Posts Tagged ‘liberals’

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Jean-Pierre Roy, “The Sultan and the Strange Loop” (2016)

The U word has once again reared its ugly head.

I’m referring of course to uncertainty, which at least a few of us are pleased has returned to occupy a prominent role in relation to scientific discourse. The idea that we simply do not know is swirling around us, haunting pretty much every pronouncement by economists, virological scientists, epidemiological modelers, and the like.

How many people will contract the novel coronavirus? How many fatalities has the virus caused thus far? And how many people will eventually die because of it? Do face masks work? How many workers have been laid off? How severe will the economic meltdown be in the second quarter and for the rest of the year?

We read and hear lots of answers to those questions but, while individual forecasts and predictions are often presented as uniquely “correct,” they differ from one another and change so often we are forced to admit our knowledge is radically uncertain.

Uncertainty, it seems, erupts every time normalcy is suspended and we are forced to confront the normal workings of scientific practice. It certainly happened during the first Great Depression, when John Maynard Keynes used the idea of radical uncertainty—as against probabilistic risk—to challenge neoclassical economics and its rosy predictions of stable growth and full employment.* And it occurred again during the second Great Depression, when mainstream macroeconomics, especially the so-called dynamic stochastic general equilibrium approach, was criticized for failing to take into account “massive uncertainty,” that is, the impossibility of predicting surprises and situations in which we simply do not know what is going to happen.

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The issue of uncertainty came to the fore again after the election of Donald Trump, which came as a shock to many—even though polls showed a race that was both fairly close and highly uncertain. FiveThirtyEight’s final, pre-election forecast put Hillary Clinton’s chance of winning at 71.4 percent, which elicited quite a few criticisms and attacks, since other models were much more confident about Clinton, variously putting her chances at 92 percent to 99 percent. But, as Nate Silver explained just after the election,

one of the reasons to build a model — perhaps the most important reason — is to measure uncertainty and to account for risk. If polling were perfect, you wouldn’t need to do this. . .There was widespread complacency about Clinton’s chances in a way that wasn’t justified by a careful analysis of the data and the uncertainties surrounding it.

In my view, Silver is one of the best when it comes to admitting the enormous gap between what we claim to know and what we actually know (as I argued back in 2012), which however is often undermined in an attempt to make the results of models seem more accurate and to conform to expectations.

And that’s just as much the case in social sciences (including, and perhaps especially, economics) and the natural sciences as it is in weather forecasting. Many, perhaps most, practitioners and pundits operate as if science is a single set of truths and not a discourse, with all the strengths and failings that implies. What I’m referring to are all the uncertainties, not to mention indeterminisms, linguistic risks and confusions, referrals and deferences to other knowledges and discourses, embedded assumptions (e.g., in both the data-gathering and the modeling) that are attendant upon any practice of discursive production and dissemination.

As Siobhan Roberts recently argued,

Science is full of epistemic uncertainty. Circling the unknowns, inching toward truth through argument and experiment is how progress is made. But science is often expected to be a monolithic collection of all the right answers. As a result, some scientists — and the politicians, policymakers and journalists who depend on them — are reluctant to acknowledge the inherent uncertainties, worried that candor undermines credibility.

What that means, in my view, is science is always subject to discussion and debate within and between contending positions, and therefore decisions need to be made —about facts, concepts, theories, models, and much else—all along the way.

As it turns out, acknowledging that uncertainty, and therefore openly disclosing the range of possible outcomes, does not undermine public trust in scientific facts and predictions. That was the conclusion of a study recently published in the Proceedings of the National Academy of the Sciences.

In the “posttruth” era where facts are increasingly contested, a common assumption is that communicating uncertainty will reduce public trust. . .Results show that whereas people do perceive greater uncertainty when it is communicated, we observed only a small decrease in trust in numbers and trustworthiness of the source, and mostly for verbal uncertainty communication. These results could help reassure all communicators of facts and science that they can be more open and transparent about the limits of human knowledge.

Even if communicating uncertainty does decrease people’s trust in and perceived reliability of scientific facts, including numbers, that in my view is not a bad thing. It serves to challenge the usual (especially these days, among liberals, progressives, and others who embrace a Superman theory of truth) that everyone can and should rely on science to make the key decisions.*** The alternative is to admit and accept that decision-making, under uncertainty, is both internal and external to scientific practice. The implication, as I see it, is that the production and communication of scientific facts as well as their subsequent use by other scientists and the general public is a contested terrain, full of uncertainty. 

