In Memoriam: Robert Solow

     One of the tallest trees in the economic forest has fallen:  Bob Solow has died at the age of 99.

The modern study of economic growth could not have happened without his work, of course.  He was also one of the funniest economists I know. For years I have had the following quote from him on my office door,  which hilariously sums up his attitude to Lucas and Sargent on business cycles:

"Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is get involved in a technical discussion of cavalry tactics at the battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous—that is, by laughing at it—so as not to fall into the trap of taking it seriously and passing on to matters of technique."

RIP, Robert Solow

Seeing the frowns on the jugglers and the clowns

It is a problem that has vexed and eluded Marxists -- and tantalized critics of Marx -- for a century and a half. If I am correct, Karl Marx had an intuition of the argument I am about to present but he couldn't quite bring himself to articulate it. A bit over a century later, in "Proletariat and Middle Class in Marx: Hegelian Choreography and the Capitalist Dialectic." Martin Nicolaus almost got it or may have gotten it but couldn't put it into words. The question is usually framed in terms of a New Middle Class, although the agglomeration isn't a class, it isn't in the middle, and it isn't particularly new. For background on the debates about this so-called new middle class, see Val Burris's 1986 review article, "The Discovery of the New Middle Class" in Theory and Society, Vol. 15, No. 3 (May, 1986), pp. 317-349.

Burris mentioned Nicolaus's essay in connection with the argument that "Marx was actually an advocate, if not the originator, of the concept of a 'new middle class.'" That hardly does justice to Nicolaus's contribution. Abram Harris had traced the concept to Marx in 1939. Nicolaus's argument was a much more complex one having to do with Marx abandoning certain Hegelian preconceptions in the face of empirical evidence. I won't summarize Nicolaus's entire argument here but focus on two pieces of evidence he presents in his essay. The first is a footnote from the Grundrisse in which Marx wrote, "the creation of surplus labor on one side corresponds to the creation of minus-labor, relative idleness (or non-productive labor at best) on the other." 

The second is a parenthetical commentary from Theories of Surplus Value 1 in which Marx speculated about an advance of productivity such that "whereas earlier two-thirds of the population were directly engaged in material production, now it is only one-third." If the produce and productive labour time were equally distributed, everyone would have more free time and time for "unproductive labor," presumably of their choice. But that could never happen under capitalism. As Nicolaus explained, "[t]he contradiction resides in the fact that the distribution of disposable time cannot be equal so long as the capitalist system operates by appropriating surplus labor."

At the end of his Theories of Surplus Value commentary on the consequences of productivity, Marx supposed that, 

—with the exception of the horde of flunkeys, the soldiers, sailors, police, lower officials and so on, mistresses, grooms, clowns and jugglers—these unproductive labourers will on the whole have a higher level of culture than the unproductive workers had previously, and in particular that ill-paid artists, musicians, lawyers, physicians, scholars, schoolmasters, inventors, etc., will also have increased in number.

I personally don't see why the clowns and jugglers wouldn't also have a higher level of culture, hence their frowns. But I take the point of Marx's listing of occupations to be precisely the heterogeneity of the unproductive workers who live on redirected revenue. This variety of occupations is in contrast to the footnote from the Grundrisse, in which Marx had enumerated, "the paupers, flunkeys, lickspittles etc. living from the surplus product, in short, the whole train of retainers; the part of the servant [dienenden] class which lives not from capital but from revenue." 

Incidentally, that footnote began with the disclaimer "[i]t does not belong here..." "Does not belong here" is a frequent occurence in the Grundrisse, appearing 17 times in that form. Sometimes Marx was referring to an anachronism. Sometimes he may have felt that a stray thought belongs in a different section than the one he is currently writing. But it seems to me that in this case "it does not belong here" referred to an idea that he did not know what to say about it. The footnote contains what appear to be several non-sequiturs but they are only such because Marx failed to develop the connections:

It does not belong here, but can already be recalled here, that the creation of surplus labour on the one side corresponds to the creation of minus-labour, relative idleness (or not-productive labour at best), on the other. This goes without saying as regards capital itself; but holds then also for the classes with which it shares; hence of the paupers, flunkeys, lickspittles etc. living from the surplus product, in short, the whole train of retainers; the part of the servant [dienenden] class which lives not from capital but from revenue. Essential difference between this servant class and the working class. In relation to the whole of society, the creation of disposable time is then also creation of time for the production of science, art etc. The course of social development is by no means that because one individual has satisfied his need he then proceeds to create a superfluity for himself; but rather because one individual or class of individuals is forced to work more than required for the satisfaction of its need - because surplus labour is on one side, therefore not-labour and surplus wealth are posited on the other. In reality the development of wealth exists only in these opposites [Gegensatze]: in potentiality, its development is the possibility of the suspension of these opposites. Or because an individual can satisfy his own need only by simultaneously satisfying the need of and providing a surplus above that for another individual. This brutal under slavery. Only under the conditions of wage labour does it lead to industry, industrial labour. - Malthus therefore quite consistent when, along with surplus labour and surplus capital, he raises the demand for surplus idlers, consuming without producing, or the necessity of waste, luxury, lavish spending etc.

