Elephants in the Room
David Ruccio and Thomas Palley have just described some of the problems they think economics should be addressing. Let me add a couple more:
1. Climate change. This enormous elephant in the room is finally receiving some attention in the U.S.—even, at long, long, long last, from the Bush administration! Yet the usual argument against working to prevent catastrophic effects is that such action would be “bad for the economy.” Economists near silence in responding to this claim is deafening. Even those economists who do look at climate change tend to take the most conservative assumptions and apply mathematical discounting techniques that make enormous negative consequences in the future pale in comparison to minor present costs. At the most, one may hear a suggestion for the “creation of markets” for greenhouse gas emissions. We need economists who take these threats—and science!—seriously, and are willing to think and act more broadly in relation to this issue. I think contemporary economists are going to look really, really silly (and irresponsible) in any future retrospective, fiddling while Rome burns (and New Orleans floods).
2. The present and coming crisis in care. Mainstream economics assumes that people are autonomous agents. Yet everyone is only one car accident, or a few decades (in one direction or the other) removed from being a dependent patient, child, or frail elderly person.
Traditionally, women were expected to take care of all these “messy” lives, as (low-status, and low-paid or unpaid) nurses, mothers, and daughters. Health care in the U.S. is a joke, unless you have a lot of money (or access to the kind of health insurance enjoyed by tenured economists). Hospitals continually complain of “nursing shortages” and understaffing puts patients in danger. With an aging population, these issues are going to get worse, not better. Meanwhile, child care quality is nowhere near what it should be, and lack of affordability leaves many children outright dangerous (non)care, and parents frazzled. Some people in this world—notably prime-age men with money, and wives and sisters to do family care—can pretend for a while that they are autonomous. It’s time for some effort to be put in on studying the economic lives of those who aren’t.
Yes, an number of issues raised by other economists in this forum are also important. But the effort, within this discipline, that goes into endless elaborations of theories designed to meet the pressing issues of two decades ago--or two centuries ago—is nothing short of stunning.
Comments (16)
Hear those crickets ...
One of the other elephants in the room is directly linked to climate change, but would be an important economic issue even if it weren't -- our dependence on oil. Whatever one thinks of the varied estimates of remaining oil, it's an inescapable fact that it's a limited resource and demand is quickly rising.
Given how much of the world's economy is directly and indirectly fueled by oil products, and given the seemingly obvious effect on costs by the combination of rising demand and plateauing/falling supplies, it seems like this ought to be getting more attention than it is.
Instead, what little discussion I've seen -- at least in the US -- is between those who advocate some barely-funded half-hearted efforts toward conservation and alternate energy production and those who have faith that the market will kick in and save us all, just as soon as oil prices rise "enough". A sort of deus ex venalicium, if you will.
June 1, 2007 12:45 PM | Reply | Permalink
It's nice to see someone addressing something besides the next twist in trade policy. I've been blogging about ecological economics for the past three years ever since I discovered the work of Herman Daly.
However, climate change is the symptom, not the disease. The disease is overpopulation and over consumption. The issue of consumption is further complicated by the high degree of poverty which means that while the advanced societies should be cutting back the marginal ones should be improving their standard of living (without also increasing population).
Since the majority of western economists take capitalism or "market economy" to use the current euphemism as a desirable condition, there is no attempt to see what other types of social structure could be devised to replace it.
Capitalism requires permanent growth, we live in a finite world. Something has to give. Do we plan ahead or is the entire western society going to look like it was hit by Katrina?
--- Policies not Politics
Daily Landscape
June 1, 2007 1:01 PM | Reply | Permalink
For example, I'm not certain that modern revisionism on the role and stature of women historically is all that accurate. It's an issue of labor specialization and "sticky roles" as "women's work" diminished in perceived value as the developing world was mostly occupied with tribal amalgamation and bureaucratic structuring which naturally grew out of traditionally male roles.
It's a modern assumption that only work external to the home has stature, as housework has largely been replaced by automation and schooling and other child rearing done mostly externally. However, throughout most of human history having a dedicated FT manager of the house and child care specialist biologically specialized to the task was vitally important and quite prestigious work in it's own realm which is equal to any other.
Now, the limitations of similac and other simulacrum in providing broad-spectrum nutrients, literally and metaphorically, is prompting a reevaluation of domestic, touchy-feely, and messy work towards promoting a healthy society.
