Thursday, January 7, 2016

Still more unpopular economic opinions

I have two recent popular posts on my unpopular economic opinions (here, and here). Over the Christmas break I spent time reading and thinking. Here are some more opinions.

1. Democracy is not part of the recipe for a nation’s success. The historical evidence is pretty overwhelming here. Democracy can be useful to appease competing internal interest AFTER overall stability of the legal and economic system is obtained. Introducing democracy BEFORE this generation-long period of stability is a recipe for instability because there is no reason to trust the ballot box.

We also forget that the word democracy captures a vast array of different political institutions. There is no ‘one democracy’. Indigenous Australia’s could not vote in Queensland until 1965. Women in 1905. The voting age was lowered from 21 to 18 in 1973. Making voting compulsory came back in 1924. All of this democratisation happened after the country was quite politically stable. Not before. This is the empirical trend. The Asian Tigers weren't known as the democratic Tigers.

UPDATE: Yanis Varoukafis makes similar points and more in his TED Talk here.

2. The economics blogosphere reveals that economics is often just a clash over competing metaphysical explanations for a phenomenon. “No it’s not secular stagnation, it’s a savings glut”. For an outsider, it might seem intelligent. But in reality, it is chest-beating about preferred ways to label the residual.

3. Improving economics is not about the mainstream versus the rest. It’s about social scientists being able to communicate big ideas to each other, and about empirical strategies to try an eliminate bad or useless ideas and refine the domains in which particular models may apply. Read Evonomics.

4. The long peace since WWII is a historical anomaly. Expect either a) another war between superpowers in your lifetime, or b) a perpetual skirmish against nominal out-group "enemies" who are mostly fabrications.

5. There is no ‘willing driver shortage’ in our car-based transport system. Robot car driving is not in demand. Also, any economic benefits of replacing the labour of a car driver are even greater for rail and bus transport. Driverless cars do not rescue car-based urban transport from its inherently bad economics. Even Uber is using ‘smart routes’ that look like mini-bus routes.

6. Robots are not coming for our jobs. Why is this a thing? Even if robots are intelligent, they will just be a really advanced tool. Like a modern slave. The owners of robots would see advantages. But if they are so smart, wouldn’t they take over the role of capitalist rather than worker to make the big bucks? Or is it all just nonsense. After all, a monkey can’t own the copyright on their own photo, so I’m sure a robot can’t. Nor can it own the product of its own “labour”. To me the robot commentary it is all made up nonsense that ignores the history of mechanisation and the rise of services.

7. Ageing is bloody brilliant. There is nothing good or bad about population growth. It just is. But a stable population makes per capita economic gains much easier, reduces conflicts over resources and so forth. What makes ageing "bad" in some economic analysis is that we seem to pretend that at arbitrary birthdays people in society go from productive contributors to leaching resources. It’s not so simple.

And seriously, if non-workers we such a major economic problem, we would eliminate private ownership of capital anyway. We can't let those capital owners make an income without working, can we? They would be economically costly, just like old people. 

1 comment:

  1. Thanks for interesting thoughts! Maybe these opinions are unpopular, it's difficult to disagree with them. And some point were completely new for me.