On the one hand it is a jumble, on the other it is an extremely compressed summary of the theory Marx is developing. Right at the centre of that theory is disposable time: "In relation to the whole of society, the creation of disposable time is then also time for the production of science, art, etc." Recall Nicolaus's observation that under capitalism "the distribution of disposable time cannot be equal." That is both a law of capital accumulation and a fundamental contradiction of capitalism.

The pamphlet that inspired Marx's affection for disposable time, The Source and Remedy of the National Difficulties, contains a multi-page polemic against the proliferation of the "unproductive classes" in answer to the question, 

Why then is it that no existing society, nor society that ever had existence, has arrived at this point of time, considering that in all times, and in all societies, excepting only the very barbarous, a few years would naturally have led to it?

"It" being "that real national prosperity, when men would no more labour,

'than sufficed
To recommend cool zephyr, and make ease

More easy, wholesome thirst and appetite
More grateful;'"

In his polemic, C. W. Dilke, the author of the pamphlet cited "all soldiers, sailors, parsons, lawyers, counsellors, judges, and innumerable other persons," as representative of the unproductive classes. Was Marx influenced by this opposition between disposable time and unproductive labour in The Source and Remedy? Consider that the does-not-belong footnote came at the end of a passage that began with a quote from The Source and Remedy:

With the development of the forces of production, necessary labour time decreases and surplus labour time thereby increases. Or, as well, that one individual can work for 2 etc. (‘Wealth is disposable time and nothing more. ... If the whole labour of a country were sufficient only to raise the support of the whole population, there would be no surplus labour, consequently nothing that can be allowed to accumulate as capital . . .')

Marx subtly modified the pamphlet's maxim about wealth: "The whole development of wealth rests on the creation of disposable time." For Marx, disposable time became not merely the product of surplus labour but also its origin. Where Dilke had written of only an opposition between unproductive labour and the realization of disposable time, Marx, the dialectician, detected a unity.

Could it be, though, that this unity was already implicated in Dilke's term "disposable time"? At the end of his "does not belong here" footnote, Marx cited Malthus and acknowledged the consistency of his "demand for surplus idlers, consuming without producing." In notebook VI Marx quoted Thomas Chalmers, "one of the most fanatic Malthusians," writing that profit " has the effect of attaching the services of the disposable population to other masters, besides the mere landed proprietors." The quote is from Chalmers's On Political Economy: In Connexion with the Moral State and Moral Prospects published in 1832, but Chalmers had discussed and extolled the "disposable population" at length in his 1808 Inquiry into the Extent and Stability of National Resources.The latter book contains a chapter "On the distinction between productive and unproductive labour," which objects at length to the "mischief" done by the definition of unproductive labour.

Is it possible that Dilke chose the term "disposable time" -- as opposed to the more prosaic "leisure" -- as a veiled rebuttal to Chalmers's "disposable population"? The possibility is amplified by Dilke's attachment to William Godwin's philosophy and Chambers's (and Malthus's) open hostility toward Godwin.

We are by no means finished...

Still, we are by no means finished. The contradiction between production and realization - of which capital, by its concept, is the unity - has to be grasped more intrinsically than merely as the indifferent, seemingly reciprocally independent appearance of the individual moments of the process, or rather of the totality of processes.

Immediately following Marx's "does not belong here" footnote in the Grundrisse begins a 22-page section that examines the "transition from the process of the production of capital into the process of circulation." The climax of the section is the four point summary of the fundamental contradictions that I mentioned in a previous post and that culminates in the "fetter" that “real wealth has to take on a specific form distinct from itself, a form not absolutely identical with it order to become an object of production at all." One might be tempted to conclude that it is precisely those barriers that arise during the transition from production to circulation that necessitate the increase in unproductive workers as consumers of the revenues from surplus labour. As Malthus pointed out, at the end of a long quotation by Marx, "The very existence of a profit upon any commodity presupposes a demand exterior to that of the labourer who has produced it." Did Marx offer direct analysis of the relationship between the fetters on the development of productive forces and the expansion of unproductive labour? Only negatively: by explicitly "omit[ting] here any regard for the other possessing and consuming etc. classes, which do not produce but live from their revenue..." 

Summing up, then, productive labour, which produces surplus value, thereby also produces unproductive labour as both an external demand for the products of industry and as a conduit for the revenues of capital that are not reinvested: "the creation of surplus labour on the one side corresponds to the creation of minus-labour, relative idleness (or not-productive labour at best), on the other." First, the wages of productive labour are limited because otherwise there would be no incentive for capital to invest: "the existence of necessary labour time is conditional on the creation of superfluous labour time." 

Second, the amount of surplus value that can be re-invested is limited by consumption, which can not grow as fast as productivity could grow if all profits were reinvested. Economists' favorite maxim that "human wants are insatiable" is false. Wants can expand over time but at any given moment they are limited by taste, habit, and custom. The capitalist production process is driven by the production of exchange values and only incidentally produces use-values. But for that exchange value to be realized, the commodities produced must also be use-values for someone with the means to purchase them. Besides, if too much capital is taken out of circulation for re-investment, then not enough will be available in circulation for the purchase of the goods produced.

