There is a growing feeling, among those who have the responsibility of managing large economies, that the discipline of economics is no longer fit for purpose. It is beginning to look like a science designed to solve problems that no longer exist.

A good example is the obsession with inflation. Economists still teach their students that the primary economic role of government—many would insist, its only really proper economic role—is to guarantee price stability. We must be constantly vigilant over the dangers of inflation. For governments to simply print money is therefore inherently sinful. If, however, inflation is kept at bay through the coordinated action of government and central bankers, the market should find its “natural rate of unemployment,” and investors, taking advantage of clear price signals, should be able to ensure healthy growth. These assumptions came with the monetarism of the 1980s, the idea that government should restrict itself to managing the money supply, and by the 1990s had come to be accepted as such elementary common sense that pretty much all political debate had to set out from a ritual acknowledgment of the perils of government spending. This continues to be the case, despite the fact that, since the 2008 recession, central banks have been printing money frantically in an attempt to create inflation and compel the rich to do something useful with their money, and have been largely unsuccessful in both endeavors.

We now live in a different economic universe than we did before the crash. Falling unemployment no longer drives up wages. Printing money does not cause inflation. Yet the language of public debate, and the wisdom conveyed in economic textbooks, remain almost entirely unchanged.

One expects a certain institutional lag. Mainstream economists nowadays might not be particularly good at predicting financial crashes, facilitating general prosperity, or coming up with models for preventing climate change, but when it comes to establishing themselves in positions of intellectual authority, unaffected by such failings, their success is unparalleled. One would have to look at the history of religions to find anything like it. To this day, economics continues to be taught not as a story of arguments—not, like any other social science, as a welter of often warring theoretical perspectives—but rather as something more like physics, the gradual realization of universal, unimpeachable mathematical truths. “Heterodox” theories of economics do, of course, exist (institutionalist, Marxist, feminist, “Austrian,” post-Keynesian…), but their exponents have been almost completely locked out of what are considered “serious” departments, and even outright rebellions by economics students (from the post-autistic economics movement in France to post-crash economics in Britain) have largely failed to force them into the core curriculum.

As a result, heterodox economists continue to be treated as just a step or two away from crackpots, despite the fact that they often have a much better record of predicting real-world economic events. What’s more, the basic psychological assumptions on which mainstream (neoclassical) economics is based—though they have long since been disproved by actual psychologists—have colonized the rest of the academy, and have had a profound impact on popular understandings of the world.

Against Economics | by David Graeber

I’ve been supporting basic income to some of the world’s poorest people through GiveDirectly for a couple of years now, and I highly recommend it. Your money simultaneously helps some of the people who most need it, and supports research into the effects of basic income, research we very much need as we debate future economic policies.

For about a decade now, the charity GiveDirectly has been distributing cash straight to poor residents in sub-Saharan Africa, starting in Kenya and expanding later to Uganda, Malawi, Rwanda, Liberia, the Democratic Republic of the Congo, and Morocco.

The organization was founded by economists, and has been studying the impact of its programs from the get-go. But the research has focused narrowly on recipients: Were they better off, the same, or worse off than people not getting cash?

Now, a research team has released a study of a large-scale GiveDirectly program that distributed over $10 million in cash to rural residents of Siaya County, Kenya, near Lake Victoria. But this time, the focus was not on the individuals who received aid. Instead, the researchers wanted to find out what effect the cash had on the region of Kenya where the aid was being distributed — the first major study to test “general equilibrium” effects of the policy.

GiveDirectly gave about $1,000 (or $1,871 in purchasing power terms) each to more than 10,500 households, through three transfers over the course of about eight months. The program amounted to about 15 percent of the GDP of the local area. For comparison, that’s about three times as much economic stimulus, relative to the size of the economy, as the 2008-09 stimulus packages in the US.

So the researchers conducted extensive, repeated surveys not just of recipients but of local businesses and employers too, to see how wages and prices change. Given how many people were collecting data, the study as a whole cost upward of $1 million to pull together, according to Ted Miguel, a coauthor on the paper and economist at UC Berkeley. (Miguel wrote the paper with Dennis Egger, Johannes Haushofer, Paul Niehaus, and Michael Walker.)

