Why economics falls short for me

I talk unfavorably about economics here frequently, so let me walk things back a little bit and explain how the lens through which I view things is shaped.

First and foremost, I freely acknowledge that economics does have a value and a purpose. I don’t think I do a very good job or communicating that, because I focus mostly on it’s shortcomings as a discipline. I think that in a technical aspect, a lot of it works out just fine. But that, to me, only extends to textbooks. Once you try to apply the theories to the real world, once they leave the paper, I believe that the human factor muddies things and lessens the predictive value of economic theories.

Before we delve into that, I feel the need to reiterate that there are still real world applications for economics. For example, production and consumption, labor, etc. I won’t be ridiculous and assert that all economics is flawed and has no use. Clearly it does. Now, allow me to elaborate on where I see it getting muddy.

If the basic question at the heart of economics is, “What is the best way to use these resources?” then I think we first must answer the question, “Why do people do the things that they do and what do they value?” Answering the first question is easy–it’s often just a simple matter of mathematics. However, the second question is going to be more complex to answer because of psychology, philosophy, ethics, etc.

For example, perhaps we can figure out mathematically what the most efficient way to use resources is. But suppose that somehow violated our ethics or morality. What then? What is a person to do? Resources might have to be used less efficiently in order to fit morally or ethically in a society or culture.

Similarly, how do we determine what people value? There is no mathematical equation for this. People have basic needs to live and reproduce, to complete their biological functions. But as far as resource allocation goes, that will be directed by what people value, and what people value varies widely and is subjective in nature.

If you take a look at any budget, be it governmental or personal, you will see what people value. Economics did not lead them to those values, though. They made economics work for their values and their philosophies and ethics, NOT vice versa. In other words, you can’t answer the second question, “Why do people do what they do and value what they do,” by simply answering “economics.” And we’ll see why now, using budgets as an example.

If the premise that economics informs values were true, we should in theory see roughly the same proportions of money dedicated to the same things in virtually every budget. But we clearly don’t see that. Let’s take a look at the US budget first:

US budget

Now let’s take a look at the budget of another country, Australia:

australia budget

Different countries form their economic system differently because they answer the, “How do we best use these resources?” question by using their values and ethics, philosophy. And again, these things vary from culture to culture, person to person.

Let’s talk about some more examples. Let’s talk about contraception. Planned Parenthood is a hot button issue in America right now, with a lot of politicians and states wanting to defund it. Why do they want to defund it? It isn’t because of economics. Of course it isn’t. Because contraception and it’s impact is something that can be studied, and there’s an ample amount of evidence to show that access to contraception lowers birth rates and disease transmission, and you can generate a dollar amount saved by offering it and a dollar amount needed to budget in order to offer those services. If it were simply a matter of economics, contraception, sex ed, and a whole host of other reproductive health interventions would be no-brainers.

But the economic decisions are made through the lens of values, particularly religious ones. In many instances, in many states and communities and our congress, religious values supersede economics. Again–economics has not informed or influenced psychology or philosophy or ethics or values here–indeed we see that the opposite is true, that the values and ethics and philosophies again are the things that influence our economics.

And those things can’t be quantified on paper, and they’re the reason why economics often loses much of its sway with me in the real world when you try to apply it. Let me offer another example of where I believe economics fails us: creativity and innovation.

Why do people create? Why do they innovate? Now let’s frame that in an economic context: do market principles like competition and profits cause people to create? Well, now that’s an interesting question. Let’s take it a step further. If we removed those elements of the premise–competition and profit–would people still create? Would they still innovate?

Yes, of course they would, because economic profit and competition aren’t the only kinds of incentives out there. They aren’t even the only kinds of profit and competition out there. And for an example of this we need look no further than Dr. Jonas Salk, the father of the polio vaccine. Dr. Salk refused to patent his vaccine, which meant he missed out on a boat load of money, but also that the vaccine could be widely available and affordable. He believed, in short, that it belonged to the world. But let’s look at that decision through an economic lens, specifically keeping competition, profit, and innovation in mind.

