Tuesday, October 7, 2014

Krugman, straw man, beggar, thief

In his "Slow Steaming..." column today, Paul Krugman blatantly misrepresented and trivialized Mark Buchanan's argument:
Buchanan says that it’s not possible to have something bigger — which is apparently what he thinks economic growth has to mean — without using more energy.
Wrong. Buchanan said bigger things, as a rule, use more energy. He also said that efficiencies of scale don't overturn that rule. He referred to data about economic growth and energy use, not "what he thinks economic growth has to mean":
Data from more than 200 nations from 1980 to 2003 fit a consistent pattern: On average, energy use increases about 70 percent every time economic output doubles. This is consistent with other things we know from biology. Bigger organisms as a rule use energy more efficiently than small ones do, yet they use more energy overall. The same goes for cities. Efficiencies of scale are never powerful enough to make bigger things use less energy.
Krugman disparaged Buchanan for reprising the claims and title of the book that William Nordhaus "demolished so effectively forty years ago":
...not only does he make the usual blithe claims about what economists never think about; even his title is almost exactly the same as the classic (in the sense of classically foolish) Jay Forrester book that my old mentor, Bill Nordhaus, demolished so effectively forty years ago.
I'll leave it to posterity whether or not Nordhaus "demolished" Limits to Growth. Forty years on, Brian Hayes wrote a less "blistering" critique, published in American Scientist, judging Forrester's mathematical model to be "more of a polemical tool than a scientific instrument" but concluding the book's message of limits is worth listening to. Defenders of the book have argued that Nordhaus misunderstood or misrepresented the structure of the model and whether or not the model used historical data (it did) -- the title of Nordhaus's review was "World dynamics: measurement without data."

But, following the Krugman's link to his earlier article reveals that the "foolishness" or otherwise of the book Nordhaus supposedly demolished is really beside the point. Krugman's conclusion in that earlier article directly contradicts the Pollyanna claims he is now making:
You might say that this is my answer to those who cheerfully assert that human ingenuity and technological progress will solve all our problems. For the last 35 years, progress on energy technologies has consistently fallen below expectations. 
...
But anyway, while the Limits to Growth stuff of the 1970s was a mess, the history of energy technology doesn’t support extreme optimism, either.
You've really got to follow the links.

6 comments:

Eric Blood Axe said...

I realised some time ago, that the only real capital was energy, all else is money. The Growth of world population is the result of coal and petroleum. When these are gone, the world population will have to shrink down to a level governed by solar, and geothermal energy.
Question - how much energy do you consume every day?

media said...

I thought capital was money. Because of my "lifestyle' i have in the past i used the few dollars i had as kindling (everything else was already gone) to build a fire (like jack london's story---and i used to live on the Yukon river---sleeping outside in -45; they once sent a plane to look for me ( i was going to visit some caribous) ; i saw it and they tried to charge me for a rescue when i got back---you must be out of your mind, i didnt ask for no rescue (tho i did get a bit frostbit). i got my pepco bill yesterday---too much. my mom bought me an air conditioner---against my objections---and i used it too. too much money. now its chilly (it was 30's nearby but not here, but i may have to close my windows).

Thornton Hall said...

I've noticed of late that Krugman is playing fast and loose with his links. There's a blogger code of honor that says your rough paraphrase can't lie about the content of the actual link, but he accused David Glasner of making "elementary conceptual mistakes" in his disequilibrium macro. The link, it turns out, is about (arguably) a mistake critiquing IS-LM and has nothing to do with disequilibrium. See, The Temporary Equilibrium Method (Very Wonkish) 9/22/2014.

Sandwichman said...

Thornton,

I think you could safely abbreviate that to "of late... Krugman is playing fast and loose."

Whatever the merits or faults of the Limits to Growth model may have been 40 years ago, Nordhaus's more conventional model assumes perfect substitutability between capital and resources. This led him a mere 20 years ago to recommend policies that would impose only minor abatement of greenhouse gases. If Nordhaus "demolished" Limits to Growth, Neumayer ("Global warming: discounting is not the issue,but substitutability is," 1999) obliterated Nordhaus. It is to Nordhaus's credit that, unlike Krugman, he isn't stuck in the time warp of some primordial triumph over the "classically foolish" Limits to Growth book.

Why does Sandwichman care about perfect substitution? Because on labor issues, we never cease to hear from economists that capital does not only substitute for labor, it is also a complement to labor, ergo there is not a fixed amount of work blah, blah, blah. Yep.

And Sandwichman says to economists: "No, you cannot change the rules every time they don't give you the answer you were wishing for."

Thornton Hall said...

This changing the rules back and forth technique seems to confuse even (or especially) the people using it. It seems like pointing it out is a bit wack-a-mole.

I'm hoping to come up w/ a general theory of econ wrongness that avoids the wack-a-mole problem, as I progress reading Orlean and Mirowski. My current tentative hypothesis: economics is a private language as described by Wittgenstein. The basic idea being the lack of an empirical check despite references to the empirical world.

Sandwichman said...

Quoting myself, "It's hard to think of another field (besides advertising) where assertion trumps analysis with such impunity."

My linguistic hypothesis is that economists are more educated than the rich and powerful personages who patronize them, which leads to a particular distortion of discourse. There is a kind of stilted deference toward capital and those who embody it, offset by a seething subaltern contempt toward the disenfranchised.