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Friday, October 27. 2017

Economists are vocal proponents of the simplistic scientific method. If they can’t present their work as experimental, they strive to label it “quasi-experimental.” But if you read an introductory economics text, virtually none of the content is based on experiments. Instead, good economics texts are packed with truisms based on calm observation of humanity: incentives change behavior, trade is mutually beneficial, supply slopes up, demand slopes down, excess supply leads to surpluses, excess demand leads to shortages, externalities lead to inefficiency. These lessons are as undeniable as “the heart pumps blood” and “the stomach digests food.” But they’re nevertheless supremely insightful and useful. Designing social institutions without considering incentives is as absurd trying to stuff food down people’s lungs.

Brian Caplan, via Cafe Hayek

Posted by The Barrister in Quotidian Quotable Quote (QQQ) at 14:33 | Comments (13) | Trackbacks (0)

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Why do leftists deny this?

#1 Sam L. on 2017-10-27 15:45 (Reply)

The first thing they must deny is the first rule of economics: supply is finite and demand is infinite. They also think they can change human nature so economic truisms are nothing more than somebody's (right wing) idea.

#1.1 mudbug on 2017-10-27 16:48 (Reply)

The first thing rightists must deny is the first rule of money: supply is infinite and demand is finite.

#1.1.1 Meh on 2017-10-28 11:31 (Reply)

Why do rightists deny the debt spiral?

#1.2 Meh on 2017-10-28 02:54 (Reply)

I remember all the concern leftists showed about "the debt spiral" when Obama was in office.

#1.2.1 mudbug on 2017-10-28 20:20 (Reply)

Right. Who'da thought this couldn't be distilled down to the usual partisan nonsense, like some Spy vs Spy comic book.

Defensive much? "Capitalism"!

#1.2.1.1 Meh on 2017-10-29 02:55 (Reply)

I'm not defensive at all about it at all. Both parties are to blame for where we are WRT the debt but while there are only a few pubbies who are genuinely concerned, there are virtually no lefties who are. Trump made it an issue in the campaign. Hillary ignored it all together. Obama made noises about it before he became president and then doubled it. Both parties are to blame for not having a budget for the last eight years.

The left is adamant about base line budgeting so the budget always grows. The left has fought all balanced budget amendments. The left has come ups with most of the free stuff proposals. The left has come up with most of the laws that take money from people who earned it and gives it to people who didn't. And on and on...

#1.2.1.1.1 mudbug on 2017-10-29 09:44 (Reply)

mudbug: Both parties are to blame for where we are WRT the debt

True enough.

mudbug: Trump made it an issue in the campaign.

Yes, and is prepared to explode the deficit with tax cuts.

mudbug: Hillary ignored it all together.

No, Hillary Clinton's proposed policies were tailored to not further increase the deficit, but left the structural deficits unaddressed.

The last president to directly address the deficit was Bill Clinton, who left structural cash surpluses.

mudbug: The left has fought all balanced budget amendments.

Balanced budget policies exacerbate the market cycle.

mudbug: The left has come ups with most of the free stuff proposals.

Most Americans support the largest such programs, including Social Security, Medicare, Medicaid, and Veterans' Benefits.

#1.2.1.1.1.1 Zachriel on 2017-10-29 11:14 (Reply)

In other words you are quite partisan about a terminal trajectory the right is arguably more to blame for. Add in the left's persistent rancor about banks - if it's accidental or conscious us up for debate - and it's even more arguable that the corporatist right bears most of the blame.

Remember, like the leftist, the rightist is defined by his statism. How if occurs and how he assists it is irrelevant, at least as far as the definition goes.

#1.2.1.1.1.2 Meh on 2017-10-29 11:46 (Reply)

The only basic economic texts I had were strictly Keynesian, in fact no other economic theories or economists were even mentioned.

And they were of course very clear about what drives the economy, and that's the Government. If the economy is "too hot", taxes and central bank interest rates need to go up. If the economy is "too slow", increase subsidies and lower interest rates.

Those 2 mechanisms were stated as the sole parameters driving economic development...

#2 JTW on 2017-10-28 00:29 (Reply)

JTW: The only basic economic texts I had were strictly Keynesian, in fact no other economic theories or economists were even mentioned.

As Keynesian Economics is a market-based theory and presupposes classical economics, it's hard to imagine such a text. A review of economic textbooks show that nearly all start with supply and demand models.

#2.1 Zachriel on 2017-10-28 10:35 (Reply)

JTW: And they were of course very clear about what drives the economy, and that's the Government.

Government doesn't drive the economy, but governs (regulates) it. Government issues currency and represents a significant portion of GDP, so what the government does will affect the overall economy.

JTW: If the economy is "too hot", taxes and central bank interest rates need to go up.

Raising taxes in a hot economy isn't sufficient if spending also increases. However, in certain circumstances, reducing debt will tend to decrease economy activity.

JTW: If the economy is "too slow", increase subsidies and lower interest rates.

Again, simply increasing spending may not be sufficient. However, increasing debt will tend to increase economic activity.

#2.2 Zachriel on 2017-10-28 10:44 (Reply)

QUOTE:

But if you read an introductory economics text, virtually none of the content is based on experiments.

Of course not. Most introductory texts do not provide direct evidence, but provide definitions and an overview.

#3 Zachriel on 2017-10-28 10:29 (Reply)

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