Talk:Economics/Archive 6

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Scope of economics

One word I have been banishing from economics pages is "modern". It's kind of ridiculous, in most countries you have a Marxist, Keynesian, monetarist and perhaps other analyses battling it out in the political sphere. Considering that economics is a SOCIAL science and not a real science, it seems to me the idea that say Milton Friedman's ideas are "modern" and Keynes (and his followers like Paul Krugman) and Marx (and his followers like the Monthly Review) are old-hat, classical, outdated and so forth seems to be slightly POV. Post-Galileo, most people will agree to a consensus on real sciences like astronomy, but a social science like economics will always be fraught with different camps as long as economic classes exist, and implying that economics is more like a science (once they dropped the word political from political economy and added the -ics), and that the ideas of Milton Friedman financed by the idle classes are "modern", and that Keynesian or Marxian ideas supported by many workers are outdated in some manner doesn't seem to fit. -- Lancemurdoch 04:19, 15 Jan 2004 (UTC)

There is a clear dividing line between economics in the 19th century, which based its practice in description, and the modern view which takes economics to be mathematically based - which is not to say scientific or not. This difference is primary, and not based on monetarism versus Keynesian theory. The basis of economics as the choice between scarce outcomes is something which no school of market economics seriously disputes. Now what, exactly, is scarce, and what the fundamental scarcities are, is open to enormous dispute, but "a form" is both vague and does not correctly capture that the overwhelming consensus among practicing economists is for the definition offered, which, literally, heads just about every text book on economics currently published.

This differs strongly from the 19th century defintions of political economy, which treated the subject as based in description of human activity - even if the ultimate subject of choices between mutually exclusive outcomes was the central question of the work.

I am all in favor of not piling on wasted adjectives which only serve to advance one particular view over others, but here, the word modern is used in its absolutely proper sense as the current tradition and theory of a discipline, and not being attached to a particular school, though I did note in the definition that it was modern market economics - that is all schools of economics centered on the operation of markets.

changing it back, there was no NPOV violation here.

Stirling Newberry 06:07, 15 Jan 2004 (UTC)

How about this:
Marxist economic theory asserts that each historical era has a unique "dialectical" tension that is determined by that society's "relations of production" (who owns what, who does what, and who receives what), relations that constitutes that societies economic structure. Analysis of any economic system must, according to Marx, be done within the framework of its relations of production, and the dialectical tension that this creates. mydogategodshat 06:16, 15 Jan 2004 (UTC)
I'm probably more familiar with Marx than the average person here and I have no idea of what dialectic means (Noam Chomsky says he has no idea what that word means as well, not for lack of trying to find out).


