comments on rwer issue no 88

  1. John Boone
    July 10, 2019 at 10:30 pm

    Statistics is also used in psychological studies and in medical studies. Economics is comparable in its diverse complexity like these fields. I find the author’s argument unconvincing when he says that predictive (statistical) analysis should not be used in economics (it is a short step to say that it should not be used in the fields of psychology and medicine as well).

  2. Ikonoclast
    July 12, 2019 at 2:27 am

    Re. “Real GDP: the flawed metric at the heart of macroeconomics” – Blair Fix, Jonathan Nitzan and Shimshon Bichler

    The authors say: “differential measures of money income and assets –unlike “real” utilitarian magnitudes – can be studied objectively.”

    Am I right in assessing that this procedure would switch the focus of money measures from “real” growth of the entire economy to relative shifts in income and wealth for different persons, or classes of persons, in the economy? Thus we would know, from this measure alone, if inequality was rising or falling across an economy but we would not know if the economy was growing in the “real” or the real sense: “real” meaning as measured by inflation adjusted GDP and real meaning as measured by real biophysical measures. This conceptual and indeed sociopolitical-epistemological shift to a construction of genuine knowledge (as opposed to the construction of GDP which is a construction of pernicious falsehoods) would be highly useful in my opinion.

    Of course, real growth (quantitative or qualitative) would have to be measured by biophysical measures as given by the energy example in the paper (and accepting that a mere increase in raw energy use might be constructive, wasteful or destructive). The next set of biophysical measures worth studying would be those related to human health, education and general welfare. If the number, range and impact of curable diseases in the population (and in all classes) is measurably reduced over a period then this equates to real growth or a better term might be real development. Indeed, we would overall have to shift our focus from growth to development.

    The growth shibboleth certainly needs to be debunked at this late stage of near climate and biosphere collapse. The world does not need more gross growth: in tons of humans, tons of human infrastructure, tons of CO2 in the atmosphere and oceans, tons of plastics in the seas, tons of toxins everywhere, acres of tillage increased, acres of wilderness destroyed etc. etc. The paper below may be useful to consider in this light.

    “Human domination of the biosphere: Rapid discharge of the earth-space battery foretells the future of human kind” – John R. Schramskia,1, David K. Gattiea, and James H. Brown.

    Here is the abstract.

    “Earth is a chemical battery where, over evolutionary time with a trickle-charge of photosynthesis using solar energy, billions of tons of living biomass were stored in forests and other ecosystems and in vast reserves of fossil fuels. In just the last few hundred years, humans extracted exploitable energy from these living and fossilized biomass fuels to build the modern industrial-technological-informational economy, to grow our population to more than 7 billion, and to transform the biogeochemical cycles and biodiversity of the earth. This rapid discharge of the earth’s store of organic energy fuels the human domination of the biosphere, including conversion of natural habitats to agricultural fields and the resulting loss of native species, emission of carbon dioxide and the resulting climate and sea level change, and use of supplemental nuclear,hydro, wind, and solar energy sources.The laws of thermodynamics governing the trickle-charge and rapid discharge of the earth’s battery are universal and absolute; the earth is only temporarily poised a quantifiable distance from the thermodynamic equilibrium of outer space.Although this distance from equilibrium is comprised of all energy types, most critical for humans is the store of living biomass. With the rapid depletion of this chemical energy, the earth is shifting back toward the inhospitable equilibrium of outer space with fundamental ramifications for the biosphere and humanity. Because there is no substitute or replacement energy for living biomass, the remaining distance from equilibrium that will be required to support human life is unknown.”

    The “trickle-charge” problem may be surmountable by solar power. However, the degradation of natural phytomass and indeed total biomass (along with biosphere flows and cycles) is also likely to be a major problem for humans. A complex web of life disrupted and decimated (several times decimation in fact, considering the current mass extinction event) is very likely to seriously destabilize and degrade civilization and human populations. Real measures of what is happening to real ecology are clearly needed along with scientifically supportable principles suggesting what proportion of civilization to wild nature is supportable indefinitely. It’s clear we have overshot the safe point so targeted de-growth plus selective qualitative development needs to be the new goal.

    Getting people to realize these facts politically still seems impossible. As I argue elsewhere, it seems likely that natural and salutary demonstration events of a huge scale (regional natural disasters) will have to occur before the bulk of the population (currently living under a capitalist endless growth false consciousness) become convinced of the real, natural facts on the ground. One hopes it does not get to that terrible juncture but currently this seems the most likely path given our gross inaction at one minute to midnight, ecologically speaking. As I have also said elsewhere, new theory has to be prepared against the day when the mass of the people awake from false consciousness and realize what is at stake and what is needed to save civilization. Thinkers still ignored by the mainstream and general populace today will be judged great forward-thinkers by the next generation. Their theory will be needed to implement new and vitally necessary economic praxis. This is if we do avoid the decline into barbarism and collapse.

  3. pfeffertag
    July 13, 2019 at 9:17 am

    To Salim Rashid’s ‘The fiction of verifiability in economic science’

    Footnote 2: ‘“economics cannot claim to be a science” in the sense of a systematic study capable of empirical verification and accurate prediction.’

    But science is not about being capable of verification; it’s about being capable of falsification. If a proposition could potentially be falsified (at least in principle) it’s science; if not, it isn’t. Popper suggested this in the 1930s and philosophy of science settled it (inasmuch as it settles anything) over fifty years ago.

    The scientist publishes something and readers look to see how they could show it to be false. Every technical application—every engine started, every drug taken—is a test with potential to falsify the underlying theory.

    Also, I do not see that it can be valid to criticise a theory on grounds that the real world does not accurately reflect it.

    Galileo theorised gravity using a perfect sphere rolling friction-free on a perfectly flat plane. Reality gives us landslides yet Galileo’s theory is needed to understand landslides. Newton’s first law says an object moves in a straight line at a constant velocity forever. This cannot be verified for there is not a single instance in the whole universe. Yet that law is needed to understand the movement of everything from raindrops to galaxies.

    A scientific theory is an idealization. It expresses an ideal relationship between two or more idealized concepts. Nothing—absolutely nothing—ever conforms to the theory.

  4. Basil Al-Nakeeb
    July 14, 2019 at 8:47 am

    It is high time academics draw attention to this problem; I am heartened that someone is doing so. The author is absolutely right in drawing attention to this matter. In the absence of valid economic theory, numbers, using econometric analysis, can be made to say anything. Econometrics has not just been used but abused because, as Keynes rightly pointed out long ago, economics is an easy subject but good economists are rare. That is the origin of the problem. It has been compounded in recent decades by an over supply of mathematicians, hence, an oversupply of mathematical academic papers that are, at best, light on useful economic solutions. Hence, serious economic problems remain unaddressed and unsolved.

  5. Steven J Klees
    July 20, 2019 at 4:55 pm

    I agree completely with Moosa’s article. Econometrics can basically support any point of view. The reasons that no form of regression analysis can uncover causal impact go back to the complete falsity of the underlying assumptions that are necessary to believe it can. This is clearly exposed in my RWER article (issue no. 74) “Inferences from Regression Analysis: Are They Valid?”

  6. Robert Locke
    August 3, 2019 at 10:14 am

    Did you read chapters 1. The New Paradigm and 2 The New Paradigm Revisited in my book, Management and Higher Education Since 1949, Cambridge UP, 1989, which was operational research oriented. That book appeared 30 years ago, so the critique has been around some time.

    • Robert Locke
      August 3, 2019 at 10:18 am

      This comment is directed at Game Theory article.

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