But why does that have to be a "feminist" issue as opposed to a humanist issue? Isn't such reductionist terminology anathema to the ideas buried within? How can one hope to bring all people together by rallying a subset to a banner by nature exclusionary to the other?
June 1, 2007 1:05 PM | Reply | Permalink
Why do you think "feminist" is exclusionary? The International Association for Feminist Economics welcomes male members...and has a number of them.
And I would differ about homemaking being historically "prestigious" in a separate-but-equal realm. If it were so, why weren't men clamoring to enter it? Or women in it looked upon as the leaders of the nation?
June 1, 2007 1:12 PM | Reply | Permalink
Yes, and i consider myself a male feminist as one, and certainly a balance between various strategies is important.
However, let's get real for a moment, feminist certainly is a gender limiting term, just as masculinist would be a gender limiting term, and it's burdened by negative connotations as there are no shortage of self described feminists who use the term as a bludgeon.
The rationale that society is already patriarchal and therefore a counter force is necessary, that is a militant ideology with a built-in counterproductive element, and also tending towards the exclusionary by nature.
Humanist, attempting to composite a broad and through understanding of various strategies hopefully towards a more optimal set, while acknowledging pluralist forms of optimizations, is a more inclusive, if perhaps more vague term and less of a battle standard. Which also has value as it encourages thoughtful interpretation and is less easily weaponized.
Maybe the question to you would be: what's wrong with humanist? Why can't you call what you do "humanist" economics with the emphasis on broadening and strengthening the richness of understanding to be more comprehensive, inclusive, and recognize and value various human strategies?
June 1, 2007 1:25 PM | Reply | Permalink
On the subject of economics and climate change, it's not accurate to say that econ is silent on the subject, rather that they haven't come up with an answer that satisfies people who hate economics. Classical econ suggests 3 general solutions to managing pollution: 1a) tax the polluters to bring the costs of producing what they produce in line with the true social costs (i.e., internalizing the externalities); 1b) if the polluters have property rights (i.e., an industrial plant owns the section of river that they dump sludge into), have the people who dislike the pollution pay the polluters to do less of what they do; or (3) set up a market for pollution permits that introduces a cost to polluting the environment. You can construct a model that shows how (3) is the most efficient solution, but it's very difficult to implement practically, depending critically on how many permits are distributed and how they're distributed (i.e., free or by auction) at the outset.
As far as "mathematical discounting techniques", here's the story on that. Discounting is a pretty standard analytic technique that captures time preference - in other words, given a choice between getting $100 today and $100 a year from now, most people would rather have it today, since if nothing else it would have a year to accrue interest in a savings account. It's been put to some very creative uses, such as Gary Becker's model of drug addiction as a problem of heavily discounting future utility (i.e., implying that addiction can be a "rational" choice if you're indifferent enough to the future). The controversy stems from EPA regulatory impact analyses that discount the benefits as well as the costs of proposed rules or remediation projects; in other words, if a project saves 10 lives, but does so 500 years in the future, those benefits would be discounted down by a pre-determined rate. Obviously some people would rather you discounted the costs only, for a variety of excellent reasons. The reason the benefits are discounted is that not doing so can yield bizarre results. The most famous of these is the Cretin-Keeler paradox, which shows that discounting costs but not benefits of a proposed program would lead you to never actually implement the program, since the cost-benefit ratio gets better and better every year you put it off.
June 1, 2007 1:29 PM | Reply | Permalink
Unfortunately, "feminist" is often seen as exclusionary because it's been successfully re-defined that way for the mainstream by people who aren't feminists.
A classic example of that was one time I quoted the Kramarae/Treichler bit that "feminism is the radical notion that women are people". One of the other people in the discussion said that he'd recently seen that bumper sticker on a woman's car and wished for a marker to add "and men are not".
He was remarkably oblivious to the irony that it would have been yet another example of a man trying to speak for a woman.
June 1, 2007 1:37 PM | Reply | Permalink
Those "self-described feminists who use the term as a bludgeon" have been endlessly pushed by non-feminists as prime examples of feminism, instead of the fringe exceptions they actually are. This cleverly serves the dual function of setting up easily-ridiculed ideas to respond to instead of actual issues, and has resulted in the long-term marginalizing of any organized push for gender equality.
