Debunking Vienneau
John Weatherby
theories from none other than Rob Vienneau. His content is that post
Keynesian thought completely overturns classical theory and somehow even
modern theory. Time and time he has charged that Post-Keynesians are shunned
by the mainstream and not recognized because we ugly main economist are
afraid they will expose some ugly secret.
I submit to a different story. The ASSA is an organization that brings
together various groups for a conference once a year. A big part of the
proceedings is done by the AEA, that is the American Economics Association.
So if the Post-Keynesians were truly feared and covered up as Rob suggest
you wouldn't expect to see a seminar by them at the AEA meetings would you?
Well the truth is they held a seminar. Christopher Rude from the New school
and New York University presided. He also presented a paper on information
theory. They were two others who presented and two discussants. Two of these
papers dealt with labor markets and the macro-economy. So Rob if the members
of mainstream economics are so afraid of your ideas then why did they allow
this seminar to happen?
Lets face it if you did serious research like these guys and not rehash some
40 year old controversy, people might listen. Obviously these guys presented
at the meetings. But then again they actually did original research and
found interest topics rather rehashing old work. So you see if you study
hard and do something original it might actually get a positive response.
However from the titles of the papers it doesn't look like even the post
Keynesians would have much interest in your past postings.
John
Robert Vienneau
"John Weatherby" <jjwea...@earthlink.net> wrote:
> Over the years sci.econ has been entertained by widespread conspiracy
> theories from none other than Rob Vienneau.
I believe the above statement to be untrue.
> His content is that post
> Keynesian thought completely overturns classical theory and somehow even
> modern theory.
I assume that Mr. Weatherby means ""neoclassical"" when he writes
"classical". At least, I cannot imagine how one can get that
exagerated claim from my posts. The relationship between Post
Keynesianism and the ongoing classical revival exemplifed by, say,
Garegnani is contentious. I draw on that classical revival mainly
for negative criticism of long period neoclassical price theory.
I'm quite aware that Post Keynesians following Paul Davidson
reject this classical revival. Others, such as Nell and
Pasinetti seem to have a different opinion.
As for modern economics - I'd like to see where I said that Post
Keynesianism overthrows Game Theory.
> Time and time he has charged that Post-Keynesians are
> shunned
> by the mainstream and not recognized because we ugly main economist are
> afraid they will expose some ugly secret.
I don't recall ever have said anything like the above. I don't think
it's any secret, among scholars, that
o Due to price Wicksell effects, the equilibrium interest rate
is unequal to the marginal product of social capital.
o Economic theory doesn't impose any restrictions on the direction
of real Wicksell effects.
o These findings suggest aggregate neoclassical theory, as used
in Solovian growth theory, Lucas-style macroeconomics, and
much New Growth Theory, is without theoretical foundation.
o These findings have implications for intertemporal equilibria
and sequences of temporary equilibria.
o F. Fisher and Shaikh's results suggest some of the empirical
results said to support aggregate neoclassical theory fail
to test that theory.
o The neoclassical project of extending supply and demand functions
and "the principle of substitution" (Marshall) to long period
models has failed on theoretical grounds.
o The rate of interest/profits is positive in certain models if and
only if labor is exploited (where exploitation has a formal
definition).
o Marshallian theory has consistency and generality problems
brought out by Sraffa's publications in the 1920s.
o The Sonnenschein-Mantel-Debreu models suggest that General
Equilibrium theory, representative agent models, and maybe
even strong methodological individualism, in general, are
failed research programs.
o So-called Keynesian economics arguably never incorporated certain
themes important in the economics of Keynes, in particular, the
distinction between uncertainty and risk. (The IS/LM model
replicates the lack of interaction between real and monetary
theory that Keynes aimed to abolish.)
o So-called neoclassical economics was arguably not a continuation
of classical economics.
o Neoclassical economics arguably developed by stealing the
structure of 19th century mechanics (pre-entropy).
And so on.
> I submit to a different story. The ASSA is an organization that
> brings
> together various groups for a conference once a year. A big part of the
> proceedings is done by the AEA, that is the American Economics
> Association.
> So if the Post-Keynesians were truly feared and covered up as Rob suggest
> you wouldn't expect to see a seminar by them at the AEA meetings would
> you?
> Well the truth is they held a seminar. Christopher Rude from the New
> school
> and New York University presided. He also presented a paper on
> information
> theory. They were two others who presented and two discussants. Two of
> these
> papers dealt with labor markets and the macro-economy. So Rob if the
> members
> of mainstream economics are so afraid of your ideas then why did they
> allow
> this seminar to happen?
The above is quite curious. As a matter of fact, the American Economic
Association (AEA) coordinator of ASSA announced in 1998 that the
Union of Radical Political Economics (URPE) sessions at the annual
AEA meeting were to be cut from 30-32 to 18 for 1999 and to 9 for
2000. Other heterdox sessions were to be cut as well. This resulted
in some internal politicing. I don't know how it all worked out,
but this history provides empirical evidence that that seminar
that Mr. Weatherby cites is a bone of contention among communities
of American economists. Also, the AEA proceedings apparently don't
print papers from URPE and other groups' sessions, at least as of
1998. I have had read sessions in the proceedings, apparently
AEA-sponsored, devoted to themes I find of interest. (I bring up
URPE, even though many of their members are somewhere to my left,
because I obtained this info from a left-leaning community.)
> Lets face it if you did serious research like these guys and not rehash
> some
> 40 year old controversy, people might listen. Obviously these guys
> presented
> at the meetings. But then again they actually did original research and
> found interest topics rather rehashing old work. So you see if you study
> hard and do something original it might actually get a positive response.
> However from the titles of the papers it doesn't look like even the post
^^^^^^^^^^^^^^^^^^^^^^^^
> Keynesians would have much interest in your past postings.
Mr. Clark might find amusing Mr. Weatherby's method of drawing
conclusions.
I think many Post Keynesians would have as little interest in my
postings as they would have in arguments that the earth is round. These
results have long been established and are accepted in the main by that
community. Some might think I use more formalism than needed to
prove neoclassical economics is not about economies in this
universe. They might prefer more an external critique about superior
empirical applicability to internal critiques of coherence and
logical consistency.
I have often found curious the impression that some seem to convey
about my posts. They don't seem respond to what I say, but rather
some stereotype.
--
Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
r c .../Keynes.html
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
ro...@telus.net
<jjwea...@earthlink.net> wrote:
>Over the years sci.econ has been entertained by widespread conspiracy
>theories from none other than Rob Vienneau.
??? What do you mean? Of course there have been others.
>Time and time he has charged that Post-Keynesians are shunned
>by the mainstream and not recognized because we ugly main economist are
>afraid they will expose some ugly secret.
Substitute "Georgists" for "Post-Keynesians" if you want to see a real
case of shunning and unofficial censorship. And for a real ugly
"secret" that mainstream economists never want mentioned in public,
try the fact that virtually every society in the world gives away
benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
contributing exactly nothing.
How is it that the great majority of economists (let alone the public)
is prevented from mentioning or even _knowing_ a crucial fact that the
most brilliant and accomplished economists have all considered obvious
and undeniable:
"Pure ground rent is in the nature of a 'surplus,' which can be taxed
heavily without distorting production incentives or reducing
efficiency."
-- Paul Samuelson, Nobel laureate in Economics
"In my opinion the least bad tax is the property tax on the unimproved
value of land, the Henry George argument of many, many years ago."
--Milton Friedman, Nobel laureate in Economics
"It is important that the rent of land be retained as a source of
government revenue."
-- Franco Modigliani, Nobel laureate in Economics
"For efficiency, for adequate revenue, and for justice, every user of
land should be required to make an annual payment to the local
government equal to the current rental value of the land he or she
prevents others from using."
-- Robert Solow, Nobel laureate in Economics
"While the governments of developed nations with market economies
collect some of the rent of land, they do not collect nearly as much
as they could, and they therefore make unnecessarily great use of
taxes that impede their economies -- taxes on such things as incomes,
sales, and the value of capital goods."
-- William Vickrey, Nobel laureate in Economics and past
president of the American Economics Association
Is this fact suppressed by a "conspiracy," or merely an unspoken
agreement?
And regarding Robert Vienneau, if there were no crackpot conspiracy
buffs, real conspirators would have to invent them.
<click>
Oh. I get it.
-- Roy L
ro...@telus.net
<rv...@see.sig.com> wrote:
> o So-called neoclassical economics was arguably not a continuation
> of classical economics.
Probably true. Neo-classical's rejection of the dichotomy between
land and capital put an essentially Marxist cornerstone in its
epistemological foundation. What is the difference, in scientific
terms, between aggregating land and tools as "physical capital" and
aggregating them as "the means of production"?
> o Neoclassical economics arguably developed by stealing the
> structure of 19th century mechanics (pre-entropy).
UC Riverside Professor Mason Gaffney has put together an interesting
paper that traces the development of neo-classical economics as a
specific counter-measure to Henry George and the Single Tax movement.
Excerpts from both the personal and published writings of
neo-classical founders like John Bates Clark and Edwin Seligman show
clearly that they harbored an intense and quite personal hostility
toward George and his analysis.
>I have often found curious the impression that some seem to convey
>about my posts. They don't seem respond to what I say, but rather
>some stereotype.
Join the club. The ones on the right talk about socialism instead of
what I wrote, the ones on the left talk about fascism instead of what
I wrote.
-- Roy L
William F Hummel
>about my posts. They don't seem respond to what I say, but rather
>some stereotype.
As you might expect from the brotherhood of the academy.
John J Weatherby
Robert Vienneau wrote:
> > Time and time he has charged that Post-Keynesians are
> > shunned
> > by the mainstream and not recognized because we ugly main economist are
> > afraid they will expose some ugly secret.
>
> I don't recall ever have said anything like the above.
Really you never said that you couldn't beleive that today's economist have no
knowledge of the MIT method or its shortcomings.
You never stated that mainstream economist censor post Keynesian becuase if they
didn't there would be a revolution in economics.
You haven't said time and time again that you can't believe that mainstream
economist are blind to the potential problems of an aggregate production function?
>
> o These findings suggest aggregate neoclassical theory, as used
> in Solovian growth theory, Lucas-style macroeconomics, and
> much New Growth Theory, is without theoretical foundation.
I would suggest learning what the term new growth theory means before blindly
applying it.
>
>
> I don't know how it all worked out,
> but this history provides empirical evidence that that seminar
> that Mr. Weatherby cites is a bone of contention among communities
> of American economists. Also, the AEA proceedings apparently don't
> print papers from URPE and other groups' sessions, at least as of
> 1998.
You have to realize the ASSA meetings are big. They have limited space to place
seminars in. Generally you have 2 days of seminars running from 8:00 to 5:00 PM and
one day from 8:00 AM to 2:30 PM. What largely determines presentations are the
amount of meeting rooms. Things have to be cut all around. The fact the URPE had it
sessions cut by no means indicates that mainstream economist won't hear them.
Attendance may indicate that however. I am not sure of the attendance of the
seminar I saw part of a dynamic imperfect competition seminar and had a meeting
during that time.
> I have often found curious the impression that some seem to convey
> about my posts. They don't seem respond to what I say, but rather
> some stereotype.
>
It is not a stereotype it is your words.
John
Mark Patrick Witte
We sure did a great job black-balling Friedman, Lucas, Sims,
Buchanan, Alais, Akerlof, Tversky, Rabin, Card, Krueger, Rodrik, Manski,
Hansen, and anyone else who comes up with a new idea that challenges the
orthodoxy.
Tim Worstall
> On Wed, 16 Jan 2002 20:18:22 GMT, "John Weatherby"
> <jjwea...@earthlink.net> wrote:
>
> >Over the years sci.econ has been entertained by widespread conspiracy
> >theories from none other than Rob Vienneau.
>
> ??? What do you mean? Of course there have been others.
>
> >Time and time he has charged that Post-Keynesians are shunned
> >by the mainstream and not recognized because we ugly main economist are
> >afraid they will expose some ugly secret.
>
> Substitute "Georgists" for "Post-Keynesians" if you want to see a real
> case of shunning and unofficial censorship. And for a real ugly
> "secret" that mainstream economists never want mentioned in public,
> try the fact that virtually every society in the world gives away
> benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
> contributing exactly nothing.
Really ? The US has a $ 7 trillion economy. Are you really saying that
the rent of the unimproved value of land in the US is $ 1.4 trillion ?
I have no idea what the true figure is, but that one seems awfully
high. Of course, if total rent in the US was that figure ( and I am
still inclined to doubt that ) then that would be on the improved
value of land.....and buildings etc. Which of course is ' something '
that is being paid for.
>
> How is it that the great majority of economists (let alone the public)
> is prevented from mentioning or even _knowing_ a crucial fact that the
> most brilliant and accomplished economists have all considered obvious
> and undeniable:
>
> "Pure ground rent is in the nature of a 'surplus,' which can be taxed
> heavily without distorting production incentives or reducing
> efficiency."
> -- Paul Samuelson, Nobel laureate in Economics
>
> "In my opinion the least bad tax is the property tax on the unimproved
> value of land, the Henry George argument of many, many years ago."
Another correspondent to this NG had a look at this phrase and came up
with someother quote from Freidman where he said ' I do not agree with
the Georgists ' .....and I know you read it because you replied to it.
> --Milton Friedman, Nobel laureate in Economics
>
> "It is important that the rent of land be retained as a source of
> government revenue."
> -- Franco Modigliani, Nobel laureate in Economics
>
> "For efficiency, for adequate revenue, and for justice, every user of
> land should be required to make an annual payment to the local
> government equal to the current rental value of the land he or she
> prevents others from using."
' current rental value ' and ' rental value of unimproved land ' do
not sound like the same thing to me.
> -- Robert Solow, Nobel laureate in Economics
>
> "While the governments of developed nations with market economies
> collect some of the rent of land, they do not collect nearly as much
> as they could, and they therefore make unnecessarily great use of
> taxes that impede their economies -- taxes on such things as incomes,
> sales, and the value of capital goods."
I think we might be getting closer to a realistic view here. '
Unnecessarily great' makes more intuitive sense than ' tax only the
rental value '....and I'll explain that in a moment.
> -- William Vickrey, Nobel laureate in Economics and past
> president of the American Economics Association
>
> Is this fact suppressed by a "conspiracy," or merely an unspoken
> agreement?
It can't be a conspiracy...it's simply too public for that, as the
quotes you have given us show. I can imagine that it is unspoken
agreement.....and the reason that it is not shouted from the rooftops
comes down to accountancy.
In other posts you have posited that taxing away in full the rental
value of unimproved land should be the main or only tax raised from
the citizenry. Or maybe I have misunderstood and you think that we
should have that first, and then raise other taxes that we might need.
A few problems as I see it :
1) With no benefit going to a supplier of land by putting land up for
rent, how can we determine what the rent is ? No market, no price
clearing mechanism, so how to set a price level ? If for example, we
take the current value ofrent, and then tax it away. Then the landlord
raises the rent, as he wants an economic return on his investment.
Next year we say ' Ah, rental values have gone up. Let's raise the tax
'. This could go on forever. Govt fiat is possible, but at that point
I think you will be getting the sort of porblems the UK had over the
rating system. It was precisely to correct the imbalances of 20 years
of economic growth on that price system, that Margaret Thatcher
brought in the community charge, or Poll Tax. Not a process that any
rationalpolitician wants to repeat.
2)Will it raise enough money ? You've stated often enough that it
should be on the unimproved value of the land....and not the capital
value, but the rental value. Unimproved means , if I have your
argument correctly, the value of the land itself....without utility
connections, zoning to build on, a house, nor roads to it. Land like
this in the US is cheap . Very cheap. $ 1,000 an acre near the coast
of California. Rental value of land at $ 1,000 an acre ? Say $ 100 a
year just for arguments sake? 1/2 acre plot for a house ? So we are
going to tax away that rental value, all $ 50 a year of it. This is
rather less than the $ 2 / 3 ,000 a year a house owner is already
paying in property taxes. So how does this actually help anything ?
The amount raised is minimal.
3) The USA is about 2.3 billion acres ( 3.5 million sq miles approx.
).
Average unimproved value of the land ? What ? $ 1,000 ? It's a hell of
a lot less than that in Alaska, or West Virginia. Central California
coast it's about that.....around Paso Robles, perhaps. Rental value of
10 % of capital value ? So $ 100 a year per acre ? Or $ 220 billion a
year ? So we seem to have the perfect Georgist tax raising 10 % or so
of the total Govt spending in the USA ( adding Fed, State and local
together I think it's about 30 % of the $ 7 trillion economy ).
I'd be interested to know. Is this more or less than is already raised
by property taxes ? I agree that it might be less distorting to use
the Georgist method, rather than the one which is used ( I think
property taxes are paid on the improved value of land, including
buildings, rather than unimproved ).
Of course these numbers change drastically if the average value is
higher or lower than $ 1,000. And charging tax equivalent to rental
values is going to change rental values.
My figures could be way off. Perhaps someone else has access to better
figures than I do. But the above calculation seems to be telling me
that the Georgist solution won't actually ' solve ' the tax problem.
We'll still have to get 90 % of the money through income tax, FICA,
Capital gains, all those other economically distorting things. Is it
really worth the convulsions the change over would cause to only get
rid of 10 % of the problem ?
Tim Worstall
Grinch
>>
>> .... And for a real ugly
>> "secret" that mainstream economists never want mentioned in public,
>> try the fact that virtually every society in the world gives away
>> benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
>> contributing exactly nothing.
>
>Really ? The US has a $ 7 trillion economy.
US GDP was $10.2 trillion at an annual rate, Q3 2001
>Are you really saying that
>the rent of the unimproved value of land in the US is $ 1.4 trillion ?
>I have no idea what the true figure is, but that one seems awfully
>high. Of course, if total rent in the US was that figure ( and I am
>still inclined to doubt that ) then that would be on the improved
>value of land.....and buildings etc. Which of course is ' something '
>that is being paid for.
Total national income at an annual rate, Q3 2001: $8.2 trillion
Total rental income of persons: $144 billion, or 1.7% of national
income.
http://www.bea.doc.gov/bea/dn/nipaweb/
As you note, this is total rental income, not rental income to owners
of unimproved land.
The US federal budget alone is about $2 trillion. So it would seem
that even at confiscatory rates, a tax on landowners' rental income
might not produce enough revenue to go around in financing a modern
nation state. In the US it would seem to leave the gov't about
$2 trillion short.
Perhaps this is why, as recently noted in another group, David
Friedman has suggested that we first reduce government expenditures to
the level that can be supported by taxing such nonproductive income,
and then hold gov't spending there for a couple decades before
deciding if it can be reduced still further. ;-)
William F Hummel
Patrick Witte) wrote:
Yeah, and you are trying to do the same thing to Vienneau
because he challenges the orthodoxy -- and what's worse, does it
without malice. Don't let the infidels speak, they might be
dangerous to the accepted wisdom. Shout them down.
John J. Weatherby
"William F Hummel" <wfhu...@mediaone.net> wrote in message
news:lnsd4us73b1j90btj...@4ax.com...
> Yeah, and you are trying to do the same thing to Vienneau
> because he challenges the orthodoxy -- and what's worse, does it
> without malice. Don't let the infidels speak, they might be
> dangerous to the accepted wisdom. Shout them down.
>
First of all Mr. Witte had in this list a few economist who were completely
unorthoxdox in their day. Yes that right the Chicago school and Freidman
were once the rebels. Now they have been proved right. Greg Mankiw has an
interesting view on how Freidman, Lucas, Sergant, and others went from
radical to mainstream. Beleive it or not when the RE movement started it was
Bob Solow and many Keynesian economist who were completely hostile to the
literature. Solow would laugh out loud and make scathing comments when Lucas
presented. When asked why he went as far as to "If you were sitting on a
park bench and someone sat down and claimed he was Napeleon you wouldn't
have a discussion of Waterloo with him. Would you?"
Mankiw's idea is that the radical became the norm due to the oil crisis.
In many ways this was similar to what the Great Depression did for Keynes.
Keynes' work came at time when it seem like the Classical school didn't work
anymore. The supply shocks of the 1970's seemed to make it look like the
Keynesian theory didn't work any more. Combine this with criticism of the
theoretical underpinnings of the model and you find a revolution of sorts
incurring.
The main point is that many radicals of yesterday, including the father
of economics Adam Smith, are today's mainstream. If economist have tried to
blackball radicals we have done a very poor job. If this had happened we
would still be bullonist reading Thomas Mun and not Adam Smith.
Merchantilism would be the dominant idea not capitialism. Smith, Ricardo,
Freidman, Lucas, Sergant, Wallace, Jevons, Samuelson ( a rebel in his day),
Hotellings, and Schumpeter would have been in the dust bin of history had
the predominate schools of thought desired and been able to black ball the
radicals.
John
William F Hummel
<jjwea...@earthlink.net> wrote:
>
>"William F Hummel" <wfhu...@mediaone.net> wrote in message
>news:lnsd4us73b1j90btj...@4ax.com...
>> Yeah, and you are trying to do the same thing to Vienneau
>> because he challenges the orthodoxy -- and what's worse, does it
>> without malice. Don't let the infidels speak, they might be
>> dangerous to the accepted wisdom. Shout them down.
>>
>First of all Mr. Witte had in this list a few economist who were completely
>unorthoxdox in their day.
Precisely my point. So one has to wonder why the "economists" on
this list are so antagonistic to Mr. Vienneau. Could it be that
they are repeating the same mistakes?
>Yes that right the Chicago school and Freidman
>were once the rebels. Now they have been proved right.
Now you are making an assertion that many in academia itself
would not accept. You are also give support to the view that
only those properly anointed can speak the truth. The others
should be laughed down.
Mr. Vienneau has done some serious study of economic theory,
probably a lot more than most of the academic economists on this
list. Even though you may not agree with his arguments and
conclusions, they deserve something more than a sneer which is
about all I've seen here. Could it be we are simply seeing
"credentialism" at its worst?
ro...@telus.net
<jjwea...@earthlink.net> wrote:
>"William F Hummel" <wfhu...@mediaone.net> wrote in message
>news:lnsd4us73b1j90btj...@4ax.com...
>> Yeah, and you are trying to do the same thing to Vienneau
>> because he challenges the orthodoxy -- and what's worse, does it
>> without malice. Don't let the infidels speak, they might be
>> dangerous to the accepted wisdom. Shout them down.
>
>First of all Mr. Witte had in this list a few economist who were completely
>unorthoxdox in their day.
But unorthodox in a way that did not threaten the interests of the
powerful.
>If economist have tried to
>blackball radicals we have done a very poor job.
They have done a bang-up job on Henry George and the Georgists.
>If this had happened we
>would still be bullonist reading Thomas Mun and not Adam Smith.
That is closer to reality than you seem to realize.
>Merchantilism would be the dominant idea not capitialism. Smith, Ricardo,
>Freidman, Lucas, Sergant, Wallace, Jevons, Samuelson ( a rebel in his day),
>Hotellings, and Schumpeter would have been in the dust bin of history had
>the predominate schools of thought desired and been able to black ball the
>radicals.
It's not radicals per se who are blackballed, only radicals who
unambiguously identify facts whose general dissemination would
threaten the interests of the powerful. And when it is not possible
to blackball or silence those who identify such facts (like the five
Nobel laureates I quoted advocating land taxation), those facts and
the statements identifying them are just studiously ignored.
-- Roy L
susupply
"William F Hummel" <wfhu...@mediaone.net>
who, on the one hand (the "Seigniorage" thread), finds "real" economists to
be a useful source to which to appeal:
> I assume you claim to be an economist, but I suspect the real
> ones think you are an embarrassment.
but, on the other,
wrote in message news:sp7e4uggfu8saq7al...@4ax.com...
> Mr. Vienneau has done some serious study of economic theory,
> probably a lot more than most of the academic economists on this
> list. Even though you may not agree with his arguments and
> conclusions, they deserve something more than a sneer which is
> about all I've seen here. Could it be we are simply seeing
> "credentialism" at its worst?
Now that we've cleared up the lines of authority, perhaps you could answer
the questions that Professor Vienneau has been so reticent about lo these
many years.
Please list the three most important real world/public policy implications
of Vienneauism.
For extra credit on this Pop Quiz:
1. What tax should the Gov. of NY propose to fund the Sraffa Memorial?
2. Did Friday exploit Crusoe when he crashed Crusoe's boat on the rocks and
lost his fishing pole?
3. How many streetcars would there be today peacefully transporting
Americans if General Motors had never existed?
Patrick
Chasna1
>First of all Mr. Witte had in this list a few economist who were completely
>unorthoxdox in their day. Yes that right the Chicago school and Freidman
>were once the rebels.
This is a gross oversimplification. Friedman and others were never rebels in
the sense that you portray them. They accepted the received legacy of economic
literature and built from it. The PKTers, on the other hand, are mainly
Marxists and cranks of various varieties who see their mission as the overthrow
of legitimate economics and its received doctrine.
William F Hummel
Ah yes, "received doctrine". And those with true faith in
"legitimate economics" shall receive salvation.
Pardon me a moment 'til I quit laughing.
---------
Thanks
Mark Patrick Witte
William F Hummel <wfhu...@mediaone.net> wrote:
>On 17 Jan 2002 07:07:42 GMT, mwi...@merle.acns.nwu.edu (Mark
>Patrick Witte) wrote:
>
>>In article <d77c4uo72pk25kp3t...@4ax.com>,
>>William F Hummel <wfhu...@mediaone.net> wrote:
>>>On Wed, 16 Jan 2002 18:27:32 -0500, Robert Vienneau
>>><rv...@see.sig.com> wrote:
>>>>
>>>>I have often found curious the impression that some seem to convey
>>>>about my posts. They don't seem respond to what I say, but rather
>>>>some stereotype.
>>>
>>>As you might expect from the brotherhood of the academy.
>>
>> We sure did a great job black-balling Friedman, Lucas, Sims,
>>Buchanan, Alais, Akerlof, Tversky, Rabin, Card, Krueger, Rodrik, Manski,
>>Hansen, and anyone else who comes up with a new idea that challenges the
>>orthodoxy.
>
> Yeah, and you are trying to do the same thing to Vienneau
>because he challenges the orthodoxy -- and what's worse, does it
>without malice. Don't let the infidels speak, they might be
>dangerous to the accepted wisdom. Shout them down.
(Leaving sarcasm mode: The above is a list of researchers who challenged
orthodoxy and whose contributions were subjected to great debate, as should
be all relatively untested ideas. However, in these cases, the ideas built
by these thinkers were strong enough to overcome entrenched views to the
contrary.)
William F Hummel
Patrick Witte) wrote:
And so there is still a chance that Vienneau's views will prevail
in academy (the fountain of true economic wisdom) some day? He
just has to put up with the hazing by the brethren until then.
Or did I miss the point?
Leaving sarcasm mode: Can anyone of his tormentors on sci.econ
honestly claim that he has seriously considered what Vienneau has
written? Or has it been picky stuff, basically a pro forma
defense of the orthodoxy against an unlettered challenger? Damn
those upstarts. Who do they think they are, trying to tell us,
the experts, anything?
Mason Clark
QUOTE
>>The PKTers, on the other hand, are mainly Marxists and cranks
>>of various varieties who see their mission as the overthrow
>>of legitimate economics and its received doctrine.
Now *there* is a quotation to save! Look at its aesthetics, its
beauty, its theological basis -- no need for a glaze of rationality.
And its versality: substitute for "PKTers" liberals, socialists,
whoever suits your mood. Republicans fit it perfectly.
I'm grateful to have received this. God is generous to sinners
Mason C
Robert Vienneau
wrote:
I like the suggestion that the only way one has been exposed to
the "PKTers" is through a certain Web site and discussion group.
I mean one couldn't have stumbled across dead tree literature,
professional conferences, and such like.
Describing Post Keynesians as "mainly Marxists", of course, is
extremely bizarre, especially in an American context.
John J. Weatherby
"William F Hummel" <wfhu...@mediaone.net> wrote in message
news:l4me4uc11nng59g2v...@4ax.com...
> And so there is still a chance that Vienneau's views will prevail
> in academy (the fountain of true economic wisdom) >some day?
If Veinneau can come up with an actually alternative rather than
bitching about a single special case perhaps. Vienneau's posting lack good
theory in that they are highly specialized non robust cases. They lack
empirical evidence of any kind. If Mr. Vienneau can show us something other
than highly specialized cases that often have been recognized by mainstream
economist, ie. in a two good model the Solow and Ramsey-Cass Koopmans model
do not work quite well, then he probably won't be listened to very often.
As Mr. Witte's examples show it is possible to overturn orthodoxy but
the work must be done very very well. The "mainstream" theories are
mainstream becuase they have strong theoritical underpinnings and have stood
the empirical test time and time again. That is why they hard to overturn.
Make no mistake these theories have been challenged time and time again and
have stood.
If you want proof of this look at Vienneau's source. Rob still seems to
be debating Joan Robinson's ideas of 1920-1960's. Many of the issue Rob
brings up have been discussed throughly in the AEA journals at least 40
years ago. Browse through the journals of the 1960's and you will see much
of what Rob argues has already been extensively debated, exhuasted and moved
on from. However for some reason Post-Keynesians won't give up the debates
that economics has moved for from. Many of these arguments are still stuck
in 1950's and 1960's. For example, Rob still hasn't figured out that most of
the new growth theory he pretends to overthrow doesn't even use an aggregate
production function.
John
Robert Vienneau
Hummel <wfhu...@mediaone.net> wrote:
> Mr. Vienneau has done some serious study of economic theory,
> probably a lot more than most of the academic economists on this
> list. Even though you may not agree with his arguments and
> conclusions, they deserve something more than a sneer which is
> about all I've seen here. Could it be we are simply seeing
> "credentialism" at its worst?
It took me a while to realize that, even after years, some of
these sneerers don't even know what's being debated and seem
to be unaware of the literature upon which I draw. Much of
what I say is intended to be a consensus position.
If some were to try to enter into serious conversation, they
should be alive to how different perspectives affect the meaning
of words. Mr. Weatherby has already made some mistakes along
these lines. For example, I think I accept the norms of
contemporary historians when I hold that Keynes usage of
"Classical economics" was deeply misleading. Keynes, I think,
was mistaken in thinking that there was a continuity from
Ricardo to Marshall. I think even Samuel Hollander would
have problems with this claim. Furthermore, Sraffianism is
a reconstruction - whether logical or otherwise I make no
claim about here - of the Classical economics of Ricardo. The
Sraffians think Ricardo's theory of value can be retained,
while discarding Say's law. This also seems to have been
Marx's view.
As far as I can see, Lucas accepts Keynes usage when he refered
to his reconstruction of pre-Keynesian macroeconomics as
"Classical".
It's my impression that Mr. Weatherby is not aware of all these
arguments. He uses "Classical" in a way to leave no room for
the Sraffians, and does not perceive any possible need for
translation or debate here.
And, pace Mr. Witte, this view of the lack of continuity between
the Classical theory of value and the "Neoclassical" theory has
won out in strong debates. (I don't claim that the differences
are not a subject of debate.) Those who try to minimize the
differences, such as Hollander, knew they were fighting the
received doctrine.
As far as I can see these debates might have happened on another
planet as far as the statements of some of the mainstream economists
here go, with their lack of nuance and caveats.
One could produce the same sort of dissertation on "Keynesianism"
as I know you and Mr. Clark know. And once again, I think
my view has won out by strong debate. But the literature is
ignored by some.
Robert Vienneau
<susu...@mindspring.com> wrote:
> [ Behavior that those who had some concept of civil discussion ]
> [ would never engage in or encourage - deleted. ]
It doesn't matter whether I am right or wrong on substance. All
serious people would have been discouraging Patrick's behavior
on this list for the last few years.
"This is a very big problem. People like [deleted] --people with
no social skills whatsoever, who never learned how to behave in any
company, polite or not--ruined USENET as a forum. In my view,
the--unfortunate--prevalence of such <censoreds> makes an unmoderated
email list unsustainable and non-viable in the long run...
...The only strategy I think will work in the long run is
to adopt the rules of propriety that legislatures typically adopt.
Think about it: speech on the floor of the U.S. Congress is--in many
ways--the freeest anywhere. Legislators are not to be called to
account 'in any other place' for what they say on the floor. But
within their chamber they are held to strict rules of politeness and
propriety--so much so that Tip O'Neill once landed in a big mess for
saying a very weak version of what he thought of Newt Gingrich. All
statements are notionally addressed not to other members but to the
Chair. Forms of reference to other members are tightly controlled.
All of these rhetorical rules exist for good reasons. Unless forums
like this adopt analogous rules, I fear that they are doomed."
-- Brad DeLong, 18 May 2001
> Please list the three most important real world/public policy
> implications of Vienneauism.
The question is bizarre. Anybody paying attention knows I draw
on recognized schools of thought. I don't know what Vienneauism
is.
It also seems to reveal a misunderstanding on how policy should
be drawn up.
"The most percipient of the critics of my Accumulation reproached
me for a selective lowering of the degree of abstraction.
Certainly it is not legimate to set up a highly abstract model
and then draw from it conclusions applicable to actual problems.
In that book I dropped out here and there hints as to whither,
in my own opinion, the analysis might be found to lead. This
time I have refrained even from hints."
-- Joan Robinson (in a source that people that wanted
to enter in a serious conversation with me would
have thought worth reading a long time ago.)
I have no problem with arguments whose major point is that
certain other arguments are sheer bosh.
> For extra credit on this Pop Quiz:
> 1. What tax should the Gov. of NY propose to fund the Sraffa Memorial?
I was amused that Mr. Auld should raise a question of tax incidence
for a demonstration of the lack of practical implications of
Sraffianism. That reveals that he had very little idea of what he
had been arguing about for years. (What is the distinction between
basic and non-basic goods? The King of Sweden conferred on Sraffa
the Soderstrom gold medal of the Royal Academy of Sciences in
March 1961. This award was for a massive work of scholarship. What
was the topic of the middle third of the first volume?)
> 2. Did Friday exploit Crusoe when he crashed Crusoe's boat on the rocks
> and lost his fishing pole?
That's more about Mr. Sullivan's obsessions. I don't remember the
story, but I assume it revealed a lack of understanding of a certain
formal model, as well as Mr. Sullivan's own quote several months
back from Coase. (Coase asserted that capitalism assured the
commodities that should get produced do get produced.) I think the
answer was no.
> 3. How many streetcars would there be today peacefully transporting
> Americans if General Motors had never existed?
The question is silly and reflects Mr. Sullivan's obsessions. Newt
Gingrich's contributions to a certain subgenre of SF may be amusing -
I cannot tell because I have not read them - but historians would
rarely think such a counterfactual worth investigating.
Robert Vienneau
<jwea...@mail.uh.edu> wrote:
> Robert Vienneau wrote:
> > > Time and time he has charged that Post-Keynesians are
> > > shunned
> > > by the mainstream and not recognized because we ugly main economist
> > > are
> > > afraid they will expose some ugly secret.
> > I don't recall ever have said anything like the above.
> Really you never said that you couldn't beleive that today's economist
> have no
> knowledge of the MIT method or its shortcomings.
I don't recall saying the above.
Mr. Weatherby once again had the opportunity to acknowledge certain
mathematical facts about Wicksell effects. And he did not.
And those mathematical facts do not seem to depend on assumptions
convenient for the application of linear programming, despite
what a succession of economists have been incorrectly telling me
for years.
> You never stated that mainstream economist censor post Keynesian becuase
> if they
> didn't there would be a revolution in economics.
From Google (before this thread arrived there):
Your search - Vienneau censor group:sci.econ - did not match any
documents.
Certainly, proponents of Post Keynesianism are proponents of a
theoretical revolution in economics. That there are external political
interests in how economics develops doesn't seem debateable to me.
I find it hard to believe that one familiar with economics today
would think Keynes was successful among the mainstream in his attempt
at a revolution.
But I fail to see what this business about a revolution has to
do with an "ugly secret". It's no secret that Keynesian
economics is not the economics of Keynes, at least in the
opinion of many.
> You haven't said time and time again that you can't believe that
> mainstream
> economist are blind to the potential problems of an aggregate production
> function?
