Thursday, August 31, 2017

Alex Lantier — French President Macron calls for military buildup in foreign policy address

At the centre of Macron’s policy is an attempt to re-assert French influence in its former colonial sphere in Syria, North Africa, and the Sahel. “Two great zones are the focus of our efforts in the struggle against terror: Syria and Iraq on the one hand, and Libya and the Sahel on the other,” he said. He announced that he would “soon” travel to Ouagadougou, the capital of the former French colony of Burkina Faso, which has played a significant role in the French war in neighbouring Mali.
Neoliberalism, neo-imperialism, neocolonialism; what else is new?
Macron’s agenda shows that the promises the European bourgeoisies made as they launched the European institutions after World War II—that it would never again fall into war, economic depression, and dictatorship—were false. Unless they are stopped by a conscious political movement of the international working class against war, the imperialist powers are again heading towards military catastrophes on a scale as great, or even greater, than the wars of the previous century.
French President Macron calls for military buildup in foreign policy address
Alex Lantier
Only 40 per cent approve of his performance, the Ifop poll showed, a 14 per cent plunge since July, although another poll has placed his rating as low as 36 per cent.
The dramatic decline since his landslide election victory in May, when he enjoyed a 62 per cent approval rating, will do little to enhance Mr Macron’s standing as he hosts a summit on Monday with Chancellor Angela Merkel of Germany, and Italian and Spanish leaders.
That didn't take long.
The far-Left leader, Jean-Luc Mélenchon, who the poll indicates is seen as the most effective opposition leader by a majority of voters, on Sunday urged his supporters to “take the struggle to the streets”.
The Telegraph
Majority of people in France now dissatisfied with Macron
David Chazan

Pam and Russ Martens — Trump & Company Channel Ayn Rand

Ayn Rand made her mark by writing and lecturing on a philosophy called Objectivism. It’s a philosophy that flips upside down everything that most Americans hold dear. Under Objectivism, greed is good, selfishness is noble, helping one’s fellow human beings is for suckers and an outright evil. The philosophy also holds that big government is bad and obscenely rich corporate titans are the real heroes of society. (See related articles below.) The Koch brothers’ network of billionaires has been financing the proliferation of Rand’s books into high schools and colleges for decades.
Trump is the personification of the Ayn Rand creed and his elevation from reality TV host to the Oval Office is valid proof that the Kochs and their ilk have spent their money wisely....
Wall Street On Parade
Trump & Company Channel Ayn Rand
Pam Martens and Russ Martens

Yeganeh Torbati — U.S. retaliates against Russia, orders closure of consulate, annexes

US-Russian relations continue to sour. Cold War 2.0 looms as both sides arm up and beef up their nuclear capabilities.

U.S. retaliates against Russia, orders closure of consulate, annexes
Yeganeh Torbati

See also

Diplomatic war: From Obama’s expulsion of Russian embassy staff to Trump’s closure of SF consulate

China says it will never allow war or chaos on its doorstep as tensions escalate on Korean Peninsula
It is crucial that unlike many previous statements, today’s was made not by the Chinese Foreign Ministry but by the Defense Ministry. This sends a clear message that the People’s Liberation Army will not tolerate any military action by foreign powers on the Korean peninsula, namely the United States.
This is the first time that the Chinese Defence Ministry has clearly made such a statement with previous allusions to such things deriving from the Chinese media.
A similar ironclad commitment to the ‘double-freeze’ was further made at yesterday’s session of the United Nations Security Council by Russia’s Ambassador to the UN, Vasily Nebenzya.
Having borders with North Korea, China and Russia draw a red line.

The Duran

Seeing Emergent Physics Behind Evolution — Interview with Nigel Goldenfeld

Quanta Magazine recently spoke with Goldenfeld about collective phenomena, expanding the Modern Synthesis model of evolution, and using quantitative and theoretical tools from physics to gain insights into mysteries surrounding early life on Earth and the interactions between cyanobacteria and predatory viruses. A condensed and edited version of that conversation follows.
Quanta Magazine
Seeing Emergent Physics Behind Evolution
Interview with Nigel Goldenfeld, Swanlund Endowed Chair and Center for Advanced Study Professor in Physics at the University of Illinois at Urbana-Champaign (UIUC), Director of the NASA Astrobiology Institute for Universal Biology at UIUC, and head of the Biocomplexity Group at the University's Institute for Genomic Biology

Lars P. Syll — Damon Runyon’s Law

Robert Solow destroys economics as a hard science. Of course, he is not alone in this. Heterodox economists have been pointing this out for a long time, and so have observers from other disciplines looking in. And this is not the only reason. For example, key terms are poorly specified as shown by the Cambridge capital controversy that Solow was involved in with Samuelson on the losing side.

Business schools figure this out some time ago and switched to the case method.

Lars P. Syll’s Blog
Damon Runyon’s Law
Lars P. Syll | Professor, Malmo University

See also

Adam Curtis video

Economics — nothing but an ideological paranoia

Bill Mitchell — When economists lose the plot entirely and show their colours

When I started studying economics at University, I had a lecturer in microeconomics who, thankfully, was an antagonist of the mainstream micro mantra about perfect markets and their capacity to deliver optimal, efficient outcomes for all. She is no longer with us but her early teachings have stayed with me (thanks Kaye!). She used to say that the market was like a voting system where the votes were cast in dollars. The rich have more votes and can sway the outcome in their favour. At the extreme, they can deprive the poor of the essentials of life, yet mainstream economists, who recite the mantra in those textbooks, would claim that outcome was optimal and efficient because supply and demand interacted to determine a ‘market-clearing’ price. 
For those who resisted the socio-pathological tendencies that arise from a complete undergraduate program in mainstream (neo-liberal) economics, it was obvious that the narrative was a fantasy. The real world is nothing like the requirements that the textbooks specify before ‘markets’ deliver optimal outcomes. Deeper study, not usually, taught in standard, mainstream economics programs also allowed one to understand that when the ‘market’ is not as specified in the textbook (read the real world) attempting to engineer ad hoc shifts towards that ‘idealisation’ probably resulted in even worse outcomes. At any rate, application of ‘perfectly competitive’ theory is fraught. 
And that is before we invoke basic morality and human valuation. Unfortunately, events like Hurricane Harvey, bring out economists who think it is smart to apply these ridiculous textbook models and claim authority over the rest of the citizenry. All they achieve is that they utter venal garbage and shame on the media outlets who give them oxygen....
Paragraphing introduced for online readability.

Bill Mitchell – billy blog
When economists lose the plot entirely and show their colours
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tim Worstall is not alone. Another case in point.

"Price Gouging" Is Urgently Necessary
David Henderson

Roger Copple — International Socialists Seeking the Divine Source Within

It seems like it is part of human nature to want to belong to and participate in a nonhierarchical group to share our deepest political and spiritual values and beliefs. Perhaps that is why many of us long to be part of a tribe, ultimately a network of tribes or intentional communities.

In mainline Christian churches, I can enjoy the singing and music, sometimes the sermon, if I ignore the theistic doctrines and the neo-conservative or neo-liberal foreign policies of the members shared during coffee hour.

Even at Unitarian-Universalist churches, you won't find many leftists, though many are progressive Democrats. Moreover, I don't like the idea of supporting the salary of a minister, who often does not seem any more enlightened than the rest of us. I do like the fact, however, that more UU churches are allowing mindfulness and Buddhist meditation groups to meet at their churches.

