I tried to avoid block-quoting in my last post, which was intended as more of an essay. Here are some follow-up points on the question of where and how economics can go.
Nassim Taleb, whose black swans I mentioned minutes ago, has a post with some predictions about our world in 2036. I think that he and I may think alike on how to approach the environment:
Science will produce smaller and smaller gains in the non-linear domain, in spite of the enormous resources it will consume; instead it will start focusing on what it cannot—and should not—do. Finally, what is now called academic economics will be treated with the same disrespect that rigorous (and practical) minds currently have for Derrida-style post-modernist verbiage.
Of course, Taleb doesn’t offer much of a vision for economics and science going forward, because that wasn’t in the scope of his post. Now, my last post certainly offered one vision for what a different economics can look like, but is limited by the scope of my own knowledge and understanding. Julie Nelson, on the other hand, is an accomplished economist and has a great open comment to the NSF on next-generational research challenges. You should read the whole thing, as she gets at many of the points I made in my previous post, but elaborates on them better than I ever could. Here’s are some of her best sentences:
There is, however, another solution, which involves recognizing the inescapable intertwining of fact and value, while continuing the systematic search for reliable knowledge. Amartya Sen has called this “transpositional” objectivity. This (in fact more exacting) standard of objectivity requires that the viewpoints and values underlying the analysis be brought out into the open and subjected to scrutiny…
Re-evaluating the role of ethics in economics challenges assumptions that are deep-seated in the mainstream of U.S. economics. Accordingly, improving economic analysis of climate change will require a multi-pronged effort…The rising generation, given their energy and larger stake in the outcomes of climate change policy, should be a key part of this transformation…
As Nelson points out, shifts like this one require funding bodies like NSF to embrace a new vision for economics. If more economists like Nelson speak up and NSF pays heed, economics in 2036 will look a lot more like an economics of Stewardship, and today’s academic economics will indeed look simply arachaic.
P.S. I wrote my entire last post without mention of the Catholic Social Tradition in stewardship. It would be an understatement to say it’s greatly informed my thinking of these issues. The best starting point on that topic is JPII’s Sollicitudo rei socialis. The USCCB’s pastoral letter is also helpful on these issues.
Economics in 2036 is going to be dominated by two forces — transition from the oil age and climate change, which are, of course, related. “Scarce resources” is going to take on new meaning.
Economics is a subsidiary of politics, i.e., political philosophy and political science. Political philosophy is a subset of ethics as a study of the key fundamental of human action (deliberation, choice, motivation, behavior, etc.) and political science is a subset of life science (social, biological and evolutionary sciences). Economics is going to become progressively integrated with its antecedents.
For example, the Enlightenment political values of liberté (freedom, liberalism), égalité (end of privilege, distributional justice), et fraternité (solidarity, social coordination) have been skewed toward freedom, vide “neoliberalism.” There is a revolution coming that will end this imbalance and greater emphasis will be place on integrating these three values into a global social, political and economic system.
There will be a tortuous transition process, however. This is not going to be an easy row to hoe for the coming generations until the transition is completed. It promises to be exciting times though.
Ah, don’t you just love the BS of long-term predictions? I really should make some predictions about the year 2036. As I am 75 years old, I won’t have to worry about being embarrassed when I’m proven wrong.
Anyway, the thing about predictions is no one remembers them — except the guy who made them, and then, only if he was right.
Isn’t it amusing to read about “the genius who predicted the recession”? You know that either this guy had been predicting a recession every year for 40 years, or this was the only prediction he’s had right in his whole life. (The “stopped clock” syndrome)
On my blog, a debt hawk named Vincent, courageously predicted U.S. hyperinflation in 2011 (See: Hyperinflation. Of course, he will be wrong. America’s sole hyperinflation occurred during the Revolutionary War, the birth of our nation. But why would a debt-hawk’s being wrong surprise anyone?
All those, who in 1980, predicted the scope of the Internet, please raise your hand.
Rodger Malcolm Mitchell
Rodger Malcolm Mitchell
roger malcolm mitchell, many of the near-term science fiction books i read around 1980 had wireless internet in people’s brains. it wasn’t hard to plot miniaturization & networking in that direction.
Mr. Winners,
If “it wasn’t hard,” I guess in 1980, you predicted the scope of the Internet. Congratulations. By the way, where did you publish your prediction?
Your comment is affirmation of “hindsight bias.” When controversial thoughts are proven correct, people tend to say, “It was obvious. I knew it all along.”
My hope: This will happen with Monetary Sovereignty.
Rodger Malcolm Mitchell
roger malcolm mitchell, you only asked if people predicted it. i didn’t say i predicted it, i said i read many mainstream science fiction books that did.
I predict that by 2036, even the politicians will realize that for a monetarily sovereign nation, austerity makes no sense and, in fact, is damaging to our children, to our grandchildren and to us.
Further, I predict the U.S. will provide fully-paid-for universal health care. It will cover every man woman and child in America, including undocumented aliens. It even will include mainstream economists, politicians, debt-hawks and other riffraff.
Further, I predict Social Security will cover everyone 65 and older, with a living wage, not the starvation wage we see today. No taxes will be deducted and FICA will have been eliminated.
Further, I predict Medicare will pay for all medical and medicine expenses, and will compensate doctors, nurses, hospitals and drug providers enough to motivate people to become doctors, nurses, hospital builders and drug providers.
Further, I predict taxes on business will have been eliminated, as even the media belatedly begin to realize these are the most self-destructive taxes possible.
Further, I predict the federal government will stop creating T-securities from thin air, then selling them. This activity has no purpose, and only tends to inflame the debt-hawks’ hysteria. Without T-securities, there would be no federal debt to worry about.
Further, I predict the standard tax deduction will have been increased each year, until only those in the upper .05% income will pay any taxes at all.
Finally, I predict that all those people who have rejected the conclusions of Monetary Sovereignty, finally will get around to reading it. At that point, they still may reject it, but at least they will know what they are rejecting, as opposed to today.
I courageously make these bold predictions, with the anticipation you will not remember them. But if you do, you will be able to reach me at my permanent residence in the Shalom Memorial Cemetery.
Rodger Malcolm Mitchell