6 ms·

Protesters who are trying to upend the “fantasy world” of economics

45 points by mgunes 12y ago

eastbayjake 12y ago
> “It makes no sense! It’s like, they’re measuring how many commodities are bought and sold in a year, but the point isn’t the commodities, you know? It’s the hours of labor.” This is a flawed, Marxist labor theory of value that can't explain why an artisanally-made handbag that takes 120 man-hours to produce still is valued less than a Coach/Prada/LV handbag that was machine-manufactured with no human labor. I really don't understand these people -- but then again, theory not matching up with reality has never been a problem for Marxism's adherents, has it?
- hvs 12y ago
  I'm not sure why you are being down-voted, you are correct. The "Labor Theory of Value" has been discredited. This is a group of students railing against something that they don't understand.
  - fennecfoxen 12y ago
    Funny, because if it was global warming that we were talking about, I'm sure they'd demand we defer to the scientific consensus on the matter. :P (And no, not everything in economics -- let alone economic policy proposals -- has an overwhelming consensus behind it, but there are definitely some things, like free trade...)
    - arca_vorago 12y ago
      "(And no, not everything in economics -- let alone economic policy proposals -- has an overwhelming consensus behind it, but there are definitely some things, like free trade...)" I've been reading most of the comments in this thread with a kind of silent horror, but I think yours clarifies the issue. The fact that there is a large gap between the imagined systems in place and the actual systems in place. So called "Free Trade" is largely a farce as it is purported to be, and the reality is something much different. That you would claim there is "overwhelming consensus" on "free trade" just strengthens my point. Here's what Chomsky has to say about "Free Trade". "Nobody in the corporate world or government takes free trade seriously. The parts of the economy that are able to compete internationally are primarily the state-subsidized ones: capital-intensive agriculture, high-tech industry, etc. The government has the public pay for research and development and provides a state-guaranteed market for waste production. If something is marketable, the private sector takes it over. That system of public subsidy and private profit is what is called free enterprise. Source: What Uncle Sam Really Wants, by Noam Chomsky, p. 13 , Jan 13, 1991 " The same holds for the rest of the discussion here. People want to talk about Capitalism, or Marxism, or any number of other ideological economic ideas as if they exist in their ideological form, while they obviously do not. Not only that, but that they actively exploit the misunderstanding of their form as a sort of PR move. I don't think half of the people speaking in this thread have any sort of solid understanding of such things. Too much time spent understanding the textbook academic view and not enough time spent understanding the pragmatic, complex, and nuanced view of reality.
  - TheOtherHobbes 12y ago
    I'm surprised you think so. Perhaps you believe The Magic Market Fairy somehow assembles products without human help? Last time I looked if you took labor out of the process, all you'd have left were assorted piles of raw commodities and disappointed wishes for the future. Not even marketing can save you from this terrible fate. (Unless you work for Cards Against Humanity, in which case - well played over Christmas.) >This is a group of students railing against something that they don't understand. Indeed, for assorted values of 'students.'
    - ori_b 12y ago
      > Perhaps you believe The Magic Market Fairy somehow assembles products without human help? The value doesn't come from the assembly; the value comes from the utility that someone gets. Let's say you're a chef. How much would you pay for a bunch of shovels to stock up the kitchen of your restaurant? You wouldn't buy shovels? Why not, it's raw materials plus labor, same as a knife. In fact, it's just steel and wood -- it's even the same raw materials. Clearly it has value you should pay for; the value is the same, after all... Oh, you have no USE for it. I see.
    - cheald 12y ago
      http://en.wikipedia.org/wiki/Labor_theory_of_value http://en.wikipedia.org/wiki/Labor_theory_of_value
  - zenogais 12y ago
    I have to point out again that it has not been discredited, and is still quite actively debated and used in economics. This includes both the LTV of Karl Marx and that of David Ricardo.
- michaelchisari 12y ago
  > theory not matching up with reality has never been a problem for Marxism's adherents, has it? Theory not matching with reality has been a problem for every ideology. Marxism hardly holds a monopoly on that.
