J. Bradford DeLong's Blog, page 88

David Glasner does the Lord's work in pointing out that D...

David Glasner does the Lord's work in pointing out that David Graeber���well, it's hard to know what David Graeber does. It certainly does not include things I would call "doing one's homework", "thinking clearly", or "writing coherently". : David Glasner: Graeber Against Economics https://uneasymoney.com/2019/12/01/graeber-against-economics/: 'Graeber describe how he thinks that economists think about how banks create money, correctly observing that there is a debate.... "Only a minority���mostly heterodox economists, post-Keynesians, and modern money theorists���uphold... that... deposits themselves were the result of loans. The one thing it never seemed to occur to anyone to do was to get a job at a bank...". But since James Tobin���s classic essay ���Commercial banks as creators of money��� was published in 1963, most economists who have thought carefully about banking have concluded that... deposits created by banks corresponds to the quantity of deposits that the public... chooses to hold.... Graeber... acknowledges that the weight of professional opinion... says that loans create deposits. He... triumphantly cites a report by Bank of England economists.... "Before long, the Bank of England... rolled out an elaborate official report called 'Money Creation in the Modern Economy', replete with videos and animations, making the same point: existing economics textbooks, and particularly the reigning monetarist orthodoxy, are wrong. The heterodox economists are right. Private banks create money. Central banks like the Bank of England create money as well, but monetarists are entirely wrong to insist that their proper function is to control the money supply..." Graeber, I regret to say, is simply exposing the inadequacy of his knowledge of the history of economics. Adam Smith in The Wealth of Nations explained that banks create money.... Subsequent economists from David Ricardo through Henry Thornton, J. S. Mill and R. G. Hawtrey were perfectly aware...

#noted #2019-12-02

Note to Self: Dylan Riley on Romania, Italy, Spain: fasci...

Note to Self: Dylan Riley on Romania, Italy, Spain: fascism develops because civil society makes patrimonial rule impossible... and right-wingers need an alternative...

#fascism notetoself #2019-12-01

Weekend Reading: Mark Twain's Huckleberry Finn Wrestles with the American Christian Church for His Soul, and Wins and Saves It

Mark Twain: From Huckleberry Finn https://www.patheos.com/blogs/slacktivist/2019/11/30/all-right-then-go-the-whole-hog/: 'I about made up my mind to pray; and see if I couldn���t try to quit being the kind of a boy I was, and be better. So I kneeled down. But the words wouldn���t come. Why wouldn���t they? It warn���t no use to try and hide it from Him. Nor from me, neither. I knowed very well why they wouldn���t come. It was because my heart warn���t right; it was because I warn���t square; it was because I was playing double. I was letting on to give up sin, but away inside of me I was holding on to the biggest one of all. I was trying to make my mouth say I would do the right thing and the clean thing, and go and write to that n���r���s owner and tell where he was; but deep down in me I knowed it was a lie���and He knowed it. You can���t pray a lie���I found that out. So I was full of trouble, full as I could be; and didn���t know what to do. At last I had an idea; and I says, I���ll go and write the letter���and then see if I can pray. Why, it was astonishing, the way I felt as light as a feather, right straight off, and my troubles all gone. So I got a piece of paper and a pencil, all glad and excited, and set down and wrote: "Miss Watson your runaway n���r Jim is down here two mile below Pikesville and Mr. Phelps has got him and he will give him up for the reward if you send. HUCK FINN". I felt good and all washed clean of sin for the first time I had ever felt so in my life, and I knowed I could pray now. But I didn���t do it straight off, but laid the paper down and set there thinking���thinking how good it was all this happened so, and how near I come to being lost and going to hell...

...And went on thinking. And got to thinking over our trip down the river; and I see Jim before me, all the time; in the day, and in the night-time, sometimes moonlight, sometimes storms, and we a floating along, talking, and singing, and laughing. But somehow I couldn���t seem to strike no places to harden me against him, but only the other kind. I���d see him standing my watch on top of his���n, stead of calling me, so I could go on sleeping; and see him how glad he was when I come back out of the fog; and when I come to him agin in the swamp, up there where the feud was; and such-like times; and would always call me honey, and pet me, and do everything he could think of for me, and how good he always was; and at last I struck the time I saved him by telling the men we had smallpox aboard, and he was so grateful, and said I was the best friend old Jim ever had in the world, and the only one he���s got now; and then I happened to look around, and see that paper.