It’s highly arguable that Dr. Salk created the vaccine independent free market incentives. To be clear and fair, a free market system put together the manufacturing and distribution of his work. But “free market competition” and “market shares” and “economic profit” clearly, arguably did not increase his genius, his desire, or his motivation. In other words, economics did not provide the incentive–personal values and philosophy did.

Let’s go back to the question, “Why do people innovate and create?” and provide two explanations. 1) to make the world a better place/to make life better, and 2) to make money. Now let’s perform a thought experiment.

What if we removed one of the possible reasons? For example, if we removed “making the world better/life easier” would people still create and innovate? Well, that would leave creating and innovating solely for the sake of profit the only remaining option. Now think about a society wherein the only reason to create and innovate would be to create wealth. Could such a society work? Sure, of course it could. People would see needs that were unaddressed and then create accordingly in order to fill that niche, and by doing so would turn a profit.

Now, what if we reversed the thought experiment? What if we took away the profit part, so that “the make the world a better place/make life easier” was the only answer. In such a scenario or society, people who innovate would not be compensated with money for their creations, for their improvements. Would people still do it, then? Yes, of course. Dr. Salk is a prime example of someone with this type of attitude.

As I hope this thought experiment showed in the real world the answer is that both explanations are not mutually exclusive; people create and innovate for both reasons. I’m not trying to say that one or the other is really more correct. I’m merely attempting to illustrate that reducing innovation and creativity down to only economic terms is going to generate an incomplete picture of what actually happens in the real world, and that trying to motivate people to create and innovate using only economic incentives is bound to experience failure. Such a reductionist view misses a lot other very important factors.

And that’s ultimately why economics leaves me dissatisfied as a field of study. Too often economics ignores the human factor, or purports to impact the human factor, somehow mitigating it. Such assertions are false, though. While someone might seem to be motivated by economic factors, that can further be reduced to value and philosophy: a person is only open to economic incentives because of their values. In other words, economics doesn’t create values, values create economics. And until economics does more to take that variable and subjective human factor into account, it’s always going to be quite lacking for me.

Oscars? Fuck that.

There’s a move right now among black members of Hollywood to boycott the Oscars because there wasn’t a single black nominee this year. On one level, this situation is a reflection of how Hollywood treats black people in general. So I get the urge to boycott. And apparently so does the academy, because they’ve just rolled out a new plan to make the academy and the process more diverse.

To which I say, too little, too late.

Let’s say things do change. If I was a black actor who won an Oscar at some future time, I’d stop and wonder: “Did I win because my performance was good, or because they need to get more black people on the stage?” It’s a lose/lose.

And really, on an entirely different level, who gives a shit what the academy thinks? It’s a shadowy organization with secretive membership. If you don’t even know who’s on the academy, how can it have any value? And speaking of value, an Oscar has zero. And I can prove it.

Nicolas Cage won an Oscar. What the hell was the last good thing he ever made? Need I remind anyone of this:

Meanwhile, you know who’s never won an Oscar. Harrison Ford. Great actor. One of the greatest of all time. He’s Han Solo, Indiana Jones, AND Jack Ryan for fuck’s sake. And hello, Blade Runner?! Compare every performance Nicolas Cage has ever done to every one of Ford’s and tell me which one is the better actor with the better body of work. And then look at which one has an Oscar.

Here’s list of other people who have never won an Oscar:

  • Leonardo DiCaprio
  • Gary Oldman
  • Samuel L Jackson
  • Bill Murray
  • Gene Wilder
  • Steve McQueen

And a bazillion other people. And, again, to really nail in this point, Ben Affleck has won an Oscar. The guy who made Gigli, which gave us a whole movie full of moments like these:

And, again, because I cannot emphasize this enough, Ben Affleck and Nicolas Cage have Academy Awards, and somehow none of the following was “Oscar” material:

So you’ll have to forgive me if I hold the academy with the same esteem I would hold a rotten turd. And that, in my opinion, is the only way to hold them, both for us as an audience and for the actors themselves.

