The Autumn of the Paradigm: A Fairy Tale

Seems everyone these days is talking about a "new paradigm".

The Wall Street Journal: "Crisis Compels Economists To Reach for New Paradigm"

"'We could be looking at a paradigm shift," says [Prince?] Frederic Mishkin, a former Federal Reserve governor now at Columbia University.

George Soros:

In response to the policy challenges presented by the economic crisis and the need to develop fresh approaches to economic theory, a group of top academics, policy-makers, and private sector leaders today announced the creation of the Institute for New Economic Thinking (INET).

David Leonhardt in the New York Times Magazine, August 2008:

The second point Obama wanted to make was about sustainability. The current concerns about the state of the planet, he said, required something of a paradigm shift for economics. If we don’t make serious changes soon, probably in the next 10 or 15 years, we may find that it’s too late.

Gabriel Garcia Marquez, The Autumn of the Patriarch:

Over the weekend the vultures got into the presidential palace by pecking through the screens on the balcony windows and the flapping of their wings stirred up the stagnant time inside, and at dawn on Monday the city awoke out of its lethargy of centuries with the warm, soft breeze of a great man dead and rotting grandeur....

Hans Christian Andersen, The Emperor's New Clothes:

MANY, many years ago lived an emperor, who thought so much of new clothes that he spent all his money in order to obtain them; his only ambition was to be always well dressed. He did not care for his soldiers, and the theatre did not amuse him; the only thing, in fact, he thought anything of was to drive out and show a new suit of clothes. He had a coat for every hour of the day; and as one would say of a king "He is in his cabinet," so one could say of him, "The emperor is in his dressing-room."

Problem is, the pursuit of the new paradigm is being conducted in the same way the King's son searched for Cinderella.

"No one shall be my wife but she whose foot this golden slipper fits."

No one shall be the new paradigm but he whose epistemologically-vapid rational actor microfoundations this stultifying, putrefying growth imperative fits.

...for the only thing that gave us security on earth was the certainty that he was there, invulnerable to plague and hurricane, invulnerable to Manuela Sanchez's trick, invulnerable to time, dedicated to the messianic happiness of thinking for us, knowing that we knew that he would not take any decision for us that did not have our measure, for he had not survived everything because of his inconceivable courage or his infinite prudence but because he was the only one among us who knew the real size of our destiny...

The Contrary Commonwealth of Virginia

Before anybody makes too much of the gubernatorial election results in Virginia, whether from the Right that this is a Warning Shot to Obama or from the Left that Creigh Deeds just did not hew to the Obama line enough, everyone should keep in mind the contrary record of Virginia since the main part of the old Byrd machine that used to run the state switched from the Democratic to the Republican parties back in the 1970s. With its elections coming one year after the presidential ones, it has exhibited an anti-Washington attitude appropriate to the location of the former rebellious Confederacy, electing someone from the party not in the White House every time starting in 1977. Here is the record.

1977: Dem Jimmy Carter in WH, GOP John Dalton wins in VA
1981: GOP Ronald Reagan in WH, Dem Charles Robb wins in VA
1985: GOP Ronald Reagan in WH, Dem Gerald Baliles wins in VA
1989: GOP George H.W. Bush in WH: Dem L. Douglas Wilder wins in VA
1993: Dem Bill Clinton in WH: GOP George Allen wins in VA
1995: Dem Bill Clinton in WH: GOP Jim Gilmore wins in VA
2001: GOP George W. Bush in WH: Dem Mark Warner wins in VA
2005: GOP George W. Bush in WH: Dem Tim Kaine wins in VA
2009: Dem Barack Obama in WH: GOP Bob McDonnell wins in VA.

Who Killed More: Communism Or Naziism?

With the 20th anniversary of the fall of the Berlin Wall upon us, various folks are popping up with all kinds of arguments, including in the 11/2 Washington Post, one Paul Hollander, an emeritus sociology prof once at U-Mass-Amherst, now at the Cato Institute, and a refugee from the 1956 Hungarian uprising writing on "Murderous Idealism." He resurrects the argument that the Communists killed more than the Nazis, indeed, a lot more: "There is little public awareness of the large-scale atrocities, killings and human rights violations that occurred in communist states, especially compared with awareness of the Holocaust and Nazism [sic] (which led to far fewer deaths)."