Unity and Science of Mind churches that I have attended are more likely to support the perennial philosophy (as found in the Bhagavad Gita, Advaita Vedanta, Buddhism, Yoga and Zen philosophy, and the writings of Aldous Huxley), which I value, as compared to the Unitarian-Universalist churches, which often take a more intellectual approach to everything....
So, here is my plan. I want to go to and start a local group called "International Socialists Seeking the Divine Source Within." Even if I only get one or two people that regularly show up, I just might find my tribe. Each group meeting could have personal sharing time, if not group therapy, and much discussion, possibly after watching a youtube documentary. Each group meeting could also have ten minutes of silent group meditation as well.
If the personal fellowship group grows beyond eight members, then the group can be encouraged to divide the way cells divide. Who knows, if the intellectual, emotional, and spiritual needs of people can be met, this concept could become a movement that starts competing with the many churches on every other block....
Probably not even necessary to call it "the Divine Source within." In the 12 steps program, it is just called "the higher power," however one chooses to conceive of this.

Wednesday, August 30, 2017

Zero Hedge — US Coalition Attacks ISIS Convoy, Accuses Syria And Russia Of "Terror Transfer"

Calling out US hypocrisy and fake outrage.

Zero Hedge
US Coalition Attacks ISIS Convoy, Accuses Syria And Russia Of "Terror Transfer"
Tyler Durden

See also

AP correctly reports on what Nasrallah said about the deal involving a prisoner exchange, and then muddles it by reporting on "Turkish-backed Syrian forces" that have nothing to do with either Hezbollah or ISIS firing on US troops. 

Daniel Little — New thinking about causal mechanisms

Everyone is familiar with the nostrum, "correlation is not causality." Simply put, correlation can potentially identify input-output relationships with a certain degree of probability. But the relationship is a "black box."

Causal explanation involves opening the box and examining the contents. Correlation shows that something happens; causality in science explains how it happens, elucidating transmission in terms of operations. In formal systems the operators are rules, e.g., expressible by mathematical functions.

Generally speaking correlation is probabilistic, whereas causality is deterministic. Causes are logically antecedent to effects, but arguments based on prior occurrence are post hoc ergo propter hoc fallacies.

There is also probabilistic causation.
Informally, A probabilistically causes B if A's occurrence increases the probability of B. This is sometimes interpreted to reflect imperfect knowledge of a deterministic system but other times interpreted to mean that the causal system under study has an inherently indeterministic nature.
Causality in philosophy involves provision of an account of why something happens based on principles.

Causation is at the heart of the fundamental problems in philosophy of science. It's exploration began in the West in earnest with Aristotle and it has become one of the enduring questions.

Understanding Society
New thinking about causal mechanisms
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Saker request for comment, suggestions + a poll and “ESSENTIAL SAKER” on free download!

The Vineyard of the Saker
Saker request for comment, suggestions + a poll and “ESSENTIAL SAKER” on free download!
The Saker

Philip Ball — Quantum Theory Rebuilt From Simple Physical Principles

Important from the perspective of philosophy of science.

Perhaps the most significant line is the last one:
What is needed is new mathematics that will render these notions scientific,” he said. Then, perhaps, we’ll understand what we’ve been arguing about for so long.
Recall that Newton had to develop the calculus as a new mathematical notation in order to express his discoveries in classical physics.

Quanta Magazine
Quantum Theory Rebuilt From Simple Physical Principles
Philip Ball

C. P. Chandrasekhar — The Indian Economy: 70 years after Independence

It would be interesting to compare India's development with that of China over this period, which is roughly equivalent to China's period of modernization. Arguably, China's rise under communism began in a worse position that India's at the end of the British Raj. Is there is a lesson about socio-economic systems to be gleaned from such a comparison? And political economy.

Real-World Economics Review Blog
The Indian Economy: 70 years after Independence
C. P. Chandrasekhar | Professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi

Reinhilde Veugelers — China is the world’s new science and technology powerhouse

Chinese R&D investment has grown remarkably over the past two decades. It is now the second-largest performer in terms of R&D spending, on a country basis, and accounts for 20 percent of total world R&D expenditure, with the rate of R&D investment growth greatly exceeding that of the U.S. and the EU.…
This steep improvement in S&T performance has been underpinned by significant strides in science and engineering education. China is now the world’s number one producer of undergraduates with science and engineering degrees, delivering almost one quarter of first university degrees in science and engineering globally....
Policy outcome.
China’s rise in science and technology is not an accident. Successive Chinese leaderships have seen S&T as integral to economic growth and have consequently taken steps to develop the country’s S&T-related infrastructure....
The rest of the world is on notice.

China is the world’s new science and technology powerhouse
Reinhilde Veugelers

Jean Twenge — How the smartphone affected an entire generation of kids

This is an important article socially, politically and economically based on its implications.

While there is a "digital divide" between analog people and digitally capable people, the more significant divide is between those that grew up in the transition to the digital age, with the introduction of mass computing in around 1980. The Apple II was introduced in 1977.

The most significant digital divide generationally is between analog natives and digital natives. Now a further iteration is coming to light. The divide between smart technology natives and those previous to it.

In this environment, analog natives are being left behind, even though they may be digitally capable but are not digitally native. It is a deep difference in culture.

Something similar happened at the time of the countercultural revolution. I was in the preceding generation but not by much and I opted to burn bridges and join the movement. As a result I live in a very different world from that inhabited by the people with whom I grew up. 

I was also on the cusp of the movement away from classical liberal arts education, where there was a sharp division in high school between college track and trade track. In the classical liberal tradition, college track included study of Latin and Greek for reading the classics in the original language. Serious writing was littered with allusion that would be opaque to those without a classical education. That is over now and has almost been forgotten.

Something similar is happening with the proliferation of digital technology. It's a new world. And his will have enormous implications across the board.

The Conversation
How the smartphone affected an entire generation of kids
Jean Twenge | Professor of Psychology, San Diego State University


I agree about learning to code, along with reading, writing and 'rithmetic. It's a component of literacy in the digital age.

Ideally, children should also learn two languages from infancy. Presently, this only happens in bi-lingual  households. The research is in, showing that the benefits are significant, and it should be introduced culturally as early as possible.

This is already happening in many countries where knowing more than one language is essential. Technology now makes this possible. For example, in bi-lingual households, often grandparents don't live near the children but talk to them daily via digital technology.

A Computing Pioneer Says It’s Never Too Early to Teach Kids to Code
Karla Lant

Chris Dillow — Against high CEO pay

Imagine we lived in a feudal society in which lords exploited peasants. A defender of the system might argue that wealthy lords perform a useful service; they protect their peasants from invasion and theft thus giving them security and a little prosperity. And competition between lords should improve these services; bad lords will find their lands and peasants seized by better lords who become wealthier as a result.

Such an argument would, however, miss the point. The case against feudalism is that the system as a whole is unjust and inefficient. The fact that good lords provide services and are richer than bad ones is quite compatible with this.
This analogy came to mind whilst reading Ben Ramanauskas’s defence of high CEO pay. The fact that good CEOs make a positive difference to a company does not in itself justify a system in which CEOs in aggregate – many of whom are far from good – get fortunes.
Two big facts suggest that such a system might well be inefficient....
The fundamental principle is the same in feudalism and capitalism. Both are based on rent extraction.
Unsurprisingly, then, there is little clear link between CEO pay (pdf) and corporate performance. It might be that high pay is better explained by rent-seeking than as a reward for maximizing shareholder value - though as it's almost impossible to know in most cases what constitutes maximal value, we might never know for sure.

In fact, my analogy with feudal lords is too generous to CEOs. Whereas (arguendo) a bad lord would pay for his incompetence perhaps with his life, bad CEOs walk away with fat pay cheques.
When so-called free marketeers try to defend bosses’ pay, they do the cause of free markets a huge dis-service by encouraging people to equate free markets with what is in effect a rigged system whereby bosses enrich themselves with no obvious benefit to the rest of us.
To the degree that perfect competition doesn't exist, owing to asymmetries, then rent-seeking takes over.  It's the "rational" thing to do for "utility maximizing agents."