No. I have suggested some don't seem to be alive to the bearing of
capital-theoretic problems, debated for centuries, on aggregate
Neoclassical theory. Posts in this newsgroup provide empirical
evidence for the truth of such a claim. Of course, Samuelson
is quite aware of these problems, and Solow has had them brought
to his attention. Other problems dealing with aggregation are
in another chapter of, say, Ahmad's capital theory textbook.
Anyway, I don't see the relation between Mr. Weatherby's new post
and his old. Where have I claimed anything about "secrets" to
those who want to find them?
> > o These findings suggest aggregate neoclassical theory, as used
> > in Solovian growth theory, Lucas-style macroeconomics, and
> > much New Growth Theory, is without theoretical foundation.
> I would suggest learning what the term new growth theory means before
> blindly applying it.
Whatever. I have seen accounts of NGT mathematical models in the
secondary literature to which my comment applies. Perhaps Mr.
Weatherby can read it again, slowly.
> > I don't know how it all worked out,
> > but this history provides empirical evidence that that seminar
> > that Mr. Weatherby cites is a bone of contention among communities
> > of American economists. Also, the AEA proceedings apparently don't
> > print papers from URPE and other groups' sessions, at least as of
> > 1998.
> You have to realize the ASSA meetings are big. They have limited space to
> place
> seminars in. Generally you have 2 days of seminars running from 8:00 to
> 5:00 PM and
> one day from 8:00 AM to 2:30 PM. What largely determines presentations
> are the
> amount of meeting rooms. Things have to be cut all around. The fact the
> URPE had it
> sessions cut by no means indicates that mainstream economist won't hear
> them.
> Attendance may indicate that however. I am not sure of the attendance of
> the
> seminar I saw part of a dynamic imperfect competition seminar and had a
> meeting
> during that time.
I am aware of how professional conferences work.
Mr. Weatherby tells me that the government works well. Others, who
have discussed all the matters that Mr. Weatherby mentions, tells
me it doesn't. Mr. Weatherby did not seem to be aware earlier
in the day of his post even of the existence of this dispute. How has
he so quickly obtained the facts and wisdom to adjudicate?
> > I have often found curious the impression that some seem to convey
> > about my posts. They don't seem respond to what I say, but rather
> > some stereotype.
> It is not a stereotype it is your words.
Yeah, like "secret", "shunned", "ugly main economist", "ugly secret",
and "censor".
Robert Vienneau
> "William F Hummel" <wfhu...@mediaone.net> wrote in message
> news:l4me4uc11nng59g2v...@4ax.com...
> > And so there is still a chance that Vienneau's views will prevail
> > in academy (the fountain of true economic wisdom) >some day?
> If Veinneau can come up with an actually alternative rather than
> bitching about a single special case perhaps. Vienneau's posting lack
> good
> theory in that they are highly specialized non robust cases. They lack
> empirical evidence of any kind. If Mr. Vienneau can show us something
> other
> than highly specialized cases that often have been recognized by
> mainstream
> economist, ie. in a two good model the Solow and Ramsey-Cass Koopmans
> model
> do not work quite well, then he probably won't be listened to very often.
Every statement above is false, except for the last. For that
statement, what Mr. Weatherby meant, as opposed to what he wrote,
is false.
The Kahn-Kaldor-Pasinetti-Robinson theory of distribution is one of
several alternatives that have stood the test of time. It is a logical
contradiction to say that the assumptions of a theory imply the
conclusions and that there are special cases meeting the assumptions
in which the conclusions do not hold. It is bad theory to impose any
restriction on the direction of real Wicksell effects. No empirical
evidence is needed for that. Nevertheless, there is some empirical
evidence for "perverse" real Wicksell effects. There is also empirical
evidence for the more interesting question of whether Post Keynesian
theory of distribution is superior. Solovian growth theory is
simply bad theory. (Whether measurement without theory is good
practice is another question.)
Non-zero price Wicksell effects are not a special case;
price Wicksell effects of zero are an extremely special case.
(This is connected with why the labor theory of value was
rejected; not that classical economics depends on that theory
of value according to the Sraffians.)
All the above claims, except for the one about which theory of
distribution is empirically superior, have won out in the
literature, at least among those who know what they are
talking about (Burmeister, Hahn, Samuelson). The exeception is
still open.
The above claims are about N good models, not merely the
special case in which N = 2. (Recent theoretical work on the
probability of reswitching has concentrated on N = 2.)
> For example, Rob still hasn't figured out that most
> of
> the new growth theory he pretends to overthrow doesn't even use an
> aggregate
> production function.
One should notice my use of the word "much" in my mention of NGT
theory in my earlier post on this thread. I have said that Lucas's
contributions to NGT tend to be more aggregated with Roemer's.
The assertion that neoclassical supply and demand explanations don't
apply to long run theory is not about aggregate production functions.
Mark Patrick Witte
According to Mr. Vienneau, his preferred school of though is already
the majority in the field, although I have my doubts.
RV: I feel Mr. Witte's major concern is with perceptions of whether
RV: "economics" - so narrowly defined as to exclude maybe half of all
RV: economists - is a legimate science.
MW: I am unaware (but interested) in any such census of economists.
MW: If Mr. Vienneau has any basis for making this statement, I'd sure
MW: like to read how economists break down into such groups. However,
MW: I am unaware that I've ever tried to exclude economists from the
MW: field and certainly have no standing to do so.
>Leaving sarcasm mode: Can anyone of his tormentors on sci.econ
>honestly claim that he has seriously considered what Vienneau has
>written? Or has it been picky stuff, basically a pro forma
>defense of the orthodoxy against an unlettered challenger? Damn
>those upstarts. Who do they think they are, trying to tell us,
>the experts, anything?
I've read a number of the authors and articles cited by Mr.
Vienneau, as have others on this group, and posted serious critiques of
them, which were then usually brushed off by Mr. Vienneau, particularly in
areas relating to empirical work, that is relating theoretical models to the
experience of the real world. As I've pointed out in other posts, the
degree of "letters" a challenger has is no bar to the field, it is the
ability of a challenger to answer serious questions about the quality and
importance of his work. Mr. Vienneau certainly cites work by authors who
are both well lettered and well published. However, this work has failed to
generate much following in the field because it generates few real world
implications that can be tested with data. As Chris Auld and Susupply have
noted in questions they have posed to Mr. Vienneau, his approach has little
do with the questions most people and most economists care about.
So...why does Mr. Vienneau get so excited about what is generally
seen in the field as a very sterile approach? Because it is one way to get
factor payment indeterminacy, that is, how much should worker and capital
owners be paid. This can be an interesting feature, but unless the
framework extends to explain many more interesting facets of the world in
ways that invite empirical tests against the data the real world gives us,
it's just not going to build up much of a following among the free agent
researchers that make up the field.
For a nice, current piece on academic research (in the medical
field), take a look at this week's New Republic. The point here being that
researchers are free to march to whatever piper they want to, particulary
tenured ones, if they produce interesting work that meets with empirical
success.
http://www.thenewrepublic.com/012102/mukherjee012102.html
Mark Patrick Witte
I think this is too strong. There are many very intelligent, very
serious researchers in the PK paradigm and they certainly build on many
aspects of the economic tradition. One shouldn't blame the careful scholars
for the camp followers who choose to attach themselves to whatever bandwagon
exists.
I would also say that many of the people on my list really were seen
as radicals who were throwing out well-established, central aspects of
economic theory, but who eventually made their cases and have changed what
most economists think is good work.
William F Hummel
Patrick Witte) wrote:
>In article <20020117160735...@mb-fb.aol.com>,
>Chasna1 <cha...@aol.com> wrote:
>>
>>This is a gross oversimplification. Friedman and others were never rebels in
>>the sense that you portray them. They accepted the received legacy of economic
>>literature and built from it. The PKTers, on the other hand, are mainly
>>Marxists and cranks of various varieties who see their mission as the overthrow
>>of legitimate economics and its received doctrine.
>
> I think this is too strong. There are many very intelligent, very
>serious researchers in the PK paradigm and they certainly build on many
>aspects of the economic tradition.
Mr. Witte informs us that describing PKTers as Marxists and
cranks is "too strong", which says more about Mr. Witte than the
PKTers.
>One shouldn't blame the careful scholars
>for the camp followers who choose to attach themselves to whatever bandwagon
>exists.
Mr. Witte has no use for the unwashed who latch on to careful
scholars. Apparently he considers them to be camp followers who
could not have anything of importance to say. One has to wonder
then why Mr. Witte seems to know what they say. Could it be that
he has doubts about the "received doctrine"?
Mark Patrick Witte
Ahem. The set of birds contains elements that are flightless.
However, this does not imply that all birds are flightless. Just because
some jackass praises the work of some scholar, it does not imply that the
scholar nor others who think highly of the original research are jackasses.
I hope this simple logical distinction is not lost on those who would
endeavor to understand difficult economic topics.
ro...@telus.net
wrote:
>On 17 Jan 2002 03:04:38 -0800, t...@2xtreme.net (Tim Worstall) wrote:
>
>>Are you really saying that
>>the rent of the unimproved value of land in the US is $ 1.4 trillion ?
>>I have no idea what the true figure is, but that one seems awfully
>>high. Of course, if total rent in the US was that figure ( and I am
>>still inclined to doubt that ) then that would be on the improved
>>value of land.....and buildings etc. Which of course is ' something '
>>that is being paid for.
>
>Total national income at an annual rate, Q3 2001: $8.2 trillion
>
>Total rental income of persons: $144 billion, or 1.7% of national
>income.
>http://www.bea.doc.gov/bea/dn/nipaweb/
>
>As you note, this is total rental income, not rental income to owners
>of unimproved land.
Neither of which has even the most tenuous resemblance to total land
rent....
>The US federal budget alone is about $2 trillion. So it would seem
>that even at confiscatory rates, a tax on landowners' rental income
"Rental income" is not land rent. Of course, being informed and then
repeatedly reminded of this fact of objective reality will not prevent
you from continuing to pretend that it is. It's all part of the
campaign of disinformation. You know it. I know it. But I'm hoping
you might get tired of me publicly identifying it as such.
>might not produce enough revenue to go around in financing a modern
>nation state. In the US it would seem to leave the gov't about
>$2 trillion short.
>
>Perhaps this is why, as recently noted in another group, David
>Friedman has suggested that we first reduce government expenditures to
>the level that can be supported by taxing such nonproductive income,
>and then hold gov't spending there for a couple decades before
>deciding if it can be reduced still further. ;-)
David Friedman might want to look at _why_ governments that recover
less land rent from private landowners have to spend more money trying
to undo the economic and social damage their taxes on production
inflict. His suggestion makes about as much sense as leaving the milk
out on the counter to get cold before putting it in the fridge.
Government is not going to get smaller as long as the subsidy to
landowners keeps people poor and economies stagnant. Look at Japan,
for Chrissakes: the smaller the fraction of publicly created land rent
recovered for public purposes, the more the government has spent
trying to kick-start the economy, and the less it has availed them.
-- Roy L
Robert Vienneau
> On Thu, 17 Jan 2002 18:55:40 GMT, "John J. Weatherby"
> <jjwea...@earthlink.net> wrote:
> >First of all Mr. Witte had in this list a few economist who were
> >completely
> >unorthoxdox in their day.
> But unorthodox in a way that did not threaten the interests of the
> powerful.
Don't be silly. The mere possibility of the existence of such
external forces on the development of economics cannot even be
imagined, much less discussed.
Christopher Auld
>> 1. What tax should the Gov. of NY propose to fund the Sraffa Memorial?
>
>I was amused that Mr. Auld should raise a question of tax incidence
>for a demonstration of the lack of practical implications of
>Sraffianism.
This is amusing I suppose because the literature is full of
applied Sraffian econometrics? Perhaps Rob could provide
a cite to Sraffian estimates of the demand for cigarettes,
which was the question referred to above.
And Dr. Auld, please, if you insist on this faux formality.
> That reveals that he had very little idea of what he
>had been arguing about for years.
Some general remarks on Rob's habit of making comments like
this and the recent meta-analysis of "Vienneauism":
Rob's take on what economics is and what economists do is
warped. As I have vainly pointed out in the past, most of
the issues Rob obssesses on are, as of 2002, points of
curiousity discussed mostly in history of thought journals.
If that floats Rob's boat, great -- he can read to his heart's
content. But he leaps over the line between thoughtful
commentator and net kook when he shrilly insists, usually
in the form of spammed wild-eyed essays, that these issues
overturn all of modern economic thought. He's at least
three decades behind the envelope of economic theory, and the
vast majority of theoretical research is on topics other than
core distribution theory. This irrelevance -- not political
reasons or the other emergent conspiracies Rob dreams up -- is
why the vast majority of the profession is uninterested in
Sraffa. I don't think Rob understands at all just how
extraordinarily narrow the "literature he draws on" is.
Much of the reason for this weird take on economics is that
Rob views it through a darkly tinted political lense. The
equation
MP_K = r
is not a political statement in the minds of most economists,
but it is to Rob, as it apparently justifies income distribution
under market outcomes. But this is a bizarre and counterproductive
interpretation, as most economists simply view the equation above
as part of a model, not a part of a political philosophy. Most of
the issues Rob talks about are actually irrelevant to most of
economic research. For instance, some of the topics I'm currently
working on include: estimating how much behavior changes as risk
of disease changes, estimating the efficacy of public health care
provision, the relationship between cognitive ability and health
status, and theoretical issues in the nonparametric estimation of
panel data models subject to multiple forms of censoring. These
are all quite mainstream topics. You can imagine my surprise at
being told, over and over and over, that price-Wicksell effects
undermine my research program!
Beyond all this, Rob has never bothered to understand even the
basics of the canonical models he's so sure are "defective." For
instance, the essay he recently posted a link to on "the physics
idea of equilibrium" applied to price theory is entirely based on
a misunderstanding of second-year undergraduate microeconomics.
He often simply makes a hash of the economics he's discussing,
which compounds the offensiveness of his various allegations that
economists are unscholarly, poorly educated, politically motivated,
ignorant, and so on. These comments would grate coming from
a top economist; they are simply ludicrous as well as offensive
coming from Rob.
All of the above is exacerbated by Rob's intensely confrontational
and prolific net persona. Rob wants to know why economists don't
hang out on sci.econ. The answer is: every discussion is immediately
dominated by an individual who changes the topic to one of three of
four hobbyhorses no matter how vague the relevance is. Invariably
the economist will be told his motives are vile and his
understanding of economics is deeply flawed, e.g.,
> That reveals that he had very little idea of what he
> had been arguing about for years.
This is probably because of the economist's "brainwashing" (which
most people spell "education"). We will then be treated to a
half-dozen essays expositing ancient models of the price of
317/23rds of a bushel of wheat. And of course after all this
whatever the original topic was is irrelevant, nothing interesting
has been said, everyone is pissed off, and there's just no reason to
continue.
Believe it or not, Rob, I -- as judged by my colleagues, journal
editors, grant referees, the media, consulting firms, the
government, and my students if not the esteemed Robert Vienneau --
actually do know what I'm talking about. So too do many of the
people you've chased off the group over the years. If you have an
interesting point that many economists aren't aware of, try
expressing it sans the relentlessly noxious attitude. If you wish
instead to spend much of your free time regaling sci.econ with the
view that most of the profession are incompetent hacks gleefully
driving BMWs and giving high-fives to boisterous cries of "screw
the poor," that's your right. Just have enough self-awareness
to not follow up by making snide posts wondering why economists
don't frequent this group, much less the recent slew of deeply
ironic posts complaining about the lack of decorum here.
In short: Physician, heal thyself.
--
Chris Auld
Department of Economics
University of Calgary
au...@ucalgary.ca
Robert Vienneau
(Mark Patrick Witte) wrote:
> In article <l4me4uc11nng59g2v...@4ax.com>,
> William F Hummel <wfhu...@mediaone.net> wrote:
>>And so there is still a chance that Vienneau's views will prevail
>>in academy (the fountain of true economic wisdom) some day? He
>>just has to put up with the hazing by the brethren until then.
>>Or did I miss the point?
> According to Mr. Vienneau, his preferred school of though is already
> the majority in the field, although I have my doubts.
Naturally, the text following doesn't say what Mr. Witte says it says.
How could a serious economist not know about disagreements and
different approaches among those who reject orthodoxy?
> RV: I feel Mr. Witte's major concern is with perceptions of whether
> RV: "economics" - so narrowly defined as to exclude maybe half of all
> RV: economists - is a legimate science.
> MW: I am unaware (but interested) in any such census of economists.
> MW: If Mr. Vienneau has any basis for making this statement, I'd sure
> MW: like to read how economists break down into such groups. However,
> MW: I am unaware that I've ever tried to exclude economists from the
> MW: field and certainly have no standing to do so.
It's obvious how to collect empirical data for my claim. One
looks at membership in AEA, membership in URPE, membership in
AFEE, membership in other societies, subscriptions to JPKE, JEI,
whatever Austrians have, and so on. One corrects for double
counting. Now I know of nobody that has actually done this.
I do know that some economists have reported their impression
about what such a survey would reveal. I don't know how
accurate that impression is, thus, "maybe".
But, of course, counting noses isn't about what "prevails". What
economists at MIT think has more influence than what somebody in
the business department at SUNY Binghamton thinks.
In short, Mr. Witte does not seem to have answered Mr. Hummel's
question. Mr. Witte's policy of continual harassment of anybody
with whom he disagrees seems to have long driven many away.
> I've read a number of the authors and articles cited by Mr.
^ (badly)
> Vienneau, as have others on this group, and posted serious critiques of
> them, which were then usually brushed off by Mr. Vienneau, particularly
> in
> areas relating to empirical work, that is relating theoretical models to
> the
> experience of the real world...
> Mr. Vienneau certainly cites work by authors who
> are both well lettered and well published. However, this work has failed
> to
> generate much following in the field because it generates few real world
> implications that can be tested with data.
Given the range of work I have cited and the imprecision of Mr.
Witte's comments, I find it difficult to comment. But I'll
assume he's talking about the CCC. It seems
that he still cannot perceive how others see the CCC literature,
including me. Mr. Witte has yet to outline a logically consistent
set of assumptions for multicommodity models that will yield
(old) neoclassical conclusions. (Hahn, Samuelson, etc. have
abandoned the theories Mr. Witte seems inclined to defend.) Nor
does Mr. Witte ever explain how empirical results can be
relevant to a point of logic.
As far as how empirical results are relevant, I have long insisted
certain empirical questions were more interesting than the
empirical evidence for or against reswitching or capital
reversing.
Furthermore, when some have pointed out empirical evidence, Mr.
Witte has dismissed it based on his lack of understanding. On
another point, his standard response to the statement that
uncertainty is outside the scope of neoclassical theory is to
claim models with risk perform well empirically.
Likewise, others have pointed out to Mr. Witte the logical
structure of arguments he hasn't seen fit to understand.
I may be guilty of "brushing off" non-sequiturs. And, as
usual, I am puzzled by Mr. Witte's lack of awareness of disputes
on why the CCC isn't more well-known. And his lack of awareness
of evidence (AEA petition, AEA committees, an originally french
protest movement, disputes over academic appointments) relevant
to the question of the openness of the institutional structure
of economics to certain sorts of innovation.
> As Chris Auld and Susupply
> have
> noted in questions they have posed to Mr. Vienneau, his approach has
> little
> do with the questions most people and most economists care about.
The fact that Mr. Witte should pretend Mr. Sullivan has ever
raised serious questions for me would be quite curious,
if one hadn't long ago noticed what behavior he finds
acceptable.
Those seriously interested in the empirical and policy implications
of Sraffa should consult Bharadwaj and Schefold (1990). But, of
course, tax incidence is not a strong point for those questioning
the empirical and policy relevance of Sraffa. Those with
familiarity with the literature would think it's more an area
that should be thought of as a caveat.
"The critique ... opens the way to an interpretation of the
wage rate as 'the independent variable' (Napoleoni, 1963...),
implying a degree of freedom for trade unions' wage
bargaining policy. In Italy 'the wage as the independent
variable' became a widely accepted slogan, often used in
newspaper articles and in political speeches, as implying
theoretical support for trade unions' increased combativeness."
-- Alessandro Roncaglia (1990), in op. cite.
When I asked Mr. Witte how he thought Leontief and Sraffa's
work related, he refused to answer (exluding a vague metaphor).
Just like he refused to give Mr. Hummel a serious answer above.
Maybe he can tell us instead in what works on endogeneous
money Mr. Hummel might have seen the CCC discussed, if any?
Robert Vienneau
(Christopher Auld) wrote:
> Robert Vienneau <rv...@see.sig.com> wrote:
>
> >> 1. What tax should the Gov. of NY propose to fund the Sraffa Memorial?
> >
> >I was amused that Mr. Auld should raise a question of tax incidence
> >for a demonstration of the lack of practical implications of
> >Sraffianism.
[>> That reveals that he had very little idea of what he ]
[>> had been arguing about for years. (What is the distinction between ]
[>> basic and non-basic goods? The King of Sweden conferred on Sraffa ]
[>> the Soderstrom gold medal of the Royal Academy of Sciences in ]
[>> March 1961. This award was for a massive work of scholarship. What ]
[>> was the topic of the middle third of the first volume?) ]
> This is amusing I suppose because the literature is full of
> applied Sraffian econometrics? ...
> when he shrilly insists, usually
> in the form of spammed wild-eyed essays, that these issues
> overturn all of modern economic thought.
Chris Auld prefers persons of straw. Notice he does not answer the
questions.
And Mr. Auld is invited to show where I said the CCC overturns
game theory.
Christopher Auld
>[>> the Soderstrom gold medal of the Royal Academy of Sciences in ]
>[>> March 1961. This award was for a massive work of scholarship. What ]
>[>> was the topic of the middle third of the first volume?) ]
>Chris Auld prefers persons of straw. Notice he does not answer the
>questions.
That's because I wasn't responding to the questions.
>And Mr. Auld is invited to show where I said the CCC overturns
>game theory.
Almost all of game theory supposes rational agents. One of Rob's
hobbyhorses I referred to is that this is a "defective" assumption.
Further, many game theoretic models make the same "without
theoretical foundation" assumptions that Rob claims "overturn"
canonical theory, for instance, firms produce stuff using "capital."
ro...@telus.net
>ro...@telus.net wrote in message news:<3c460fbe...@news.telus.net>...
>> On Wed, 16 Jan 2002 20:18:22 GMT, "John Weatherby"
>> <jjwea...@earthlink.net> wrote:
>>
>> >Time and time he has charged that Post-Keynesians are shunned
>> >by the mainstream and not recognized because we ugly main economist are
>> >afraid they will expose some ugly secret.
>>
>> Substitute "Georgists" for "Post-Keynesians" if you want to see a real
>> case of shunning and unofficial censorship. And for a real ugly
>> "secret" that mainstream economists never want mentioned in public,
>> try the fact that virtually every society in the world gives away
>> benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
>> contributing exactly nothing.
>
>Really ? The US has a $ 7 trillion economy. Are you really saying that
>the rent of the unimproved value of land in the US is $ 1.4 trillion ?
Close enough. That's including all natural resources (private
property that has not been produced by the labor of any human being)
as "land." Not that all of that is currently given away to the
owners, as governments _do_ collect a small part of the rent of
natural resources, and it is often difficult to determine just how
much. Property tax rates in the USA vary by an order of magnitude --
from 0.4% to nearly 4% -- from state to state and city to city, with
the weighted mean probably somewhat over 1%. In addition, mining
companies and others pay a variety of fees and royalties for rights on
public lands; broadcasting and cell phone companies pay taxes that
amount to spectrum rents, and so on. Individual and corporate income
and (especially) capital gains taxes also include an imponderable but
certainly significant land rent component.
IMO it is likely that the various levels of government in the USA
collectively recover perhaps 1/5 - 1/4 of all land rent, almost all of
it more or less indirectly through property taxes and taxes on
personal income, corporate profits, and capital gains. This puts the
USA on the high end of the distribution worldwide, as only a handful
of countries -- Hong Kong, Taiwan, Singapore, the dozen or so
countries whose economies are dominated by oil or other natural
resource exports, and perhaps a few others -- recover more of it.
>I have no idea what the true figure is,
Obviously.
>but that one seems awfully high.
Only because you have no idea what the true figure is.
>Of course, if total rent in the US was that figure ( and I am
>still inclined to doubt that ) then that would be on the improved
>value of land.....and buildings etc.
What kind of equivocation is this? Do you or do you not know the
difference between "rent" in the sense of a periodic payment for use
of something owned by another, and the _economic_ rent of natural
resources?
>Which of course is ' something '
>that is being paid for.
Natural resources are also "something" that is being paid for. It's
just that the people being paid for them did not produce either them
or (with very few and mostly insignificant exceptions) any of their
value.
>> "In my opinion the least bad tax is the property tax on the unimproved
>> value of land, the Henry George argument of many, many years ago."
>> --Milton Friedman, Nobel laureate in Economics
>
>Another correspondent to this NG had a look at this phrase and came up
>with someother quote from Freidman where he said ' I do not agree with
>the Georgists ' .....and I know you read it because you replied to it.
Indeed. I don't completely agree with the Georgists, either, and on
much the same grounds as Friedman. I do not now nor have I ever
called or considered myself a Georgist.
>> "For efficiency, for adequate revenue, and for justice, every user of
>> land should be required to make an annual payment to the local
>> government equal to the current rental value of the land he or she
>> prevents others from using."
>> -- Robert Solow, Nobel laureate in Economics
>>
>' current rental value ' and ' rental value of unimproved land ' do
>not sound like the same thing to me.
That is only because you do not know what you are talking about, as
demonstrated above by your confusion of the economic rent of land with
the "rent" one pays for use of, say, an apartment or car.
>> "While the governments of developed nations with market economies
>> collect some of the rent of land, they do not collect nearly as much
>> as they could, and they therefore make unnecessarily great use of
>> taxes that impede their economies -- taxes on such things as incomes,
>> sales, and the value of capital goods."
>> -- William Vickrey, Nobel laureate in Economics and past
>> president of the American Economics Association
>>
>I think we might be getting closer to a realistic view here.
>'Unnecessarily great' makes more intuitive sense than ' tax only the
>rental value '....and I'll explain that in a moment.
Friedman and I agree with what you appear to be saying, here.
>> Is this fact suppressed by a "conspiracy," or merely an unspoken
>> agreement?
>It can't be a conspiracy...it's simply too public for that, as the
>quotes you have given us show. I can imagine that it is unspoken
>agreement.....and the reason that it is not shouted from the rooftops
>comes down to accountancy.
?? An explanation of that would be nice.
>In other posts you have posited that taxing away in full the rental
>value of unimproved land should be the main or only tax raised from
>the citizenry.
No. I have said that recovering _almost_ all (90%-95%) of the
economic rent of natural resources could, should and would provide
government with most of the revenue it needs to fund its legitimate
duties.
>Or maybe I have misunderstood and you think that we
>should have that first, and then raise other taxes that we might need.
Need for revenue is a singularly poor justification for taxing
anything. If natural resource rents cannot fund all the activities
the people want their governments to undertake, recovering some of the
publicly created value of other privately owned assets can.
>A few problems as I see it :
>1) With no benefit going to a supplier of land
A what? Don't you mean a _withholder_ of land?
>by putting land up for
>rent, how can we determine what the rent is?
How do private landowners determine what the rent is?
>No market,
Nonsense.
>no price
>clearing mechanism,
More nonsense.
>so how to set a price level ?
How does "the highest bid" sound?
>If for example, we
>take the current value of rent, and then tax it away. Then the landlord
>raises the rent, as he wants an economic return on his investment.
Landlords cannot raise rents to cover higher taxes on land, no matter
how much they may "want" a "return" on their "investment," because
land's elasticity of supply is zero. The burden of a tax on land
cannot be shifted. This is a fact of economics that has been known
for nearly 200 years. That you are completely ignorant of it does not
surprise me.
In any case, I'm at a loss to understand why you would imagine that
tax policy should be designed simply to give landlords whatever they
_want_.
Oh, right. I forgot. That's how tax policy _is_ designed....
>Next year we say ' Ah, rental values have gone up.
Nope. Land rents are determined by differential productivity given
identical inputs, and thus are totally unaffected by taxation.
>Let's raise the tax
>'. This could go on forever.
Nope. As the land tax rate is raised, land value declines so that the
tax revenue asymptotically approaches the land rent. This is implied
by the net present value equation:
V = R / (t + d)
>Govt fiat is possible, but at that point
>I think you will be getting the sort of porblems the UK had over the
>rating system. It was precisely to correct the imbalances of 20 years
>of economic growth on that price system, that Margaret Thatcher
>brought in the community charge, or Poll Tax.
??? That's like saying Argentina tried to "correct the imbalances" in
its monetary system by increasing its external US$ debt. You don't
correct imbalances by making them bigger.
>Not a process that any
>rational politician wants to repeat.
It was not a process that a rational politician could have initiated
the first time around.
>2)Will it raise enough money ? You've stated often enough that it
>should be on the unimproved value of the land....and not the capital
>value, but the rental value.
You seem to be confused about what capital value and rental value are.
The capital value is just the discounted net present value of the
future expected rental value.
>Unimproved means , if I have your
>argument correctly, the value of the land itself....without utility
>connections, zoning to build on, a house, nor roads to it.
No. Zoning, roads, and utility connections available at the property
line are not improvements to that property, but part of what the
community currently gives away to the landowner. Such infrastructure
increases the land value, not the improvement value.
>are not Land like
>this in the US is cheap . Very cheap.
Some is, some isn't. The some that isn't sometimes _very_ isn't.
>$ 1,000 an acre near the coast
>of California. Rental value of land at $ 1,000 an acre ? Say $ 100 a
>year just for arguments sake? 1/2 acre plot for a house ?
Where land is $1K/acre, few people build on 1/2 acre. But this is the
sort of common-sense fact of objective reality that the opponents of
land value taxation specialize in ignoring.
>So we are
>going to tax away that rental value, all $ 50 a year of it. This is
>rather less than the $ 2 / 3 ,000 a year a house owner is already
>paying in property taxes.
Not on _that_ property, he isn't.
>So how does this actually help anything ?
If you assume 2 + 2 = 5, all sorts of interesting consequences follow.
>The amount raised is minimal.
Are you really an econmic illiterate, or do you just play one on
Usenet?
>3) The USA is about 2.3 billion acres ( 3.5 million sq miles approx.
>).
>Average unimproved value of the land ? What ? $ 1,000 ?
OK, let's see now. The "average" American is what, 25 years old? He
has maybe a few thousand in liquid assets (bank account and cash), a
car a few years old, maybe a bit of furniture, some audio-video gear,
and doesn't own a house, so his total assets are like, $20,000, tops.
So multiply that by 280 million Americans, and you get total privately
owned asset value of $5.6T. Yet our friends in government inform us
that total privately owned assets in the US are $63T. Such a mystery.
To you, that is.
(Hint: When summing the value of a log-normal distribution, do you
just multiply the median by the population?)
>It's a hell of
>a lot less than that in Alaska, or West Virginia. Central California
>coast it's about that.....around Paso Robles, perhaps. Rental value of
>10 % of capital value ? So $ 100 a year per acre ? Or $ 220 billion a
>year ? So we seem to have the perfect Georgist tax raising 10 % or so
>of the total Govt spending in the USA ( adding Fed, State and local
>together I think it's about 30 % of the $ 7 trillion economy ).
>I'd be interested to know. Is this more or less than is already raised
>by property taxes ?
Depends if you use any kind of facts or logic when you calculate
it....
>I agree that it might be less distorting to use
>the Georgist method, rather than the one which is used ( I think
>property taxes are paid on the improved value of land, including
>buildings, rather than unimproved ).
Congratulations! You got something right!
>Of course these numbers change drastically if the average value is
>higher or lower than $ 1,000.
In this context, the term, "average value" would appear to be almost
completely devoid of semantic content.
>And charging tax equivalent to rental
>values is going to change rental values.
It might depress them slightly, as more land is put into productive
use, but that would be only temporary. The resulting increase in
economic growth would soon increase rental values at a higher rate.
>My figures could be way off.
You could say that....
>Perhaps someone else has access to better
>figures than I do.
Like, almost anybody?
(Hint: Total real estate value is about 2/3 land value. How much is
the average American's dwelling worth? About half of all real estate
value is residential. This implies total US land value of how much?)
>But the above calculation seems to be telling me
>that the Georgist solution won't actually ' solve ' the tax problem.
Governments of modern size probably cannot be supported on land rent
alone, true. In George's day, it would have been easy.
OTOH, much if not most current government spending is undertaken in a
futile attempt to undo the economic and social damage caused by taxing
production instead of land. The capitalist countries that recover
more publicly created land value for public purposes -- Hong Kong,
Singapore and Taiwan -- seem to get along fine with smaller
governments. Recover more land value, and government looks like
getting even smaller.
>We'll still have to get 90 % of the money through income tax, FICA,
>Capital gains, all those other economically distorting things.
That is, we would, if your argument above had any foundation whatever
in reality...
>Is it
>really worth the convulsions the change over would cause to only get
>rid of 10 % of the problem ?
It would be more like 70%.
-- Roy L
Ron Peterson
> Total national income at an annual rate, Q3 2001: $8.2 trillion
> Total rental income of persons: $144 billion, or 1.7% of national
> income.
> http://www.bea.doc.gov/bea/dn/nipaweb/
With over 100 million families in the U.S., that amounts to about $1,400
rental per family.
Another table at that Web site indicates $709 billion (1996 dollars)
for housing in 2000.
Ron
John Weatherby
"Robert Vienneau" <rv...@see.sig.com> wrote in message
news:rvien-D895DE....@news.dreamscape.com...
> Whatever. I have seen accounts of NGT mathematical models in the
> secondary literature to which my comment applies. Perhaps Mr.
> Weatherby can read it again, slowly.
>
AER, Journal of Monetary economics, Journal of Evolutionary Economics, or
any journal in which these papers are published. Rather you are basing this
on someone else's comments on the model. Why do you read the papers and at
least be aware if the comments are in context.
Let me give you a mainstream example. Jones 1995 introduces the problem
of scale effects in Romer 1990. The Jones model wishes to move away from
using human capital employed in the research sector as a measure of the
amount of research firms undertake. He uses the number of researchers or
research expenditure instead. However if you had read Romer 1990 you would
get the impression Romer did not even mention human capital. As with Jones'
typical fashion he assumes you know something about the literature he is
discussing, which often made him hard to read as a first or second year grad
student.
The point is reading secondary material is often misleading. If you want
to debate these models read the damn things first. Believe it or not this
section of theory is not so well established that you have to kill it to
make people listen. It is really only 10 years in the making, hence it is
still a hot topic with much left to be explored. As for stating they should
be more like Romer you were the only reference you have made to Romer was
his 1986 paper which is the big paper. Romer was still into AK models at
this point. Romer 1990 Endogenous
technological change JPE is where you should start.
As to your charge, your post have been ignored I make one argument.
Browse the AEA journals of 1960's. I have seen many articles that discuss
these issues and my opinion have refuted them well. I actually still have
some on file. Yes after reading some of post I did check the history and had
found mainstream journals have refuted many of your arguments a long time
ago.
As for reswitching, that is why every macro model with an aggregate
production assumes that capital can not be convert back into consumption
goods. Yes that is right mainstream economics is aware of this and made
assumptions to rule out the case so a tractable model could be made.
Again aggregation issues were a big of MACRO I which was taught by a
Chicago grad. We were made aware of conditions like homeothetic utility
functions are needed to aggregate or consumers must be identical, that a
single consumption keeps the model tractable even if it doesn't seem to fit
the real world, utility functions need time additive seperability. Yes we
are aware if you take a model with N goods the analysis is sticky and
doesn't always work. That is why, prior to Grossman and Helpman and others
who applied Dixit and Stiglitz's model of imperfect competition, models with
homogenous consumption goods were used. After Dixit and Stiglitz Macro
economist saw an opening to introduce multi good models and more importantly
Joseph Schumpter's ideas. Romer 1990 show how aggregate models could be
constructed to where heterogeneous capital goods existed. Furthermore firms
were the decision makers and aggregate production functions were not needed.