Now, I will agree that there is more awareness of the deaths caused by the Nazis than by the Communists. However, this meme that the Communists "killed" many more has been increasingly pushed since it appeared in the 1990s in works by R.J. Rummel and the The Black Book of Communism by Stephane Courtois. The former claims over 140 million, the latter around 100 million, their main difference being an extra 39 million or so Rummel claims died on the way to or in the gulag that Courtois and others do not accept. These are large numbers and are indeed larger than any that anybody attributes to the Nazis. But, this argument has some serious problems in the way it gets mentioned by people like Hollander.

In particular, starting from Courtois's 100 million, about 55 million of those are famine deaths, the largest single number being from the Great Leap Forward disaster in China at the end of the 1950s, with the other biggies being 1921 and the early 1930s in the USSR. This still leaves a really huge number, although if one focuses on people specifically killed on orders of leaders, the remaining number gets much smaller, although still well up into the millions. I am sorry, but while one can blame "the system" for the famines, I do not buy the argument some make (especially some Ukrainian nationalists about the 1930s famine in the USSR) that the Soviet and Chinese leaders actively wanted these deaths rather than having them happen due to bungling and errors.

So, what are the Nazi numbers? Well, Courtois claims something like 20 million roughly killed by them in World War II. I am not sure where he got those numbers, but I just looked at Wikipedia's accounting of deaths in that war. I went through the countries of Europe where the Germans and Italians fought (and, I do think the Nazis must be held responsible for WW II, not the Soviets, despite the Molotov-von Ribbentrop Pact), and I got a figure of about 43 million, with more than half of those (26 million) coming out of the Soviet Union. Now, of course, one can argue that many of those 43 million were killed by Allied soldiers or bombings. But these would not have occurred if the Nazis had not sought to conquer the world and invaded their neighbors. With the 6 million from the Holocaust, that puts the dead due to the Nazis at around 49 million by my count, arguably slightly ahead of the dead due to the Communists if one does not count famine deaths, and over a much shorter period of time and a much larger population ruled.

So, I find this ongoing effort to claim that the "large-scale atrocities [famines?], killings and human rights violations" by the Communists werre far greater in scale than those killed by the Nazis to be a pretty clear exaggeration.

Is A Completely Clean Solution To Global Warming Possible?

The latest issue of Scientific American says "yes." An article in the November issue by Mark Z. Jacobson and Mark A Delucchi, "Sustainable Energy," argues that by 2030 100% of all global energy demand could be supplied by wind, water, and solar. This would even involve a reduction in power demand globally from 12.5 terawatts to 11.5 tw, as we would replace inefficient internal combustion engine autos and fossil fuel using airplanes with hydrogen technologies, the hydrogen obtained from electrolysis of water, using clean electricity sources to do so. 51% would come from wind, with 3.8 million wind turbines, 40% from solar, and the rest from water, including most tidal and waves, with some geothermal thrown in as well. While admitting that costs are still a bit too high for the solar components, they argue that the wind and water parts are already competitive economically with existing tech, with only some further improvements in transmission capability needed to really do it.

They do admit some caveats. In particular some rarer metals will be pushed to the limit unless there are some further tech breakthroughs: silver for solar cells, neodymium for gear boxes on wind turbines (mostly located in China), tellurium and indium for thin film solar cells, lithium for electric car batteries (half of world supplies in Bolivia and Chile), and platinum for hydrogen fuel cells. They note that nuclear has high carbon output in building the plants, but agree it does not once they are built (although other problems). I think there are other problems, with listening to local environmentalists here going on again over the weekend against wind turbines, reminding me that there will be lots of opposition to much of this, even if it is cost effective (and if it is not cost effective, just forget China or India signing on at all). But, it certainly makes for a nice vision just prior to the Copenhagen conference on global warming.

