Posts Tagged ‘facts’


To judge by Christopher Snyder’s attempt to defend contemporary economists, the answer is clear: nothing!

Yes, Snyder is right, economists have expanded their domain, to analyze such issues as art auctions and corruption. But then he goes off the rails.

That’s because the only kind of economics Snyder appear to know about and give credence to is mainstream economics—in terms of what he argues are the “core concepts” that underlie economists’ thinking.

What are those core concepts, around which all economists supposedly organize their theories and models?

For starters, Snyder thinks the most important one is “scarcity”:

Devoting resources to one project—say, preventing diabetes—means some other worthy project—curing cancer—goes unserved. So, in determining whether a choice should be undertaken, one of the functions of economics is to argue that its benefits should not be considered in isolation but weighed against its costs. Costs put a dollar value on what has to be given up when one choice is made over another.

But he never even considers the possibility that scarcity is institutionally created, not a given. And different economies are characterized by different kinds of scarcities, which are endogenously produced and reproduced. Thus, capitalism both creates and is characterized different scarcities from other economic systems, such as slavery and feudalism. Where is that in Snyder’s definition of what economists do and the core concepts they supposedly hold.

And then there’s “value,” which for Snyder “is the result of the interaction of several impersonal market forces,” illustrated in the usual fashion:


But there’s no mention of long-run “natural” prices (of the sort classical economists such as David Ricardo or, more recently, Piero Sraffa focused on) or a class theory of value (emphasizing surplus labor, which Karl Marx developed in his critique of political economy)—or any one of a large number of other ways value can be, has been, and is being analyzed within economics.

Finally, Snyder, discusses “modern empirical research” and the attempt to uncover “true causal relationships rather than overinterpreting apparent correlations as causation.”

Uncovering causal relationships is difficult in economics. Opportunities to run experiments are limited by the expense and ethics involved in controlled interventions in markets (although these opportunities are growing, owing to an explosion of interest in laboratory and field experiments).

Once again, Snyder overlooks the many alternative approaches—concerning both “facts” and “causation”—within economics.

Sure, mainstream economists might claim they’ve finally solved the problem of “causal identification” (as they’ve claimed so many other times in the past). But they still fail to acknowledge the possibility that different economic theories produce different sets of facts. Nor do they consider the idea that economists actually use different notions of causation: some limit themselves to essentialist, one-way causation (from given causes to effects), while others, criticize essentialism and look at mutual effectivity (in which everything is seen to be both cause and effect).

The existence of different notions of scarcity, value, and causation within economics doesn’t prove that mainstream economists are wrong. It merely shows that reducing economics to a set of core concepts that pertain only to what mainstream economists do is wrong.

The problem, of course, is that’s the only set of concepts to which generations of students, who have been taught by mainstream economists, have been exposed. And Snyder just continues that tradition.

In the end, mainstream economists are good for nothing precisely because they exclude all other ways of thinking about and doing economics.


Apologists for mainstream economics (such as Noah Smith) like to claim that things are OK because good empirical research is crowding out bad theory.

I have no doubt about the fact that the theory of mainstream economics has been bad. But is the empirical research any better?

Not, as I see it, in the academy, in the departments that are dominated by mainstream economics. But there is interesting empirical work going on elsewhere, including of all places in the International Monetary Fund (as I have noted before, e.g., here and here).

The latest, from Mai Dao, Mitali Das, Zsoka Koczan, and Weicheng Lian, documents two important facts: the decline in labor’s share of income—in both developed and developing economies—and the relationship between the fall in the labor share and the rise in inequality.

I demonstrate both facts for the United States in the chart above: the labor share (the red line, measured on the left) has been falling since 1970, while the share of income captured by those in the top 1 percent (the blue line, measured on the right) has been rising.

labor shares

Dao et al. make the same argument, both across countries and within countries over time: declining labor shares are associated with rising inequality.

And they’re clearly concerned about these facts, because inequality can fuel social tension and harm economic growth. It can also lead to a backlash against economic integration and outward-looking policies, which the IMF has a clear stake in defending:

the benefits of trade and financial integration to emerging market and developing economies—where they have fostered convergence, raised incomes, expanded access to goods and services, and lifted millions from poverty—are well documented.

But, of course, there are no facts without theories. What is missing from the IMF facts is a theory of how a falling labor share fuels inequality—and, in turn, has created such a reaction against capitalist globalization.

Let me see if I can help them. When the labor share of national income falls—the result of the forces Dao et al. document, such as outsourcing and new labor-saving technologies—the surplus appropriated from those workers rises. Then, when a share of that growing surplus is distributed to those at the top—for example, to those in the top 1 percent, via high salaries and returns on capital ownership—income inequality rises. Moreover, the ability of those at the top to capture the surplus means they are able to shape economic and political decisions that serve to keep workers’ share of national income on its downward slide.

The problem is mainstream economists are not particularly interested in those facts. Or, for that matter, the theory that can make sense of those facts.


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It’s now official, Truth is dead.

Oxford Dictionaries has selected “post-truth” as 2016’s international word of the year, after seeing a spike in frequency this year in the context of the Brexit referendum in the United Kingdom and the presidential election in the United States.*

Many of us are neither surprised nor dismayed by the realization that Big-T Truth—in relation to politics, the media, and much else—is being called into question. We’re not surprised because telling the truth was never a mainstay of political discourse or newspaper reporting. Remember the lies that served as the basis for President Lyndon B. Johnson’s 1964 order to launch retaliatory air strikes on North Vietnam and his request for a joint resolution of Congress—the Gulf of Tonkin Resolution—which gave him authorization, without a formal declaration of war by Congress, for the use of conventional military force in Southeast Asia? Or the New York Times in the run-up to the 2003 invasion of Iraq, especially Judith Miller’s now thoroughly discredited reporting about Iraq’s supposedly brimming stockpile of weapons of mass destruction?