June 1, 2007 1:49 PM | Reply | Permalink
Let's get real. This is a semantic debate and therefore of limited utility. But as far as it goes, feminist is a flawed term because it is by nature exclusionary. "Feminist" has it's place in history and in specific context, but it's certainly a limiting and burdensome term for a school of economics. And it's a bit odd for economists to leave the utility of their own moniker unquestioned.
Humanist is more inclusive, and the superior term.
All of this is of course rooted in the times. I could easily imagine a near future where primatologists object to the term "humanist" as limiting to the discussion on morality for example, as excluding the commonalities with primate ancestors. But that isn't a significantly large consideration yet, while the baggage on feminism certainly is.
June 1, 2007 2:07 PM | Reply | Permalink
Tell me how a peasant man of 1000AD breast feeds his children already suffering from high mortality, or how a woman of that era goes forth to wield arms either in aggression or defense or to do optimally labor in areas requiring high upper body muscle mass when resources are scarce? Tell me it's not obvious.
And cultural norms, like wages, are sticky.
If you really want to go back, there are some basic facts of biological specialization. Larger upper body muscle mass and testosterone were optimal if not necessary for certain physical tasks like warfare but also wholly peaceful endeavors like plowing fields, taming beasts, etc. While breasts, wombs and empathy are obviously necessary for childrearing which will occupy a lot of a woman's time in the ancient world where mortality is high. (a problem with many sociologists is they make no effort to understand biological underpinnings.)
Never forget that the beautiful art and technology of the ancient Greeks for example could never have been achieved without armies to defend their gains or other traditionally masculine endeavors. It's tempting to imagine a dreamy natural environment where everyone gets along harmoniously. In reality, even the desire for deliberate harmonious coexistance is non-existent in nature except in humanity and to a limited degree in some higher primates. The very notion of a Utopia or Eden is a fairly recent technological invention only biologically possible by humans with the combined efforts of both genders.
In terms of prestige, for the last few millennium or so in the upper rungs of society has been increasingly focused on outwards expansion and the formation of states and technology, which has overall been a good thing, though rather "messy" in it's own way. (personally I'd rather change diapers than have my limbs hacked away.)
External work was a natural outgrowth of "men's work" while there were little to no technological inventions to replace "women's work" until very recently, especially for the vast majority of humanity which were peasants living in much the same way as people did many millennium ago.
Some now assert that men by and large kept women in the home out of some sort of malicious intent. But let's look at facts. What could possibly replace "women's work" a millennium ago without dooming the community to disease and disintegration? The reality is that conquest and such was the gravy on top, but the maintenance of the home was the foundation of all human civilization. Women's work was absolutely essential to maintaining the survival of the species, however their prestige fell in the same way as the new always surmounts the old, due to a perceived scarcity.
As analogy, breathing is more vital than eating steak. One can go much longer without steak. But who really lusts for and savors each breath? People say love (and kindness, compassion, nurturing, morality, etc) are like the air we breathe. Yes, but not how people usually intend it. It's often taken for granted, by men and women alike.
So, as men went out and built empires and governments and such to put red meat on the table, and women were by necessity focused on child rearing and such, women saw a decreasing share of value in society which also become increasingly patriarchal.
Now that's changing due to technology which is gender neutral by nature. A computer program or robot has no gender, it's only goal is to perform a specific task as optimally as possible. Technology wipes away gender distinctions in regards to the labor it performs, unburdening the people themselves and allowing them the freedom and luxury to get along better and experiment with other models, placing the premium on happiness and not merely survival. Freedoms which previously were non-existent.
June 1, 2007 2:33 PM | Reply | Permalink
Julie,
I'd like to mention a third elephant that's closely related to climate change and the care crisis: working time. It also happens to have been referred to by Lionel Robbins as "one of the chief problems of the analysis of economic equilibrium."
The neoclassical economic theorist who, according to Robbins, effectively dealt with that problem was Sydney Chapman. Chapman's analysis was described by John Hicks as the "classical statement of the theory of 'hours' in a free market." By "classical" Hicks meant preeminent, not "pre-neoclassical" -- Chapman's analysis was scrupulously marginalist.
