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Generally speaking, I agree with the overall content of your post. However your first and last sentences really emphasise for me the real problem: oversimplifying and stratifying the discussion.

"Nonsense" is an extreme overstatement, there are nuances to both arguments.

"This is economics 101" is exactly the problem: we're dealing with an economic system that isn't working. Questioning economics 101 is precisely what's needed, and I'd argue that while your arguments are sound, they've been treated as absolutes, which they're not.

A farmer needs to buy their tractor from a tractor manufacturer and fuel it from a fuel extractor/generator, but not everyone need be involved in this cycle and not every step need be specialised in a completely unary manner. Also, the emphasis on individual economic efficiency over efficiency of communal benefit is important: if a farmer can produce less - but sufficient - food, for less - but sufficient - material profit, while not producing negative impacts for others elsewhere in the economic system at large, that's a more "efficient" overall system.

The most important word in the excerpt you quoted is "most"






"This is economics 101" is exactly the problem: we're dealing with an economic system that isn't working. Questioning economics 101 is precisely what's needed, and I'd argue that while your arguments are sound, they've been treated as absolutes, which they're not.

This makes as much sense as saying "You say that my magical spacecraft won't work due to the laws of physics, but physics is exactly the problem: We can't travel to Alpha Centauri yet. Questioning the laws of physics is precisely what's needed...".

You don't get to ignore facts simply because they're inconvenient.


Begging the question; economics is not a physical science where you can run A/B tests on an economy and find results. It's a social study, mostly. As someone who studied it for years, institutionally and on my own, I can tell you that economists do not agree on any basic laws except that people have a long list of wants and that not all of them can be satisfied.

Many economists are questioning their 101s lately. Look closely in the various journals and you'll see evidence of that, both explicitly and implicitly.


> economics is not a physical science where you can run A/B tests on an economy and find results

The is broadly true of Macro Economics. This might even be impossible as a science, since the object of study (world economy and markets) is aware of its findings, and adapts around them.

Micro Economics, or "Price Theory" as it maybe should be called, is OTOH a very powerful science that gives deep and counter intuitive insights into how the world works.

It is also largely ignore by decision makers :)


I love you. :)

Seriously, though, your econ mind is on the same track as mine. "Economics" is a pretty broad brush, and it's difficult engaging in meaningful discussion.

You make a great point: The "economic system" is conscious and reacts/adapts to internal and external changes, which changes the rules, and the meta rules, and the meta meta meta....


"Trade and exploiting comparative advantages yields greater utility" is about as hard a law as any.

If the law stands in isolation. But there are more questions that arise. To whom? For how long? In which way? Etc. etc.

The side effects must be investigated because that's largely where we are in the public discourse right now. We're in a big adjustment period. We're learning about consequences; good and bad.

Reminds me of Keyne's famous long-run quote.


Not if you ask marxist-economists...

Yes, and we should ask Lysenkoists about effective growing of crops.

Marx contributed massively to sociology. He contributed nothing of note to economics that's really relevant to this day (not that his effort was not commendable). Sticking to orthodox marxist economics in 2016 is more dogma than science.


That wasn't the point. The point is that the "laws" of economics are the same rigorous laws of physics.

Markets aren't forces of nature. That's propaganda.


Marx's contributions to sociology are definitely relevant today, even if they're not in vogue. Even if they're wrong. This is human behavior we're talking about, and people have memories that they act upon.

And if you ask biblical literalists, they'll tell you that there was no big bang but the world was instead created in six days. There are always some people with counterfactual beliefs.

Most (all?) bad economic policies come from denial of economics 101. For example, fixed currency exchange rates. And, of course, wage and price controls.

Can you give one (preferably two) specific examples of respected economists who are questioning 101 level econ principles?

I've studied economics at the college level. I follow economics news and am not aware of economists questioning 101 level principles. Many of these are relatively simple and intuitively obvious ones (once you wrap your head around them), much like 101 level maths.

Consequently I am inclined to disbelieve the claim that economists are questioning econ 101 principles, unless you can provide some examples. More than one example would be most convincing since you're claiming this is a general trend. Journal article links would be appreciated.


(I am not an economist, never took a class in economics, but am interested in the field and like to read about it, so talke all of this w/ a grain of salt)

It is not so much about questioning economics 101 principles as much as questioning their validity in the various economies. Taking the example of comparative advantage and more general trade theory, there are well known, respected economists (e.g. D. Rodrik) who have argued against the scope of their validity.

There also seems to be a debate about how 101 is taught in schools, see e.g. [1].

[1] https://www.washingtonpost.com/posteverything/wp/2016/05/13/...


You're right, it's a larger question of validity in these nuances. I knew I'd get in trouble saying "101", but I hope people will read that in a sympathetic light. (Ha!)

Please accept my apologies: I'm taking a Mary Poppins approach by "not explaining anything." We're all capable of looking for examples that'll confirm our own suspicions; an attempt at confirming or disconfirming what I've blurted out above can be an exercise for the diligent reader.