- pastProlog 12y ago
  > This is a flawed, Marxist labor theory of value that can't explain why an artisanally-made handbag that takes 120 man-hours to produce still is valued less than a Coach/Prada/LV handbag that was machine-manufactured with no human labor. Certainly it can explain it. The bespoke handbag has the labor of manufacturing done in one place, the machine-manufactured handbag has the labor of manufacturing done in two places - the place of manufacture and the place where the machine was manufactured. The "Marxist" labor theory of value was held by Benjamin Franklin, Adam Smith and all of the pre-Marxist political economists I know of. It is also a theory you seem to know little about as you're constructing a false, strawman notion of what LTV is and then knocking it down. Not that you're alone in this, I've read Paul Krugman attribute theories to the LTV which its proponents never had, so as to, like you, knock down the strawman theories. I honestly believe he is doing it out of ignorance as opposed to malice. Actually, like all economic theories, the LTV does have holes which serious critics have pointed out. You don't seem to know what those are though.
  - notahacker 12y ago
    I'd warrant the girl quoted in the article's view of "it's the labour that matters" is a lot closer to Marxist normative view of the significance of the LTV, than Smith's notion that the exchange value of a particular good should under normal circumstances be broadly equivalent to the cost of the labour to get someone else to make a new good instead. (Not that Smith's notion exchange value is much use for valuing designer handbags, mind you.) The additional Marxian "embedded labour" in the sewing machines and even the ad agencies reponsible for building brand equity doesn't even get close to identifying why Prada handbags cost more than artisanally made ones though...
  - deleted 12y ago
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- meric 12y ago
  The labor theory of value has some relevance in dealing with intrinsic goods. Your mother knitting you a scarf with her own hands for your birthday instead of an identical one she bought in walmart, and cooking dinner with a sauce she made herself from raw ingredients on Christmas rather than buying the same sauce from the supermarket are two examples. Modern economic theory assumes all human beings are rational. But they are not rational, all the time, every day, and by optimizing for rationality, something is lost.
  - Locke1689 12y ago
    Modern economic theory assumes all human beings are rational. Citation needed.
    - CWuestefeld 12y ago
      This doesn't deserve a downvote. While rationality is generally assumed, that's not universal. For example, Mises, in Human Action, explicitly discusses the problem, structuring his argument such that people must be considered black boxes that do what they do. Even any given person himself may not actually understand why he's doing something, or even what his actual preferences are.
      - stolio 12y ago
        Mises is also an Austrian which, as a school, is often at odds with mainstream economics.
      - meric 12y ago
        Modern mainstream economic theory
  - tbrake 12y ago
    Yeah but what use is a model where you assume irrational actors? I'm not a huge fan of it but I understand the concessions that have to be made.
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- rayiner 12y ago
  Your statement ironically exemplifies the value judgment that the protestor is talking about. Neo-classical economics says that the price of a good or service is a function of supply and demand. It says nothing about "value." Some people have the tendency of conflating the two, but it's nothing that falls out of the mathematics. Simple example. You have a company. What's the "value" of your receptionist? Well how do you measure that? Simple: get rid of her, and have your developers answer the phones. The decrease in productivity from that is the value of her position, and it's independent of how many or few people could do the job. The price of her services is a lot lower, and based on the cost of hiring someone else to do the same thing. There's a strong drive in our society to conflate the two, but they're mathematically distinct. Is it Marxist to point out the fact that a capitalist society rewards people based on their fungability rather than the value of their service? Yes, but that doesn't make it wrong. Rant: the older I get, the more I think that "value" (our social evaluation of worth) should be based on nothing more than hours of labor. An hour of labor from someone with a 130-IQ might carry a higher price on the market than an hour of labor from someone with a 90-IQ, but that doesn't mean our society should perceive the former as being more "valuable." Because at the end of the day, each person is giving up the same hour of life on this earth God gave him.