Stumbling and Mumbling
Against high CEO pay
Chris Dillow | Investors Chronicle

Brian Romanchuk — Expect More Of The Same On The Inflation Front

Although I do not bill myself as a forecaster, my generic inflation forecast has remained remarkably accurate: expect it to stick around 2%, barring a recession. Although this has been the correct forecast for years, it does not match what people want to hear: higher inflation (or deflation!) is around the corner! (This generic forecast is for the United States and Canada, but I will stick to U.S. data for this article.) To a certain extent, the entire social position of mainstream economics is based on their ability to sound very serious about inflation, and just saying that inflation will probably stick around 2% does not sound serious at all. This article is an update on my views on inflation, which obviously have not moved very much....
Bond Economics
Expect More Of The Same On The Inflation Front
Brian Romanchuk

Dirk Ehnts — Keynes on Savings and Investment

Geoff Tily in his paper on Keynes (pdf) has this quote (from the Collected Writings):
S = I at all rates of investment. Y either definable as C+S or as C+I. S and I were opposite facets of the same phenomenon they did not need a rate of interest to bring them into equilibrium for they were at all times and in all conditions in equilibrium. (CW XXVII, pp 388–9)
This is very enlightening. The “General Theory” also contained the issue of savings and investment, but the quote above nails it. There is no “supply” and “demand” for capital, hence savings and investment do not need anything to move so that there can be equilibrium.
From my point of view, this is one of the strongest rejections of neoclassical macroeconomics and it stands until this day. In a monetary economy, there is no “savings good” that needs to be produced before it can be “invested”. I = S “at all times” – there cannot be a disequilibrium between saving and investment....
In the income equals expenditure model based on accounting, saving and investment are residuals that must always equal each other by identity in a double entry system when consumption is subtracted from each side. If they don't equal each other, check the accounting for a mistake. Income must be equal to expenditure by identity in double entry, since they are opposite entries in recording transactions and must always balance as confirmation that the accounting is correct.

econoblog 101
Keynes on Savings and Investment
Dirk Ehnts | Lecturer at Bard College Berlin

Bill Mitchell — Reclaiming the State

On June 3, 1951, the Socialist International association was formed in London. It is still going. It is “a worldwide association of political parties, most of which seek to establish democratic socialism”. Its roots date back to the C19th (to the First International formed in 1864) when it was considered beneficial to unite national working class movements into a global force to overthrow Capitalism. Internal bickering among various factions led to various dissolutions and reformations over the last 150 odd years. In 2013, the membership split when the German SPD decided to set up an competing group, the Progressive Alliance, which saw a host of so-called social democratic parties (including the Australian Labor Party) join and desert the SI. Both bodies are dogged by internecine conflict and members who have fallen for the neo-liberal macroeconomic myths. More recently, DIEM25 has emerged to pursue a Pan-European vision of Left-wing politics. The more recent dynamics of these movements deny power of the nation state in a globalised economy and global financial flows. They are all failing because of this denial.

There was an interesting article in the Financial Times (July 4, 2017) – Sovereignty still makes sense, even in a globalised world – by Robert Tombs, who is a British academic specialising in French history, which bears on this topic.
The claim that the nation state is dead is also a major theme of my upcoming book (with Thomas Fazi) – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World – which will be released by Pluto Press (UK) on September 20, 2017.
We will be launching the book in London on September 26, 2017 and then doing a 10-day lecture and promotional tour throughout Europe following that. All the details of where and when events will occur will be published soon but at the end of this blog is an indicative guide.
Applied MMT in a socialist context.

Bill Mitchell – billy blog
Reclaiming the State
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, August 29, 2017

Barry Ritholtz — Born-Again Fiscal Hawks Turn Into Doves

Funny how some folks stop caring about federal deficits after an election.…
This sort of behavior is intellectually dishonest, hypocritical, economically counterproductive and, at times, even dangerous. It has been going on for too long....
But Ronald Reagan (and you thought I was referring to Barack Obama) ignored the critics. His deficit spending and tax cuts helped stimulate the economy and led to an economic recovery that lasted for the better part of a decade. 1
This is further support for the playbook laid out by John Maynard Keynes in "A Treatise on Money," written almost 90 years ago: The government acts temporarily to replace missing corporate and household demand during recessions by increasing spending.
Both Reagan and Obama had the big concept right; the time for stimulus through the combination of deficits and tax cuts is during a bad downturn. When private-sector demand crashes, the government can replace it temporarily with the proper programs....
Bloomberg View
Born-Again Fiscal Hawks Turn Into Doves
Barry Ritholtz

Jason Smith — Lazy econ critique critiques

I agree that "unrealistic assumptions" has to be just about the laziest econ critique in existence. I wrote a post I was particularly proud of about how a lot of econ criticism is starting to look like vacuous art criticism.
Information Transfer Economics
Lazy econ critique critiques
Jason Smith

Pam and Russ Martens — Financial Relief Available to Texas Victims of Hurricane Harvey

According to insurance experts, approximately 80 percent of the homeowners impacted by flooding in Houston may not have flood insurance policies on their home. That’s because much of Houston falls outside of designated Special Flood Hazard Zones where mortgage holders are required to maintain flood insurance policies.
Hoping to relieve some of the panic by homeowners rescued from water-logged homes in Texas who have no idea when they may be able to return to their home or where the money will come from to restore the home to livability, the Federal Emergency Management Agency (FEMA) has released a fact sheet on what types of disaster assistance it can make directly to individuals along with specifics on how to apply.
The fact sheet makes clear that not all individuals are being guaranteed each form of assistance. It notes that the assistance “can include as required” the following....
Wall Street On Parade

Jeff Desjardins — The History of Consumer Credit in One Giant Infographic

Consumer credit may seem like a fairly new invention – but it’s actually been around for more than 5,000 years!
In fact, many millennia before the credit score became ubiquitous, there is historical evidence that cultures around the world were borrowing for various reasons. From the writings in Hammurabi’s Code to the exchanges documented by the Ancient Romans, we know that credit was used for purposes such as getting enough silver to buy a property or for agricultural loans made to farmers.
In today’s infographic from Equifax, we look at the long history of consumer credit – everything from the earliest writings of antiquity to the modern credit boom that started in the 20th century....

Kenny Hodgart — Let’s call the whole thing off: India, China row back from war

The details of how hostilities were cooled remain unclear; but for now, at least, there is an "understanding."
Looks like the grownups on both sides got involved.

Robert Parry — More Misleading Russia-gate Propaganda

The U.S. mainstream media is touting a big break in Russia-gate, emails showing an effort by Donald Trump’s associates to construct a building in Moscow. But the evidence actually undercuts the “scandal,” reports Robert Parry.
From the New York Times again.

Consortium News
More Misleading Russia-gate Propaganda
Robert Parry

Brad DeLong — Must-Read: Samuel Bowles, Alan Kirman, and Rajiv Sethi: Friedrich Hayek and the Market Algorithm

Does anyone else see a parallel between Hayek's view of markets as information systems that generate natural spontaneous order and intelligent design arguments in evolutionary theory, harkening back 18th century Deism?

The point of the paper is that while Hayek was on to some good things, he let his liberal ideology run away with him, making claims that are not substantiated by his economic work.

WCEG — The Equitablog
Must-Read: Samuel Bowles, Alan Kirman, and Rajiv Sethi*: Friedrich Hayek and the Market Algorithm
Brad DeLong
* We thank Jeffrey Friedman, David Glasner, Gordon Hanson, and Timothy Taylor for their contributions to this essay and the Santa Fe Institute for providing an ideal environment for the collaboration that resulted in this paper.