Finally, real wealth is distinct from the commodities that are produced. It must "take on a specific form, distinct from itself... to become an object of production at all." What might that imply for Dilke's statement that "wealth is disposable time"? For the capitalist, disposable time comes in the form of servants that improve the quality of their quantitatively finite free time. For all with disposable income, disposable time is produced in the form of time-saving "conveniences" ranging from automobiles to household appliances to communications devices, all of which began as luxuries and evolved into necessities. Whether they live up to their billing as time savers is questionable, though, if they are subjected to full cost accounting. For example, "free parking" is anything but and the cost of housing is escalated by zoning requirements to provide parking spots for each unit. Not to mention the huge environmental "externalities" of the automobile. Given a choice between working eight fewer hours per week or working the eight more to earn enough money to buy devices that save six hours per week, how many people could even find the information to make the comparison, wrapped as it is in regulations, taxes, urban development and a thousand other roundabouts?

Funny, people spend all kinds of time trying to figure out the meaning of the lyrics to Like a Rolling Stone (for example) but are incurious when it comes to what happens to their own free time. "You never turned around to see the frowns on the jugglers and the clowns" is 14 words and gets 23 results in Google Scholar, 100 times that many on Google. "Surplus labour on the one side corresponds to the creation of minus-labour" is 13 words and gets 6 results on Google Scholar, "about 10" on Google. Sure, the comparison is arbitrary and invidious. Karl Marx was no Bob Dylan. 

Growth below zero and the development of the productive forces

Was Karl Marx a “degrowth communist” as Kohei Saito claims in Marx in the Anthropocene? In a word, no. But the whole truth is even stranger and more wonderful than Kohei Saito’s anachronistic oxymoron.

André Gorz is credited with the first use of la décroissance (degrowth) in the context of modern criticism of the political imperative of economic growth. The occasion was a public forum held in Paris by Le Nouvel Observateur on June 13, 1972 to discuss the Club of Rome’s Limits to Growth report. Gorz’s remarks were largely a reply to a speech and interview given by European Commission President, Sicco Mansholt.

In the interview, Mansholt had called for “growth below zero” and the end of wasteful and environmentally destructive consumer society. Gorz acknowledged the compatibility of Mansholt’s vision with socialism and even better, "with communism as it was understood in the last century. … In short, an economy ruled not by the law of value but by the slogan: to each according to his needs.” Gorz objected, however to the absence of any discussion of a method for achieving such a post-industrial civilization. “With few exceptions,” he complained, “ecologists and ecological movements are silent on the subject of means.”

Such silence was not innocent in Gorz’s view because without a clearly defined alternative, implementation would, by default, have to “rely on the moral conversion of the custodians of big capital, and enlightened intervention by national and international state bureaucracies, to bring about a post-industrial and post-capitalist civilisation.”

Gorz’s own strategy, up to that time, relied on the traditional Marxist expectation of a revolutionary working class, albeit a working class weaned from the allure of the affluent society, planned obsolescence, and an enervating culture industry. His Strategie ouvriere et neocapitalisme (1964) stressed anti-consumerist themes from Herbert Marcuse, John Kenneth Galbraith, and Vance Packard.

It would be another eight years before Gorz would bid Adieu au Proletariat and head off in pursuit of a new subject of history, namely a “non-class of non workers” whose goal would be the abolition of work and the expansion of a “sphere of autonomy” outside the heteronomous activity of waged work.

Saito quotes approvingly from a postscript to Adieu au Proletariat, originally titled "Croissance destructive et décroissance productive":

…the development of productive forces within the framework of capitalism will never lead to the gate of Communism, since the technologies, the relations of production and the nature of the products exclude not just the durable, equitable satisfaction of needs but also the stabilization of social production at a level commonly accepted as sufficient.

Saito quoted this passage in support of his thesis that Marx’s “productive forces” or “forces of production” belonged to a Promethean, “productivist” perspective that Marx abandoned after 1860 but had tainted his analysis in the Grundrisse. However, in both Adieu au Proletariat and Strategie ouvriere et neocapitalisme, as well as in much of his subsequent writing, Gorz relied heavily on the Grundrisse in formulating his unconventional views.

Gorz shared with Saito – as well as Lenin, G.A. Cohen, Eric Hobsbawn, and just about every other Marxist -- an interpretation of productive forces derived from Marx’s 1859 preface to A Contribution to the Critique of Political Economy:

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.

In quoting this famous passage, Saito overlooked the introduction to it, which clearly stated this was a “general conclusion at which I arrived [during his time in Paris and Brussels in the 1840s] and which, once reached, became the guiding principle of my studies.” In other words, it was not meant to be a summary of the results of those studies, which continued through the next decade and included the Grundrisse.

Here is where the story of those productive forces starts to get interesting. Martin Nicolaus, a Simon Fraser University grad student and lecturer who had co-translated Gorz’s Strategie ouvriere et neocapitalisme in 1967, wrote a highly acclaimed article the following year, “The Unknown Marx,” in which he discussed the much more detailed and, more importantly, historically specific account of productive forces that appeared in the Grundrisse. The essay, published in the New Left Review, won the first Deutscher memorial prize. Nicolaus subsequently translated the Grundrisse into English.

In his NLR essay, Nicolaus explained that the dichotomy between forces and relations of production in the preface was developed in the Grundrisse as the dichotomy between “two distinct processes which Marx identifies as basic to capitalist production.” It is also the unity of those two distince processes of production and circulation that is basic to capitalist production.