If films really are an art form, then all of us are critics, so the opinions of a select few backroom Hollywood hobnobs means nothing. And if you’re an actor, which is more important to you: what the public and your fans think about your movies, or what the academy thinks about them?

So yes, the Oscars have a problem with race, but the Oscars are also an incredible stupid institution that shouldn’t have any bearing on anything, racism or not.

 

Fuck you, establishment

That’s the message that voters are sending this election cycle. There’s a huge feeling of anger that’s gripping people in America, on both the right and the left. And it really explains the two candidates who are surging right now: Donald Trump and Bernie Sanders. Not that I’m trying to equate the two, but they both have tapped into a deep-seated frustration gripping America right now.

People feel powerless.

And in reality, they are. They have very little social or financial power right now. They’re tired of maintaining a system that doesn’t give a shit about them. They’re tired of money over people. They’re tired of not having their will represented in DC. Wherever people fall on the political spectrum, they can all agree on one thing: Washington is broken.

Both camps have radically different ideas about how to fix that, but that isn’t even the point. The point is that both Donald Trump and Bernie Sanders are a rejection of the donor class. They represent people who aren’t beholden to big money. Neither candidate has a Super PAC. Bernie has a 30+ year history of fighting against oligarchy and other forms of social and economic inequality. And while Trump is a member of the donor class, he’s used that to his advantage on the campaign trail: because he’s already wealthy, he isn’t beholden to anyone’s money. And his rhetoric certainly matches that assertion.

This polls says it all. 66% of Americans think that the wealthy have more influence over elections than they do. A whopping 84% think there is too much money in politics. 85% think that politicians promote policies that directly help their donors either most of the rime or sometimes. The rest of the numbers are equally telling, and I encourage everyone to take a look at them. But they make one thing clear:

Americans aren’t blind to how badly they’re getting screwed.

And that should worry the donor class. It should worry them a lot. Because at the end of the day, the 1% may have most of the wealth, but they only have 1% of the votes in any election. Once people are wise to how badly they’re getting fucked over, there isn’t any amount of money that will make them un-know that. The genie is out the bottle, so to speak.

And so we have Donald Trump and Bernie Sanders, who are ahead in polls as we head into Iowa and New Hampshire in a few short weeks. Both candidates represent a big middle finger to Washington and to the donor class, a fundamental rejection of the status quo. Whatever your feelings about the two, they are shaking things up (for better or worse).

No matter who wins this next presidential election, one thing is certain: the game has changed. The conversation has shifted. No longer is it about who has the most experience. It’s now truly about who will actually try to restore balance to the system. And the American people have the votes to put those populist candidates in office. Slowly they’re starting to realize that, that their vote has more power than the dollars of lobbies and Super PACS.

A check can’t pull a lever or mark a box on a ballot. And that’s the lasting legacy of this upcoming election.

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Why the GOP can’t win

The current frontrunner in the GOP presidential race is Donald Trump. Let that sink in for a moment. A man who thinks that Syrian refugees and ISIS are the same thing. A man who has bankrupted multiple businesses. A reality TV show star.

How the hell did we get here?

I’m not a republican or a conservative, but as I’ve stated in the past, that doesn’t mean some conservative principles or ideas don’t have merit. But the current GOP field is a complete mess. But why? Why is the ticket so abysmal?

Well, in short, it’s because to the republican base, experience is a bad thing.

There’s a huge anti-establishment push in this country right now. Anyone seen as a “Washington insider” is unfit to elect. Indeed, a complete lack of political experience is what is considered desirable by the republican base currently. If government is the problem, then the solution is to send someone who isn’t part of the system in to fix it.

Don’t believe me? Just look at the current people in the front of the GOP pack. Ben Carson, Carly Fiorina, and Donald Trump have zero political experience. Rand Paul, Ted Cruz, and Marco Rubio are all freshmen congressmen. In other words, all of these people have either zero or very little experience in the system.

And the people who actually do have executive experience–John Kasich, Jeb Bush, and Chris Christie–continue to languish at the bottom of the polls. I actually kinda like John Kasich, as far as their candidates go. He’s a little too religious for my taste, but his track record makes me think he’s actually a pretty moderate man. If I had to vote for a republican in this race it would be him. But he’s not going to get the nomination.