Michael Spence — The Global Economy’s New Rule-Maker

Good article on the rise of China without China bashing.

Project Syndicate
The Global Economy’s New Rule-Maker
Michael Spence | Nobel laureate in economics, is Professor of Economics at NYU’s Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, Senior Fellow at the Hoover Institution at Stanford University, Advisory Board Co-Chair of the Asia Global Institute in Hong Kong, and Chair of the World Economic Forum Global Agenda Council on New Growth Models

Austin Clemens — No one measure of inequality tells the whole story–income, wealth, and consumption should be considered together

A challenge is limited data.

WCEG — The Equitablog

Lars P. Syll — Revealed preference theory — much fuss about ‘not very much’

Utility theory and economists' approach to human action in general reminds me of previous debates in the history of intellectual thought that hung on words. 

Logical positivism was introduced as a corrective, but its assumptions, too, lacked foundation. 

Ludwig Wittgenstein's Tractatus Logico-Philosophicus was assumed to be a positivist document, he dissociated himself from the Vienna Circle. His view was that it was a tract in the philosophy of logic as an iteration in the debate around the work of Gottlob Frege and Russell-Whitehead's Principia Mathematica. Wittgenstein later published Philosophical Investigations as a corrective to the limitations of the Tractatus, which only treated the logic of description. He credited Pierro Sraffa, one of his friends at Cambridge, for insights involved in the development of a unique approach to philosophical logic evinced in his later work.

Observing the actual use of terms in context is central to the later Wittgenstein. He said that his method was neither nominalistic nor pragmatic, both of which involve assumptions. While he did not use the term with respect to his own method, it can be called "operational."
Don’t say: “They must have something in common, or they would not be called ‘games’” but look and see whether there is anything common to all. For if you look at them, you won’t see something that is common to all, but similarities, affinities, and a whole series of them at that. To repeat: don’t think, but look.  — Philosophical Investigations § 66
Pressing ordinary language beyond its accustomed use invites logical problems that may infect meaning. The later Wittgenstein was especially critical of exporting ordinary language terms for technical use since they bring along many associations that are difficult to disentangle, leading to ambiguity and confusion, especially when done haphazardly by assuming that what seems obvious actually is.

This seems to me to the be case as someone trained in philosophical logic looking at conventional economics. Terms like "utility," "preference," "rational" and the like suggest the kinds of approach in Western intellectual thought that Wittgenstein found problematical. Being subjectively oriented they don't add anything empirically without being defined operationally, and even when they are defined operationally problems can still creep in owing to ordinary language associations that are at least in part normative or prescriptive while posing as entirely positive.

The point of analysis based on philosophical logic is becoming clear about what is being expressed. Very often it is not obvious and without care one can be led astray oneself and also lead others astray. In the hands of sophists, people can be intentionally misled though illogic that appears compelling in the manner of presentation.

Mathematical expression is supposed to obviate this, but connecting mathematical symbols in models to what is purportedly being modeled depends on definitions and rules that involve assumptions and concepts that need to be carefully specified and adhered to throughout. Formal consistency can never be a guarantee of the quality of a formal model as a representation. In fact, formal consistency can mask logical inconsistency being introduced in other ways, either inadvertently or purposefully.

Wittgenstein called this "nonsense."
Philosophy is a battle against the bewitchment of our intelligence by means of our language — Philosophical Investigations § 109
Lars P. Syll’s Blog
Revealed preference theory — much fuss about ‘not very much’
Lars P. Syll | Professor, Malmo University

Bill Mitchell — Fiscal policy is effective, safe to use, and markets know it

The Federal Reserve Bank of Kansas City has just hosted its annual Economic Policy Symposium at Jackson Hole in Wyoming where central banks, treasury officials, financial market types and (mainstream) economists from the academy and business gather to discuss economic policy. As you might expect, the agenda is set by the mainstream view of the world and there is little diversity in the discussion. A Groupthink reinforcing session. One paper that was interesting was from two US Berkeley academics – Fiscal Stimulus and Fiscal Sustainability – which the news reports claimed suggested that governments should be increasing fiscal expansion even though they may be carrying high levels of public debt. The conclusion reached by the paper is correct but the methodology is mainstream and so progressives should not get carried away with the idea that there is signs that some give is emerging, which will lead to more progressive outcomes. A progressive solution will only come when the neo-liberal dominance of my profession is terminated and an entirely new macroeconomics paradigm based on Modern Monetary Theory (MMT) is established. There is still a long way to go though....
This is a must-read for those interested in MMT. Bill also provides links to previous blog posts that are key to understanding the MMT position on fiscal space (policy space) and fiscal sustainability.

The actual constraint is availability of real resources and policy needs to be addressed to effective and efficient use of those limited resources. Financial resources are unlimited for a soveriegn currency so issuer, so policy is never constrained by "affordability."

Policy is too tight if real resources that are available are be idled, which is wasteful and foregoes opportunity. Policy is too loose if effective demand is stimulated in excess of the capacity of the economy to provide goods to meet it, so inflation may result. The goal is run a policy that optimizes use of available resources in the present, while also generating the economic capability to increase real resources for future use.

The purpose of MMT as a "policy science" is showing how this is possible based on the actual operations of a modern monetary production economy. This involves debunking the myths that rest on a failure to correctly understand money monetary operations in the context of the presently existing monetary system, which results in the inability to appreciate the theoretical implications of this for policy.

Bill Mitchell – billy blog
Fiscal policy is effective, safe to use, and markets know it
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Monday, August 28, 2017

Joshua Stewart — Rep. Duncan Hunter gives President Trump a profane compliment

“He’s just like he is on TV,” Hunter, R-Alpine, told the group. “He’s an asshole, but he’s our asshole.”
San Diego Union-Tribune

Jason Smith — The replication argument

A very simple reason that there may be decreasing returns to scale is transaction costs increasing for a variety of reasons, some of which may not be well explained.

Scaling up micro to the macro level risks running into the fallacy of composition since systems operate differently at different scales — as J. M Keynes observed with the paradox of thrift.

Information Transfer Economics

Evgenia Pismennaya, Andrey Biryukov, and Ilya Arkhipov — Putin’s New Favorite Official Plans Ministry of Future to Revamp Economy

“We are building the ministry of the future,” Oreshkin said by text message. “A key task is to attract strong personalities and create the environment for them to develop.
In the revamp, Oreshkin is creating an informal group known as the “office of changes,” to improve the structure of the ministry and the way it operates. It’s populated with recent prize hires -- Ekaterina Vlasova, poached from Citigroup Inc, PricewaterhouseCoopers’ Zoya Viktorova and Yulia Urozhaeva from McKinsey & Co. -- and will have direct access to him, according to two other officials....
Putin’s New Favorite Official Plans Ministry of Future to Revamp Economy
Evgenia Pismennaya, Andrey Biryukov, and Ilya Arkhipov

Zero Hedge — China Slams White House For Latest Sanctions On "Close Ally" VenezuelaChina Slams White House For Latest Sanctions On "Close Ally" Venezuela

Shortly after the White House unveiled new sanctions last Friday against Venezuela while prohibiting U.S. trading in various bonds issued by the country (while exempting the notorious Goldman "Hunger Bonds"), Venezuela’s "close ally" China slammed the latest diplomatic crackdown and said on Monday that external interference and unilateral sanctions only make things "more complicated and will not help resolve problems."
Asked by reporters about the new U.S. measure, Chinese Foreign Ministry spokeswoman Hua Chunying said China’s position had consistently been to respect the sovereignty and independence of other countries and not to interfere in their internal affairs. "The present problem in Venezuela should be resolved by the Venezuelan government and people themselves."
“The experience of history shows that outside interference or unilateral sanctions will make the situation even more complicated and will not help resolve the actual problem,” Hua told the daily news briefing.
Short version: China accuses US of meddling.