You see these ideas are well known. They have been worked around over
the years. Today many of the model techniques and new models make these
issues a very moot point. That is why they are not discussed not because we
are hiding something. The issues you discuss were settled 40 years ago.
Furthermore even the techniques you use, such as linear programming, have
passed up for at least 30 years. The only person I know who uses linear
programming was awarded his Ph.D. in the 1960's. Honestly even if your ideas
were mainstream your techniques and simplistic models would not be
publishable today.
John
Mark Patrick Witte
Robert Vienneau <rv...@see.sig.com> wrote:
>In article <a29m3l$97k$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
>(Mark Patrick Witte) wrote:
>
>> In article <l4me4uc11nng59g2v...@4ax.com>,
>> William F Hummel <wfhu...@mediaone.net> wrote:
>
>>>And so there is still a chance that Vienneau's views will prevail
>>>in academy (the fountain of true economic wisdom) some day? He
>>>just has to put up with the hazing by the brethren until then.
>>>Or did I miss the point?
>
>> According to Mr. Vienneau, his preferred school of though is already
>> the majority in the field, although I have my doubts.
>
>Naturally, the text following doesn't say what Mr. Witte says it says.
>How could a serious economist not know about disagreements and
>different approaches among those who reject orthodoxy?
This statement might have some traction if it actually specified Mr.
Vienneau's claim of how I define economics so narrowly that I disinclude
half the field.
>> RV: I feel Mr. Witte's major concern is with perceptions of whether
>> RV: "economics" - so narrowly defined as to exclude maybe half of all
>> RV: economists - is a legimate science.
>
>> MW: I am unaware (but interested) in any such census of economists.
>> MW: If Mr. Vienneau has any basis for making this statement, I'd sure
>> MW: like to read how economists break down into such groups. However,
>> MW: I am unaware that I've ever tried to exclude economists from the
>> MW: field and certainly have no standing to do so.
>
>It's obvious how to collect empirical data for my claim. One
>looks at membership in AEA, membership in URPE, membership in
>AFEE, membership in other societies, subscriptions to JPKE, JEI,
>whatever Austrians have, and so on. One corrects for double
>counting. Now I know of nobody that has actually done this.
>I do know that some economists have reported their impression
>about what such a survey would reveal. I don't know how
>accurate that impression is, thus, "maybe".
And to think that I had supposed that this was more than someone's
fantasy....
Since AER cirulation is greater than the sum of the
circulations of the journals Mr. Vienneau seems to favor plus membership in
URPE and AFEE, I suppose he will have to go fairly far afield in including
"other societies" (ASPCA?) to support his claim. I'll look forward to his
report though. However, he will have to be careful about supporting his
claim that I've handed out negative judgements against all URPEs and
Austrians.
>But, of course, counting noses isn't about what "prevails". What
>economists at MIT think has more influence than what somebody in
>the business department at SUNY Binghamton thinks.
And there's no chance that this might have something to do with
merit, perhaps? (However, SUNY Binghamton has some very good economists.)
>In short, Mr. Witte does not seem to have answered Mr. Hummel's
>question.
It is unclear which of Mr. Hummel's questions go unanswered.
H: Could it be that they are repeating the same mistakes? (To challenge
ideas.)
No, it is never a mistake to challenge an idea, but some challenges are
better than others.
H: Could it be we are simply seeing "credentialism" at its worst?
No.
H: And so there is still a chance that Vienneau's views will prevail
in academy (the fountain of true economic wisdom) some day?
Yes, but it's highly unlikely in its current form, and current level of
empirical applicability.
H: He just has to put up with the hazing by the brethren until then.
Yes, and even after that. Such is the competition of ideas.
H: Or did I miss the point?
I hope not, but everyone does from time to time.
H: Can anyone of his tormentors on sci.econ honestly claim that he has
seriously considered what Vienneau has written?
Since Mr. Vienneau claims that none of what he writes is particularly new in
the field but rather is the established wisdom in some areas of economics,
then it would have been accorded the usual serious consideration academic
journals and referees produce, and since some of it actually appeared in
these journals, although not recently, it cannot be said that these ideas
have been purely ignored.
H: Or has it been picky stuff, basically a pro forma defense of the
orthodoxy against an unlettered challenger?
No.
>Mr. Witte's policy of continual harassment of anybody
>with whom he disagrees seems to have long driven many away.
Some people make bold claims they are unable to support. I suppose
some miss such fellow travelers. I miss economists Voit and Landsberg who
lost interest in this group following rude treatment.
>> I've read a number of the authors and articles cited by Mr.
> ^ (badly)
>> Vienneau, as have others on this group, and posted serious critiques of
>> them, which were then usually brushed off by Mr. Vienneau, particularly
>> in
>> areas relating to empirical work, that is relating theoretical models to
>> the
>> experience of the real world...
>> Mr. Vienneau certainly cites work by authors who
>> are both well lettered and well published. However, this work has failed
>> to
>> generate much following in the field because it generates few real world
>> implications that can be tested with data.
>
>Given the range of work I have cited and the imprecision of Mr.
>Witte's comments, I find it difficult to comment. But I'll
>assume he's talking about the CCC. It seems
>that he still cannot perceive how others see the CCC literature,
>including me. Mr. Witte has yet to outline a logically consistent
>set of assumptions for multicommodity models that will yield
>(old) neoclassical conclusions. (Hahn, Samuelson, etc. have
>abandoned the theories Mr. Witte seems inclined to defend.) Nor
>does Mr. Witte ever explain how empirical results can be
>relevant to a point of logic.
Mr. Vienneau is invited to say how his preferred set of assumptions
would generate different results than are standard in the field today. He
can then follow up with empirical support for how his preferred set of
assumptions generates a better fit of real world data than is given by any
of many widely cited papers. Since the interest here is how the most
influential economists and journals proceed, a recent (non-empirical paper)
that might be of interest in this context is from the Journal of Economic
Dynamics and Control (Volume 26, Issue 5) by Petr Dcuzynski entitled
"Adjustment costs in a two-capital growth model", pp. 837-850. If this
paper is too difficult to obtain, he might prefer Barro, Mankiw, and
Sala-i-Martin's "Capital Mobility in Neoclassical Models of Growth" AER
1995, or Cabelle and Santos, "On Endogenous Growth with Physical and Human
Capital, JPE 1993. I am not saying that Mr. Vienneau's models are wrong,
but that they do not seem to produce the interesting descriptive power about
our real world that these other models do. If he can show that these other
models are wrong or fail to match moments of the data that his models do,
then he should make his case and take it up with the editors of the above
journals who would be eager to publish papers that have so much to offer.
My comments on Mr. Vienneau's depth in areas of econometrics relates
to a list of articles he claimed supported the importance of capital
reversing and also a recent post where he advanced a recent paper that
oddly involved a very tired critique of old papers by Solow, a paper that
was written as though Lars Peter Hanson had never been born. It is fine not
to be an econometrician, but it's poor form to claim support that is not
there.
>As far as how empirical results are relevant, I have long insisted
>certain empirical questions were more interesting than the
>empirical evidence for or against reswitching or capital
>reversing.
What is more interesting than actual evidence? (Perhaps the above
is an admission that there is vanishingly little evidence that these issues
matter at all, which was my conclusion after reading the list of papers Mr.
Vienneau gave in support of the importance of this issue.)
>Furthermore, when some have pointed out empirical evidence, Mr.
>Witte has dismissed it based on his lack of understanding. On
>another point, his standard response to the statement that
>uncertainty is outside the scope of neoclassical theory is to
>claim models with risk perform well empirically.
This is a very old question in economics, and one that has
benefitted greatly from Bayesian statistics. It is certainly not a dead
issue and has been an area of work in recent decades by Tversky and Hanson,
among others. However, this again goes to issues of methodology. Do models
that implement Mr. Vienneau's preferred assumptions perform better in
matching the data of the real world? If not, then they are not better and
it is left to the reader to wonder why Mr. Vienneau prefers them.
>Likewise, others have pointed out to Mr. Witte the logical
>structure of arguments he hasn't seen fit to understand.
What another person is judged fit for seems outside the parameters
of this group, but that's just my opinion.
>I may be guilty of "brushing off" non-sequiturs. And, as
Graceless apology gracelessly accepted. Let's put this behind us.
>usual, I am puzzled by Mr. Witte's lack of awareness of disputes
>on why the CCC isn't more well-known. And his lack of awareness
>of evidence (AEA petition, AEA committees, an originally french
>protest movement, disputes over academic appointments) relevant
>to the question of the openness of the institutional structure
>of economics to certain sorts of innovation.
While anything that generates a French protest movement must be
accorded the highest respect, I would suggest that such conspiracy theories
are supported more by romantic notions than reality. Certainly journal
resources are finite and so not every article submitted can be published.
More and more, theory pieces must be supported by some level of empirical
applicability. Certainly, a model that outperforms others on some aspects
of the data must be given some respect. If Mr. Vienneau would care to
specify how his preferred assumption set produced models that do a better
job of explaining the data generated by our world than do other models, I am
sure that everyone, and certainly the editors of the competing journals in
the field, would be of interest.
>> As Chris Auld and Susupply have
>> noted in questions they have posed to Mr. Vienneau, his approach has
>> little
>> do with the questions most people and most economists care about.
>
>The fact that Mr. Witte should pretend Mr. Sullivan has ever
>raised serious questions for me would be quite curious,
>if one hadn't long ago noticed what behavior he finds
>acceptable.
Questions about the application of public finance in a Sraffarian
setting and questions, also raised by Landsberg before his interest in this
group was diminished by rudeness, about the nature of "exploitation" go
unanswered. On the public finance issue, what are the welfare implications
of various forms of taxation? This seems like a rather important matter to
me and many others.
>Those seriously interested in the empirical and policy implications
>of Sraffa should consult Bharadwaj and Schefold (1990). But, of
>course, tax incidence is not a strong point for those questioning
>the empirical and policy relevance of Sraffa. Those with
>familiarity with the literature would think it's more an area
>that should be thought of as a caveat.
I'll be sure to track this down. I presume it's the book they
edited. I hope that this ends better than previous suggestions from this
poster about the existence of empirical support. If any specific chapters
are thought to provide particularly strong empirical support of Sraffa's
approach, I'd be particularly grateful to be given a heads up about them.
> "The critique ... opens the way to an interpretation of the
> wage rate as 'the independent variable' (Napoleoni, 1963...),
> implying a degree of freedom for trade unions' wage
> bargaining policy. In Italy 'the wage as the independent
> variable' became a widely accepted slogan, often used in
> newspaper articles and in political speeches, as implying
> theoretical support for trade unions' increased combativeness."
> -- Alessandro Roncaglia (1990), in op. cite.
This seems an unpromising non-sequitur concerning data that supports
a Sraffarian approach.
>When I asked Mr. Witte how he thought Leontief and Sraffa's
>work related, he refused to answer (exluding a vague metaphor).
>Just like he refused to give Mr. Hummel a serious answer above.
Oh dear, was it Pauli who described something as, "not even wrong?"
This is seemingly the level of Mr. Vienneau's level of understanding of
empirical methodology. Perhaps Mr. Vienneau would care to cite exactly what
paper by Leontief provides some sort of hypothesis test that gives some
support for the work of Sraffa. He should be warned that statistical
testing is a different matter than using a modelling approach for
identically true data organization. (Or, if space is limited, how much did
Leontief say the standard commodity should cost and how did that compare
with what it could be bought for retail? I'm sorry, that joke was just too
good to pass up. Ouch, my sides are aching.)
>Maybe he can tell us instead in what works on endogeneous
>money Mr. Hummel might have seen the CCC discussed, if any?
Excellent question! Perhaps a list can be generated, with a star
placed next to each one that contains supporting empirical evidence that
compares that model's ability to explain the real world's data relative to
the explanatory ability of competing models. Sorry to keep coming back to
this point, but this is how science works.
susupply
"Robert Vienneau" <rv...@see.sig.com>
reminding us that there are no atheists in foxholes,
wrote in message news:rvien-B71D61....@news.dreamscape.com...
> ...The only strategy I think will work in the long run is
> to adopt the rules of propriety that legislatures typically adopt.
All those guys rushing to give back their Enron contributions.
>
> Think about it: speech on the floor of the U.S. Congress is--in many
> ways--the freeest anywhere. Legislators are not to be called to
> account 'in any other place' for what they say on the floor. But
> within their chamber they are held to strict rules of politeness and
> propriety--so much so that Tip O'Neill once landed in a big mess for
> saying a very weak version of what he thought of Newt Gingrich. All
> statements are notionally addressed not to other members but to the
> Chair. Forms of reference to other members are tightly controlled.
>
> All of these rhetorical rules exist for good reasons. Unless forums
> like this adopt analogous rules, I fear that they are doomed."
> -- Brad DeLong, 18 May 2001
Those dastardly, dissent-crushing, neo-classical economists!
But hey, no matter how sweetly you address Prof. DeLong he won't respond:
<<-------------------------------
Dearest Brad,
I wonder why you think Paul has the stronger case. He has ignored (re
QWERTY: wow! Is that ever easy to type!) the massive, crushing evidence
that not one typing-intensive company has adopted alternative typing
systems, though the shift has been trivially easy for the computer equipment
now for ten or twenty years, and, surely, if the savings were large the
small cost of retraining the typists wouldn't be much of an obstacle. Does
anyone here play a clarinet? Thinking of shifting to a sax? (Btw, please
don't!) Does the different fingering give you pause? Not much.
You say that the market economy does not generate information about the
relative efficiency of different paths. Huh? What do you think engineers
and businesspeople spend their days doing? That "we" [academic economists]
don't 'have access" to the information they accumulate is hardly surprising,
though I am puzzled that you as an economic historian would talk this way:
for old decisions we can have as much access to the information as our
curious hearts desire, yes?
Anyway, I worry about the word "information." "Knowledge" would be better,
because it's information plus judgment (persuasion), and more relevant in
this (Austrian) veil of tears in which few things about the future are
indubitable.
Love,
Deirdre
---------------------------------->>
Not so much as a peep from him in reply. Maybe moderated seminars are
DOOMED.
> > Please list the three most important real world/public policy
> > implications of Vienneauism.
>
> The question is bizarre. Anybody paying attention knows I draw
> on recognized schools of thought. I don't know what Vienneauism
> is.
I've suspected that for several years.
> It also seems to reveal a misunderstanding on how policy should
> be drawn up.
You prefer drawing laws at random out of a hat?
[snip Saint Joan's quote]
> I have no problem with arguments whose major point is that
> certain other arguments are sheer bosh.
You sure used to.
> > For extra credit on this Pop Quiz:
>
> > 1. What tax should the Gov. of NY propose to fund the Sraffa Memorial?
>
> I was amused that Mr. Auld should raise a question of tax incidence
> for a demonstration of the lack of practical implications of
> Sraffianism. That reveals that he had very little idea of what he
> had been arguing about for years. (What is the distinction between
> basic and non-basic goods? The King of Sweden conferred on Sraffa
> the Soderstrom gold medal of the Royal Academy of Sciences in
> March 1961. This award was for a massive work of scholarship. What
> was the topic of the middle third of the first volume?)
Amusement parks? "Here you are Johnny, a ticket for the Reswitching Ride of
Death at Pierro Parkland.".
I like it, capitalist memorials.
> > 2. Did Friday exploit Crusoe when he crashed Crusoe's boat on the rocks
> > and lost his fishing pole?
>
> That's more about Mr. Sullivan's obsessions.
How does one say it...I think Mr. Vienneau displays exceptional self
awareness here?
> I don't remember the
> story, but I assume it revealed a lack of understanding of a certain
> formal model, as well as Mr. Sullivan's own quote several months
> back from Coase. (Coase asserted that capitalism assured the
> commodities that should get produced do get produced.) I think the
> answer was no.
When we all know that it's socialism that assures that the commodities that
should get produced do get produced?
But does your "no" mean that exploitation is no longer about payment for
marginal productivity?
> > 3. How many streetcars would there be today peacefully transporting
> > Americans if General Motors had never existed?
>
> The question is silly and reflects Mr. Sullivan's obsessions. Newt
> Gingrich's contributions to a certain subgenre of SF may be amusing -
> I cannot tell because I have not read them - but historians would
> rarely think such a counterfactual worth investigating.
Then why did you cite that Webfoot's article in the CJE? Surely you could
extrapolate the number from that scrupulous piece of scholarship.
Patrick
Steve Conover
> [snip]
>Maybe moderated seminars are DOOMED.
>
Hardly, I'm afraid. They will still attract anyone interested in
hearing predictable, talking-point answers to the softball
questions selected by the moderator. Hardball questions are
ignored. That's the moderator's job.
The RNC invited me to participate in a moderated, online
discussion two months ago. I did. The only two questions I
asked were ignored in real time, and ignored in their subsequent
email and snailmail follow-ups.
No surprise. That's politics. Politics trumps economics.
BTW, the DNC has never (and will never) invite me to participate
in any similar event they decide to sponsor. Reason: I am not a
contributor to the DNC.
And I am no longer a contributor to online moderated seminars.
It's a waste of my time; I already know the talking points, and I
already know that hardball questions will be ignored. It's not a
left-v-right thing; it's not a Repub-v-Dem thing. It's a
politics thing.
That's fine with me; lots of people love softball. They'll
continue to sell plenty of tickets without my participation.
--Steve
Robert Vienneau
"John Weatherby" <jjwea...@earthlink.net> wrote:
> "Robert Vienneau" <rv...@see.sig.com> wrote in message
> news:rvien-D895DE....@news.dreamscape.com...
> > Whatever. I have seen accounts of NGT mathematical models in the
> > secondary literature to which my comment applies. Perhaps Mr.
> > Weatherby can read it again, slowly.
> ...As for stating they should
> be more like Romer you were the only reference you have made to Romer was
> his 1986 paper which is the big paper. Romer was still into AK models at
> this point. Romer 1990 Endogenous
> technological change JPE is where you should start.
So is Mr. Weatherby agreeing or disagreeing with my claim that Roemer
tends to use less aggregated models than Lucas? (For others following
along, AK models are aggregated, if I recall correctly.)
> As to your charge, your post have been ignored I make one argument.
I'm not sure where I made that charge, if anywhere.
> Browse the AEA journals of 1960's. I have seen many articles that discuss
> these issues and my opinion have refuted them well. I actually still have
> some on file. Yes after reading some of post I did check the history and
> had
> found mainstream journals have refuted many of your arguments a long time
> ago.
I, of course, formed my opinion partly from reading the RES, QJE, etc.
from the 1960s and 1970s. I think Mr. Weatherby is simply wrong in
his opinion that my points have been refuted. He should note my
tendency to cite Hahn and recent comments from Burmeister and
Samuelson in my support. (I could also mention F. Fisher.) Apparently
the Cambridge, U.S., side disagrees with his opinion, too.
The consensus of this literature is that:
o Economic theory imposes no restrictions on the direction of
real Wicksell effects.
o Certain models make sense only if real Wicksell effects are
"non-perverse".
It is true I have not followed all the variations of models that
make no sense over the last 30 years. I depend on reports of
such a jackass as Burmeister:
"In the United States, on the other hand, mainstream economics
goes on as if the controversy had never occurred...The problems
of heterogeneous capital goods have also been ignored in the
'rational expectations revolution' and in virtually all
econometric work."
-- Edwin Burmeister, 2000.
Clearly, Burmeister is a Marxist.
By the way these problems extend to firm-level models with
production functions of the form fj( K, L ).
> As for reswitching, that is why every macro model with an aggregate
> production assumes that capital can not be convert back into consumption
> goods. Yes that is right mainstream economics is aware of this and made
> assumptions to rule out the case so a tractable model could be made.
The issue addressed by putty-clay models isn't the same as reswitching.
> Again aggregation issues were a big of MACRO I which was taught by a
> Chicago grad.
Joan Robinson said that the issue was the meaning of capital, not
its measurement. I have told Mr. Weatherby that problems dealing
with aggregation are in another chapter of, say, Ahmad's capital
theory textbook. He doesn't seem to understand my point. Nor
does he offer much on the relationship between capital
as finance and capital as capital goods (other than the bit about
putty-clay).
> We were made aware of conditions like homeothetic utility
> functions are needed to aggregate or consumers must be identical...
Mr. Weatherby seems to think that that is a defense of mainstream
economics, rather than a cause to dismiss a number of models
as not having the U.S. economy within their scope.
> Furthermore even the techniques you use, such as linear programming, have
> passed up for at least 30 years. The only person I know who uses linear
> programming was awarded his Ph.D. in the 1960's. Honestly even if your
> ideas
> were mainstream your techniques and simplistic models would not be
> publishable today.
The above statement, if true, should be an embarassment to the
mainstream. If a paper can make its point with simple techniques and
that point is worthwhile, it should be publishable. The point of
a paper should be its point, not to show off the author's ability
to handle complicated techniques. (It's certainly OK for a paper's
point to be to introduce new techniques or improve existing ones.
And it is certainly OK for a paper to have more than one point.)
Old and valid techniques, such as linear programming, should have
entered the toolkit, not have been discarded.
"And here we finally come to the non sequitur of the conclusion:
the 'Neo-Ricardians' could safely be ignored.
Mainstream economists could not have asked for better. The
effect has been to give re-switching the air of an obsession
vexing others, and to induce dominant economic theorists not to
talk of it any more. The debate soon flagged; in the major
economics journal it has been forgotten.
But something even more interesting and intriguing has
happened. After only a few years, even the admissions initially
made no longer found any mention. Aggregate production functions
have made their untroubled re-appearance in the macroeconomic
textbooks, without the slightest hint as to their earlier
(recognised) logical inconsistencies. It has taken only a few
years for them to reappear in papers published in the major
journals of dominant economic theory, which at the same time
have begun systematically to reject all articles dealing with
re-switching as unpublishable. The same authors, who had for two
decades been asserting the need to scrap the aggregate
neoclassical production functions are now using them quite
normally. The typical economics student entering university from
the 1980s onwards has heard nothing of the re-switching
difficulties involved in the neoclassical theory of capital
and income distribution.
It is as if the debate on the choice of techniques had never
taken place. Amnesia on such a vast scale can only be explained
by more appropriate terms, such as 'suppression' or 'repression'
or 'removal'."
-- Luigi L. Pasinetti, "Critique of the neoclassical theory
of growth and distribution", 200?. Available on the Web
somewhere like two clicks from my home page.
Pasinetti seems to think new growth theory would be a more promising
development if its progenitors were informed enough to know they
were rediscovering certain non-neoclassical ideas. One of those
ideas is an assymmetry in the treatment of labor, land, and capital.
Grinch
pugnaciously obfuscatious as ever, wrote...
>On Thu, 17 Jan 2002 09:18:56 -0500, Grinch <oldn...@mindspring.com>
>wrote:
>
>>On 17 Jan 2002 03:04:38 -0800, t...@2xtreme.net (Tim Worstall) wrote:
>>
>>>Are you really saying that
>>>the rent of the unimproved value of land in the US is $ 1.4 trillion ?
>>>I have no idea what the true figure is, but that one seems awfully
>>>high. Of course, if total rent in the US was that figure ( and I am
>>>still inclined to doubt that ) then that would be on the improved
>>>value of land.....and buildings etc. Which of course is ' something '
>>>that is being paid for.
>>
>>Total national income at an annual rate, Q3 2001: $8.2 trillion
>>
>>Total rental income of persons: $144 billion, or 1.7% of national
>>income.
>>http://www.bea.doc.gov/bea/dn/nipaweb/
>>
>>As you note, this is total rental income, not rental income to owners
>>of unimproved land.
>
>Neither of which has even the most tenuous resemblance to total land
>rent....
You've never been good at taking a hint, Roy.
If actual rent doesn't come within 1/1000th of the amount you need to
finance your scheme, do you really think the "total" implicit rent
does?
How about some real numbers? For once in your life. Even when I poke
you with a stick you won't produce them.
So even though this is your tax proposal, so the burden of proving its
plausibility is on you, I guess I'll have to go first...
>>The US federal budget alone is about $2 trillion. So it would seem
>>that even at confiscatory rates, a tax on landowners' rental income
>
>"Rental income" is not land rent. Of course, being informed and then
>repeatedly reminded of this fact of objective reality will not prevent
>you from continuing to pretend that it is. It's all part of the
>campaign of disinformation. You know it. I know it. But I'm hoping
>you might get tired of me publicly identifying it as such.
OK, yes, let us end the disinformation.
In your other post you say ...
>>There's a pretty easy way to get a ballpark estimate. About half of
>>all real estate value is residential. About 2/3 of all real estate
>>value is land value, 1/3 improvement value. If we say the average
>>American household's dwelling is worth $50K/person (close enough),
>>that implies total US unimproved land value is about $18T.
Easy for you, maybe. ;-)
I can't keep up with so many unsupported assertions in one paragraph.
And I will leave it for the econometricians to figure out how $33,000
(2/3rds of $50k) times 100 million households "implies" $18 trillion.
I'll simply give the national balance sheet data produced by the
Federal Reserve, release Z-1...
Total assets of all US households, Q3 2001 ...
Real estate $11.98 trillion
minus value of structures 8.22 trillion
Which gives land value of $3.76 trillion
(You are such a master of the hard realities of this subject, I'm
surprised you didn't have these numbers at your fingertips.)
OK. Now we all know that land value equals all future rents expected
to be earned from the land discounted to current value at the going
interest rate.
If we take a rate of say, 8%, for this purpose, then our $3.76t land
value gives rent of about $300 billion.
And with federal and state governments together spending some $3
trillion annually, this $300 billion leaves you about 90% short of a
full deck in this game you are playing.
Unless you can come up with some other more persuasive actual numbers
for land value that are stated rather than "implied", from a source
somewhat more credible than one that begins "Let's imagine..."
ro...@telus.net
wrote:
>On Fri, 18 Jan 2002 23:46:16 GMT, ro...@telus.net, being as
>pugnaciously obfuscatious as ever, wrote...
>
>>On Thu, 17 Jan 2002 09:18:56 -0500, Grinch <oldn...@mindspring.com>
>>wrote:
>>
>>>On 17 Jan 2002 03:04:38 -0800, t...@2xtreme.net (Tim Worstall) wrote:
>>>
>>>>Are you really saying that
>>>>the rent of the unimproved value of land in the US is $ 1.4 trillion ?
>>>>I have no idea what the true figure is, but that one seems awfully
>>>>high. Of course, if total rent in the US was that figure ( and I am
>>>>still inclined to doubt that ) then that would be on the improved
>>>>value of land.....and buildings etc. Which of course is ' something '
>>>>that is being paid for.
>>>
>>>Total national income at an annual rate, Q3 2001: $8.2 trillion
>>>
>>>Total rental income of persons: $144 billion, or 1.7% of national
>>>income.
>>>http://www.bea.doc.gov/bea/dn/nipaweb/
>>>
>>>As you note, this is total rental income, not rental income to owners
>>>of unimproved land.
>>
>>Neither of which has even the most tenuous resemblance to total land
>>rent....
>
>If actual rent doesn't come within 1/1000th of the amount you need to
>finance your scheme, do you really think the "total" implicit rent
>does?
??? $144B/yr is not within 1/1000th of the amount needed?
>How about some real numbers? For once in your life.
<yawn> I have posted real numbers plenty of times. But unlike you, I
don't imagine that an official source or an extra decimal place of
precision makes up for dishonest definitions or tendentious
methodology.
>Even when I poke
>you with a stick you won't produce them.
Where do you suggest I get them? The same place you get your bogus
numbers?
>>>The US federal budget alone is about $2 trillion. So it would seem
>>>that even at confiscatory rates, a tax on landowners' rental income
>>
>>"Rental income" is not land rent. Of course, being informed and then
>>repeatedly reminded of this fact of objective reality will not prevent
>>you from continuing to pretend that it is. It's all part of the
>>campaign of disinformation. You know it. I know it. But I'm hoping
>>you might get tired of me publicly identifying it as such.
>
>OK, yes, let us end the disinformation.
So you proceed to continue and amplify it....
>In your other post you say ...
>
>>>There's a pretty easy way to get a ballpark estimate. About half of
>>>all real estate value is residential. About 2/3 of all real estate
>>>value is land value, 1/3 improvement value. If we say the average
>>>American household's dwelling is worth $50K/person (close enough),
>>>that implies total US unimproved land value is about $18T.
>
>Easy for you, maybe. ;-)
Yes. It was. Because I understand the issue.
>I can't keep up with so many unsupported assertions in one paragraph.
You mean you don't know how to think. I know you don't.
>And I will leave it for the econometricians to figure out how $33,000
>(2/3rds of $50k) times 100 million households "implies" $18 trillion.
<sigh> More proof that you don't know how to think.
>I'll simply give the national balance sheet data produced by the
>Federal Reserve, release Z-1...
>
>Total assets of all US households, Q3 2001 ...
>
> Real estate $11.98 trillion
Valued how?
>minus value of structures 8.22 trillion
Valued how?
>Which gives land value of $3.76 trillion
So the structures are worth more than twice as much as the land? That
would be normal for _new_construction_, but certainly not for all
properties. Obviously, the Fed is valuing all that real estate at its
_acquisition_cost_, not its current value, same as the way
corporations carry real estate on their books. And of course, ever
since the day of acquisition, the structures have been depreciating,
while the land appreciates....
>(You are such a master of the hard realities of this subject, I'm
>surprised you didn't have these numbers at your fingertips.)
I have lots of numbers at my fingertips. Unfortunately, they are
mostly as bogus as the ones you quoted above, which is why I don't
bother posting them.
>OK. Now we all know that land value equals all future rents expected
>to be earned from the land discounted to current value at the going
>interest rate.
>
>If we take a rate of say, 8%, for this purpose, then our $3.76t land
>value gives rent of about $300 billion.
Remember, that's only the real estate owned by households. Corporate
properties have to be included, too.
>And with federal and state governments together spending some $3
>trillion annually, this $300 billion leaves you about 90% short of a
>full deck in this game you are playing.
I have never said that governments of modern size can be financed by
land rents alone.
>Unless you can come up with some other more persuasive actual numbers
>for land value that are stated rather than "implied", from a source
>somewhat more credible than one that begins "Let's imagine..."
Fine. Refuse to use your head instead of your mouse. It's a habit by
now.
-- Roy L
Grinch
for specific numbers to back up his claims, instead has a 139-line
tantrum while not giving a single one. Ah, well, when reality
intrudes on one's utopia it can be disconcerting....
>On Sat, 19 Jan 2002 16:53:38 -0500, Grinch <oldn...@mindspring.com>
>wrote:
>
>>On Fri, 18 Jan 2002 23:46:16 GMT, ro...@telus.net, being as
>>pugnaciously obfuscatious as ever, wrote...
>>......
>
>>How about some real numbers? For once in your life.
>
><yawn> I have posted real numbers plenty of times.
I confess, I must not have been reading then.
Would it be so inconvenient to post them again?
>But unlike you, I
>don't imagine that an official source or an extra decimal place of
>precision makes up for dishonest definitions or tendentious
>methodology.
Yeah, what's being off by a mere order of magnitude on our revenue
projections among friends?. ;-)
So your tax produces only 10% of what you need -- what does one lousy
decimal place like that matter?
>>Even when I poke
>>you with a stick you won't produce them.
>
>Where do you suggest I get them? The same place you get your bogus
>numbers?
Anywhere you want. Poke Poke.
Just use real numbers of actual real estate market values that can be
tallied up by independent parties today. From any reputable source
you want.
Not fantasy values that would come true after the wondrous tax reform.
>>>>The US federal budget alone is about $2 trillion. So it would seem
>>>>that even at confiscatory rates, a tax on landowners' rental income
>>>
>>>"Rental income" is not land rent. Of course, being informed and then
>>>repeatedly reminded of this fact of objective reality will not prevent
>>>you from continuing to pretend that it is. It's all part of the
>>>campaign of disinformation. You know it. I know it. But I'm hoping
>>>you might get tired of me publicly identifying it as such.
>>
>>OK, yes, let us end the disinformation.
>
>So you proceed to continue and amplify it....
Yes, with a request for specific numbers and sources I still pursue
may campaign of disinformation! ;-)
>
>>In your other post you say ...
>>
>>>>There's a pretty easy way to get a ballpark estimate. About half of
>>>>all real estate value is residential. About 2/3 of all real estate
>>>>value is land value, 1/3 improvement value. If we say the average
>>>>American household's dwelling is worth $50K/person (close enough),
>>>>that implies total US unimproved land value is about $18T.
>>
>>Easy for you, maybe. ;-)
>
>Yes. It was. Because I understand the issue.
And you won't share you understanding. That's so ungenerous. :-(
>>I can't keep up with so many unsupported assertions in one paragraph.
>
>You mean you don't know how to think. I know you don't.
Now, insults aren't data from a reputable source.
I can still think clearly enough to know that.
>>And I will leave it for the econometricians to figure out how $33,000
>>(2/3rds of $50k) times 100 million households "implies" $18 trillion.
>
><sigh> More proof that you don't know how to think.
So teach me!
$33,000 x 100 million "implies" $18 trillion ...?
Don't hog all your superior knowledge for yourself!
>
>>I'll simply give the national balance sheet data produced by the
>>Federal Reserve, release Z-1...
>>
>>Total assets of all US households, Q3 2001 ...
>>
>> Real estate $11.98 trillion
>
>Valued how?
>
>>minus value of structures 8.22 trillion
>
>Valued how?
>
>>Which gives land value of $3.76 trillion
>
>So the structures are worth more than twice as much as the land? That
>would be normal for _new_construction_, but certainly not for all
>properties. Obviously, the Fed is valuing all that real estate at its
>_acquisition_cost_, not its current value,
Well, *obviously* you haven't even looked at the Fed's data our you'd
know how it values the structures, since it says so, yet you don't.
Your purported mastery of the facts seems to be slipping. How can you
claim to refute data when you don't even know what it is?
>same as the way
>corporations carry real estate on their books. And of course, ever
>since the day of acquisition, the structures have been depreciating,
>while the land appreciates....
Really? Well, I'm posting this from a building that is 100 years old
that is worth considerably more today than its average value
throughout its history. And the same can be said for near every
building in this whole neighborhood. My parents live in a home that
only 45 years old, and in real terms worth only three or four times
what they paid for it.
See? It's a question of real-world data, rather than over simplistic
pet theories.
So you won't be offended if I ask you for a source for your claim that
the average land/improvement ratio for value is 2-1 as you claim.
I've been working with real estate professionally for a long time, and
land value of 20%-25% is a heck of a lot more consistent with my
experience and what I've seen published, not to mention the Fed's
numbers.
Source and data please?
>
>>(You are such a master of the hard realities of this subject, I'm
>>surprised you didn't have these numbers at your fingertips.)
>
>I have lots of numbers at my fingertips. Unfortunately, they are
>mostly as bogus as the ones you quoted above, which is why I don't
>bother posting them.
You have lots of bogus numbers at your fingertips?
But no real ones?
You make a darn audacious argument for someone with no data!
(But when we've seen "the truth" who needs reality, eh?)
>>OK. Now we all know that land value equals all future rents expected
>>to be earned from the land discounted to current value at the going
>>interest rate.
>>
>>If we take a rate of say, 8%, for this purpose, then our $3.76t land
>>value gives rent of about $300 billion.
>
>Remember, that's only the real estate owned by households. Corporate
>properties have to be included, too.
Fine! It's there in release Z-1 too. But since you only mentioned
households I kept to that.
>>And with federal and state governments together spending some $3
>>trillion annually, this $300 billion leaves you about 90% short of a
>>full deck in this game you are playing.
>
>I have never said that governments of modern size can be financed by
>land rents alone
So you have more in common with David Friedman than you thought!
Well, that's the end of the famous "single tax" anyway.
How much do you figure to raise -- ballpark, but closer than an order
of magnitude?
>>Unless you can come up with some other more persuasive actual numbers
>>for land value that are stated rather than "implied", from a source
>>somewhat more credible than one that begins "Let's imagine..."