Quick and Easy; Cheap and Cheerful

At the late Sandwichman's insistence, Dean Baker has stopped burying his lede:

The Obama administration came out with its first set of numbers on the jobs impact of its stimulus package. It's pretty much along the lines of what was predicted. To date, the package has created close to one million jobs. That is good news, but in an economy with more than 15 million unemployed workers, it is not nearly good enough. We need to do more, much more.

Fortunately, there is an easy and quick way to begin to get these unemployed workers back to work. It involves paying workers to work shorter hours. The mechanism can take the form of a tax credit to employers. The government can give them a tax credit of up to $3,000 in order to shorten their workers' hours while leaving their pay unchanged. The reduction in hours can take the form of paid sick days, paid family leave, shorter workweeks or longer vacations. The employer can choose the method that is best for her workers and the workplace.

Changing the Subject: Beyond Wishful Thinking

John Dryzek, Professor of Social and Political Theory at the Australian National University, wrote an article published 13 years ago titled "Foundations for Environmental Political Economy: The Search for Homo Ecologicus." Dryzek's article speaks directly to the central concern of my own book: to identify an alternative economic actor to Homo economicus. A copy of the article was one of only two supplementary sources I brought with me to Saturna Island two weeks ago when I went to (nearly) complete the first draft.

While waiting for the ferry, I retrieved the article from my bag to pass the time. There, on page 29, I was surprised to find that I had several weeks earlier scrawled "OSTROM!" in the margin. My ferry trip to Saturna took place the afternoon of the day her Swedish Bank Prize ("Nobel") was announced. So the name in the margin suddenly took on an unexpected resonance. Serendipitously, Dryzek's interpretation (at least) of Elinor Ostrom's work on common-pool resources dovetails quite nicely with what I'm trying to achieve in The Gift of Prosperity. It also addresses Brenda's and Carl Rogers's call for a "new kind of person."

Dryzek himself is critical of the results of eco-philosophical efforts to specify the features of this new kind of person. He cites E.F. Schumacher, Theodore Roszak and others. "The ecophilosophical house is an attractive dwelling," he writes, "but nobody has any idea how to build it." Dryzek's sketch of an alternative relies not so much on positing an ideal as on searching for precedents. It is in Ostrom's Governing the Commons that he finds the rudiments of that "alternative, beyond wishful thinking." In Gift I believe I take this alternative a crucial step forward, addressing human labor as a Common Pool Resource. Waged work is, after all, the primary source of income for an immense portion of the earth's inhabitants.

Mischievously, I've decided to call this labor-as-CPR, "The Lump" or, more formally, the lump of labor. My rehabilitated lump of labor, however, is not a fallacious belief in a fixed amount of work to be done. That is grammatically awkward anyway. My new lump is about a finite amount of labor that it is prudent (and sustainable) for workers collectively to offer on the market at any given time. I think a case can be made that this new lump is not that different from what workers traditionally had in mind long before the economists, journalists and propagandists raised the lump-of-labor fallacy banner as a gesture of ridicule and disdain.

Jerry Brown: California Gubernatorial Front Runner, yes, but ...

Here is an interesting piece about how he operates

http://www.consumerwatchdog.org/politicians/articles/?storyId=30658

London Calling

Tuesday Nov 3rd 7-9pm

The Centre for Environment & Sustainability (UWO) presents: Dr. Peter Victor –
"Managing Without Growth: Slower by Design, not Disaster"

Venue: Middlesex College Room 110

Growth, expansion, greater wealth – these have long been the standard policies of governments and business. But is growth effective in eliminating world poverty, solving unemployment, protecting the environment and contributing to individual happiness? What would happen to world economics if we had a no growth policy? Dr. Peter Victor will address these issues and others in his upcoming lecture as part of the E&S Special Lecture Series. An economist and Professor in Environmental Studies at York University, Dr. Victor has worked on environmental issues for nearly 40 years. Dr. Victor was one of the original founders of ecological economics and was the first President of the Canadian Society for Ecological Economics.

