Observation: If you want to know what Nate Silver would be like if he decided to use his powers for “soft jazz glibertarian concern trolling of liberals” instead of for good, then the Freakonomics franchise is about as close as you can get. It’s what happens when a Village Centrist and a Chicago school social economist team up for maximum totebagger nonsense.
Every single story there is “Here’s this liberal policy that you probably think is a no brainer. Now here’s our cherry-picked cost/benefit analysis that shows there’s really a massive hidden socioeconomic price of that policy because the evil and stupid federal government gets involved at this point here. It’s okay however, because you’re subconsciously doing the counter-intuitive opposite of this policy on your own personal microeconomic scale. And since so is everybody else, that’s why the policy seems to ‘work’ at the macro level. You’re just a delusional hypocrite, that’s all. Still, enjoy the guilt while you ruminate on the fact that government can never, ever work.”
And if the story isn’t about a liberal policy screwed up by the gubment, it’s “here’s this conservative free-market policy that you would think doesn’t work but…” and then you have to punch somebody. Luckily, hanging around this place long enough has allowed me to recognize the standard McBargle/Reasonoid logic these guys employ and go “But your entire premise is self-serving bullshit that only works as the very definition of confirmation bias. Go stick your head in a goat orifice. Thanks.”
Makes me want to set a Thermomix on fire.
Thanks for starting my day off with a chuckle!
c u n d gulag
“Makes me want to set a Thermomix on fire.”
First, make sure there’s no bechamel sauce in it.
McMegan considers burning bechamel to be far worse than torture, or shooting 20 Kindergarten children.
And if you do burn a Thermomix within her sight, make sure you have some Pink Himalayan Smelling Salts nearby, to revive the poor dear.
Great observation – and a great example was Freakonomics tie of less crime to abortion laws. Now Kevin Drum and others have laid out a much better case for lead being the culprit. Lead makes much more practical sense – and matches international data as well.
Other countries did not have such a big change in abortion laws – but they did have drops in lead. The “tell” was that the Freakonomics folks never put any effort into really thinking hard about what else the crime driver might be. They set up strawmen and knocked those down – but really nothing other than that.
Statisticians and other quant experts who focus on boring things like sound methodology don’t seem to have a very high opinion of the Freakanomics guys. But hey, I’m sure they don’t make as much money or get as much media exposure, so who are the real losers?
comrade scott's agenda of rage
Yet another reason to never give a dime to anything associated with public radio.
Marketplace (where I hear the Freakonomics claptrap) is such a Chicago school of economics media outlet, no wonder the totebaggers love it so.
Certified Mutant Enemy
The Freakonomics gang fail in that they lack any sort of mathematical rigor in their statistical “analysis” (to their credit, they actually admit this)…
Snarki, child of Loki
“But your entire premise is self-serving bullshit that only works as the very definition of confirmation bias. Go stick your head in a goat orifice. Thanks.”
Please, think of the goats.
The Tragically Flip
@comrade scott’s agenda of rage:
Public radio in other countries is great. I’d take a bullet for the CBC. NPR is just desperately publicly underfunded and thus is pleasing the real people who fund it: Wealthy totebaggers who like having their biases confirmed. Better to think of NRP as “philanthropy radio” than “public radio.”
comrade scott's agenda of rage
@The Tragically Flip:
The sad thing is, an hopefully I’m not falling into some nostalgic haze, but I’ve listened to public radio in general go down the toilet. I’ve been a listener for 30 years now and over the last 15 years, it’s demise has been sad to behold.
Of course it parallels that of, as Charlie Pierce calls it, the courtier press. Probably not a coincidence.
Linky no work. I fix: “Freakonomics: What Went Wrong.”
I bought a book for the title by one of these types of guys–it had some name like “The Economic Naturalist.” The entire gist was “Its cheaper if you do the free market thing (and don’t acknowledge social pressure, imperfect information, or externalities). It was basically an Evo-Psych approach to retroactively explaining why we live in the best of all possible worlds and nothing can ever change.
Don’t suppose you’ve caught the SHAME Project Levitt article? Quality stuff.
“Freakonomics: What Went Wrong?”
Andrew Gelman, BTW, is a well-known statistician. A couple times he’s been charmingly naive on economics/politics issues, though.
Thanks you, thank you! Someone else who hates the Freakonomics “brand” makes me wanna puke. Smug, facile glib nonsense.
@comrade scott’s agenda of rage:
Two things NPR is not geared to do is (1) business reporting and (2) sports reporting. Marketplace is awful. Any attempt by NPR to do sports is worse.
One thing in Levitt’s defense: he’s shit all over John Lott.
@The Tragically Flip:
Perhaps if NPR had not decided to go corporate they would not have so much trouble with funding. I used to give them money every year, year after year, but I suddenly realized that I was just paying for a more in-depth version of Fox.
They are so transparently carrying water for the 1% now I don’t know why anyone looking for objectivity would give them a dime. There are many people like me who are desperate to hear a fair rendering of the left’s point of view I would gladly pony up – and I predict that one day an enterprising sort will come up with a business model to provide a voice for us, a voice that is practically non-existent right now.
OT but I just read that 26 Sandy Hook elementary students will sing America The Beautiful at the Super Bowl. Wonderful.
I didn’t think it could be that bad so checked out the site and holy shit.
One of the earlier articles is literally about letting people buy more votes as a solution to corruption. It’s like legalizing murder as a solution to the a crime epidemic.
So using this. With the politeness!
I started reading Freakonomics and found myself having to back up and question their conclusions constantly. I bailed. (I had the same reaction to Bobo’s book.)
So using this. With the politeness!
I started reading Freakonomics and found myself having to back up and question their conclusions constantly. I bailed. (I had the same reaction to Bobo’s book.)
I like NPR’s version of sports because I’m not at all interested in sports. I hate Marketplace because I’m quite interested in business and labor issues and those people are such transparent liars and tools.
I, too, would like to see a place where I could contribute to something like NPR but with a serious left/labor focus. I’d like to see whether by getting the rest of us to contribute they could have a sustainable business model.
Certified Mutant Enemy
I wonder if they will get booed by the NRA…
@gene108: I should qualify that “Marketplace” is not NPR. It’s American Public Media, generated out of LA. APM does some good work – they had a great series on poverty through their show American Radioworks.
Ditto for “This American Life,” which is published by another off-brand public radio supplier.