>
>Fine. Refuse to use your head instead of your mouse. It's a habit by
>now.
Just insults and we end there? No numbers?
Oh, that's right, you admit all your own numbers are bogus.
Well *there's* surely a solid foundation for tax reform!
>
>-- Roy L
Robert Vienneau
> >the question of the openness of the institutional structure
> >of economics to certain sorts of innovation.
is a question of the truth of
> such conspiracy theories.
> >> William F Hummel <wfhu...@mediaone.net> wrote:
> >>>And so there is still a chance that Vienneau's views will prevail
> >>>in academy (the fountain of true economic wisdom) some day?
> No, it is never a mistake to challenge an idea, but some challenges are
> better than others.
> >>>He
> >>>just has to put up with the hazing by the brethren until then.
> >>>Or did I miss the point?
> Yes, and even after that. Such is the competition of ideas.
If the above display of more-than-ignorance is not enough, Mr. Witte
says his amazingly absurd statement that hazing is appropriate merely
repeats something that is in the following text:
> According to Mr. Vienneau, his preferred school of thought is already
> the majority in the field, although I have my doubts.
>
> RV: I feel Mr. Witte's major concern is with perceptions of whether
> RV: "economics" - so narrowly defined as to exclude maybe half of all
> RV: economists - is a legimate science.
>
> MW: I am unaware (but interested) in any such census of economists.
> MW: If Mr. Vienneau has any basis for making this statement, I'd sure
> MW: like to read how economists break down into such groups. However,
> MW: I am unaware that I've ever tried to exclude economists from the
> MW: field and certainly have no standing to do so.
I think Mr. Clark needs a new category for his files. I find it difficult
to say in civil discussion what label might be appropriate.
And just as a reminder:
Mr. Witte has yet to outline a logically consistent set of assumptions
for multicommodity models that will yield (old) neoclassical conclusions.
Nor does Mr. Witte ever explain how empirical results can be relevant to
a point of logic.
Mr. Witte will not tell us how he thinks Leontief and Sraffa's work
relate.
And he apparently cannot tell us instead in what works on endogeneous
money Mr. Hummel might have seen the CCC discussed, if any.
Of course, given that Mr. WItte thinks his reader should know "I
watched a football game on TV yesterday" means "it is snowing now",
I may just have missed what he considers an answer to these questions.
John J. Weatherby
> tends to use less aggregated models than Lucas? (For others following
> along, AK models are aggregated, if I recall correctly.)
>
What I have been trying to pound through your thick head is all the newest
models are disaggregated to a large extent. I will say it one more time, the
new R&D models do not use aggregate production functions. In fact many R&D
models do not even have capital in them.
I am not saying that I believe Robinson's critique. In my mind Solow and
Samuelson both answered that sufficently in 1960's. As to Samuelson agreeing
with you, I recall that only happened when you completely changed his model
to a case that would never exist. I do believe that many older articles
have also answered your critique and that is when economics has moved on.
I think more importantly Romer\Young\Sergerstorm and Dinopolous and
Thompson/Perretto models are superior to aggregate production functions. I
think Romer and Grossman and Helpman made an important contribution in that
growth models should consider innovation and imperfect competition. These
new models have great potential for building macro models with strong micro
foundations. This is something that simply didn't exist in Solow's model.
Although Lucas and Ramsey-Cass-Koopman models added some macro foundations
they still didn't have the GE framework the new models have.
It is this new trend to look at growth from the level of a firm and
build up that I find attractive. Furthermore the disaggregation completely
makes these points of the CCC completely moot. It is my opinion these
arguments which could never be fully settled with move to the dustbin of
history as new techniques begin to dominate. I simply think your arguments
rarely apply becuase there are 10 years of literature you and the people you
quote are completely unaware of. If you are up to Romer 1986 now perhaps
there is some hope you will read more. I doubt it though becuase the new
literature bypasses Post Keynesian bitching so it will probably be treated
as if it never existed.
> And it is certainly OK for a paper to have more than one point.)
> Old and valid techniques, such as linear programming, should have
> entered the toolkit, not have been discarded.
>
Perhaps but it isn't the way journals work. They tend to become more
complex over time. You may want to look at Freidman's piece old in new
bottles. The funny thing is that many topics that were disscussed in say
1900 are still discussed in 2000 but the techniques have changed
drastically. An economist of the 1930's probably couldn't follow the journal
articles of today. I am not sure if journals should always move to more
complex models and techniques, I know of one professor who even grad school
used a lot of linear models and still got the point of things like imperfect
competition across, however this is the way it is journals become more
complex not less over time. As time goes by the level of complexity needed
to publish continues to rise. You can have any opinion of how right or how
wrong this is however, it doesn't change the way journals are referred. You
can no longer win a Nobel prize by writing down a single differential
equation like Robert Solow did.
Speaking of Solow, beleive it or not most mainstream economist are that
thrilled about his model either. Mankiw, Romer, and Weil actually open their
paper a contribution to the empirics of economic growth with the statement
that this paper takes Solow seriously. Despite some goods predictions I find
the Solow model lacking enough without having to tack the CCCP arguments to
it. Of course the immediate response to MRW was a couple of papers asking if
the Neo-Classical Revival went too far. Anyway I digress.
> It is as if the debate on the choice of techniques had never
> taken place. Amnesia on such a vast scale can only be explained
> by more appropriate terms, such as 'suppression' or 'repression'
> or 'removal'."
I completely disagree. I for one was at least given some background in
these problems. They were discussed even if only in passing. Granted Macro
profs. just don't have the month or more to spend discussing them. I think
most economist feel as I do that Samuelson and Solow's rebuttals were good
enough. There is no suppression or repression (NB: these are synonyms for
censorship. so if you haven't accussed the mainstream of censorship you
surely post opinons of authors who do).
> One of those
> ideas is an assymmetry in the treatment of labor, land, and capital.
>
One word for you: tractability. Romer has assymetric labor as well as Aghion
and Howitt, Jones, Grossman and Helpman, Dinopolous and Thompson, and almost
every other author of endogenous growth models with R&D. Assymetric capital
is the one of the main components of Romer 1990 and all of Jones' models.
Romer spends at least three pages explain how variety of capital is
implement and why. I haven't land enter into too many growth models and in
my opinion the move from farming has made it almost insignificant now. The
reason for that Dixit Stiglitz utility functions and Romer style firm level
decision making models allow for it. Prior to these no one really knew how
to add these things into the model. In fact some papers are even addressing
income distribution using these models.
I would love for my next research paper to have assymetric firms.
However I haven't found a way I can solve the model and a have a clear
answer to anything by doing so. An idea was given to me by someone else that
I may dabble with for some time but it will wait until I have tenure. At
this stage of my carrer you can't spend too much time on projects that may
not work or else you will not have the publications needed to tenure.
John
ro...@telus.net
wrote:
>On Sun, 20 Jan 2002 02:02:32 GMT, ro...@telus.net, when simply asked
>for specific numbers to back up his claims, instead has a 139-line
>tantrum while not giving a single one. Ah, well, when reality
>intrudes on one's utopia it can be disconcerting....
>
>>On Sat, 19 Jan 2002 16:53:38 -0500, Grinch <oldn...@mindspring.com>
>>wrote:
>>
>>>On Fri, 18 Jan 2002 23:46:16 GMT, ro...@telus.net, being as
>>>pugnaciously obfuscatious as ever, wrote...
>>>......
>>>How about some real numbers? For once in your life.
>>
>><yawn> I have posted real numbers plenty of times.
>
>I confess, I must not have been reading then.
>Would it be so inconvenient to post them again?
Without the context of the discussion, what would be the point?
Anyway, the numbers you like offer plenty of material for discussion.
>>But unlike you, I
>>don't imagine that an official source or an extra decimal place of
>>precision makes up for dishonest definitions or tendentious
>>methodology.
>
>Yeah, what's being off by a mere order of magnitude on our revenue
>projections among friends?. ;-)
Your claim is completely false and dishonest.
>So your tax produces only 10% of what you need
Outright lie.
>what does one lousy
>decimal place like that matter?
Do you know the difference between a decimal of precision and an order
of magnitude? I may well have been wrong by the former. You are
wrong by the latter.
>>>Even when I poke
>>>you with a stick you won't produce them.
>>
>>Where do you suggest I get them? The same place you get your bogus
>>numbers?
>
>Anywhere you want. Poke Poke.
>
>Just use real numbers of actual real estate market values that can be
>tallied up by independent parties today. From any reputable source
>you want.
For now, let's use the Fed numbers you quoted. But this time, let's
look more closely, and find out what they really mean.
>Yes, with a request for specific numbers and sources I still pursue
>may campaign of disinformation! ;-)
You do indeed.
Well, why not start with your first lie? You said total real estate
value owned by households was $12.T, of which $8.2T was value of
structures, leaving just $3.8T in land value. But that is not what
the Fed release Z.1 says. It says the _replacement_cost_ of the
structures would be $8.2T. Not their actual current value.
So you lied when you claimed that total land value owned by households
was only $3.8T. That makes you lying filth, pursuing, in fact, a
campaign of disinformation.
>>>And I will leave it for the econometricians to figure out how $33,000
>>>(2/3rds of $50k) times 100 million households "implies" $18 trillion.
>>
>><sigh> More proof that you don't know how to think.
>
>So teach me!
I have no "superior knowledge." Just honesty, and willingness to see
what is in front of my eyes and tell the truth about it.
Like the fact that Fed release Z.1 also states that non-farm,
non-financial corporate business owns real estate valued at $4.8T, and
non-farm, noncorporate business owns real estate worth $4.6T.
Non-profits own $1.1T. So the total US real estate value reported in
release Z.1 is actually $22.6T, and that _doesn't_ include
non-household farm businesses, nor financial industry holdings of
banks, insurance companies, _mortgage_companies_ like Fannie Mae,
etc., which must certainly add several trillions more to the total.
So the total might well be, oh, say, $27T, at a conservative guess.
And by some strange coincidence, if, as I claim, land value is about
2/3 of total property value, that would yield land value of $18T, the
exact same figure I arrived at by a completely different method.
Scientists like to see independent results converge like that.
>>>I'll simply give the national balance sheet data produced by the
>>>Federal Reserve, release Z-1...
>>>
>>>Total assets of all US households, Q3 2001 ...
>>>
>>> Real estate $11.98 trillion
>>
>>Valued how?
>>
>>>minus value of structures 8.22 trillion
>>
>>Valued how?
>>
>>>Which gives land value of $3.76 trillion
>>
>>So the structures are worth more than twice as much as the land? That
>>would be normal for _new_construction_, but certainly not for all
>>properties. Obviously, the Fed is valuing all that real estate at its
>>_acquisition_cost_, not its current value,
>
>Well, *obviously* you haven't even looked at the Fed's data our you'd
>know how it values the structures, since it says so, yet you don't.
I notice that you don't, either. It values them at _replacement_, not
market. Funny how that affects the result of your calculations, isn't
it?
>Your purported mastery of the facts seems to be slipping.
It may seem that way to you because you think you have got away with
your lie.
>How can you
>claim to refute data when you don't even know what it is?
Release Z.1 claims real estate valued at market (how the Fed gets such
data is not revealed -- certainly it cannot rely on local tax rolls,
which lag far behind market on land value, and dramatically overstate
improvement value), but you subtracted structure value at
_replacement_ to get land value, a totally dishonest manipulation of
the figures.
>>same as the way
>>corporations carry real estate on their books. And of course, ever
>>since the day of acquisition, the structures have been depreciating,
>>while the land appreciates....
>
>Really? Well, I'm posting this from a building that is 100 years old
>that is worth considerably more today than its average value
>throughout its history.
Wrong. It's the _land_ that is worth more. Obviously.
>And the same can be said for near every
>building in this whole neighborhood. My parents live in a home that
>only 45 years old, and in real terms worth only three or four times
>what they paid for it.
Land value. Not building value. You obviously either have no idea
what you are talking about, or are delibertely lying, as you did about
the Fed figures.
>See? It's a question of real-world data, rather than over simplistic
>pet theories.
If the real-world data supported you, why did you feel it was
necessary to lie about them?
>So you won't be offended if I ask you for a source for your claim that
>the average land/improvement ratio for value is 2-1 as you claim.
Professor Mason Gaffney of UC Riverside says, in his paper on property
taxation, that in CA, land value is 40% of total _assessed_ value.
Because the assessments are only done when properties sell, and
buildings depreciate while land appreciates, he estimates that
accurate assessments would put land value at 70% -- as it was in CA in
1917.
>I've been working with real estate professionally for a long time, and
>land value of 20%-25% is a heck of a lot more consistent with my
>experience and what I've seen published, not to mention the Fed's
>numbers.
I have identified your lie wrt the Fed's numbers.
>>>(You are such a master of the hard realities of this subject, I'm
>>>surprised you didn't have these numbers at your fingertips.)
>>
>>I have lots of numbers at my fingertips. Unfortunately, they are
>>mostly as bogus as the ones you quoted above, which is why I don't
>>bother posting them.
>
>You have lots of bogus numbers at your fingertips?
>But no real ones?
I have found no credible current measure of total land value, nor of
total land rent, nor of land value fraction.
>You make a darn audacious argument for someone with no data!
True. But it is a reasonable argument for someone who has data, and
more importantly, understands what the data mean.
>>>OK. Now we all know that land value equals all future rents expected
>>>to be earned from the land discounted to current value at the going
>>>interest rate.
>>>
>>>If we take a rate of say, 8%, for this purpose, then our $3.76t land
>>>value gives rent of about $300 billion.
>>
>>Remember, that's only the real estate owned by households. Corporate
>>properties have to be included, too.
>
>Fine! It's there in release Z-1 too. But since you only mentioned
>households I kept to that.
Uh-huh. And the fact that Z.1's numbers on corporate real estate show
relationships that cannot possibly be true had nothing to do with
it...
Z.1 claims that the replacement value of non-farm corporate owned
structures is about _90%_ of the total value of the real estate, an
absurd notion. It also claims that the ratio between historical cost
and market value for real estate is the same as between the historical
and replacement cost of the structures -- despite the fact that the
real cost of construction has declined, while the real cost of land
has increased. IMO this proves the Fed is relying on a bogus source
for its "market value" of real estate, like local government
assessments.
>>>And with federal and state governments together spending some $3
>>>trillion annually, this $300 billion leaves you about 90% short of a
>>>full deck in this game you are playing.
>>
>>I have never said that governments of modern size can be financed by
>>land rents alone
>
>So you have more in common with David Friedman than you thought!
Nope.
More than _you_ thought.
>Well, that's the end of the famous "single tax" anyway.
It was buried in a campaign of relentless disinformation long before
governments grew too big for it.
>How much do you figure to raise -- ballpark, but closer than an order
>of magnitude?
Call it 15% of GDP. By coincidence, 8% of $18T is a little under
$1.5T.
>>>Unless you can come up with some other more persuasive actual numbers
>>>for land value that are stated rather than "implied", from a source
>>>somewhat more credible than one that begins "Let's imagine..."
>>
>>Fine. Refuse to use your head instead of your mouse. It's a habit by
>>now.
>
>Just insults and we end there? No numbers?
>
>Oh, that's right, you admit all your own numbers are bogus.
Why don't you go back to the Fed's numbers, and try to say something
about them that is not bogus?
-- Roy L
Gary G Forbis
news:a2afr1$24...@acs1.acs.ucalgary.ca...
> Almost all of game theory supposes rational agents. One of Rob's
> hobbyhorses I referred to is that this is a "defective" assumption.
OK, I should know better. I'm grossly unqualified to make assertions,
however, I'll ask a question.
Is it not true that game theory deals with models that are aggregates
rather than individuals. Further, is it not true that "rational" doesn't
mean what a lay person would think it means. For instance, if given
the choice between two anticoagulants, one made from tick spit and
one made from apple juice, the "yuck" factor will guide many people's
choice. Also, for instance, US is extremely overweight.
Christopher Auld
>> Almost all of game theory supposes rational agents. One of Rob's
>> hobbyhorses I referred to is that this is a "defective" assumption.
>Is it not true that game theory deals with models that are aggregates
>rather than individuals.
"Game theory" is an approach to modelling strategic interactions.
Sometimes the approach is applied at a very aggregated level, such
as when thinking about national trade policies. Other times
it is applied at a very disaggregated level, such as when thinking
about how individuals strike bargains. My point was that Mr.
Vienneau's oft-repeated critiques of various economic models apply
to most game theoretic models, contrary to his apparent beliefs.
> Further, is it not true that "rational" doesn't
>mean what a lay person would think it means.
Yes.
Robert Vienneau
> [ snip - some of which I agree with ]
> It is my opinion these
> arguments which could never be fully settled with move to the dustbin of
> history as new techniques begin to dominate. I simply think your
> arguments
> rarely apply becuase there are 10 years of literature you and the people
> you
> quote are completely unaware of. If you are up to Romer 1986 now perhaps
> there is some hope you will read more. I doubt it though becuase the new
> literature bypasses Post Keynesian bitching so it will probably be
> treated
> as if it never existed.
Let's see some of what those conversant with neoRicardian economics
have to say these days.
I think an amateur can get the general trend of this paper:
Ian Steedman, "On Measuring 'Knowledge' in New (Endogeneous)
Growth Theory"
<http://growthconf.ec.unipi.it/papers/Steedman1.pdf>
Unfortunately, I was able to read only the abstracts of these papers:
---
Non-monotonic c(r) Relations in the Absence of Complementarity
Metroeconomica, February 2002, vol. 53, no. 1, pp. 25-36(12)
Steedman I. [1]
In both 1976 and 1987 Tatsuo Hatta showed that consumption
reversal (dc/dr > 0) can occur in a three-period Wicksellian model
of production only if the first and the third labour inputs are
Hicksian complements. (This was also generalized to n labour
inputs.) Unfortunately, he drew the bold conclusion that
consumption reversal is merely one more complication introduced
by input complementarity. It is shown here that the specific
formal result does not generalize and that the bold claim cannot
be sustained.
-----
Endogenous Growth, Increasing Returns and Externalities: An
Alternative Interpretation of the Evidence
Metroeconomica, November 2001, vol. 52, no. 4, pp. 391-427(37)
Felipe J.
A number of recent papers have used aggregate production functions
in an attempt to measure the degree of returns to scale and
possible external effects in US manufacturing industries. In this
paper I argue that the methods used and the results obtained are
deceptive. The reason is that underlying every aggregate production
function is the income accounting identity that relates output in
value terms to the sum of wages and profits. This identity can be
transformed, depending on the empirical paths of the wage and
profit rates and of the factor shares, into different mathematical
forms which resemble neoclassical production functions. Estimation
of these forms, as is done in the literature discussed in the
paper, poses serious problems for the interpretation of the results.
----------
Is Kaldor's Theory of Money Supply Endogeneity Still Relevant?
Metroeconomica, February 2001, vol. 52, no. 1, pp. 95-120(26)
Bertocco G.
Contemporary monetary theory is characterized by the predominance
of the monetarist thesis. Paradoxically, the widespread acceptance
of the monetarists' conclusions has coincided with the
disappearance of the stable relation between money stock and nominal
income from the 1980s onwards. These results did not call the
monetarist theory into question, but instead stimulated the
elaboration of various proposals for the modification of the
monetary authorities' operative schemes. Each of these
proposals gives rise to some perplexity. These anomalies provide
the justification for this paper, which sets out to analyse the
characteristics of the money supply endogeneity theory, a
theoretical approach initiated in the 1970s thanks to Kaldor's
seminal contribution, with the objective of demonstrating the
inconsistencies in the monetarists' conclusions. It is intended
to show that the debate on the endogeneity theory developed by
the post-Keynesians has overlooked an essential aspect of Kaldor's
theory, the examination of which permits: (a) the elaboration of
an important criticism of monetarism; and (b) the development of a
theory of credit and of financial intermediaries that highlights
elements of Keynes's theory that have been neglected by the
traditional interpretation.
----------
Linear Programming and the von Neumann Model
Metroeconomica, February 2000, vol. 51, no. 1, pp. 122-125(4)
Bidard C.
The formal similarity between von Neumann's theorem on maximal
growth and (a weak form of) the fundamental theorem of linear
programming is striking. The parallelism is explained by
considering a simple economy for which the two problems are
identical.
-------
A Linear Multisector Model of "Endogenous" Growth and the Problem
of Capital
Metroeconomica, October 1998, vol. 49, no. 3, pp. 319-335(17)
Salvadori N.
In this paper a linear multisector model of "endogenous" growth
with heterogeneous capital goods is elaborated. The purpose of
this exercise is to show that this kind of model is exempt from
the capital theory critique put forward against the conventional
long-period neoclassical growth model a la Solow. This confirms
previous claims that at least some of the "new" growth models are
somewhat extraneous to neoclassical analysis and actually exhibit
the logical structure of classical theory. In addition it is shown
that the use of an intertemporal analysis to establish a correct
long-period position is not necessary and that the use of the
long-period method may speed up the elaboration of new scientific
results.
---------
Aggregate Demand and Endogenous Growth: a Generalized Keynes-Kaldor
Model of Economic Growth
Metroeconomica, 1997, vol. 48, no. 2, pp. 161-176
Palley T.I.
This paper presents a generalized Keynes-Kaldor growth model which
incorporates both the Cambridge theory of income distribution and
endogenous technical change. Within the model, the rate of aggregate
demand growth affects both the level of aggregate demand and the
rate of output growth. However, demand growth management can only
be used to shift the economy from low to high growth equilibria, and
cannot produce continuous adjustments in the equilibrium rate of
growth. This reveals that management of the growth trajectory is a
qualitatively different problematic from management of the level of
output. Lastly, the model highlights ambiguities regarding the
adjustment dynamics of demand growth.
-------
Robert Vienneau
Game theory is a deep subject. Try to imagine what Mr. Auld's
reaction would be if I concluded one of my CCC posts with "and
this also shows ALL of game theory is misdirected." (Note his
qualifications.) As I understand it, some game theory models use
agents whose strategies are determined by evolutionary forces,
not rationality.
I also understand game theory has been used to raise doubts
about whether the notion of "rationality" is even self-consistent.
Somewhere, maybe in a negative review of the book "A Beautiful
Mind", Mirowski notes the difference between cooperative and
non-cooperative games. V.N. and M. assume agents live in a society
where they can strike bargains outside the game about distributing
their payoffs and those bargains will be enforced; the agents are
not asocial, so to speak. Others don't take such institutions as
prior to the game and try to explain how institutions arise out of
the game.
But I don't claim any expertise on game theory. I do know
Von Neumann and Morgenstern had negative things to say about
neoclassical economics. They also note that gambling can have
neither a negative nor positive utility in their axioms for
expected utility. (This is not about the convexity of
utility functions.) Some have told me that others have relaxed
this limitation.
Anyways, Mr. Auld has said that I claim the CCC overthrows
all of mainstream economics, that I know of the existence of
game theory, and that I erroneously imply the CCC doesn't
overthrow game theory.
Mark Patrick Witte
>(Mark Patrick Witte) wrote:
>
>> As Chris Auld and Susupply have noted in questions they have posed
>> to Mr. Vienneau, his approach has little do with the questions most
>> people and most economists care about.
>Those seriously interested in the empirical and policy implications
>of Sraffa should consult Bharadwaj and Schefold (1990).
Exactly what pages of this book document any empirical support
whatsoever to a Sraffarian approach to any economic question? Where does an
approach based upon Sraffa's work produce a better fit for some moment of
the data relative to some non-Sraffarian approach? Is there a single page
in this book that refers to data at all?
>But, of
>course, tax incidence is not a strong point for those questioning
>the empirical and policy relevance of Sraffa. Those with
>familiarity with the literature would think it's more an area
>that should be thought of as a caveat.
OK, what aspect of Sraffa's work has any implication for tax
incidence, what are the empirical implications, and how do they do relative
to alternatives?
And some begin to wonder why the influence of Sraffa is so small
in modern economics.
Mark
Vienneau's post was coming out garbled on my newsreader (I'm on the
road and so don't have my standard set-up). Sadly, whatever garbling
occurred must have been as he typed it.
Robert Vienneau <rv...@see.sig.com> wrote in message news:<rvien-99ED04....@news.dreamscape.com>...
> According to Mr. Witte
>
> > >the question of the openness of the institutional structure
> > >of economics to certain sorts of innovation.
>
> is a question of the truth of
>
> > such conspiracy theories.
>
> > >> William F Hummel <wfhu...@mediaone.net> wrote:
>
> > >>>And so there is still a chance that Vienneau's views will prevail
> > >>>in academy (the fountain of true economic wisdom) some day?
>
> > No, it is never a mistake to challenge an idea, but some challenges are
> > better than others.
>
> > >>>He
> > >>>just has to put up with the hazing by the brethren until then.
> > >>>Or did I miss the point?
>
> > Yes, and even after that. Such is the competition of ideas.
>
> If the above display of more-than-ignorance is not enough, Mr. Witte
No, the above is a display of typically Viennearial editing. It
makes not sense because, for reasons hopefully known at least to
himself, Mr. Vienneau has removed the correspondence of context and my
remarks. If he cannot respond to substance, it is hoped that he will
just abandon the tread.
> says his amazingly absurd statement that hazing is appropriate merely
> repeats something that is in the following text:
>
> > According to Mr. Vienneau, his preferred school of thought is already
> > the majority in the field, although I have my doubts.
> >
> > RV: I feel Mr. Witte's major concern is with perceptions of whether
> > RV: "economics" - so narrowly defined as to exclude maybe half of all
> > RV: economists - is a legimate science.
> >
> > MW: I am unaware (but interested) in any such census of economists.
> > MW: If Mr. Vienneau has any basis for making this statement, I'd sure
> > MW: like to read how economists break down into such groups. However,
> > MW: I am unaware that I've ever tried to exclude economists from the
> > MW: field and certainly have no standing to do so.
>
> I think Mr. Clark needs a new category for his files. I find it difficult
> to say in civil discussion what label might be appropriate.
Mr. Vienneau makes a dubious statement, I call him on it, he
replies with a statement that is just strange.
> And just as a reminder:
>
> Mr. Witte has yet to outline a logically consistent set of assumptions
> for multicommodity models that will yield (old) neoclassical conclusions.
It is unclear what Mr. Vienneau is looking for here. Would he
like me to try to explain the math behind some specific paper in the
modern literature? Does he want me to type out a bunch of stuff from
Burmeister or some source like that? Does he think that some paper in
a major journal contains a serious error that the editors missed?
Perhaps one of the three specific papers I suggested as comparison
cases with Sraffarian methodology in my last post? (Oddly deleted,
but here they are again: (Journal of Economic Dynamics and Control
(Volume 26, Issue 5) by Petr Dcuzynski entitled "Adjustment costs in a
two-capital growth model", pp. 837-850. If this paper is too
difficult to obtain, he might prefer Barro, Mankiw, and
Sala-i-Martin's "Capital Mobility in Neoclassical Models of Growth"
AER 1995, or Cabelle and Santos, "On Endogenous Growth with Physical
and Human Capital, JPE 1993). Perhaps, since these recent thread have
been about what is going on in modern economics, Mr. Vienneau would be
kind enough to show how a Sraffarian approach would improve over the
results of the listed authors.
> Nor does Mr. Witte ever explain how empirical results can be relevant to
> a point of logic.
Just as in the movie, "A Fish Call Wanda" there was a discussion
of the difference between reading Nietzsche and understanding
Nietzsche, Mr. Vienneau once read something by Thomas Kuhn. I am with
those that say that if two sets of assumptions differ but both produce
tractable models, the model that should be preferred is the one that
does better with the data. Some evidently are less interested in
empirical fit than they are with some other measure of modelling
purity.
> Mr. Witte will not tell us how he thinks Leontief and Sraffa's work
> relate.
It is not clear what more I need to say on this point. Perhaps
it would be helpful to anyone unfortunate enough to still be reading
this thread if Mr. Vienneau would gather the personal integrity to
avoid editing out remarks he is responding to, or failing to respond
to. This again goes back to a question from me as to whether there
was any empirical support for a Sraffarian approach relative to common
alternatives. Mr. Vienneau suggested the work of Leontief, but I
pointed out that this struck me as quite a stretch. I am unaware of
any papers where Leontief credited Sraffa with creating a framework
that inspired him toward any successful hypothesis tests that
supported Sraffa's work. Much of Leontief's work certainly did
involve Input-Output tables and hence the production of commodities by
the means of commodities, but I pointed out that calling this support
of Sraffarian economics was a sad, sad misunderstanding of what
empirical support of a methodology is. This is explained in my last
post and so I'll let it go unless Mr. Vienneau would like to try to
better explain why he thinks this somehow supports his position. (I
do recall seeing an unfavorable comparison by Samuelson of Sraffa to
Leontief, essentially saying that Leontief was doing what Sraffa
failed to and at the same time period. I also recall writing in my
last post: "Perhaps Mr. Vienneau would care to cite exactly what
paper by Leontief provides some sort of hypothesis test that gives
some support for the work of Sraffa." Oddly, that didn't make it
through.)
> And he apparently cannot tell us instead in what works on endogeneous
> money Mr. Hummel might have seen the CCC discussed, if any.
I have no idea what this is about.
> Of course, given that Mr. WItte thinks his reader should know "I
> watched a football game on TV yesterday" means "it is snowing now",
> I may just have missed what he considers an answer to these questions.
My enjoyment of the Rams aside, each year Robert Vienneau gets a
little stranger, and a little sadder.
And each year I wonder if this will be the time that Mr.
Vienneau, as I asked last post and in so many others, would be able to
give some examples where the data seem to support a Sraffarian
approach over more modern models.
Christopher Auld
>Game theory is a deep subject. Try to imagine what Mr. Auld's
>reaction would be if I concluded one of my CCC posts with "and
>this also shows ALL of game theory is misdirected." (Note his
>qualifications.) As I understand it, some game theory models use
>agents whose strategies are determined by evolutionary forces,
>not rationality.
Right, it's settled then. We have established that:
1. Any economic model with rational agents is defective.
2. Any economic model with production functions involving
capital -- aggregate or not -- is defective.
We could also list all Bob's other complaints about various
models, but since these two wipe out 99 in 100 theoretical
(and a good chunk of empirical) papers, we need not go on.
But let no one claim that Bob is attacking all of mainstream
economics (ignore the fact that lots of "heterodox"
approaches also get thrown out with that bathwater), for
apparently evolutionary game theory is A-OK with Bob.
Now, we have to overlook the fact that evolutionary game
theorists sometimes use models in which strategies are
"hard coded" only as a severe simplification -- this is a
limitation, not an advantage as Bob has strangely inferred.
Many papers try to relax that simplification by allowing
deep parameters to evolve, not strategies per se. These
may be parameters in (horrors!) utility functions. I
suppose it's up in the air whether such models are
"defective" or not. Perhaps another fraction of a percent
of theoretical economics is spared!
>Somewhere, maybe in a negative review of the book "A Beautiful
>Mind", Mirowski notes the difference between cooperative and
>non-cooperative games.
As does any undergraduate textbook on game theory.
> V.N. and M. assume agents live in a society
>where they can strike bargains outside the game about distributing
>their payoffs and those bargains will be enforced; the agents are
>not asocial, so to speak.
What an odd distinction. Assuming an external enforcement
mechanism is A-OK because agents then aren't "asocial," but
not assuming a such a mechanism is "defective" I guess?
Exactly what about such an assumption differentiates these
two agents? Is all of canonical theory then not "asocial"
because property rights are implicitly enforced via an
external mechanism?
One should also keep in mind that much of vNM is non-
cooperative game theory -- "defective."
> Others don't take such institutions as
>prior to the game and try to explain how institutions arise out of
>the game.
Such approaches describes many papers in many areas of
economics, game theoretic or not. Are we to gather that
such papers aren't defective? But what if they involve
such no-no's as production functions or utility functions?
A conundrum indeed.
> I do know
>Von Neumann and Morgenstern had negative things to say about
>neoclassical economics.
One wonders if Bob will ever acknowledge that the discipline
has progressed in the last sixty years, or that "saying
negative things" about a paradigm as part of the great
conversation does not imply the sundry radical viewpoints
he holds dear.
>They also note that gambling can have
>neither a negative nor positive utility in their axioms for
>expected utility. [...]
Perhaps Bob could start another thread, "Random facts I know
about game theory."
I'm also not sure if Bob thinks vNM is "defective." Not only
do they assume rationality, they _invented_ a strong notion of
rationality! On the other hand, they said negative things about
neoclassical economics, so they can't be all bad. Decisions,
decisions.
Bob might like to know (well, I've said this before, but Bob
is clever enough to ignore everything I say) that vNM's game
theory was mostly obsolete a decade after it was written.
The lasting contribution is the axiomization of expected
utility theory -- alas, again "defective."
Incidentally, I bought the DVD of "Dr. Strangelove" today.
Full of game theory, and von Neumann's, er, Strangelove's
lust for nuclear combat toe-to-toe with the Russkies does
strike as a rather dangerous example of poor game theoretic
analysis. Damn that rationality assumption!
>Anyways, Mr. Auld has said that I claim the CCC overthrows
>all of mainstream economics, that I know of the existence of
>game theory, and that I erroneously imply the CCC doesn't
>overthrow game theory.
I acknowledge that Bob knows of the existence of game theory.
I don't recall making either of the other statements, but I
think someone's been messing with my precious bodily fluids,
so I can't be sure.
Robert Vienneau
supposedly being a Marxist with the comment that, given my
interest in certain work of Von Neumann, I must be a
Trotskyite. Poor Chris Auld has finally gotten the joke.
Poor Chris Auld is upset that I am too modest to offer
an evaluation of game theory.
Some economists apply the Cox proportional hazard rate
model and suchlike. Poor Chris Auld has whined that
therefore economists need not be interested in my
objections to price theory, even if they are valid.
Now he tells me that those objections "wipe out 99 in
100 theoretical (and a good chunk of empirical) papers".
Maybe poor Chris Auld is correct. Maybe mainstream
economists do not care whether or not mainstream
economic theory is incoherent nonsense.
"But self-absorption and consistent policy error are just two of
the endemic problems of the leading American economists, and not
even the most serious among them. The deeper problem is the nearly
complete collapse of the prevailing economic theory--of the
structure of thought that supports their policy ideas. It is a
collapse so complete, so pervasive, that the profession can only
deny it by refusing to discuss theoretical questions in the first
place."
-- James Galbraith
http://www.prospect.org/print/V11/7/galbraith-j.html
It is important to understand the reasons why general equilibrium
theory had to be replaced. This has to do with the emergence of
arbitrariness results in general equilibrium theory during the
1970s and early 1980s. Because of these results, it became
obvious that individual rationality postulates gave no structure
to aggregate theorizing: the aggregate realm was undetermined and
arbitrary. This vacuum provided an environment in which rational
choice game theory, with all of its problems, was able to prosper.
Here, too, the conception of rationality was inadequate to the
task at hand. Nash play required entirely unbelievable assumptions,
and created a plethora of equilibria; the simplest form of subgame
perfection was bedeviled by experimental nonconfirmation. These
problems gave impetus in turn to the development of boundedly
rational and evolutionary approaches to game theory. To the extent
that these approaches have had success in giving basis to some
notions from rational choice game theory, they do this by, to a
large extent, doing away with rationality. Yet since many of these
results were obtained in an oversimple setting, it does not seem
likely that evolutionary approaches will find widespread economic
applications. Another response to the arbitrariness results has
been the work on market demand. Explicitly, authors in this
tradition do away with individual rationality to the extent
possible. What remains, then, of optimization and its relation to
best choice? Since best choice has been the basis of normative
economics, evaluative concerns are sacrificed in the effort to
obtain aggregate-level results of the most straightforward sort.
Many of these approaches are to some extent allied to the
emergence of experimental economics. But there is controversy
concerning the role of experiments in economics. Are they just a
source of paradoxes to be resolved in the usual way in theoretical
economics, or should experiments form the centerpiece of an
inductive approach to economics? If the latter way is found to be
attractive, it is doubtful that there is much chance that the
view of economic behavior or satisfaction that emerges will be
anything like the universal and individually rational agent.