Because, again, of the GOP base. People who think that the problem in Washington is politicians aren’t going to nominate a career one, no matter how sane his or her track record. It’s Jon Huntsman all over again.

Remember Jon Huntsman?

He ran for president in 2012 on the republican ticket. He was a former governor of Utah who was also ambassador to China, and who also happened to believe in climate change. Naturally, he languished in the polls and dropped out of the race.

Because really, what conservative wants to elect a candidate with executive experience who’s beloved in his home state, actually understands science, and who has experience dealing with China? That’s just crazy talk, right there.

And it’s an example of what the problem in the GOP is. Kasich and Huntsman both would have had massive appeal to independent voters, and those are the voters who decide elections. 32% of voters are democrats. 29% are republicans. 39% are independents. That last number is the one both parties target. Yet, time and time again, the GOP base has all but assured that the candidate that gets the nomination is the one that only appeals to that 29% of the party.

It’s the republican voters who are killing the party. “The call is coming from inside the house!”

huntsman

Is a resource economy inevitable?

There are two things on this blog that I write about frequently: technology/artificial intelligence and economics. How are the two really related, and what does their relationship mean for us humans caught in the middle? As technology improves, it seems that all current economic models are destined to fail, and we’ll see why in a moment.

First, let’s take a look at how things were done in the past, and how they’re done currently. Before the advent of modern technology–the use of electricity and computers–all work was done by human labor. This labor was rewarded with currency, something that represented the value of the labor provided. This currency could be used to purchase goods, etc.

And then technology came along. We all know what automation did to factory work. It was easy to replace human workers with machinery. And that’s exactly what happened. More and more, technology took over certain human functions. And that leads us to now.

Currently, certain tasks are “safe” from being taken over by machines. Jobs that require creativity, judgement, complex thinking or physical coordination, etc. are traditionally thought of as not executable by machines. And so the economy was retooled, people were retrained, and the standard person-performs-labor-receives-money-for-labor- purchases-goods-with-money cycle continues. But is this sustainable?

The answer is no, not at the rate at which technology is progressing.

It turns out that machines don’t need true artificial intelligence to perform tasks traditionally done by human beings. They only need enough memory and a fast enough processor to do one thing really well. Like the self-driving car that Google is working on. Or like the quantum computers that many companies (like Google) are working on and making advances in every year.

Computers can drive cars. Fine. But can they learn? You bet they can. In fact, a computer vision program recently outperformed a group of humans in identifying handwritten characters based on a single example. From the article:

The program is capable of quickly learning the characters in a range of languages and generalizing from what it has learned. The authors suggest this capability is similar to the way humans learn and understand concepts.

This is important for one huge reason. Namely, it shows that in order to make human work obsolete, machines do not need to achieve true artificial intelligence or become self-aware or even be as smart as humans. They simply need to replicate certain aspects of the human brain, which is itself a sophisticated biological machine.

And machines can now do that. Self-driving cars are an example, and this new ability that machines have to learn visual symbols and then apply them generally and broadly only means that machines that work by using visual recognition can now perform that with some degree of sophistication that rivals the human brain. And let’s not forget that machines can already “hear” and respond to audio cues.

Object recognition and application is important because that would mean that machines could do a variety of other things besides drive: they could cook, clean, and even do something as complex as perform surgery if they were able to visually learn what objects are and to use that knowledge in varying situations.

And that takes us back to human beings. At that point, where do we fit into the scheme of things? Machines already check your groceries, and it’s only a matter of time before they can drive your car for you. Software can do your taxes. Imagine if machines could indeed cook. What would that do to the service industry? Imagine if they could diagnose and treat an illness. That doesn’t seem like something a machine could do, but if they could visually recognize objects and symbols? Then there’s no reason why it could follow a simple clinical pathway just like human clinicians do.

Is it inevitable that this happens, though? That machines take over increasingly complex human tasks? Well, it initially makes all sorts of sense from a business standpoint. You don’t have to pay machines. They don’t need vacations. They never call out sick. They can work 24/7/365. Machine workers make all sorts of sense.