Marketplace is shit, and has been at least since David Brancoccio left to go work with Bill Moyers. Maybe that’s why he left.
more than once someone has told me some historical ‘fact” was was total BS and when I’ve asked “where did you hear that?!?” the answer was “I read it on Freakanomics.” sigh..
@EconWatcher: That link doesn’t work. Could you repost, please?
As a white male 18-54, everyone should listen to my ideas no matter how stupid and self serving they are.
Good post, Zandar. I never read the book, but the hour-long radio program by Levitt’s co-author, journalist Stephen Dubner, shows up on my local NPR affiliate on the occasional Sunday evening. In casual listening, I haven’t heard anything blatantly dubious there, but then again, slipping in phoney narratives without being blatant was rather a specialty in the book, so who knows what the radio programs might be leaving out in their narratives.
Tone in DC
@Snarki, child of Loki:
Mickey Kaus doesn’t work for NPR, does he?
Myself and one other commenter already fixed the link.
comrade scott's agenda of rage
Note I always refer to “public radio” as “public radio” since there are a number of production outfits like NPR and APM that make content which can be “purchased” by local public radio stations.
Since NPR gets the bulk of “sales”, it’s easy to see why most people associate the generic public radio with them. Public Radio International (PRI) is another, they’re the ones that distribute “This American Life”.
I can cherry pick good programming from NPR, APM and PRI but the overall “face” of public radio remains the news programming driven primarily by NPR.
@comrade scott’s agenda of rage: Adam Davidson is another one of these smug bastards I do not like.
ETA: He writes for NYT and I have heard him on market place.
awesome. Here’s a good profile of Steven Levitt http://shameproject.com/profile/steven-d-levitt/
This guy uses his talent of cranking out pointless contrarianism that gets totebaggers to stroke their chins to shill for the prison industry and other corporations.
Could it be that what these ‘contrarian’ and ‘counter-intuitive’ analyses have in common is that they’re mostly all wrong? Big surprise there, ya think?
The same thing applies to Malcolm Gladwell and ugh, Tyler Cowen.
@Bob2: Almost anyone from the econ dept of George Mason University.
I don’t know why anyone takes these guys seriously, they endorsed this ridiculous climate change engineering measure that I can’t even remember it was so ridiculous. It involved trying to blast enormous amounts of gases into the air like some sort of weird reverse volcano, as I remember it, which would be magical and we’d never have to change our ways. Until I read that SI piece yesterday about athletes believing in magic stickers and deer antler spray, it was probably the dumbest thing I’d ever read.
I stopped listening to WGBH radio on my evening commute after “All Things Considered” and “Marketplace” on a day when I was feeling crummy that had me screaming at the radio in traffic. On ATC, there was some anniversary-of-Katrina feature that consisted mostly of an interview with some Gulf-state local about how the displaced people living in the FEMA trailers were just lazy bums with no initiative. Then I think Marketplace had an editorial crowing in self-congratulatory fashion about how businesses were moving from high-tax, high-government-services to low-tax, screw-the-poor states.
No more. I think I discovered WERS’s rock programming immediately after that.
By the by, why isn’t “totebaggers” in the BJ Lexicon?
@greennotGreen: Oddly, my least favorite co-worker just got a thermomix and was raving about it.
If you have mastered the ability to be 18-54 I will absolutely listen to your opinions on things. I want to know your secret.
…But I have so many well-intentioned friends and relatives who consider themselves liberal Democrats and eat this stuff up. Freakonomics, Thomas Friedman, even Cokie Roberts.
It’s hard to remember sometimes that this stuff is actually probably the highest grade of political/economic analysis that most people in the US ever hear: keep in mind, they’re comparing it to Fox News and Rush Limbaugh.
Patience pays off, though. I had to carefully explain to some liberals why Herman Cain’s 9-9-9 plan made no sense when it first appeared. But they got the message.
@Certified Mutant Enemy:
No doubt, in some living rooms…I’d guess about 27%.
Is it wrong of me to think that this is a brilliant campaign for sensible gun laws even if that is not the intention?
Ah, yes. Dump megatons of crap into an extremely complex, chaotic system that is absolutely critical to our survival without any possibility of proper testing. What the fuck could possibly go wrong?
There’s nothing wrong with questioning conventional wisdom, but there’s a difference between reexamining conclusions and just assuming everyone in currently in the field in question is a fucking idiot. Freakonomics is now a brand and the beast must be fed. Since it’s basic function is to enable clever dinner party conversation rather than provide solutions to people actually working in the field, of course it goes over big with the Village.
Did anyone notice, after looking at their homepage, that Terrance and Phillip apparently have day jobs as economics writers at Freakanomics? Blame Canada….
@Certified Mutant Enemy: Why does the Superbowl hate America?
The thing about confirmation bias though is that it does feel good. Like when I heard about these guys I was like yeah, I don’t know, something bugs me about them. Then they published their second book and it had a climate denial chapter, and I was like I knew it, these guys are hacks.
very nice summary of these folks.
That’s a good point. I think Mythbusters ran into the same problem- everyone can’t be wrong and be living in a fairly functioning society at the same time.
The entire reason why there is a Freakonomics at all is because of the right-wing belief in the year 2003 or so that all the big, important questions in economics had been “solved” by deregulation and getting the government off the backs of wall street titans so that they could go out and do good in the world. All that was left for someone with a degree in economics was to use it the analysis techniques they spent years mastering for parlor games analysis of trivial issues. The more trivial/counterintuitive the better.
In 2008 they learned that perhaps not every economic question had been answered, but by then Freakonomics was a franchise.
Odie Hugh Manatee
I thought they already did that. Oh, you mean the other head.
@Snarki, child of Loki:
I heard they prefer dead goats because they don’t fight back.
Pretty sure the math demands that if we teach children to mob mass shooters, abortion won’t be necessary to reduce crime rates.
I’m reading a really fun book about the history of Magic “Hiding the Elephant” and the last post by Capri really resonates for me. There is a parlor game quality to the questions and answers freakonomics offers that seems very reminiscent of the period 1800-1930 in the stage magician biz. Lots of people are interested in it, there’s a lot of showmanship involved, it doesn’t exactly promise to be “real” and dances on the edge of a true believer movement like spiritualism/ghosts and science–exploiting people’s desire to be in the know with respect to modern science and numbers, on the one hand, and also to believe in impossible things on the other.
In addition the point about “the more trivial/counterintiutive the better” reminds me of that moment when, in an undergraduate class, the undergraduates are blown away by the explanatory power of the Professor’s analysis. Its like the Freakonomics guys are continually trying to recreate that moment of awesome power that you really only get because the undergraduates are so freaking stupid and ill informed that they can still be impressed with some hoary bit of sciency talk.
