Topic: Why does anyone pay attention to people that study "economics"? - page 4. (Read 9560 times)

I think that just because scientists can't add unknown variables into their predictions (i.e. future technologies or some major earth changing event that simply couldn't have been predicted) doesn't mean we should sit and wait with our collective "fingers crossed".

There are very clear steps that we can take now which also can allow for changes down the track should new things give us a new direction.

The smart guy in the back seat is the "scientist" and in my opinion is he is the one you should be listening to (I'd be advising the other guy to shut up and put on his seat belt).

This is exactly knowing the economic future :-)  Which is exactly what is contested.

The avalanche is the effect of the economy slowing down and hitting people also (like triggering wars, famine, and so on), the potential sharp turn is the effect of the climate change on the economy.

Smart guy in the back seat has been carefully watching out the back window every few seconds to gauge the speed at which the avalanche is advancing and calculates that we can certainly put the car into 3rd gear without risking it hitting us (he also knows that putting the car into 3rd gear at our current speed won't destroy the vehicle and that we can always put it into neutral in the unlikely event that we we do ruin the gear box as a last resort).

Now maybe 3rd gear won't save us from going off the edge but it is certainly better than not doing anything (the other guy in the back seat doesn't have any better suggestion than just keep going as he wasn't paying attention to the speed of the avalanche and actually has no idea at what speed the gears are safe to engage as he never learned much about cars).

This is a nice start of an analogy, but there's a flaw in it: there's no cost in your story for using the gear braking.

Now let us change the story as follows: similar situation but:
they are actually trying to escape an avalanche, so that's why they are going fast.  They want to avoid being crushed by the avalanche.
The guy in the back says that given that the brakes don't work, we have to put small gear, so as to go slower, in case there is a sharp turn.  The guy next to him says that if we slow down, the avalanche will probably hit us, and that we don't know if a sharp turn is ahead.

So what do you do now ?

Sure - so let's say it is like we are driving a car down a winding mountain road and our brakes have failed (and that we have poor visibility so no way to know how far we have to get to the bottom of the mountain).

We have been told by the smart guy in the back seat that we can slow the car down by using the gears but then the guy next to him says - sure but if we do that we are likely to hurt the vehicle and for all we know we are already nearly at the bottom of the mountain anyway. So the driver says a prayer and just keeps going without trying to use the gears to slow the vehicle.

It seems to me that the second guy is a bit like the modern economist, the driver is the political leader and the vehicle is the economy.

Having someone to blame when we go off the side of a cliff really isn't much of a concern when you only have seconds to live and bear in mind even if we ruin the vehicle if we are still in good health then we can just get out an walk.

But climate change IS an economic problem.  It is not an ecological problem.  After all, climate has changed a lot in the past hundreds of millions of years.  The change brought by the (probable) meteor impact that killed the dinosaurs 65 million years ago was probably much more "devastating" than putting back in the atmosphere the CO2 that has been extracted from it and put into geological layers (also called fossil fuels).  It might be that our species, and a lot of mammals, will disappear.  But that's not an ecological problem, no more than the extinction of the dinosaurs.  Something else will come after that.  In the very very worst case.

The main problem with climate change is that it may affect production (of food, of drinking water, and of French wine) 50 - 100 years from now.  That's an economic problem - potentially.

So the main difficulty is to find out what cost that will be 50 or 100 years from now, and what costs we should make now to avoid or diminish those costs 50 or 100 years from now.

And we're back to the Austrians: it is simply impossible to model the economy 50 - 100 years from now, and hence it is totally impossible to estimate the economic costs by (difficult-to-calculate regionally) climate change 50 - 100 years from now.

We have a difficult (but possible) scientific problem (climate change) of which we have to calculate the impact on a totally impossible to do prediction of the economy.  Just as well say that it is total guesswork. 

Think of how people would have estimated the economic situation today, somewhere between the first and the second world war, and how accurate they would have been back then in estimating the cost of any climate change today, when in the thirties.

Simply ridiculous.

In the thirties, people could calculate where the moon was going to be today.  In the thirties, people could calculate the solar eclipses of this century.  But they could not, in any far cry, predict the general state of the economy, and its dependence on climate, back then.

And we can't for within 50 - 100 years either.

So basically the Liberal party in Australia have often used the argument that "it will hurt our economy" to actually do anything to properly address climate change (and I am sure they are not the only political party in the world pushing that message).

The statistics that they quote are normally sourced from reports that are created by Treasury (when they are in power) or by economic forecasting organisations (when they are not in power - but without really anything much in the way of scientific input either way).

So - if the economists are never going to take climate change into account (as that should be up to climate change scientists) and the politicians just focus on using reports whose main input comes from the economists then I think you can begin to see why we might have a problem.

Oh - and I am not a Labor party supporter (for any Aussies wondering).

The people know and feel what is happening in the economy but they have learned lies about the positive that come from governement intervention and the minimal wage.

It is an assumption that there can be a mathematical model underlying economics of course.  You have to be aware of that.
In fact, you find the same in theoretical physics.  There is an assumption that nature can be described by a mathematical model.  That assumption is not empty, and evident.  It is an axiom, that could very well be proven wrong.  However, in theoretical physics, down to a certain level at least, one finds empirically that mathematical modeling works very well.