Until suddenly there are too many people who are out of work and are unable to pump money back into the businesses. After all, if machines are performing all the labor, it means humans aren’t, which means they aren’t earning wages. So we’re faced with a few choices here.

We could stop development of artificial and machine intelligence, thus ensuring that human labor is never obsolete. But that seems unlikely when higher profit margins are tantalizingly within reach of businesses.

selfchecklane
Resistance is futile
atm-machine
All your jobs are belong to us

We could give everyone a basic wage. That would keep the economy going, certainly. And if technology continues to advance and businesses take advantage of those advances, that’s probably going to need to be an intermediate step.

Fully embracing technological advances would inevitably lead to something else: simply doing away with money. After all, if machines could perform all of the services and production necessary to provide for humans, why not let them? That’s eventually what the choice will be: do we suppress technology so that humans can continue to perform repetitive tasks in exchange for money, or do we let the machines produce what human beings need, making it so that we didn’t have to do the repetitive tasks?

“But people like to work!”

I can already hear people screaming this at their monitors. And I don’t disagree. But if machines could perform all of our day jobs, that doesn’t mean we’d all sit around in our underwear staring at the wall all day. People would still be free to “work.” The difference is that they could work on whatever they wanted. They would be free to learn and indulge in whatever they were curious or passionate about.

Always wanted to become a concert pianist, but didn’t have the time to master it? Well, you do now! Always wanted to hike the Appalachian Trail, but couldn’t take 6 months off work? The machines got it covered, go for it! Never got around to learning Chinese? Do it! But we aren’t limited to leisure activities.

Want to study the ocean? Go for it, the machines can even build you a submarine. Or the machines could build you a telescope so you can look at the stars. Or a microscope so that you could study cellular biology. You can learn and study whatever you want, because human labor is no longer needed. If you need something, you simply ask a machine for it and there it is. That’s the basis of a resource economy–goods and services are available without the use of money, credits, barter or any other system of debt.

I believe that’s what is eventually going to happen. I can’t say when, but I’d be willing to bet it will be a lot sooner than most people think. And given the choice between continuing to work tedious and monotonous jobs or being free to enjoy their time and relationships and intellectual indulgences without sacrificing quality of life, I’d be also be willing to bet that most people would choose the latter.

It’s almost a question of morality or ethics: if we had the technological ability to allow humans to choose whether or not servitude and debt were necessary, is it wrong to withhold that? Put another way: once machines can do the work of humans, is the current economic system even necessary, does it continue to provide us with a net benefit? Because it seems that currently a lot of people are forced to make choices: do something they enjoy or something that pays the bills? Take a job that pays more but has more stress because they have a mortgage and student loans? Sacrifice time with the family to earn more money to provide for said family? Take jobs that are horrible for their health because they make us sedentary or are hazardous and dangerous? But what if technology could absolve all of that? What if technology could shoulder all of the responsibilities and workings of an economy, mitigating its negative effects?

If that sounds like the stuff of science fiction, I’d cautiously say that once upon a time people thought that airplanes, submarines, telephones, and televisions were the stuff of science fiction. We humans have a knack for turning what’s in our imaginations into a reality.

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Yeah, I can tell you all about it while I drive you to work. 

Be a verb, not an adjective

My brother had an exchange on Facebook the other day that made me think about racism and oppression in America. It all started when my brother posted this meme (the caption is the text he included with it):

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“Watch out for the PC police, they’re everywhere”

This elicited the following response from one of his friends:

“God forbid we live in a world where people recognize the disparities that exist between race, gender, and sexual identity, and attempt to foster dialogue that doesn’t intentionally or unintentionally solidify the social hierarchies that exist today…I’m just tired of the joke and the overall backlash around “PC police” and “social justice warriors”.”

Fuck this guy and people like him.