It was a close place. I took it up, and held it in my hand. I was a trembling, because I���d got to decide, forever, betwixt two things, and I knowed it. I studied a minute, sort of holding my breath, and then says to myself:

���All right, then, I���ll go to hell������and tore it up.

It was awful thoughts, and awful words, but they was said. And I let them stay said; and never thought no more about reforming. I shoved the whole thing out of my head; and said I would take up wickedness again, which was in my line, being brung up to it, and the other warn���t. And for a starter, I would go to work and steal Jim out of slavery again; and if I could think up anything worse, I would do that, too; because as long as I was in, and in for good, I might as well go the whole hog...

#books #moralresponsibility #weekendreading #2019-12-01

Comment of the Day: Impressed https://www.bradford-delong...

Comment of the Day: Impressed https://www.bradford-delong.com/2019/11/note-to-self-one-take-on-how-we-can-learn-better-andy-matuschak-and-michael-nielsen-_how-can-we-develop-transfo.html?cid=6a00e551f0800388340240a4f1a44c200b#comment-6a00e551f0800388340240a4f1a44c200b: On Quantum Country 'Thanks for consuming a full day of my weekend reviewing matrix mathematics and learning the basics of quantum computing. I highly recommend people view http://quantum.country and if necessary, view the recommended matrix videos. I didn't realize quantum computing was this easy to understand. Computers are absolutely revolutionizing the learning process. The video series on matrix mathematics suggested at http://quantum.country is astounding in its clarity. Commenters agree���the new generation of students have unprecidented learning tools which can condence a month or more of learning into a single day. The visualizations in the video series are astounding. I wish I had these available when I originally learned this subject. The mnemonic medium mentioned is very similar to they way I learned Skinner's behaviorism. It was presented in the same kind of manner, but all within a single workbook which included the repetitive review at the proper intervals. As I previously stated years ago, it was extremely effective, and nobody in the survey class received less than a B...

#commentoftheday #2019-12-01

Marx's Capital : Parts I-II

4.2) Capital, Parts I-II: Let me provide you with a brief guide in the form of my reactions on my last reading through Capital. And, truth by told, if I had made up the syllabus I would have assigned Parts VII and all but the last chapter of Part VIII, and dipped into Parts I-VI only for chapter 10, The Working Day, and a few selected passages. In place of the bulk of Parts I-VI, I would have substituted Marx���s 1847 essay Wage Labor and Capital; Marx and Engels���s 1848 The Communist Manifesto; Marx���s early 1850s study of French politics and political economy, The Eighteenth Brumaire of Louis Bonaparte; and his late-in-life Critique of the Gotha Program.

So here I am going to rush through Parts I through VI of Capital. I do not have time now to do more. Plus, with the exception of Chapter 10, The Working Day, which is great and which is by itself worth the price of the book, these pieces of the book do not sing to me.

4.2.1) Part I: Commodities and Money: The start of the book is, at bottom, a Hegelian German-philosophical argument for the truth of something called the labor theory of value: that the value of a commodity is the human labor that it took, directly and indirectly, to produce it. If you were a Hegelian German philosopher you might well find that argument somewhat convincing. But you are not. And in fact there are no Hegelian German philosophers at all: the consensus of philosophers is that Hegel is an important figure in the history of philosophy, but that his concepts and frameworks have little worthwhile bite.

Moreover, the labor theory of value is wrong, or at least profoundly unhelpful for Marx.

It involved him in spending years of his life trying to resolve all kinds of problems���the reduction problem, the transformation problem, how to characterize the capital-intensity of the economy���that were at best time-wasting sinks of energy and at worst led to what were in retrospect obvious analytical errors.

I get little out of Part I. But maybe I have not remade myself into the right kind of reader?