  - harryh 12y ago
    I hear what you are saying but I think you go to far with your rant. An hour of time from a surgeon might save my life one day. An hour of time from a cashier will let me pay for my groceries ~12 times. We can certainly disagree about the precise relative merits of those two things but I think that almost everyone would agree that the former is more valuable than the latter.
  - TrainedMonkey 12y ago
    'An hour of labor from someone with a 130-IQ might carry a higher price on the market than an hour of labor from someone with a 90-IQ, but that doesn't mean our society should perceive the former as being more "valuable."' And an hour of time of a person who studied hard, got good grades, and went through college should be compensated same as high school dropout? Your logic while nice in a "we are all equal fairy tale" way, immediately breaks down society because it devalues education, intelligence, and hard work tremendously.
- zenogais 12y ago
  This is simply incorrect - not only is there still much active debate and work done using the LTV, but Marx's economics is perfectly capable of explaining the differing in quantity between price and value (socially necessary labor time). This is not to say that Marx's theory is perfect, far from it, but it is far from the naive theory posited here. It's amazing how many people who have never read Marx or seriously thought through his economics posit and then proudly refute this sophistic and extremely naive strawman argument. This is a wildly incorrect reading of the LTV that can be eliminated by simply reading Capital: Volume 1, Chapter 1 - Where the LTV is spelled out in detail.
- stolio 12y ago
  It's easy to blame Marx for the Labor Theory of Value but that was just the economic theory of his time. For example Ricardo, who Marx largely based his economic theories on, was a classical economist who was also subscribed to the LTV[0]. [0] - http://en.wikipedia.org/wiki/David_Ricardo#Value_theory http://en.wikipedia.org/wiki/David_Ricardo#Value_theory
- yk 12y ago
  Well, Marx distinguishes between price and value. He then argues that price is a feature of the capitalist system, with the consequence that you can only build a theory of capitalism on price dynamics, not a more general theory that would be able to talk about different economic systems. He then goes on to argue about necessary work and work that is spend beyond keeping just the status quo - the surplus value. And besides, your argument about expensive handbags is flawed, since they are status signifier because of the work of PR people.
- chipsy 12y ago
  If you're saying it's flawed, you should defend that stance with an actual critique instead of a pejorative-laden dismissal.
DanielBMarkham 12y ago
Oh boy, people protesting a science. I'm the first guy in line to cut into economics. To me it's just astrology for people who know calculus. Or, as one wag put it, How many economists does it take to reach a conclusion? But having said that, the practitioners themselves are just as aware of the problems of the "science" as anybody else. I'm also not crazy about Jungian psychotherapy, but you don't see me protesting outside the psychiatrist conventions. While I may disagree with methodology, and I may even argue politically about policy implications based on conclusions various sciences reach, I remain convinced by the Charity Principle that these folks are working in good faith. What I'm seeing here are people who don't want other people in positions of authority because they disagree with their conclusions. This looks uncomfortably like an ecclesiastical dispute. So as bad as economics and economists look? These protesters look worse. Terrible thing.
- dmix 12y ago
  > I'm also not crazy about Jungian psychotherapy, but you don't see me protesting outside the psychiatrist conventions. Economics is much more political than psychiatry, and most other sciences. As you stated, maybe due to it's lack of hard science. So it doesn't surprise me that there are activists doing this. Whether it will actually influence the top economists who have politicians ears, and to a lesser extent overall academia, is the big question.
  - tsotha 12y ago
    From that perspective I agree with the protesters, though I'm coming from the right of the mainstream instead of the left. Economics, particularly that of the academic variety, seems like an exercise in starting with a view of the world and fitting the data to it instead of the other way 'round. But I agree with DanielBMarkham in that economists are generally working in good faith (though I have my doubts about Krugman). It's just not very easy to see your own biases.