Last year, even before the coronavirus pandemic, Scientific American [unfortunately, behind a paywall] published a special issue titled “Truth, Lies, and Uncertainty.” The symposium covers a wide range of topics, from medicine and mathematics to statistics and paleobiology. For those of us in economics, perhaps the most relevant is the article on physics (“Virtually Reality, by George Musser).

Musser begins by noting that “physics seems to be one of the only domains of human life where truth is clear-cut.”

The laws of physics describe hard reality. They are grounded in mathematical rigor and experimental proof. They give answers, not endless muddle. There is not one physics for you and one physics for me but a single physics for everyone and everywhere.

Or so it appears.

In fact, Musser explains, practicing physicists operate with considerable doubt and uncertainty, on everything from fundamental theories (such as quantum mechanics and string theory) to bench science (“Is a wire broken? Is the code buggy? Is the measurement a statistical fluke?”).

Consider, for example, quantum theory: if you

take quantum theory to be a representation of the world, you are led to think of it as a theory of co-existing alternative realities. Such multiple worlds or parallel universes also seem to be a consequence of cosmological theories: the same processes that gave rise to our universe should beget others as well. Additional parallel universes could exist in higher dimensions of space beyond our view. Those universes are populated with variations on our own universe. There is not a single definite reality.

Although theories that predict a multiverse are entirely objective—no observers or observer-dependent quantities appear in the basic equations—they do not eliminate the observer’s role but merely relocate it. They say that our view of reality is heavily filtered, and we have to take that into account when applying the theory. If we do not see a photon do two contradictory things at once, it does not mean the photon is not doing both. It might just mean we get to see only one of them. Likewise, in cosmology, our mere existence creates a bias in our observations. We necessarily live in a universe that can support human life, so our measurements of the cosmos might not be fully representative.

Musser’s view is that accepting uncertainty in physics actually leads to a better scientific practice, as long as physicists themselves are the ones who attempt to point out problems with their own ideas.

So, if physicists are willing to live with—and even to celebrate—uncertain knowledge, and even if the general public does lose a bit of trust when a degree of uncertainty is revealed, then it’s time for the rest of us (perhaps especially economists) to relinquish the idea of certain scientific knowledge.

Then, as Maggie Koerth recently explained in relation to the coronavirus pandemic, instead of waiting around around for “absolute, unequivocal facts” to decide our fate, we can get on with the task of making the “big, serious decisions” that currently face us.

 

*Although, as I explained back in 2011, the idea of fundamental uncertainty was first introduced into mainstream economic discourse by Frank Knight.

**And later central bankers (such as the Bank of England’s Andy Haldane) discovered that admitting uncertainty might actually “enhance understanding and therefore authority.”

***The irony is that “the Left” used to be skeptical about and critical of much of modern science—from phrenology, craniometry, and social Darwinism to the atom bomb, sociobiology, and evolutionary psychology.

 

We’re back at it again: “the economy” has broken down and we’re all being enlisted into the effort to get it back up and working again. As soon as possible.

The Congressional Budget Office has announced that it expects the U.S. economy will contract sharply during the second quarter of 2020:

    • Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent. Those declines could be much larger, however.
    • The unemployment rate is expected to exceed 10 percent during the second quarter, in part reflecting the 3.3 million new unemployment insurance claims reported on March 26 and the 6.6 million new claims reported this morning. (The number of new claims was about 10 times larger this morning than it had been in any single week during the recession from 2007 to 2009.)

Just as in the aftermath of the spectacular crash of 2007-08, the supposedly shared goal is to do whatever is necessary to engineer a recovery so that the economy can start operating normally again.

That presumes, of course, that we were satisfied with the normal workings of the economy before, and that such a state of normality is what we all desire moving forward.

But before I attempt to address that issue, it’s important that we stop and think a bit more about what we mean when we refer to this thing called “the economy.” In a fascinating recent interview, Anat Shenker-Osorio [ht: ja], argues that the economy is often portrayed as an all-powerful, personified entity.*

Previously, we would hear politicians admonish that we can’t pass X policy because it will “hurt the economy” — as if it were a being to which we owe our efforts and loyalties. And now, all the more brazenly, Republicans tell us we must sacrifice ourselves or perhaps our elders to the economy.

Another oft-used metaphor for the economy is the human body.

Conservatives, aided and abetted by progressives who also unwittingly employ the metaphor, tend to talk about the economy as a body. You can hear this expressed in language like “it’s suffering” or “the economy is thriving.” We have a “recovery bill” to get the economy “off life support” and “restore it to health.” What this metaphor suggests is that in grave cases, we must “resuscitate the patient” (perhaps with a stimulus bill.)

