How to Use Economics and Not Be Used By Economists (6/6) — Lynn Fries interviews Ha-Joon Chang

Video and transcript.

... in the book I argue that there should be intellectual diversity within economics. I introduce no less than nine schools of economics, each with its own strengths and weaknesses, each with its own focus and specialty. And I argue that all of these different schools are necessary if you are going to fully understand the complex thing called the economy....

No one has the ocean in their bucket, regardless of how imposing the bucket.

..we have created a world where economists are impervious to outside scrutiny, and economists do not have to subject themselves to public debate. They can just browbeat the general public, saying well, we know what you don't know. We have all these sophisticated mathematical models that proves this, proves that. And that closing off of public debate in the area of economics I think has been very important in weakening our democracies.

So my hope in writing this book was to tell people, look. I mean, economics is not that difficult. You know, anyone with secondary education can understand the basics of it, and by getting rid of that aversion or even fear about economics, I think that this book will contribute to encouraging people to engage in more vigorous debate on economic issues. And through that, I hope to contribute to the promotion and strengthening of democratic debate.

Amen. Otherwise we are toast and that could be literally.

Real News Network
How to Use Economics and Not Be Used By Economists (6/6)

Lynn Fries interviews Ha-Joon Chang

Starting With The Basics ... Explaining Fiat Currency Operations To A DoD Lobby That Either Doesn't Understand .... Or Worse

   (Commentary posted by Roger Erickson)

Our core task is to explain fiat currency operations to at least 10% of our electorate. Until we reach that stage ... does anything else matter ... any more than pissing into the wind?





The following article contains the tired old argument about "money."

"Retiring the A-10 fleet will save a lot of money, and these days saving money is a necessity, not an option."

Doing The Math: Saving A-10s By Cutting F-35s

As long as the proverbial TINA is still in charge of policy, how does one dig into the operational details, without first clearing the Pink Elephant from the room, to reduce the fog and get a bit more clarity on context? First things first!

For those who want "MMT" to go "farther," why not first solidify step one? First, get an adequate threshold % of the electorate - and the leaders they elect - to simply be AWARE of the most basic operational details of a fiat currency system? Say, 10% of voters? That's in the range of 15 million people familiar and comfortable with fiat currency operations. Until then, since data is meaningless without context, it doesn't matter how much data you dig into if you misread context from the get go.

The only thing worse are those Control Frauds who actually may understand .. but purposely mislead their fellow citizens. There's no doubt that such frauds also exist, throughout the K-Street MICC lobby, and also within Congress (and the electorate too - lets be honest).

Where to start? How simple can we make a prerequisite consensus, beyond which most discussions are premature? Here's one brief reiteration of what's been said countless times the last 9 years ... (since I 1st met Warren Mosler).

***

We've been on a "fiat" currency system since 1933.

Tell me. How, exactly, does one "save" fiat? aka, Public Initiative? And, should we EVER leave initiative unused?

If politicians are going to discuss "money," they should at least be aware of the operational details. You don't send soldiers into the field who can't disassemble/reassemble their weapons in the dark - precisely because they then know what operations are and aren't possible. Similarly, you don't let politicians set policy who can't understand the 1st thing about fiat currency operations. Good lord!

We set objectives, assign roles, and pay each other with "liquid" chits called our national currency. That allows a growing Policy Space and Agile Policy - things you need for national security and national resiliency.

The main responsibility is to avoid irrational levels of inflation (nowhere in sight) or deflation (a current reality). Oh .. and set Desired Outcomes worthy of this electorate. That, and don't allow extreme, class-based wealth disparity. That's like letting Generals hoard all the weapons .. and expecting a functional army (or economy).

Of course, to do that, we need an electorate that can select leaders who listen to all, enunciate Desired Outcomes, and NEVER TELL PEOPLE "HOW" TO DRIVE DISTRIBUTED INNOVATION.

***

While that terse approach may resonate with SOME DoD staff, the same message will have to be stated 1001 different ways, with different words, before the growing diversity of people in this electorate get the message. We clearly have over 14 million people to recruit .. just to get to 10%.

Diversity Minus Selection Is Meaningless - Just Stockpiling Static Assets

   (Commentary posted by Roger Erickson)

In 1929 [Leslie] White ... realized that socialism was the alternative to capitalism, which was in serious trouble through the 1930s.

A critical attack from Maxim Gorky, claiming that White was not a Marxist and not a Communist but a bourgeois evolutionary scientist who dealt with human problems only through science"

Now THAT is academic infighting! :) Wow! Would that still be classified as criticism today? Sadly, yes, in many circles, for diverse reasons.

How do you get people to explore their options?

Well, first you have to circumvent their life-threatening taboos.

I'm liking this Leslie White. Sounds like he recognized how deeply our processes were flawed, but never quite figured out how to do anything objective about it. 

What tipped him off? One hundred thousand years of exquisitely adaptive & evolving tribalism?

What do you do when you subconscious tells you that NOTHING we are doing currently is accelerating selection, and instead is only building up surplus diversity .... which we may, might, SOMEDAY, maybe actually select from?

What'd Walter Shewhart say? That data minus context is meaningless?

Then simple algebraic substitution leaves us with the following:

"Diversity minus selection is meaningless."

You want a case in point?

Let's start with the axiom that adaptive rate is always the rate-limiting issue, in every profession, within every culture.

So, in all seriousness, what avenues and methods would have triggered a far faster change in economic textbooks, teaching and policy advice?

Note that the recent Bank of England summary of operational reality came 81 years after Marriner Eccles finally took the USA off the gold-std and completely reinvented the FED.

81 years? Seriously?

We'd still be working on the Atomic bomb if physicists worked that slowly!

Some university physics departments probably wouldn't even be teaching relativity or quantum mechanics yet!

If other disciplines shared information that slowly, half of practitioners in relevant fields wouldn't know about DNA, or turbo-charged engines, or autism ... or most other operational advances.

Didn't the UK go off the gold-std a few years before the USA did? I have no idea how much the BoE changed, relative to FED adaptations. Given that the UK also went to a fiat currency, the main adaptations were presumably similar, from the get-go?

Personally, I think that that the topic of Adaptive Rate in Academic Economics is deserving of one helluva serious review paper, targeting the state of economics education. Objectively measured, it's adaptive rate might be honestly estimated at near zero.

Plus, trying to standardize academic economics research & teaching across national policy regimes is mal-adaptive, by definition.

Can't Get More Straightforward Than This

commentary by Roger Erickson

A Question, Answered by Warren Mosler

Japan, US, ECB, they're all just bureaucracies doing what they do ... nothing ... until absolutely forced to, kicking & screaming.

Plus, it gets worse. It's hard to self-tune & select well from a pool of options you refuse to adequately fill. If you limit your options & reduce baseline diversity ... voila ... you steadily degrade the statistics & probability of making high quality selections. Duh!

Selection & option-diversity go hand in hand, inseparable, catalyzed by threshold liquidity & distributed initiative.

What part of 2-stage optimization don't bureaucrats get?

It doesn't matter what wave you select if you don't paddle your surfboard far enough out into the damn ocean!

This ain't rocket science. Just bureaucracy in inaction.

Hamid Dabashi — Can non-Europeans think?

What happens with thinkers who operate outside the European philosophical 'pedigree'?

Al Jazeera
Can non-Europeans think?
Hamid Dabashi | Hagop Kevorkian Professor of Iranian Studies and Comparative Literature at Columbia University

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