Tyler Cowen: Economics trumps politics.
John Carney: Politics trumps economics, especially in a modern democratic state like the US.
John Carney is right. Tyler Cowen is spouting ideology (as usual).
What Cowen describes is a situation in which America is ripe for a political and social revolution. You can keep some of the people down most of the time, you can keep most of the people down some of the time, but you can't keep most of the people down most of the time. Not in the United States.
Far more likely, long before we ever get to Cowen's ugly world, people will decide that there are better ways of taking care of themselves than submitting to a economy that only has room to keep the top 10 percent comfortable. That could mean hugely redistributive taxes. It could mean some form of economic protectionism. Or perhaps some Very New Deal we haven't yet conceived. Even if these are in fact economically destructive, I think many people would prefer to live in a society that is poorer overall but in which the middle-classes and lower-classes aren't impoverished.
Capitalism has been the most successful program of the modern era. It has improved the lives of millions. If Cowen is right and it's next phase is widespread lowering of the standards of living for most Americans, it's days are numbered.CNBC NetNet
Will underachievers have to eat more beans?
John Carney | Senior Editor
Tyler Cowen's new book is Average Is Over. "Average" usually implies mean, when median and mode are more significant socially, politically and economically, especially when the distribution isn't normal, with most of the bell indicating the middle class and the tails the rich and poor. As the middle class slips into poverty, inequality rises, and more people fall behind, as Cowen projects, this eventually has social and political consequences in addition to economic. Cowen seems to think that tacos and gadgets are going to be the new bread and circuses. John Carney doubts it, and so do I. Get ready for the revolution.
This is chiefly about the US and by implication the developed world, But it is also the trend globally as the ultra-rich increase proportionately and emerging nations fall at the Lewis turning point to generate a solid middle class, the result being a have and have-not world. I don't think that this is viable, either, and if it is the outcome of neoliberal capitalism, so much the worse for that system. It cannot survive socially and politically as the level of collective consciousness rises worldwide.
11 comments:
If Tyler Cowen wants to get all mystical on himself, he should consider that justice eventually trumps everything and get on the right side of it.
" I think many people would prefer to live in a society that is poorer overall ..."
Pope Francis 101 imo....
Cowen: "whose self-motivation and mastery of technology will allow them to roar away into the future..."
On 'Instagram'? 'Twitter'? 'Facebook'? Video games? Assassins Creed? LOL!
"Zoom to the future!" this is rich... Dan's not going to like Cowens book methinks...
Politics trumps economics as a course of action…unrelated to whether it will work or not (unlikely)..
Of course we have to define economics first…unfortunately no one knows what it is…even (especially) the ones that claim to.
I'll stick with science…the money system.
Unfortunately, politics trumps that also, with the same result.
Paul the word actually means 'house-law' and law comes out of the political process.... its like the product of the political process...
So I don't know if it is correct context to even think of one trumping the other like they do here...
The context here is like 'economics' is out of our control or something.... like it is a natural science ... F=ma and S=I type thing... "the invisible hand", etc.... crazy!
Our political process directly produces our economics is the way I look at it...
Bill Mitchell said one time "if you want to increase employment then employ people...." pretty simple unless you think "we are out of money..."
And we don't have to 'eat beans' (bad metaphor as 'beans' so-called 'Mexican Food' is REALLY GOOD imo! washed down with a Dos Equis!) or otherwise settle for poverty like the Pope is advocating for if we don't want to...
What are Cowen's 'high achievers' going to be working on? If all of these people think 'we are out of money'?
The issues with energy, transportation, healthcare, environment, etc.. are still there as they always have been and they are not on video games they are REAL things that need REAL people, doing REAL work to construct and maintain them...
Cowen is caught up in all the hoopla of this latest round of BS IT mania with Pinterest/Facebook/video games and BS just like I remember "Dr Koop.com" back in the year 2000.
rsp,
Matt, yes you're right.
Politics doesn't "trump" economics…it is powerless to do anything wrt economics…if we consider economic reality, which depends on input from the money system.
What reasons do people have to suggest or believe that the world (economy) which has been constructed by man, cannot be re-constructed by man?
In general terms, modern capitalism has been granted it's place in the world using the argument that it was required for democracy to take hold and that each would be rewarded in proportion to their contribution.
We know that China has thoroughly discredited the democracy argument and the reward in proportion to contribution et al has long since left the building. I would argue that the massive inequality in national income and wealth is evidence of this.
Regardless, the current system is failing the majority of citizens of the nation. Similar trends exist in many if not all other nations as well.
If the intelligentsia begins to argue that a lowering of living standards is acceptable in the face of extremes in inequality, then I suspect the hollowness of their position will lead to their downfall.
Tyler Cowen's narrative has been used for decades. You can not compete in the industry that you want to work in. We are going to destroy it, and you can work in this other industry, but you have to jump through 12 hoops and stand on one leg, oh and the pay kind of sucks compared to your old pay and there are no benefits and no stability. But this is the future. You can work at mc donalds or healthcare or STEM or hedge frauds if you don't like it.
I know I'm supposed to shut up, call for larger deficits and act like I'm just grateful I get the barely livable wage, play the job hunt game, primp and work hard, continuously re-educate in the latest doctrine to be socially acceptable while you take $20,000,000 for marketing your sneakers and running investment banks and pay bureaucrats off. You pay the back office $2.00 a day to work and the world marvels at your 'productivity'.
It is hogwash.
We can pick and chose which industries we want. We can outsource all the flipping economists and professors and CEOs and keep all the hula-hoop and beer making here if we choose. The decisions by industry, politicians justified with the 'research' of academics serve their own purposes to maximize profits, research dollars and the number of people attending educational institutions. It has nothing to do with comparative advantage, game theory or any such high minded consideration.
A country offers to build your company a new plant, for basically free, staff it with 40,000 college/technical educated people that will work for 2.00/day and gives you no interest loans with no environmental regulation or workers comp or a tax-free decade. You don't have to pay for any automation, or anything really. All you have to do is ship your knowledge and equipment and train the people. The whole notion that profit seeking drove the process, come on!, political leaders drove the process without any regard for any of that, they subsidized the companies to fat profits to promote strategic goals in their country. No free market about it. No invisible hands. No Krugman "New Trade" theory. Even between the US and Mexico and Canada, we play these games of strategy. Any slim margin of productivity improvement by trade theory is completely negated through politics and subsidy considerations. Get real.
Keeping the score in the economy isn't complicated or difficult and the games of claiming we are too stupid to understand the simple concepts, they are over. We know your game and it is simple.
Righteous Ryan!
"What reasons do people have to suggest or believe that the world (economy) which has been constructed by man, cannot be re-constructed by man?"
It can be re-constructed by Man as long as Man follows the laws of the universe with the blueprint.
The only laws of the universe that apply to economics are those of the natural sciences, those that govern real resources and their use, and especially the life sciences since humans are a life form.
The other laws that govern economics are positive law created by humans and subject to change by humans.
However, the "laws of thought" (logic) also apply, that is, the formation and transformation rules in any particular context.
For example, equality and identity apply in virtually all mathematical contexts since they are tautologies.
There are also positive rules that are somewhat arbitrary, like accounting rules that can vary among jurisdictions. But the basic rule of account balance that implies accounting identities applies generally.
These laws and rules, natural and positive, establish the boundary conditions for possibilities of human choice. There is quite a bit of possibility space within the boundaries open to choice.
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