Economics: Its History and Politics
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Please, Not Another Bias! The Problem with Behavioral Economics - Evonomics

Please, Not Another Bias! The Problem with Behavioral Economics - Evonomics | Economics: Its History and Politics | Scoop.it
I accepted the invite because natural selection has shaped the human mind to take actions that have, in our past, tended increase reproductive success.

That statement isn’t as creepy as it sounds. I did not calculate the direct reproductive opportunity of this speaking engagement. Rather, our evolutionary past means that we are inclined to pursue proximate objectives that lead to the ultimate goal.

For example, we seek status – and what could be more status-enhancing than speaking here. And we engage in the costly signalling of our traits – such as intelligence – to the opposite sex, allies or rivals.
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Economics: Its History and Politics
Is economics the dismal science or does politics make it the dismal science.
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David M. Levy, Sandra J. Peart, The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century | Library of Economics and Liberty

David M. Levy, Sandra J. Peart, The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century | Library of Economics and Liberty | Economics: Its History and Politics | Scoop.it

My motto is: Nothing is ever as it seems!  And stis story proves that point one more time.   This story has VI parts.  All very, very very interesting.

 

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#IMF: #Greece Is Totally Screwed #Goldman #Sachs #Wallstreet #lehman #banksters

#IMF: #Greece Is Totally Screwed #Goldman #Sachs #Wallstreet #lehman #banksters | Economics: Its History and Politics | Scoop.it
Jordan Weissmann reads the latest IMF report on Greece and calls this one of the saddest passages you’ll ever read about a developed country:
Greece will continue to struggle with high unemployment rates for decades to come.
Via CineversityTV
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Austerity policies do more harm than good, IMF study concludes

Austerity policies do more harm than good, IMF study concludes | Economics: Its History and Politics | Scoop.it
Economists give strong critique of neoliberal doctrine ushered in by Ronald Reagan and Margaret Thatcher in the 1980s

Via Bruce Fellowes
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Bruce Fellowes's curator insight, May 28, 10:20 AM
As mentioned in A2 Economics classes recently
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The China Syndrome

The China Syndrome | Economics: Its History and Politics | Scoop.it
I feel a little like Rip Van-Winkle. The consensus amongst economists in the 1980s was that trade is always and everywhere good for everyone.  After attending a UCLA workshop on trade a couple of weeks ago, I learned that all that has changed. There is a new consensus, summarized in two papers, "The China Syndrome", published in the American Economic Review, and "the China Shock", a new working paper,  by David Autor, David Dorn and Gordon Hanson (ADH). According to their research, the effects of trade with China have been truly catastrophic for the average American worker. Over to ADH --
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A very bad sign for all but America’s biggest cities

A very bad sign for all but America’s biggest cities | Economics: Its History and Politics | Scoop.it
It's a trend that jeopardizes the economic future of vast swaths of the country.

Via Demarcio Washington
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What Does it Mean to "gig" American Workers? * Hightower Lowdown

This “alternative work arrangement” is not a futuristic concept – it’s already here and spreading fast. Some 16 percent of US workers are now in this on-call, temporary, part-time, low-pay, you’re-on-your-own economy, up from only 10 percent a decade ago. Corporate chieftains (backed by the economists and politicians they purchase) are creating what they call a workforce of non-employees for one reason: Greed. It directly transfers more money and power from workaday families into the coffers of moneyed elites.

Via The Planetary Archives / San Francisco, California
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Don't Be Fooled. Corporate Ecosystems Are Filled with Predators and Parasites - Evonomics

Don't Be Fooled. Corporate Ecosystems Are Filled with Predators and Parasites - Evonomics | Economics: Its History and Politics | Scoop.it
A bedrock assumption of economics is that firms become well adapted by competing against each other. If so, then consider a study that I reported upon earlier, which monitored the survival of 136 firms starting from the time they initiated their public offering on the US Stock Market. Five years later, the survivors—by a wide margin—were the firms that did best by their employees.

