Battlespace Preparation

You might find this article at Boston Review by economists Suresh Naidu, Dani Rodrik, and Gabriel Zucman interesting as I did. Here’s a snippet:

The tools of economics are critical to developing a policy framework for what we call “inclusive prosperity.” While prosperity is the traditional concern of economists, the “inclusive” modifier demands both that we consider the whole distribution of outcomes, not simply the average (the “middle class”), and that we consider human prosperity broadly, including non-pecuniary sources of well-being, from health to climate change to political rights. To improve the quality of public discussion around inclusive prosperity, we have organized a group of economists—the Economics for Inclusive Prosperity (EfIP) network—to make policy recommendations across a wide range of topics, including labor markets, public finance, international trade, and finance. The purpose of this nascent collective effort is not simply to offer a list of prescriptions for different domains of policy, but to provide an overall vision for economic policy that stands as a genuine alternative to the market fundamentalism that is often—and wrongly—identified with economics.

My own view is that economics is not a predictive science like physics or chemistry but a descriptive one like anthropology or psychology to which it is closely related. Econometrics has been a 50 year distraction from the real role of economics which is describing economic behavior.

Economists who seek to make policy pronouncements should run for political office. Unless you also want to grant the civil engineers the authority to decide which bridges and roads should be built and improved as well.

2 comments… add one
  • steve Link

    Somewhere along the line it seems to me that economists (some) became the equivalent of the ministers pushing the prosperity gospel. Come to Jesus and follow my plan and God will bless you and make you wealthy. (Also donate to my church and TV show.) Follow my tax plan and vote for my party and you will be rich. (Also please donate to my political party and please give me tenure.) Both seem to take a lot of faith and no real evidence of success.

    Steve

  • Guarneri Link

    The authors write as if the tails of wealth/income/”prosperity” distribution curves have received no attention, whereas they receive almost all the attention.

    Every country, and every economic system, for which I’ve seen such curves have tails representing the very rich and the very poor. There are no tight distributions I have seen. The United States appears to have created a curve (for those statistically inclined, a gamma distribution) with a k to theta ratio of about 5x. That’s quite a feat. Critics complain and desire one that more closely resembles a k to theta ratio of about one. However, in point of fact, most socialist, communist and despotic regimes produce curves that look more like k to theta of 8-9x.

    (In words, the US has created a rightward leaning, with a hump, distribution – an upper middle class – while producing lower middle and poor classes not worse than most other economic systems. Communism, socialism and despots produce very rightward skewed curves, but without truncating the left tail. That is, the elite and their buddies get the vast majority of the spoils. )

    The current talk of redistribution is nothing but a straw man. Reconciling killing the upward mobility and economic engine of the US, simply for the sake of vote getting redistribution schemes, and the historical record of that approach’s failure wrt the lower echelons of prosperity, is never addressed. But its a mirage. A true fools errand.

    Dave has often pointed out the prerequisite of cultural uniformity to making such a system work. I think it goes deeper, but the point is worthy. And look at what immigration is doing in Scandinavia. That the current crop of redistributionists also advocate less homogeneity through open border policies can only be described as weird, and the advocates either idiots or the most craven cynics. That’s you, Bernie, AOC, Kamala and Spartacus.

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