In the course of examining these transformations in economic
theory, we can see quite clearly a loss of ambition in terms of
generality, and an increasingly tenuous grasp on the concept of
rationality. In consequence, there is a loss in the ability to
say anything much about normative considerations. To some, the
current period of rapid theoretical change and even逆o some
extent却luralism will be attractive; but durable results are
hard to find and many of the fundamental concerns of economics
have fallen by the wayside.
-- S. Abu Turab Rizvi, "Rationality, Evolution and Games" (1999?).
Available on the Web somewhere or other
Tim Worstall
But this one seems good enough for my purposes.
But first, I would , please, like to point out that I am not
attempting to debunk your ideas, nor to be insulting. I am actually
trying to learn something, and I find that the best way for me to do
that is ask some questions, get answers,think about it for a bit and
then ask some more. Perhaps you could call it a junior league version
of the Socratic Method.
Sometimes I am persuaded by the answers, as I was when I started
asking about Global Warming over on sci.environment. Sometimes I am
not, as when you and Mason wanted to persuade me that the average
household was 30 % worse off in terms of housing.
But the important point is that it is really an attempt to understand
what you are saying, and then only reject it if or when I do
understand it and still think it wrong. Or accept it as the case may
be.
> >ro...@telus.net wrote in message news:<3c460fbe...@news.telus.net>...
> >> On Wed, 16 Jan 2002 20:18:22 GMT, "John Weatherby"
> >> <jjwea...@earthlink.net> wrote:
> >>
> >> >Time and time he has charged that Post-Keynesians are shunned
> >> >by the mainstream and not recognized because we ugly main economist are
> >> >afraid they will expose some ugly secret.
> >>
> >> Substitute "Georgists" for "Post-Keynesians" if you want to see a real
> >> case of shunning and unofficial censorship. And for a real ugly
> >> "secret" that mainstream economists never want mentioned in public,
> >> try the fact that virtually every society in the world gives away
> >> benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
> >> contributing exactly nothing.
> >
> >Really ? The US has a $ 7 trillion economy. Are you really saying that
> >the rent of the unimproved value of land in the US is $ 1.4 trillion ?
>
> Close enough. That's including all natural resources (private
> property that has not been produced by the labor of any human being)
property '. For example, would the Federal Govt pay the same portion
of economic rent on its land holdings as a private user ? Or State
Govts. If the answer is yes, then I fear we would say goodbye to all
the State and Federal parks, forests and so on, As it would be
necessary for the Govt to pony up the true economic costs of these
things every year. And if the answer is no, then there will be an
inevitable increase in Govt as opposed to private land holdings, as
people slide out from under the tax burden by donating or selling to
Govt. 100 %Govt ownership of the land is one of the things that made
the USSR such a lovely environment.
> as "land."
Ahhh....this was not a piece of the picture that I had seen. I was
also, as you poointed out, confused over the difference between rent
and economic rent. Although I would still appreciate a clear
disticntion between the two. I assume, perhaps wrongly, that in a free
market, rent will be the same as economic rent. Clarification here
would be good for me.
Not that all of that is currently given away to the
> owners, as governments _do_ collect a small part of the rent of
> natural resources, and it is often difficult to determine just how
> much. Property tax rates in the USA vary by an order of magnitude --
> from 0.4% to nearly 4% -- from state to state and city to city, with
> the weighted mean probably somewhat over 1%. In addition, mining
> companies and others pay a variety of fees and royalties for rights on
> public lands; broadcasting and cell phone companies pay taxes that
> amount to spectrum rents, and so on. Individual and corporate income
> and (especially) capital gains taxes also include an imponderable but
> certainly significant land rent component.
>
> IMO it is likely that the various levels of government in the USA
> collectively recover perhaps 1/5 - 1/4 of all land rent, almost all of
> it more or less indirectly through property taxes and taxes on
> personal income, corporate profits, and capital gains. This puts the
> USA on the high end of the distribution worldwide, as only a handful
> of countries -- Hong Kong, Taiwan, Singapore, the dozen or so
> countries whose economies are dominated by oil or other natural
> resource exports, and perhaps a few others -- recover more of it.
At this point I feel that your theory has a few real world problems.
Some countries that do recover large portions of land rent ( as you
define it ), like Hong Kong, have minimally invasive Govts and are
highly successful as economies, and they are also absent such things
as welfare states. Others, perhaps some of the oil rich nations, (
Saudi comes to mind, Iraq, Iran are others ) similarly capture very
large portions of land rent ( this time natural resources, not land,
but still within your definition ) , have extensive welfare systems,
and outside resource extraction, are terrible economies. Given that
both capture similar percentages of land rent, but the outcomes being
dissimilar, at first glance one would assume that it was not that
portion of land rent recovered which made the economy successful or
not.
Again at first glance, onemight want to ponder the influence of a
heavy welfare state, or a licence culture, on the economic development
of the various places.
Please note that these are not my examples. They are yours. And they
don't seem to be showing that taxing land rent is automatically
beneficial. How the money is spent, and the organisation and structure
of the economy also seem to be ( more ? ) important.
>
> >I have no idea what the true figure is,
>
> Obviously.
That's why I posted. Why I asked.
>
> >but that one seems awfully high.
>
> Only because you have no idea what the true figure is.
>
> >Of course, if total rent in the US was that figure ( and I am
> >still inclined to doubt that ) then that would be on the improved
> >value of land.....and buildings etc.
>
> What kind of equivocation is this? Do you or do you not know the
> difference between "rent" in the sense of a periodic payment for use
> of something owned by another, and the _economic_ rent of natural
> resources?
As above, I look forward to the true definition. As I said, I am under
the possible misapprehension that in a free market the two will be the
same.
>
> >Which of course is ' something '
> >that is being paid for.
>
> Natural resources are also "something" that is being paid for. It's
> just that the people being paid for them did not produce either them
> or (with very few and mostly insignificant exceptions) any of their
> value.
Something that puzzles me about this. This is from my own business
life, and I'd like to use an example from it. At least I will
understand the example, even if I don't understand the answer.
So, natural resources are not created by any human labour. In one
sense, they're a freebie granted by a beneficient nature,and we should
use such freebies to fund the Govt. Right so far ?
I work with rare earths...things like cerium, lanthanum etc. We also
handle about 50 % of the world's usage of scandium....you may have
seen those very expensive bike frames and baseball bats. We've been
looking round the world to see if we can find a new source of these
materials. We've found a process whereby we can treat the waste stream
of another industrial process to extract all of these various
elements. Now obviously, we are not creating elements. They are
already pre existent, part of nature's bounty. But currently they are
thrown away by the megatonne....literally, dumped in a hole in the
ground. So if we build our mooted factory, who gets the money ? Our
intellectual labour has spotted the opportunity, tested the process,
and our physical labour will process and market it. But we have not
created the elements, so they are not ' produced ' by our labour. At
present the waste steam is pollution and therefore has a negative
value. We will make it have a positive value. So, who gets the money ?
The Govt, which has added no value to this process? Us, who have ? And
when you think of the four countries involved, which Govt gets the
money ? Profit taxes sound a better solution than mining royalties in
this case.
While this is a specific example from my working life, the mining
industry is full of such things.
>
> >> "In my opinion the least bad tax is the property tax on the unimproved
> >> value of land, the Henry George argument of many, many years ago."
> >> --Milton Friedman, Nobel laureate in Economics
> >
> >Another correspondent to this NG had a look at this phrase and came up
> >with someother quote from Freidman where he said ' I do not agree with
> >the Georgists ' .....and I know you read it because you replied to it.
>
> Indeed. I don't completely agree with the Georgists, either, and on
> much the same grounds as Friedman. I do not now nor have I ever
> called or considered myself a Georgist.
>
> >> "For efficiency, for adequate revenue, and for justice, every user of
> >> land should be required to make an annual payment to the local
> >> government equal to the current rental value of the land he or she
> >> prevents others from using."
> >> -- Robert Solow, Nobel laureate in Economics
> >>
> >' current rental value ' and ' rental value of unimproved land ' do
> >not sound like the same thing to me.
>
> That is only because you do not know what you are talking about, as
> demonstrated above by your confusion of the economic rent of land with
> the "rent" one pays for use of, say, an apartment or car.
As above, I am looking forward to you disabusing me of this notion.
Really, I am . I want to know.
>
> >> "While the governments of developed nations with market economies
> >> collect some of the rent of land, they do not collect nearly as much
> >> as they could, and they therefore make unnecessarily great use of
> >> taxes that impede their economies -- taxes on such things as incomes,
> >> sales, and the value of capital goods."
> >> -- William Vickrey, Nobel laureate in Economics and past
> >> president of the American Economics Association
> >>
> >I think we might be getting closer to a realistic view here.
> >'Unnecessarily great' makes more intuitive sense than ' tax only the
> >rental value '....and I'll explain that in a moment.
>
> Friedman and I agree with what you appear to be saying, here.
>
> >> Is this fact suppressed by a "conspiracy," or merely an unspoken
> >> agreement?
> >It can't be a conspiracy...it's simply too public for that, as the
> >quotes you have given us show. I can imagine that it is unspoken
> >agreement.....and the reason that it is not shouted from the rooftops
> >comes down to accountancy.
>
> ?? An explanation of that would be nice.
To me, and I suspect to many others, conspiracy is something which
flourishes in the dark. One of the joys of free speech, of freedom of
information, is that a cabal can't get together and carve up the body
politic. This doesn't stop people trying, but such schemes get found
out, and thus collapse. The publicity you showthat these views have
means to me that there is no ' conspiracy ' to reject or suppress
them. That they are not adopted must be due to some other reason.
>
> >In other posts you have posited that taxing away in full the rental
> >value of unimproved land should be the main or only tax raised from
> >the citizenry.
>
> No. I have said that recovering _almost_ all (90%-95%) of the
> economic rent of natural resources could, should and would provide
> government with most of the revenue it needs to fund its legitimate
> duties.
But then one must define what are the legitimate duties of a
Govt.....and as teh root of the word tells you, that is really what is
legal. Which is whatever the Govt says it is. But I take the point you
are actually trying to make, which is the Govt spends too much because
it tries to do too much.
>
> >Or maybe I have misunderstood and you think that we
> >should have that first, and then raise other taxes that we might need.
>
> Need for revenue is a singularly poor justification for taxing
> anything.
I think it was a French Court financier who said that the art of
taxation is to pluck the goose with the least amount of hissing.
Need for revenue is in fact the major reason that most Govts use for
taxing anything. ( the lyrics of Taxman come to mind here ) If the
general public, as it has in the UK, has democraticlly decided that it
wants a health system funded out of general taxation, then that
taxation must come from somewhere. And at 7 % of GNP, that money is
substantial.
If natural resource rents cannot fund all the activities
> the people want their governments to undertake, recovering some of the
> publicly created value of other privately owned assets can.
>
> >A few problems as I see it :
> >1) With no benefit going to a supplier of land
>
> A what? Don't you mean a _withholder_ of land?
No, I don't. I own a field. I rent it to someone. Or I let it lay
fallow and allow the tweetie birds to live there. If I am always going
to be charged the economic rent as a tax, then I will have to rent it
to someone to farm, and what happens to tweetie then ? And if when I
do rent it, I don't receive any benefit, then why would I bother to
own the land ? And why would anyone else ?
>
> >by putting land up for
> >rent, how can we determine what the rent is?
>
> How do private landowners determine what the rent is?
Through the market. Willing buyers and sellers, making their own
deals. Or as a slight subset, willing renters and rentiers.
>
> >No market,
>
> Nonsense.
>
> >no price
> >clearing mechanism,
>
> More nonsense.
>
> >so how to set a price level ?
>
> How does "the highest bid" sound?
Highest bid is great. That's one side of a market.But if the other
side gets no benefit, whatever the bid level ( becasue, as explained
above, I still labour under the belief that in a free market, economic
rent and rent are by definition the same thing ) then you don't have a
market. You need both willing suppliers and willing buyers. Without
both it ain't a market.
>
> >If for example, we
> >take the current value of rent, and then tax it away. Then the landlord
> >raises the rent, as he wants an economic return on his investment.
>
> Landlords cannot raise rents to cover higher taxes on land, no matter
> how much they may "want" a "return" on their "investment," because
> land's elasticity of supply is zero. The burden of a tax on land
> cannot be shifted. This is a fact of economics that has been known
> for nearly 200 years. That you are completely ignorant of it does not
> surprise me.
Elasticity of supply of land, in terms of total acreage, is of course
zero. I actual terms it is not. Forest can be cleared for agriculture,
agricultural land can be built on, marshes drained, polders built,
zoning changed. I am not sure that one could say that there is one'
demand ' for land. There are a number of different demands, for
housing land, for recreational land, for farming land ( with many
subsets ), for forest, for wild nature, and it is more change of use
between them rather than total aggregate demand which is the greater
influence. I think , anyway. Another way to put it might be that given
2 billion acres of the USA, and 300 million people, that's 6.5 acres
per head.Almost no one, as an individual, requires or demands
this....so it is not the aggregate level of demand that is important,
it is the demand for certain specific uses in certain specific places.
And elasticity of demand for certian uses in certain places is higher
than zero. So landlords can pass on some of the tax burden.
>
> In any case, I'm at a loss to understand why you would imagine that
> tax policy should be designed simply to give landlords whatever they
> _want_.
No, I don't think they should get just what they want. But I do
believe in individual freeedom, something underpinned by property
rights. But that's another story.
>
> Oh, right. I forgot. That's how tax policy _is_ designed....
>
> >Next year we say ' Ah, rental values have gone up.
>
> Nope. Land rents are determined by differential productivity given
> identical inputs, and thus are totally unaffected by taxation.
Not in a free market they're not. Whatever someone is willing to pay.
Now in a rational world, the calculation should perhaps be done as
above, but then I'm not sure that any of us believe that all consumers
are rational all the time. How to explain Britney Spears if this were
true ?
Some will pay more to live on a mountain, or by the sea, or in
Manhattan...so unless you extend ' productivity ' to mean ' indivudual
preference or utility ' then I can't see how your statement can be
true in the real world.
>
> >Let's raise the tax
> >'. This could go on forever.
>
> Nope. As the land tax rate is raised, land value declines so that the
> tax revenue asymptotically approaches the land rent. This is implied
> by the net present value equation:
>
> V = R / (t + d)
>
> >Govt fiat is possible, but at that point
> >I think you will be getting the sort of porblems the UK had over the
> >rating system. It was precisely to correct the imbalances of 20 years
> >of economic growth on that price system, that Margaret Thatcher
> >brought in the community charge, or Poll Tax.
>
> ??? That's like saying Argentina tried to "correct the imbalances" in
> its monetary system by increasing its external US$ debt. You don't
> correct imbalances by making them bigger.
No, I don't think you understand what the rating system was. Each
property in a local council area was assessed. £ 500, £ 1,000
whatever. Then each year the council would announce the ' rate '. 50 p
in the £ or whatever. So the owner of a £ 500 house would pay £ 250 a
year in local property taxes. You also had a similar system for
businesses. There were two main problems with the system. One was that
countrywide relative property values had changed significantly, as the
assessment had not been done for 20 years or so. Another was that some
councils preferentially taxed business ( mostly socialist councils ).
A third, polotical , problem was noted in that it was only property
owners who paid rates, not renters. But everyone had the vote.So there
was always upward pressure on more services, paid for by property
owners, the pressure caused by the votes of those who didn't have to
pay for it.
Thatcher did not think that politically it would be possible to go
through with the re assessment process, and she was probably right.
Business rates were nationalised, while the personal aspect of local
taxation was made into a per capita tax. This was an attempt to
correltate votes for higher spending ( or lower, of course ) with the
requirement to pay for such spending.
The rating system was close, as far as I can see,to what you suggest
as a good tax. If it was limited to the land rent, rather than the
bulding rent ( as it was ) it would seem to fit your definition. But
the populace wouldn't wear it.
>
> >Not a process that any
> >rational politician wants to repeat.
>
> It was not a process that a rational politician could have initiated
> the first time around.
>
> >2)Will it raise enough money ? You've stated often enough that it
> >should be on the unimproved value of the land....and not the capital
> >value, but the rental value.
>
> You seem to be confused about what capital value and rental value are.
> The capital value is just the discounted net present value of the
> future expected rental value.
And if the Govt is getting all the rent, thenthe capital value is zero
?
>
> >Unimproved means , if I have your
> >argument correctly, the value of the land itself....without utility
> >connections, zoning to build on, a house, nor roads to it.
>
> No. Zoning, roads, and utility connections available at the property
> line are not improvements to that property, but part of what the
> community currently gives away to the landowner. Such infrastructure
> increases the land value, not the improvement value.
OK, fair enough.
>
> >are not Land like
> >this in the US is cheap . Very cheap.
>
> Some is, some isn't. The some that isn't sometimes _very_ isn't.
>
> >$ 1,000 an acre near the coast
> >of California. Rental value of land at $ 1,000 an acre ? Say $ 100 a
> >year just for arguments sake? 1/2 acre plot for a house ?
>
> Where land is $1K/acre, few people build on 1/2 acre. But this is the
> sort of common-sense fact of objective reality that the opponents of
> land value taxation specialize in ignoring.
Urrmmm....I used to live in San Luis Obispo County. And I could buy
land for $ 1,000 an acre. And people did live on 1/2, 1 acre lots. I
am telling you about an objective reality.
>
> >So we are
> >going to tax away that rental value, all $ 50 a year of it. This is
> >rather less than the $ 2 / 3 ,000 a year a house owner is already
> >paying in property taxes.
>
> Not on _that_ property, he isn't.
Again, San Luis Obispo County that sort of number is correct.
>
> >So how does this actually help anything ?
>
> If you assume 2 + 2 = 5, all sorts of interesting consequences follow.
>
> >The amount raised is minimal.
>
> Are you really an econmic illiterate, or do you just play one on
> Usenet?
I am, as I said at the top, trying to actually understand your
argument. If you can't get it across to me, well, too bad, but I am
actually doing you teh courtesy of reading, thinking and asking. So
less of the insults.
>
> >3) The USA is about 2.3 billion acres ( 3.5 million sq miles approx.
> >).
> >Average unimproved value of the land ? What ? $ 1,000 ?
>
> OK, let's see now. The "average" American is what, 25 years old? He
> has maybe a few thousand in liquid assets (bank account and cash), a
> car a few years old, maybe a bit of furniture, some audio-video gear,
> and doesn't own a house, so his total assets are like, $20,000, tops.
> So multiply that by 280 million Americans, and you get total privately
> owned asset value of $5.6T. Yet our friends in government inform us
> that total privately owned assets in the US are $63T. Such a mystery.
>
> To you, that is.
>
> (Hint: When summing the value of a log-normal distribution, do you
> just multiply the median by the population?)
I don't actually understand that parentheses....but I only put the
number in to try and generate a response. What is the value of land in
the US ? BTW, , you might be correct if I used the median....but
perhaps I was assuming that I had the arithmetic mean....in which case
my calculation is correct.
I've also been amused by your response to Grinch on property values.
You call him liar or something, because he says that land value is 25
% of total property value. You come up with 70 % or something, because
you say the Feds measure replacement value, not depreciated value.
Looks fair on the face of it....but aren't you the guy who in another
thread berated me for claiming that housing had got better as there
were more rooms per person. As I recall you called me dumbo or
something similar, for not realising that as housing is manufactured (
while land is not ) then of course housing will get cheaper over time.
Or larger for the same money, as seems to happen. Given this fact that
you told me, the idea that current value is below replacement cost
sounds odd. At the very least we would need to see what the
depreciation rate is, and compare that to the decline in building
costs. Given the US preponderance of wooden framed housing, you might
be right. But I would want to see figures before I believed it.
>
> >It's a hell of
> >a lot less than that in Alaska, or West Virginia. Central California
> >coast it's about that.....around Paso Robles, perhaps. Rental value of
> >10 % of capital value ? So $ 100 a year per acre ? Or $ 220 billion a
> >year ? So we seem to have the perfect Georgist tax raising 10 % or so
> >of the total Govt spending in the USA ( adding Fed, State and local
> >together I think it's about 30 % of the $ 7 trillion economy ).
> >I'd be interested to know. Is this more or less than is already raised
> >by property taxes ?
>
> Depends if you use any kind of facts or logic when you calculate
> it....
I am trying to. I don't have facts and figures at my fingertips, so I
have to use these very general ones. As it is your theory, it really
is incumbent upon you to have the figures.
>
> >I agree that it might be less distorting to use
> >the Georgist method, rather than the one which is used ( I think
> >property taxes are paid on the improved value of land, including
> >buildings, rather than unimproved ).
>
> Congratulations! You got something right!
>
> >Of course these numbers change drastically if the average value is
> >higher or lower than $ 1,000.
>
> In this context, the term, "average value" would appear to be almost
> completely devoid of semantic content. Lets try Arithmetic mean of the land value of each and every acre in the 50 states. Semantic value enough for you ?
>
> >And charging tax equivalent to rental
> >values is going to change rental values.
>
> It might depress them slightly, as more land is put into productive
> use, but that would be only temporary. The resulting increase in
> economic growth would soon increase rental values at a higher rate.
>
> >My figures could be way off.
>
> You could say that....
>
> >Perhaps someone else has access to better
> >figures than I do.
>
> Like, almost anybody?
Or perhaps you ?
>
> (Hint: Total real estate value is about 2/3 land value. How much is
> the average American's dwelling worth? About half of all real estate
> value is residential. This implies total US land value of how much?)
I don't know, you do the math. And I don't believe the 2/3 figure. I
don't even believe it in the UK, a much much more crowded country.
>
> >But the above calculation seems to be telling me
> >that the Georgist solution won't actually ' solve ' the tax problem.
>
> Governments of modern size probably cannot be supported on land rent
> alone, true. In George's day, it would have been easy.
This is what I think is the let out in your theory. I'm all for a
different and lower tax burden, and this obviously implies a change in
those tasks which Govt undertakes. But I think there are different
ways to do this, and ones which have a greater good effects / bad
effects ratio. Like complete and total free trade, abolition of
corporate txation ( these are all ultimately paid by individuals
anyway, so why not make it clear ? ) , abolition of corporate welfare
amnd tax breaks if we can't do that. Many other similar things would
increase economic growth without having to use what I regard as your
flawed plan.
Unless, of course, you can convince me differently.
>
> OTOH, much if not most current government spending is undertaken in a
> futile attempt to undo the economic and social damage caused by taxing
> production instead of land. The capitalist countries that recover
> more publicly created land value for public purposes -- Hong Kong,
> Singapore and Taiwan -- seem to get along fine with smaller
> governments. Recover more land value, and government looks like
> getting even smaller.
As above, I think you might have the cart before the horse here. There
are other countries, like Saudi, Libya, Iran, which also capture very
large portions of land rent ( from natural resources ) and which are
not great economies, indeed, outside their natural resource sectors,
they are barely functional. So perhaps it is not just capturing land
rent that makes an economy successful ?
>
> >We'll still have to get 90 % of the money through income tax, FICA,
> >Capital gains, all those other economically distorting things.
>
> That is, we would, if your argument above had any foundation whatever
> in reality...
>
> >Is it
> >really worth the convulsions the change over would cause to only get
> >rid of 10 % of the problem ?
>
> It would be more like 70%.
So land tax would not support a modern Govt, as you say above, but
would provide 70 % of the money needed ? So we only have to reduce
Govt by 30 %for you numbers to make sense ? Love to see the plan for
that.
Tim Worstall
>
> -- Roy L
susupply
"Robert Vienneau" <rv...@see.sig.com>
Chief of the Usenet Decorum Police,
wrote in message news:rvien-0C7FDD....@news.dreamscape.com...
> Poor Chris Auld is upset that I am too modest
and,
> Poor Chris Auld has whined
and,
> Maybe poor Chris Auld is correct.
Quis custodiet ipsos custodes?
Christopher Auld
from laughing at his claim to "modesty" and his dismissal
of _most_ economic research as "application of the Cox
proportional hazard model and suchlike" (?), there doesn't
seem to be a point here. In any case, I once again offer
Bob's response as an answer to his query: Why don't
economists hang out on sci.econ?
Robert Vienneau <rv...@see.sig.com> wrote:
>Once upon a time, I responded to some ignorance about me
>supposedly being a Marxist with the comment that, given my
>interest in certain work of Von Neumann, I must be a
>Trotskyite. Poor Chris Auld has finally gotten the joke.
>
>Poor Chris Auld is upset that I am too modest to offer
>an evaluation of game theory.
>
>Some economists apply the Cox proportional hazard rate
>model and suchlike. Poor Chris Auld has whined that
>therefore economists need not be interested in my
>objections to price theory, even if they are valid.
>Now he tells me that those objections "wipe out 99 in
>100 theoretical (and a good chunk of empirical) papers".
>
>Maybe poor Chris Auld is correct. Maybe mainstream
>economists do not care whether or not mainstream
>economic theory is incoherent nonsense.
[ Snip: quotes. No, Bob, Aristotle was not Belgian. ]
Robert Vienneau
RV> It is bad theory to impose any
RV> restriction on the direction of real Wicksell effects. No empirical
RV> evidence is needed for that. Nevertheless, there is some empirical
RV> evidence for "perverse" real Wicksell effects. There is also
RV> empirical evidence for the more interesting question of whether
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
RV> Post Keynesian theory of distribution is superior.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Later I wrote in a different post:
RV> As far as how empirical results are relevant, I have long insisted
RV> certain empirical questions were more interesting than the
RV> empirical evidence for or against reswitching or capital
RV> reversing.
To which Mark Witte responded:
MW> What is more interesting than actual evidence?
----------------------------------------------------------
Later on 18 Jan, I wrote:
RV> Those seriously interested in the empirical and policy implications
^^^^^^^^^^^^^^^^^^^
RV> of Sraffa should consult Bharadwaj and Schefold (1990). But, of
RV> course, tax incidence is not a strong point for those questioning
RV> the empirical and policy relevance of Sraffa. Those with
^^^^^^^^^^^^^^^^
RV> familiarity with the literature would think it's more an area
RV> that should be thought of as a caveat.
RV> "The critique ... opens the way to an interpretation of the
RV> wage rate as 'the independent variable' (Napoleoni, 1963...),
RV> implying a degree of freedom for trade unions' wage
RV> bargaining policy. In Italy 'the wage as the independent
RV> variable' became a widely accepted slogan, often used in
RV> newspaper articles and in political speeches, as implying
RV> theoretical support for trade unions' increased combativeness."
RV> -- Alessandro Roncaglia (1990), in op. cite.
To which Mr. Witte replied on 19 Jan:
MW> This seems an unpromising non-sequitur concerning data that
MW> supports a Sraffarian [sic] approach.
---------------------------------------------------------------
I guess the above is just some of Mr. Witte's hazing.
I'm not sure that it's an exaggeration to say I find
all of Mr. Witte's posts about as perceptive as the
above. I particularly liked the complaint that he
wouldn't type out Burmeister's math on a thread in
which I had been outlining some aspects of Burmeister's
contributions to capital theory. (And how many times
have I pointed out Baldone's criticisms?)
Yes, this thread shows why people have been driven away
from sci.econ. (Of course, I don't think I ever asked
why more economists don't post to sci.econ; I thinked
I asked about sci.econ.research.) If it hadn't been for
the hazing and harassment Mr. Auld and Mr. Witte encourage,
we could have an expert on game theory, at least as far
as industrial organization goes, as far as I understand, offer
some opinions.
I thought Scott Susin's long ago comments on theory choice
were more in keeping with Kuhn. Perhaps somebody sneering
from the northwest has something to do with why he
doesn't post.
---------------------------------------------------------
Rho: Newtonian theory does not say all planetary orbits are
circular.
Mu: Yes it does. And your ideas are not empirically applicable.
Rho: Here's how to construct an elliptical orbit. Let M be
the mass of the sun. Let m be the mass of the planet at
a distance r(t) from the sun...
Mu: You just don't understand how to analyze empirical data.
Rho: That seems to be a misunderstanding of the question.
Mu: Of two theories, why do you prefer the one that isn't
empirically applicable?
Rho: There's only one theory here. I suppose there might be
some arbitrary ad hoc hypotheses one could introduce
to make all planetary orbits circular in this solar
system. But that's not good theory.
Mu: Yes it is. But of the two special cases, ellipses and
circles, why do you prefer the one without empirical
evidence?
Rho: That's a misunderstanding of what's being discussed.
But where's the evidence for your theory?
Mu: If orbits were circular, there would be recurrent patterns
known as the year. And there are. So why do you prefer
a theory without empirical support?
John J Weatherby
Robert Vienneau wrote:
> In article <enH28.10918$OS5.9...@newsread1.prod.itd.earthlink.net>,
> "John J. Weatherby" <jjwea...@earthlink.net> wrote:
>
> > [ snip - some of which I agree with ]
>
> > It is my opinion these
> > arguments which could never be fully settled with move to the dustbin of
> > history as new techniques begin to dominate. I simply think your
> > arguments
> > rarely apply becuase there are 10 years of literature you and the people
> > you
> > quote are completely unaware of. If you are up to Romer 1986 now perhaps
> > there is some hope you will read more. I doubt it though becuase the new
> > literature bypasses Post Keynesian bitching so it will probably be
> > treated
> > as if it never existed.
>
> Let's see some of what those conversant with neoRicardian economics
> have to say these days.
So you agree to the charge that you have not read one orginal model dealing with
growth in the past 10 years? None of these papers are from a top journal. How do
you even know for yourself if any of the criticism is valid when you haven't even
picked up a copy of Romer 1990 to even see for yourself what it says. BTW none of
these papers had anything to do with Romer 1990 or subsequent models. If you want
to know why then pick up the papers.
I find it very strange that in a thread where you are trying to defend yourself
against the charge of conspiriacy theory, you quote author who use words like
repression and synomns for censorship. Are we to beleive you don't really think
there is a conspiracy however you like to quote authors who do.
One snip from an earlier post.
It is as if the debate on the choice of techniques had never
taken place. Amnesia on such a vast scale can only be explained
by more appropriate terms, such as 'suppression' or 'repression'
or 'removal'."
hmm don't mind quoting conspiracy theorist do ya?
Mark Patrick Witte
did on the 17th:
"I've read a number of the authors and articles cited by Mr.
Vienneau, as have others on this group, and posted serious critiques of
them, which were then usually brushed off by Mr. Vienneau, particularly in
areas relating to empirical work, that is relating theoretical models to the
experience of the real world. As I've pointed out in other posts, the
degree of "letters" a challenger has is no bar to the field, it is the
ability of a challenger to answer serious questions about the quality and
importance of his work. Mr. Vienneau certainly cites work by authors who
are both well lettered and well published. However, this work has failed to
generate much following in the field because it generates few real world
implications that can be tested with data. As Chris Auld and Susupply have
noted in questions they have posed to Mr. Vienneau, his approach has little
do with the questions most people and most economists care about."
And what sort of reply always comes? Ah, see below.
In article <rvien-390852....@news.dreamscape.com>,
Robert Vienneau <rv...@see.sig.com> wrote:
>On 18 Jan, I wrote in this thread:
>
>RV> It is bad theory to impose any
>RV> restriction on the direction of real Wicksell effects. No empirical
>RV> evidence is needed for that.
It is bad theory to make an assumption to provide tractability to a
model? Please, let us not return to arguing assumptions and basic
research methodology.
>RV> Nevertheless, there is some empirical
>RV> evidence for "perverse" real Wicksell effects. There is also
>RV> empirical evidence for the more interesting question of whether
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>RV> Post Keynesian theory of distribution is superior.
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
What is this empirical evidence? For years this has been asked;
what is it?
>Later I wrote in a different post:
>
>RV> As far as how empirical results are relevant, I have long insisted
>RV> certain empirical questions were more interesting than the
>RV> empirical evidence for or against reswitching or capital
>RV> reversing.
>
>To which Mark Witte responded:
>
>MW> What is more interesting than actual evidence?
And Mark Witte continues to wonder, what is this evidence? Here
Mr. Vienneau explicitly rejects empirical results, that is evidence from
the real world, in favor of "certain empirical questions" that he finds more
interesting than mere data. Sure, the set of interesting questions is
always bigger than the set of answerable questions. I think questions about
the existence of God are very interesting, but when it comes to doing good
research, we really need to work on questions where we can find a way to get
the data to give us answers. This isn't a difficult concept, but some don't
seem to be picking up on it, even after repeated exposure.
>----------------------------------------------------------
>
>Later on 18 Jan, I wrote:
(In yet another classic example of Viennerial editing, this is a
response to: "Mr. Vienneau certainly cites work by authors who
are both well lettered and well published. However, this work has failed to
generate much following in the field because it generates few real world
implications that can be tested with data. As Chris Auld and Susupply have
noted in questions they have posed to Mr. Vienneau, his approach has little
do with the questions most people and most economists care about.")
>RV> Those seriously interested in the empirical and policy implications
> ^^^^^^^^^^^^^^^^^^^
>RV> of Sraffa should consult Bharadwaj and Schefold (1990). But, of
>RV> course, tax incidence is not a strong point for those questioning
>RV> the empirical and policy relevance of Sraffa. Those with
> ^^^^^^^^^^^^^^^^
>RV> familiarity with the literature would think it's more an area
>RV> that should be thought of as a caveat.
Perhaps Mr. Vienneau would like to carefully state where in the work
he cites is any empirical support given to any policy issue that favors his
preferred approach?
>RV> "The critique ... opens the way to an interpretation of the
>RV> wage rate as 'the independent variable' (Napoleoni, 1963...),
>RV> implying a degree of freedom for trade unions' wage
>RV> bargaining policy. In Italy 'the wage as the independent
>RV> variable' became a widely accepted slogan, often used in
>RV> newspaper articles and in political speeches, as implying
>RV> theoretical support for trade unions' increased combativeness."
>RV> -- Alessandro Roncaglia (1990), in op. cite.
Does Mr. Vienneau think that there is anything particularly unusual
about using wages rates as "independent variables" in standard economic
work? (How can the wage rate be "the" independent variable? What sort of
econometric work are we talking about here?) Or is this an attempt to say
that wage rates are "independent" in that they are determined in an
un-modelable fashion? If so, what sort of model could possibly find
tractability under such an assumption?
>To which Mr. Witte replied on 19 Jan:
>
>MW> This seems an unpromising non-sequitur concerning data that
>MW> supports a Sraffarian [sic] approach.
Indeed it does.
>---------------------------------------------------------------
>I guess the above is just some of Mr. Witte's hazing.
Or to one who has read Kuhn and came away with at least a little
understanding, the above is the sort of standard skeptical probing that goes
on in the world of research. A friend of mine gave a paper today that I
like a lot, but I gave him holy hell for an hour and a half to try to stress
all the seams and find any logical leaks that might undercut his argument.
I raised some questions about alternative interpretations, but could not
shoot him down on anything important. As pointed out in another thread on
sci.econ, Bob Gordon and Bob Hall enjoy sniping at each other's work and are
each other's most perceptive critics, but both are also each other's best
friends. Ideas are criticized not because researchers are mean, but because
that is how ideas are tested; the strong ones survive such inquiry
and are improved over time, and the weak ones crumble and are left behind.
>I'm not sure that it's an exaggeration to say I find
>all of Mr. Witte's posts about as perceptive as the
>above.
Is Mr. Vienneau saying that he didn't understand what I wrote? If
so, I will try to use smaller words in the future.
>I particularly liked the complaint that he
>wouldn't type out Burmeister's math on a thread in
>which I had been outlining some aspects of Burmeister's
>contributions to capital theory. (And how many times
>have I pointed out Baldone's criticisms?)
Typing out text from a book for Mr. Vienneau's amusement seems a
poor use for time. I'm not inclinded to get out my Real Analysis notes
every time I want to use Ito calculus. As I said, since this is sort of
a debate about modern economic methodology, if Mr. Vienneau feels that if
some recent important paper is in error and that his preferred approach
would generate quantitatively different results that better matched the
data, I'd be willing to go through the assumptions and see if his accusation
holds up.
>Yes, this thread shows why people have been driven away
>from sci.econ.