    - DanielBMarkham 12y ago
      I have a guilty pleasure: I enjoy watching economists. I read the financial opinion columns, and I enjoy the policy debates. But that's just because I like watching smart people argue. Economics is a great place to watch this. Krugman looks to me like a political shill, not an economist (Somebody said once that most of his columns should start with "Fools!") He'll say something outrageous, and then over the next several days other economists will try to sort it all out. Many times it's just political bickering, but there have been times where it looks like he's crossed the line: I see folks who don't do politics try to come out publicly and reason with him. It's most always a mistake. The more they pile on the more he revels in it. Having said that, I'm fine with him continuing to opine. The dangerous thing I'm seeing is politicians who don't seem to be responsible for anything: everything they do is based on experts somewhere who are more than willing to back them up on whatever decision they make. The real discussion we should be having here is the role of academia and the role of elected leaders in a democracy. That's where the lines are blurring, and that's the reason you see well-meaning (but perhaps not-so-well-educated) folks protesting who can work the job of basically "a guy that tells me things I didn't know". It's because they view professors as some sort of priesthood that decides what the policy should be. That's not true -- and it should never be true.
javajosh 12y ago
If these people are concerned about "growth and limits to growth" then why are they heckling economists and not lobbying for putting birth control drugs in our water supply? Is an economist is really needed to tell anyone that growth is bad when it causes an overwhelmingly destructive externality? The thing is that people don't want to be convinced of the link between economic activity and climate change. And yes, perhaps the high priests of money are indeed the right group to give mainstream credence to the (economic) downside of climate change.
greggyb 12y ago
Ignoring content and ideology. If mainstream economics is so demonstrably flawed, the best way to make the point is not to childishly disrupt conventions and speeches, nor to make personally-directed attacks at individuals. The best way to "protest" the flaws would be to consistently and professionally refute the flaws and falsehoods. By making their vehicle a protest rather than a rigorous intellectual deconstruction, at best the message is that they can't come up with more than catchy slogans and loaded (unbacked) statements. I have not done significant research beyond the article linked, which includes no reference to supporting and more rigorous arguments produced by this group. Factually, there is huge variation in the economics profession and the claim "Neoclassicism is essentially the standard for 95 percent of the graduate departments in the country." is simply not true. There are many academic foci in economics and a healthy dialogue among proponents of different viewpoints. There is also a vast network of blogs published by both academic economists and amateurs (connotation = non-professional, but well educated on the topic) treating the topic in a more casual tone. Lastly, the representation of neoclassical economics presented is a straw man, and an uninspired one at that: >the fantasy world of neoclassical economics — a faith-based religion of perfect markets, enlightened consumers and infinite growth that shapes the fates of billions. This is the model (excepting infinite growth) typically taught in introductory economics courses of all types. It is not taught as an actual representation of the world (though even as simplified as the models in Intro Micro/Macro carry a great amount of explanatory value over a naive interpretation of matters economic), but as a framework within which the basic principles of economics can be taught. A rough equivalent would be protesting a physics conference because the solar system model of an atom is not representative of reality.
- TheOtherHobbes 12y ago
  Firstly the model you claim isn't taught as an actual model of the world is - for some reason - exactly the model used to shape national and international economic policy. The European economy has been crippled over the last few years by bankers and ideologues who plainly believe that this model is the only possible way to describe economic activity. You also ignore the fact that the few heterodox economists that exist are utterly ignored by policy makers - even when they continue to make correct predictions about future economic outcomes. >a rigorous intellectual deconstruction Rigorous intellectual deconstructions have existed for decades. They have a much better predictive record than mainstream 'wisdom', but they continue to be ignored by the profession. How do you explain this? I'll explain it by pointing out that mainstream economics has always been a purely political exercise, funded by those who would benefit from it, and created as a deliberate attempt to eliminate the political leverage of those they considered their social and economic inferiors. I wonder how many fans of mainstream economics know anything about the real history of Hayek, or of the Mont Pelerin Society, or the influence of Harold Luhnow and his administration of the Volker Fund, or how the so-called political consensus around free-market liberalism is a wholly manufactured PR exercise and has absolutely no relationship with honest, objective, evidence-based economic science?