Zero Hedge
China Slams White House For Latest Sanctions On "Close Ally" Venezuela
Tyler Durden

Gordon M. Hahn — Putin, Stalin, Orthodoxy, and Russian Traditionalism

Much Western media and many observers of Russian politics are fond of playing up an ostensible revival of Stalin – his ‘rehabilitation’ as it were – under Russian President Vladimir Putin’s rule. This is not just inaccurate — as I have written in the past, the Putin era has seen numerous anti-Stalinist and non-Stalinist state-funded projects including mass audience films, television serials, museums and monuments — but it dangerously distorts our understanding of contemporary Russia. Moreover, many of the same observers are also fond of emphasizing the powerful role of the more traditional – some would say retrograde or reactionary – Russian Orthodox Church. This is often exaggerated, but this is not the most interesting aspect of such a focus. The latter focus is often made by the very same observers who decry Putin’s alleged rehabilitation of Stalin. The more revealing phenomenon is the political tension between these two positions; something that might suggest Putin’s less than dictatorial powers and the syncretic and more inclusive nature of his somewhat moderate Russian traditionalism. Thus, anti-Stalinist, anti-communist, Tsarist, and projects of other ideological, cultural, religious, and ethnic orientations often coexist in Putin’s Russia, with the state giving space, albeit often strictly limited, for their expression. This is a function of a supra-national identity still being in development, Russia’s multi-communal character, and the interplay of various orientations and of those orientations within the state....
The US and Europe are now going through similar conflicts between traditional and liberal views and factions representing them. Every nation's character is a melding of historical forces through the historical dialectic. History is path dependent.

Furthermore, it can be argued that countries like Germany and Russia have dealt more openly and rankly with their unsavory past than countries like the US and Japan.

Russian and Eurasian Politics
Putin, Stalin, Orthodoxy, and Russian Traditionalism
Gordon M. Hahn, analyst and Advisory Board member at Geostrategic Forecasting Corporation, member of the Executive Advisory Board at the American Institute of Geostrategy, a contributing expert for Russia Direct, a senior researcher at the Center for Terrorism and Intelligence Studies, Akribis Group, and; and an analyst and consultant for Russia – Other Points of View

Kehinde Andrews: The west’s wealth is based on slavery. Reparations should be paid

I have often argued here in the comment sections that the ruling elite made their money from the slave trade and now they are able to cripple those countries where they got the slaves from all those centuries ago through the their financial system and by installing client vassal states (a country where a few ruling elite do very well out of the situation as in old Venezuela before Chavez) . They then use 'capitalism' and 'free markets' and even 'democracy'  to buy the media so they can spread their propaganda and to buy the politicians so they can take control of their country's economies. In this way they get to own the world.

The West doesn't need slavery anymore because it can do it through 'markets' and 'capitalism' to drives wages down to slavery rates. As Kehinde Andrews argues, the reason why so many people want to migrate to the West is because this exploitation drives people in the third world into terrible poverty.

The west is built on racism; and not in some abstract or merely historical way. Genocide of over 80% of the natives of the Americas in the 15th and 16th centuries paved the way for the enslavement of millions of African people and the conquest of the world by European powers. At one point Britain’s empire was so vast that it covered two-thirds of the globe, so large that the sun never set on the dominion. The scientific, political and industrial revolutions the British school system is so proud to proclaim, were only possible because of the blood, toil and bounty exploited from the “darker nations” from across the globe. Colonialism left Africa, Asia and the Caribbean underdeveloped, as the regions were used to develop the west while holding back progress in what we now call the global south.

The Guardian: The west’s wealth is based on slavery. Reparations should be paid

Thomas C. Mountain — Shia Insurrection in Saudi Arabia; The Battle for Awamiya

How long the Shia rebellion in eastern Saudi Arabia, home to almost all Saudi oil reserves, will be able to maintain an armed resistance to the Saudi military assault is the 10 million barrel a day question.
The excuse given by the House of Saud royal family mouthpieces is they were driving the Shia from their ancient homeland for "urban renewal" purposes. Never mind the "renewing" would destroy world heritage sites such as the ancient town of al-Zara, capital of the Shia, Persian province of Bahrain for millenia past and sacred to the Shia population and in the process "relocate" the Shia population as far a possible from the Saudi oil fields.
Wahabi is as Wahabi does with the crimes committed in the name of Sunni Islam in Yemen now being carried out next door to their cousins, the Saudi Shia. Only the silence of the media lambs internationally alongside the UN, allows this to go unnoticed, for a double standard has long existed when it comes to condemning the crimes of the House of Saud. After the latest round of beheadings of Shia leaders protests turned to gunfire in Awamiya and the fires of armed revolution have been lit for the first time in Saudi Arabia....
Shia Insurrection in Saudi Arabia; The Battle for Awamiya
Thomas C. Mountain, independent journalist in Eritrea

Mark Thoma — Paul Krugman: Fascism, American Style

The cards are on the table, and the battle lines are drawn.

Note: I am linking to the Krugman piece through Economist's View rather than providing a link to the New York Times, to which I refuse to link owing to what I consider ongoing bad behavior.

Economist's View
Paul Krugman: Fascism, American Style
Mark Thoma

McKinsey — Reimagining capitalism to better serve society

Is capitalism still creating prosperity and well-being for the many? That’s a central question behind Re-Imagining Capitalism (Oxford University Press, November 2016), a book coedited by McKinsey’s global managing partner, Dominic Barton; York University’s Schulich School of Business dean, Dr. Dezsö J. Horváth; and Matthias Kipping, Richard E. Waugh chair of business history at the Schulich School. In this video interview, Horváth speaks with McKinsey’s Rik Kirkland about the various forms of capitalism around the world, how societal well-being is strongly linked to enhanced competitiveness and productivity, and how a new generation of students wants to ensure that economic priorities meld well with societal needs.
Video and transcript.

Note: "Societal well-being" is called "social welfare" in economics, political science, and sociology, but "welfare" has been tarred with a negative connotation by its opponents. The new term is "well-being."

McKinsey Insights & Publications
Reimagining capitalism to better serve society

Stephen S. Roach — America and China’s Codependency Trap

On August 14, President Donald Trump instructed the US Trade Representative to commence investigating Chinese infringement of intellectual property rights. Whatever the merit of such allegations, Chinese retaliation against US trade sanctions would almost certainly cause far more economic damage.
Project Syndicate
America and China’s Codependency Trap
Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm's chief economist, now a senior fellow at Yale University's Jackson Institute of Global Affairs and a senior lecturer at Yale's School of Management

Chris Dillow — On models & downs

One shoe fits all not a satisfactory method. The question then become now to chose the appropriate model for the task in advance rather than through hindsight when the future is enveloped in uncertainty.

Stumbling and Mumbling
On models & downs
Chris Dillow | Investors Chronicle

John McKenna — What are the issues keeping young people awake at night? This survey has the answers

The World Economic Forum’s latest Global Shapers Annual Survey 2017 of 25,000 young people from 186 countries found that nearly half of all young people rank climate change and the destruction of nature as the most serious issue affecting the world today.

Wars and inequality also score highly when it comes to global concerns.

However, there is a marked shift in attitude when young people are asked to name the three most pressing issues of concern in their own countries.