Yes, if they were fond of posting poorly supported assertions and
then took offense if their claims were questioned, they might be happier
elsewhere. Of course such gentle souls can hardly expect to survive long on
the usenet in any group.
>(Of course, I don't think I ever asked
>why more economists don't post to sci.econ; I thinked
>I asked about sci.econ.research.) If it hadn't been for
>the hazing and harassment Mr. Auld and Mr. Witte encourage,
>we could have an expert on game theory, at least as far
>as industrial organization goes, as far as I understand, offer
>some opinions.
Mr. Vienneau considers himself a good judge of who is an expert on
game theory and industrial organization? Whoever does he mean?
>I thought Scott Susin's long ago comments on theory choice
>were more in keeping with Kuhn. Perhaps somebody sneering
>from the northwest has something to do with why he
>doesn't post.
Scott Susin was (or is, I hope) a smart guy who knew a lot of
economics and who could hold up his side in a debate. He won some, he lost
some, and he is missed. This is not intended as any sort of endorsement of
whatever understanding Mr. Vienneau may think he gleaned from Scott's
writings.
>---------------------------------------------------------
I'll stop my reply here. I'd said before that with each passing
year, Mr. Vienneau seems to get progressively sadder and stranger. This
is another disturbing example of this trend. I don't know what sort of
effect he thought he was making, but is is illustrative of a couple points.
One, he understands almost nothing of research methodology, which leaves one
to wonder why he wasted time running his eyes over the writing of Kuhn if
nothing was sinking in. Another point that is clear is that Mr. Vienneau is
no student of the history of science. The elipical orbits of planets were
established as an empirical fact by Kepler, well before Newton came up with
his laws of gravity. Simply sadder and stranger all the time.
Mark Patrick Witte
>On Wed, 16 Jan 2002 20:18:22 GMT, "John Weatherby"
><jjwea...@earthlink.net> wrote:
>
>Substitute "Georgists" for "Post-Keynesians" if you want to see a real
>case of shunning and unofficial censorship. And for a real ugly
>"secret" that mainstream economists never want mentioned in public,
>try the fact that virtually every society in the world gives away
>benefits equivalent to _15%-20%_of_GDP_ to landowners, as a reward for
>contributing exactly nothing.
>
>is prevented from mentioning or even _knowing_ a crucial fact that the
>most brilliant and accomplished economists have all considered obvious
>and undeniable:
>
>"Pure ground rent is in the nature of a 'surplus,' which can be taxed
>heavily without distorting production incentives or reducing
>efficiency."
>-- Paul Samuelson, Nobel laureate in Economics
>
>"In my opinion the least bad tax is the property tax on the unimproved
>value of land, the Henry George argument of many, many years ago."
>--Milton Friedman, Nobel laureate in Economics
>
>government revenue."
>-- Franco Modigliani, Nobel laureate in Economics
>
>"For efficiency, for adequate revenue, and for justice, every user of
>land should be required to make an annual payment to the local
>government equal to the current rental value of the land he or she
>prevents others from using."
>-- Robert Solow, Nobel laureate in Economics
>
>collect some of the rent of land, they do not collect nearly as much
>as they could, and they therefore make unnecessarily great use of
>taxes that impede their economies -- taxes on such things as incomes,
>sales, and the value of capital goods."
>-- William Vickrey, Nobel laureate in Economics and past
>president of the American Economics Association
>
>agreement?
Wow, having Samuelson, Friedman, Modigiliani, Solow, and Vickery
praise the cause! Has there ever been a more stunning example of shunning
and a more complete conspiracy of silence?
However, while pretty much all economists agree that it's a good
thing to tax land, none of the above are saying that a land tax is
sufficient to cover all of a government's revenue needs.
Robert Vienneau
<jwea...@mail.uh.edu> wrote:
> Robert Vienneau wrote:
> So you agree to the charge that you have not read one orginal model
> dealing with
> growth in the past 10 years?
I think Luigi Pasinetti's "Structural Economics Dynamics" (1993) is
innovative. There's other recent stuff I've read dealing with growth
and development.
> BTW
> none of
> these papers had anything to do with Romer 1990 or subsequent models. If
> you want
> to know why then pick up the papers.
"Romer's (1990) paper makes little advance over (1986) with respect
to the issues at hand...
In their discussion of 'Models with Learning-by-Doing and Knowledge
Spillovers', Barro and Sala-i-Martin (1995) consider a production
function for firm i...
A new element of terminological slapdashery (not of terminological
progress) is to be found in Jones (1995)...
A ray of hope in the general gloom of carelessness and casualness
has been provided recently by Aghion and Howitt, who offer a 14
page appendix 'On Some Problems in Measuring Knowledge-Based
Growth.' (1998, pp.435-448; fourteen pages, that is, in a volume of
694 pages.)
These warnings seem to have come too late for Jones (1999), however..."
-- Ian Steedman, op. cite.
> I find it very strange that in a thread where you are trying to defend
> yourself
> against the charge of conspiriacy theory, you quote author who use words
> like
> repression and synomns for censorship. Are we to beleive you don't really
> think
> there is a conspiracy however you like to quote authors who do.
> One snip from an earlier post.
> "It is as if the debate on the choice of techniques had never
> taken place. Amnesia on such a vast scale can only be explained
> by more appropriate terms, such as 'suppression' or 'repression'
> or 'removal'."
> hmm don't mind quoting conspiracy theorist do ya?
Not every comment dealing with the sociology of "knowledge" is
a conspiracy theory. If some can study how the beliefs of physicists
evolve, and argue that the path is contingent, surely some can
wonder about the beliefs common among some communities of
economists.
Pasinetti points to a problem. How is it that so many have rejected,
without argument, the position the MIT boys came to in the later
stages of the CCC?
susupply
"Robert Vienneau" <rv...@see.sig.com>
rushing to the defense of yet another neo-classical economist,
wrote in message news:rvien-390852....@news.dreamscape.com...
> Yes, this thread shows why people have been driven away
> from sci.econ. (Of course, I don't think I ever asked
> why more economists don't post to sci.econ; I thinked
> I asked about sci.econ.research.) If it hadn't been for
> the hazing and harassment Mr. Auld and Mr. Witte encourage,
> we could have an expert on game theory, at least as far
> as industrial organization goes, as far as I understand, offer
> some opinions.
You mean the Kiwi who, after having a question answered politely and
informatively, responded to the courtesy with:
<< I'm sure that you won't believe me, but why don't you get
one of your economist friends to explain to you why David
and Arthur are fine economists and you are a rude ignorant
little boy who doesn't know what he's talking about. >>
And followed that up by an accusation of "gutless" when a Northwestern grad
student added that David had a "mixed record" (and detailed why)? That the
guy you're talking about, Robert?
Besides, he still owes me $100 for the bet he lost.
Patrick
Robert Vienneau
(Mark Patrick Witte) wrote:
> In article <rvien-390852....@news.dreamscape.com>,
> Robert Vienneau <rv...@see.sig.com> wrote:
> >On 18 Jan, I wrote in this thread:
> >RV> It is bad theory to impose any
> >RV> restriction on the direction of real Wicksell effects. No empirical
> >RV> evidence is needed for that.
> It is bad theory to make an assumption to provide tractability to a
> model? Please, let us not return to arguing assumptions and basic
> research methodology.
Here Mr. Witte says he does not want to argue this assumption.
> >RV> Nevertheless, there is some empirical
> >RV> evidence for "perverse" real Wicksell effects. There is also
> >RV> empirical evidence for the more interesting question of whether
> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> >RV> Post Keynesian theory of distribution is superior.
> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> What is this empirical evidence? For years this has been asked;
> what is it?
Here Mr. Witte perceives that I think there's empirical evidence
relevant for the questions I think interesting.
> >Later I wrote in a different post:
> >RV> As far as how empirical results are relevant, I have long insisted
> >RV> certain empirical questions were more interesting than the
> >RV> empirical evidence for or against reswitching or capital
> >RV> reversing.
> >To which Mark Witte responded:
> >MW> What is more interesting than actual evidence?
And here Mr. Witte says he wants to see evidence for or against
that assumption.
> [ snip ]
> Here
> Mr. Vienneau explicitly rejects empirical results, that is evidence from
> the real world, in favor of "certain empirical questions" that he finds
> more
> interesting than mere data. [ Yaba, Yaba...]
And here Mr. Witte makes stuff up. I certainly never explictly
rejected empirical results.
> [ snip - Mr. Witte's lack of understanding of a certain ]
> [ political slogan. ]
To summarize - Mr. Witte has said:
o That the question of the truth of a certain assumption is
uninteresting
o That empirical evidence of its truth or falsity is
interesting
o That I reject empirical evidence
o That I claim to have empirical evidence.
> >I guess the above is just some of Mr. Witte's hazing.
> Or to one who has read Kuhn [ yaba, yaba ]
My subject was not Mr. Witte's misunderstanding of Kuhn. I
can recommend some amusing contemporary work on the sociology
of science, if he would ask.
> >I particularly liked the complaint that he
> >wouldn't type out Burmeister's math on a thread in
> >which I had been outlining some aspects of Burmeister's
> >contributions to capital theory. (And how many times
> >have I pointed out Baldone's criticisms?)
> Typing out text from a book for Mr. Vienneau's amusement seems a
> poor use for time.
Mr. Witte's suggestion that I asked him to type out math is more
of his usual fabrications.
Let's turn to Mr. Witte's confusion about Burmeister and "assumptions".
Mr. Witte's stated views on assumptions is sort of official dogma. But
mainstream economists, including him, don't follow this dogma in
practice. I have sometimes presented models here in which different
(average and marginal) savings propensities are parameters for
savings out of different sources of income. Some, including Mr. Witte,
if I remember correctly, have objected to these assumptions. They
have wanted to see savings propensities derived from intertemporal
utility maximization.
This particular questioning of assumptions is sensible for the
neoclassical economist insisting on methodological individualism
(microfoundations). But that program is in conflict with the
dogma on methodology. (It is also in conflict with pluralism.)
From the viewpoint of neoclassical theory, the "assumption" that
capital-reversing does not occur presents the same problems. It
should be justified by profit-maximizing and microeconomic
assumptions on technology. In fact, the attempt to find some
reasonable assumptions on technology was a response of some
economists, including mainstream economists, to the CCC. As
Burmeister has noted in several places, they have not been
able to find assumptions on technology to justify their
models. Hence my question: What are your assumptions? which
goes unanswered.
(As an aside, I note that Burmeister says the equation of
the marginal product of capital would be equal, in equilibrium,
to the interest rate, given no capital reversing, if capital
were measured by Champerowne's chain index measure. This index
basically sums up real Wicksell effects over the steady-state
profit-maximizing techniques as the rate of interest varies
from zero to a given value. Since this measure can never be
calculated from observable data, it is curious that Mr. Witte
should cite the mathematics I outline to justify certain
empirical models. Or maybe he is attempting to justify long
period models by Burmeister's explicit dismissal of long
period models. Who can tell, given his revealed preference for
posting silly ridicule, rather than substantial posts?)
From the perspective of Post Keynesianism, the assumptions
on savings propensities are different in kind from "assumptions"
ruling out capital-reversing. The former are stylized facts.
the latter is not a stylized fact, nor an empirical
generalization. The context of its discovery reveals its
ad hoc nature. It was introduced to justify certain models
with "nice" properties.
And so many economists who understand the CCC, heterodox and
orthodox alike, have thought economic theory should be
developed with no restrictions placed on the direction of
real Wicksell effects (or the presence or absence of price
Wicksell effects). This is the consensus of the specialized
literature on the topic. Tractable models have been developed
under these guidelines.
(I think if one wants to reject this consensus and impose
some such restrictions, one should recognize that one is
rejecting neoclassical methodology. It has been my consistent
position for a number of years that mainstream economics is
NOT identical to neoclassical economics. I often bring up some
responses to the SMD results in this context. I might note there
is now a paper in the professional literature entitled "The
Death of Neoclassical Economics" that advances similar arguments.)
And there we reach the position to which advanced theory
leaves us.
> I'll stop my reply here.
There Mr. Witte tells another untruth.
> [ more irrelevancies about Kuhn and a true, but irrelevant, ]
> [ statement that a dialogue not presented as history of science ]
> [ is not accurate history of science, as well as usual drivel. ]
>> [ A dialogue whose point has not been addressed. ]
Burkhard C. Schipper
> o The Sonnenschein-Mantel-Debreu models suggest that General
> Equilibrium theory, representative agent models, and maybe
> even strong methodological individualism, in general, are
> failed research programs.
The Sonnenschein-Mantel-Debreu theorem just says that in general equilibrium
models assumptions on utility functionals do not yields any interesting
properties of general equilibrium. In particular, it does not provide for
uniqueness of general equilibrium.
However, we can pose assumptions directly on demand functions instead
utility functions. General equilibrium theory does not really require
utility functions.
I think research in the spirit of the methodological individualism, such as
in game theory, experimental economics etc., yields interesting insights in
human economic behavior. However, the aggregation problem remains open.
> o So-called Keynesian economics arguably never incorporated certain
> themes important in the economics of Keynes, in particular, the
> distinction between uncertainty and risk. (The IS/LM model
> replicates the lack of interaction between real and monetary
> theory that Keynes aimed to abolish.)
Note that models of uncertainty, like Choquet expected utility or Case-Based
decision theory, are pretty resent. It is not a surprise that it couldn't be
modeled in earlier works.
Burkhard C. Schipper
www.bgse.uni-bonn.de/~burkhard
susupply
> > >RV> Nevertheless, there is some empirical
> > >RV> evidence for "perverse" real Wicksell effects. There is also
> > >RV> empirical evidence for the more interesting question of whether
> > > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> > >RV> Post Keynesian theory of distribution is superior.
> > > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
To which Prof. Witte asks the obvious question:
> > What is this empirical evidence? For years this has been asked;
> > what is it?
And receives Mr. Vienneau's typical evasion:
> Here Mr. Witte perceives that I think there's empirical evidence
> relevant for the questions I think interesting.
If Prof. Witte is mistaken in his perception, what perception should he have
to your statements:
"there is some empirical evidence for" and; "There is also empirical
evidence for" ?
Christopher Auld
>Let's turn to Mr. Witte's confusion about Burmeister and "assumptions".
>Mr. Witte's stated views on assumptions is sort of official dogma. But
>mainstream economists, including him, don't follow this dogma in
>practice. I have sometimes presented models here in which different
>(average and marginal) savings propensities are parameters for
>savings out of different sources of income. Some, including Mr. Witte,
>if I remember correctly, have objected to these assumptions. They
>have wanted to see savings propensities derived from intertemporal
>utility maximization.
Whether savings rates are constant is, in fact, an empirical question.
Let us suppose -- purely hypothetically of course -- that it has been
well known for 50 years that savings rates are not constant but rather
vary systematically with, for instance, expectations over the
transience of income (such that asserting their constancy as a
"stylized fact" would be an abuse of the term). In such a fanciful
scenario, it would be perfectly reasonable to object on empirical
grounds that a model ruling such behavior out by assumption is making a
false assumption. Depending on the point of the model, that may
nonetheless be a reasonable assumption, although it would certainly be
highly questionable if the focus of the model were intertemporal
consumption behavior. But in any case it would certainly be odd to
claim that objections to parametric savings rates are without empirical
basis.
>From the viewpoint of neoclassical theory, the "assumption" that
>capital-reversing does not occur presents the same problems.
Bob does not mean "neoclassical theory." Bob means "a subset of
theories in a subset of macroeconomics." But see below.
Is there anything duller than pointing out problems with aggregation,
in science generally, but particularly in macroeconomics?
> I might note there
>is now a paper in the professional literature entitled "The
>Death of Neoclassical Economics" that advances similar arguments.)
>
>And there we reach the position to which advanced theory
>leaves us.
Where to start? Oh, the dangers of citing papers you've never
read.
Bob, having been recently lambasted for confusing history of
thought with current "advanced theory," oddly omits the name of
journal in which this piece appears.
< drumroll >
It is in fact "Journal of the History of Economic Thought." And
does this paper back up the particular claims he makes in this
thread, claims he makes generally, or his own oft-spammed essay
bearing the same name? Well, from the abstract:
Let me be clear about what I am sentencing to death -- it
is not the content of neoclassical economics... What I am
declaring dead is the term.
Why does Colander think the term "neoclassical economics" should
be retired?
The problem is its use by some heterodox economists, by many
nonspecialists, and by historians of thought at unguarded
moments, as a classifier for the the approach that the
majority of economists take today.... The use of the term
neoclassical to describe the economics that is practiced today
is not only not useful, but it actually hinders understanding
by students and lay people of what contemporary economics is.
Economists today are not neoclassical by any reasonable
definition of the term. They are far more eclectic, and
concerned with different issues than were the economists
of the early 1900s.
It would seem that Colander is expressing sentiments that
people have been trying vainly to get across to a particular
lay person for years, not bolstering said lay person's
pet arguments. Even in this thread, this lay person has yet
again been exposed to the idea that economists are concerned
with more than narrow issues in price theory. Said lay person
has previously dismissed such research generally, and in this
thread mocked one particular dramatic change in economic
practice -- the rise of econometrics -- as "application of the
Cox proportional hazard model and suchlike." Finally, it has
also been explained to said lay person that his take on what
economists do is warped, possibly because he limits his
readings in economics largely to the meta-analysis of "heterodox"
economists. Perhaps said lay person ought to finally start
taking these comments seriously now that he has cited a paper
by a non-evil economist saying exactly the same thing.
Just for laughs, let's repeat this again:
The use of the term neoclassical to describe the economics
that is practiced today is not only not useful, but it actually
hinders understanding by students and lay people of what
contemporary economics is.
Perhaps someone should program a bot to auto-respond with this
sentence every time Bob spams one his essays.
>>> [ A dialogue whose point has not been addressed. ]
Bob has recently started complaining about the lack of decorum
on this forum. Among the many offensive and rude remarks he
has subsequently made is a "dialogue" in which Bob explains basic
research methodology to a strawman idiot representing the economics
profession. Bob then asks why this vacuous insult has not been
"addressed."
--
Grinch
wrote:
>....
>Where to start? Oh, the dangers of citing papers you've never
>read.
>
>....
>Just for laughs, let's repeat this again:
>
> The use of the term neoclassical to describe the economics
> that is practiced today is not only not useful, but it actually
> hinders understanding by students and lay people of what
> contemporary economics is.
Ah, yes, Colander remains just as full of insight the second time
through. ;-)
susupply
> Where to start? Oh, the dangers of citing papers you've never
> read.
>
> Bob, having been recently lambasted for confusing history of
> thought with current "advanced theory," oddly omits the name of
> journal in which this piece appears.
>
> < drumroll >
>
> It is in fact "Journal of the History of Economic Thought." And
> does this paper back up the particular claims he makes in this
> thread, claims he makes generally, or his own oft-spammed essay
> bearing the same name?
To be evenhanded, he doesn't do particularly well grasping the the
arguments of the articles he actually does read either.
John J. Weatherby
> In article <3C4F44FA...@mail.uh.edu>, John J Weatherby
> "Romer's (1990) paper makes little advance over (1986) with respect
> to the issues at hand...
>
This just shows you have not read Romer 1990 nor have a clue to what is
contained in it.
> In their discussion of 'Models with Learning-by-Doing and Knowledge
> Spillovers', Barro and Sala-i-Martin (1995) consider a production
> function for firm i...
>
Romer 1990 and the subsequent R&D literature are not learning by doing
models. Yes they contain knowledge spillovers but these model are
SIGNIFICANTLY DIFFERENT FROM HUMAN CAPITAL MODELS. repeat Romer 1990 and
beyond are not learning by doing nor human capital models. Romer 1990 has a
long discussion of how hetreogenous labor, differentiated goods, and
hetreogenous capital are introduced. This is a significant break from all
previous literature. Grossman and Helpman, Aghion and Howit, Jones, etc.
follow this break in producing models with hetregenous goods and labor. Not
all models introduce physical capital. Either 1981 showed that the
Dixit-Stiglitz form of prefences could be seen as individual preferences or
a production function for final goods. Some models like Romer emphasize
hetregenous capital goods while Grossman and Helpman use differentiated
final goods.
I am getting sick of repeating myself and refuse to discuss this any
more until you obtain a copy of Romer 1990 for yourself and read the damn
thing. It is obvious from your comments you have never read it nor the
literature following it. Paseinetti may know the difference in these models
however you are clueless. You don't even have the basic idea of what any of
these models say. In your typical fashion you change the models to say what
you want to them say. I can not be fooled by this. The last three years of
my life have been spent studying these models and extending on them. I
personally know these are complex models and they can be difficult to
understand that is why it takes more than waving a someone's name or an
abstract from a radical journal to convince me you are right.
For all I know, and what I suspect, these authors probably don't even
understand the R&D literature. In fact few trained economist know the inner
workings of these models. The number people in the Unitied States who have
intensely studied these models are low. In fact I can count on one hand the
number of experts in the area. This leads to a high level of suscipion that
these quotes are either shooting off the cuff or do not understand these
models. The average economist will rarely even comment on this area. Trust
me I know. Finding people who are willing to look these papers and make
comments on the model can be difficult.
> A new element of terminological slapdashery (not of terminological
> progress) is to be found in Jones (1995)...
>
Without reading Romer 1990 you are at loss to discuss Jones 1995. Jones
extends on Romer without understanding Romer you can not understand Jones.
Furthermore this is just a stupid comment and I am not even sure which Jones
1995 paper it refers to. This is just a one liner that sounds like it came
from someone who just had to make a comment but didn't know what to say. It
has no substance to it at all. You see one of Jones' 1995 papers shows the
problem of scale effects, a very significant contribution, the problem of
the prediction of accelerating growth. Time series test of endogenous growth
has sparked about 5 years of responses and new models to deal with scale
effects. The second shows how to deal with scale effects. Personally
although I find it innovative I am not thrilled with the way Jones deals
with scale effects. His model puts us back to transitional dynamics and
ultimately predicts governmental policy can not affect long term growth
rates.
My advice is to kill the search engine and read some damn papers.
> A ray of hope in the general gloom of carelessness and casualness
> has been provided recently by Aghion and Howitt, who offer a 14
> page appendix 'On Some Problems in Measuring Knowledge-Based
> Growth.' (1998, pp.435-448; fourteen pages, that is, in a volume of
> 694 pages.)
>
> These warnings seem to have come too late for Jones (1999), however..."
What warnings? Which Jones 1999 paper? Are you refering to "Too much of a
good thing"? This is an entirely empiral piece which uses a slight variation
on Jones 1995. Somehow I doubt this is what the author refers to. Are you
refering to Growth with or without Scale Effects this is a survey. Surely
this author isn't so desperate to attack a survey is he? What warnings are
refered to? What ray of hope is the author refering to ? Aghion and Howitt
have long discussions about scale effects and the evidence for and against
is this what he is talking about? Do you even know what the author is
refering to?
Again I suggest you kill the search engine and read some papers. One line
slapshots by an unknown aren't enough to kill good theory.
> Pasinetti points to a problem. How is it that so many have rejected,
> without argument, the position the MIT boys came to in the later
> stages of the CCC?
>
Which is what? Your doctored version of Samuelson where you claim he made a
mistake and then patch the alleged mistake and try to say Samuelson agreed
with you? Sorry this isn't way things work. Again read some papers then we
can have a discussion.
> --
> Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
Is this a joke some all this is a game that has commie flag on it and states
it is about economic planning. Get real. What is this supposed to prove?
John
Mark Patrick Witte
compare what Robert Vienneau writes with the original text to which he is
responding. I wonder if it is his fault that such amazing discrepancies
appear or whether his editor is only serving him as well as Arthur Andersen
served Enron. Both do seem bent on shredding all inconvenient evidence of
past embarrassments.
In article <rvien-1E1C6E....@news.dreamscape.com>,
Robert Vienneau <rv...@see.sig.com> wrote:
>In article <a2odaj$4a2$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
>(Mark Patrick Witte) wrote:
>
>> In article <rvien-390852....@news.dreamscape.com>,
>> Robert Vienneau <rv...@see.sig.com> wrote:
>
>> >On 18 Jan, I wrote in this thread:
>
>> >RV> It is bad theory to impose any
>> >RV> restriction on the direction of real Wicksell effects. No empirical
>> >RV> evidence is needed for that.
>
>> It is bad theory to make an assumption to provide tractability to a
>> model? Please, let us not return to arguing assumptions and basic
>> research methodology.
>
>Here Mr. Witte says he does not want to argue this assumption.
This is really not a complicated matter, and one that I have written
about many times. Serious scholars don't argue assumptions; rather they
compare models. Models with "bad" assumptions yield poor results relative
to models with "better" assumptions. That is, the proof of the pudding is
in the eating, and assumptions are good or bad based upon how well the model
that contains them does relative to competing models.
>> >RV> Nevertheless, there is some empirical
>> >RV> evidence for "perverse" real Wicksell effects. There is also
>> >RV> empirical evidence for the more interesting question of whether
>> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>> >RV> Post Keynesian theory of distribution is superior.
>> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>
>> What is this empirical evidence? For years this has been asked;
>> what is it?
>
>Here Mr. Witte perceives that I think there's empirical evidence
>relevant for the questions I think interesting.
Perhaps my lack of success in getting Mr. Vienneau to understand the
basics of research are not for the lack of the quality of my explanations
but rather a problem of certain other basics having not been covered.
Perhaps I should first spend some time on giving pointers in basic reading
comprehension. I guess I was putting the cart before the horse on this.
Well, it's never too late to try to set things right. Just for a starter,
the "?" mark indicates an interrogative statement, a question. That is, it
indicates a statement with a truth value that has not yet been determined.
However, this question has a deeper shading of meaning. By asking what
evidence there might be to support a claimed position, it is politely
skirting the question of whether such evidence exists at all. That is,
after years of asking for such evidence and receiving no serious reply, the
questioner is still politely holding to a good faith convention that when a
poster writes that "There is also empirical evidence for" something, that
such evidence really exists and that the poster is not merely talking out of
his nether regions.
>> >Later I wrote in a different post:
>
>> >RV> As far as how empirical results are relevant, I have long insisted
>> >RV> certain empirical questions were more interesting than the
>> >RV> empirical evidence for or against reswitching or capital
>> >RV> reversing.
>
>> >To which Mark Witte responded:
>
>> >MW> What is more interesting than actual evidence?
>
>And here Mr. Witte says he wants to see evidence for or against
>that assumption.
Ah, I hope that after our president completes his war against the
evil-doers that he will return to his quest for literacy, so that no child,
nor even the merely childish, are left behind! Yet again: Evidence does
not support assumptions, it tests models. Do we need evidence that people
have infinite lives to use models that use the assumption of infinitely
lived agents? No. Would a model of retirement saving decisions that used
such an assumption match up well with the data, as compared to models that
did not use such an assumption? It seems unlikely.
>> [ snip ]
>
>> Here
>> Mr. Vienneau explicitly rejects empirical results, that is evidence from
>> the real world, in favor of "certain empirical questions" that he finds
>> more interesting than mere data. [ Yaba, Yaba...]
It seems that my post was interrupted by a rude outburst from Fred
Flintstone. (It's not widely known, but Fred actually has made some
contributions in economics and has been cited for his work in at least one
paper by Xavier Sala-i-Martin. "Sally Martin" really is one of the nicest
and most enjoyable people in economics (and damn smart too) and he has by
far the best website: http://www.columbia.edu/~xs23/home.html)
>And here Mr. Witte makes stuff up. I certainly never explictly
>rejected empirical results.
Ah, it does not pay to be "explicit", now does it? However, after a
certain number of years, actions begin to speak louder than any words ever
could. But what were the actual words from Mr. Vienneau anyway? He makes
that rather hard to tell, doesn't he? One might wonder why, or else one
could look up those words and then see exactly why Mr. Vienneau would want
to cut them out, and why he would probably wish that he could get in a time
machine and go back to a fewo days ago so that he could stop himself from ever
typing them in the first place.
RV: "As far as how empirical results are relevant, I have long insisted
certain empirical questions were more interesting than the
empirical evidence for or against reswitching or capital
reversing."
Yes, yes, questions are more interesting then empirical evidence.
Words to live by, indeed. Or as I was trying to say before Mr. Flintstone
rudely interrupted:
"And Mark Witte continues to wonder, what is this evidence? Here
Mr. Vienneau explicitly rejects empirical results, that is evidence from
the real world, in favor of "certain empirical questions" that he finds more
interesting than mere data. Sure, the set of interesting questions is
always bigger than the set of answerable questions. I think questions about
the existence of God are very interesting, but when it comes to doing good
research, we really need to work on questions where we can find a way to get
the data to give us answers. This isn't a difficult concept, but some don't
seem to be picking up on it, even after repeated exposure."
No indeed, some certainly don't seem to be picking up on the basics
of methodology.
>> [ snip - Mr. Witte's lack of understanding of a certain ]
>> [ political slogan. ]
This statement is as opaque as it is rude. It is too bad for
readers looking for yet another laugh at Mr. Vienneau's expense that we
cannot go back and figure out what bon mot further scored his already
smoldering backside to make him cut it out in this fashion.
>To summarize - Mr. Witte has said:
>
> o That the question of the truth of a certain assumption is
> uninteresting
This is true.
> o That empirical evidence of its truth or falsity is
> interesting
This is not true, and this continues to be a slightly subtle issue
that seems completely lost on Mr. Vienneau. Serious research is not
debating assumptions, it is comparing the results of models.
> o That I reject empirical evidence
Over time, Mr. Vienneau is generating a large supporting dataset
on this question.
> o That I claim to have empirical evidence.
This claim has been made, but never actually supported by this
claimed evidence. After a few years, one begins to wonder how seriously the
person making this claim feels looking at data actually is.
>> >I guess the above is just some of Mr. Witte's hazing.
>
>> Or to one who has read Kuhn [ yaba, yaba ]
FLINTSTONE!
>My subject was not Mr. Witte's misunderstanding of Kuhn.
...but rather Witte's lack of misunderstanding of Kuhn.
>I can recommend some amusing contemporary work on the sociology
>of science, if he would ask.
I'm sure that Mr. Vienneau can recommend some amusing work in this
area. I base this statement upon the loud laughter and still continuing
chuckles I got out of reading his recommended piece by David Colander.
>> >I particularly liked the complaint that he
>> >wouldn't type out Burmeister's math on a thread in
>> >which I had been outlining some aspects of Burmeister's
>> >contributions to capital theory. (And how many times
>> >have I pointed out Baldone's criticisms?)
>
>> Typing out text from a book for Mr. Vienneau's amusement seems a
>> poor use for time.
>
>Mr. Witte's suggestion that I asked him to type out math is more
>of his usual fabrications.
"More of his usual fabrications?" Well, this can hardly meet the
standard for decorum we have on sci.econ. Bouncer, show this man to the
door!
>Let's turn to Mr. Witte's confusion about Burmeister and "assumptions".
>Mr. Witte's stated views on assumptions is sort of official dogma.
I had no idea I was so influential! This makes my day!
>But
>mainstream economists, including him, don't follow this dogma in
>practice. I have sometimes presented models here in which different
>(average and marginal) savings propensities are parameters for
>savings out of different sources of income. Some, including Mr. Witte,
>if I remember correctly, have objected to these assumptions. They
>have wanted to see savings propensities derived from intertemporal
>utility maximization.
A model of consumer choice that does not contain consumer choice
would not seem to be a promising research agenda. This is not a matter of
saying that an assumption is wrong, but rather saying that someone who is
planning to go fishing in a toilet should not make plans to host a fish fry.
>This particular questioning of assumptions is sensible for the
>neoclassical economist insisting on methodological individualism
>(microfoundations). But that program is in conflict with the
>dogma on methodology. (It is also in conflict with pluralism.)
>
>From the viewpoint of neoclassical theory, the "assumption" that
>capital-reversing does not occur presents the same problems. It
>should be justified by profit-maximizing and microeconomic
>assumptions on technology. In fact, the attempt to find some
>reasonable assumptions on technology was a response of some
>economists, including mainstream economists, to the CCC. As
>Burmeister has noted in several places, they have not been
>able to find assumptions on technology to justify their
>models. Hence my question: What are your assumptions? which
>goes unanswered.
Ill-defined questions cannot be answered. But speaking of things
that go unanswered:
"Typing out text from a book for Mr. Vienneau's amusement seems a
poor use for time. I'm not inclinded to get out my Real Analysis notes
every time I want to use Ito calculus. As I said, since this is sort of
a debate about modern economic methodology, if Mr. Vienneau feels that if
some recent important paper is in error and that his preferred approach
would generate quantitatively different results that better matched the
data, I'd be willing to go through the assumptions and see if his accusation
holds up."
>(As an aside, I note that Burmeister says the equation of
>the marginal product of capital would be equal, in equilibrium,
>to the interest rate, given no capital reversing, if capital
>were measured by Champerowne's chain index measure. This index
>basically sums up real Wicksell effects over the steady-state
>profit-maximizing techniques as the rate of interest varies
>from zero to a given value. Since this measure can never be
>calculated from observable data, it is curious that Mr. Witte
>should cite the mathematics I outline to justify certain
>empirical models. Or maybe he is attempting to justify long
>period models by Burmeister's explicit dismissal of long
>period models. Who can tell, given his revealed preference for
>posting silly ridicule, rather than substantial posts?)
Unfair, unfair! I only post the most serious of ridicule, as befits
replys to someone who is so seriously ridiculous.
>From the perspective of Post Keynesianism, the assumptions
>on savings propensities are different in kind from "assumptions"
>ruling out capital-reversing. The former are stylized facts.
>the latter is not a stylized fact, nor an empirical
>generalization. The context of its discovery reveals its
>ad hoc nature. It was introduced to justify certain models
>with "nice" properties.
Assumptions are introduced to make models tractable, end of story.
Some years ago I accused Tom Sargent of making what I thought was a
nakedly ad hoc assumption when greater generality was possible and
even called for. He politely replied that from the Latin the assumption
was "for this", it was minimally necessary to make this model work, and
if I could find an alternative that was more general or worked better, than
he'd like to see it. I couldn't.
>And so many economists who understand the CCC, heterodox and
>orthodox alike, have thought economic theory should be
>developed with no restrictions placed on the direction of
>real Wicksell effects (or the presence or absence of price
>Wicksell effects). This is the consensus of the specialized
>literature on the topic. Tractable models have been developed
>under these guidelines.
And so, with this beloved assumption, how do they do compare on
their predictions of the moments of the data in contrast to models that are
based upon a different assumption set?
>(I think if one wants to reject this consensus and impose
>some such restrictions, one should recognize that one is
>rejecting neoclassical methodology. It has been my consistent
>position for a number of years that mainstream economics is
>NOT identical to neoclassical economics.
Oh yes, Mr. Vienneau's census of economists by their flavors. Where
can I see the results of that posted? Or is it hard to get through to the
webpage due to all the PK's and Sraffarians checking in to see their names?
>I often bring up some
>responses to the SMD results in this context. I might note there
>is now a paper in the professional literature entitled "The
>Death of Neoclassical Economics" that advances similar arguments.)
Perhaps we need to start a new thread or two. I suggested that
every year Mr. Vienneau gets a little sadder and a little stranger. So, I
would nominate this for the saddest moment yet, where he posted up
something that pretty much demolished so much of what he has been claiming
for so long and exposes his lack of any serious understanding of the field
of economics. But then, I'm sure I'm forgetting some golden moments of this
sort. So, maybe we could start a thread where we could bring up some
comparable chestnuts from threads past?
>And there we reach the position to which advanced theory
>leaves us.
>
>> I'll stop my reply here.
>
>There Mr. Witte tells another untruth.
Actually, I did stop my reply with that paragraph, which was what
the "here" was intended to indicate, so that readers would be spared paging
down through the ill-informed dialogue that Mr. Vienneau had concocted.
Just to be clear, I'll reprint the text:
"I'll stop my reply here. I'd said before that with each passing
year, Mr. Vienneau seems to get progressively sadder and stranger. This
is another disturbing example of this trend. I don't know what sort of
effect he thought he was making, but is is illustrative of a couple points.