4.2.2) Part II: Transformation of Money into Capital ���Capital��� as Not Things But a Process: As the book moves out of Marx���s Hegelian German-philosopher mode it becomes, I think, much more promising. People typically think of ���capital��� as stuff: machines, buildings, inventories, and so on. But, Marx argues���I think correctly���that capital is better thought of as a particular form of social power: wealth directing human activity by being itself directed toward acquiring more wealth. Capital is money that is in the business of making more money by being used to buy and thus be transformed into commodities, and then back into more money. And, Marx argues, the most important commodity that capital is transformed into in its every-amplifying circular flow is labor-power, because the only reason that the system can produce profits on average���that the amount of capital can grow in general���is that the value of labor-power is less than the value of the commodities that that labor-power the capitalist purchases then creates.

But it takes Marx three chapters to say that.

Antisemitism Again: There is one piece of Part II that I should not pass over. It is:

The capitalist knows that all commodities, however tattered they may look, or however badly they may smell, are in faith and in truth money, are by nature circumcised Jews, and, what is more, a wonderful means for making still more money out of money���

What are ���the Jews" doing here? Yep. This is a leftover from 1842, from the days when Marx and his soon to be ex-friends Moses Hess and Heinrich Heine were attacking ���Jewishness��� as the source of evil���cf. Heinrich Heine���s denunciation of his own city of Hamburg a:

a city of hagglers populated entirely by Jews, some baptized (I call all Hamburg���s inhabitants Jews)���

It���s people who behave like how Heine has been taught to think Jews behave who are the subject of his ire. Still, not at all a good look.

Here the full files are���unfinished: https://www.icloud.com/pages/0howtV7CndvjkSCCLmtjmq_SA

And the course slides:

https://www.icloud.com/keynote/0osOOsPvSrTaiK4__D5MghPVA

#books #highlighted #history #historyofeconomicthought #moralphilosophy #politicaleconomy #2019-12-02

I have been quite surprised to discovery that the 2019 Ec...

I have been quite surprised to discovery that the 2019 Economics Nobel Laureates have not received enough praise since the announcement. So go read this:

Oriana Bandiera: Alleviating Poverty with Experimental Research: The 2019 Nobel Laureates https://voxeu.org/article/alleviating-poverty-experimental-research-2019-nobel-laureates: 'Abhijit Banerjee,��Esther Duflo,��and Michael Kremer�����for their experimental approach to alleviating global poverty���.... Development economics had no PhD courses, no group at the NBER or CEPR, and hardly any publications in top journals until the early 2000s. What this year���s Nobel laureates did was to build the infrastructure to make fieldwork widely accessible and the methods to make the analysis credible. What they did, and what they were awarded for, is to put development economics back on centre stage.... What is unusual and relevant is that the nomination explicitly mentions that the winners lead a group effort: ���The Laureates��� research findings���and those of the researchers following in their footsteps��� (Royal Swedish Academy of Sciences 2019). What is even more unusual and extremely relevant is that the nomination emphasises the practical applications of their methods, which ���have dramatically improved our ability to fight poverty in practice���. This is a monumental change, and one that the profession should welcome for the obvious reason that making the world a better place is a desirable goal.�� To be clear, each of them could have easily won the prize the ���usual��� way ��� that is, by doing research of the highest quality, which has had lasting influence both in theoretical and applied economics. The economist (still) on the street might notice that of the top three cited papers for each of the three laureates, only two are randomised controlled trials (RCTs).... The need for policy to fix market failures generates the need for tools to evaluate policy. RCTs were developed to achieve this in a systematic way. They and other experimental methods had been widely used in the natural sciences and to a lesser extent in economics well before Abhijit Banerjee, Esther Duflo, and Michael Kremer began their work. Their contribution was to make them accessible to a large number of researchers, creating a research ���firm��� which, like those in Banerjee and Newman (1993) and Kremer (1993), combines the talent of many to produce more than the sum of its individual components...

#noted #2019-12-01

Yes, the Medicaid expansion part of the ACA had a very hi...