Now, the Austrian school maintains that this axiom is not valid for economy in the long run.  Most other economists claim the opposite.  However, contrary to theoretical physicists, they have never come up with a WORKING mathematical model in the long run.  In the short run, they have.  In backfitting data, they have some success.  But in actually making predictions, economic modeling is - to say the least - much less successfull than physics in, say, predicting the next solar eclipse.

The answer is that the system is too complex.  Right.  The answer can also be that the Austrians are right of course.

There are other human endevours which are obviously not apt at being modeled mathematically.  For instance, the plot of the first movie that will come out in the theaters in 2028.  That plot is unpredictable by any means using mathematical models.

I'm not talking about determinism.  There's not even a stochastic model that could describe the ensemble of plots of the movie that will come out in the theaters in 2018.  The best one could do is to make a statistical description of past plots.  But nobody knows if that statistical description will be valid for movies in 2028.  

Nobody will find it ridiculous that there is no such mathematical model, and that it cannot be found.  In fact, rather the other way around: people proposing to model this will rather be considered crazy.

With economy, however, the axiom that economic activity in the long run is following a mathematical model is an axiom taken for granted.

Politicians are forever talking about statistics and the economy so virtually any interview with any politician where they mention anything about the economy should suffice as an example (and they often put forward economic "excuses" as to why climate change is something we can't afford to do anything about now).

But let's get to what riles me most - here is a well known publicly made statement from the current Australian PM (it was made before he was PM but he was leader of the opposition at that point in time).

"Climate change is crap." (Tony Abbot)

It is not surprising that even America (which has dragged its feet on doing anything much to address the issue of climate change) is now finding Australia's complete lack of political will and funding to be of concern (which has been recently been brought up).

And on what kind of logical deduction is that theorem based ?

Just for your information (from wiki):


Now, give me a logical deduction, starting from the above given, that this "is more suited to trolling or soapboarding".
Use Keynesian logic if you want to :-)

Can you be more specific?  Which politician is consulted by which economist on which issue?

I don't follow air pollution issue but that sounds more the field of climate scientists

That is close to what the point of this (perhaps ultimately pointless) topic was.

What was perhaps implied rather than explicitly stated is that the "constant message" that is being broadcast by the general media (IMO) is that the world's most serious problems don't need fixing because the economic experts (which the politicians love to quote) have this all "under control" (or even worse that there simply is no problem).

So "why are we even asking the economists?" is in fact *exactly* what I was meaning (and by "we" I am really meaning those that are giving us the messages not literally "we" as I am pretty sure that most of us know that given any set of X economists you'll get X different predictions).

And @twiifm I am not mad at you (you'd have to do a lot better than say that I am ignorant).

I say that because you make assumptions that are ignorant. 

1 you assume that economists are supposed to solve problems that are better solved by politicians or scientists or businessmen.

2 you assume that economists and politicians are not aware of these problems

3 you assume I'm trying to win arguments, when I am merely responding to your inquiries. 

Basically, all your saying is, "there are problems, therefore economists suck because those problems aren't being solved".  It tells me you haven't a clue what economics is about.  It's just your ignorance about the field. You did ask someone to Call you out, so I am.

I didn't say you were stupid or anything so don't get mad.  Just do some more research and enlighten yourself.  Or don't and stay ignorant.  I don't care either way

You seem to be awfully sure of how ignorant I am - but that is okay as I know that your type just care about "winning arguments" rather than actually "doing anything useful to help the world".

So enjoy "winning your argument" and convincing everyone that they should just shut up and let the politicians and economists save us (because we all know what a great job they are doing).

Accurate for what?  That's not even the appropriate question.  The question is:  given something complex like the economy how does one seek better understanding of it.

By collecting empirical data and trying create mathematical models to back test against the data?

Or by logical deduction aka praxing aka philosophizing?

You can put ten economists in a room and they can come up with ten different answers, I won't really trust economists.

Strawman arguments.  Economics isn't a pseudo science or a hard science - it's a social science.

Economics don't a have theory about pollution.  What an economist can do is do cost analysis of renovating or updating coal burning plants vs cost of healthcare or some other associated costs and present the study to policy makers.  Then policy makers decide about legislation.

Not only you are ignorant about economics,  it appears you are ignorant about politics as well

And so I. Which is why I'd like they learn to judge with their own brain and eyes, and not believe what they are told blindlessly.

No doubt about that, but despite the tax, the fuel will become more costly than a solar panel.

So what is not mainstream is considered "pseudo-science", while the rest is science... The "hockey stick" is definitely a piece of science. (http://en.wikipedia.org/wiki/Hockey_stick_controversy)
Global warming is not science, nor economic.

When you have no way to proove or disprove, you are not dealing in science.

You know the response to your own question : why do you pay attention to people that study "global warming"?
I am an austrian not a keynesian, but would not consider any of them science. And can't point any incoherence in the keynesian model. I am only arguing the violation of property that it morally justifies.