Mikeb85 12y ago
The problem with economics is that its trying to make sense of the single most dynamic, difficult problem ever contemplated. Its basically an attempt to model the entire world's behaviour. There's 7 billion people in the world, we're all connected in various ways, and we all buy, sell, engage in work and other economic activities multiple times per day. Oh and nothings reproducible, so good luck trying to recreate experiments. That's one huge model to attempt to simulate. And if any programmer/engineer thinks they're smarter than the people currently working on these problems, I'm sure some hedge fund will pay you millions to 'solve' the problem of modeling economics.
- arca_vorago 12y ago
  As a matter of fact, it's something I've thought about (large model economic et al simulation) for quite some time. It was only recently after my work with "big data" in a genetics lab that I think it might actually be doable. I also think part of the problem is that it's the blood-sucking octopus entities that pay all the money normally for such development and then use it to sharpen their fangs on the public.

45 points by mgunes 12y ago

> “It makes no sense! It’s like, they’re measuring how many commodities are bought and sold in a year, but the point isn’t the commodities, you know? It’s the hours of labor.” This is a flawed, Marxist labor theory of value that can't explain why an artisanally-made handbag that takes 120 man-hours to produce still is valued less than a Coach/Prada/LV handbag that was machine-manufactured with no human labor. I really don't understand these people -- but then again, theory not matching up with reality has never been a problem for Marxism's adherents, has it?

hvs 12y ago
I'm not sure why you are being down-voted, you are correct. The "Labor Theory of Value" has been discredited. This is a group of students railing against something that they don't understand.
- fennecfoxen 12y ago
  Funny, because if it was global warming that we were talking about, I'm sure they'd demand we defer to the scientific consensus on the matter. :P (And no, not everything in economics -- let alone economic policy proposals -- has an overwhelming consensus behind it, but there are definitely some things, like free trade...)
  - arca_vorago 12y ago
    "(And no, not everything in economics -- let alone economic policy proposals -- has an overwhelming consensus behind it, but there are definitely some things, like free trade...)" I've been reading most of the comments in this thread with a kind of silent horror, but I think yours clarifies the issue. The fact that there is a large gap between the imagined systems in place and the actual systems in place. So called "Free Trade" is largely a farce as it is purported to be, and the reality is something much different. That you would claim there is "overwhelming consensus" on "free trade" just strengthens my point. Here's what Chomsky has to say about "Free Trade". "Nobody in the corporate world or government takes free trade seriously. The parts of the economy that are able to compete internationally are primarily the state-subsidized ones: capital-intensive agriculture, high-tech industry, etc. The government has the public pay for research and development and provides a state-guaranteed market for waste production. If something is marketable, the private sector takes it over. That system of public subsidy and private profit is what is called free enterprise. Source: What Uncle Sam Really Wants, by Noam Chomsky, p. 13 , Jan 13, 1991 " The same holds for the rest of the discussion here. People want to talk about Capitalism, or Marxism, or any number of other ideological economic ideas as if they exist in their ideological form, while they obviously do not. Not only that, but that they actively exploit the misunderstanding of their form as a sort of PR move. I don't think half of the people speaking in this thread have any sort of solid understanding of such things. Too much time spent understanding the textbook academic view and not enough time spent understanding the pragmatic, complex, and nuanced view of reality.
- TheOtherHobbes 12y ago
  I'm surprised you think so. Perhaps you believe The Magic Market Fairy somehow assembles products without human help? Last time I looked if you took labor out of the process, all you'd have left were assorted piles of raw commodities and disappointed wishes for the future. Not even marketing can save you from this terrible fate. (Unless you work for Cards Against Humanity, in which case - well played over Christmas.) >This is a group of students railing against something that they don't understand. Indeed, for assorted values of 'students.'