Here “Government accountability and transparency/corruption” comes out on top with 46.9%, followed by “Inequality” (38.1%) and “Lack of economic opportunity/employment” (30.5%).
There are several regions that go against this overall trend: in Oceania, including countries such as Australia and New Zealand, climate change is the number one concern both nationally and globally; in Europe and North America it is inequality that worries young people the most; and in the Middle East and North Africa it is a lack of economic opportunity and employment that dominates; more than half of all respondents from the region say this is their chief concern....
Both globally and at a regional level, equal access to opportunities is considered the most important thing to make young people feel more free....
World Economic Forum | Agenda
What are the issues keeping young people awake at night? This survey has the answers
John McKenna


  1. They’re very concerned about climate change
  2. They distrust the media, big business and governments
  3. They aren’t lazy, they’re workaholics
  4. They’re optimistic about technology
  5. They care about others
And far and away the most important in indicting the level of collective consciousness:
At a time of global uncertainty and movement towards isolationism, the vast majority of young people (86.5%) see themselves as simply ‘human’, as opposed to identifying with a particular country, religion or ethnicity.
There's hope for humanity.

Warren Mosler — Durable goods orders, Vehicle sales, Credit check

With each data release it seems more likely to me that the deceleration in the growth of borrowing from the banks is reflecting a drop in aggregate demand:

Growth of C and I loans has been near 0 since the election:
No tax cuts, no infrastructure spending either. Trumponomics is dead in the water in Congress so far as the GOP engages in a circular firing squad. It's a party great at unifying on obstruction, but a bunch of losers on governing. The mid-term campaign season is nearing, so they had better change course quickly. 

Trump had promised jobs, jobs, jobs. That promise remains empty.

The Center of the Universe
Durable goods orders, Vehicle sales, Credit check
Warren Mosler

Sunday, August 27, 2017

Xinhua — China, Russia freight train delivers success, 17,000 tons of cargo

Over the past year, a total of 43 trains have run on the route, delivering more than 17,000 tonnes of products, worth 236 million U.S. dollars, from Guangzhou to Russia.
It takes the train 15 to 18 days to reach Vorsino, about 10 days less than the sea-rail transport service, and 25 days less than a ship. The costs are just one-third of air transportation.
"Our train runs once per week and were fully loaded from March this year, one of the highest loading rates among all China-Europe routes," said Huang Zhongxi, general manager of Guangzhou Dashunfa Logistics, the train operator.….

Peter Cooper — The Social Economy and the Potential Inherent in Currency Sovereignty

In any society, of whatever configuration, production at a given point in time is limited by certain ‘real’ (meaning non-monetary) factors. Notably, a society’s productive activity will always be limited by access to natural resources, the current state of its technology, and the skill, strength, size and imagination of its people. These and similar factors determine the absolute productive potential of a society. At a given point in time, these factors would apply even if, hypothetically, a society happened to be organized in a completely different way to its current form of existence.

But this refers only to the upper limit – the potential – of social production and reproduction, taken at a particular point in time and viewed in ahistorical and static terms. Under a particular societal form, production can easily run into barriers located well inside its real limits. This is certainly true of capitalism, a system in which nothing gets produced for exchange without an expectation of a monetary demand for the final product. The production may well be possible, and its product desired by a section of the community, but unless that desire is backed by both willingness and capacity to pay, the production will not take place....
The Social Economy and the Potential Inherent in Currency Sovereignty
Peter Cooper

Cameron K. Murray — A random physicist takes on economics

Short appreciation of Jason Smith's A Random Physicist Takes on Economics. He likes it.
Jason Smith, a random physicist, has a new book out where he takes aim at some of the core foundations of microeconomics. I encourage every economist out there to open their mind, read it, and genuinely consider the implications of this new approach.
Go get it now. It only costs a few bucks.
Fresh Economic Thinking

Peter Koenig — Venezuela – Open Letter to President Nicolas Maduro

Brings out some facts that are generally overlooked or suppressed in the neoliberal media.

The Vineyard of the Saker
Venezuela – Open Letter to President Nicolas Maduro
Peter Koenig, former World Bank economist

Sputnik International Debunking Myths: Tea is Not Really Healthier Than Coffee

Good news, or Russian propaganda?

Sputnik International
Debunking Myths: Tea is Not Really Healthier Than Coffee

William R. Polk — MAYDAY KOREA!

Part one of backgrounder on Korea. It's a must-read for understanding the situation today.

Sic Semper Tyrannis
William R. Polk

Moon of Alabama — Syria Summary - Towards The End Of The Caliphate

What is left of ISIS, probably some 10,000 fighters in total, is now confined to east Syria and west Iraq. No more replenishment is coming forward. No new fighters are willing to join the losing project. Its resources are dwindling by the day. The U.S. is extracting its assets within the organization. The Euphrates valley west and east of Deir Ezzor will become the last defensible territory it holds. Six month from now it will be defeated. Its Caliphate will be gone.
The other Jihadi project in Syria is run under the various names of al-Qaeda in Syria. It is now mainly confined to Idleb province. The estimated strength is some 9,000 fighters with some 12,000 auxiliary forces of local "rebels". Like ISIS, al-Qaeda in Syria is now isolated and no one is willing to come to its help. Its local helpers will give up and reconcile as soon as the Syrian army will move in on them. The hard-core militants will be killed.
The U.S. has told its proxy "rebels" to give up on their political project. Jordan is sending peace signals towards Damascus. The Syrian President Assad will not be removed and the country will stay under the protection of Russia and Iran. The U.S. still supports the Kurdish YPG fighters in Syria's north-east. But its relation with its NATO member Turkey will always be more important than any national Kurdish project. In the end the Kurds, like others, will have to accept the condition Damascus will set for them.
Moon of Alabama
Syria Summary - Towards The End Of The Caliphate

Ana Palacio — Who will stand up, against China, for rules-based order?

Delusional article of the day.

As China becomes a hegemon and the US pursues a short-sighted and largely undefined 'America First' policy, Europe must tend the flame of values-based policy and the rule of law.

This person is complete out of touch with what is happening in Europe.

Asia Times
Who will stand up, against China, for rules-based order?
Ana Palacio, a former Spanish foreign minister and former Senior Vice President of the World Bank, member of the Spanish Council of State, and a visiting lecturer at Georgetown University

Do Phillips Curves Conditionally Help to Forecast Inflation?


This paper reexamines the forecasting ability of Phillips curves from both an uncon- ditional and conditional perspective by applying the method developed by Giacomini and White (2006). We find that forecasts from our Phillips curve models tend to be unconditionally inferior to those from our univariate forecasting models. Significantly, we also find conditional inferiority, with some exceptions. When we do find improvement, it is asymmetric – Phillips curve forecasts tend to be more accurate when the economy is weak and less accurate when the economy is strong. Any improvement we find, however, vanished over the post-1984 period.
Federal Reserve Bank of Philadelphia
Do Phillips Curves Conditionally Help to Forecast Inflation?
Michael Dotsey, Shigeru Fujita, and Tom Stark

Jack Peat — Trump pardons Arpaio: This is his human rights record

American soft power takes another hit, coming soon after the torchlight march in Charlottesville reminiscent of the rise of the Nazis in Germany in the lead up to WWII.

The London Economic
Trump pardons Arpaio: This is his human rights record
Jack Peat
Donald Trump’s pardon elevates Arpaio once again to the pantheon of those who see institutional racism as something that made America great.

Dean Baker — Supporters of Trade Deals, LIke George Will and the Washington Post, Think They Have to Lie to Make Their Case

George Will is a columnist rather than an economist. One might think that this is a mistake instead of a lie. But Will is a professional and the Washington Post is a premiere medium where professionalism is presumed. If this was not a deliberate lie spreading fake news as propaganda, either Will was misinformed and did not realize it, or the Washington Post failed to in performing due diligence in fact-checking. Another fail.