On the other hand I totally agree about the relations of production. To those not steeped in Marxian economics: the idea is that a commodity undergoes three phases - production, exchange and consumption. That people like Milton Friedman are focused on exchange, and to a lesser extent consumption, and to a large extent ignore production, is seen as ideological. The classical economists like Smith and Ricardo considered these now sort of verboten topics, as did Marx, in depth, but in the 21st century, among the economists employed by people who can afford to employ economists, "the laws which regulate the distribution of the produce of the earth" as Ricardo put it, hold little interest, and focus is on exchange (trade) and price, and to a lesser extent use and consumption.
Really, the problem is that in a Marxian, or perhaps even Ricardian sense, the feeling is that the focus is too narrow, and especially virtually ignores production.
As far as mathematics, well I can think of no better way to ignore a social relationship in a social science than mathematics. Marx saw economic systems of different eras like slavery, feudalism, capitalism. One could calculate how much cottons slaves picked, how much a slave cost to capture, ship, feed, breed. How much the slave cost at an auction, how many square meters of cotton a slave picked a day, what the price of cotton was, how it was traded to Britain which helped in its industrial revolution in textiles, how Eli Whitney's cotton gin increased slave productivity and the master's profits and so forth if one look over the account books of an American slavemaster's accountants books of 140 years ago. But all of that economic data, in the social science of political economy, would not explain some important relations of production. In fact, Haiti's slaves rose up and killed off their masters not long after the American revolution, which changed the economic system being studied.
I am not obsessed with adjectives, I, and many others, just don't like how this social science is portrayed as more like physics than literary theory, how theories favoring the rich are called "modern" while ones favoring workers are "old, outdated" and whatnot, and how the field of economics has been narrowed significantly since even bougeois liberals like Adam Smith began studying political economy. In my mind, narrowing economics to a narrow mathematical study of price at the point of exchange is inherently ideological. -- Lancemurdoch 09:45, 16 Jan 2004 (UTC)
This is some very good and productive discussion, and I'd like to first thank everyone for taking the time to elucidate where they are going.
I think the first of Lance's concerns - on "social science" itself - is best dealt with on that page. I've started a rather longish essay on the history of the modern concept, and welcome expansions and additions, particularly in areas involving the still controversial role of the idea. Economics isn't the place to fight this particular battle except by reference.
Dialectic - dialectic is actually a simple concept in Marx. There is the means of production, there is the ability to control the relationships that make up those means of production. Consciousness is the ability to create the relationships that run production. So if you can take a group of people, drop them someplace, and they can, for example, start a factory, then they have sufficient "consciousness" to run a factory. If a society has sufficient consciousness to run the production it is based on, then it possesses the "objective" means of producition. Basically, there is being able to do something, and there is the ability to organize it.
Dialect then is the process by which classes come to consciousness of production, and the struggle to control production once they do. The dominant class at an given time can be defined as the class "the people who know what the fuck they are doing". Against them are struggling people who actually are doing it, but don't know how to do it themselves.
To Marx then, history is a series of struggles, in each case the dominant class is overthrown by a new class that figures out how to produce and then says "what do we need these bums for?"
We then get into his analysis of profit and why surplus value is distributed more widely etc etc etc. But Dialectic is not, itself, problematic as a concept.
Production and Consumption I think Lance has hit on a core problem here: most critiques of current practice, both within and outside the field, center on what economics calls "value", which is another way of saying "underlying realities of production" and over "decision" which is another way of saying underlying psychology of consumption. Perhaps we can organize material which allows a general summary of these critiques - giving broad reference to all of the major work being done, that we know of - that centers around these and finding a place to put them. Again, economics doesn't seem to be the place, and instead, these questions seem to be about framing economics - where it fits in the general scheme of knowledge. Political Economy is the subject where more of this fits, since production issues are crucial to policy.
Once again, thank you for taking the time to work through this, I am very confident we can produce a final article which hits the mark and broadens, rather than narrows, the focus. For myself I am going to concentrate on economic modelling and the mathematics, simply because it is something everyone ought to know, and wiki is rather short on good explanations. People need to know what it is economics is "really" about, in terms of what it does, before they can start sorting the real critiques from the rants of cranks.
Especially because there are enough cranks on the internet to deal with.
Stirling Newberry 18:08, 16 Jan 2004 (UTC)
I agree that the fundamental assumptions of economics are very important to include in our articles. It is always difficult to know where to put content as broad and as fundamental as value theory. There is an interesting article at Anthropological theories of value which still need some work, and there is a section of the Wealth article Wealth#The Anthropological view of Wealth that goes into these issues somewhat. There is also Economic anthropology which is a mere stub (and not a very good one).
Looked at it, it is basically what I call a "But But But!" page, which references a critique of the mainstream view without exploring it, and provides a link to some yet more minority position. To integrate it means really giving a good exigesis of the views of anthropology with respect to wealth - which go a lot farther than an anthropological critique of economics - and finding places to link with economics, sociology etc. etc. More work - fun fun fun. I'm going to focus on doing a section on the basic math of mainstream economics (supply and demand curves!) and continuing with the political economy section creating links into as many other disciplines as possible so that people will be able to get a sense of how all of this holds together. But back to that evil original research stuff for the time being. Stirling Newberry 19:11, 17 Jan 2004 (UTC)
As for dialectic, this is a term Marx borrowed from Hegel. He took Hegel's system of historical change (thesis, antisythesis, and synthesis, ultimately culminating in the Ideal) and applied it to the means of production. mydogategodshat 16:25, 17 Jan 2004 (UTC)
And Hegel borrowed from Aristotle. Marx' use of the term, while it is in the Hegelian tradtion is different in key ways. For Hegel the dialectic was an expression of metaphysical reality. For Marx, it is rooted in the struggle over the objective means of production. hence "Materialist Dialectic".
Yes, from Aristotle he borrowed the notion of a teleological flow of history. mydogategodshat 16:25, 17 Jan 2004 (UTC)
By the way,the concept of "a final article" is one that we all learn to abandon here at Wikipedia. No sooner than you get an article just the way you want it, and someone will make changes to it. Colaborative authorship is an amazing process to see in action: It can be maddening too. mydogategodshat 02:07, 17 Jan 2004 (UTC)
As for final, on a subject like Economics - probably not. But getting to an island of stabilty would be nice, so that we can drill down deeper into the sub areas of economics - many of which are stubs or paraphrases of the definition. Marx is, of course, going to be problematic, especially since there is on overwhelming USA bias to contributors, and Marx is viewed differently in Europe than in the US. There he is more or less a classical labor theory of value economist who studies production. Here he's a satan against what is held dear. Hence there are always going to be "corrections" which represent the, well, libertarian leaning, consensus of internet Americans.
What I hope we can avoid is crude slapshots, these always come across badly, and don't present the case for a particular POV well, which is what NPOV writing should be aiming for: give everyone their best case, and let original research and the reader sort it out.
Another thing is that I think as far as mainstream or whatever to ask who is paying the bills. For example, Stephen Roach is a Morgan Stanley economist studying the "relationship between ends and scarce means which have alternative uses". Now imagine he did analysis and said one day to his boss "I think the drive for profit is creating inefficiency in matching scarce resources to their uses of highest utility, my analsis shows eliminating shareholders, prodit, dividends, rent, and interest, and handing over the companies, offices and factories to the people who work in them will have a better result". What would happen? He would be fired. Economists employed by the AFL-CIO come to different conclusions than ones employed by the US Chamber of Commerce, and the fact that the Chamber of Commerce can afford to employ more economists to forward their ideas doesn't make what they're saying any more true. -- Lancemurdoch 09:45, 16 Jan 2004 (UTC)
Roach has in fact said that. Econospeak is "market inefficiency due to insufficiently transparent flow of information" - id est fraud - and "market misallocation of resources due to temporary price anomolies" - id est "people were stupid enough to buy CMGi at 104, so who am I not to sell it to them?" and "distributed costs of capital accumulation" - id est "having a lot of poor people so that we can have more billionaires has got to lead to something bad at some point." - and "low probability high consequence events" - id est "we know that catastrophe is going to strike sometime, we can't price it, so the best thing to do is hope you are out of the market before it happens." A good deal of solid work has been done which points to why smooth statistical models don't see these rather obvious real world consequences, and ways of looking at them, mathematically, are coming into being see complexity etc.
While this isn't, yet, a consensus viewpoint, looking at the recent list of Nobel prize winners would suggest that the discipline is piling up counterexamples to the neo-classical consensus and we should document that. For the rest, that is under the heading of "original research" - which is where I need to be getting back to at the moment.
Thanks again, this has been very productive, and I hope this core can hack out the issues we have and produce some high quality work.
Stirling Newberry 18:15, 16 Jan 2004 (UTC)


