- Paul Krugman on the rhetoric-reality gap between political leaders and climate-chaos-driven fires in Australia. We will see this dysfunction in far too many other places as humanity goes down in flames… of denial.
- Economists are starting to understand the value of culture and community.
- A useful look into the dangers of nuclear war under Trump. Good news is that he can’t just do crazy. Bad news is that some of his advisors may help him do crazy.
- How bees vote.
- Good news: Climate change is “not going as badly as we expected” as RCP8.5 gets shot down as “business as usual.” Bad news in 5 parts.
- Some good tips on improving your life. Related: The simple life is good for your mental health but also for the environment, as I wrote here.
- Teens are reading less and following “trustworthy people” to learn about reality. I’m worried.
- Esther Duflo (one of three new Nobel Laureates in Economics) has good ideas on how to fight poverty and develop yourself.
- An amazing essay on how technology will be misused to undermine both economies and our political spaces.
- A really beautiful podcast on how challenges can drive our creativity.
Greetings and welcome to the first edition of the Marshall 2020 Project, i.e., spending 2020 reading and discussing chapters from Alfred Marshall’s Principles of Economics, which was first published in 1890 and finally in 1920. Since it’s 2020, I thought it would be fun to read a book last published 100 years ago, to think about and (re-)learn the economics that predated a mathematical revolution (devolution), reflected on empires and imperialism, and had not considered women’s suffrage and the arrival of many other freedoms… and evils. I’m looking forward to learning how different or similar life was, as portrayed in Principles, which was the most-popular perspective on economics in those days.
This project is informal by participation but not in structure. We will read one chapter per week, starting today, and discuss points raised (and missing) in each chapter. I’m going to begin by posting on one-handed-economist, but I will cross-post onto the Marshall2020 subreddit, where I think we might get more participation and discussion. Feel free to participate in either location.
To get started, I think it’s useful for me to write my real-time reflections while reading the chapter. In the future, I may just say “what do you think?” but I’m trying to break the ice.
Feel free to comment with your own thoughts or reply to mine.
(NB: Email me if you can’t get past the anti-spam guards.)
Preface to the First Edition (1890)
[I’m writing comments as I read. I will try not to comment on every paragraph!]
The preface begins by claiming that economic thought does not jump by evolves gradually. The motto of the book (on the title page) is “Natura non facit saltum,” which I translate as “Nature — thus economies — do not jump.” This motto may come back to trouble us if it denies the existence of discontinuities (e.g., political upset or stock market panic).
The next paragraph swiftly defines economics as describing how things are rather than specifying ethics but ends with the claim (reasonable to me) that economics draws on common sense and thus provides a practical “guide in life.”
Wow. Now Marshall directly attacks the idea of a selfish “homo economicus” who cares only for themselves. He says that we all make altruistic gestures and that “continuity” requires economics to include altruism.
(This is a pretty heavy protest against what I thought was a much more recent ideal of homo economicus.)
Marshall then goes on to say that people will make the best decisions they can, whether they are “city men of ability” or “ordinary people who lack the will to conduct their affairs in a business-like way.” This sentiment denies the “rational calculator” stereotype that, along with self-interest (not altruism), was claimed of homo economicus.
(These words were written in 1890, but they could have been written as a counter-critique (not all deserved) to Milton and Rose Friedman’s Free to Choose [my review], published in 1980.)
Marshall then mentions that time also flows, rather than chopping, which means that our behavior in different times of our lives, or places, will deviate in a “continuous” manner from our other behaviors. This insight leaps to the continuous relation between renting and owning assets, which is mostly a question of time, since rents form the basis of income over time to property.
Marshall then offers an opaque (to me) rebuttal of Marx’s Labor Theory of Value, by saying that labor and effort are related to the value of objects, but that those values are not solely of labor (to be explained…)
Marshall then brings the continuity hammer down on those economists who would want to classify economic goods into discrete categories (public or private, normal or luxury), since their characteristics all flow into each other.