If only the fittest firms survive, then doing well by employees would have become the prevailing business practice a long time ago. That hasn’t happened, so something is wrong with the simple idea that best business practices evolve by between-firm selection. That “something” is multilevel selection, which is well known to evolutionary biologists and needs to become better known among economists and the business community.
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What Milton Friedman Got Wrong: Biologists Destroy Homo-Economicus - Evonomics

What Milton Friedman Got Wrong: Biologists Destroy Homo-Economicus - Evonomics | Economics: Its History and Politics | Scoop.it
One of the most influential articles published in the field of economics is Milton Friedman’s (1953) “The Methodology of Positive Economics”, in which he argues that people behave as if the assumptions of neoclassical economic theory are correct, even when they are not. One of the most influential articles in the field of evolution is Stephen Jay Gould and Richard Lewontin’s (1979) “The Spandrels of San Marcos and the Panglossian Paradigm”, which argues against excessive reliance on the concept of adaptation.

Different disciplines, different decades. No wonder these two classic articles have not been related to each other. Yet, there is much to be gained by doing so, for one reveals weaknesses in the other that are highly relevant to current economic and evolutionary thought.
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When oil boom went bust, Oklahoma helped drillers and squeezed schools

When oil boom went bust, Oklahoma helped drillers and squeezed schools | Economics: Its History and Politics | Scoop.it
Oilmen won a big victory when legislators made permanent one of the juiciest tax breaks in the United States. Schools, meanwhile, are having to cut classes, administrators and teachers to make up a growing revenue shortfall.
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Can Capitalism Survive Without the Commons? - Evonomics

Can Capitalism Survive Without the Commons? - Evonomics | Economics: Its History and Politics | Scoop.it
One of the most insidious things about enclosures is how they eradicate the culture of the commons and our memory of it. The old ways of doing things; the social practices that once bound a people together; the cultural traditions that anchored people to a landscape; the ethical norms that provided a stable identity — all are swept aside to make room for a totalizing market culture. Collective habits give way to individualism. Cherished traditions fall victim to whatever works now or saves money today. The colorful personalities and idiosyncratic lore of a community start to fade away.

Karl Marx memorably described the commoditizing logic of capitalism, saying, “All that is solid melts into air.” Enclosures eclipse the history and memory of the commons, rendering them invisible. The impersonal, individualistic, transaction-based ethic of the market economy becomes the new normal.
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Buddhist Economics: How to Start Prioritizing People Over Products and Creativity Over Consumption

Buddhist Economics: How to Start Prioritizing People Over Products and Creativity Over Consumption | Economics: Its History and Politics | Scoop.it
"Work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure."

Via Mariaschnee
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Channel 4 News - Noam #Chomsky on why #TPP is not a tradedeal #TTIP #EU #Nuitdebout #indignados #occupy

Channel 4 News - Noam #Chomsky on why #TPP is not a tradedeal #TTIP #EU #Nuitdebout #indignados #occupy | Economics: Its History and Politics | Scoop.it
"Highly protectionist" and "for the benefit of private powers".

America's foremost intellectual, Noam Chomsky, on why the Transatlantic Trad

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The Manila Galleons that oceaneered for plague and profit – David Z Morris | Aeon Essays

The galleons ushered in global capitalism in another, bleaker way. Friedrich Engels, observing the disease, malnourishment and suffering rampant in London’s nightmarish 19th-century slums, would write that ‘everything which here arouses horror and indignation is of recent origin, belongs to the industrial epoch’. Engels was wrong. The age of sail gave us the same kind of horror, or worse.

The crossing that Urdaneta first completed in four months took longer for the less savvy sailors who followed in his wake: five months, sometimes as many as eight, with no fresh water but from rain, and no fresh food but from the sea. Never before had humans been so isolated from their natural environment, for so long, in such numbers. Centuries before the slums of industrial Europe, the trade ships of the Pacific were full of sailors rolling in their own shit, starving to death, and ravaged by disease – a Breugellian vista of Hell, compacted into a boat. At times, the dangers grew too great. In 1657, the San Jose was found drifting off the coast of Acapulco, every last crewman and passenger dead.
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How the Profound Changes in Economics Make Left Versus Right Debates Irrelevant - Evonomics

How the Profound Changes in Economics Make Left Versus Right Debates Irrelevant - Evonomics | Economics: Its History and Politics | Scoop.it

...new economic thinking provides something altogether different: a new way of seeing and understanding the economic world. When viewed through the eyeglasses of new economics, the old right–left debates don’t just look wrong, they look irrelevant. New economic thinking will not end economic or political debates; there will always be issues to argue over. But it has the promise to reframe those debates in new and hopefully more productive directions....