Forum Transmitted Disease
The Freakonomics fuckers all ought to be lined up and shot. Economics is something that people have a hard enough time understanding in the first place, they tend to take a lot of what gets tossed out there on faith as the proofs require a lot of really hard work to understand, and most Americans don’t have the education or mathematics background to even attempt a stab at it.
And instead of doing the hard work and explaining things to Americans (like Bonddad does, and occasionally Krugman) the Freakonomics jerks just make shit up and lie to the public for their own personal gain.
@comrade scott’s agenda of rage: Marketplace is actually a great show when they talk about pretty much anything but economics.
A few years back climate scientist and fellow University of Chicago professor Ray Pierrehumbert wrote a devastating open letter to Steve Levitt
” I don’t think you would have accepted such laziness and sloppiness in a term paper from one of your students, so why do you accept it from yourself? What does the failure to do such basic thinking with numbers say about the extent to which anything you write can be trusted? How do you think it reflects on the profession of economics when a member of that profession — somebody who that profession seems to esteem highly — publicly and noisily shows that he cannot be bothered to do simple arithmetic and elementary background reading?”
Pierrehumbert concludes with a google map showing Levitt the directions to walk across campus to Pierrehumbert’s office if he wants some friendly help getting his facts straight.
Very good line.
Joining in the praise of others here for the trenchancy of your comment, especially the second paragraph. Superb.
(But of course, choosing “Eric Blair” as your “nym” sets a pretty high standard for your prose.)
@ericblair: So you are saying that clever dinner conversation is not a good basis for policy decisions? Isn’t the genius of the Laffer curve that it was drawn on a napkin? See how cleverly I have refuted your argument?
@Morbo: Another one of those librul perfessers indoctrinating our children in the ways of the hippie.
@SatanicPanic: My kids love Mythbusters, but personally I think the episode where they try to give a polygraph to a potted plant was probably where the shark was jumped most conclusively.
@jibeaux: I think that’s the crux of it. Kids love Mythbusters, but anyone with a modicum of education in science can see that they’re jumping all over the place and forcing conclusions.
Economics, especially the Chicago school variety is about comforting the comfortable.
Chicago school economist is an oxymoron.
@Cassidy: I haven’t seen a single episode, I did not have a TV the last couple of years and even now, since we don’t get cable in our area, viewing choices are limited to a few PBS channels, ABC and Fox. I hate the dumbing down of science on TV, even PBS shows like Nova don’t do a great job explaining physics, and are usually too simplistic. I do love Nature, may be because I am a lay person where biology is concerned.
@Forum Transmitted Disease:
What would be a specific example of this?
@Walker: Well they rule the roost in the field. What they say is the received wisdom in the field. Thanks, Milton Friedman, Lucas etc.
@schrodinger’s cat: It started out really good. The SFX guy, Adam Savage, was just quirky and nerdy enough to be entertaining, while the “science” guy Jaime was always deadpan and trying to come up with a decent experiment to test the theory.
Then, at some point, it got really awkward. There chemistry was off, everything felt scripted and the experiments got so rigid that the testing seemed to try and define a very narrow result. I’m not a science person by any stretch, but I can tell when you’er not doing it right. Part of it was bring in the interns; they brought in an attractive redhead because GIRLZ!, I guess. Although, most times she seemed like the only smart one of the bunch.
Dubner definitely peddles his fair share of bullshit, and they really disgraced themselves with the stupid sulfur dioxide “solution to climate change”, but there’s some good stuff in the Freakonomics franchise as well. Sudhir Venkatesh for one. At the time it came out, there really was very little effort to communicate microeconomics to the masses, so that’s another point in their favor. So let’s not throw the baby out with the bathwater.
Judas Escargot, Bringer of Loaves and Fish Sandwiches
Economists are the court astrologers of our time.
Jim, Foolish Literalist
Good lord. Just clicked on MSNBC to find Gampy McPalin angrily questioning Hagel for questioning “The SURGE!”
Jay in Oregon
@Snarki, child of Loki:
I’m sure Mickey Kaus has that covered.
@Cassidy: I don’t know. It seems to be a more education focused than junkyard wars, and for shows about a bunch of guys welding stuff together, it’s pretty fun. Not always interesting, but fun to watch.
@Steeplejack: I do love me some Andrew Gelman. He also disassembled Thomas Frank’s lazy arguments as well.
@Judas Escargot, Bringer of Loaves and Fish Sandwiches: Let’s not go too far here. Economics works just fine within its limitations – just like any social science. It is only when people expect or claim that it can do more that it become problematic.
It really seemed to do a 180 after Brancoccio left. His version used to use a lot of pro-labor, pro-employee commentators, but now it’s 100% glibertarian “aren’t CEOs awesome?” bullshit.
I had to stop listening because I was afraid I would accidentally drive my car off the road while screaming at the radio.
Is it obnoxious quibbling to point out that Marketplace is actually produced by APM rather than NPR?
It had a fallow period, but I still enjoy it. They got a little too into guns and explosions for a while, but I think they’re trying to get away from that now.
They had an interesting one recently where they tested that old movie myth where someone is running across a suspension bridge and is able to leap to safety when the other end is cut. Nope — once the tension is cut, the whole thing falls in a mass and you’re hosed.
@Steeplejack: @EconWatcher: Key graf:
@Omnes Omnibus: Well nothing in their precious theories predicts a collapse like the one we had in 2008-09.
If that’s your goal, you should just go straight to The Dinner Party, which aims directly at that market.
@schrodinger’s cat: That’s akin to saying that climate change models failed to predict the rate of melting in the Greenland ice sheet, or the cold weather we’ve been having lately, or whatever. These are sciences, based on modeling, and are thus imprecise.
The Tragically Flip
I don’t know NPR’s history in detail, but I believe they were driven there by desperation. NPR (and PBS) are the most ridiculously underfunded public media outlets in the world.
Canada spends more than double in absolute dollars on CBC what America spends on its public broadcasters (about $400M). Canada is not generous in public media spending either, the BBC was getting about $5B a year up to the Cameron years (haven’t checked lately, I know he cut them significantly).
Public radio should not be begging donations from anyone. It should be funded adquately by the state. That’s how they serve everyone, rather than those with the money to donate.