In a section that began three-quarters of the way through his essay, “The Road to Revolution,” Nicolaus revealed what are the famous “fetters” on the development of the productive forces. Or rather he quoted Marx’s enumeration of those fetters. Capital, Marx argued, “appears as the condition of the development of the forces of production as long as they require an external spur, which appears at the same time as their bridle.”

It is a discipline over them, which becomes superfluous and burdensome at a certain level of their development, just like the guilds etc. These inherent limits have to coincide with the nature of capital, with the essential character of its very concept. These necessary limits are:

(1) Necessary labour as limit on the exchange value of living labour capacity or of the wages of the industrial population;

(2) Surplus value as limit on surplus labour time; and, in regard to relative surplus labour time, as barrier to the development of the forces of production;

(3) What is the same, the transformation into money, exchange value as such, as limit of production; or exchange founded on value, or value founded on exchange, as limit of production.

This is: (4) again the same as restriction of the production of use values by exchange value; or that real wealth has to take on a specific form distinct from itself, a form not absolutely identical with it, in order to become an object of production at all.

This short excerpt hardly does justice to an argument that Marx developed over the course of 26 pages and then returned to in the heralded “Fragment on Machines.” But the final clause is crucial to questions of ecology and social justice. Under capitalism, “real wealth has to take on a specific form distinct from itself, a form not absolutely identical with it order to become an object of production at all.” The commodity is that form not identical with wealth. 

Marx had a lot more to say in the Grundrisse about productive forces that is very different from the conventional reading based on the 1859 preface. Relying exclusively on the latter is like writing a high school book report based on the dust jacket blurbs.

While Saito construes the productive forces as technology, albeit in its broadest sense, Marx conceived the development of the productive forces as “the development of the social individual which appears as the great foundation stone of production and of wealth.” Marx reiterates this point in a section labelled “true conception of the process of social production”:

When we consider bourgeois society in the long view and as a whole, then the final result of the process of social production always appears as the society itself, i.e. the human being itself in its social relations. Everything that has a fixed form, such as the product etc., appears as merely a moment, a vanishing moment, in this movement. The direct production process itself here appears only as a moment. The conditions and objectifications of the process are themselves equally moments of it, and its only subjects are the individuals, but individuals in mutual relationships, which they equally reproduce and produce anew. The constant process of their own movement, in which they renew themselves even as they renew the world of wealth they create.

This essay began with a recap of the circumstances of André Gorz’s use of la décroissance and his objection to the absence of means or a “revolutionary subject” in scenarios for a “growth below zero” future. Saito’s rejection of productive forces implies that Marx abandoned his theory of historical change and consequently turned his back on communism. If he did, Marx couldn’t have been a “degrowth communist.”

The question of what a Grundisse-based analysis of productive forces might contribute to human emancipation and ecological survival would take a book. I am working on it.

Only DA Willis Can Save Us

 Imagine: 

Trump convicted of federal crimes by Jack Smith, sentenced to prison and imprisoned during 2024 election cycle, wins election and proceeds to pardon himself. The Supine Court upholds his self-pardon, Thomas writing for the majority.

Are you sufficiently scared? To forestall this, he must be convicted of serious felonies at the state level:  a president's power to pardon only bears on federal crimes. 

Hence my title: Godspeed, Fani Willis!!

Peter Pan to the rescue

 I'm more and more convinced that the simplest way out of the debt-ceiling morass would be to start issuing perpetual bonds or consols (sometimes dubbed "Peter-Pan" bonds, since they never mature or grow up )which simply offer a fixed payment every year, with no face value. This would seem to be immune to court challenges -- unlike the constitutional gambit or the platinum coin.  The Republicans in the House are manifestly crazy, so there's no hope there.

One question is how much bigger the term premium would be to borrow longer term in this way.

Escape from Muddle Land

Let’s get the up-or-down part of this review over with quickly: Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It by Erica Thompson is a poorly written, mostly vacuous rumination on mathematical modeling, and you would do well to ignore it.

Now that that’s done, we can get on with the interesting aspect of this book, its adaptation of trendy radical subjectivism for the world of modeling and empirical analysis.  The framework I’m referring to goes something like this: Each of us exists in our own bubble, a product of our experiences and perspectives.  Our thoughts express this subjective world, and they are true in relation to it but false beyond its boundaries.  This means no one has the right to speak for nor criticize anyone else.  In some versions, bubbles can be shared among people with the same set of identities, but, as before, not across them.  In some unspecified way, we will be happy and productive if we embrace the diversity of our incommensurable worlds and their corresponding truths.  Oppression occurs when some privileged people think their bubbles are universal, the doctrine of false objectivity.  We must be re-educated out of such a delusion.

This of course is a cartoon version, but I think it expresses the core of the cognitive bubble framework.  Its adherents think it is very radical and liberating, and self-evidently correct.  I won’t belabor the obvious contradiction between the no-objective-criteria-across-bubbles hypothesis and the claim that the cognitive bubble world is the one we all live in.  The only other point I’ll make is that, true to their belief that each cognitive world is impervious to criticism from another, adherents never, and I mean never, acknowledge, much less grapple with, serious criticism of their worldview.  Instead, they argue by authority: Author X, who is much admired by people like us, says thusly, and so we can use this insight as a basis for further analysis.  “Argument” in this context tends to take the form of exemplary analogy: here is a good way to think about the topic at hand because something like it works in a situation that is analogous to it in some respects.  Argument by analogy fits a subjectivist framework, since its salience derives from aha-ness, not the sort of reasoning or empirical evidence that depend on objective criteria.