(I talk a lot about dividing the world into four types of goods, but I also know how they can change types but also fall into tricky edge cases.)
Marshal then alludes to the importance of biological, historical and mathematical perspectives on economic thinking, all of which are “continuous.” He then says:
“[I] attach great importance to the fact that our observations of nature, in the moral as in the physical world, relate not so much to aggregate quantities, as to increments of quantities, and that in particular the demand for a thing is a continuous function, of which the “marginal” increment is, in stable equilibrium, balanced against the corresponding increment of its cost of production.
In this, Marshall is evoking the “marginal revolution” that has just taken over much of economic thinking. He then says that the math used to explain these ideas is not necessary to understand them, although diagrams will be useful 🙂
The last delightful paragraph I leave for you to read.
Next week: Preface to the Eighth Edition.
- I suggest listening to these podcasts on Russia’s mafia capitalism, Silicon Valley’s undermining of social values, the need for non-manipulated social and news media and privacy in the Age of Surveillance.
- “Doing well in school is nothing to be proud of” and how the meaning of meritocracy was inverted from “undeserving” to “deserving”
- Menstruation apps are sharing your physical, sexual and emotional data with advertisers (mostly via Facebook’s sales machine). Meanwhile, colleges are forcing students to install tracking apps
- “America once had a balanced transportation landscape, one with choice and some semblance of freedom… until the federal government put nearly all its weight behind the automobile.”
- Experiences are replacing shopping malls (and they are pretty cringy)
- Andrew Yang is a really cool presidential candidate: smart, honest and (realistically) devoted to the middle classes in a way that few others are
- A farewell essay to a dear, brilliant, compelling friend.
- Smart phones and students: “awkward interactions, calculated risks, time alone, and connecting with others without being in control of the interaction are all important parts of being human. Navigating those experiences is part of a healthy engagement with a world that we can never fully master, and the illusions of safety and control provided by our technology also produce isolation, distraction, and anxiety as we retreat from that uncontrollable world.” Related: Insights from students who lived 10 days without their phones. (I will try this with mine).
- How economists used “virtual currency” to overcame Brazil’s perennial hyperinflation in the early 1990s.
- A sharp but insightful rant against research on the history of philosophy
I bought Alfred Marshall’s Principles of Economics (1920) a few yeas ago, with the intention of reading it — a book central to economic thought and teaching for 30+ years — when time allowed. When I got around to it a few months ago, I was immediately overwhelmed by the useful and fascinating ways in which Marshall, who predated the arrival of the “mathturbation” trend that has made economics so useless, explored and explained economics.
A few months ago, I announced my “Marshall 2020 Project” to read the book, one chapter per week, in a reading club format. Thus, I set up a subreddit for the project (r/Marshall2020) in which I will open a discussion for each week’s chapter for others to add their comments on the material and react to each other.
Next week (13 Jan), we will begin with Chapter 1. I do not know how this will work exactly, how it will evolve with the material (I haven’t read the book) or adjust to everyone’s participation (I have never run — or participated — in such a project). Nevertheless, I think this will be a fun, engaging and enlightening experience — and it’s exactly the kind of project that I, as an academic, should be leading in this world of shallow outrage and short-term thinking.
My one-handed conclusion is that old books often contain important — and forgotten — insights that can help us think better about our contemporary lives.
So… see you next week?
It’s 2020! I’m still on vacation in Italy but I’ve too many interesting articles to share with you, so I’m posting these now. I’ll be blogging (what’s that?!?) from Monday…
But before I share these links, let me note here that Trump’s attack on Iran is not just ground for war, but yet another example of him doing the exact stupid thing he’s accused others of thinking.
- Related: How do dictators go about their business?
- Americans are spending $7k-100k+ per household on parking spaces. That’s quite a lot of money wasted on legacy technology that helps oil companies and destroys the commons.
- People are often rich (or poor) due to chance, not luck.
- The NYT has an excellent series of articles on how little privacy you really have. In this one, they explore how your location is tracked, by the minute, and for sale to anyone.