A reminder: Dr. Victor will be the guest author for E&S Reads – 10:30 to Noon, Nov. 3, 09 – Kresge Building Room 106. This is an excellent opportunity for a intimate discussion with the author. Copies of "Managing Without Growth" are available in the Bookstore.

Everyone is welcome to both events.
Presented by: The Centre for Environment and Sustainability, The Global and Ecosystem Health Interest Group at the Schulich School of Medicine & Dentistry and The McConnell Family Foundation.

A revolution is not a change in management. It is a change in man.

Forty years ago many writers and thinkers and poets (and even economists) talked of a revolution that was coming. The 'Age of Acquarious', the 'Limits to Capitalism', 'The Greening of America', the 'New World New Mind', the 'Limits to Growth' and 'The End of Certainty' etc.

One of these writers, Carl Rogers [1], wrote about the increasing disbelief in the democratic process in the early 1970s. He also stated unequivocably 'that a revolution was coming', not 'a gun carrying army with banners, not in manifestos or declarations, but through the emergence of a new kind of person, thrusting up through the dying, yellowing, putrefying leaves and stalks of our fading institutions.'

This new kind of person, Rogers wrote, would have the following traits:

** deep concern for authenticity against the climate of half-truth, exaggeration, scandal, sensation and double talk, or talk without meaning at all;

** an opposition to all highly structured, inflexible and impersonal institutions;

** fundamental indifference to material comforts and rewards, although accustomed to affluence [2];

** deep desire for close personal associations, not confined to the old 'familiar areas', with all others excluded;

** a rejection of national and racial discrimination;

** deep distrust of science and established truth with is so much in the 'head' that in fact it suppresses truth;

** strong desire for self-knowledge including dreams, mediation, mysteries and psychic phenomena, and for feeling and understanding rather than 'knowledge' which seems to have no real social value;

** a feeling of closeness to nature, an identification with it, and a desire to act in no way against it;

** an awareness of living in an ever-changing process in which he or she is vitally alive and willing to risk;

** a trust in one's own experience as a validation of life.

Unfortunately governments and political parties have continued to enforced authoritarian and capitalist hegemonies around the world. They "themselves need transformation almost as much as most of the people who elect them, or comprise them. That hegemony is central in control, bureaucratic in form, relying upon leadership, and embarassed at the very idea of liberation" wrote the ousted left-wing radical of the Australian Whitlam Labor Government, Jim Cairns. [3]

Rogers and Cairns were writing words as a silent plea for the world to find the individual and group strength to counter the zero sum game of imperialism, corporatism, and the coups and wars that go with it. Their predicament was dire and so eloquently put in a song by Simon and Garfunkel:

People talking without speaking
People hearing without listening

People writing songs that voices never share
Noone dare
disturb the sound of silence

Fools said I
you do not know
Silence like a cancer grows

Hear my words that I might teach you ...
Take my arms that I might reach you

But my words like silent raindrops fell...[4]

Decades earlier George Orwell appeared to mirror this message when he wrote despairingly that "Traditions are not killed by facts."

[1] 'The Man and His Ideas', Richard I Evans (ed), EP Dutton and Co Inc New York, 1975. As quoted by Jim Cairns (former Australian Deputy Prime Minister in the early 1970s) in 1976 book entitled 'Oil in Troubled Waters'.

[2] "An important question here is whether affluence is needed to produce the new, emerging person." wrote Jim Cairns

[3] Jim Cairns.1976. 'Oil in Troubled Waters'. Page 151.

[4] Lyrics in the song: 'The Sounds of Silence'. Sung by Simon and Garfunkel

Dismantling the Economy

During the New Deal, the government left a legacy of buildings, parks, and public spaces. Gray Brechin deserves great credit for documenting this achievement.

http://livingnewdeal.berkeley.edu/

In contrast, the U.S. is engaged in wasteful spending on war and bailouts that will leave a pitifully small legacy. What king of legacy will Obama leave?

I remember when the United States was going to prosper as an information economy, based on the premise that we are either the smartest or the best educated in the world. To ensure success in achieving this vision, the country is engaged in a massive defunding of education. California, of course, is the leader in this respect.