It seems to me, there’s a third common metaphor for the economy: a machine. Often, especially in conservative political discourse and neoclassical economic theory, the economy-as-machine is said to be functioning on its own, in a technical manner, with all its parts combining to produce the best possible outcome.** Unless, of course, there’s some kind of monkey wrench thrown into the works, such as a government intervention or natural disaster. However, according to liberal politics and Keynesian economics, the economic machine by itself tends to break down and needs to be regulated and guided, through some kind of government policy or program, so that it gets back to working properly.

As Shenker-Osorio correctly observes, the metaphor of “the economy” that is shared by both sides of mainstream political and economic discourse puts progressives at a distinct disadvantage:

we see progressives attempt to make arguments about how social welfare programs will “grow the economy” in the hopes of sounding like the reasonable adults in the room. This tacitly reaffirms the toxic idea that our purpose ought to be to serve the economy — that the correct evaluation of policy is how it affects the GDP

Much the same argument is made in favor of other liberal or progressive programs: raising minimum wages, extending health insurance, anti-poverty programs, education and job training, and so on. All are justified as contributing to making the economic machine work better, more productively, by including everyone.

So, what’s the alternative? One possibility, which Shenker-Osorio offers, is to reject the existing metaphors and refuse to continue to debate “who loves the economy best” and, instead, force “the far more relevant discussion: What is best for people.”

I don’t disagree with Shenker-Osorio’s goal but I wonder if there might not be another way of proceeding, by teasing out the implications of thinking about the economy as a machine.

If we continue with the machine metaphor then, first, we can demonstrate that the existing machine, in the midst of the novel coronavirus pandemic, is simply not working. It is an unproductive machine. For example, the U.S. economy-as-machine hasn’t been able to protect people’s health, for example, by providing adequate personal protective equipment for nurses and doctors, ventilators for patients, and masks for everyone else. Even more, it has put many people’s health at additional risk, by forcing many workers to continue to labor in unsafe workplaces and to commute to those jobs using perilous public transportation. Finally, it has expelled tens of millions of American workers, through furloughs and layoffs, and thus deprived them of wages and health insurance precisely when they need them most.

Second, we can read the decisions of the Trump administration—both its months-long delay in responding to the pandemic and then its refusal to enact a nationwide shutdown when it finally did admit a health emergency—as precisely enacting the general logic of the economic machine: that nothing should get in the way of production, circulation, and finance. It fell then to individual states to decide whether and when to shutdown parts of the economic machine and to distinguish between “essential” and “nonessential” sectors.

Finally, we can interpret the repeated calls to reopen the economy—not only by Trump and his advisors, but also by a wide variety of others, from Lloyd Blankfein, the billionaire former CEO of Goldman Sachs, to Republican Sen. Ron Johnson of Wisconsin—as a rational but unconvincing gesture, based on no other reason than that the machine needs to keep operating. It expresses the rational irrationality of the existing economy-machine.

All of which leaves us where? It seems to me, their continued reference to the economy as a machine creates the possibility of our demanding, in the first place, that the machine should remain closed down—for health reasons. People’s health should not be put under any further stress as long as the pandemic continues to ravage individual lives and entire communities.

And in second place, it becomes possible to imagine and invent other assemblages of the existing economy-machine, and even other machines, instead of obeying the logic of the current way of organizing economic and social life in the United States. In fact, while many of the changes to people’s lives have been designed to keep the existing machine functioning (for example, by working at home), it is also possible that people are taking advantage of the opportunity to experiment with how they work and live and creating new spaces and activities in their lives.***

If the common refrain these days is that “nothing will be the same” after the pandemic, perhaps one of the outcomes is that the economy-machine will finally be seen as an empty signifier, unmoored from the reality of people’s lives and incapable of organizing their desires.****

Then, maybe, the existing economy-machine will stop functioning. Before it kills any more of us.

 

*As in the episode of South Park, “Margaritaville” (the third episode in the thirteenth season, broadcast in March 2009), which Shenker-Osorio discusses in her 2012 book, Don’t Buy It: The Trouble with Talking Nonsense about the Economy.

**There is also, of course, an ethics of the economy-as-machine. As I explained back in 2018,

According to neoclassical economists, the capitalist distribution of income is fundamentally fair. If every factor of production (e.g., capital and labor) is remunerated according to its marginal contribution to production, and each individual sells to firms the amount of each factor they desire (because of utility-maximization), the resulting distribution represents “just deserts.” It’s fair on an individual level and it represents justice for society as a whole. Let free markets operate, without any external intervention (e.g., by the state), and the result will be both fair and just.