- Five money rules to give yourself more financial security
- If you leave a partner who doesn’t appreciate you, then perhaps it’s useful to busy yourself with human (or biological) trivia, rather than obsessing over what you might have done right or wrong.
- Piketty points out that the supporters of populists (and Trump) are from the lower class (in education, income and work). So it’s not about ignorance as much as class rebellion.
- Are you eating the butter you deserve?
- “…the real snowflakes are the people who are afraid of that situation. The poor souls who never take the opportunity to discuss ideas in a group of people who will very likely respectfully disagree with them”
- American spies are increasingly vulnerable to their digital habits (DNA tests, Facebook), which leaves the country vulnerable to the profit-seeking policies of American companies that don’t care about national security. Related: Facial recognition means that you will not longer have privacy, let alone “obscurity” from tracking (or stalking) in public.
I’m on vacation in Italy, so this short post will also give you a break 😉
Here’s a really short episode of Jive Talking if you want to think a little about saving (or gaining) time.
My one-handed opinion is that most of us have a lot more time than we think — it’s just hard to say no to all the things that take it from us.
See you in 2020!
- The internet is now mainly driven by shopping
- Arundhati Roy says lots of insightful things about colonialism, capitalism and sustainability.
- I’m seeing a rise in “farewell to the Earth we knew” articles, videos, etc. These scientists are saying goodbye to cold weather as the arctic warms. In this video, a Solomon Islander bids farewell to their island lives. What will you miss as climate chaos changes your life?
- Visualizing the Mississippi’s evolving route
- Great podcast (in Dutch) with a Dutch woman working for Greenpeace on climate change, etc.
- The EU’s CAP is exploited by corrupt politicians (and not very helpful for small farmers)
- Vitalik Buterin (inventor of Ethereum) writes a nice overview of quadratic payments, which can be used as a hybrid voting mechanism. I should have used this method in my 2009 paper [pdf] on fighting over water in California’s Sacramento-San Joaquin Delta.
- Schools need to stop teaching to the test and focus on learning.
- Funny how we only started to understand the oceans about 50 years ago!
- Want to see the future? Spend some time on these maps showing how climate
changechaos impacts will vary across the US. Related: RCP 8.5 (the “worst case scenario” for global heating, with an average increase of 4.9C by 2100) is sometimes called “business as usual,” but its proposed pathways of population growth (12 billion people), GDP growth (very slow) and coal use (a multiple of today’s use in contrast to current downward trends) tend to attract criticism. I agree that those assumptions are questionable, but this article makes the obvious point that we might get to RCP8.5 by a combination of human activity (10 billion richer people using lots of oil and gas on goodies as well as coping with chaos) and natural feedback loops (lost albedo as Arctic summer ice disappears, permafrost belching methane, perennial fires/loss of tree cover), such that we get that scenario anyway. Not a good scenario.
H/T to JP
I read this 2019 book at record speed due to its breezy (“magazine”) tone and discussion of one of my favorite passions: reusing old stuff.
A few years ago Adam Minter wrote Junkyard Planet about the trash trade, but many readers told him about how they reused stuff rather than about their trash. Their passion led to this book (subtitle: Travels in the New Global Garage Sale) on the second-hand goods that are exported by businesses and non-profits in the US and Japan, via processors in India, to various Asian and African countries.
Perhaps the most important fact I learned is how little we know about the secondhand-world. Data is missing due to the “used” nature of the goods, their missing objective value (“one mans trash is another man’s treasure”), and the informal trade of “worthless” things among some very poor people.
That’s the summary. Now I will list my notes and highlights to summarize what I learned and why you might want to read it.
- Part of [North] Americans’ problem with having “too much stuff” can be traced directly to the huge amount of personal space that Americans enjoy. My girlfriend and I share 60m2 (600 square freedom units), which means that I often throw away (or donate) old stuff as new stuff comes in. Americans with garages, mini-storage, etc. tend to buy too much and definitely throw out stuff they’ve barely used.