  - ori_b 12y ago
    > Perhaps you believe The Magic Market Fairy somehow assembles products without human help? The value doesn't come from the assembly; the value comes from the utility that someone gets. Let's say you're a chef. How much would you pay for a bunch of shovels to stock up the kitchen of your restaurant? You wouldn't buy shovels? Why not, it's raw materials plus labor, same as a knife. In fact, it's just steel and wood -- it's even the same raw materials. Clearly it has value you should pay for; the value is the same, after all... Oh, you have no USE for it. I see.
  - cheald 12y ago
    http://en.wikipedia.org/wiki/Labor_theory_of_value http://en.wikipedia.org/wiki/Labor_theory_of_value
- zenogais 12y ago
  I have to point out again that it has not been discredited, and is still quite actively debated and used in economics. This includes both the LTV of Karl Marx and that of David Ricardo.
michaelchisari 12y ago
> theory not matching up with reality has never been a problem for Marxism's adherents, has it? Theory not matching with reality has been a problem for every ideology. Marxism hardly holds a monopoly on that.
pastProlog 12y ago
> This is a flawed, Marxist labor theory of value that can't explain why an artisanally-made handbag that takes 120 man-hours to produce still is valued less than a Coach/Prada/LV handbag that was machine-manufactured with no human labor. Certainly it can explain it. The bespoke handbag has the labor of manufacturing done in one place, the machine-manufactured handbag has the labor of manufacturing done in two places - the place of manufacture and the place where the machine was manufactured. The "Marxist" labor theory of value was held by Benjamin Franklin, Adam Smith and all of the pre-Marxist political economists I know of. It is also a theory you seem to know little about as you're constructing a false, strawman notion of what LTV is and then knocking it down. Not that you're alone in this, I've read Paul Krugman attribute theories to the LTV which its proponents never had, so as to, like you, knock down the strawman theories. I honestly believe he is doing it out of ignorance as opposed to malice. Actually, like all economic theories, the LTV does have holes which serious critics have pointed out. You don't seem to know what those are though.
- notahacker 12y ago
  I'd warrant the girl quoted in the article's view of "it's the labour that matters" is a lot closer to Marxist normative view of the significance of the LTV, than Smith's notion that the exchange value of a particular good should under normal circumstances be broadly equivalent to the cost of the labour to get someone else to make a new good instead. (Not that Smith's notion exchange value is much use for valuing designer handbags, mind you.) The additional Marxian "embedded labour" in the sewing machines and even the ad agencies reponsible for building brand equity doesn't even get close to identifying why Prada handbags cost more than artisanally made ones though...
- deleted 12y ago
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meric 12y ago
The labor theory of value has some relevance in dealing with intrinsic goods. Your mother knitting you a scarf with her own hands for your birthday instead of an identical one she bought in walmart, and cooking dinner with a sauce she made herself from raw ingredients on Christmas rather than buying the same sauce from the supermarket are two examples. Modern economic theory assumes all human beings are rational. But they are not rational, all the time, every day, and by optimizing for rationality, something is lost.
- Locke1689 12y ago
  Modern economic theory assumes all human beings are rational. Citation needed.
  - CWuestefeld 12y ago
    This doesn't deserve a downvote. While rationality is generally assumed, that's not universal. For example, Mises, in Human Action, explicitly discusses the problem, structuring his argument such that people must be considered black boxes that do what they do. Even any given person himself may not actually understand why he's doing something, or even what his actual preferences are.
    - stolio 12y ago
      Mises is also an Austrian which, as a school, is often at odds with mainstream economics.
    - meric 12y ago
      Modern mainstream economic theory
- tbrake 12y ago
  Yeah but what use is a model where you assume irrational actors? I'm not a huge fan of it but I understand the concessions that have to be made.