They found that the cash transfers not only benefited recipients; they benefited people in nearby villages too because recipients spent more money, some of which went to their neighbors’ businesses. Contrary to some fears, there were no meaningful inflation effects, and there were no envy or jealousy effects where people close by who didn’t receive cash felt worse off after the intervention.

Most striking of all, the study estimates a “fiscal multiplier” of 2.6 for this area of Kenya, implying that every $1 invested in fiscal stimulus will grow the local economy by $2.60. That’s somewhat larger than the multiplier estimated in places like the US when in recession. But “there’s probably many low- and middle-income countries that look more like Kenya than the US,” Miguel says. “These numbers could be very useful in understanding fiscal multipliers in many places across the world.”

Source: A charity dropped a massive stimulus package on rural Kenya — and transformed the economy

Earlier this month, management of the .org top-level domain underwent a radical shift: first, ICANN dropped price-caps on .org domains, and then the Internet Societ (ISOC) flogged the registry off to Ethos Capital, a private equity fund, and a consortium of three families of Republican billionaires: the Perots, the Romneys, and the Johnsons.

This doesn’t just mean that nonprofits — for whom the .org top-level domain was created — will pay higher prices to maintain their domains, and it doesn’t just mean that private equity funds — rather than a transparent, nonprofit NGO — will be able to censor what gets posted to .org domains, by kicking out any domain that it doesn’t like (remember when everyone was cheering because Nazi websites were being stripped of their domain names by registrars? This cuts both ways: if registrars have the power and duty to respond to speech they object to by taking away organizations’ domains, then that duty and power also applies to billionaires and private equity-appointed administrators).

A massive coalition of nonprofits and civil society organizations has signed an open letter to ISOC president Andrew Sullivan. Everyone from the Girl Scouts and the YMCA to EFF and Creative Commons (and many others) have signed it, and so can you.

Source: Civil society groups protest the sale of .ORG to a private equity fund and a collection of Republican billionaires

This is a list of paradoxes, grouped thematically…[Some of] these paradoxes, often called antinomy, point out genuine problems in our understanding of the ideas of truth and description.

List of paradoxes – Wikipedia

Upstairs, Flemons, Farrow, and I talked like long-lost friends. I told them about my own fascination with country music and roots, how the ballads of George Jones and Ralph Stanley called to me early on, even as I posed as a hip-hop kid in ’90s Los Angeles.

Flemons told me his own story. Growing up in Arizona, he became interested in guitar in high school. He began hanging out at a folk festival near his home, and fell in love with the jagged and delicate literature of cowboy poets. This led him to seek out as many black musicians playing old-timey and roots music as he could find; before long, he had stumbled upon Huddie Ledbetter, a.k.a. Lead Belly, the guitarist/singer/songwriter considered by most historians to be the original nexus point of blues, bluegrass, Dixieland, and country-and-western. Creating a seminal jumping-off point in a litany of American musical traditions, Lead Belly recorded “When I Was a Cowboy” for archivist Alan Lomax in 1933, when Lomax visited the Angola State Penitentiary in Louisiana to find and archive African-American folk songs. Lead Belly was serving time on an attempted murder charge for stabbing a white man during a brawl.

As Flemons dove deeper into the history, he began to play banjo (itself an African instrument) and harmonica. Tracing the roots of cowboy music is like unfolding a string puzzle. You find that African music led to bluegrass when it married with Scotch-Irish folk songs. Jazz is rooted in the same spot, but followed the sunlight in a different direction, merging with — and in some cases lampooning — the stately American brass marches of John Philip Sousa and the Confederate army bands that wandered the South after the Civil War.

Meanwhile, blues as we know it comprised only a minority of the music played by African-Americans, in the ’20s and ’30s, but because the Lomax recordings focused almost entirely on blues, that’s what became synonymous with the black South. Musicians traveled from town to town, for work or family, happening upon the work of other players and influencing or being influenced by them. Arnold Shultz was a black Kentucky guitar picker who traveled to New Orleans every summer in the 1910s, learning new chords and constructions from Dixieland ensembles there. He then went on to teach what he knew to Bill Monroe, Chet Atkins, and Ike Everly, father of The Everly Brothers.

http://www.mtv.com/news/2990869/the-roots-of-cowboy-music/

This is the first thing I’ve read by Andrew Yang, and I’m kind of impressed.

