A comment on the Raworth-Milanovic debate

A friendly critique of Kate Raworth's book Doughtnut Economics by Branko Milanovic on the Brave New Europe blog has locked the two in a heated debate. One point of contention, has the two in a war of art references, Giotto's "St. Francis" versus Rodin's "Gates of Hell." This rhetorical sticking point appears to be a debate over nature versus nurture. While Raworth appears to regard such a debate sufficient to prove her point, Milanovic appears to take a more structural view. However, in his rejoinder to Raworth's reply, Milanovic plays to Raworth's critique on the question of human nature rather than reasserting his own.

Liberalism Is Probably Impossible Reader

Since the Democratic Party and its enabling non-profits have recently staked their hopes on an electoral process that they have insisted for over a year was compromised by foreign actors, I have been thinking about the consistent failure of electoral strategy in light of fascist upsurge. What history demonstrates time and again, from the Pact of Pacification to the Sermon on the Mount, is that a brutal government cannot be thwarted through obsequiousness. Liberalism, understood not as a political orientation but a governmental paradigm, ultimately proves impossible. Whatever is won in the moral spectacle of violence cannot make up for the literally everything that is materially lost. Suffering is suffering. Dying is dying. Below, I present five texts that tackle different aspects of the logic and application of liberalism which prefigures its own demise.

Shawn Rosenberg - Against Neoclassical Political Economy: A Political Psychological Critique

Ed White - The Value of Conspiracy Theory

Frederick Shauer - Uncoupling Free Speech

Mitch Berbrier - "Half the Battle": Cultural Resonance, Framing Processes, and Ethnic Affectations in Contemporary White Separatist Rhetoric

Frantz Fanon - On Violence (from Wretched of the Earth)

Jean Paul Sartre - Preface to Fanon's Wretched of the Earth

New Post at NSER: Experimental Evidence of Sunspot Bank Runs

Last week, I attended a seminar by Jasmina Arifovic. I did a write up at the New School Economic Review blog:

For all the adoration that the gold standard gets from radical libertarians, currency is surely more stable without it. On the gold standard, currency crises were so regular that social scientists and philosophers came up with all sorts of theories to explain them. Some of them were really weird.

Among the weirdest was the sunspot theory of bank runs. Through several blind leaps of conjecture, William Stanley Jevons connected the occurrence of sunspots as having an (unproven) effect on crop yields which, in turn affects farmers’ debt from seed to harvest.

Later Arthur Pigou and later John Maynard Keynes used the phrase to describe sudden shifts in financial markets not based on changes in the fundamentals. A fluke. A panic. A sunspot. A bankrun.

Read the rest here

#tbt Gary Becker 1962 Irrational Behavior and Economic Theory

Gary Becker is often known for his penchant for the hyper-rational. The large body of his work attempts to tease individualistic rationality out of seemingly irrational behavior. In this pursuit, he sought to include all sorts of moral values into the "utility function" to explain things like monogamy, addiction, and suicide. Thus, it might come as a surprise to most to learn that one of his earlier papers made the case that one didn't need any sort of utility function at all in order to derive normal economic behavior.

According to one of my mentors, this paper is the best thing Becker ever wrote. In the 1962 article in the Journal of Political Economy, Becker shows how it is possible to derive normal aggregate demand behavior - all that a market needs to function properly - from any sort of budget maximization. Becker shows that even with completely irrational and inconsistent actors, overall behavior will be consistent enough for firms to react to market demand. What this shows, among other things, is that it's entirely possible (and perhaps likely) that what determines economic behavior is not preference at all, but rather structural constraints on behavior. Of course, for a Chicago economist in the heart of the microfoundations (counter)revolution, such conclusions are unacceptable. So instead, we got Superfreakonomics.

Download the paper here