- Governments “like” new stuff that can be taxed and added to GDP. That means they may disfavor reuse saves people money and reduces the environmental harms from production and disposal.
- Rich people can choose to be minimalists. Poor people are involuntarily so.
- Producers respond to our desire for more, new, cheap by reducing quality, which means we might not care for the goods but also reduces resale value. These dynamics put us another step away from a circular economy (aka, “Spaceship Earth”) and towards a throughput economy that increases resource use and environmental damages.
- The move from handmade and hand-me-down to fast fashion and psychological obsolescence means that people are more careless about their stuff, which drives the circle of high-speed, low quality consumption around once more.
- “Marie Kondo… is addressing the problem of an abundance or excess of stuff, which is a problem only if you’re of a certain class and can afford to have an abundance and excess of stuff. [S]he doesn’t actually address the consumption side of things… how and why stuff ends up in your home in the first place” [loc 659].
- Goodwill Industries began as a business to help underemployed people repair and refurbish used stuff for reuse. That model has changed to hiring professional managers to sell decent quality used stuff and then using the revenues to help the poor get jobs outside of Goodwill.
- The global trade in used stuff has been changing as China produces cheaper new things that grab people’s attention, further undermining reuse. “Between 2000 and 2015, global clothing production doubled, while the average number of times that a garment was worn before disposal declined by 36 percent” [loc 985].
- In Japan, there are businesses that will buy used stuff, so they get higher quality. In the US and Europe, old stuff is donated so people do not take care of it.
- The value of used stuff can rise and fall based on trends (e.g., typewriters and hipsters).
- “The democratization of stuff that began with the industrial revolution is quickening. In the nineteenth century, household objects that once held value—like dishes, glassware, and solid-oak furniture—began to lose it. By the early twentieth century, middle-class consumers could afford multiple sets of dishes and changes of clothes. Individuals further down the income ladder were still excluded from the new and fashionable, but thanks to the excess thrown off by wealthier consumers, they could participate via secondhand” [loc 1548].
- India, Mexico, Nigeria and Rwanda prohibit trade in used goods, which helps local producers but harms consumers and results in smuggling (and corruption).
- The secondhand world is ruthless about costs and profits, which maximizes trade-value-added as well as tonnage dumped in landfills: “more than half the apparel that arrives at Goodwill is unsold” [loc 2084]. (Japan’s landfills are expensive compared to the US, which means there are stronger incentives to reuse goods.)
- African buyers of bales of used clothes are businesspeople, not idiots:
‘“Do people send garbage? Not if they want to be paid. They learn what we will take. We are not a dump.” That’s an opinion at odds with fashionable Western perceptions and critiques of the secondhand-clothing trade. Instead of viewing it as an exchange of goods driven by African demand, Western critics tend to view it as an exchange between the savvy and the ignorant’ [loc 2375].
- “In fact, by easing consumer concerns over the environmental impact of consuming, and lowering the overall cost of raw materials (recycled raw materials compete directly with virgin), recycling can actually contribute to more consumption. There’s a reason that “recycling” is the third “R” in the familiar “Reduce, Reuse, Recycle” environmental mantra: it’s the third best (or worst) thing you can do with stuff. When a consumer brand like Coca-Cola advertises the recyclability of its products, it’s not promoting sustainability. It’s helping sustainably minded consumers assuage their guilt” [loc 2857].
- Baby-car-seat manufacturers in the US add “expiration dates” to their products and tell parents to buy new (if they want their kids to live!) without any evidence of safety problems. They just want to sell more seats. (This is fucked.)
- Quality depends on the buyer’s goals. “Rather than design for the durability valued by business, most consumer appliance manufacturers will work on finding a way to ensure an attractive sticker price”… and thus build lower-quality, cheaper goods [loc 3202].
- Consumers do pay attention to quality but manufacturers can lie about it. (I have a few “100% cotton” shirts that are poly-cotton.) What to do? “Companies must be transparent about the lifespans of their products and attach a sticker or tag (physical in stores, and virtual for online) to their products informing consumers of just how long they’re projected to last, based on verifiable testing” [loc 3278].