So how can this framework be extended to the world of information sciences and mathematical modeling?  Thompson’s insight is that each model can be thought of as existing within its own cognitive bubble, composed of the assumptions that structure it and the purposes it’s designed to serve.  Each model is true within its own bubble, but we need to step outside them, into the world of social and cognitive diversity, to see their limitations and escape their claims to any broader truth or objectivity.  And that’s sort of it.  While (as you can see) Thompson didn’t persuade me of any of this, I think there’s a chance her book will be successful on its own terms: future writers of the radical subjectivist persuasion may cite her as the reason why we should all think about models in this way.

My own view is probably clear from the way I describe hers, but just to be complete, here is its own cartoon version: There really are better and worse models, based on criteria that apply across different social and intellectual divides.  Our self-knowledge is imperfect, and others often understand things about us we don’t see.  We benefit from their criticism.  They can also represent us, sometimes better and sometimes worse than we would represent ourselves.  Arguments that evade engagement with counterargument are generally weak and unreliable.  Arguments based on reasoning and evidence are better than those based on some version of grokking, and those are the criteria we’ll need to use if we’re serious about positive social change.  How much we share with one another, cognitively and otherwise, is not a matter for ex cathedra generalizations; it’s something we discover through interacting with others—or better, something we can create by building on what already connects us.

Economic Insomnia? A Review of "The Guest Lecture" by Martin Riker.

It’s a rare day when an economist plays the key role in a novel, and even rarer when one of the supporting players is John Maynard Keynes himself.  So, spurred on by enthusiastic reviews, I sailed through Martin Riker’s The Guest Lecture this week, a novel in which a woman, just denied tenure by the all-male economics department at her university, lies awake at night in a hotel room, rehearsing a lecture she’ll be giving the next day while re-evaluating the twists and turns of her life’s trajectory.  Maybe it’s a risk to read insomnia fiction at bedtime, but I definitely enjoyed myself, laughing out loud several times and rereading especially zingy paragraphs.

Yet I was disappointed, and I’ll use this post to explore how and why.  The first part of the disappointment is obvious and straightforward: this is supposed to be an expression of the inner thoughts of an economist, but it shows close to zero understanding of the world of academic economics.  Yes, there is some name-dropping, and yes the great Keynes shows up to guide Abby, the unsleeping economist, through her long night of the Deep CV.  Superficially it’s all there; in substance not.

First, why is Abby an economist?  Where does she fit in that world?  The only explanation we’re given is that she found herself to be “good at math”, and she took a course in experimental economics as an undergrad from a female professor who served as a role model.  Well, OK, that may be part of it, but did she think that being an economist would be a way to change the world for the better, or to understand a complex and puzzling aspect of it, or what?  Other than the paycheck, what did she think she would be getting?  Without that piece, it’s difficult to relate her deep struggles of self-meaning to her career crisis.

Second, so what did she write her dissertation on?  The novel parades scenes from her academic coming of age—her undergrad course with her mentor, following her to grad school, her departure from the expected path of a junior professor when she wrote about about Keynes and the rhetoric of economics a few years in—but there is a blank space in between where the core formation-of-an-economist ought to be.  Grad school in econ is very demanding and, except for a few renegade departments, strongly pushes a market-centered view of the world; how did that go down with Abby?  And a dissertation is the culmination of this process, where the economist-to-be both draws on and finds breathing room from the methodological onslaught to which they’ve been subjected.  This is a very big gap in the record.

Third, while Martin Riker is an academic himself (with a degree in English, no surprise), he misunderstands the tenure expectations for junior faculty to a degree that Abby wouldn’t.  We’re told she was hired by an R1(ish) research university, where it’s considered enough to publish one article a year in second-tier journals.  No way!  Six articles won’t get you tenure unless, just perhaps, most are in top-ranked outlets (AER, QJE, etc.).  Moreover, books don’t count.  Economists regard book-writing as a sort of indulgence, best saved until the choice morsels of science have been parceled out in article form.  The Journal of Economic Literature, the main review outlet in the profession, has steadily reduced the number of books for which it publishes reviews; the latest quarterly issue reviewed just two books.  I’m sure many economists make an entire career in the field without reading a single economics book post grad school.

And, to get tenure at an R1, the candidate’s research has to use formal modeling, either theoretical (as in game theory) or empirical (econometrics).  There is no ambiguity about this.  If Abby spends half her tenure period on a book without a single equation, she should be looking for another job sooner rather than later.  I’m not saying this is justified—quite the contrary—but it’s central to the culture of the discipline.  Making it all seem like an unexpected shock and personal crisis when Abby is denied tenure leaves someone like me wondering whether she had much reality contact all along.