Presumably, imposing requirements multiple choice tests and scripted teaching in the poor neighborhoods will be all we need, once we can break the teachers' unions.

In line with the steady undermining of information in the information economy, the University of California is making some questionable choices. Here is one that has not been widely publicized:

California is contemplating a $10 billion bond to finance a massive statewide water project. One would assume that the state would want to have access to as much information for guidance in such matters.

Yet the University of California is getting ready to mothball its valuable Water Resources Center Archives, which a Sacramento Bee article observed, "For decades it has served as a shrine for engineers, lawyers and academics working to understand and improve the management of water, California's most precious resource." The problem is that the school cannot afford the $230,000 annual cost, probably equal to a couple of superfluous vice presidents.

Weiser, Matt. 2009. "UC Archives on Water Imperiled." Sacramento Bee (26 October): p. B 1.
http://www.sacbee.com/378/story/2281137.html

Workers' Ownership and Management and Work Sharing

If indeed, as the kurzarbeit evidence from Germany suggests, work sharing or other methods of reducing work hours during a recession preserves jobs, then it should be of interest what sorts of economic systems and organizations might lead to more of this. One form that has long been suggested as having this character is worker managed and worker owned firms, more conventionally called "cooperatives." The literature on this is simply huge, and a good summary can be found in John P. Bonin, Derek C. Jones, and Louis Putterman, "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?" Journal of Economic Literature, 1991, 31, pp. 1290-1320. Indeed, in such enterprises owner-manager-workers are more likely to share the pain of a fall in demand by a shared cutback. These firms also tend to show greater short-term productive efficiency through flatter managerial hierarchies and the worker-owners monitoring each other for shirking.

The literature also cites possible disadvantages, perhaps a tendency to be reluctant to hire more worker-owners, possible tendencies to engage in ignoring externalities and trying to gain monopoley power, and so on. With a few exceptions, such as the Mondragon cooperatives, these firms rarely become very large, with financing a big issue. A few countries have tried to encourage them, but by and large they remain scarce in most economies, a vision, but not much of a widespread reality.

Issue Lab

Issue Lab:

Job Sharing: Tax Credits to Prevent Layoffs and Stimulate Employment

Contributing Organization(s): Center for Economic and Policy Research

Author(s)/Creator(s): Dean Baker

The unemployment rate is expected to average 10.2 percent for 2010, 9.1 percent for 2011, and 7.3 percent for 2012. With this in mind, this Issue Brief describes a job sharing tax credit, designed to provide a quick and substantial boost to the economy. It would use tax dollars to pay firms to shorten the typical workweek, while keeping pay constant. This should cause employers to want to hire additional workers. A rough estimate of the impact of this tax credit is between 1.3 and 2.7 million jobs created.

Comprehensive Assessment

foothillsmike October 17th, 2009 at 2:49 pm:

It is my thought that the typical work week should be reduced from 40 hours.

James K. Galbraith October 17th, 2009 at 2:52 pm In response to foothillsmike:

Sacre bleu! The French tried this.

I haven’t seen a comprehensive assessment, but I don’t think that it worked very well as employment policy. It does change patterns of social life … but it’s not very clear that Americans want to spend more time at home.

Well, here's a comprehensive assessment.You may not agree with the author's conclusions but Anders Hayden gives sources so you can dig deeper if you're not satisfied.

Drawing on existing survey and economic data, supplemented by interviews with French informants, this article examines the 35-hour week’s evolution and impacts. Although commonly dismissed as economically uncompetitive, the policy package succeeded in avoiding significant labor-cost increases for business. Most 35-hour employees cite quality-of-life improvements despite the fact that wage moderation, greater variability in schedules, and intensification of work negatively impacted some—mostly lower-paid and less-skilled—workers. Taking into account employment gains, the initiative can be considered a qualified success in meeting its main aims.

But there are two sides to every story: the comprehensive assessment and the relentless media boilerplate that creates an impression of what the truthy truth might be. So below is a reprise of my arrangement of sentences from 17 articles over 12 years in The Economist that tell people what to think without them actually having to do the thinking.

