Back in the saddle next week. In the meantime, here are some thoughts on Economics.
Nobel Prize winner Daniel Kahnemann described his first brush with Economics this way in his Book, Thinking, Fast and Slow:
One day in the early 1970’s, Amos handed me a mimeographed essay by a Swiss economist which discussed the psychological assumptions of economic theory…I can still recount its first sentence: “The agent of economic theory is rational, selfish, and his tastes do not change.”
I was astonished. My economist colleagues worked in the building next door, but I had not appreciated the profound difference between our intellectual worlds. To a psychologist, it is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything by stable.Our two disciplines seemed to be studying different species.”
Guys like Kahnemann are turning Economics on its head. It’s about time. Some previous posts:
Generation 1099, February 2011
Employment as we have understood it for a hundred years is fading away. It is being replaced by what Bush II’s speechwriters called “The Ownership Society.” With each passing year, fewer and fewer us are formally employed and more of us work for ourselves (almost 1/3 of the workforce already), either as full-blown entrepreneurs or as independent contractors. It may feel scary, but on the whole, this could become a very, very good thing.
Economics is Broken, August 2012
Economics in our time is a philosophy dressed up in equations. That does not imply that economics is worthless, only that is should not be trusted to deliver precision or provable certainty.
Preparing for a Post-Jobs Economy, November 2013
Imagine a country in which everyone can feed themselves, pay for a minimal place to live, and get access to health care. No matter how ill, damaged, or even indolent they may be, their children have an opportunity to earn an education and develop their talent if they so choose. Those who choose to work hard can live a lifestyle we can scarcely imagine. The wealth available to those who are particularly successful is spectacular.
Those who don’t work hard or succeed, for whatever reason, still survive reasonably well. Their children will not be precluded from opportunities to develop their talent by their parent’s failures.
Notes from a Libertarian Paradise, February 2014
The people in Belize are no different from Americans. However, no one in Belize is building the next Google because they are still trying to get reliable access to the Internet. There are stark limits to what private entrepreneurial activity can accomplish without the power of an effective government.
Porn and the Future of Labor, November 2014
The porn business is dying. The forces destroying established business models in the industry offer some lessons about the future of other businesses in an age of accelerating technological dynamism.
A Fourth Era of Capitalism, October 2015
Social capitalism is an economic order in which social and political forces come together to cause market transactions to more competently incorporate formerly “external” costs. Industrial capitalists paid no price for polluting a river or destroying a forest. Under social capitalism, an increasingly equal distribution of power across a society provides methods to force those costs to be factored into market mechanisms. Under social capitalism, the division between labor and capital blurs to near-irrelevance. Meanwhile, an expanded commercialization of nearly every valuable resource leads to a sort of “commodification of everything.”
Were we better off as a country in an era of relative middle-income equality? Establishing some common ground for comparison among eras is as difficult as making comparisons across cultures. In the end, as in any assessment of values, subjective factors will tend to prevail. We can, though, establish a few empirical markers. One of the simplest comes from comparing our almost mythical imagination of 50’s middle class buying power to our present experience.