____

If other people are happy with it I am.

Stirling Newberry 06:55, 15 Jan 2004 (UTC)

I think that can be understood without having previous knowledge of Marxist thought. Maybe someone not familiar with Marxist economics can tell us if this is clear to them. mydogategodshat 07:06, 15 Jan 2004 (UTC)

We really need an equation editor. This subject needs to have at least the simple equations laid out.

Some topics I think would be worthwhile (off the top of my head):

Game theory (linking to John Nash etc), pareto optimality, exchange rate theory (pegged, float, dirty-float), Bretton Woods, Neo-Keynesian school, Milton Friedman, the Austrian School, utility theory, revealed preference, cardinality and ordinality, simple supply and demand, oligopoly / monopoly theory and competition, contestability, sunk costs, interest rates, money supply, the concept of a market, Walras and the concept of the auction, the business cycle, random walks, determinism and predictablity in economics (linking to chaos theory), financial markets, and theories of regulation and taxation.

Just linked 'em all to see which are here now (September 2003) - about half are, thankfully. Also needing to be worked in somewhere: Triple bottom line, ecosystem valuation, social welfare function, and any discussion of clearing and settlement - we've got Bank for International Settlements but no fundamental discussion of what it *does* - fiat clearing nor for credit clearing or for commodity clearing which are different again, nor creditworthiness. Some of these are finance topics but there will be overlap between list of finance topics and list of economics topics on such basic issues. Both may need to be updated to include all of the ones that exist.
Is Supply and demand good enough, or should there be a simple supply and demand? Also is Consumer theory what you mean by utility theory?? Jrincayc 01:09, 16 Sep 2003 (UTC)

Off the top of my head though - I might come back to do some of them if I've got the time. Haven't really thought about most of this stuff for a few years now ...

C

Replaced scarcity, not because it isn't in the textbooks, but because "choices under scarcity" is just a verbose defintition of "trade". I vote for clarity.

I think the point of economics is to create those verbose definitions. It's not just "choice under scarcity" but also the NATURE of choice, the NATURE of scarcity. The Fundamentals section is good but has to make this clearer, and come up front.