@Judas Escargot, Bringer of Loaves and Fish Sandwiches:
That may be, but I’d happily be a citizen of Krugmania, DeLongland, United Sen, the Republic of Solow, or Greater Stiglitz. One must simply never cross the borders of Friedmania or the evil empire of Hayek.
Besides for economists, no less than for us, “The fault…is not in our stars, but in ourselves” (or at least our ideologies).
Not quite true — IIRC, there were a lot of economists (including Paul Krugman) who were pointing out that housing was a bubble and we were all going to be in a world of shit if the banks making bad loans weren’t reined it.
But they didn’t have fun “counterintuitive” theories about economics that proved liberals wrong, so nobody listened to them.
The main limitation being that economists—as their very own theory predicts!—respond to incentives.
What is the biggest incentive facing an economist? To whore oneself out to the rich and powerful.
You wish. If you listen to conservatives, all that 2008 proves is that we need more
cowbellderegulation. Remember, in their world the subprime mortgage bubble was caused by the CRA, Fannie, and Freddie; bailing out the financial system was unnecessary; and private lenders were lining up to help GM and Chrysler. There are none so blind as those who will not seehave gouged out their eyes because they don’t like looking at the real world.
@Joel: Economic models only deal with equilibrium so according to these models markets are always stable. The theories just ignore the inherent instability of markets. Also there are problems with the way
economists define risk, uncertainty and rationality. Their models stray too far from reality.
@Mnemosyne: Yes there were some exceptions, Paul Krugman being one of them. I speak of the general consensus. And the inability of economic theories to deal with the inherent instability of capital markets.
ETA: Hyman Minsky who wrote about inherent instability of capital markets is still considered an oddity by most mainstream economists.
@Jim, Foolish Literalist: Uh-oh. Gwampy didn’t get his pudding at dinner last night.
Yes, there were such economists, but “economists” as a class of professionals failed miserably.
BTW, IIRC Krugman wasn’t all that early in warning about the bubble. The ones I usually think of are Robert Shiller and Dean Baker. Baker (who blogs at his think tank, CEPR, and is generally awesome) is especially near and dear to my heart, because his warnings about the late 1990s stock bubble encouraged me to get out of the market at the time, which saved me big bucks.
The winner, though, in this prediction market was a Georgist economist, who saw it coming long, long before the fundamentals ever got out of whack. That’s because Georgists understand that land—and after all, it was really a land bubble, not a housing bubble—has very peculiar economics, since it’s in fixed supply. Such goods often behave like collectibles markets, and land in particular has a cyclical boom-bust behavior.
There’s a ton of whackjob libertarians out there who think that money itself should be “private”.
Interestingly, my impression is that this experiment has already been done (even in the US), and the results aren’t pretty.
Completely agree. After 2008, anyone who thinks that economics (as practiced, on the whole) isn’t a laughingstock as a science needs to have their head examined.
Some people say “Well, geologists can’t accurately predict earthquakes!!” The proper analogy is a geologist who observes a 1 mile high tsunami about to hit the coast, and then observes, “This is a great time to go surfing!”
While the theories are “unable,” it’s more a matter of the refusal of economists to analyze money and finance. While it’s true that ultimately those should serve the world of real goods, the idea that money doesn’t change things is hilarious. As if no one gets a hard on by looking at their own big bank balance.
Not really; there is a qualitative difference. The economic collapse in 2008 was only predicted by a handful of economists, most notably Roubini, even though the evidence was there for all to see for years. Which makes me wonder what use is economics when it really, really, really matters?
Now you might argue that there is nothing wrong with economics, the problem lies with the economists, or human frailty, but as a layman I see that as a distinction without a difference.
I will gladly withdraw my comments and concede that your analogy holds if Greenland melts into the North Atlantic before the end of the year.
p.s. Roubini is predicting a “meltdown” in 2013 as well. If he’s right then where the hell are all the other economists? And if he’s wrong then the guy who called it in 2008 blew it in 2013. Either way it doesn’t say much for the value of economic theory to me.
As someone trained in mathematics, I don’t get this obsession with equilibrium. The only thing that makes sense to me is that it allows them to construct models they can solve, and furthermore it’s “too hard” to have dynamic models. Those would involve “d/dt”; what the hell do you put on the other side of the equation. (Yeah, conceptually you could put something, but there’s nothing accurate, unlike say a = F/m.)
@ericblair: “Ah, yes. Dump megatons of crap into an extremely complex, chaotic system that is absolutely critical to our survival without any possibility of proper testing. What the fuck could possibly go wrong?”
And Levitt didn’t take an hour to walk a couple of buildings over to talk with real, live U Chic climate scientists.
How is Roubini the most notable? Sure, most paid-attention-to.
Dean Baker (who focussed on the bubble itself, but AFAICT didn’t understand knock-on effects on the financial sector) was IIRC earlier than Roubini, and had a very simple explanation: fundamentals in housing were very, very, very out of whack.
It’s certainly of use to economists, who line their pockets by shilling for the rich and powerful.
Of course there’s a difference.
It’s of no value if you can’t look at the arguments and evaluate them.
The argument Dean Baker made in 2003 or before was compelling, and became more and more compelling as the bubble continued. What’s compelling about Roubini’s current predictions, other than the name “Roubini”?
This is scaring me; sounds uncomfortably like that unforgettable Stephen King story where a similar feat made us all peace loving buddies, and then dying Alzheimers patients.
@Joel: ” That’s akin to saying that climate change models failed to predict the rate of melting in the Greenland ice sheet, or the cold weather we’ve been having lately, or whatever. These are sciences, based on modeling, and are thus imprecise. ”
Incorrect. The neoliberals claimed that the markets would be more efficient, self-correcting, etc. The opposite was true.
The correct analogy would be climate change models stating that adding more CO2 would cool the atmosphere.
Now, what right-wing economists are now claiming is that they are being pilloried for failing to make accurate predictions (e.g., ‘the market will collapse at 8:04 AM on blah-blah date), but that’s to distract people from their failings.
If we’re fair about it, though, climate scientists have knocked Nate Silver’s book’s chapter on climate change.
@liberal: In finance they only study things at the micro level. You cannot really address capital markets unless you deal with macro, government spending, taxation, monetary policy etc.
Of course they can. They may not be able to give you a date and time, but they can tell you that the risk of a major earthquake is much higher in California than Kansas. They can even tell you with some specificity where in California the shaking is likely to be worst. That isn’t particularly helpful if you want to know when to be out of state, but it’s very helpful when writing building codes and zoning plans.
“Georgist economics.” Now that’s obscure.