- “Right to repair” laws should be enacted everywhere. (I tossed out an old dishwasher with a leaking hose because I could not access the back panel. Since it would cost €100 to get a service person to open the panel and €30 for an official plastic hose, it was more cost-effective for me to buy new.)
- The media loves stories about e-waste dumping in Africa or Asia, with stories illustrated by children burning bundles of plastic wires. The reality is that most goods shipped over the ocean have value (someone pays for shipping plus what’s in the container) so those fires only for the least valuable dregs of a sophisticated reuse and refurbishment industry. “Implicit in these editorial choices is the assumption that Ghanaians are incapable of doing anything with foreign technology other than burning it. That’s a failure to see the computer workshops in Agbogbloshie and around Ghana. And in many cases, it’s a failure to recognize that the developed world has something to learn from the developing world about managing stuff” [loc 3897].
- Waste colonialism is when rich-country politicians, rather than traders in markets, decide what’s “waste” (and thus prohibited from export) or not: “Whether acknowledged or not, debates over whether certain countries and peoples can import or export “waste” are, at their core, debates over whether certain racial groups should have access to material goods, and whether they should be required to use and dispose of them in ways that richer, usually white countries prescribe… As a white U.S. citizen… but also a business journalist with a career spent covering the global recycling and reuse industry. In that capacity, I’ve learned that ignorance, racism, and other prejudices are among the most intractable barriers to the development of globalized secondhand and recycling” [loc 3985]. Let the market work!
I enjoyed this book immensely for its confirmation of what I knew, its corrections of what I misunderstood, and its strong support for less consumption, quality repairable goods, and a vibrant market in used goods. I recommend that you read it but more strongly recommend that you examine your own consumption:waste ratio before buying anything this holiday season 😉
- Why girls (and boys) need summer camp: “Traditions—unlike the superficial public culture that surrounds us—actually establish significant places for people at every age. They offer work and responsibility appropriate to a person’s experience.”
- American Racism will never go away
- China’s AI-totalitarianism may backfire, badly. Related: The beginnings of AI gave insight into human biases… and new “reporter bots” that can fool us.
- Sea-levels are rising faster than expected. Say goodbye to Ho Chi Minh City, Bangkok, Mumbai, Alexandria et al by 2050. Related: Our inability to consume less means the end of our ecosphere.
- Kim Kardashian is a surprisingly sensible woman.
- “Why Faster Internet Isn’t Worth It“
- AI is not taking over the world… just yet.
- Putting China’s rise (and America’s fears) into perspective
- Social media and risks to digital freedom
- Western bankers are helping dictators rob their people blind
Many economies around the world continue to grow or bumble along without much sign of crisis. (This article describes how such a “trend” might be enduring, using the example of a Japan whose aging and shrinking population is consuming and investing less.)
Without economic issues in the headlines, politicians are looking for ways to differentiate themselves and “get things moving.” This impulse worries me, as politicians are far less predictable than markets or economies.
Thus, I think that our next economic crisis will result directly from political mistakes rather than indirectly result from political regulatory failures.
Trump is already playing this game, pulling the market here and there with new larger forgotten back-again tariffs. His democratic opponents, many of them proposing radical change (e.g., wholesale reform of a “health industry” that absorbs 18 percent of GDP) have led some hedge funds to bet on big market losses after the Super Tuesday primaries, when Warren might perhaps win a lot of delegates.
Meanwhile in the UK, Corbyn and the Labour Party have proposed a strong return to state intervention, which could also have dramatic consequences.
Let me point out that I am not opposed to different political platforms or (often much needed) reforms. Nor am I a fan of Trump’s policy of destroying government from the inside and leaving the ruins to corporate cronies. Rather, I am worried that politicians are starting to forget the benefits of a strong diversified economy by taking existing economic stability for granted.
My one-handed conclusion is that politicians are at their most dangerous when they think they can implement radical policies without consequences.