For Keynesian economists, the machine can be made to operate fairly, and therefore in an ethical manner, when the state can step in (e.g., via fiscal and monetary policy) to create full employment.

***I understand, some of those changes may be experienced as losses—of laboring alongside fellow workers, of certain leisure activities, and so on. But people are inventing all kinds of new ways, even at a physical distance, of provisioning, socializing, and much else.

****And, yes, for those who are interested, as I prepared to write this post, I did go back and reread some of the works of Gilles Deleuze and Félix Guattari, including AntiOedipusCapitalism and Schizophrenia.

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How else to put it? The levels of economic inequality in the United States are obscene.

According to the latest data from the World Inequality Database, the share of pre-tax income captured by the top 1 percent of Americans is an astounding 20.1 percent, while the bottom 50 percent are forced to make due with only 12.6 percent. And the distribution of wealth is even more unequal: the top 1 percent own 37.2 percent but the bottom 50 percent of Americans hold no net wealth at all.

Even Donald Trump’s Federal Reserve Chair Jerome H. Powell has warned that income inequality is the nation’s biggest economic challenge in the coming decade.

Powell and many others recognize that, if present trends continue—with corporate profits growing and the Trump administration in power—economic inequality is only going to get worse.

It’s no wonder, then, that Dani Rodrick argues that the Democratic Party will face a critical test in the next U.S. presidential election:

Will it remain the party of merely adding sweeteners to an unjust economic system? Or does it have the courage to address unfair inequality by attacking it at its roots?

Clearly, Rodrick reflecting on the poor showing of Hillary Clinton in the last presidential election, who promised to continue the policies of economic recovery under Barack Obama, and the fact that most of the proposals currently on the table are aimed at raising taxes on the rich. They don’t really get at the roots of the grotesque levels of inequality the U.S. economy has been generating.

The problem is, most of what Rodrick offers as an alternative agenda for “the Left” also fails that test. His plan for “inclusive prosperity” is confined to “productive re-integration of the domestic economy” (basically, encouraging large corporations to invest in their local communities), directing technological change (to help less-skilled workers), rebalancing labor markets (for example, by promoting unionization and raising minimum wages), regulating the financial sector (with higher capital requirements and tighter scrutiny), and electoral reform (such as more stringent campaign financial rules).

Now, there aren’t many on the Left—at least progressive thinkers and activists I talk to or whose work I read—who would be opposed to such changes. They would, indeed, improve the condition of the working-class and make it somewhat easier for the vast majority of Americans to make their voices heard.

But, by the same token, the kinds of policies Rodrick is putting forward do not meet his own test of attacking the problem of inequality “at its roots.”

The fact is, inequality begins where the surplus is produced and appropriated—in the factories, offices, and warehouses where most Americans work. Workers produce much more value than they receive in the form of wages and salaries, and it’s that surplus that is appropriated by their corporate employers to do with it what they will. Some of it is invested and the rest is distributed for other purposes—stock buybacks, mergers and acquisitions, salaries for corporate executives, and so on—which only serve to make the existing distribution of income and wealth even more unequal.

In other words, it’s that control over the surplus by a small minority of Americans that is the root, the condition or source, of the unfair inequality that characterizes the United States today. And there’s nothing in Rodrick’s set of policies that seeks to fundamentally alter or solve that particular problem.

Perhaps a month ago, when Rodrick first published his piece, he could claim to have been out front in the discussion—and perhaps he still is for mainstream liberals. But already the terms of debate, for the Left, have bypassed him and moved on. Now, politicians, activists, and journalists are asking new questions and posing new solutions—under the rubric of socialism.*

People in the United States often ask whether or not we should keep the socialist label. My answer is an unequivocal “yes,” for two reasons: one is that it ties contemporary discussions and debates to a long historical tradition of criticizing existing conditions and proposing alternatives; second, socialism is based on a recognition that the problems workers face are based on and stem from an “unjust economic system,” and “merely adding sweeteners” doesn’t represent a solution.

The current discussion of socialism is only in its infancy, and it’s impossible to tell at this point where it will end up. But already, in putting issues like a Green New Deal and economic democracy on the table, it is much close to attacking the roots of unfair inequality in the United States than anything mainstream Democrats or Dani Rodrick have to offer.

 

*Even “On Point,” a radio program produced by WBUR in Boston and broadcast every weekday on NPR stations around the United States, recently hosted an episode on socialism.

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