Only So Much Work to Go Round

This idea cannot withstand a nanosecond of thought.

The idea that a fixed quantity of work exists, to be parcelled out among workers, is the so-called lump-of-labour fallacy. It is depressing that supposedly responsible governments continue to pretend to be unaware of the old 'lump of labour' fallacy: the illusion that the output of an economy and hence the total amount of work available are fixed.

The notion that there is a fixed amount of work to be shared out, so that shorter hours for all must mean more jobs, is widely derided by economists as the 'lump of labour' fallacy. The idea of the 35-hour week, derided by many economists as the 'lump-of-labour fallacy', is that if employees work less, companies, spurred by tax concessions, will hire more. Although mocked by economists as a prime example of the 'lump-of-labour' fallacy – the idea that there is only so much work to go around – the government claims that it had created 240,000 jobs by the end of 2000. But to conclude from this that overall employment will decline is to succumb to the lump-of-labour fallacy: the long-disproved idea that there is only a fixed amount of output (and hence work) to go round.

France's own Frédéric Bastiat had pointed out two centuries ago that there is no limit to the work that needs doing. Debunking the 'lump of labour fallacy' before it was even given that label, he suggested that to parcel out the limited amount of work available, people should be required to use only one hand, or even to have a hand chopped off. But -- the lump of labour fallacy strikes again -- the amount of work to be done is not fixed. The quantity of work is not fixed: such a notion is known to economists as the 'lump-of-labour' fallacy.

The lump of labour fallacy also lies behind paranoia about jobs being 'stolen' by low-wage countries. The accusation that migrants steal jobs is a version of the 'lump of labour' fallacy -- that there is only so much work to go around. In effect, export pessimism involves a fallacy of its own -- a 'lump-of-trade' fallacy, akin to the idea of a 'lump of labour' (whereby a growing population is taken to imply an ever-rising rate of unemployment, there being only so many jobs to go round).

This is a classic lump-of-labour fallacy (the idea that there is a fixed quantity of work and that if you take a job it is at my expense). Economists call this the 'lump-of-labour' fallacy. Economists call this the lump of labour (or sometimes the lump of output) fallacy.

The lump of labour fallacy is often to blame for confusion about whether productivity growth (due to more efficient working practices or to new technology) is a good or bad thing. Luddism is also commonly linked to the lump-of-labour fallacy in economics, which first-year students are taught to refute and according to which, as the demand for labour is fixed in the short run, labour-saving machinery is bound to 'kill jobs'. But the assumption that this results in fewer jobs rather than more output (and hence more goods, and more job-stimulating demand, in a beautifully virtuous circle) is based on an economic fallacy known as the 'lump of labour': the notion that there is only a fixed amount of output (and hence work) to go round.

If new technology or foreign competition do lead to net job losses it will not be because the lump of labour has become a fact rather than a fallacy, but because labour is not sufficiently mobile between sectors and regions, or because relative wages have failed to adjust. Nearly all of these mistakes boil down in the end to the most enduring of all economic fallacies: the idea that there is only so much output to be produced, or capital to be invested. (Europe is currently preoccupied with the 'lump of labour' version of this mistake, see page 18.)

A recent piece accused conservatives of embracing the 'lump of labour fallacy', the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. Hmm. Are those arguments entirely incorrect? Yes, entirely. The first is a myth. In fact, the paper he cited did not commit the lump of labour fallacy.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Every sentence in the above article came from one of the 17 Economist articles published over the past 12 years deriding the chimerical lump-of-labour fallacy. The article used all sentences in those articles that included the phrase "lump of labour" and used each sentence only once.