Yes, the Medicaid expansion part of the ACA had a very high benefit-cost ratio. And those states that have blocked it have seen their poor suffer and die in not insignificant numbers for no comprehensible reason. Why do you ask?:

Sarah Miller, Sean Altekruse, Norman Johnson, and Laura R. Wherry: Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data: "Changes in mortality for near-elderly adults in states with and without Affordable Care Act Medicaid expansions. We identify adults most likely to benefit using survey information on socioeconomic and citizenship status, and public program participation. We find a 0.13 percentage point decline in annual mortality, a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time. We find no evidence of differential pre-treatment trends in outcomes and no effects among placebo groups...

#noted #2019-12-01

Let me, for one, say that I am very skeptical of Spartan ...

Let me, for one, say that I am very skeptical of Spartan generalship if Gylippos the Mothrax���the victor of Syrakusa���is unable to think through the game tree to understand that there is probably, somewhere, an accounting check on his actions.

"Not knowing there was a writing in [each] sack indicating the sum it held" is not a boss move here:

Plutarch: Life of Lysander http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Lysander*.html: 'Lysander, after settling these matters, sailed for Thrace himself, but what remained of the public moneys, together with all the gifts and crowns which he had himself received,���many people, as was natural, offering presents to a man who had the greatest power, and who was, in a manner, master of Hellas,���he sent off to Lacedaemon by Gylippus, who had held command in Sicily. But Gylippus, as it is said, ripped open the sacks at the bottom,��and after taking a large amount of silver from each, sewed them up again, not knowing that there was a writing in each indicating the sum it held.��And when he came to Sparta, he hid what he had stolen under the tiles of his house, but delivered the sacks to the ephors, and showed the seals upon them. When, however, the ephors opened the sacks and counted the money, its amount did not agree with the written lists, and the thing perplexed them, until a servant of Gylippus made the truth known to them by his riddle of many owls sleeping under the tiling. For most of the coinage of the time, as it seems, bore the forgery of an owl, owing to the supremacy of Athens. Gylippus, then, after adding a deed so disgraceful and ignoble as this to his previous great and brilliant achievements, removed himself from Lacedaemon...

Of course, what can we say about Athenian demagogue and general Nikias, who was beaten by Gylippos?

#noted #2019-12-01

Andrei Shleifer: Implementation Cycles https://scholar.ha...

Andrei Shleifer: Implementation Cycles https://scholar.harvard.edu/files/shleifer/files/implement_cycles.pdf: "An artificial economy in which firms in different industries make inventions at different timers but innovate simultaneously to take advantage of high aggregate demand. In return, high aggregate demand results from simultaneous innovation in many sectors. The economy exhibits multiple cyclical equilibria, with entrepreneurs' expectations determining which equilibrium obtains. These equilibria are Pareto ranked, and the most profitable equilibrium need not be the most efficient. While an informed stabilization policy can sometimes raise welfare, if large booms are necessary to cover sized costs of innovation, stabilization policy can stop all technological progress...

#noted #2019-12-01

Wikipedia: Athena Promachos: "One of the earliest recorde...

Wikipedia: Athena Promachos: "One of the earliest recorded works by Pheidias and was originally a well-known and famous Athenian landmark.... It originally stood between the Erechtheion and the Propylaea.... According to the Greek Byzantine historian, Niketas Choniates, the Athena Promachos stood at around thirty feet (10 meters) tall.... Made entirely of bronze.... The term 'Promachos' meaning 'fighting before' or 'in front of' was not originally used when referring to the statue; this nickname came later, most notably being used by Zosimus.... Shortly after 465 CE... the sculpture was transported to Constantinople... Niketas Choniates documented a riot taking place in the Forum of Constantine in Constantinople in 1203 CE where a large, bronze, statue of Athena was destroyed by a 'drunken crowd' of Crusaders which is now thought to have been the Athena Promachos.... Of surviving models thought to represent the type, the two outstanding ones are the Athena Elgin, a small bronze statuette in the Metropolitan Museum of Art,[10] who bears an owl in her outstretched hand (as among some coin types), and the Athena Medici torso in the Mus��e du Louvre...

#noted #2019-12-01