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rayiner 12y ago
Your statement ironically exemplifies the value judgment that the protestor is talking about. Neo-classical economics says that the price of a good or service is a function of supply and demand. It says nothing about "value." Some people have the tendency of conflating the two, but it's nothing that falls out of the mathematics. Simple example. You have a company. What's the "value" of your receptionist? Well how do you measure that? Simple: get rid of her, and have your developers answer the phones. The decrease in productivity from that is the value of her position, and it's independent of how many or few people could do the job. The price of her services is a lot lower, and based on the cost of hiring someone else to do the same thing. There's a strong drive in our society to conflate the two, but they're mathematically distinct. Is it Marxist to point out the fact that a capitalist society rewards people based on their fungability rather than the value of their service? Yes, but that doesn't make it wrong. Rant: the older I get, the more I think that "value" (our social evaluation of worth) should be based on nothing more than hours of labor. An hour of labor from someone with a 130-IQ might carry a higher price on the market than an hour of labor from someone with a 90-IQ, but that doesn't mean our society should perceive the former as being more "valuable." Because at the end of the day, each person is giving up the same hour of life on this earth God gave him.
- harryh 12y ago
  I hear what you are saying but I think you go to far with your rant. An hour of time from a surgeon might save my life one day. An hour of time from a cashier will let me pay for my groceries ~12 times. We can certainly disagree about the precise relative merits of those two things but I think that almost everyone would agree that the former is more valuable than the latter.
- TrainedMonkey 12y ago
  'An hour of labor from someone with a 130-IQ might carry a higher price on the market than an hour of labor from someone with a 90-IQ, but that doesn't mean our society should perceive the former as being more "valuable."' And an hour of time of a person who studied hard, got good grades, and went through college should be compensated same as high school dropout? Your logic while nice in a "we are all equal fairy tale" way, immediately breaks down society because it devalues education, intelligence, and hard work tremendously.
zenogais 12y ago
This is simply incorrect - not only is there still much active debate and work done using the LTV, but Marx's economics is perfectly capable of explaining the differing in quantity between price and value (socially necessary labor time). This is not to say that Marx's theory is perfect, far from it, but it is far from the naive theory posited here. It's amazing how many people who have never read Marx or seriously thought through his economics posit and then proudly refute this sophistic and extremely naive strawman argument. This is a wildly incorrect reading of the LTV that can be eliminated by simply reading Capital: Volume 1, Chapter 1 - Where the LTV is spelled out in detail.
stolio 12y ago
It's easy to blame Marx for the Labor Theory of Value but that was just the economic theory of his time. For example Ricardo, who Marx largely based his economic theories on, was a classical economist who was also subscribed to the LTV[0]. [0] - http://en.wikipedia.org/wiki/David_Ricardo#Value_theory http://en.wikipedia.org/wiki/David_Ricardo#Value_theory
yk 12y ago
Well, Marx distinguishes between price and value. He then argues that price is a feature of the capitalist system, with the consequence that you can only build a theory of capitalism on price dynamics, not a more general theory that would be able to talk about different economic systems. He then goes on to argue about necessary work and work that is spend beyond keeping just the status quo - the surplus value. And besides, your argument about expensive handbags is flawed, since they are status signifier because of the work of PR people.
chipsy 12y ago
If you're saying it's flawed, you should defend that stance with an actual critique instead of a pejorative-laden dismissal.

DanielBMarkham 12y ago

Oh boy, people protesting a science. I'm the first guy in line to cut into economics. To me it's just astrology for people who know calculus. Or, as one wag put it, How many economists does it take to reach a conclusion? But having said that, the practitioners themselves are just as aware of the problems of the "science" as anybody else. I'm also not crazy about Jungian psychotherapy, but you don't see me protesting outside the psychiatrist conventions. While I may disagree with methodology, and I may even argue politically about policy implications based on conclusions various sciences reach, I remain convinced by the Charity Principle that these folks are working in good faith. What I'm seeing here are people who don't want other people in positions of authority because they disagree with their conclusions. This looks uncomfortably like an ecclesiastical dispute. So as bad as economics and economists look? These protesters look worse. Terrible thing.

dmix 12y ago
> I'm also not crazy about Jungian psychotherapy, but you don't see me protesting outside the psychiatrist conventions. Economics is much more political than psychiatry, and most other sciences. As you stated, maybe due to it's lack of hard science. So it doesn't surprise me that there are activists doing this. Whether it will actually influence the top economists who have politicians ears, and to a lesser extent overall academia, is the big question.
