Our challenge: surviving the rule of economists 9

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1. 

   TariffDude Posted 5:51 pm
   02 Dec 2007

   BaggageExactly, I've always felt that economics was a red herring.  Bjorn Lomborg says we get more benefit just using the oil, the Stern review says it will end up costing us more.  But the monetary cost doesn't intrinsically mean anything, since it's tied to subjective assessments of value.  The best way to look at it is in terms of physical reality and our maximum potential.  If all human agency were directed towards solving a problem, at arriving at an ideal state, for example where we don't get any energy from fossil fuels, that could probably be achieved in purely physical terms in a matter of years.  That's why WWII is such a popular point of comparison when climate change is discussed - because that much mental consonance directed benevolently eliminates problems efficiently.  If it were cheaper to kill someone than not to, (say a rich guy whose money you could steal and flee the country never to get caught, guaranteed) most people wouldn't do it because it's wrong.  It doesn't really matter how much it costs to drive an SUV, it's just not the right thing to do to overconsume.  Same with famine as you mentioned.  There's more than enough food in the world to feed everyone, yet such is not the case.  How is economics not the problem, much less the solution?  It's time to remove arbitrary "costs" from our thinking about solving problems in the world.

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2. 

   stevenearlsalmony Posted 9:54 pm
   02 Dec 2007

   Godspeed to participants in Bali Climate MeetingFrom my perspective, we have a remarkably large and loud number of people, many of them are our leaders, who are denialists and naysayers with regard to the science of global warming. They have been doing what they are doing now during much of my adult life. What they are saying and doing, I suppose, is derived from one form or another of self-interested-thinking. At least one consequence of their widely shared and consensually validated way of viewing the world could lead the human community into danger. Let me say more now about what I mean.
   Self-interested-thinking is potentially dangerous because it serves to hide the truth of global warming, among other things, as well as "poison the well" of public discourse regarding climate change.
   Too many of our politicians, economists, big-business benefactors and the talking heads in the mass media are all "whistling the same tune." What is even worse is the way they entice many appointees and surrogates to whistle that same tune, too. After all, who can resist offerings of great wealth, power and privileges that accrue to those who go along with one's self-interests, with whatsoever is political convenient, economically expedient, religiously tolerated and socially agreeable. In the face of such temptation, we can readily understand why the scientific gains of the IPCC would be everywhere, in every way, rejected by the denialists and naysayers. The science from the IPCC could forcefully impede their acquisition of more wealth, more power and more privileges.
   Not only are too many leaders trying to hide or otherwise deny the good scientific evidence of human-driven climate change, they are also actively involved in poisoning the well of public discourse by strategically disseminating disinformation. And for what? Evermore power, wealth and privileges for themselves and their minions so they can carefreely play out the "conspicuous consumption fantasies" of their "Me Generation" by living large and unsustainably, come what may, having forsaken the future of their children and forgotten how human life depends upon Earth's limited resources and frangible ecosystem services for its very existence.
   It seems to me that the human community has reached a crossroads in Bali, Indonesia, December 2007: EITHER we will choose to "stay the current course" of endless economic growth, ever increasing conspicuous per capita consumption and skyrocketing human population numbers OR we will find other ways to go forward. If these distinctly human overproduction, over-consumption and overpopulation activities we see overspreading the surface of Earth are unsustainable, then I am going to suppose we will insist upon some changes in our behavioral repertoire so that sustainable ways of living in the world are proposed by policymakers and adopted by our leaders.
   With thanks to you,
   Steve
   Steven Earl Salmony
   
   AWAREness Campaign on The Human Population
   
   http://sustainabilitysoutheast.org/

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3. 

   gmobus Posted 12:06 am
   03 Dec 2007

   Energy is the only real currencyI have always been amazed at how economists have missed one of the most obvious facts of the real world - that energy is the real currency of the world system. Money is nothing more than a signaling mechanism regarding the amount of free energy available in the system. The coinage of the realm is used to form messages about the availability of energy to do useful work. It is not the work itself.
   All work requires the flow-through of energy. And by the Second Law of Thermodynamics, once energy is used up in doing work, it is lost as waste heat. So unlike material, which can in principle be recycled, energy flows in one direction, into, through, and out of the system. The so-called economic growth of the past century has been fueled by easily extracted fossil fuels, increasing the energy input per unit time. Our experts - the economists - have never understood that it was the energy flow that allowed this exuberance. Fuel is treated more-or-less like any commodity with prices speculated on and a dollar price set. The problem is the dollars should be attached to the number of BTUs available. The commodification of fossil fuels and the speculative trading distorts the monetary system's ability to represent reality and value.
   To be sure energy coupled with human cleverness (at finding ever new ways to waste the energy in their ignorance) could provide for a sustainable 'economy' if 1) the energy is renewable, 2) the population were substantially smaller and in steady-state, and 3) each individual consumed a much smaller amount of energy than the typical American today so that the sum used equaled the sum gained. Then, through technologically reasonable conversion rates (raw solar to high-potential free energy) we could enjoy an economy where human ingenuity results in what Buckminster Fuller called ephemeralization - doing more with less.
   Given that the prevailing Zeitgeist holds that growth of the GDP is an economic good, contraction of the energy flow after say, peak oil, will be viewed depressingly. Its a shame.
   But maybe stories like this will help wake people up. After all, Kahnemen & Tversky did much to dispel the belief that humans are rational agents, a cornerstone of neoclassical economics. Maybe with oil prices so high they will begin to understand the relationship between money and energy.
   George
   
   http://www.questioneverything.typepad.com/
   
   George Mobus, Professional Student for Life

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4. 