I mean absolutely no disrespect because I am far out on the thin ice of my competence here, but are the theories of Henry George now afforded much attention or regard by contemporary academic economists? I had thought his “Single Tax ” idea had been discredited or discounted, at least for advanced industrial economies.
This may be an example of the discipline’s myopia (or certainly my ignorance). If you are knowledgable about Georgist current activities or are affiliated with its organization, any summary information you could provide would be appreciated. (Before writing this, I did a cursory Google search, but have no idea as to its accuracy or reliablility.)
I don’t even think mainstream economists (maybe even including Krugman) understand money. They’re still tied to the classic model of fractional reserve banking, where reserves “cause” money to be created.
I have some problems with MMT, but they and other proponents of endogenous money models are probably right IMHO—banks are capital constrained, not reserve constrained, and reserves follow money creation, not the other way around (as an empirical model). The conventional guys seem to miss all the crazy-ass ways “money” is created, like rehypothecation in the banking industry, etc.
You just answered your own question.
I’m a quasi-Georgist myself. (Quasi, because I think the claim that LVT is sufficient for government finance might not be true; but I support LVT as a first, best tax.)
The theories of Henry George aren’t affored any respect, because economics is corrupt. While there are some plausible question about George’s prescriptions, at a theoretical level, he was entirely right.
Why would economists not like George’s theories? Because if we were to follow George’s prescriptions—tax land rent, and more generally tax all rents that could practically be taxed—the rich and powerful would suffer.
Neoclassical economists are so corrupted, they bastardized the classical distinction between land, labor, and capital as the three general productive factors; now it’s labor and capital—land is just “another asset,” despite its peculiar nature.
Finally, there are clear examples of famous economists agreeing with George’s theories, if you want to go with appeal to authority route. Samuelson’s classic textbook (at least earlier incarnations) presents the notion of land rent and its taxation in a favorable light. Another Nobelist, Vickrey, was clearly in favor of LVT. Then there was a letter urging the fUSSR to do something more or less Georgist while setting up their new political economy. (I think it had four signatories who were extremely prominent.)
Even Milton Friedman called LVT the “least bad tax,” though wtih everything MF there’s a right-wing anti-government smell to the way he put it (“least bad” as opposed to “the best”).
Just look at practical urban economics. A discussion of the subway here in the DC area in the Wash Post by decidedly non-Georgist reporters offhandedly mentioned the estimate of $9B in land value being created by the building of the system. All that money went to private parties in exchange for absolutely nothing.
As I trust you are aware, there are some Italian seismologists who would not have wished to call upon you as a defense witness.
…adding, even Adam Smith, clearly the greatest economist of all time and writing before Ricardo came up with his theory of rent, wrote:
Yeah, I agree. I’m referring to the apologists for economists who claim that their massive failures of prediction are excusable because geologists can’t predict earthquakes to the day. I’m just saying that the comparison is not apt.
Some of the dictionary definitions of notable contain the word “excellent”. I would say Baker’s predictions were “excellent”, as well as most if anot all of what he writes. Not so sure about Roubini.
You seem to want to get in a pissing contest over two economists who predicted economic problems. Arguing about which one is “best” only proves my larger point that hardly anyone was predicting an economic meltdown. Which begs the question: why?
Now it may be that a gazillion “economists” knew exactly what was going to happen, but I don’t believe that. I think that economic theory just isn’t sophisticated enough to model the highly complex real world. So while it is possible to predict a hurricane path with some accuracy, it does not seem possible to accurately predict an economic meltdown at all. If it was then a lot more “economists” would be doing it.
Economics is bunk.
@liberal: Not only can they not predict a particular economic meltdown. Their theories don’t even allow for possibility of meltdown. An apt comparison would be geological theories denying the existence of earthquakes, though everyone knows that they exist.
Greatly appreciate your extended reply. Certainly in those disciplines in which I am better informed, unorthodox or out-of-favor theories/ists may often dislodge ossified opinion or hold insights and answers to conventionally intractable issues.
Your example of the DC Metro seems a good illustration of Georgist economic analysis.
Will now blow some dust off a few textbooks and dig through the Intertubes a bit more. Thanks!
Actually, it did, and some clever people made billions with history’s largest short. Its more about herd mentality deliberately ignoring the warnings in the name of greed. Next greater fool theory, which describes Goldman Sachs’ success since they seem better able than anyone in bailing out on the next greater fool just in time.
Another point. It is also about struggling with limited information in order to make an accurate prediction, which is at the heart of so much difficulty in reading economic tea leaves. A lot of the bubble is due to more and more people piling on to a flawed business practice because at least in the short run, it made a lot of money, and in the long run, we are all dead anyway!
Many of the people who were openly describing the bubble accurately pre-pop were still surprised by the depth of the crater after it exploded.
“Freakonomics” lost all credibility when Levitt wrote that solar cells *increase* global warming because they’re dark.
If he can’t get that right, he can’t be trusted to get anything right.
@Bob2: Despise them both. Tyler Cowen’s insistence on writing about many other things besides economics definitely clinched it for me, though. “Should one become a diplomat?” “Where should one eat in NoVa?” “What books is Tyler Cowen reading?”
I’m waiting for Mythbuster to tackle the age old question – once you go black do you ever go back?
As an economist, I hate to even semi agree with anyone who says ‘economics is bunk’, but on the other hand, history is history.
A substantial subset of Keynesian econmists like Baker, Roubini, Krugman, DeLong, Galbraith, Stiglitz, did diagnose the housing bubble and predict the bust. Stiglitz was predicting and diagnosing (damn near in real time, and quite accurately IMHO) the onset of the recession and financial panic. You can watch him do so in interviews and talk on youtube and hulu.
But the fact of the matter is, these were a subset of a minority Keynesian opinion in economics. And Keynesian economics had its failures in the 70s. Several of the economists mentioned above were flummoxed by the behavior of the economy during the first 6 years of the Bush administration. There are clips of Krugman, and I was at a couple of talks where he was predicting his own debt crisis due to Bush tax cuts, but as a result of his own accurate predictions of the effects of the Bush income tax cuts on the deficit.
Pretty wobbly performance compared to ‘realer’ sciences from physics, to genetics, to even meteorology and climate science.
It is what it is. Economics is not much of science compared to other things we call science. Sad day for economists.
Edit: on other hand, we should give credit to people like Krugman who just admitted they didn’t understand why the debt crisis they predicted due to Bush income tax cuts did not materialize in their predicted time frame. So, I will say that Keynesians tend to be more empirically oriented than other schools of macro.