Beat the Press
Supporters of Trade Deals, LIke George Will and the Washington Post, Think They Have to Lie to Make Their Case
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Lars P. Syll — Abba Lerner and functional finance

Must-read for anyone interested in MMT.

Lars P. Syll’s Blog
Abba Lerner and functional finance
Lars P. Syll | Professor, Malmo University

Saturday, August 26, 2017

Matt Taibbi — The Media Is the Villain – for Creating a World Dumb Enough for Trump

Weekend reading.

Mat Taibbi sees the media as the sole factor, or major factor at least, in the rise of Trump. In my view, there are many factors involved, not the least of which is the state of the American character. This would not be happening if there were not appetite for it.

Rolling Stone
The Media Is the Villain – for Creating a World Dumb Enough for Trump
Matt Taibbi

Benjamin Balthaser — The Socialist Horizon: Building a New Party

As the Democratic Socialists of America (DSA) convention wound to its close at the beginning of August, I was struck with the historical strangeness of what I witnessed. Decades after proclamations of the "end of history" and critiques of institutional hierarchies and vertical structures of power, here were nearly 1,000 mostly young activists gathered in a giant lecture hall doing the work of building a radical political party: taking votes, making motions, electing a national leadership, making speeches for and against, observing the strange Anglo-Saxon strictures of Robert's Rules of Order.

The convention in Chicago has rightly garnered an enormous amount of attention, both for the unprecedented size of the organization, as well as for its increasingly red hue. The surge in membership makes DSA the largest socialist organization in the US since World War II, and its growth in strength and popularity is equally marked by its radical turn to the left: delegates voted to endorse the boycott, sanction and divest (BDS) movement against Israeli violations of human rights; they voted to embrace the creation of an Afro-Socialism Caucus that includes a platform for abolishing prisons and police; and they reaffirmed their distance from the Democratic Party and their role in creating an independent socialist movement. They did all this while strengthening the centralization and structure of the DSA by introducing monthly dues payments for members....
Truthout | Op-Ed
The Socialist Horizon: Building a New Party
Benjamin Balthaser

Lord Keynes — Larry White on the Origins of Coined Money: A Critique

The latest iteration in the controversy over theory of money, money creation, and historical origins of money use.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Larry White on the Origins of Coined Money: A Critique
Lord Keynes

Alan Auerbach and Yuriy Gorodnichenko — Fiscal stimulus in downturns is safe even when debt is high

Government spending in a recession can boost a country’s economy without permanently bloating its public debt, even if the debt is already quite large, researchers told an influential group of central bankers in Jackson, Wyoming, on Saturday.
“Expansionary fiscal policies adopted when the economy is weak may not only stimulate output but also reduce debt-to-GDP ratios,” University of California, Berkeley, professors Alan Auerbach and Yuriy Gorodnichenko said in a paper presented at the Kansas City Federal Reserve’s annual economic symposium….
The research presented Saturday offers new evidence that fiscal stimulus in a recession is not only safe but effective even in heavily indebted countries....
Fiscal stimulus in downturns is safe even when debt is high: researchers
Reuters Staff

Cathy O’Neil — “Algorithms Are Opinions Embedded in Code”

Algorithms are opinions embedded in code. It’s really different from what you think most people think of algorithms. They think algorithms are objective and true and scientific. That’s a marketing trick. It’s also a marketing trick to intimidate you with algorithms, to make you trust and fear algorithms because you trust and fear mathematics. A lot can go wrong when we put blind faith in big data.
Naked Capitalism
Data Scientist Cathy O’Neil: “Algorithms Are Opinions Embedded in Code”
Cathy O'Neil (aka mathbabe)

Compare with

An Interview with James Buchanan From the Austrian Economics Newsletter, Fall 1987
AEN: People have often labeled your work “normative.” Could you give us your thoughts on striking the balance between truth-seeking and advocacy?
Buchanan: I have never been especially concerned about making a sharp dividing line between what is positive and what is normative. I don’t consider myself a scientist whose task is discovering a reality that somehow exists independently of me. The model of hard sciences is not at all appropriate for economics. There is an important distinction to be made between taking an ideological position and then trying to make arguments to support that position, and on the other hand, working out the consequences of ideas and coming to an ideological position.
People do sometimes interpret my work as always being in defense of liberty. But it is less a preconceived notion and more a result of my methodology. It’s analogous to an artists that only knows and uses red paint. You should not be surprised when his paintings come out in various shades of red. Methodological individualism characterizes everything that I’ve done because I simply don’t know how to proceed with anything else, as if I only had red paint. Another artist might consciously decide to create a red painting so he goes out and buys red paint. But that is an entirely different approach.
Compare also

Thomas Aquinas in De Ente et essentia, 1
A small mistake in the beginning is a big one in the end, according to the Philosopher in the first book of On the Heavens and the Earth....
Compare Alfred Marshall
Balliol Croft, Cambridge27. ii. 06
My dear Bowley …
I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules — (1) Use mathematics as a short-hand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3. This last I did often ….
Your emptyhandedly,Alfred Marshall
Math is a tool that can be used in many ways for different purposes. In the hands of those who use the tool to manipulate and control others, math is much like Latin in the hands of a priesthood.

Friday, August 25, 2017

Jason Smith — A random physicist takes on economics: Out now!

My Kindle e-book is out now!
Here's the blurb:
A Random Physicist Takes on Economics is a novella-length critique of economic methodology from an outsider's perspective as well as a proposal for a new way of understanding supply and demand and rational agents as emergent concepts from the complex behavior of real people. After a brief biographical introduction on how he ended up doing economic research, author, blogger and physicist Jason Smith leverages "irrational" random agents and information theory to argue against the modern understanding of ubiquitous economic constructs such as so-called "rational" expectations, prediction markets, and utility maximizing agents using examples consisting of nothing more complicated than Dungeons and Dragons dice sets and pints of blueberries. Sometimes the unrealistic assumptions frequently made by economists about human rationality are found to be unnecessary to produce the same standard economic results. Sometimes "irrational" agents give insight as to why standard economic results fail. In the end, Dr. Smith calls for economists to present more uncertainty and plead greater ignorance when it comes to questions of politics and policy, and for everyone to move beyond zero-sum economic thinking and towards embracing the diversity and complexity of economic systems.
Information Transfer Economics
A random physicist takes on economics: Out now!
Jason Smith

Dara Lind — The real reason Trump pardoned Joe Arpaio

Both Trump and Arpaio believe that maintaining “law and order” is more important than adhering to the technicalities of actual law.
This is known as the difference between the rule of law and the rule by men. Go figure where this leads. If you came up with authority rather than liberty, you would be right.
Danielle Haynes

Zero Hedge — Angry Marine Who Discovered Awan's "Smashed Hard Drives" Breaks Silence, Unloads On Wasserman Schulz

Andre Taggart, the U.S. Marine who alerted the FBI when he moved into a house he rented from Imran Awan only to find a garage full of "smashed hard drives", has decided to reveal his identity in a stinging, at least for Debbie Wasserman Schultz, new interview with the Daily Caller.
Taggart, a black U.S. Marine who says he typically votes Democrat, is apparently fed up with Debbie Wasserman Schultz's Islamophobia smoke screen which he views as just a dishonest attempt to shield the Awans from their crimes....
Zero Hedge
Angry Marine Who Discovered Awan's "Smashed Hard Drives" Breaks Silence, Unloads On Wasserman Schulz
Tyler Durden
After months of litigation, The DNC Fraud Lawsuit has been dismissed by Judge Zloch. Lawyers Jared and Elizabeth Beck have long cited deep corruption of the judicial system as a potential reason for the suit’s dismissal. The ruling comes as a blow to many former Bernie Sanders supporters who had hoped that the suit would address what many view as deeply seated corruption in the Democratic party establishment.
In his ruling, Judge Zloch wrote that the plaintiffs had failed to prove their injury, calling it “too diffuse” for Federal court. Despite the dismissal, Zloch did state that the court assumed the basic claim made by the plaintiffs to have been true; that the DNC acted against Bernie Sanders and in favor of Hillary Clinton despite outward claims of neutrality....
Disobedient Media
BREAKING: DNC Fraud Lawsuit Dismissed
Elizabeth Vos