One, he understands almost nothing of research methodology, which leaves one
to wonder why he wasted time running his eyes over the writing of Kuhn if
nothing was sinking in. Another point that is clear is that Mr. Vienneau is
no student of the history of science. The elipical orbits of planets were
established as an empirical fact by Kepler, well before Newton came up with
his laws of gravity. Simply sadder and stranger all the time."
>> [ more irrelevancies about Kuhn and a true, but irrelevant, ]
>> [ statement that a dialogue not presented as history of science ]
>> [ is not accurate history of science, as well as usual drivel. ]
>
>>> [ A dialogue whose point has not been addressed. ]
Perhaps Mr. Vienneau would wish to revisit his dialogue and consider
what a reader should take from it.
>Rho: Newtonian theory does not say all planetary orbits are
> circular.
>
>Mu: Yes it does. And your ideas are not empirically applicable.
Mu is flat out wrong on both points. Elipical orbits are not only
tractably modeled but well supported empirically. And note: this was a
battle that was won empirically, not theoretically, although Kepler did make
contributions in both areas. (In fairness to Mr. Vienneau, this example has
been discussed at length in a number of papers by Thomas Kuhn so it is not
surprising that Mr. Vienneau fails to understand anything about it.)
So, I suppose that a reader should take from this little morality
play the importance of having models that are empirically implementable and
well supported by the data the real world gives us. Of course, one is free
to continue to hold a preference for the work of Ptolemy, as many did for
years after Kepler, or even for the work of Sraffa.
Robert Vienneau
(Christopher Auld) wrote:
> Robert Vienneau <rv...@see.sig.com> wrote:
[ >> I think if one wants to reject this consensus and impose ]
[ >> some such restrictions, one should recognize that one is ]
[ >> rejecting neoclassical methodology. It has been my consistent ]
[ >> position for a number of years that mainstream economics is ]
[ >> NOT identical to neoclassical economics. I often bring up some ]
[ >> responses to the SMD results in this context. ]
> > I might note there
> >is now a paper in the professional literature entitled "The
> >Death of Neoclassical Economics" that advances similar arguments.)
> Where to start? Oh, the dangers of citing papers you've never
> read.
Poor Chris Auld cannot possibly know that.
> Why does Colander think the term "neoclassical economics" should
> be retired?
>
> The problem is its use by some heterodox economists, by many
> nonspecialists, and by historians of thought at unguarded
> moments, as a classifier for the the approach that the
> majority of economists take today....
We all, me included, fall into the habit of calling modern
economics neoclassical when we want to contrast modern
mainstream economics with heterodox economics...
> The use of the term
> neoclassical to describe the economics that is practiced today
> is not only not useful, but it actually hinders understanding
> by students and lay people of what contemporary economics is.
>
> Economists today are not neoclassical by any reasonable
> definition of the term. They are far more eclectic, and
> concerned with different issues than were the economists
> of the early 1900s.
Colander: Economists today are not neoclassical by any reasonable
definition of the term.
Vienneau: mainstream economics is NOT identical to neoclassical
economics.
Colander: Neoclassical economics accepts methodological individualism.
Vienneau: the neoclassical economist insist[s] on methodological
individualism (microfoundations).
Colander: While [methodological] individualism still reigns, it is
under attack by branches of modern economics. Complexity theorists
challenge the entire individualistic approach, at least when that
approach is used to understand the aggregate economy. Evolutionary
game theorists are attempting to show how such norms develop and
constrain behavior. New Institutionalists consistently operate
out of a framework at odds with methodological individualism.
Vienneau [among other places]: I think if one wants to...impose
some such restrictions [on real Wicksell effects], one should
recognize that one is rejecting neoclassical methodology.
Colander: Focus on marginal tradeoffs
While many undergraduate texts still present economics within
a marginal framework, that is not the way it is presented in
graduate schools or the way top economists think about issues.
In fact, by the 1930s, in cutting-edge theory, calculus was
already being dropped...and math was moving to set theory
and topology as economists tried to expand the domain of
economics to include a wider variety of topics...
Vienneau: (In an essay titled "Choice of Technique")
Display 3 defines a relation for the coefficients of production.
Formally, a relation is a set of ordered tuples, such as...
where Kj is an index set. Kj could be continuous. Sometimes it
might be convenient to use a multidimensional index set. This
representation of the production possibilities available to an
industry is completely general for constant-returns-to-scale,
circulating capital technologies.
> It would seem that Colander is expressing sentiments that
> people have been trying vainly to get across to a particular
> lay person for years, not bolstering said lay person's
> pet arguments. Even in this thread, this lay person has yet
> again been exposed to the idea that economists are concerned
> with more than narrow issues in price theory.
Since I have been saying the same for years, one can
only wonder about poor Chris Auld's problems. Of course,
he seems to "think" that the following two propositions
are contradictory:
Price theory has problems.
Some economists worry about developing more powerful
statistical tests appropriate for data that appears
in certain applied fields in economics.
Robert Vienneau
(Mark Patrick Witte) wrote:
> >> >RV> Nevertheless, there is some empirical
> >> >RV> evidence for "perverse" real Wicksell effects. There is also
> >> >RV> empirical evidence for the more interesting question of whether
> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> >> >RV> Post Keynesian theory of distribution is superior.
> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> >> >RV> As far as how empirical results are relevant, I have long
> >> >RV> insisted
> >> >RV> certain empirical questions were more interesting than the
> >> >RV> empirical evidence for or against reswitching or capital
> >> >RV> reversing.
The above passages mention "'perverse' real Wicksell effects", "capital
reversing", "reswitching", and the "Post Keynesian theory of
distribution". I notice Mr. Witte has made no substantial comment
on the concepts represented by these terms. I wonder if he can tell
us which terms are synonyms?
Even somebody that does not understand the technical jargon, I think,
would see the second quote above does not reject empirical evidence.
Both passages have a parallel contrast.
So I can only would wonder why Mr. Witte delivers this lecture:
> Serious scholars don't argue assumptions; rather they
> compare models.
I also found this passage of interest:
> >From the viewpoint of neoclassical theory, the "assumption" that
> >capital-reversing does not occur presents the same problems. It
> >should be justified by profit-maximizing and microeconomic
> >assumptions on technology. In fact, the attempt to find some
> >reasonable assumptions on technology was a response of some
> >economists, including mainstream economists, to the CCC. As
> >Burmeister has noted in several places, they have not been
> >able to find assumptions on technology to justify their
> >models. Hence my question: What are your assumptions? which
> >goes unanswered.
> Ill-defined questions cannot be answered.
Burmeister has written how nobody has yet discovered necessary
assumptions on technology that imply all real Wicksell effects
are "non-perverse". I would think it would be clear that I
was asking what assumptions, other than the standard neoclassical
ones, Mr. Witte was inclined to make on technology. Burmeister
seems clear to me on the fact that additional ones are needed.
In short, I was asking Mr. Witte to say something relevant on
the topic I was discussing.
And if he wants to discuss the need for empirical evidence, it
would be more relevant to define the theories or models the
evidence is supposed to decide between than to deliver ill-thought
out lectures on meta-topics. After all, ill-defined questions
cannot be answered.
I did like this bit:
> A model of consumer choice that does not contain consumer choice
> would not seem to be a promising research agenda.
> Would a model of retirement saving decisions that
> used ...an assumption [of infinite lived agents ]
> match up well with the data, as compared to models that
> did not use such an assumption? It seems unlikely.
versus:
> Assumptions are introduced to make models tractable, end of story.
(It seems to me the bit about consumer choice is a non sequitur.
Kaldor explained to Pasinetti that his assumptions were more about
corporations. Researchers have built on this thought, including
some doing empirical work. Why was Alfred Eichner a Post Keynesian?)
This bit was amusing too:
>>Rho: Newtonian theory does not say all planetary orbits are
>> circular.
>>Mu: ...your ideas are not empirically applicable.
> Mu is flat out wrong... Elipical orbits are...well supported
> empirically.
And this has what to do with Rho's point?
By the way, Mr. Witte's standards seem to have evolved since 1996:
------------------------------------------------------
CA> Is Rob aware that more than half of the
CA> papers published in mainstream journals are empirical?
RV>You have a cite for that statistic? I am aware that some
RV>have counted, but the numbers I vaguely recall were some time
RV>ago and I thought lower.
MW>Nice try at diverting the issue. Mr. Auld's point is surely
MW>that the empirical content of most mainstream journals is quite
MW>high, perhaps above 50% or perhaps a bit lower but with a
MW>standard error that is likely large enough to cover the 50% mark
MW>when placed as a bound around the first moment.
--------------------------------------------------------------
susupply
"Robert Vienneau" <rv...@see.sig.com>
paddling furiously to stay afloat,
wrote in message news:rvien-0F2006....@news.dreamscape.com...
> In article <a2tbqg$i03$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
> (Mark Patrick Witte) wrote:
Funny how Robert has "disappeared" almost everything Prof. Witte did write.
> > >> >RV> Nevertheless, there is some empirical
> > >> >RV> evidence for "perverse" real Wicksell effects. There is also
> > >> >RV> empirical evidence for the more interesting question of whether
> > >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> > >> >RV> Post Keynesian theory of distribution is superior.
> > >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Tell us Robert, what percentage of sci.econ readers do you suppose suffer
from Alzheimers?
That is, how many of us do you suppose will forget that in response to your
above claims, Prof. Witte asked (and more than once) the simplest of
questions. I.e., what is this evidence, and where can we find it?
Are we supposed to be mindreaders?
Mark Patrick Witte
Robert Vienneau <rv...@see.sig.com> wrote:
>In article <a2tbqg$i03$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
>(Mark Patrick Witte) wrote:
>
>> >> >RV> Nevertheless, there is some empirical
>> >> >RV> evidence for "perverse" real Wicksell effects. There is also
>> >> >RV> empirical evidence for the more interesting question of whether
>> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>> >> >RV> Post Keynesian theory of distribution is superior.
>> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
And I ask yet again, what is this evidence? Is it appended to
Senator McCarthy's list of known Communist Party members in the US
government? Is it like the census of economists by flavor? Or is it
real? And if it's real, where is it? (I really wouldn't be surprised if
some such evidence exists, but I really am amazed at how many years have
gone by without Mr. Vienneau backing up his claim.)
>> >> >RV> As far as how empirical results are relevant, I have long
>> >> >RV> insisted
>> >> >RV> certain empirical questions were more interesting than the
>> >> >RV> empirical evidence for or against reswitching or capital
>> >> >RV> reversing.
>
>The above passages mention "'perverse' real Wicksell effects", "capital
>reversing", "reswitching", and the "Post Keynesian theory of
>distribution". I notice Mr. Witte has made no substantial comment
>on the concepts represented by these terms. I wonder if he can tell
>us which terms are synonyms?
>
>Even somebody that does not understand the technical jargon, I think,
>would see the second quote above does not reject empirical evidence.
>Both passages have a parallel contrast.
Sigh, yet again: actions speak lower than words. What evidence
supports the approach for which Mr. Vienneau holds in such an emotional
embrace?
>So I can only would wonder why Mr. Witte delivers this lecture:
>
>> Serious scholars don't argue assumptions; rather they
>> compare models.
Yes, some of the poorest students wonder over the simplest lessons.
"Mr. Vienneau is invited to say how his preferred set of assumptions
would generate different results than are standard in the field today. He
can then follow up with empirical support for how his preferred set of
assumptions generates a better fit of real world data than is given by any
of many widely cited papers. Since the interest here is how the most
influential economists and journals proceed, a recent (non-empirical paper)
that might be of interest in this context is from the Journal of Economic
Dynamics and Control (Volume 26, Issue 5) by Petr Dcuzynski entitled
"Adjustment costs in a two-capital growth model", pp. 837-850. If this
paper is too difficult to obtain, he might prefer Barro, Mankiw, and
Sala-i-Martin's "Capital Mobility in Neoclassical Models of Growth" AER
1995, or Cabelle and Santos, "On Endogenous Growth with Physical and Human
Capital, JPE 1993. I am not saying that Mr. Vienneau's models are wrong,
but that they do not seem to produce the interesting descriptive power about
our real world that these other models do. If he can show that these other
models are wrong or fail to match moments of the data that his models do,
then he should make his case and take it up with the editors of the above
journals who would be eager to publish papers that have so much to offer."
>I did like this bit:
>
>> A model of consumer choice that does not contain consumer choice
>> would not seem to be a promising research agenda.
>
>> Would a model of retirement saving decisions that
>> used ...an assumption [of infinite lived agents ]
>> match up well with the data, as compared to models that
>> did not use such an assumption? It seems unlikely.
>
>versus:
>
>> Assumptions are introduced to make models tractable, end of story.
Mr. Vienneau liked this, but it's unclear if he understood it.
Models are built upon assumptions, but some models are better than others.
Or instance, a model of retirement saving decisions that was built upon an
assumption of infinitely lived agents might be tractable, but it is unlikely
to be a good model, that is, it is unlikely to give useful insights into
real-world behavior, which is what we want from our models.
>(It seems to me the bit about consumer choice is a non sequitur.
>Kaldor explained to Pasinetti that his assumptions were more about
>corporations. Researchers have built on this thought, including
>some doing empirical work. Why was Alfred Eichner a Post Keynesian?)
This guy just gets sadder and stranger.
>This bit was amusing too:
>
>>>Rho: Newtonian theory does not say all planetary orbits are
>>> circular.
>
>>>Mu: ...your ideas are not empirically applicable.
>
>> Mu is flat out wrong... Elipical orbits are...well supported
>> empirically.
>
>And this has what to do with Rho's point?
I can see why Mr. Vienneau has to ask this question. It seems that
some jackass has so edited his strawman conversation it has has lost some
of its most foolish elements. Perhaps this same jackass is the one who has
edited out the hundreds of requests for Mr. Vienneau to provide supporting
data for the modelling approaches that give him that special warm feeling.
>By the way, Mr. Witte's standards seem to have evolved since 1996:
Not in the least. Dr. Auld's claim is close to my Bayesian prior
and a quick sampling of top econ journals supports his claim, while Mr.
Vienneau's claim for the numerical importance of a very minor sub-splinter
in economics is laughable, but I guess that is his basic role here.
So Mr. Vienneau has been recalling this slight since 1996? Wow,
that's a long time to be licking a wound. I guess this would lean more
toward the sad than the strange, althought it clearly has elements of
both in it.
Robert Vienneau
has been named the greatest paper on mathematical economics of the
20th century. In a few short pages, VN
o Describes technology in a manner in which set-theoretic techniques
are more appropriately applied than calculus.
o Introduces activity analysis (linear programming)
o Introduces duality theory
o Uses a fixed-point theorem to prove the existence of an
economic equilibrium.
This paper contains a multicommodity (disaggregated) endogeneous
growth model. And it's place in various traditions is disputed
today.
In article <qSn48.16203$Fh4.1...@newsread1.prod.itd.earthlink.net>,
"John J. Weatherby" <jjwea...@earthlink.net> wrote:
> Romer 1990 has
> a
> long discussion of how hetreogenous labor, differentiated goods, and
> hetreogenous capital are introduced. This is a significant break from all
> previous literature.
I suggest Mr. Weatherby's characterization of Romer's 1990 contribution
is not quite accurate in a wider context than he apparently had in
mind.
> > A new element of terminological slapdashery (not of terminological
> > progress) is to be found in Jones (1995)...
> Without reading Romer 1990 you are at loss to discuss Jones 1995.
Mr. Weatherby seems not to notice that I was not discussing Jones 1995.
I was quoting a Steedman paper which Mr. Weatherby falsely asserted
did not discuss Romer 1990 or Jones 1995.
> > A ray of hope in the general gloom of carelessness and casualness
> > has been provided recently by Aghion and Howitt, who offer a 14
> > page appendix 'On Some Problems in Measuring Knowledge-Based
> > Growth.' (1998, pp.435-448; fourteen pages, that is, in a volume of
> > 694 pages.)
> >
> > These warnings seem to have come too late for Jones (1999),
> > however..."
> What warnings? Which Jones 1999 paper? Are you refering to "Too much of a
> good thing"? This is an entirely empiral piece which uses a slight
> variation
> on Jones 1995. Somehow I doubt this is what the author refers to. Are you
> refering to Growth with or without Scale Effects this is a survey. Surely
> this author isn't so desperate to attack a survey is he?
I, of course, wasn't referring to anything. Once again the quote was
from Steedman. Steedman was referring to the latter.
> > Try
> > http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
> Is this a joke some all this is a game that has commie flag on it and
> states
> it is about economic planning. Get real. What is this supposed to prove?
It doesn't prove anything. The default parameters illustrate the
turnpike theorem. The turnpike theorem, of course, is closely related
to the Von Neumann model of endogeneous growth.
John Weatherby
> I suggest Mr. Weatherby's characterization of Romer's 1990 contribution
> is not quite accurate in a wider context than he apparently had in
> mind.
How the hell would you know? You have admitted you have never picked up a
copy of Romer 1990. The quote you provide, note from an author who is a
complete unknown in the field, goes so far to attack a survey article that
barely even shows a model. Jones' Growth with or without scale effects
breifly summarizes the two approaches to removing scale effects. He only
produces one key equation from his model, which is based on Romer 1990. I
hardly think this is the paper you want to criticize.
Jones and Williams 1999 takes a macro calibration approach to estimating
a model similar to Jones 1995. My expertise is in this field and trust me I
didn't fully follow Jones until I sat down with a copy of Romer 1990 and
Jones 1995 and constantly refered back to the two papers. Jones writes to an
audience who is familar with the field and his work. I think this is mainly
becuase he is a relatively new Ph.D., the two Jones 1995 papers are his
dissertation. This is the reason Jones can be hard to follow if you haven't
read his previous work. Jones can be easily misconstrued even by an
economist not specializing in the field.
>
>
> > > A new element of terminological slapdashery (not of terminological
> > > progress) is to be found in Jones (1995)...
>
> > Without reading Romer 1990 you are at loss to discuss Jones 1995.
>
> Mr. Weatherby seems not to notice that I was not discussing Jones 1995.
> I was quoting a Steedman paper which Mr. Weatherby falsely asserted
> did not discuss Romer 1990 or Jones 1995.
>
Steedman does not discuss these papers. These are mere slapshots that should
have no never been published. They are mere one line come backs with no
depth. Furthermore, I doubt before this thread you even knew who Charles I.
Jones was. Yet somehow you pretend this has all be overthrown by some hand
waving. I also notice you snipped and didn't reply to a lot of comments were
you were undebately dead wrong.
>
> > > A ray of hope in the general gloom of carelessness and casualness
> > > has been provided recently by Aghion and Howitt, who offer a 14
> > > page appendix 'On Some Problems in Measuring Knowledge-Based
> > > Growth.' (1998, pp.435-448; fourteen pages, that is, in a volume of
> > > 694 pages.)
> > >
> > > These warnings seem to have come too late for Jones (1999),
> > > however..."
>
> > What warnings? Which Jones 1999 paper? Are you refering to "Too much of
a
> > good thing"? This is an entirely empiral piece which uses a slight
> > variation
> > on Jones 1995. Somehow I doubt this is what the author refers to. Are
you
> > refering to Growth with or without Scale Effects this is a survey.
Surely
> > this author isn't so desperate to attack a survey is he?
>
> I, of course, wasn't referring to anything. Once again the quote was
> from Steedman. Steedman was referring to the latter.
>
Again I ask he isn't really so desperate that he is attacking a survey is
he? So what does this prove. That some one wrote a piece without
substitence. Damn this crap has less substance than Todaro bitching about
Coles and Sanders extension of the Harriss Todaro model. At least Todaro had
some substance in arguing that Mexico was more of a MDC than a LDC. Putting
out simply one liners without substance is no answer to an literature of
work. I still will say this has been ignored by main of the radicals simply
due to the fact their previously filsmy claims won't even begin to stick
here.
When I see a paper that presents problems that would bring down and does
it right I will be convinced. In fact I think such a paper does exist. Adams
and Jaffe 198?. This paper points out how treating spillovers on the macro
level may not be appropiate. In fact it is this exact criticism that I am
using for justification of using firm and industry level panels, as opposed
to macro data, to test these models and find magnitudes of some of the
market failures.
Again I suggest you actually read the papers and not secondary
literature that tries to describe them. Actually don't only read the papers
but work through and see how the modeling actually works. Often this is
necessary to understand the intricacies of these models. It isn't always
apparent where externalities are coming from if you have worked through the
paper.
I still highly suggest reading Romer 1990, especially the pages prior to
the model. Romer goes through great pains to show how this model is
different from previous literature, that it is a break from previously
standard literature, and actually why and how he is doing things. In fact I
think this is the absolute best paper I have seen written. Romer's style is
much more like Lucas in that he goes through great pains to explain things
and not just throw equations on the page. This is a long discussion of how
capital is treated in the model and how this is completely different from
Solow and previous aggregate production functions. Romer also has a long
discussion on non-convexities and imperfect competition.
Again until you have read this paper, and many others, I do not find you
qualified to comment at all on R&D models. You are still some hack that
doesn't have clue and stabbing in the dark to support something that
economist have moved beyond 40 years ago. Read the literature then form an
opinion on it.
John
Christopher Auld
>(Christopher Auld) wrote:
>> Where to start? Oh, the dangers of citing papers you've never
>> read.
>
>Poor Chris Auld cannot possibly know that.
Then I shall rephrase: Oh, the dangers of citing papers you've either
never read, or did read but didn't understand.
>Vienneau: mainstream economics is NOT identical to neoclassical
> economics.
Yet despite this remark, Bob's oft-spammed essay implicitly equate
mainstream economics and neoclassical economics. For instance, in
THIS THREAD he responded to an expression of disinterest in the CCC
with something to the effect, "Perhaps mainstream economists are
not concerned with the coherence of their theories."
Unsurpringly, Bob completely misses Colander's main points,
ignores the scathing remarks about "heterodox" economists
and laymen, and contents himself to focus on finding things
in the paper which he doesn't disagree with. Even this he
gets wrong:
> already being dropped...and math was moving to set theory
> and topology as economists tried to expand the domain of
> economics to include a wider variety of topics...
>
>Vienneau: (In an essay titled "Choice of Technique")
> Display 3 defines a relation for the coefficients of production.
> Formally, a relation is a set of ordered tuples, such as...
> where Kj is an index set. Kj could be continuous. Sometimes it
> might be convenient to use a multidimensional index set. This
> representation of the production possibilities available to an
> industry is completely general for constant-returns-to-scale,
> circulating capital technologies.
Bob thinks the silly technologies he uses in his "papers" echo
the set theoretic approaches to, largely, GE theory employed in
the last few decades! That's funny.
>> Even in this thread, this lay person has yet
>> again been exposed to the idea that economists are concerned
>> with more than narrow issues in price theory.
>
>Since I have been saying the same for years, one can
>only wonder about poor Chris Auld's problems.
My mistake Bob! There are apparently two people named Bob
Vienneau who post to sci.econ. One of them certainly seems
to think that all of mainstream economic thought stands or
falls with certain narrow issues in price theory. For instance,
he likes to spam an essay which begins:
The Cambridge Capital Controversy was a major theoretical
controversy arising out of the work of Piero Sraffa. By use
of an example, this article summarizes some negative
consequences of the CCC for mainstream theory.
And frequently uses "mainstream" and "neoclassical" interchangably,
for instance:
For a number of years I have maintained that the Cambridge Capital
Controvery showed that neoclassical economics lacks any coherent
theory of value and distribution for models in which goods are
produced.... We are told that economics studies the allocation of
scarce resources. I claim that mainstream economics considers
prices to be scarcity indices, as modified by information a
symmetries, disequilibrium,
I am glad we can agree, along with Colander, that Bob's doppleganger
has dramatically overstated the scope of the CCC! Now, I typed
"neoclassical" and "Vienneau" into a search engine, and after Google
sifted through the zillion hits there was some interesting stuff
indicating that poor Bob's double has been making exactly the same
mistake Colander rails against for many years. For instance, back
in '99 someone intrepidly tried to get across to Bob (or his evil
twin) that
> this is the single most important
>point I've been trying to explain to you since 1995 Rob: your
>dismisal of almost all of economics because of issues brought up
>in the CCC (a forty year old debate about production theory
>as it stood circa 1950) is silly. I would even say that the
>majority of economists have never written anything that is touched
>upon by the CCC, but to Rob and a handful of other political
>zealots, all of their research is nonetheless rendered
>meaningless by the CCC.
This went unacknowledged, like all the similar arguments that
had been made to Bob over the years. He later in the thread
dismissed all of economics that isn't capital theory as "models
of how many children one ought to have" that aren't of much
interest to him. So, it is with great joy that we can now all
boisterously agree that, in fact, the CCC is a rather small fish
in a rather large ocean, and perhaps some other topic could be
discussed on this group!
> Of course,
> he seems to "think" that the following two propositions
> are contradictory:
>
> Price theory has problems.
>
> Some economists worry about developing more powerful
> statistical tests appropriate for data that appears
> in certain applied fields in economics.
I don't know what Bob's point here is. Perhaps he and his double
are fighting over control of the keyboard and coherence was lost.
One does hope, though, that the above is foreshadowing that we are
about to be treated to the long-awaited follow-up to Bob's-double's
magnum opus, "The death of econometrics!"
Robert Vienneau
(Mark Patrick Witte) wrote:
> In article <rvien-0F2006....@news.dreamscape.com>,
> Robert Vienneau <rv...@see.sig.com> wrote:
> >In article <a2tbqg$i03$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
> >(Mark Patrick Witte) wrote:
> >
> >> >> >RV> Nevertheless, there is some empirical
> >> >> >RV> evidence for "perverse" real Wicksell effects. There is also
> >> >> >RV> empirical evidence for the more interesting question of
> >> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> >> >> >RV>whether
> >> >> > ^^^^^^
> >> >> >RV> Post Keynesian theory of distribution is superior.
> >> >> > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> [ Some balderdash deleted. ]
> (I really wouldn't be surprised if
> some such evidence exists, but I really am amazed at how many years have
> gone by without Mr. Vienneau backing up his claim.)
Some years ago, I repeatedly presented a reference in this newsgroup to
empirical evidence relevant for this question.
For example, from 1995:
A textbook effort to present empirical data contrasting Post
Keynesian, Neo-Marxian, and Neoclassical models is Stephen
Marglin's _Growth, Distribution, and Prices_ (Harvard University
Press, 1984).
Mr. Witte in 1997:
I spotted no...naive errors in Marglin's estimation techniques.
Other empirical evidence involves not direct comparisons between macro
models, but observations about which macro models fit better with
theories in other parts of economics. I have repetively pointed this
out when outlining the Kaldor-Kahn-Pasinetti-Robinson theory.
Then, of course, there's lots of qualitative evidence. Empirically,
these authors had developed around 1960 a theory of stagflation. This,
also, is a point I have made repetitively.
Other empirical evidence I have cited on this
newsgroup (e.g., by James K. Galbraith), is relevant to the
family of models under discussion.
Anyways, if Mr. Witte knows of no empirical evidence that his preferred
theory is superior, why does he remain ignorant of competing theories?
By his lights, the question is open.
> >> >> >RV> As far as how empirical results are relevant, I have long
> >> >> >RV> insisted
> >> >> >RV> certain empirical questions were more interesting than the
> >> >> >RV> empirical evidence for or against reswitching or capital
> >> >> >RV> reversing.
> >The above passages mention "'perverse' real Wicksell effects", "capital
> >reversing", "reswitching", and the "Post Keynesian theory of
> >distribution". I notice Mr. Witte has made no substantial comment
> >on the concepts represented by these terms. I wonder if he can tell
> >us which terms are synonyms?
Can Mr. Witte tell us which terms above are synonyms?
> >Even somebody that does not understand the technical jargon, I think,
> >would see the second quote above does not reject empirical evidence.
> >Both passages have a parallel contrast.
> Sigh, yet again: actions speak lower than words. What evidence
> supports the approach for which Mr. Vienneau holds in such an emotional
> embrace?
So when Mr. Witte said I "explicitly" rejected empirical evidence,
he stated an untruth. I guess the above is Mr. Witte backing
away from his previous statements.
Anyway, I have presented references in this newsgroup to empirical
evidence.
Considered as a response to "What are your assumptions?", the above
can only be considered as a non-sequitur. This response is in the
context of comments on technology and the theory of production. Mr.
Witte knows I think of my preferred approach as a general model
of technology. It is not clear to me whether there is a neoclassical
special case. Mr. Witte cannot argue this point; he begs the
question.
> He
> can then follow up with empirical support for how his preferred set of
> assumptions generates a better fit of real world data than is given by
> any
> of many widely cited papers. Since the interest here is how the most
> influential economists and journals proceed, a recent (non-empirical
> paper)
> that might be of interest in this context is from the Journal of Economic
> Dynamics and Control (Volume 26, Issue 5) by Petr Dcuzynski entitled
> "Adjustment costs in a two-capital growth model", pp. 837-850. If this
> paper is too difficult to obtain, he might prefer Barro, Mankiw, and
> Sala-i-Martin's "Capital Mobility in Neoclassical Models of Growth" AER
> 1995, or Cabelle and Santos, "On Endogenous Growth with Physical and
> Human
> Capital, JPE 1993. I am not saying that Mr. Vienneau's models are wrong,
> but that they do not seem to produce the interesting descriptive power
> about
> our real world that these other models do. If he can show that these
> other
> models are wrong or fail to match moments of the data that his models do,
> then he should make his case and take it up with the editors of the above
> journals who would be eager to publish papers that have so much to
> offer."
The above seems to leave out whole families of models that seem
relevant for this thread. Maybe Mr. Witte has decided that the
empirical evidence rules them out without ever actually understanding
those families or looking at any empirical evidence showing
the superiority of his preferred models over contrasting families.
One might wonder how he came to this decision rigorously and
consistently with his stated position.
I guess Mr. Witte is no longer interested in Burmeister's understanding
of real Wicksell effects. I guess it's just as well. So my question:
What are your assumptions? goes unanswered here.
It remains the case that the marginal productivity theory of
distribution is all bosh. Empirical evidence is irrelevant to
this claim.
> >I did like this bit:
> >
> >> A model of consumer choice that does not contain consumer choice
> >> would not seem to be a promising research agenda.
> >
> >> Would a model of retirement saving decisions that
> >> used ...an assumption [of infinite lived agents ]
> >> match up well with the data, as compared to models that
> >> did not use such an assumption? It seems unlikely.
> >
> >versus:
> >
> >> Assumptions are introduced to make models tractable, end of story.
> Mr. Vienneau liked this, but it's unclear if he understood it.
> Models are built upon assumptions, but some models are better than
> others.
> Or instance, a model of retirement saving decisions that was built upon
> an
> assumption of infinitely lived agents might be tractable, but it is
> unlikely
> to be a good model, that is, it is unlikely to give useful insights into
> real-world behavior, which is what we want from our models.
So tractability of assumptions is not the end of story. The
appropriateness of some assumptions can sometimes be discussed
prior to looking at empirical evidence. It's good that Mr.
Witte backs away from his untenable prior position. Mr. Witte
goes on and on so as to disguise his retraction. Or maybe, it's
to disguise his lack of awareness of his contradiction.
One paper on this topic:
Alan Musgrave, "'Unreal Assumptions' in Economic Theory: The
F-Twist Untwisted", Kyklos, V. 34, 1981, pp. 377-387.
> >(It seems to me the bit about consumer choice is a non sequitur.
> >Kaldor explained to Pasinetti that his assumptions were more about
> >corporations. Researchers have built on this thought, including
> >some doing empirical work. Why was Alfred Eichner a Post Keynesian?)
>
> [ Balderdash deleted ]
Apparently Mr. Witte is not aware of the work of Kaldor, Pasinetti,
or Eichner.
> >This bit was amusing too:
> >>>Rho: Newtonian theory does not say all planetary orbits are
> >>> circular.
> >
> >>>Mu: ...your ideas are not empirically applicable.
> >
> >> Mu is flat out wrong... Elipical orbits are...well supported
> >> empirically.
> >
> >And this has what to do with Rho's point?
> I can see why Mr. Vienneau has to ask this question.
> [ Balderdash and distortions of what I said - deleted ]
I guess Mr. Witte has no answer.
Mark Patrick Witte
the Viennearial editing to figure out what deleted things I actually said
in order to try to make sense or reveal the nonsense in Mr. Vienneau's
reply to my redacted words. I am frankly amazed that he still doesn't
understand the role of assumptions in models: they are made to make a
model tractable; an assumption is bad if it yields a model that performs
poorly relative to other models. It's just that simple.
In the spirit by which John Weatherby launched this thread, I
shall repeat my offer. If Mr. Vienneau can highlight an important
paper in modern economics that he feels is overtly incorrect or if he
feels that some model from the economic traditions he prefers does a
better job matching the data than said modern paper, than I'd be glad
to examine his claim, including stating relevant underlying assumptions.
I would hope that any empirical evidence he would cite would be relevant
to the question and that he does not again explicitly brush off a request
for support in the data with something like "As far as how empirical
results are relevant, I have long insisted certain empirical questions
were more interesting than the empirical evidence for or against
reswitching or capital reversing."
So, just to be clear: If Mr. Vienneau wishes to be taken
seriously in his attempts to critique modern economics, he can cite
specific important papers he finds objectionable and either show
their errors or else show that papers with alternative assumption
sets have better empirical support.
In article <rvien-57B1F7....@news.dreamscape.com>,
susupply
> Robert Vienneau <rv...@see.sig.com> wrote:
> >In article <a32o2e$je8$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
> >(Mark Patrick Witte) wrote:
> >> [ Some balderdash deleted. ]
Balderdash being synonymous with simple questions, or with; "No time now, I
have go to a party"?
http://foxnews.com/story/0,2933,44301,00.html
<<-----------------------------
NEW YORK - New York City, still recovering from the devastation of Usama
bin Laden's attack on the World Trade Center, braces this week for another
assault - this time by leftist protestors and anarchists bent upon
disrupting the World Economic Forum.
The city's police, widely regarded as heroes following Sept. 11, will be
working 12-hour shifts guarding the Waldorf-Astoria Hotel on Park Avenue,
where the world's business and political leaders will be meeting from
Thursday through the weekend until Monday.
Officers in full riot gear have spent the past few weeks rehearsing crowd
control at Shea Stadium, and top police officials have consulted with their
counterparts in Seattle, Genoa and Quebec City, scenes of previous
anti-globalization violence.
Demonstrator leaders say, as always, that they oppose violence and want
simply to send a message to the world's elite that not everyone agrees with
the rapid pace of globalization.
"We're respectful of what New York has been through. We live here, too,"
says Eric Laursen, an activist with the umbrella protest group Another World
Is Possible. "We're trying to be very visual and colorful and emphasize
events that aren't violent in any way."
But the organizers admit that they have no control over the violent,
ski-mask-wearing vandals who inevitably accompany their protests and grab
headlines by smashing windows, burning cars and engaging in street battles
with police.
David Graeber, a Yale anthropology professor and member of the anarchist
group Anti-Capitalist Convergence, is already blaming police for anything
that goes wrong.
Graeber says his group plans no violence - although many anarchists believe
destroying smashing Starbucks and looting McDonald's is liberating property
and doesn't count as violence.
The more mainstream demonstrators hope to distract the police, anarchists
and media with a carnival-like atmosphere featuring puppets and dancers.
"For weeks, the police have been training in riot tactics," said activist
Brooke Lehman. "We've been training in samba, puppetry and street theater."
-------------------------------------------->>
Well that samba-ing can tucker a guy out.
Patrick
Robert Vienneau
(Mark Patrick Witte) wrote:
> [ Balderdash deleted ]
> I am frankly amazed that he still doesn't
> understand the role of assumptions in models:
I did think about deleting the above balderdash.
> they are made to make a
> model tractable; an assumption is bad if it yields a model that performs
> poorly relative to other models. It's just that simple.
> > >> Or instance, a model of retirement saving decisions that was built
> > >> upon
> > >> an
> > >> assumption of infinitely lived agents might be tractable, but it is
> > >> unlikely
> > >> to be a good model, that is, it is unlikely to give useful insights
> > >> into
> > >> real-world behavior, which is what we want from our models.