“Nuts N Gum–Together At Last”
I think one of the best ways to get back into Georgist stuff is to read poster “[email protected]” on the newsgroup “sci.econ”.
He’s not a professional economist, and there’s some things about him I disagree with (on other topics, he’s a truther, and he’s also a goldbug), but on the topic of land and economics more generally he has a lot to say that’s interesting and inciteful.
My impression from reading Dean Baker is that the impact on the economy of the crash in housing itself (apart from the knock-on effect on the financial markets) was pretty straightforward to estimate, at least to first order. Just assume prices go back to trend and see how much the effect is due to (a) lost jobs in construction, and (b) decreased consumer demand due to (negative) wealth effects in housing.
Not saying I could do it myself, but basic calculations are probably pretty standard for a competent macroeconomist.
Yeah, I think some people who watch right wing stuff had a pretty damning portrayal of Gladwell.
Cowen…another propertarian douchebag.
@liberal: I agree. I think what most economists did not pick up was the extent that unregulated financial securitzation and associated developments in unregulated derivatives markets would amplify the effect of the housing bust.
Stiglitz, who predicted the course of events much better than most, has a long history of research into banking and financial markets, and so he had a better grasp of the connection between the two, so was quicker and deeper in his analysis and more accurate in his predictions.
Right, but while I don’t want to defend economics, I don’t think we should get too hung up on the semantics and classification. By that argument biology is less of a science than chemistry.
Isn’t the core problem with economics that it is trying to address and explain many things, including human nature, and it is really hard (impossible?) to create economic models that do that well? There are just so many interrelated volatile variables (e.g. the effects of the collapse of Lehman Brothers) that have to considered.
It isn’t so much that economics is bunk, but more that it is failing when trying to do something which is really, really hard.
By analogy, suppose someone in a restaurant sits on the edge of a dining table, and the table falls over. Well anyone can predict roughly what will happen, but even with all our understanding of physics it would not be possible to predict exactly how everything lands on the floor.
Well, when it comes to economics it seems to me that we can predict that if someone sits on the table (e.g. Greece, tech bubble, housing bubble, etc.) then bad things will happen. But that is about as far as we can go, and I am not sure that things will be much different in economics fifty years from now.
First, I won’t dispute that most economists didn’t predict the meltdown. And if you look at my numerous posts here, it’s clear that I think that economics is corrupted.
Second, I’m not in a pissing contest. I was able to read Baker’s posts in real time, understand his data and his reasoning, and decide it was correct. You’re apparently left with what is frankly an idiotic competition in appeal to authority.
The fact that many/most economists are a bunch of corrupted, ignorant morons doesn’t mean that a science of economics is impossible.
Ignorant BS. While it might be difficult to create a precise model of bubbles in general, and this housing bubble in particular—I’ll grant the question of “why does bubble X get started at time T, in particular?“—there’s definitely predictions that can be made.
In particular, the ~2000 stock market crash and the ~2008 housing bubble crash were entirely predictable, at least after the bubble commenced. Why? Because the underlying assets were being priced at values far in excess of anything remotely rational.
The fact that a large group of people failed to predict this isn’t proof that such predictions are impossible.
I and many other people predicted that the invasion of Iraq would be disastrous. Now, there were many ways in which disaster could occur, and I certainly didn’t get all the details right.
By your own reasoning, there’s no use in having predicted that Iraq would be a disaster if we couldn’t have gotten all the details right.
Same thing with economics. Sure, it would be difficult/impossible for anyone to predict exactly when or why the housing bubble got started, but once it did, it actually really wasn’t hard to predict “this won’t end well.” (Though, again, it would have been very difficult in advance to get a fairly accurate date on when the market would top.)
Agreed, and a very important point. The notion that markets can behave irrationally, not clear, etc etc is to them laughable heresy.
No, that’s not the main problem. The problem is failing when it pays to fail, because some powerful interest wants it so.
Which theories might those be? Can you give me a citation or two? There definitely were traders/hedge fund managers made a lot of money by making the right bets. So some practitioners do seem to have a better and more intuitive understanding of the markets than finance and econ professors. That is hardly supportive of your thesis that economics profession was successful in predicting the last crisis or even having a good theoretical handle on catastrophic market events.
@liberal: Yes I have to agree, its not that they can’t do a better job, its that they don’t even seem like they want to.
[email protected]Mandalay: OT but did you see I answered your probability question yesterday? I think it was on the MA senate appointment thread. Thread was nearly dead so I’m not sure you checked back in
This is all win. Thank you.
One of the things on my bucket list is to some day be able to line up every single oh-so-worldly and knowing austerion dickhead who works for Marketplace and bitchslap the smug out of them. Ditto every asswipe at Planet Money who thinks they know what they’re talking about but doesn’t.
@Mandalay: You raise a very good egghead point, which is neglected in comparisons of different scientific fields.
I don’t know much advanced physics, but I do know that one principle of physics is that you try to separate theoretical principles (particularly when thinking in terms of underlying symmetry spaces) from initial and boundary conditions. You don’t hold up the science by trying to explain everything at the same level of resolution for arbitrary initial and boundary conditions or restrictions on the system.
Newtonian celestial mechanics was not held to be hunk of junk because it could not explain the some aspects of the orbit of mercury, or the trajectory of every asteroid in the asteroid belt. Economics, from long back at least back to the eighteenth century, was held responsible for explaining the behavior of some grand system of ‘everything’ economic (Edit:) in real time always everywhere from the same one theoretical principle, regardless of the initial conditions, or how the system was forced by outside influences.
Today, there is a big fight between experimental economics where empirical laws of artificial markets can be derived in things that correspond to Galilean experiments. And you get some rough results like, markets work pretty OK with flow goods, but the economic decision makers get befuddled by complex dynamic behavior possible when capital stocks, investment, time to build, and inventories are introduced. Old school neoclassical economists don’t like this stuff, since they say, well, you can rationalize what seems to be crazy nonequilibrium non optimizing behavior if you fiddle with the unobservable theoretical structures (like utility functions, and learning mechanisms) underlying the behavior enough. But then whether you end up with a falsifiable empirical theory is kind of uncertain.
The whole issue of whether we are comparing different sciences on consistent basis is extremely confused, IMHO.