Bibliography

"Cranks and Proud of It." Economist, 1/20/96, Vol. 338 Issue 7949, p86, 2p
"Eat Your NAFTA." Economist, 11/13/93, Vol. 329 Issue 7837, p15, 2p

"The End of Work?" Economist, 9/28/96, Vol. 340 Issue 7985, Supplement p19, 3p

"Europe Hits a Brick Wall." Economist, 4/5/97, Vol. 343 Issue 8011, p21, 3p

"Everyone Cross." Economist, 2/5/00, Vol. 354 Issue 8156, p47, 2/3p

"Frederic Bastiat." Economist, 7/21/01, Vol. 360 Issue 8231, p64, 1p

"Grinding the Poor." Economist, 9/29/01, Vol. 360 Issue 8241, Special section p10,

“Labours lost.” Economist, 6/15/02, Vol. 363 Issue 8277, p78, 1p

“Myths and reality.” Economist, 2/28/04, Vol. 370 Issue 8364, p53, 2/3p

"One Lump or Two?" Economist, 11/25/95, Vol. 337 Issue 7942, p67, 2p

"One Lump or Two?" Economist, 10/25/97, Vol. 345 Issue 8040, p17, 2/3p

"The One-handed Economist." Economist, 11/15/03, Vol. 369 Issue 8350, p62, 1p

"Room for Improvement." Economist, 3/16/02, Vol. 362 Issue 8264, p69, 3p

“Sharing the burden.” Economist, 11/13/93, Vol. 329 Issue 7837, p18, 2p

"Short Measure." Economist, 1/31/98, Vol. 346 Issue 8053, p79, 1/2p

"Thirty-five Hours of Misery." Economist, 7/17/04, Vol. 372 Issue 8384, p13, 2p

"A World without Jobs?" Economist, 2/11/95, Vol. 334 Issue 7901, p21, 3p.

Since When Was Reductio A One-Way Street?

A self-styled "libertarian" clown (judging by the blog roll) plays reductio ad absurdum with my post, some questions on unemployment for economists. He's only playing with half a deck, though. The first mistake he makes (and it's a doozy) is to equate asking people questions with telling them to "shut the fuck up". On the contrary, when I ask a question, I'm actually inviting someone to speak.

The second mistake is to twist my point about the non-representation of the unemployed in forums on unemployment into a demand that only the unemployed should have a voice.

Based on those two total distortions, "Angus" proceeds to imagine some "logical extensions" of my argument, reductio ad absurdum: "Only the uninsured should have a voice in the health care debate." "Only soldiers should make our military decisions."

We'll no, Angus, that's not how you do a proper reductio. To do it right you must begin from your debate opponent's actual premise to show why his or her argument is absurd. If you first distort the premise, you've demonstrated nothing but your intellectual dishonesty and/or your incompetence.

So let me ask you a question, Angus, is it also your position that the Civil Rights Act of 1964 denied the right to vote to white folks because it upheld the right of African Americans to vote? That's how you do an actual reductio ad absurdum and not a phony one based on glibly distorting your opponent's position.

Having A Kazurbeit With The Sandwichman

So, as part of semi-peacefulness around here, I shall join Sandwichman (and Milkshakeman?) in munching on some of that stuff at the greasy spoon truck stop, particularly the German food, taking a bite of their policy of shortened work hours during the recession known as kazurbeit, of which I do not know all the details. However, I am prepared to say that whatever those details, the apparent evidence suggests that during the past year, Germany has had a relatively low impact of its recession, as measured in decline of GDP, on its unemployment rate. I shall simply present some numbers below, without further comment beyond noting that state governments in the US have also been following something like this with the furlough policy, and also to note that this is something both neoclassicals and Austrians would like, not to mention advocates of cooperatives, as it involves preserving jobs by cutting wages. So, I am going to show for several countries, their 2009 decline in GDP as reported in the 10/10 Economist, along with the Sept. 2008 unemployment rate, and the most recently available unemployment rate (oh, and keep in mind that France largely gave up its limited work hours approach in 2005).

Country 2009 GDP decline Sept. 08 UR Recent UR

Germany -4.9 8.0 8.2 (Sept. 09)
France -2.1 7.9 9.9 (Aug. 09)
UK -4.4 5.5 7.9 (July 09)
US -2.9 6.1 9.8 (Sept. 09)
Netherlands -4.0 2.5 5.0 (Aug. 09)
Switzerland -1.7 3.4 4.1 (Sept. 09)