At 15:33 31/12/2012, EW wrote:
(EW) I guess we'll just have to leave Krugman aside for the time
being. I do read him partly as an economist but largely as a person
who thinks deeply about the evolving world.
I have one of Rogoff's books on my shelves (Reinhart & Rogoff, This
Time is Different, Eight Centuries of Financial Folly, Princeton and
Oxford, 2009) and I have read parts of it.
(KH) Like you, I've only part-read the book and also I was toying
around with having another go at it. (With 100 pages of appendices
to add to the graphs and charts of the main text, it's probably the
most heavily researched economics book of modern times.) If the main
message of the book is correct -- that the recovery of the present
depression will take many years -- then this book is more likely to
be talked about in 2020 or 2030 than most others that have been
published so far.
Keith
(EW) It appears to be a carefully researched book, but you don't
have to read much of it to appreciate what the authors are getting
at. Economic patterns are similar over the centuries. Economies
can grow very quickly with people much better off for a time, but
then they contract and difficult, even miserable, conditions return.
Economists have been taught to think in terms of cycles, but I
wonder if they shouldn't think more in terms of bubbles - e.g. the
recent sub-prime mortgage crisis and the dot-com bubble of the late
1990s or, going way way back, the South Sea bubble and the Dutch
tulip bubble. Maybe I'd better take another look at Reinhart & Rogoff.
Ed
I didn't play much chess, but I had a game with the guy who was
recognized as the best player at UBC when I was student there and
hey! I beat him. Not wanting to ruin a good thing, I quit playing
then and there.
----- Original Message -----
From: <mailto:[email protected]>Keith Hudson
To: <mailto:[email protected]>Futurework , Ed Weick
Sent: Monday, December 31, 2012 9:29 AM
Subject: Re: [Futurework] Nobel Prize -- was Re: [Ottawadissenters]
Hey, you gotta watch dem machines...
At 11:53 31/12/2012, Ed wrote:
(EW) Not sure of why people on this list are going after Krugman.
Personally, I think he writes a very good, very readable column on
a diverse range of topics.
(KH) I think I'm the only one who goes after Krugman fairly
frequently. But I only do so because his NYT op-eds are constantly
flaunted at us, as though there were no other economists around.
It's not as though he has anything significantly new to say each
time. He hasn't. About 80% of his pieces are exactly the same --
pushing Keynesianism as the only economic elixir. And as much of it
as possible. I've often been tempted not to spend time giving
arguments in detail why Krugman is, at best devious, and, at worst
perilous. It would be easier for me to put up an article by several
economists, such as Kenneth Rogoff, who think he is wrong. (Rogoff
once described one of Krugman's pieces as "ridiculous" Rogoff is
not only one of the most reputed US economists but he also plays
chess at world championship standard. Incidentally, my eldest son
drew against Karpov in the 1970s when he was world champion and
giving exhibition matches all round the world. This was not a
straight fight, of course. My son, then aged 14 was a member of a
Coventry City team of 20 players who sat in a ring while Karpov went
from board to board. He beat 18 of them fairly quickly but my son
and another player hung on grimly, refusing to be tricked into
making an error. Anyway, perhaps because Karpov wanted to get to the
drinks party afterwards, the two Coventry players were offered a
draw. Needless to say, they snatched at it straight
away!)
(EW) In today's column, he deals with a very relevant topic, the
hidden influence of big money on politics, a very important but
largely ignored topic. OK, so he got the Nobel prize because he
pointed something in an academic field that Henry Ford already knew
as a practical person and the Japanese already knew as
well. However, what he said wasn't recognized in the field of
economics until he said it. I did my undergrad work back in the
1950s, and the Ricardian idea of comparative and absolute advantage
is what we had to learn and how we had to view the economic
world. I did a graduate degree in the late 1960s and things were
still very much the same. What Krugman did to get his Nobel was
open economics up and make us see that while Ricardian theory may
still apply to growing grapes and oranges, it may only very
partially apply to the modern industrial and increasingly
cybernetic economy, if it applies there at all. I for one will
continue to read Krugman's columns not because he is an economist
but because I find him an interesting liberal thinker.
(KH) Fair enough! I prefer to pick and choose quite carefully where
I choose my liberal ideas (certainly not from the LibDems of the
UK!) and my socialist ideas (far to the left of the Labour Party of
the UK). (The Labour Party in the UK, still reacting with horror
from the irresponsible welfare spending of George Brown until two
years ago, are presently like a weak form of the Tory Party.)
Keith
Ed
----- Original Message -----
From: <mailto:[email protected]>Keith Hudson
To: <mailto:[email protected]>RE-DESIGNING WORK, INCOME
DISTRIBUTION, EDUCATION ; <mailto:[email protected]>Ed Weick
Sent: Monday, December 31, 2012 3:38 AM
Subject: Re: [Futurework] Nobel Prize -- was Re: [Ottawadissenters]
Hey, you gotta watch dem machines...
At 16:26 30/12/2012, you wrote:
(EW) Not sure of where all of this is going. Prior to Krugman,
the theory of international trade was based on the Ricardian
notion of comparative advantage. Countries would produce those
products in which in which they had an advantage, given their
resources, and then trade with each other. From what little I
know, Krugman brought in the idea that, given a certain level of
technological development, resource advantage didn't really matter very much.
(KH) But that idea didn't need Krugman! Or anyone else for that
matter. The Japanese had been importing resources ('cos they had
none of their own) for decades before Krugman was even born. I
believe those who say that Krugman got a Nobel for the same reason
as Paul Samuelson (who only copied Marshall's ideas of Sale and
Demand curves) -- that he was an economist very much in the public's eye.
(EW) Any advanced country could, and would, produce cars and,
given consumer willingness to buy, these cars would be shipped to
markets all over the world. As others have pointed out, economies
of scale were very important in this. The more cars that could be
produced, the lower the unit costs; the more cars that could be
shipped, the lower the costs of shipment.
(KH) And Henry Ford had known that decades before Krugman was born!
----------
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