 

New economics seeks explanations of how the economy works that have empirical validity. Thus behavioural economists run painstakingly crafted experiments to explain actual human economic behaviour. Institutional economists conduct detailed field investigations into the functions and dysfunctions of real institutions. Complexity theorists seek to understand the dynamic behaviour of the economy with computer models validated against data."


Via Lorien Pratt
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Lorien Pratt's curator insight, May 30, 4:05 PM

In multiple arenas, including economics and more, an older approach - which we might call "linear" for lack of a better term - is giving way to a way of thinking that better reflects the world.

 

This article gives a good summary of what's going on from the point of view of economics.

 

For instance, the Federal Reserve did an analysis in  2006 that predicted "not much" of an impact on the economy if housing prices dropped by 20%.  This was, of course, wildly wrong.  As have been many other predictions that don't take networks, virtuous and vicious cycles, and emergence into account.

 

This is, in essence, the core of what we do in Decision Intelligence: bringing the same next level of nonlinear systems thinking to organizational decision making that this article says is starting to creep into economics. 

 

There is every reason to believe that both approaches have tremendous promise.

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EU launches consultation on social impact of TTIP

EU launches consultation on social impact of TTIP | Economics: Its History and Politics | Scoop.it
TUC analysis and union legal opinions clearly shows that public services are not protected in TTIP and EU governments like the UK need to call for complete carve outs for public services as well as no special courts (like the Investment Court System the EU currently proposes) in the deal.

In perhaps one of the most problematic sections of the report, the researchers suggest they have swallowed whole evidence it has been given by business advocacy group United States Council for International Business (USCIB) and suggests that there is no need for the USA to ratify ILO standards as they are already being upheld by existing laws in the USA. If they had spoken to the unions they would have been told that ‘Right to Work’ laws in 26 US states essentially outlaw freedom of association.   Trade unions in the EU and USA are calling for TTIP to contain binding commitments to ratify and effectively enforce ILO labour standards.

Via Svend Aage Christensen
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malek's comment, May 29, 4:57 PM
at least a decline in employment growth, fair and still painful
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How the Deadly Sin of Avarice Was Rehabilitated as Self Interest - Evonomics

How the Deadly Sin of Avarice Was Rehabilitated as Self Interest - Evonomics | Economics: Its History and Politics | Scoop.it
In the aftermath of the stock market crash of 1987, the New York Times headlined an editorial “Ban Greed? No: Harness It,” It continued: “Perhaps the most important idea here is the need to distinguish between motive and consequence. Derivative securities attract the greedy the way raw meat attracts piranhas. But so what? Private greed can lead to public good. The sensible goal for securities regulation is to channel selfish behavior, not thwart it.”
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Reboot: Adidas to make shoes in Germany again – but using robots

Reboot: Adidas to make shoes in Germany again – but using robots | Economics: Its History and Politics | Scoop.it
"Adidas, the German maker of sportswear and equipment, has announced it will start marketing its first series of shoes manufactured by robots in Germany from 2017. More than 20 years after Adidas ceased production activities in Germany and moved them to Asia, chief executive Herbert Hainer unveiled to the press the group’s new prototype “Speedfactory” in Ansbach, southern Germany. "

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Impact of the Transatlantic Trade and Investment  Partnership (TTIP) on the Legal Framework for
Public Services in Europe by Markus Krajewski and Britta Kynast*