Finally, there just isn’t any economics thinking of any sort in Abby’s nighttime ruminations.  She is steeped in rhetoric, its history and current relationship to philosophy and critical theory, but no thoughts from the economic realm arise to make sense of her predicament.  For instance, she thinks a lot about ideology, but economists for whom this concept matters use it to connect belief systems to social structures and the incentives they produce; they think of ideological beliefs as in the economy, not as forces lying outside it.  On a couple of occasions, in listing the horrors of the modern world, Abby mentions the menace of “endless growth”, a term that has entered the canon of at least part of the left, but rubs nearly all economists, including those on the left end of the spectrum, the wrong way.  Economists inclined to criticize capitalism usually see it as a system that places the gain of the few ahead of the well-being of the many, an important part of which is the repeated demand of the rich for tight money and austerity—not growth.  (The classic statement of this position is by Michael Kalecki in 1943, “Political Aspects of Full Employment”.  This may be the most cited paper by a left wing economist, ever.)  Obviously, anyone who admired Keynes would be reluctant to criticize economic growth in a general way.  Even the word “endless” would annoy economists who think of the world as a tangle of differential equations, not as a rigid arrow forever trending in the same direction.  To be blunt: a mindless reference to the evils of “endless” economic growth, to an economist, simply looks like ignorance.

Even putting aside all those complaints, I didn’t see anything illuminating about Abby’s analysis of Keynes’ essay on the “Economic Possibilities for our Grandchildren”.  Of course, the value of this essay doesn’t depend on whether the people of today, or those of 100 years from now, inhabit a world in which economic necessity has disappeared.  I’ve heard many discussions of it, and none of them have been about its timing.  So what is Abby adding to the mix?  Maybe it’s just me, but I couldn’t find anything new.

Granted, it’s not easy making an economist, much less an economist’s nighttime brain, an engaging subject for fiction.  I’m not saying Riker’s job was easy, only that I wish it had actually given us someone with human depth and complexity who also manages to be an economist.  With few exceptions, novels on academic themes are about literature professors; there’s an obvious reason for that.  I’ve enjoyed them, but I was hoping for something different this time, and not a lit prof who wandered into the economics department by accident.

ps: One more thought occurred to me.  In the book, Abby is concerned that her insight about Keynes and rhetoric was anticipated by Deirdre McCloskey, although she (Abby) came to it independently.  This greatly understates the importance of what McCloskey did.  It is no great insight that Keynes, the author of Essays in Persuasion, was a rhetorician.  Showing that would make no one’s career.  What McCloskey argued, however, is not just that the language of economics follows rhetorical tropes, but that the math does too.  This is an immensely important point.  To establish, apply or simply argue in parallel with it, you have to deconstruct the architecture of modeling in theoretical and empirical economics.  A great example of this is the joint work of McCloskey and Ziliak on statistical significance as rhetoric (and its corresponding scientific shortcomings).  If Abby is on the same plane, she should be writing and talking about the role of “mathiness” in economics, not on the rhetorical status of a narrative essay.  Maybe you need to have actually grappled with mathematical models in order to appreciate what this entails.

This Is What Happens When Progressives Look the Other Way

Recent events in Florida—the “Stop WOKE” Act, the rejection of AP African American Studies, the hostile takeover of New College—and the publication of an excellent op-ed about Diversity, Equity and Inclusion (DEI) in the Chronicle of Higher Education have me returning to a topic I blogged on several years ago, but in a new light.

It was obvious, and I mean Emperor’s New Clothes obvious, right from the outset that DEI ideology was predicated on the flimsiest of foundations.  The confusion of inequality and privilege, the epistemological mess known as standpoint theory, and the positive affect theory of human rights (all people, or at least people from historically oppressed groups, have a right to be free of psychic discomfort) are individually indefensible and collectively toxic.  Above all, they rest on an individualized, one-consciousness-at-a-time conception of social change that obscures any role for collective action, turning “the personal is political” into “the political is personal”.

My hope was that others who value genuine, on-the-ground egalitarianism would have the courage to face down this intrinsically reactionary and authoritarian—not to mention ignorant—“movement”.

No such luck.  With few exceptions, progressive people who shared my outlook looked away, at most grumbling quietly to each other.  We didn’t like it, but we figured it was not worth the nastiness it would stir up.

Well, it turns out that the culture-warrior Right has no such qualms and is happy to feast on the banquet DEI-ism has served them.  In most instances, the practices and ideologies they denounce are just as absurd and destructive as they say they are, but the attack comes from forces whose goal is to establish conservative political control over higher education, crushing progressive thinking wherever they find it.  Our side took a pass and now it’s not up to us any more.

This is a disaster of our own making.  I’m not saying people like DeSantis aren’t the dishonest opportunists they are, but billionaire donors will always find politicians like that.  (They will run on whatever polls best and then cut the taxes and pad the profits of the rich.)  It’s our fault for making it so easy for them.

The Unbearable Tightness of Peaking

Sandwichman came across a fascinating and disconcerting new dissertation, titled "Carbon Purgatory: The Dysfunctional Political Economy of Oil During the Renewable Energy Transition" by Gabe Eckhouse. An adaptation of one of the chapters, dealing with fracking, was published in Geoforum in 2021

As some of you may know, the specter of Peak Oil was allegedly "vanquished" by the invention of methods for extracting "unconventional oil" from shale formations (or "tight oil"), bitumen sands, and deep ocean drilling. A large part of that story was artificially low interest rates in response to the stock market crash of 2008 and subsequent recession. 

What Eckhouse's dissertation and article explain is the flexibility advantage that fracking provides because the investment required for a well is two orders of magnitude less than for exploiting a conventional field and the payback time is much shorter. The downside is that the cost per barrel of the oil is much higher. Until now loose monetary policy has buffered that cost differential.