The second Witte quote says that one might decide a priori that an
assumption that makes a model tractable is bad if it puts the
phenonema to be explained outside the scope of a model.
In other words, Mr. Witte briefly recognized that whether a model
is tractable and whether a model performs poorly relative to other
models are two different criteria for the assumptions of a model.
Or, Mr. Witte has backed away from his assertion:
> >> >> Assumptions are introduced to make models tractable,
> >> >> end of story.
He now realizes that's not the end of the story.
One paper on this topic:
Alan Musgrave, "'Unreal Assumptions' in Economic Theory: The
F-Twist Untwisted", Kyklos, V. 34, 1981, pp. 377-387.
(Note that the topic above is not my understanding of the role
of assumptions in models, but the consistency of Mr. Witte's
varying explanations of his understanding of the role of
assumptions in models. It seems odd that somebody serious
would try to back away from his stated position with
comments on the understanding of discussants; no such
comment, or a comment like "I was unclear", would seem
to make a conversation go smoother.)
> In the spirit by which John Weatherby launched this thread, I
> shall repeat my offer.
That was not the spirit in which Mr. Weatherby launched this
thread.
> If Mr. Vienneau can highlight an important
> paper in modern economics that he feels is overtly incorrect
What an odd comment. I brought forward a paper by Ian
Steedman that argues that some of Mr. Weatherby's preferred
references are overtly incorrect:
Ian Steedman, "On Measuring 'Knowledge' in New (Endogeneous)
Growth Theory"
<http://growthconf.ec.unipi.it/papers/Steedman1.pdf>
I brought this paper up to show that some communities of
economists upon which I draw have explored New Growth
Theory. And I would have been interested to see some
examination of the substance of this paper. I'll now
state that I'm particularly interested in Romer (1990).
Mr. Weatherby's description of Steedman as "a complete unknown
in the field" is not a substantive reply.
By the way, there are other papers about growth theory at:
<http://growthconf.ec.unipi.it/papers>
I haven't yet examined even all of those from those members
of this community whose work I am particularly aware of.
> or if he
> feels that some model from the economic traditions he prefers does a
> better job matching the data than said modern paper,
What an odd comment. I have given a specific reference to a book
showing models explaining investment, growth, etc. by intertemporal
utility maximizing are empirically inferior to models in
traditions I prefer:
Stephen Marglin's _Growth, Distribution, and Prices_ (Harvard
University Press, 1984).
The models I prefer do not explain these things by intertemporal
utility-maximizing.
> than I'd be glad
> to examine his claim, including stating relevant underlying assumptions.
What an odd comment. I have been explaining the logical implications
of standard assumptions on technology for some time now. Neoclassical
economists use those assumptions. Mr. Witte has made many, many
comments on these explanations.
My explanations frequently employ terms like "'perverse' real
Wicksell effects", "capital reversing", "reswitching", and the
"Post Keynesian theory of distribution". I wonder if he can tell
us which terms above are synonyms?
> I would hope that any empirical evidence he would cite would be relevant
> to the question and that he does not again explicitly brush off a request
> for support in the data with something like "As far as how empirical
> results are relevant, I have long insisted certain empirical questions
> were more interesting than the empirical evidence for or against
> reswitching or capital reversing."
Somebody who has been following this thread can only find the
above comment odd. After all, that comment, which did not brush
off a request for support in the data for certain models, came
after a previous post containing my statement:
"Nevertheless, there is some empirical evidence for "perverse" real
Wicksell effects. There is also empirical evidence for the more
interesting question of whether the Post Keynesian theory of
distribution is superior."
As always, there's more to read than one has time for. So one has
make judgements of credibility. For instance, elsewhere I once
read the following:
-----------------------------------------------------------
The following summarizes
Raymond Prince and J. Barkley Rosser, Jr., "Some
Implications of Delayed Environmental Costs for
Benefit Cost Analysis: A Study of Reswitching in
the Western Coal Lands," Growth and Change,
April 1985, vol. 16, no. 2, pp. 18-25. This paper is
also discussed in my 1991 book.
So, the paper compares reasonable numbers for
that time period for a comparison of strip mining of coal
versus sustainable cattle grazing in the U.S. Southwest.
Cattle grazing was assumed to have constant net benefits
over time (certainly debatable). Strip mining of coal was
assumed to have up front costs and then delayed
environmental costs. This profile of comparisons in
a straightforward b-c framework set up the reswitching
case, with coal mining having higher expected present
value (no speeches about ergodicity here, please)
for discount rates (constant over time, not any of that
new fangled hypbolic stuff) below 4.5% and above 8.6%.
For discount rates between those switch points, cattle
grazing was optimal.
I note that this is a single sector, essentially micro,
comparison that someone like Gary Mongiovi can
declare to be not "true reswitching," which presumably
involves macroeconomic steady state level comparisons.
This point was noted in the original article.
Of course this general phenomenon of "multiple roots"
was first noticed by Irving Fisher. Although they made no
links with the capital theory debates, the following sources
also prior to Ray and me noted the general problem for
benefit-cost analysis of environmental issues.
Orris C. Herfindahl and Allen V. Kneese, _Economic
Theory of Natural Resources_, 1974, Columbus, OH:
Charles Merrill.
W. Kip Viscusi and Richard J. Zeckhauser, "Environmental
Policy Choice under Uncertainty," Journal of Environmental
Economics and Management, Sept. 1976, vol. 3, no. 3,
pp. 97-112.
Anthony C. Fisher, _Resource and Environmental Economics_,
1981, London: Cambridge University Press.
Richard C. Porter, "The New Approach to Wilderness
through Benefit Cost Analysis," Journal of Environmental
Economics and Management, March 1982, vol. 9, no. 1,
pp. 59-80.
Also, there is the still unpublished, but excellent, paper
on delayed environmental costs of nuclear power:
Geir B. Asheim, "The Occurrence of Paradoxical Behavior
in a Model where Economic Activity has Environmental
Effects," 1980, Norwegian School of Economics and
Business Administration Discussion Papers, which does
explicitly bring up the capital theory debates, possibly a
reason it has never been published.
Sorry I don't seem to have the number of that one. Geir
is still there and accessible for anybody who is curious (last
time I checked).
Barkley Rosser
susupply
<<-----------------------------------
Knowingness, of course, is not knowledge-indeed, is the rebuttal of
knowledge. Knowledge was what squares had, or thought they had, and they
thought that it was the secret of life. Knowingness is a celebration of the
conceit that what the squares knew, or thought they knew, was worthless. In
The Graduate the career advice ("Plastics") of a family friend, Mr. McGuire,
to Benjamin Braddock, played by Dustin Hoffman, is classic square knowledge.
Benjamin's mute disdain toward that advice-and his elaborately played out
disdain for all that McGuire and the Robinsons represent-is classic
anti-square knowingness.
You can see in this example the problem that a return to square poses:
anti-square is so much easier and more fun. Knowledge, even on McGuire's
level, is notoriously difficult to acquire. Sixteen years of hard, slogging
schoolwork, and what do you know? Not enough to carry on ten minutes of
intelligent conversation on any subject in the world with any person who
actually knows something about the subject. Knowingness, though-a child can
master that. (Can and does: there is an obvious inverse relationship between
age and knowingness; the absolute life peak of knowingness generally arrives
between the ages of twelve and sixteen for females, fourteen and eighteen
for males-whereas, as these cohorts can attest, grown-ups don't know
anything.)
This is why Benjamin Braddock had to ignore, with prejudice, Mr. McGuire.
McGuire may have been a fool, but he was, in the limited area of business
and economic trends, probably a knowledgeable fool. Had Benjamin been
obliged to respond to McGuire's advice in terms of knowledge, he would have
been utterly lost-he would have been the one exposed as a fool. But for
Ben-and more to the point, for the movie's audience-knowingness offered a
lovely way to not only counter McGuire's knowledge but also trump it. Ben
didn't have to know anything about McGuire to show himself intellectually
(and aesthetically, and even morally) superior to McGuire. He only had to
know that what McGuire thought he knew was a joke and McGuire was a joke
because-because the McGuires of the world are definitionally jokes, and if
you don't understand that, I can't explain it to you, because you are a
McGuire. That's knowingness, and for no-sweat self-satisfaction you can't
beat it.
------------------------------------>>
Mark Patrick Witte
Vienneau. Assumptions are put in to make a model tractable, end of story.
However, not all tractable models are equal; some are better than others.
For instance, as I've said many times, a model of retirement savings
behavior that employs the assumption of infinitely lived agents will be
unlikely to match the empirical evidence of such behavior as well as a model
that employs an assumption of finite life. Or as I put it about a week ago
on this thread:
"A model of consumer choice that does not contain consumer choice
would not seem to be a promising research agenda. This is not a matter of
saying that an assumption is wrong, but rather saying that someone who is
planning to go fishing in a toilet should not make plans to host a fish fry.
So, just to repeat: a poor choice of assumptions may yield a
tractable model, but a model that will not perform as well as other models
on the questions of interest. In this I am not criticizing the assumptions
per se, but rather pointing out that another set of assumptions allows for a
comparatively better model on the data moments of interest. The key point,
that some find infinitely subtle, is that this is not a matter of comparing
assumptions, but rather a matter of comparing models. All assumptions are
false, they are used to build models, some models are better than others, so
build your models wisely.
Quickly on other business. John Weatherby's low esteem for Ian
Steedman seems warranted by the suggested example of Steedman's work. This
article essentially whines about the assumption of cardinality of technology
(or human capital, or productivity, or various other nominal choices, a lack
of linguistic consistency that seems to cause Steedman quite a bunch in his
shorts). No alternative approach is presented that examines the same issues
in a way that Steedman feels is superior. Further, in the article Steedman
seems to reveal that he is utterly unfamiliar with the concept of latent
variables.
Finally, Mr. Vienneau is encouraged to say which of the listed
articles he has actually read and what empirical results from each of
them he feels is somehow in answer to the following:
"So, just to be clear: If Mr. Vienneau wishes to be taken
seriously in his attempts to critique modern economics, he can cite
specific important papers he finds objectionable and either show
their errors or else show that papers with alternative assumption
sets have better empirical support."
In article <rvien-F1F423....@news.dreamscape.com>,
Robert Vienneau
would not use that philosophy to provide prescriptive standards
ruling out valid arguments in specific sciences nor to settle
substantial issues in specific sciences.
Anyways, in the midst of rejecting such trends and repeating
his previous non sequiturs - Mr. Witte still seems to be
unaware that Kaldor's model of distribution is not a model
emphasizing consumer choice - Mr. Witte writes:
> All assumptions
> are
> false, they are used to build models,
On the other hand, I find in the literature:
"But Friedman is wrong to conclude from this that 'the more
significant the theory, the more unrealistic the assumptions'.
He is wrong to conclude:
To be important, therefore, a hypothesis must be
descriptively false in its assumptions...To put this
point less paradoxically, the relevant question to ask
about the 'assumptions' of a theory is not whether they
are descriptively 'realistic', for they never are,...
This error stems from unclarity about what is stated by a
negligibility assumption (and it is obviously such
assumptions that Friedman has in mind here). They are not
'descriptively false', for they do not assert that present
factors are absent but rather that they are 'irrelevant
for the phenomena to be explained'. The relevant question
to ask of them is whether they are true (or 'descriptively
realistic')...
-- Alan Musgrave, op. cite.
I chose to cut off that quote there to emphasize where Musgrave
disagrees with Mr. Witte. (Note the above does NOT say one can
decide a negligibility assumption is false without looking at
the consequences of that assumption in models and comparing
those consequences with the world.)
I don't know why Mr. Witte rejects that particular example of
the peer-reviewed literature on economic methodology.
But, it has eluded me how economists can justify mathematical
mistakes by saying, "Assumptions do not have to be realistic." Of
course, not all economists do that. For example, Samuelson has said,
"I side with the Sraffians" on specific issues. I've longed
reached a conclusion about why Mr. Witte rejects Samuelson's
stated position. I draw my conclusion from his unwillingness
or inability to restate that position in a way that seems to accord
with the literature.
My explanations frequently employ terms like "'perverse' real
Wicksell effects", "capital reversing", "reswitching", and the
"Post Keynesian theory of distribution". I wonder if Mr.
Witte can tell us which terms above are synonyms?
> Quickly on other business. John Weatherby's low esteem for Ian
> Steedman seems warranted by the suggested example of Steedman's work.
What an odd comment. Mr. Weatherby gave no argument whatsoever. So
Mr. Witte cannot know, based on public comments, whether Mr.
Weatherby follows his line of "reasoning" or not.
> This
> article essentially whines about the assumption of cardinality of
> technology
> (or human capital, or productivity, or various other nominal choices, a
> lack
> of linguistic consistency that seems to cause Steedman quite a bunch in
> his
> shorts).
What an odd comment. Somebody serious would not criticize scholars
in such a tone. I would think precise language would be worth
striving for among theorists. And where does Roemer (1990) state
any assumption of cardinality? Does Mr. Witte think models should
be presented without explicitly stating assumptions?
> No alternative approach is presented that examines the same
> issues
> in a way that Steedman feels is superior.
Apparently, the paper was a conference paper. Steedman was addressing
an audience that was considering alternatives. Steedman could take
for granted that most of the members of that audience were
familiar with his work - after all, he is hardly an unknown -
and were aware of his sympathies for certain alternatives.
Anyway, we can see that when Mr. Witte says, "either show
the...errors [of cited papers] or else show that papers with
alternative assumption sets have better empirical support", he
doesn't mean it. Specifically, he does not mean "or else".
> Finally, Mr. Vienneau is encouraged to say
> [ stupidity deleted ]
> what empirical results from each of
> them he feels is somehow in answer to the following:
>
> "So, just to be clear: If Mr. Vienneau wishes to be taken
> seriously in his attempts to critique modern economics, he can cite
> specific important papers he finds objectionable and either show
> their errors or else show that papers with alternative assumption
> sets have better empirical support."
What an odd comment. From the post to which Mr. Witte is pretending
to reply:
-------------------------------------------------------------------
> >> or if he
> >> feels that some model from the economic traditions he prefers
> >> does a better job matching the data than said modern paper,
> >I have given a specific reference to a book
> >showing models explaining investment, growth, etc. by intertemporal
> >utility maximizing are empirically inferior to models in
> >traditions I prefer:
> > Stephen Marglin's _Growth, Distribution, and Prices_ (Harvard
> > University Press, 1984).
------------------------------------------------------------------
Of course, there is other evidence. I think the explanation of
stagflation Kahn, Kaldor, Pasinetti, and Robinson had developed
by the early 1960s gives a qualitative description in accord
with what one would read about in the papers in the 1970s.
But a major emphasis of mine has always been points of logic.
I think Salvadori and Steedman's "No Reswitching? No Switching!"
(1988) article is convincing in showing the errors of another
paper. In saying so, I think I am agreeing with a theoretical
paper in modern economics. Of course, I am also disagreeing with
Samuelson's 1962 surrogate production function paper, a paper
putting forth a position that Samuelson has long since and
repetitively repudiated.
Perhaps when Mr. Witte writes, "If Mr. Vienneau wishes to be taken
seriously...", he is acknowledging that he wasn't being
serious in years of posts. After all, he has said that hazing
is appropriate. Personally, I've long lost interest in whether
Mr. Witte takes Burmeister or Samuelson seriously.
Mark Patrick Witte
As I scan this post, I have four thoughts.
1. If I were to run a probit regression with the dependent variable being
the probability that it be cited by Robert Vienneau in his defense, would
the following variables be significant at the 1% level or the 0.1% level?
It's from an obscure journal, it's at least 20 years old, it has zero
empirical implementablility.
2. How often is it that a child attempts to run before he has ever
successfully walked? And has it ever failed to result in the child falling
flat on his face?
3. When Mr. Vienneau edits, all should worry.
4. Irony is not dead, "non sequitur" and "Kaldor's model of distribution"
appear on consecutive lines. If this is a model of human behavior that does
not involve choice, one wonders how it fits into modern economics.
Three more things.
One, following up on (1) and (2) above. Mr. Vienneau cites a Kyklos article
by Alan Musgrave from over twenty years ago as though this settles some
current matter of modern methodology. This paper is in the outdated
tradition of the "realists versus instrumentalists" debate and as such
suffers from the basic fallacies there. Further, it misses Friedman's point
about negligibility (Musgrave confuses it with "detectability") and hence
misses the empirical strength of Friedman's approach. Finally, it misses
the traditional instrumentalist point that all models have assumptions, and
so comparing assumptions is foolish, but that "good" models outperform their
competing models on the empirical moments of interest.
When Mr. Vienneau restates Steedman's complaints about "Roemer (1990)", it
raises a progression of questions. One, does Vienneau mean "Romer?" Two,
as recalls John Weatherby's question, has Mr. Vienneau ever read this piece?
Three, does he really think that Romer, if that's who he means, fails to
clearly state his assumptions about how he models his variables of interest?
Finally, if Mr. Vienneau would care to point out where an important paper in
modern mainstream economics is mistaken, or where some model with an
assumption set he prefers does better on the empirical moments of
interest,....I would be rather shocked.
In article <rvien-53F5BD....@news.dreamscape.com>,
Christopher Auld
>1. If I were to run a probit regression with the dependent variable being
>the probability that it be cited by Robert Vienneau in his defense, would
>the following variables be significant at the 1% level or the 0.1% level?
>It's from an obscure journal, it's at least 20 years old, it has zero
>empirical implementablility.
What an odd comment. Communities of researchers have attempted to
analyse Vienneauvian posting patterns, invariably encountering the
problem that the sample size far exceeds the storage capacity of
modern workstation-class computers. Those familiar with the
literature will of course have read Steedman's seminal 1962 article
in the _Journal of Sraffian Seminonparametric Econometrics_, which
reveals that all previous and future research on the problem is
flawed. Johnny von Neumann's 1937 empirical model of Vienneau is
also relevant, whereas Sheik's 1969 piece firmly established
through simulation that neoclassical Vienneaumetrics is incoherent.
What is more, in 1974 Paul Samuelson muttered while eating a
pastrami on rye that he liked Joan Robinson's penmanship, which
some scholars have interpreted as heralding a revival of Classical
Vienneaumetrics. Mr. Witte clearly rejects these results, and thus
clearly rejects logic. Perhaps Mr. Witte does not understand math.
Perhaps Mr. Witte is not familiar with the literature on which I
draw. Poor Mark Witte.
Robert Vienneau
(Mark Patrick Witte) wrote:
> Mr. Vienneau cites a Kyklos
> article
> by Alan Musgrave from over twenty years ago as though this settles some
> current matter of modern methodology.
Just because I cite the literature doesn't mean that I agree with it,
or not. Perhaps I want to see what some people have to say about it.
Here, I was just making it clear that Mr. Witte disagrees with some
published literature. I do think some taxonomy of assumptions is
needed to make sense out of practice.
> This paper is in the outdated
> tradition of the "realists versus instrumentalists" debate and as such
> suffers from the basic fallacies there.
Somehow Mr. Witte manages not to mention what those basic fallacies are.
Musgrave clearly rejects instrumentalism. It is not clear to me that
he advocates any ontological position whatsoever.
> Further, it misses Friedman's
> point
> about negligibility (Musgrave confuses it with "detectability") and hence
> misses the empirical strength of Friedman's approach.
Lots of literature has made the empirical point that economists,
in practice, do not follow Friedman's approach, inasmuch as
Friedman's article on methodology can be said to have one
coherent approach. So, empirically, Friedman's approach seems
weak.
> Finally, it misses
> the traditional instrumentalist point that all models have assumptions,
> and
> so comparing assumptions is foolish, but that "good" models outperform
> their
> competing models on the empirical moments of interest.
Mr. Witte just said the "'realist vs. instrumentalist'
debate" is outdated, but here he endorses instrumentalism. I don't
see how "comparing assumptions is foolish" follows from "all models
have assumptions". Musgrave's point seems to be more the empirical
point that different sorts of assumptions play different roles in
models.
Musgrave does NOT say one can decide assumptions are false without
looking at the consequences of assumptions in models and comparing
those consequences with the world.
> does he really think that Romer, fails to
> clearly state his assumptions about how he models his variables of
> interest?
Personally, I find the following unclear:
"As used here, human capital H is a distinct measure of the
cumulative effect of activities such as formal education and
on-the-job training.
The concept of human capital as years of education or training..."
Is human capital the effect of certain activities or those
activities themself? This question would seem to enter into the
question of whether H is a cardinal variable or whether Romer
is using a cardinal variable as a proxy for an ordinal
variable.
So, yes, I think Romer fails to clearly state his assumptions
about how he models his variables.
I wonder whether the following is true:
"In the specific formulation used below, each new unit of
knowledge corresponds to a design for a new good, so there
is no conceptual problem measuring A. It is a count of the
number of designs."
I think any patent attorney could come up with any number of
conceptual problems about when a design varies enough from an
existing one to count as a new design. Romer does eventually
index producer durables by a continuous variable.
Finally, Romer seems to be still vulernable to the capital
critique:
"The other simplifying assumptions are extreme assumptions
on factor intensities. One has already been made implicitly.
Assuming that capital can be accumulated as forgone output
is equivalent to assuming that capital goods are produced
in a seperate sector that has the same technology as the
final-output sector. Forgoing consumption is then equivalent
to shifting resources from the consumption sector into the
capital sector..."
Relaxing this assumption, claimed to be only a heuristic, seems
to be worthwhile research for a theoretician. Perhaps Mr. Weatherby's
research would be furthered by looking up the Kiel school, as
well as Von Neumann's model of endogeneous growth with heterogeneous
capital goods.
On another topic, I have given a specific reference to a book
showing models explaining investment, growth, etc. by intertemporal
utility maximizing are empirically inferior to models in
traditions I prefer:
Stephen Marglin's _Growth, Distribution, and Prices_ (Harvard
University Press, 1984).
But a major emphasis of mine has always been points of logic.
I think Salvadori and Steedman's "No Reswitching? No Switching!"
(1988) article is convincing in showing the errors of another
paper. In saying so, I think I am agreeing with a theoretical
paper in modern economics. Of course, I am also disagreeing with
Samuelson's 1962 surrogate production function paper, a paper
putting forth a position that Samuelson has long since and
repetitively repudiated.
It has eluded me how economists can justify mathematical
mistakes by saying, "Assumptions do not have to be realistic."
My explanations frequently employ terms like "'perverse' real
Wicksell effects", "capital reversing", "reswitching", and the
"Post Keynesian theory of distribution". I wonder if Mr.
Witte can tell us which terms above are synonyms?
By the way, let's recall that the communities of modern economists
upon which I draw do NOT have a uniformly negative view of NGT. I
brought up Steedman in an attempt to show that some members of
this community have considered New Growth Theory. One who has
read the Pasinetti paper quoted below will have noticed his
opinion is similar to Kurz and Salvadori's - NGT is rediscovering
some of the insights of previous non-neoclassical growth theories.
What I get from the secondary literature, though, is that not all
mainstream macroeconomics and growth theory has abandoned
aggregate neoclassical theory and mistaken Clarkian concepts of
capital. I notice that Mr. Witte refuses to comment on the
truth or falsity of such generalizations.
"In the United States, on the other hand, mainstream economics
goes on as if the controversy had never occurred...The problems
of heterogeneous capital goods have also been ignored in the
'rational expectations revolution' and in virtually all
econometric work."
-- Edwin Burmeister, 2000.
"But something even more interesting and intriguing has
happened. After only a few years, even the admissions initially
made no longer found any mention. Aggregate production functions
have made their untroubled re-appearance in the macroeconomic
textbooks, without the slightest hint as to their earlier
(recognised) logical inconsistencies. It has taken only a few
years for them to reappear in papers published in the major
journals of dominant economic theory, which at the same time
have begun systematically to reject all articles dealing with
re-switching as unpublishable. The same authors, who had for two
decades been asserting the need to scrap the aggregate
neoclassical production functions are now using them quite
normally. The typical economics student entering university from
the 1980s onwards has heard nothing of the re-switching
difficulties involved in the neoclassical theory of capital
and income distribution.
It is as if the debate on the choice of techniques had never
taken place. Amnesia on such a vast scale can only be explained
by more appropriate terms, such as 'suppression' or 'repression'
or 'removal'."
-- Luigi L. Pasinetti, "Critique of the neoclassical theory
of growth and distribution". BNL Quarterly Review, n. 205,
December, 2000, pp. 383-431.
<http://www.unicatt.it/docenti/pasinetti/Treccani.pdf>
"The critique of Robinson and Sraffa is more than forty years old.
Yet for psychological and political reasons, rather than for logical
and mathematical ones, the capital critique has not penetrated
mainstream economics. It likely never will. Today only a handful of
economists seem aware of it. Aggregate production function applications
run rampart in studies of economic growth (new growth theory),
development and convergence, and international trade (factor-price
equalization and other applications of Heckscher-Ohlin). Ostensible
liberals are not exempt; their arguments for higher public
infrastructure investment (based on its alleged marginal productivity)
are precisely of this type, as are arguments for increased investment
in education based on the higher marginal productivity of human skill.
To mainstream economics, Keynesianism has been reduced to a narrow
doctrine relating sticky wages, public spending, and employment. The
fact that there exists a Post Keynesian distribution theory, still
less the reasons for it, has been mostly forgotton."
-- James Galbraith, "The Distribution of Income". In _A New
Guide to Post Keynesian Economics_, 2001.
"Re: Barkley's comments, there is also an interesting paper by
Semmler and Sieveking (don't have the cite handy) that demonstrates
reswitching-like results with discount rates for interacting
resources. This does have relevance for environmental policy, as
low discount rates will not necessarily get results expected
when analyzing a resource in isolation.
There is another 'relevance' of reswitching (and the more general
case of reverse capital deepening): for the sociology of the
economics profession. Regardless of whether there are escape
hatches for neoclassical theory or the question of empirical
relevance of the phenomenon, the fact that one of the most esteemed
economists of the twentieth century (Samuelson) conceded defeat in
a major journal, and the profession continued to use aggregate
production functions without comment in major subsequent research
programs and also declined to alter the basic curriculum, says
something about the profession.
In my graduate training I was taught that the issue of the
empirical relevance of reswitching was neither relevant nor an
issue. The empirical relevance of a logical inconsistency is not
a scientific question."
-- Mat Forstater, June 06, 2001. From an E-mail discussion list.
"Of coure, the average economist would never tell you that economic
theory had suffered such a devastating blow. This is because the
the average *young* economist doesn't even know that this
intellectual bout took place - the concepts in this debate don't
make it onto the curriculum for either the undergraduate or
postgraduate students. Older economists cannot avoid some
knowledge of the war, but they either erroneously believe that
their camp won, or they dismiss the issue completely.
Today economic theory continues to use exactly the same concepts
which Sraffa's critique showed to be completely invalid - capital
as an amorphous mass that can be costlessly moved from producing
any commodity to any other, whose return reflects its marginal
productivity, and which can be aggregated by adding up its price
times quantity.
There is no better sign of the intellectual bankruptcy of
economics than this."
-- Steve Keen, _Debunking Economics_. Pluto Press, 2001.
"By contrast, even though papers and notes have continued to be
written on the 'paradoxes' as well, the more recent ones have
been more in the nature of footnotes. The issue was settled in
favour of Cambridge University when Samuelson wrote (1976) that
wherever 'informed economic theory is taught', the 'paradoxes'
are accepted, and their consequences for the concept of capital
known. It is another matter that, on the basis of this criterion,
many seats of learning in North America, as perhaps also elsewhere,
do not teach informed economic theory. For instance, the 'new
classicals', claiming otherwise meticulous theorists, keep on
blithely using the Clarkian concept of capital in their production
functions. The case for the implicit excuse that the absence of
any easy alternative justifies such high-handedness has not so
far been made in the literature."
-- Syed Ahmad (1998)
I have been citing Ahmad's textbook on capital theory (not where
the above quote is from) here for years. Nobody has ever commented
on it here (exempting fantasies about how I confine my reading
to outdated metatheoretical political tracts).
Christopher Auld
> Stephen Marglin's _Growth, Distribution, and Prices_ (Harvard
> University Press, 1984).
> -- Luigi L. Pasinetti, "Critique of the neoclassical theory
> of growth and distribution". BNL Quarterly Review, n. 205,
> December, 2000, pp. 383-431.
> <http://www.unicatt.it/docenti/pasinetti/Treccani.pdf>
> -- James Galbraith, "The Distribution of Income". In _A New
> Guide to Post Keynesian Economics_, 2001.
> -- Mat Forstater, June 06, 2001. From an E-mail discussion list.
>
> -- Steve Keen, _Debunking Economics_. Pluto Press, 2001.
> -- Syed Ahmad (1998)
>
>I have been citing Ahmad's textbook on capital theory (not where
>the above quote is from) here for years. Nobody has ever commented
>on it here (exempting fantasies about how I confine my reading
>to outdated metatheoretical political tracts).
Oh, the irony.
Mark Patrick Witte
Mr. Vienneau writes, "Just because I cite the literature doesn't mean
Having followed up on some of Mr. Vienneau's laughably poor
suggestions for articles that he claimed gave empirical supports for
positions he has supported, I should have known not to have taken him
seriously on this point either.
[Concerning Romer's 1990 model. What part of
"F(A,X) < A*dF/dA (A,X) + X*dF/dX (A,X)"
do Steedman and Vienneau not understand?]
Just for clarity: In a philosophical debate that is now nearly as passi
as most of the economic models Mr. Vienneau feels are close to his heart,
the realism versus instrumentalism debate concerned whether models were
"real" (Is there really such a thing as an electron? Or a utility
function?) or whether they were purely instrumental, that is, useful for
categorizing the data the real world generated by some unknown and
perhaps unknowable process. However, beginning in the late 1960s, the
"no miracles" school of thought pointed out that the empirical,
predictive, and applied success of the scientific process implied a
degree of realism within instrumental models, otherwise their success
would have to be a miraculous coincidence. The counter-response mainly
runs along the line that scientific history is made up almost entirely
of theories that were replaced by better ones, so why should we think
the current set is "real"; and by the Kuhnian notion that science
is not necessarily progressive any more than, in Kuhn's metaphor, is
biological evolution. That said, the realism versus instrumentalism
debate has generally gone into the sunset to be replaced by other issues.
However, the lessons of instrumentalism continue to hold.
Assumptions are false, and saying that they are a little bit false or a lot
false does not qualify this antecedent clause. Is a given assumption "too
false?" Perhaps so, if it is attached to a model that performs more poorly
than do competing models. Then again, maybe it was some other assumption
that sunk the ship. However, it is not assumptions that are compared, it is
models.
When someone presents a new model, the essential question that is
first asked (perhaps implicitly) is, "Who cares? Why do we need this model?
What does it offer us?" And the presenter has to explain how this model is
a contribution to human understanding, that is, how it explains something
that other models don't, or don't do as well. Perhaps that model explains
some aspects of the data better than any other model (say, unemployment),
but fails to do well on other empirical moments (perhaps inflation). Then
it is a contribution. Perhaps it does better on all aspects of the data
relative to some other model. Then it is a big contribution and may well
retire the other approach. Perhaps it models some new aspect of the world
that is not even handled by other models; then it is a contribution as well.
In the first and third cases, the new model may attract some interest from
those who think that what it does well is more important that what it does
poorly. In the second case, well, some diehards will likely hold on to the
old approach until they leave this mortal plain. Such is the way of
research.
So, what do the models Mr. Vienneau favors have to offer us? I'm
heading into a period of heavy travel soon and have asked this question many
times and don't really expect to see an answer before I go. What specific
important modern paper in economics is either flatly wrong, or fails to
match some empirical prediction of some economic approach favored by Mr.
Vienneau? It seems an easy question. I'd hope that he could cite the
specific published papers, one in the mainstream literature in recent years,
one in the journals he prefers, and explain what it is he likes about this
second approach. Exactly what empirical question is better handled?
In article <rvien-924B68....@news.dreamscape.com>,
Robert Vienneau
change. He begs questions by not noting cases when his
trichotomy doesn't apply. I always find it difficult to
find substantial matters in his posts that are neither
begged questions nor non-sequiturs. I enjoyed this one:
"...all models have assumptions, and so comparing assumptions
is foolish...
He seems to argue that the consensus of a community
of specialists should be taken seriously. Yet he fails to
notice that his ideas are not a consensus reading of Kuhn
nor the consensus on economic methodology. The communities
that examine such issues are very contentious. Perhaps he
fails to point this out because he thinks one is non-serious
if one notes the range of opinions on an issue.
In article <a3nqog$h47$1...@news.acns.nwu.edu>, mwi...@merle.acns.nwu.edu
(Mark Patrick Witte) wrote:
> Concerning Romer's 1990 model. What part of
> "F(A,X) < A*dF/dA (A,X) + X*dF/dX (A,X)"
> do Steedman and Vienneau not understand?
Somehow Mr. Witte avoids discussing this:
>> Personally, I find the following unclear:
>> "As used here, human capital H is a distinct measure of the
>> cumulative effect of activities such as formal education and
>> on-the-job training.
>> The concept of human capital as years of education or training..."
>> Is human capital the effect of certain activities or those
>> activities themself? This question would seem to enter into the
>> question of whether H is a cardinal variable or whether Romer
>> is using a cardinal variable as a proxy for an ordinal
>> variable.
On my reading, Romer's model incorporates the exploded Clarkian
concept of capital. I don't understand why one would put forth
a model incorporating this idea in 1990 without at least
noting that, at best, this concept is a questionable idea.
Mr. Witte is, of course, free to suggest that Steedman
needs a tutorial on Euler's theorem and marginal productivity.
Such a suggestion can only seem odd, though.
Has Mr. Witte ever clearly stated, despite years of explanation,
that given constant returns to scale, perfect competition, etc.,
the equilibrium rate of interest is generally not equal to the
marginal productivity of (financial/value) capital?
So I don't expect Mr. Witte to be able to tell me what the hell
Romer is talking about when Romer writes:
"In the conventional specification, total capital K is
implicitly defined as being proportional to the sum of all
different types of capital. This definition implies that
all capital goods are perfect substitutes. One additional
dollar of capital in the form of a truck has the same
effect on the marginal productivity of mainframe computers
as an additional dollar's worth of computers. Equation (1)
expresses output as an additively seperable function of all
the different types of capital goods so that one additional
dollar of trucks has no effect on the marginal productivity
of computers."
It seems Romer remains interested in the marginal productivity
of a dollar's worth of truck-capital, computer-capital, etc.
That is, the quantity of a specific capital good is measured
in numeraire units. I find surprising this retention of
exploded theory. Perhaps it would be worthwhile for some
theorist to redo this model with good capital theory to see
what remains, assuming nobody has yet done this.
Christopher Auld
>So I don't expect Mr. Witte to be able to tell me what the hell
>Romer is talking about when Romer writes:
>
> "In the conventional specification, total capital K is
> implicitly defined as being proportional to the sum of all
> different types of capital. This definition implies that
> all capital goods are perfect substitutes....
Gee, Bob, it would seem Romer is expressing in words a
seperability condition sufficient for "aggregate capital"
to be meaningful. But since, as you're fond of telling
us, you have a deep and serious understanding of precisely
this sort of narrow issue, you knew that, right?
Mark Patrick Witte
heart seems to have so little influence in the field of economics, and in
the world. As I've written in this thread and in some others, successful
research convinces others that it is important, that it offers some
improvement over the previously preferred way of understanding the world.
Arguing about assumptions is not convincing, comparing the results
of models can be though, particularly when they are backed up by empirical
support.
I really can't tell if Mr. Vienneau is unclear on Romer's
assumptions about cardinality of A or just kidding around. If he feels that
Romer's 1990 paper is incorrect, he is encouraged to show how Romer and the
JPE's editors failed. If he wishes to say that other assumption sets are
possible, then he is encouraged to build a competing model to Romer's and
show how it offers some interesting contribution, particularly of an
empirical nature.
In article <rvien-B27E9F....@news.dreamscape.com>,