   odograph Posted 12:17 am
   03 Dec 2007

   externalitiesYou know, on other econ-friendly sites (pro-market and libertarian sites) I answer those with a shallow view of the free market with "externalities."
   When you honestly include the externalities, economics becomes environmental.
   I think JMG's choice of an article opposing "economics" by endorsing "chemical fertilizer" is an odd one for Grist, but ...  wouldn't we need to use the language of economics and externalities to understand how damaging (if at all) this program of chemical agriculture is?  And how the costs and benefits of a sustainable alternative would fare?
   (It's almost as if the the free-market ankle-biters prefer the same shallow definition of "economics" as do the critics of the free market.)

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5. 

   JMG Posted 11:37 am
   03 Dec 2007

   The same shallow definitionYes, if we redefine economics to mean a discipline that is completely unlike the religion actually practiced under that name today, we could imagine an economics that might help us deal with our multiple crises rather than be the political/academic equivalent of the curse of Sisyphus upon us.
   As for Malawi and fertilizer, sure it's not optimal that, like many places in the world, the soil is going to have a really hard time supporting all those people once peak oil really takes hold and petrochemicals skyrocket even further.  
   But the hopeful point of the story is there: any society that can throw off the religion of economics and tell the economic priesthood to pound sand is taking a major step towards seeing the world as it actually is, which is the first step towards sustainability.  Absent IDB/World Bank pressure to adopt the imperial neoliberal program, the people of Malawi might well be able to manage the transition to sustainable agriculture without a tremendous disruption.
   I have to say that Mobus nicely summarized where my thinking has tended to go lately; what we need is a currency/credit system that caps the growth in the money supply to the growth in the actual amount of energy sustainably captured each year, with deductions for amounts drawn down that is nonrenewable.  THAT would create the right incentives for the kinds of policies we need across the board.
   
   Save the world: Reduce greenhouse gas emissions 5% annually.

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6. 

   amazingdrx Posted 2:12 pm
   03 Dec 2007

   Wide stanceThe toe tapper is going to Bali.  Of course he doesn't believe in GHG climate change.
   It's a liberal conspiracy, like gay marriage.  Gawd speed Sen. Craig.
   
   http://amazngdrx.blogharbor.com/blog

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7. 

   odograph Posted 10:35 pm
   03 Dec 2007

   economics"Yes, if we redefine economics to mean a discipline that is completely unlike the religion actually practiced under that name today, we could imagine an economics that might help us deal with our multiple crises rather than be the political/academic equivalent of the curse of Sisyphus upon us."
   As practiced where?
   I think you are peeling off a popular-press economics, a political economics, and claiming that is the rational discipline.
   Think of the parallel with global warming ... do we fault "science" because deniers misuse it to make shallow and misleading arguments?

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8. 

   Tom Philpott Posted 11:40 pm
   03 Dec 2007

   Post-autistic economicsFrom A Brief History of the Post-Autistic Economics Movement:
   Theories, scientific and otherwise, do not represent the world as it is but rather by highlighting certain aspects of it while leaving others in the dark.  It may be the case that two theories highlight the same aspects of some corner of reality but offer different conclusions.  In the last century, this type of situation preoccupied the philosophy of science.  Post-Autistic Economics, however, addresses a different kind of situation: one where one theory, that illuminates a few facets of its domain rather well, wants to suppress other theories that would illuminate some of the many facets that it leaves in the dark.  This theory is neoclassical economics.  Because it has been so successful at sidelining other approaches, it also is called "mainstream economics".
   From the 1960s onward, neoclassical economists have increasingly managed to block the employment of non-neoclassical economists in university economics departments and to deny them opportunities to publish in professional journals.  They also have narrowed the economics curriculum that universities offer students.  At the same time they have increasingly formalized their theory, making it progressively irrelevant to understanding economic reality.  And now they are even banishing economic history and the history of economic thought from the curriculum, these being places where the student might be exposed to non-neoclassical ideas.  Why has this tragedy happened?
   Many factors have contributed, but three especially.  First, neoclassical economists have as a group deluded themselves into believing that all you need for an exact science is mathematics, and never mind about whether the symbols used refer quantitatively to the real world.  What began as an indulgence became an addiction, leading to a collective fantasy of scientific achievement where in most cases none exists.  To preserve their illusions, neoclassical economists have found it increasingly necessary to isolate themselves from non-believers.
   
    
   
   Victual Reality

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9. 

   odograph Posted 2:01 am
   04 Dec 2007

   strategyI think it is a (egregious) strategic error to yield to "bad economics" all that is "economics."
   Mainstream economics understands, and broadly endorses, Pigouvian taxes and yet somehow the far right and the far left want to ignore that.  They both prefer their straw men.
   Criticisms like the "post-Autistic" essay above cut at an angle to that.  I believe, for instance, that Pigouvian taxes are "neoclassical".
   Nonetheless we Gristers call for Pigouvian taxes daily!

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