"Introduction: Since July 2013 the European Union and the United States are negotiating a Transatlantic Trade and Investment Partnership (TTIP). These negotiations have been the object of considerable public debate and criticized or even rejected by various political actors. The criticisms focus on the negotiating procedure and three particularly controversial substantive areas of the planned agreement. The procedure is generally criticized as being opaque, especially because official negotiating documents have been published only selectively, if at all, which hinders critical examination of the current state of negotiations. , Substantive matters which are under discussion include in particular the planned chapter on investment protection, including the possibility of so - called ‘investor - state dispute settlement’ (ISDS), the ramifications of the intended regulatory convergence with regard to environmental and consumer standards, as well as product approval regulations, and the possible effects of TTIP on the provision, funding and organization of public services (services of general interest). "

Via Svend Aage Christensen
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German Association of Judges objects an Investement Court System under TTIP

German Association of Judges objects an Investement Court System under TTIP | Economics: Its History and Politics | Scoop.it
The European Commission therefore proposed to drop ISDS and to create an Investment Court System (ICS) for the resolution of investor-state disputes under TTIP (cf. http://trade.ec.europa.eu/doclib/docs/2015/september/tradoc_153807.pdf). What seemed to be a smart strategic move to safeguard TTIP as a whole (cf. http://globalarbitrationnews.com/investment-court-system-20150925/) may not work out. Apart from the fact that the United States are not overly enthusiastic about the idea (cf. http://www.heritage.org/research/reports/2015/11/the-us-should-reject-the-european-commissions-proposed-investment-court), the German Association of Judges (Deutscher Richterbund – DRB), the largest professional organization of judges in Germany with 16,000 members, has raised objections against the introduction of an ICS. In its “Opinion on the Constitution of an Investment Court for TTIP”, the DRB rejects the proposal of the European Commission to establish an ICS and declares that there is neither a legal basis for such a proposal nor a necessity to introduce a special court for foreign investors seeking legal protection in the European Union (http://www.drb.de/cms/fileadmin/docs/Stellungnahmen/2016/DRB_160201_Stn_Nr_04_Europaeisches_Investitionsgericht.pdf; the opinion was published in February 2016 and is only available in German). The DRB puts forward three reasons against the introduction of an ICS.

Via Svend Aage Christensen
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True Prosperity: Trickle-Down vs Middle-Out Economics - Evonomics

True Prosperity: Trickle-Down vs Middle-Out Economics - Evonomics | Economics: Its History and Politics | Scoop.it
“Four men sat at a table. Raised sixty floors above the city, they did not speak loudly as one speaks from a height in the freedom of air and space; they kept their voices low, as befitted a cellar.”

The four men in this early scene from Ayn Rand’s Atlas Shrugged are magnates of the steel, mining, and railroad industries who along with their lobbyist meet in “the most expensive bar-room in New York” to foil the book’s entrepreneurial hero, Hank Rearden, and protect their oligopolies. They conspire to use their influence in Washington to stitch up markets, crush competitors, and stifle innovation. They cynically clothe their plot in arguments that they are protecting “the public interest” and promoting a “progressive social policy.”
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Behavioral Economics Holds Potential To Deliver Better Results For Patients, Insurers, And Employers

Many programs being implemented by US employers, insurers, and health care providers use incentives to encourage patients to take better care of themselves. We critically review a range of these efforts and show that many programs, although well-meaning, are unlikely to have much impact because they require information, expertise, and self-control that few patients possess. As a result, benefits are likely to accrue disproportionately to patients who already are taking adequate care of their health. We show how these programs could be made more effective through the use of insights from behavioral economics. For example, incentive programs that offer patients small and frequent payments for behavior that would benefit the patients, such as medication adherence, can be more effective than programs with incentives that are far less visible because they are folded into a paycheck or used to reduce a monthly premium. Deploying more-nuanced insights from behavioral economics can lead to policies with the potential to increase patient engagement and deliver dividends for patients and favorable cost-effectiveness ratios for insurers, employers, and other relevant commercial entities.

 

Behavioral Economics Holds Potential To Deliver Better Results For Patients, Insurers, And Employers
George Loewenstein, David A. Asch and Kevin G. Volpp

http://dx.doi.org/10.1377/hlthaff.2012.1163 ;
Health Aff July 2013 vol. 32 no. 7 1244-1250


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How the Invisible Hand Was Corrupted by Laissez-Faire Economics - Evonomics

How the Invisible Hand Was Corrupted by Laissez-Faire Economics - Evonomics | Economics: Its History and Politics | Scoop.it
As I learned my economics and further explored the influence of the Invisible Hand, the power of ideas became clearer to me. Economic ideas have had enormous influence on economic conditions—and vice versa. Over the past thirty-five years, the ideas at the center of orthodox economics, did damage and laid the groundwork for the financial crisis of 2008 and the Great Recession that followed. The Invisible Hand, though alluring, is highly ambiguous—it does good and harm.