I want to push back on the idea that economics is a way to divinate the truth of how to generate and share happiness. It's a piece of the puzzle, but a very small one.


That's a bit of a silly comparison. 'Economics 101' is not a hard-and-fast set of physical rules; if it were, we'd probably be doing a much better job of managing it!

economics isn't hard science

> we're dealing with an economic system that isn't working.

Can you explain this statement further? North Korea and Venezuela's economic systems aren't working. America and most of Europe simply don't allow everyone to consume as much as they would prefer to consume.

It sounds like you mean "isn't working" in the sense of "an iPhone 5 isn't working as well as an iPhone 7", not "my car isn't working so I can't get to work."


I would say "isn't working" in the sense that the vast majority are struggling to achieve or retain financial security, while a tiny minority have concentrated most of the weath for themselves. Also, the trend continues to concentrate wealth further, making it ever more difficult for the majority.

This is a recurring cycle, which has happened many times throughout history. Pretty much every time it ends with the elites killed, their wealth stolen, civilization collapsed or set back significantly, and a new cycle begins. I don't understand why the elites never see this coming, or take adequate steps to prevent it. All they have to do is be somewhat less greedy.


Are you implying that people have had to struggle less to achieve or retain financial security in the past? During what time period and in what country? Can you share some specific data substantiating the claim?

Average wealth has increased in America over the last 50 years, and real family income has been rising overall since the 1950s. Wealth concentration today is lower than it was in the 1930s. Poverty has fallen since the 1960s. I excerpted these facts from (1). While it is also true that income and wealth inequality has been rising during this time as well, the fact of the rich being well off doesn't necessarily hurt the non-rich, especially if both groups are becoming richer over time, which the data shows is happening in the US.

People are becoming better off over time. Why is our economic system failing us?

Note as well that the average person today has a better quality of life than medieval kings did. Near the official government poverty level, most Americans live quite comfortably (2), and have amenities such as housing, air conditioning, cable TV, mobile phones, etc.

> government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. (2)

(1) http://www.cbpp.org/research/poverty-and-inequality/a-guide-...

(2) http://www.heritage.org/research/reports/2011/07/what-is-pov...


Technical progress has brought about any of the perceived benefits you mention; the economic system has only caused those benefits to be disproportionately applied. While the median quality of life has improved, the extremes continue to widen making that metric less and less relevant. The "average person" you talk about has become a tiny minority.

Your comparison of wealth concentration to the 1930s is also disingenuous: wealth concentration spiked massively toward the end of the 1920s, it was far lower than now before and after that. That particular point in history isn't a particularly ambitious bar to set.

Though if you're linking heritage.org while keeping a straight face, I fear this may fall on deaf ears...


>Note as well that the average person today has a better quality of life than medieval kings did.

Shut up poor people, you have sanitation and refrigeration!

When people who make arguments like this are dragged from their beds kicking and screaming they will only have their own hubris to blame.

Edit: Those who down vote forget that we once had an elite ruling class in this country.

"what country before ever existed a century & half without a rebellion? & what country can preserve it’s liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? let them take arms. the remedy is to set them right as to facts, pardon & pacify them. what signify a few lives lost in a century or two? the tree of liberty must be refreshed from time to time with the blood of patriots & tyrants. it is it’s natural manure."

-Thomas Jefferson


How do you build a system that is stable where an individual is expected to leave some personal gain on the table?

That runs entirely counter to human nature. If you can solve that you may have something workable, but without it "Nonsense" is as good a word as any.


Really? In Northern Europe I would argue we have this working decently well. To point where we have a health care system and educational system which is both less expensive than some and more productive/effective at the same time.

a) is this worse than the current system?

b) Is it really human nature?

This is what social norms are for. Slavery is for now still mostly frowned upon, and in some circles even racism is. Even though using either usually results in huge personnal gains for some.


Slavery is a great example to work with. It has been made so costly to own slaves that no one in the western world can or wants to do it. In most areas just the social of ramifications of attempting to acquire slaves will cause all your customers to leave and employers to fire you. Then if you somehow do get a few slaves law enforcement or military agencies will try to stop you. Since they generally enforce their monopoly on violence they will probably succeed at stopping you.

Only in the places most removed from these incentives do we see slavery. Look at North Korea, much of the population can be seen as slaves (The subsistence farmers for example). The costs of keeping the slaves can be thought of as the cost of running their propaganda machine, arming their military, controlling the border and the loss in relations with the rest of the world. As long the leaders fail to gain a sense of compassion then the only thing that matters to them is their slaves make more than they cost.


Farmer who has an Ox / horse / mule and feeds the critter with grass / grain grown on his land does not need to buy a tractor.

In fact you can plant seeds with a stick and skip the critters.


It is true, but you end up struggling to even feed your family. Ask any subsistence farmer.



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