Newtonian or classical mechanics works very well, and is extremely accurate, at speeds much less than the speed of light (when you have to account for relativity) and for our observable world, you need quantum mechanics when you go to the atomic level. Economics may have physics envy, but economic theories are no where as accurate as Newtonian mechanics. To compare economics to classical mechanics is a joke. Just using Lagrangians and Hamiltonians is not enough to make economics like classical mechanics.
Well, try explain that to neoclassical economists! If you make some headway, you will have done some good in the world, my son (or is it daughter? I forget.)
Edit: except I will add that even given its domain of application, given arbitrary initial conditions, you can generate chaos, or very long periodic motions that look like chaos over any finite observation period, and Newtonian mechanics does not work so hot by usual standards of assessing accuracy of prediction. So, I was arguing that we do not hold physics and economics to the same standards in judging how well each works.
@SatanicPanic: You have to remember that the ultimate purpose of MythBusters is not to test out myths, but to make as many big and interesting explosions as possible.
@jl: Classical mechanics is far more accurate than any economics theory. Period. Physics can deal with non-linearity. Chaos is pretty well understood mathematically.
What do you mean, give me a concrete example BTW quantum mechanics is pretty darn accurate too. Economics does not have anything that even comes close to Classical mechanics in terms predictive power and explaining the world around us. You can calculate the trajectory of baseball to up to
several significant digits by using physics a freshman can do.
BTW it is daughter.
If nature takes its proper course, the Freakonomics crowd and Fake Jef Jarvis will find one another. This hope is based on pearls of wisdom such as this:
I assume the ‘megagodins’ reference is based on Seth Godin.
In the real world and in real time? No, I rather doubt it.
Newtonian mechanics has serious limitations in the real world for a variety of reasons. Too many quantities are unknown or at best rough approximations. Worse, complex systems like our sun and its planets are non-linear and inherently chaotic. There is a very small yet very real possibility, for instance, that our Earth might take a wrong turn and go rocketing into deep space at any moment.
@Randy P: Yes, got it thanks. Seems so obvious when it’s explained.
(1) It was clear from very simple data (trends in home prices vs rents) that homes were way overpriced. In that sense, theory was on very firm ground. Just because economists as a whole are a bunch of muddleheads doesn’t mean the theory is wrong.
(2) The further connection to MBS, etc, is obscure enough that a lot of people didn’t see it.
(3) Even if you saw it, there is a risk in betting against the market, even when the market is clearly irrational: “The market can remain irrational longer than you can remain solvent.”
@Va Highlander: Why do I care about the sun and the stars when I am calculating the trajectory of a baseball?
@liberal: I agree with most of your points. I was trying to get at the fact there is no theory that can explain a market breakdown, a singularity if you will, like when the credit markets froze after Lehman collapsed. Markets are rational and in equilibrium. Instability inherent in the system is always ignored.
Right, though I certainly wasn’t trying to do that. I was just making the point that the simple act of predicting how everything will land when we upend a table is beyond our current ability (and might be forever?). So why on earth should we even kid ourselves that economic theory can usefully predict things like the housing bubble? How can models possibly hope to factor in the politics, the zeitgeist, irrational behavior, greed, over-borrowing, over-leveraging, the secrecy, the dishonesty of banks and Wall St, global markets, dubious instruments, etc?
It’s not just that we have an awful lot of variables to consider, but (like the upended table) those variables repeatedly impact each other in very complex ways.
ETA: By chance I see that SC is making a similar point much more eloquently in the previous post (#149).
Maybe for going to Mars, but are you saying this is also true for the trajectory of a baseball?
” Chaos is pretty well understood mathematically. ”
It’s not a matter of the mathematics. It’s a matter of calculating accurate predictions of trajectories of individual objects from initial conditions.
The mathematics of neoclassical economics is understood very well too. So well, that most physicists and mathematicians, find it quite boring. But that does not help with predictions.
‘ ” Newtonian mechanics does not work so hot by usual standards of assessing accuracy of prediction.”
What do you mean, give me a concrete example ‘
I meant in terms of predicting individual trajectories of objects over time if the motion is, or close to, chaotic. You could not come close to the accuracy of calculating the orbit of a planet in our solar system, or a thrown baseball.
I wasn’t arguing that economics is potentially as successful as mechanics, just that it’s poor performance is made to seem even worse if the fields are not compared on an equal basis. I think economics would be crappy compared to physics even under if compared on a consistent basis.
@jl: You are saying physics is not perfect and I agree. But it is far more accurate than economics is. In economics theory does not change even when it doesn’t agree with observed reality. It is not the case in physics.
We can definitely plot the trajectory of chaotic systems, those maps are called strange attractors, and they have fractal dimensions.
ETA: And Classical Mechanics is a very good first approximation for much of our observable universe.
My macro-econ class left me with the impression that economics was heavily influenced by statistical mechanics and that price equilibrium curves were an attempt to apply that idea to market transactions.
Trouble is, people aren’t predictable like atoms are. So the fundamentals of market transactions just aren’t well grounded. The instructor couldn’t really disagree, but said just take it on faith and let’s keep going.
Economists have physics envy.
I still don’t know what a trajectory of a baseball has to do with chaos. You need a system of 3 differential equations to get a chaotic system. Baseball trajectory is a 2D problem.
With three independent variables, and a Lyapunov exponent > 0.
I built a circuit based on the Lorentz equations ( two multipliers.. hacked from transconductance amps.. ugh ) and it made the most beautiful noise.
My EE prof said, “beautiful noise? noise is always bad!”
J R in W Va
MY plants all tell the TRUTH and I can prove it.
The Polygraph traces are all quite regular, thus showing that the plant is not under the stress of fabricating it’s story!
Proc quo hoc Victor~;
Thanks, I’m here all week. Try the veal!
@Mandalay: My problem with economists isn’t that they don’t know exactly where the wine glass will fall when the table falls over.
My problem with economists is that they don’t seem to be able to agree on the question “If we saw away three legs, is the table more or less likely to fall over?”
@schrodinger’s cat: Jumping back in after a day of meeting, I see this discussion is still going. Econ is a social science. Like poli sci, psych, and such. It always includes the human element. And the human element is always wobbly – except when it isn’t. Economic models are simplified representations of of very complex systems. They can be useful in the way a map drawn in the dirt can be useful. It is when people (including economists) forget this and expect them to be more accurate than they are that everything goes pear shaped.
Also economics is built on assumptions; lately, we have seen prediction go badly – this should be a sign that one should check one’s calculations. If the calculations are correct, then one should examine the assumptions. This is a places where I think economists are failing. When the world doesn’t conform to their models, they blame the world.