So, how does mainstream neoclassical analysis of equilibrium deal with this "chief problem" today? By ignoring it. By simply not knowing about the conundrum that it presents to analysis of equilibrium. Maybe it is incorrect to say that the Chapman elephant is even "in the room." It is buried under the foundation of the whole structure.
What does the unceremonious burial of Chapman's theory have to do with climate change and the care crisis? With regard to climate change, the Chapman-less analysis acts as an impediment to moving to a less consumption-oriented life. In the absence of a progressive reduction of the hours of work over the past half century, the only way to create jobs has been to promote economic growth, even if that growth is toxic. With regard to the care crisis, we have moved to more intensive workforce participation by women without getting rid of the "male bread-winner" model of working time that assumes the presence at home of a female caregiver -- a wife. This has meant the double-shift and the mommy-trap for women and the same-old-same-old for men.
I don't think it's any coincidence that the unaccounted for disappearance of a key piece of economic analysis in the past is intimately related to the most pressing problems we face today. I believe those problems are an outgrowth of a flaw that was engineered into the highly mathematical techniques. The flaw is manifest Hick's Value and Capital and in Abram Bergson's 1938 article, "A Reformulation of Certain Aspects of Welfare Economics", two of the cornerstones upon which the equilbrist structure is founded.
June 1, 2007 8:52 PM | Reply | Permalink
Yes, the models “show” what the efficient solutions would be (as defined, of course, within the model assumptions). I’m glad you recognize that there are transactions costs associated with implementing these solutions. But that is where economists’ “contribution” usually ends: with an abstract recommendation based on modeling. What I’m saying is that this is only the beginning of the analysis that needs to be done. What sorts of changes need to be made in the real world to address climate change? What sorts of institutional, social, behavioral, moral etc. changes need to happen to move towards a more sustainable economy? Method-centric economists generally through up their hands at this point, putting what Douglas Adams (Hitchhikers Guide to the Galaxy) called a “somebody else’s problem field” around those issues. Which tacitly, of course, just serves to endorse business-as-usual.
Failing to discount creates abstract problems. Failing to respond to climate change creates very real problems. I don’t know that future generations will be convinced that it was reasonable for us to neglect their problems because not discounting created contradictions in logic within our (self-imposed) narrow framing of the problem as a rational choice problem, similar to choices over short-term financial issues.June 2, 2007 6:25 AM | Reply | Permalink
Just to add to Julie's response, neoclassical econ has useful things to say, but it's still assuming autonomous agents with very thin social interactions. The interdisciplinary literature on care, which has largely been developed within feminist theory, addresses much denser, richer, longer-standing social ties, and it thinks about people who stand in relations of love and responsibility to each other, something not easily formalized neoclassically. Similar considerations may be relevant to environmental questions, though on different scales.
When we encounter paradoxical results in mathematical models, or simple intractability, it may be because we are discovering the limitations of a given modeling strategy.
June 2, 2007 6:51 PM | Reply | Permalink
"Women's work was absolutely essential to maintaining the survival of the species"
In ancient Sparta, the only people who could have a headstone on their grave were men who died in battle and women who died in childbirth.
June 4, 2007 12:46 AM | Reply | Permalink
I don't disagree with your point, but I don't quite think it's fair to blame economists for not outlining all the "institutional, social, behavior, and moral" changes needed to create a more sustainable economy. Economists aren't gods; they're just people who produce certain kinds of analyses for certain kinds of problems. If all the world's problems aren't solved by their models, it seems a bit much to hold them responsible for it. Creating a better world and a more sustainable economy isn't just a question of doing more elaborate math; to the extent that's true, the responsibility (and blame) is a bit more broadly shared, and a lot closer to home.
June 4, 2007 9:35 AM | Reply | Permalink
Oddly enough, the general public seems to think that economists are professionals who should be equipped to address economic issues, such as "Is addressing climate change really 'bad for the economy?'" and "How can I make a living and care for my kids at the same time?" With the mainstream of economics (and some heterodox economists) more interested in producing "certain kinds of analyses" and "elaborate math" for each other instead, I think that a revolution in economics, or a campaign to inform public (mis-)perceptions, is overdue.
I wonder how much economists would get in NSF grants if the public knew what the contemporary profession is really about...
June 5, 2007 6:00 AM | Reply | Permalink