If you think making people more sensitive or aware of language does anything to tear down the very real and physical structures and systems that keep minorities oppressed and powerless, then you’re a fucking twat. I’m pretty sure that at this point in history literally everyone is aware that disparity and inequality exist, captain obvious. Can language hurt someone’s feelings? Sure. Can it remind people of their shitty situation within a system where they have no power? Absolutely. But will forcing people to change the language they use change that power dynamic?

No, it fucking won’t, so get off your damned high horse and actually do something.

It’s one thing to sit around and correct people’s language and lecture them about how it reflects or reinforces a system that oppresses minorities or those that are different. But at the end of the day, once these people stop patting themselves on the back for getting another word or joke banned, if they stopped kissing each other’s PC asses they’d see that that had ZERO EFFECT ON THE PROBLEM.

Because the problem isn’t language, and it isn’t off-color jokes.

50 years ago it was pretty common for white people to use the word “nigger” when referring to black people. Then that word became unacceptable. Fine. But preventing white people from calling black folks niggers didn’t somehow magically stop racism. It didn’t even slow it down. The words just changed.

Because racism isn’t about what jokes people tell or what words they use. It’s about their actions, and actions and words are not mutually exclusive. Can I be a feminist and laugh at jokes about women? I’d argue yes, because the fact that I laughed at a joke doesn’t mean that I take the joke to heart, and it doesn’t mean I don’t support equal opportunities for women. And that’s the point that’s completely lost on idiots like the guy who deigned to lecture my brother about his meme.

Quite frankly I don’t think it really matters if people occasionally tell an insensitive joke or use an offensive word because it’s how they treat the actual people that are oppressed that matters. It’s the things they do to affect change–voting, using their money to support organizations and businesses within a broken system– that matter. Did exposing the racism behind the term “nigger” help black people advance in society? Maybe. But you know what really helped? The fucking Civil Rights Act.

If someone votes people who are pro-equality into office and uses their dollars to support businesses that are pro-equality, that’s what matters. If someone raises their kids to believe that everyone is equal and everyone deserves a fair shake at life, that’s what matters. But that doesn’t mean you have to tell your children that they can’t laugh at a joke. Humor, culture, and human beings are nuanced, and the “war on language” that a lot of self-appointed heroes are waging doesn’t take that into consideration.

So my advice to everyone, especially those who think microaggressions or lack of trigger warnings are the problem, is to stop being an adjective; if the only thing you can do to stop oppression is to label people and language, then congratulations, you’re officially doing absolutely nothing to end oppression. Instead, I would encourage you to be a verb and actually get out there and change the goddamned system.

The turning point

A new Pew poll was released showing that 51% of young people (under 30) now believe that man evolved due to natural processes, independent of a deity. And that number is up from 40% in 2009. You can look at all the data here. Ultimately, I’m not surprised by this, and I’m very optimistic about what this means for American culture and politics.

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The current political model

I believe that over the next 20 years we’re really going to reach a turning point in our society, both culturally and politically, as the older generation dies off and the younger generation supplants it as the primary base of voters and workers.

Because when you look at them, young people aren’t only more likely to embrace evolution. They’re also more likely to accept climate change. They’re much less likely to be religious. The folks who remain skeptical of or deny science altogether are increasingly being relegated to a pocket of older Americans. In the next 20 years or so, that pocket will dwindle as those folks die. I realize that that might sound harsh, but everyone dies.

Can you imagine a political population making decisions based on evidence and not faith? Can you imagine a congress where the majority of the people elected grew up believing in evolution? Where a majority of the folks making policy and law in this country don’t believe that a magical man in the sky blinked everything into existence a la I Dream of Jeannie and who don’t create policy based on archaic rules and stories in a book written by scientifically illiterate desert dwellers? I think we’re right on the cusp of that, frankly.

I think we’re on the cusp of a society where the majority of employers no longer openly discriminate against gay people or female employees who choose to use birth control because they don’t derive their morality from a God who hates those people and demands their castigation. Wouldn’t it be great if businesses didn’t have to legally be told to treat their customers fairly and independent of their sexual orientation, but did so because it simply doesn’t make sense to do otherwise?

I, for one, cannot wait to see the impact of these shifts and values as we head into the future.