A beautiful idea can be described as one that explains a lot with a little. Such ideas are often simpler than previous explanations of a phenomenon. But they can be siren songs, and throughout history many such ideas have been found to be wrong: the Aristotelian belief that heavy items fall fastest to earth; the once-dominant idea that the veins and arteries are separate circulatory systems; the notion, which seemed undeniable to educated people at one time, that the earth is the center of the universe.
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malek's comment, May 22, 6:40 PM
allow the invisible hand of the free market to operate as much as possible. Limited regulation is warranted for specific 'market failures'
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Economists Discover Quasi-Equlibriated Economic Sub-Particle - Evonomics

Economists Discover Quasi-Equlibriated Economic Sub-Particle - Evonomics | Economics: Its History and Politics | Scoop.it
CERN has just announced the discovery of a new particle, called the “FERIR”.

This is not a fundamental particle of matter like the Higgs Boson, but an invention of economists. CERN in this instance stands not for the famous particle accelerator straddling the French and Swiss borders, but for an economic research lab at MIT—whose initials are coincidentally the same as those of its far more famous cousin.

Despite its relative anonymity, MIT’s CERN is far more important than its physical namesake. The latter merely informs us about the fundamental nature of the universe. MIT’s CERN, on the other hand, shapes our lives today, because the discoveries it makes dramatically affect economic policy.
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George Monbiot: Neoliberalism – the ideology at the root of all our problems

George Monbiot: Neoliberalism – the ideology at the root of all our problems | Economics: Its History and Politics | Scoop.it
Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?

Via Svend Aage Christensen
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malek's comment, May 19, 8:13 AM
Older Bernie supporters have observed the failure of neoliberalism for forty years and now face a bleak retirement.
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Overtime rule out today

Overtime rule out today | Economics: Its History and Politics | Scoop.it
The rule, which will take effect Dec. 1, raises to $47,476 the salary threshold under which virtually all workers qualify for overtime pay. (We said $47,000, we said $47,500; now we’re saying $47,476, which is where it honest-to-God ended up.) That's more than double the current salary threshold ($23,660 ) but below the Labor Department's proposed threshold ($50,440). Workers above the salary threshold may still be eligible for overtime provided their duties aren't executive, administrative or professional. The rule won't affect hourly workers, whom employers already must pay overtime. More from POLITICO’s Marianne LeVine here: http://politico.pro/203zbbi


For the first time, the Labor Department will index future salary thresholds to inflation: Every three years the threshold will rise to the 40th wage percentile for full-time salaried workers in the country’s lowest-wage region (now and for the foreseeable future that’s the Southeast). Previously, lifting the salary threshold required the department to propose a new regulation — a politically and bureaucratically arduous process.

Via Rob Duke
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The WTO Gave Environmentalists A New Reason To Oppose The TPP

The WTO Gave Environmentalists A New Reason To Oppose The TPP | Economics: Its History and Politics | Scoop.it
The World Trade Organization is giving some environmentalists a reason to say “I told you so.”

On Wednesday, the WTO, the international body that enforces trade law, said that India’s solar power subsidy violated trade rules. The program — which has helped India’s solar industry get off the ground and become one of the fastest growing in the world — required new projects be built with parts made in India. Despite India’s argument that the local product requirement was crucial to India’s meeting its commitment under the Paris Climate Agreement, the WTO ruled that requirement unfairly discriminated against U.S. solar manufacturers.

This is exactly the kind of decision that has many environmentalists worried about the Trans-Pacific Partnership, the sweeping and controversial trade agreement President Barack Obama signed in February. The agreement has not yet been approved by Congress. Dozens of environmental organizations expressed deep concerns about the TPP.
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