by Margaret Paul. Continue HERE