We have to stop denying the effects of automation on our people and focus on 21st-century solutions to these problems. Looking at gross domestic product, the stock market and unemployment is a very 20th-century way of measuring the economy. Self-driving trucks will be great for the G.D.P.; they’ll be terrible for millions of truck drivers.

Our economic numbers need to measure what matters. We know stock market prices don’t mean much to the 78 percent of workers in this country who are living paycheck to paycheck or the 40 percent of workers who are a $400 bill away from financial crisis.

We need to move to a human-centered capitalism, where the market serves us instead of the other way around. That starts by investing $1,000 per month in every adult so that we can build a trickle-up economy, as I have proposed, with the proper measurements and incentives.

Human-centered capitalism would ensure that people are more important than money and that markets exist to serve our common goals and values.

My vision calls for new top-line measurements that take into account indicators like: health and life expectancy, mental health, substance abuse, childhood success rates, average income, environmental quality, retirement savings, labor force participation and engagement, infrastructure and homelessness.

https://www.nytimes.com/2019/11/14/opinion/andrew-yang-jobs.html

Part of the terror of the internet, for the olds, is that this technology exploits flaws in our thinking. Pre-internet, the prevailing belief was that we had real selves and fake selves, and we cast judgment on the fakes. We took for granted that we should at least try to present ourselves to the world as coherent people with unified personalities. An avatar could only mean trouble (and often did): an alter ego, an outlet, for the excised bits; a convenient, nearly irresistible portal for the parts of ourselves we had repressed.

This foundational (maybe Puritan?) belief in the integrated self has been helpful, even necessary, in real life, because in real life we need to deal with one another in time and space. Thus it’s nice if our fellow humans are predictable, and you have some idea of what you’ll be dealing with when a person shows up. There are whole branches of psychology dedicated to trying to help us keep ourselves together. And, of course, rafts of diagnoses — bipolar, schizophrenia, multiple personality, borderline personality — for those of us who fail to do this well.

And yet, at the same time, we know it’s a ruse. We are, all of us, deeply, inalienably contradictory and chaotic. In the practical world, we pretend it’s not true. But in art, if people capture this multidimensionality beautifully enough — “Do I contradict myself? Very well then, I contradict myself” — we herald their genius and praise them for it.

This chaos — this cubism, this unleashing of our multiple selves — is a feature, not a bug, of the online world. It’s arguably its defining characteristic for those who grew up there.

https://www.nytimes.com/interactive/2019/11/13/magazine/internet-teens.html

In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated by oligopolies. Today the opposite is true. French households can typically choose among five or more internet-service providers; American households are lucky if they have a choice between two, and many have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.

This is in part because the rest of the world was inspired by the United States and caught up, and in part because the United States became complacent and fell behind. In the late 1990s, legally incorporating a business in France took 15 administrative steps and 53 days; in 2016, it took only four days. Over the same period, however, the entry delay in the United States went up from four days to six days. In other words, opening a business used to be much faster in the United States than in France, but it is now somewhat slower.

The irony is that the free-market ideas and business models that benefit European consumers today were inspired by American regulations circa 1990. Meanwhile, in industry after industry in the United States—the country that invented antitrust laws—incumbent companies have increased their market power by acquiring nascent competitors, heavily lobbying regulators, and lavishly spending on campaign contributions. Free markets are supposed to punish private companies that take their customers for granted, but today many American companies have grown so dominant that they can get away with offering bad service, charging high prices, and collecting, exploiting, and inadequately guarding their customers’ private data.

https://www.theatlantic.com/ideas/archive/2019/10/europe-not-america-home-free-market/600859/

I found this both interesting and helpful; even though I’m not on social media, I’ve certainly heard about or run across a fair number of these claims. It also helps clarify which popular sources of health information are likely to get their info correct and which ones to just ignore.

https://healthfeedback.org/the-most-popular-health-articles-of-2018-a-scientific-credibility-review/