The first sentence has no verb: "Economics (formally known as political economy) the governance of the production, distribution and consumption of wealth and the various related problems of scarcity, finance, debt, taxation, labor, law, inequity, poverty, pollution, war, etc. " ...I am going to insert the word studies for now. Feel free to fix it differently. Kingturtle 04:54, 19 Aug 2003 (UTC)

A problem with this definition is that it is simply wrong to say that what passes for economics today includes all the studies formerly (and now in parallel) known as political economy. While there is consensus on one concept of technical economics and its methods, and on capital types, the latter has yet to be completely integrated into monetary policy, fiscal policy, accounting and such - thus there are well-defined packages of accounting reform and monetary reform that seem to have no valid reasons NOT to happen, other than the fact that someone benefits from the inertia and failure to do so. In the 20th century this exact situation led to two very nasty wars, and a third nasty confrontation over economic systems, that between them, have characterized the whole global polity and most moves towards world government. Accordingly, we are obligated to present economics in its full depth, and with its full impact on human society, and the present page simply does not do that adequately.
Hell, we're talking about distribution potentially of air, water, and food here. Hard to get more important than that.

Controversy over Economics

Removed:

There is very great controversy about how supply and demand questions, ethics questions, and ecology interact to restrict and frame economic questions. These questions are usually dealt with in the field called political economy.
The article on economic choice deals with what constitutes an economic, rather than a moral, political, or personal type of choice.

I agree sorta with the premis, and there has been a controversy over applying economics to various decisions. On the other hand this is not balanced as written, and I am not sure what a supply and demand question is. I personally think that controversy over economics should not go as part of the initial summary, but should instead go into a seperate section on the page if such is considered necessary. Jrincayc 21:57, 14 Dec 2003 (UTC)

Cyan has moved/censored the article to User:Cyan/kidnapped/Economic_choice and you should review what is said there. Incorporate as desired. User:EntmootsOfTrolls


I'd like to stress that there is substational information about alternative and in many cases obscure approaches to economics on Wikipedia. In fact, the alternatives are overall given more attention than mainstream economics in a variety of articles. The problem with the article on economics has always been that it has tended to be dominated by people who dislike the subject. I'm fine with criticism of economics, but the subject should first be given a clean, uninterrupted presentation, just like all the alternatives (green economics, natural capitalism and what have you). -- Galizia