Nor are we dismayed, since we’ve long understood that different sets of “facts” and “truths” are produced within different theoretical frameworks and that there’s no Archimedean standpoint—independent and outside of those frameworks—to decide that one or another corresponds to reality. The idea that there’s a set of bedrock facts or a single truth about reality is a holdover from positivism and other foundationalist theories of knowledge that have long been contested.

What we do need to be aware of is how those different facts and truths are constructed (the discursive and social conditions under which they are produced), and of course how they lead to different consequences (on the theories and the wider society). It’s a stance concerning knowledge that is often referred to as “partisan relativism”—relativist in the sense that validity criteria are diverse and internal to theoretical frameworks, partisan because producing knowledges always involves taking a stance, in favor of one set of facts and truths and against others.

To be clear, then, “post-truth”doesn’t mean (as if often presumed) that theoretical and empirical analysis grinds to a halt or that analysts—in whatever field, humanities, social sciences, or natural sciences—are unable to make pronouncements about the world. On the contrary. It makes discussion and debate, amongst and between those who use different theoretical frameworks, even more important—because, of course, the stakes for the world in which we live are so high.

Julia Shaw, a forensic psychologist, adopts much the same perspective

They say that we have found ourselves in a world lost to emotion, irrationality, and a weakening grasp on reality. That lies don’t faze us, and knowledge doesn’t impress us. That we are post-truth, post-fact. But, is this actually a bad thing?

I’m a factual relativist. I abandoned the idea of facts and “the truth” some time last year. I wrote a whole science book, The Memory Illusion, almost never mentioning the terms fact and truth. Why? Because much like Santa Claus and unicorns, facts don’t actually exist. At least not in the way we commonly think of them.

We think of a fact as an irrefutable truth. According to the Oxford dictionary, a fact is “a thing that is known or proved to be true.” And where does proof come from? Science?

Well, let me tell you a secret about science; scientists don’t prove anything. What we do is collect evidence that supports or does not support our predictions. Sometimes we do things over and over again, in meaningfully different ways, and we get the same results, and then we call these findings facts. And, when we have lots and lots of replications and variations that all say the same thing, then we talk about theories or laws. Like evolution. Or gravity. But at no point have we proved anything.

Still, we need to contend with the fact that so many liberals—especially liberal politicians, pundits, and political economists—are bemoaning what they consider to be the descent into a post-truth world. They’re worried that non-liberal political candidates and voters increasingly deny facts, manipulate the truth, and prefer emotion to expertise. And so they rush to defend “the facts” and Truth.

Rune Møller Stahl and Bue Rübner Hansen, I think, get it right:

liberals’ nostalgia for factual politics seems designed to mask their own fraught relationship with the truth. The supposedly honest technocrats and managers—who enacted neoliberal measures with the same ferocity as their right-wing counterparts—relied on a certain set of facts to displace the material truths they refused to acknowledge. . .

As liberals took over facts, they pushed social conflict to the non-factual realm, to the domain of values. Instead of struggles over domination and exploitation, we got the culture wars. There, progressive values held no sway; they were sold with a sense of moral superiority then betrayed by the spinelessness of triangulation and by policies that undermined the welfare state and organized labor.

As I see it, the defeats mainstream liberals suffered under the Brexit vote and the U.S. presidential election don’t prove that voters hate facts or truths. Those events (and we can expect more to come in the years ahead) merely show that enough regular citizens are fed-up with business as usual—with increasingly unconvincing liberal facts and truths, which deny the severe losses and dislocations under the existing rules and institutions—to revoke their trust in the so-called experts and, swayed by a different set of facts and truths, to throw in their lot with the only available alternatives.

The battle over facts, truths, and expertise hasn’t ended. But the idea that there’s only one—one set of facts, one truth, one group of experts—has. Which means the critique of the existing order After Truth has only just begun.


*According to Oxford Dictionaries, the first time the term post-truth was used was in a 1992 essay by the late playwright Steve Tesich in the Nation magazine. Tesich, writing about the Iran-Contra scandal and the Persian Gulf war, said that “we, as a free people, have freely decided that we want to live in some post-truth world.” The term “post-truth politics” was coined by David Roberts in a blog post for Grist on 1 April 2010, where it was defined as “a political culture in which politics (public opinion and media narratives) have become almost entirely disconnected from policy (the substance of legislation).”

Note: yes, that is Schrödinger’s cat at the top of the post.

real wages

source [pdf]

Niall Ferguson, Harvard’s ignorant gay-bashing bloviating right-wing infotainment historian, has also adopted a novel epistemology.

Ferguson has been complaining about the “smear campaign” adopted by people who have identified his factual mistakes, such as his use of nominal instead of real-wage statistics. He refers to the phenomenon, which “as with political correctness. . .originated in the US, as “correct politicalness.”

As Jonathan Chait [ht: sm] explains,

Perhaps the most enduring contribution of Ferguson’s column will be the novel epistemology it proposes. Ferguson calls his beliefs “irrefutable.” As he puts it, “Almost no one seriously claims that Obama’s second term has been a success. As for the UK economy, the Keynesians’ doom-mongering now looks laughable. All these people have got left is phoney fact-checking: correct politicalness.” Traditional reasoning uses facts to build toward conclusions. Wages rose under austerity, therefore austerity has succeeded; Obama’s health-care plan increases the deficit, therefore Obama has failed. Ferguson is suggesting that we invert the process. Since David Cameron is irrefutably good, and Obama irrefutably bad, Ferguson should be free to make any factual statement on behalf of the former and against the latter without being hounded by “fact-checkers.”