Alfred W. McCoy — The CIA and Me: How I Learned Not to Love Big Brother

In 2010, almost a decade into this secret war with its voracious appetite for information, the Washington Post reported that the national security state had swelled into a “fourth branch” of the federal government — with 854,000 vetted officials, 263 security organizations, and over 3,000 intelligence units, issuing 50,000 special reports every year.
Though stunning, these statistics only skimmed the visible surface of what had become history’s largest and most lethal clandestine apparatus. According to classified documents that Edward Snowden leaked in 2013, the nation’s 16 intelligence agencies alone had 107,035 employees and a combined “black budget” of $52.6 billion, the equivalent of 10% percent of the vast defense budget.…
Makes the Gestapo, Stasi, and KGB look tame by comparison. "But our guys are not at all like that." Read on.

The CIA and Me: How I Learned Not to Love Big Brother
Alfred W. McCoy | J.R.W. Smail Professor of History at the University of Wisconsin–Madison
This piece has been adapted and expanded from the introduction to Alfred W. McCoy’s new book, In the Shadows of the American Century: The Rise and Decline of U.S. Global Power. It originally appeared in TomDispatch.
See also

A DEA veteran recounts fighting the Taliban and the CIA while trying to bring down Afghan drug kingpins.

Mother Jones (January 12, 2015)
A Drug Warrior’s Inside Look at the War on Afghanistan’s Heroin Trade
AJ Vicens
Sputnik International
Afghanistan and the CIA Heroin Ratline

Sputnik — Collateral Damage: Hamilton 68 Sows Discord Among US Media

In an article titled "Breitbart, other 'alt-right' websites are the darlings of Russian propaganda effort" published on August 24, USA Today stated that the most popular domains mentioned by a "Russian propaganda Twitter network" during the previous 48 hours included "True Pundit, the Russian government-controlled television network RT, the Gateway Pundit, Fox News, Russian government news agency Sputnik News and Breitbart."

USA Today also argued that on that day the aforementioned websites carried a range of stories that "reflect themes promoted by the Russian network."
This coordinated smear campaign is going to backfire big time on the establishment.

Sputnik International
Collateral Damage: Hamilton 68 Sows Discord Among US Media

Peter Cooper — Short & Simple 18 – Income Determination in a Closed Economy

In this and upcoming parts of the series, we will look in a little more detail at the ‘income-expenditure model’. The foundations of the model have been introduced in the previous two parts (here and here)….
Short & Simple 18 – Income Determination in a Closed Economy
Peter Cooper

Zero Hedge — Senate Declares War On Assange

Realizing the gravity of the situation of becoming a persona non grata to the US government (and CIA), Assange then siad that “it is an interesting thought experiment to consider where other media outlets lay on this spectrum. It is clear that if the 'Pompeo doctrine' applies to WikiLeaks then it applies equally if not more so to other serious outlets."
Outlawing dissent while privileging official propaganda transmitted via compliant media. The road to tyranny leads through the US deep state and the US government. Surprised?

Zero Hedge
Senate Declares War On Assange
Tyler Durden

In April, Trump’s newly appoint CIA Director Mike Pompeo branded WikiLeaks a “hostile non-state intelligence agency” which, according to Zerohedge, meant that Wikileaks would not be afforded the protections of the First Amendment under the constitution.
The Duran
CIA colludes with Congress to brand Wikileaks a “hostile non-state intelligence agency”

Marx’s “Capital” at 150: History in Capital, Capital in History

Today a new generation, experiencing major capitalist crises, increasingly concerned about its prospects and rising inequality, is powering radical movements in the homelands of capitalism behind figures and forces such as Sanders, Corbyn, Mélanchon, Die Linke, Podemos and Cinque Stelle. Will it bring Capital back into the history of these countries? Not before the burden of western misinterpretation that has accumulated over it for a century and a half, nearly crushing it, is removed. That involves rejecting more of our intellectual legacy, mainstream and ‘Marxist’, than we imagine....
What does all this mean for those approaching Capital today? Quite simply, Capital will not re-enter history, the one you must make to prevent capitalism taking humanity down with it, unless you recover the history in it. Park your ahistorical economics and social sciences at the door before you enter. They are not aids to understanding the greatest analysis of how we got here and where we might be headed. Read what Marx says. Pay no attention to those that tell you Capital is hard: they are merely saying ‘read my book first’. You have limited time: spend it on reading Capital. If you must read an introduction, Ernest Mandel’s, remarkably brief and unsullied by the problems discussed here, will do amply. Remember, Capital was serialised in a workers’ paper. You are today’s workers and Capital is your invitation card to history. 
Marx’s “Capital” at 150: History in Capital, Capital in HistoryRadhika Desai | Professor at the Department of Political Studies, University of Manitoba, Winnipeg, Canada and author of Geopolitical Economy (2013)

Elvira Nabiullina — Bank of Russia's strategic objectives and plans for the next five years

Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at the International Financial Congress, Moscow, 13 July 2017.
Elvira Nabiullina: Bank of Russia's strategic objectives and plans for the next five years

Thursday, August 24, 2017

Jayati Ghosh — 150 years of ‘Das Kapital’: How relevant is Marx today?

Short summary of the  of Das Kapital's continuing relevance. Clear and succinct.

Real-World Economics Review Blog
150 years of ‘Das Kapital’: How relevant is Marx today?
Jayati Ghosh | Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi

Sputnik International — Pakistan to Seek Consensus With Russia, China Over Trump's New South Asia Policy

Pakistani Foreign Minister says his country will work together with Russia and China in the light of the new US strategy for Afghanistan.
Sputnik International
Pakistan to Seek Consensus With Russia, China Over Trump's New South Asia Policy

China Affirms Alliance with Pakistan After Trump Says Islamabad Abets Terrorists

RT — Cambodian PM calls US democracy 'bloody & brutal' in row over USAID-funded NGO

Political tensions have been rising between Phnom Penh and Washington, after Cambodia ordered a USAID-supported organization to halt its activity in the country. The Asian nation says it is defending its sovereignty, while Washington questioned its democracy.

In the latest development to the worsening dispute between the two nations, Cambodia's long-ruling leader, Prime Minister Hun Sen, accused Washington of interference in his country's domestic affairs.
"We wish to send a clear message again to the US Embassy that we defend our national sovereignty," the Cambodian government said in an open letter Thursday, as quoted by Reuters....
Earlier this week, the Cambodian Foreign Ministry announced it was expelling the US-funded National Democratic Institute (NDI) after a series of publications in local media suggesting that the non-profit organization attempted to act against the government. Phnom Penh said the NGO had violated national registration rules....
Although in its mission statement the institute, which has been operating in Cambodia since 1992, claims that it works with all political forces, some of its materials leaked online allegedly showed its political bias and moves to assist the opposition to overthrow the government.
The intentions of other NGOs operating in Cambodia and funded by USAID (US Agency for International Development) have also been questioned by the media, suggesting those organizations might be tools of the US State Department promoting Washington's foreign policy.

"There are... NGOs who also will want to create a color revolution and topple the government like they have successfully in other countries," one of the publications on Cambodia's Fresh News said.
Busted. Libya and Ukraine changed things.