And social science isn’t very solid science. You can measure and count and do statistics on just about anything without really gaining an understanding of underlying causes and mechanisms.
As the business of America is business, economics is our national religion.
Krugman for pope!
@Joey Giraud: I don’t disagree. I majored in government; my university didn’t call it political science on purpose. I hewed closer to the political philosophy courses when I could – both out of affinity and out of a concern numbers just don’t get you to the answers. They can say what people are doing, but not why. “Why” is what is interesting. At least to me.
” We can definitely plot the trajectory of chaotic systems, those maps are called strange attractors, and they have fractal dimensions. ”
If you have a reference that explains how to predict/forecast individual trajectories of object in a chaotic system from a set of initial conditions in the same way you can predict/forecast the orbit of Mars, or a thrown baseball, over long time horizons, please let me know.
Edit: please remember, that plotting a mathematical equation known with certainty is different from predicting a trajectory from an imperfectly measured initial condition.
Physics can explain a lot and produce lots of useful knowledge in contexts where chaotic motion does not occur. Economics, at least standard neoclassical economics has tried to copy physics theory and apply in all sorts of ways and in situations where a physicist might say the problem might be intractable. Rather than being reasonable and treating empirical laws, and their scope of operation and limits like other sciences do, neoclassical economists have said, no, we have to explain all arbitrarily complex systems all at once with one theory, and nothing less than that counts. That is what I am saying.
There is a chance we are talking misunderstanding each other, since you make similar points in your comments.
Sadly, the economists don’t use equilibrium to mean d/dt=0 as most natural sciences do, but more like all markets have cleared. I find this fairly common in economics, where they Humpty-Dumpty-ize words from science to mean something a little different.
I agree. In other words, liberal’s question is easy.
” Those would involve “d/dt”; what the hell do you put on the other side of the equation. (Yeah, conceptually you could put something, but there’s nothing accurate, unlike say a = F/m.) ”
On the other side of “d/dt” you put an equilibrium condition, producing a dynamic equilibrium equation, and essentially assume that markets clear continuously in real time.
There may be some other stuff on the other side of “d/dt” in the derivation, but you will always end up with an equilibrium condition.
Edit: except in Keynesian macroeconomics.
This thread has got me thinking that taxonomy is part of the problem.
Economics should not be termed a “science”, even a “social science”, at all. If the word “science” had never been associated with “economics” the world might have had suitably lower expectations of it, and this thread would have been a lot shorter.
Perhaps it needs to go the way of geography, and get demoted to being one of the humanities.
@Mandalay: Demoted? Bah.
” get demoted to being one of the humanities. ”
That is not too far a stretch from the formalist school back in the 50s and 60s. All the fancy equations were not be taken literally, but were devices to ensure that economic arguments were consistent.
Krugman’s comments in some of his recent columns that individual maximization of utility, or welfare, should not be taken literally may sound all unorthodox and lefty and soft and shocking now to some economists now, but was a common way of thinking among mathematical economists 50 and 60 years ago.
Then… things got confused and complicated when the True Believers arrived on the scene.
John Hicks had gimmicks that allowed him to sneak disequilibrium into his version of Keynesianism. That kind of thing would get you flunked out of many graduate programs now.
Ever since the nineteenth century when science began delivering the goods, science has become a coveted word. Just wearing a white lab coat and holding a beaker lends authority to almost any nonsense.
Yeah, taxonomy is part of the problem indeed.
I really love that Balloon-Juice has so many science-savvy readers ( and Tom L. of course ). It helps make up for all the outrage-junkie old-timers.
( names omitted to prevent butt-hurt bickering )
Chaotic equations *do* predict perfectly such trajectories. The only issue is precision; as Real numbers aren’t really real.
” The only issue is precision ”
Are you a logician? I will explain that to my funders the next time my out of sample forecasts go all to hell.
@jl: The motion of the baseball is not chaotic. If you throw a ball up in the air it is going to be attracted to the center of the earth with acceleration of 9.8m/s^2. There is no way that’s going to result into an oscillations chaotic or [email protected]Joey Giraud: True. I remember writing a program for a stat mech project to calculate the Lyapunov exponent for several chaotic systems.
@schrodinger’s cat: This has been bugging me. I suppose, strictly speaking, the baseball is a chaotic system. It’s being acted on by gravitational forces from every solid object in the universe, so it’s subject to the n-body problem like everything else. But, strictly speaking, it’s also a quantum system, subject to the uncertainty principle.
In practice, you won’t ever see effects from either, and you’ll always get away with assuming F=ma. I wonder if that means there’s a region of the state space in which trajectories do not ever diverge. Or, oh heck, something.
Sorry I came to this thread so late.
True story. Back in about 2006 or early 2007, my daughter and I were out working in the garage and one of the first Freakonomics interviews came on the radio. The guys (I don’t know which one of them) was using his economic analysis to discuss the Important Question of why do cars have the gas filler caps on different sides–why don’t they just all have it on the same side? The Freakonomics answer was, well duh, so you can get more cars in a filling station, because they can use different sides of the pumps.
I guffawed at this, and asked my daughter, who was either 13 or 14 at the time and of course had never driven a car so had no direct experience at this, I asked her what was wrong with that answer.
She immediately-not skipping a beat-said, “well, cars can come from different directions to the same pump, so it doesn’t make any difference.”
So a 14-year-old is smarter than the Freakonomics guys.
That was the end of my listening/reading anything Freakonomics. Whenever I hear them come on anywhere or see anything they’ve written I immediately think of that incident, snicker, and go elsewhere.
dance around in your bones
Where can I get an ironic goatee? I think it would look good with my soul patch.
@schrodinger’s cat: Where did I ever say that the motion of a thrown baseball is chaotic? I explicitly contrasted a thrown baseball with chaotic motion, and I thought it was obvious that I did not think the baseball, or Mars, behaved chaotically, in the very comment you reference.
I don’t understand your point.
@jl: OK then I misunderstood your point. I should read more carefully. Sorry.
@schrodinger’s cat: We may be talking past each other. You’ve said things in your comments, that I totally agree with and are consistent with my view on the difference of how physics and economics are evaluated, and in fact researchers in each field evaluate their own disciplines.
@Lurking Canadian: The quantum effects are so small that they can be ignored for all practical purposes. Have you read George Gamow’s Mr Tompkins series, where he discusses scenarios as to what would happen if the speed of light were much smaller than it is and Planck’s constant was much bigger and we could see both relativistic and quantum effects in our daily life.