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i’m completely lost as to the author’s intended takeaway. something like “[democratic] systems that are blind to second-/third-order policy effects underperform

i’m completely lost as to the author’s intended takeaway. something like “[democratic] systems that are blind to second-/third-order policy effects underperform”? so what do you do about that?

tptacek 3y ago
Populist-right economics focus on tariffs and protectionism. The first-order effect of protectionism is support for jobs in the local protected industries. The second-order effect is that all the industries downstream get hammered, because they get hit by the tariffs. Populist-left economics focus on large-scale government spending. The first-order effect is that everybody gets a $2000 check, or a subsidized rail system, or whatever. The second-order effect is inflation and economic instability; you end up paying $10 for a loaf of bread. Populism is the idea that there is a clear will of the people, or a clear set of policies in their interest. Policy debates aren't divided by left vs. right, or by supply-side Keynesianism. Rather, they're a division between the people and the elites. There isn't really room for a synthesis of multiple competing ideas (at least not until the people have taken over from the elites once again). It's the opposite of pluralism. Populist economics, according to this author, is defined largely by ideas that are simple enough to sell to people who haven't studied economics enough to conceive of second- and third-order policy effects. Those ideas all fail in the real world, but we have to re-learn that periodically, because of periodic resurgences of populism. (I believe some of this but not all of it and am really just trying to do my best to articulate what I thought the article was saying).
- iraqmtpizza 3y ago
  China, while hardly populist, has been failing upward for quite a few years now. Those tariffs, man. And if economics can't account for the monetary value of national security then it's not very useful.
  - pessimizer 3y ago
    "Populism" is only defined by its self-declared enemies, and they define it as any policy that they oppose. Just as we're still avenging the Czar in Russia, and Batista and the mafia in Cuba, everybody is still slandering the People's Party. Never let go of a grudge. So somehow, China's economic policies can be identical to what is domestically ridiculed as "populist." On the other hand, everything authoritarian that Westerners do gets referred to as like what they would do in China.
    - iraqmtpizza 3y ago
      I have not once heard anyone describe the European Union as populist despite its wildly protectionist policies and its penchant for massive spending on popular social programs. European elites are quite fond of populism then. As long as they can pretend they have a free market inside their special economic zone. Actual self-identified populists like Steve Bannon and Nigel Farage rail against the EU but would never call it populist, for obvious reasons. I imagine the same for the leader of Italy.
- SenAnder 3y ago
  > people who haven't studied economics enough to conceive of second- and third-order policy effects. The problem is the effects don't stop at 3rd order, where economic models stop, yielding the consensus that trade liberalization is always good. The reality is different: her work showed that trade liberalization had slowed the rate of poverty reduction in rural India. - the linked article " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage It turns out that our evolved instincts can be better guides than simplified mathematical models.

tptacek 3y ago

Populist-right economics focus on tariffs and protectionism. The first-order effect of protectionism is support for jobs in the local protected industries. The second-order effect is that all the industries downstream get hammered, because they get hit by the tariffs. Populist-left economics focus on large-scale government spending. The first-order effect is that everybody gets a $2000 check, or a subsidized rail system, or whatever. The second-order effect is inflation and economic instability; you end up paying $10 for a loaf of bread. Populism is the idea that there is a clear will of the people, or a clear set of policies in their interest. Policy debates aren't divided by left vs. right, or by supply-side Keynesianism. Rather, they're a division between the people and the elites. There isn't really room for a synthesis of multiple competing ideas (at least not until the people have taken over from the elites once again). It's the opposite of pluralism. Populist economics, according to this author, is defined largely by ideas that are simple enough to sell to people who haven't studied economics enough to conceive of second- and third-order policy effects. Those ideas all fail in the real world, but we have to re-learn that periodically, because of periodic resurgences of populism. (I believe some of this but not all of it and am really just trying to do my best to articulate what I thought the article was saying).

iraqmtpizza 3y ago
China, while hardly populist, has been failing upward for quite a few years now. Those tariffs, man. And if economics can't account for the monetary value of national security then it's not very useful.
- pessimizer 3y ago
  "Populism" is only defined by its self-declared enemies, and they define it as any policy that they oppose. Just as we're still avenging the Czar in Russia, and Batista and the mafia in Cuba, everybody is still slandering the People's Party. Never let go of a grudge. So somehow, China's economic policies can be identical to what is domestically ridiculed as "populist." On the other hand, everything authoritarian that Westerners do gets referred to as like what they would do in China.
  - iraqmtpizza 3y ago
    I have not once heard anyone describe the European Union as populist despite its wildly protectionist policies and its penchant for massive spending on popular social programs. European elites are quite fond of populism then. As long as they can pretend they have a free market inside their special economic zone. Actual self-identified populists like Steve Bannon and Nigel Farage rail against the EU but would never call it populist, for obvious reasons. I imagine the same for the leader of Italy.
SenAnder 3y ago
> people who haven't studied economics enough to conceive of second- and third-order policy effects. The problem is the effects don't stop at 3rd order, where economic models stop, yielding the consensus that trade liberalization is always good. The reality is different: her work showed that trade liberalization had slowed the rate of poverty reduction in rural India. - the linked article " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage It turns out that our evolved instincts can be better guides than simplified mathematical models.