The strategic advantage of fracking, combined with the volatility of oil prices over the past two decades and uncertainty about possible future government decarbonization policies (what oil industry figures are ironically calling "peak oil demand") are making large, long-term investments in conventional oil extraction -- investments of the order of, say, $20 trillion over the next quarter century -- less attractive. 

Although the latter might sound like a good thing, what it implies is a full-blown energy crisis occurring much earlier than any purported transition to renewable non-carbon energy sources. I wouldn't be surprised to see reactionary politicians and media agitate a "populist" movement to scapegoat "climate-woke" activists and scientists as saboteurs responsible for "cancelling" long-term investment in a cheap oil economy.

I had forgotten the oil price rise of 2007-08 when a barrel of West Texas Intermediate crude rose from $85 in January 2007 to $125 in November to $156 in April 2008 to $190 in June. Now I remember my sense of awe at the time and dread that something really, really bad was soon going to happen to "the economy." But then nothing happened. Nothing, that is, but the collapse of Bear Stearns and Lehman Brothers, a stock market crash, emergency bank bailouts, and subsequent central bank monetary policy of low, low interest rates. But "the fundamentals were sound."

It scrambles my brain trying to distinguish cause from effect. Did the ultra-low post 2008 crash low interest rates incidentally drive the subsequent fracking boom? Or was specifically a fracking boom one of the core objectives of the low interest rate regime?

Whither "peak oil"? According to Laherrère, Hall, and Bentley in How much oil remains for the world to produce? (2022) "the end of cheap oil" did not go away when the oil can was kicked down the road:

Our results suggest that global production of conventional oil, which has been at a resource-limited plateau since 2005, is now in decline, or will decline soon. This switch from production plateau to decline is expected to place increasing strains on the global economy, exacerbated by the generally lower energy returns of the non-conventional oils and other liquids on which the global economy is increasingly dependent.

If we add to conventional oil production that of light-tight (‘fracked’) oil, our analysis suggests that the corresponding resource-limited production peak will occur soon, between perhaps 2022 to 2025.

Including "all liquids" pushes that horizon out to 2040. In short, we overshot peak oil by a couple decades with the aid of loose money and tight oil, with a little additional help from the Covid pandemic. Those of us with a memory longer than the news cycle may recall that the current round of interest rate hikes by the Fed was initiated in response to inflation, which reached a 40-year high in June of last year due to record gasoline prices. Lower demand for gasoline brings down gas prices while higher interest rates may discourage new investment in fracking posing the specter of an oil supply crunch a couple of years down the road.

The cartoon below illustrates the loose money/tight oil -- tight money/peak oil dilemma:

No More Noma

Eating is a necessity and can be a great pleasure.  It also has a symbolic dimension in every culture.  In the long history of European civilization, going back at least to the Romans, it has been a form of status distinction, allowing the elites at the top to display their separation from the masses below.

For many centuries elite food was set apart by its ingredients, like caviar, choice cuts of meat, difficult to procure spices and rich dairy products.  Restaurants in times past would announce their status appeal not only through their prices, but also menus that advertised rarity and bounty.

Today this emphasis on ingredients is not enough.  A general increase in prosperity and the rise of a large middle-to-upper class that can afford them means that status distinction must now rest on much greater inputs of human labor, both the highly skilled labor of innovator-chefs and the line labor of dozens of underlings who precisely execute each minute twist of preparation or presentation.  Add to this the aura of world-transforming inventiveness claimed by the tech industry, and you have Noma and restaurants like it.

There has always been a tension between elite appeal and nourishment in cuisine.  The excessively rich foods of the uppermost stratum are unhealthy, which may be one reason the humbler fare of the peasantry was sometimes gussied up and given a place on the menus of the rich, like gustatory Eliza Doolittle’s.  We will see whether the chem lab restaurant ethos can find a middle ground by absorbing some of the foods people used to eat before eating was “disrupted”.

Extending Capital to Nature, Reducing Nature to Capital

The Biden administration has announced it is inaugurating a program to incorporate the value of natural resources and ecological services into national income accounts.  The New York Times article reporting this development predictably portrays the response as divided between two camps: on the one side are environmentalists, who think this will lead to more informed decision-making, and on the other Republicans and business interests who fear it is just a stalking horse for more regulation.

For the record, here is one environmentalist (me) who thinks it’s a bad idea—not completely, but mostly.

Are the quality of our environment and the availability of natural resources crucial to our well-being?  Certainly.  Can these effects be captured by economic measurement?  Mostly no.  The monetary economy is, almost by definition, the realm of the fungible.  Money is what allows us to have more of one thing at the cost of less of another, and then to change our minds and switch back to what we had before.  Pizzas can be bought and sold for money.  School buildings can built for money.  So as a society we face a choice between different consumption categories, one that is reversible if attitudes shift.

What is fundamental about most natural resources is that they are not fungible.  If you destroy an old growth forest and use the proceeds to construct a highway—not to mention a high-end housing development in Sun Valley—you can’t turn around and liquidate the road to get the forest back.  And ecological services, critical as they are (they are often have literal life and death consequences), are not produced or consumed for money, which means they are outside the chain of exchange that generates the fungibility of the goods inside it.  The monetary value attached to them by economists is strictly notional, and it matters that no one will actually pay for their provision or receive income from it.

