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Overreliance on the Pseudo-Science of Economics
Overreliance on the Pseudo-Science of Economics
Every year a Nobel Prize in Economics is awarded when in fact there is no “Nobel Prize in Economics.” There is only a “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” That prize, which was invented by the Swedish central bank nearly 75 years after Alfred Nobel’s death, is an annoyance to the recipients of the five actual Nobel Prizes, those scholars from excluded scientific disciplines such as astronomy, and a living descendant of the donor, Peter Nobel, who has denounced it as a “PR coup by economists.”
This raises the question: Have we given economists too much authority based on mistaken views about their scientific reputation among established scientists and the public?
When asked about the degree to which various academic fields can be considered “scientific,” the American public is decidedly more mixed toward economics, ranking it well below established scientific fields such as physics or biology, and even below sociology.
…click on the above link to read the rest of the article…
A Year Without the Colorado River, as Seen by Economists
A Year Without the Colorado River, as Seen by Economists
Imagine if each tap that delivered water from the Colorado River – whether to a farm, a factory, or a home – suddenly went dry for a year. What would happen to the West’s economy?
That’s pretty much the question a team of researchers at Arizona State University set out to answer – and the results are startling.
The region would lose $1.4 trillion – that’s trillion, with a “t” – in economic activity, along with 16 million jobs.
Each of the six states – Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming – plus seven southern California counties supplied by the Colorado River would see losses to their gross state product (GSP) of half or more. Nevada’s would drop by 87 percent.
Commissioned by Protect the Flows, a coalition of over 1,000 businesses, the study reveals how crucial the Colorado River is not only to these seven states that make up the watershed, but also to the nation as a whole.
Of all the water used in the basin, 43% of agriculture’s supply and 41% of municipal and industrial supplies come from the Colorado River.
…click on the above link to read the rest of the article…
The Most Common Error in Economic Debates |
The Most Common Error in Economic Debates |.
The Problem of Contingent Data
Have you ever been in an argument about whether we should raise taxes and then someone tosses out a real whopper? “The top tax rate for decades after World War II was over 90% and look how the economy boomed!”
Or perhaps you read a Paul Krugman column where he said that, “there’s a big problem with the claim that monetary policy has been too loose: where’s the inflation [he means rising prices]?”
Both the Internet troll and Professor Krugman are making the same mistake. Let me explain.
Economists love to use the Latin phrase ceteris paribus. It means all else being equal. It’s great in a thought experiment. For example, what would happen if we made a change in America today? Suppose we criminalized all use of fossil fuels. We can’t really do that (I hope!) but it can serve a pedagogic purpose.
It should be pretty obvious that the consequence of shutting off the motors is to shut off production, and people will soon starve. If this isn’t obvious, then you don’t need my blog entry on economic argumentation. You need The Moral Case for Fossil Fuels by Alex Epstein.
Every economist is aware that in comparing a historical time to the present, or comparing two different countries all else is not equal. There is not one difference between the immediate postwar period and today. There are innumerable differences. You can’t just assume that the one difference you’re debating is the only one that matters.