While there is an admirable set of articles on a lot of important questions like value of Earth (one way to assess economics is whether it values the things that humans actually value), the idea that this is somehow "given mroe attention" is just not true. The few such topics covered are absolutely basic, and even essentials like ecological yield were only covered recently.
If anything the material overall is still balanced towards the neoclassical view you wrongly call "mainstream", which is by no means accepted or acceptable in pure form in most forums outside the US. In the UK all economists must learn Marxist economics and the Marxist critique of capitalism. Joseph Alois Schumpeter is covered, etc..
But test what you say another way: If what you say were true, there would be articles on the vast fields of labour economics and welfare economics which have been leading even to Swedish Bank Prizes lately (Amartya Sen the most obvious example). There'd be attention paid to labour theory of value and labor theory of value being about the same thing, and, there'd be discussion of David Ricardo as having founded that theory, not just a firm politicized dismissal. These errors aren't corrected, so if anything that shows systematic bias against the less quantitative and technical economics.
Everyone dislikes scarcity. But it is not just dislike that drives most criticism, it's a basic belief that economics assesses scarcity falsely and thus its basic constructs are irrelevant - there is no such thing as a commodity and no such thing as a product and no such thing as supply and no such thing as demand.
Of course there is not any such thing. There is also no such thing as a person, no such thing as a light bulb, no such thing as a tree. But we have words for them because we find the concepts useful. Supply is a useful concept, demand is a useful concept, and concept of supply and the concept of demand exists (maybe not in your mind, but certainly in mine). Unless you are interested only in the philosophical concept of nihlism, stateing that they don't exist is not productive. All models are false, and we precieve the world by making models of it, so you can take the extreme view that everything that we precieve is false. Many of the models of economics are useful, as in they are true enough that they can be used some of the time. You just have to understand that what you have is a model, and then decide, is this the right model? Supply and demand is a fairly good model for wheat but a lossy model for love. Most of the ideas that have been thought of for economics in the past hundred years have been to figure out where the failings of economics is and then incorporate that into a new model. Explain exactly where the models of economics fails and you may have something useful, claiming that they fail in general is completly true and completely useless. Jrincayc 16:24, 17 Dec 2003 (UTC)
You only believe in these things if you are taught to take a God's eye view of them. The "alternative" position is that quantifications applied in the contracts on commodity markets etc., are simply based on nothing, utterly ungrounded in anything but the authority that writes and enforces them. What is a "soybean" when there are breeding, genetic manipulation, pesticide use, and other comprehensive outcome differences that really and truly matter even to the consumer but aren't reflected in the numbers? There have been street protests by economics students in Europe on this grounds - that what they are taught is pure nonsense. No one believes, for instance, that GDP has any valid economic basis whatsoever. There is NO argument for that - its creators argue that it is not relevant for the purposes politicians and bankers use it for.
Yes, GDP has some severe problems. For example, I take care of my kid, no contribution to GDP. I pay some body else to take care of my kid, contribution to GDP, even if they do a worse job. Similarly, I have to buy a lock for my door, contribution to GDP. I can leave my door unlocked and don't need to buy a lock, no contribution to GDP. I am open to suggestions for a better measure. Maybe next time you come, you could work on writing well researched NPOV articles about Genuine Progress Indicator or Index of Sustainable Economic Welfare that do try to be more accurate measures. Jrincayc 16:35, 17 Dec 2003 (UTC)
There are no more "alternatives", if you look at the discourse taking place at the UN and even at the World Bank, it is a question of deciding which of the ecology-driven approaches is the "mainstream"... the term natural capital for instance is now in wide use at both institutions.
Also, look at the lack of detailed articles on subjects such as those linked from market system - there is no detailed discussion of how an energy market differs from a debt market for instance, or even what collateral is. So the neoclassical assumptions that all contracts for all services are equally commodifiable, and that perfect competition assumptions can apply to imperfect/real situations of unequally distributed power, are both being baldly accepted. Else "we" would surely "need", and "have", articles on these detailed differences.
As it is such considerations are ghetto-ized in separate articles on energy economics that don't have the detail on how the energy trading mechanics of the real world actually work. This doesn't mean that energy economics is "alternative", it means that the impact of energy on the rest of economics has been censored/ignored. It means that energy has been treated as if it were no different than any other "commodity' - but of course "we" don't seen to be starting any foreign wars for control of oh say soybeans... nor putting trillion dollar budgets together for military devices that burn solar power... These issues dominate the political economy today, so it's pretty clear that economics articles that pretend these things are just part of some "free market" where people are making voluntary choices, is idiotic at worst, and ideological at best. User:EntmootsOfTrolls
EntmootsOfTrolls, I think that you could make some valuable contributions. Unfortunately, your behaviour overshadows your contributions. For example, the comments about economics are helpful to me to see where you are coming from (even if I disagree with quite a few of them). On the other hand (I'm an economist, so I have to say this), your removeal of the comment from Cyan and your combative strategy don't help things. I will gladly post any well researched, NPOV, GFDL articles that you email me that are appropriate material for an encyclopedia and will attribute them to you (I would love to see a good article on the World3 model (from Limits to Growth) and good articles on alternative measures to GDP and the problems with GDP). Since you claim that your banning was unfair, I am also willing to read your reason why you believe this. Good Day. Jrincayc 16:57, 17 Dec 2003 (UTC)

Dealing with the impact of energy on economics is certainly worth treatment, but then, this is an area where I have some degree of expertise. Wiki's not paper, we can cover the emerging ideas in xaos theory and scarcity which a more staid publication could not. I'd like to open a discussion on how to do this, without distracting from the presentation of the status quo, which, after all, is what people go to an encyclopedia for.

Stirling Newberry 23:04, 15 Jan 2004 (UTC)

I would be very interested in an article on chaos theory in economics if you can write one. The only thing to beware of is you can't get too close to the edge. If you do someone will delete the page claiming that it is primary research. They believe we should restrict our articles to well established knowledge. mydogategodshat 02:28, 16 Jan 2004 (UTC)
I think we could at least write a stub which points to its existence, references some of the work being done, and go from there. For reference, I am currently at work on a book entitled The Fourth Republic which argues that there is a visible relationship between the basis of monetary exchange systems and constitutional law in the US, and it makes use of a certain amount of both xaos theory and political economy versus economic theory. A careful and reasonable presentation of the conflicts within economics, as well as a solid presentation of economic thinking itself, is, I believe, useful, because if done properly, it will give people an idea not merely of what is, but the directions that are being pointed to for the future. Stirling Newberry 18:28, 16 Jan 2004 (UTC)