The wiser approach is to have parallel accounts, many of them, and measure the impacts on our well-being in units meaningful to them.  Let the fungible money economy be recorded as is, and keep close track of resource depletion, the loss of ecological services and pollution in easily understood metrics of their own.  Reducing nature to measures of monetary gains and losses drains it of what makes it different and intrinsically valuable. 

PS: I’ve written two books that develop this argument in different contexts, Markets and Mortality: Economics, Dangerous Work and the Value of Human Life (1996) and Alligators in the Arctic and How to Avoid Them: Science, Economics and the Challenge of Catastrophic Climate Change (2022).

Herb and then Barkley: we will try to sing your song right

 They are falling all around me

They are falling all around me
They are falling all around me
The strongest leaves of my tree

Every paper brings the news that
Every paper brings the news that
Every paper brings the news that
The teachers of my sound are movin’ on

Death it comes and rests so heavy
Death it comes and rests so heavy
Death comes and rests so heavy
Your face I’ll never see no more

But you’re not really going to leave me
You’re not really going to leave me
You’re not really going to leave me

It is your path I walk
It is your song I sing
It is your load I take on
It is your air that I breathe
It’s the record you set
That makes me go on
It’s your strength that helps me stand
You’re not really
You’re not really going to leave me

And I have tried to sing my song right
I have tried to sing my song right
I will try to sing my song right
Be sure to let me hear from you

--Bernice Johnson Regan

https://www.youtube.com/watch?v=AX3l2mrkP5U

Barkley Rosser, 1948-2023

I've just learned that Barkley Rosser, the mainstay of this blog, died yesterday.  I'd crossed paths with him in Madison, WI in the early 70s and then reconnected in the late 1980s, even coauthoring a paper with his wife Marina in 1990 (I think).

Barkley and I would get together for a meal most years during the economics meetings.  He was a human tornado, quick and vociferous, backed up by a vault of reading, study and thinking.  He was uncommonly wide-ranging: although his reputation rested primarily on his work in complexity theory and nonlinear dynamics, he was a textbook coauthor in comparative systems and served as editor of the Journal of Economic Behavior and Organization.  Of course, if you read his blog posts here, you would know how wide his horizons were.

Bark had a great sense of humor, loved to laugh, and was optimistic despite his cynicism.  He went out of his way to help others.  Given his never-ending intensity, I'm glad his heart held out for this long.

One of the sadder parts of aging is having to say final goodbye's to so many people who have meant so much.  Bye Bark.

Memo to Janet Yellen

 Mint the Coin!

https://talkingpointsmemo.com/edblog/debt-ceiling-hostage-update

Herb Gintis, 1940-2023

My dissertation chair, Herb Gintis, died yesterday in Northampton, Mass.  We didn’t stay in touch after I graduated—our interests and perspectives diverged—but I will always appreciate what he gave of himself at a difficult time in my life.

After my first dissertation went awry (don’t ask!), Herb, who had been on my committee, stepped in and helped me identify a new topic.  I had to learn a new set of tools, and he was patient as I stumbled through what I now recognize as elementary technical hurdles.  He even watched my kid on a couple of occasions, so I could have a few hours of freedom.  I’ve heard dissertation advisors don’t always do this!

I confess that our final session together was rocky.  At my dissertation defense I attacked my own work, and it was Herb who defended it.  He even had to convince me to publish the game theoretic modeling in a journal—I had become so embarrassed by it.  It was a terrible closure to a relationship for which I remain deeply grateful.  In recent years I had thought about contacting him again just to let him know how much his generosity meant to me, but I delayed....and now it’s too late.

So I’m taking this opportunity to say that, although Herb could be crusty—he had a reputation for this—he was also a true mensch.  He had an open mind and bottomless curiosity.  He rose to the top ranks in a field, evolutionary game theory, he didn’t take up seriously until middle age.  His intellectual partnership with Sam Bowles resulted in one of the most productive twosomes in the history of economics.  (Can you name any others?)

Here is Herb’s Wikipedia entry, and here is his website.  An impressive guy.

Why the Battle over Electing a House Speaker

I don’t know how this will turn out, and maybe what I’m about to say will be disproved by events, but here goes:

I think the Republicans face a difficulty in electing a Speaker that the Democrats wouldn’t have, and it will be hard to overcome.  Democrats may disagree intensely, but they all have legislative agendas to pursue, and in the end they are likely to compromise in order to get at least some of what they want.  Republicans have little to no agenda.  In the last presidential election they didn’t even have a party platform.  Thus there is no incentive to compromise.  If you’re a Republican congressman eager to cement your brand as a “patriot” who won’t settle for RINO’s like Kevin McCarthy, what would motivate you to vote for him?

True, representatives, even very right wing ones, still want federal money for their districts and to win favors for friends and donors.  But these things usually take the form of riders to bills for other purposes or fine print in legislative language.  The whole point of the process is that it occurs out of public purview and is therefore difficult to use to break highly visible logjams like the speakership.  The IRA compromise among the Dems did involve side payments to West Virginia but primarily took the form of substantial trims to programs most Democratic senators supported.

What will a compromise that assembles a working Republican majority in the House look like?