- tsotha 12y ago
  From that perspective I agree with the protesters, though I'm coming from the right of the mainstream instead of the left. Economics, particularly that of the academic variety, seems like an exercise in starting with a view of the world and fitting the data to it instead of the other way 'round. But I agree with DanielBMarkham in that economists are generally working in good faith (though I have my doubts about Krugman). It's just not very easy to see your own biases.
  - DanielBMarkham 12y ago
    I have a guilty pleasure: I enjoy watching economists. I read the financial opinion columns, and I enjoy the policy debates. But that's just because I like watching smart people argue. Economics is a great place to watch this. Krugman looks to me like a political shill, not an economist (Somebody said once that most of his columns should start with "Fools!") He'll say something outrageous, and then over the next several days other economists will try to sort it all out. Many times it's just political bickering, but there have been times where it looks like he's crossed the line: I see folks who don't do politics try to come out publicly and reason with him. It's most always a mistake. The more they pile on the more he revels in it. Having said that, I'm fine with him continuing to opine. The dangerous thing I'm seeing is politicians who don't seem to be responsible for anything: everything they do is based on experts somewhere who are more than willing to back them up on whatever decision they make. The real discussion we should be having here is the role of academia and the role of elected leaders in a democracy. That's where the lines are blurring, and that's the reason you see well-meaning (but perhaps not-so-well-educated) folks protesting who can work the job of basically "a guy that tells me things I didn't know". It's because they view professors as some sort of priesthood that decides what the policy should be. That's not true -- and it should never be true.

javajosh 12y ago

If these people are concerned about "growth and limits to growth" then why are they heckling economists and not lobbying for putting birth control drugs in our water supply? Is an economist is really needed to tell anyone that growth is bad when it causes an overwhelmingly destructive externality? The thing is that people don't want to be convinced of the link between economic activity and climate change. And yes, perhaps the high priests of money are indeed the right group to give mainstream credence to the (economic) downside of climate change.

greggyb 12y ago

Ignoring content and ideology. If mainstream economics is so demonstrably flawed, the best way to make the point is not to childishly disrupt conventions and speeches, nor to make personally-directed attacks at individuals. The best way to "protest" the flaws would be to consistently and professionally refute the flaws and falsehoods. By making their vehicle a protest rather than a rigorous intellectual deconstruction, at best the message is that they can't come up with more than catchy slogans and loaded (unbacked) statements. I have not done significant research beyond the article linked, which includes no reference to supporting and more rigorous arguments produced by this group. Factually, there is huge variation in the economics profession and the claim "Neoclassicism is essentially the standard for 95 percent of the graduate departments in the country." is simply not true. There are many academic foci in economics and a healthy dialogue among proponents of different viewpoints. There is also a vast network of blogs published by both academic economists and amateurs (connotation = non-professional, but well educated on the topic) treating the topic in a more casual tone. Lastly, the representation of neoclassical economics presented is a straw man, and an uninspired one at that: >the fantasy world of neoclassical economics — a faith-based religion of perfect markets, enlightened consumers and infinite growth that shapes the fates of billions. This is the model (excepting infinite growth) typically taught in introductory economics courses of all types. It is not taught as an actual representation of the world (though even as simplified as the models in Intro Micro/Macro carry a great amount of explanatory value over a naive interpretation of matters economic), but as a framework within which the basic principles of economics can be taught. A rough equivalent would be protesting a physics conference because the solar system model of an atom is not representative of reality.

TheOtherHobbes 12y ago
Firstly the model you claim isn't taught as an actual model of the world is - for some reason - exactly the model used to shape national and international economic policy. The European economy has been crippled over the last few years by bankers and ideologues who plainly believe that this model is the only possible way to describe economic activity. You also ignore the fact that the few heterodox economists that exist are utterly ignored by policy makers - even when they continue to make correct predictions about future economic outcomes. >a rigorous intellectual deconstruction Rigorous intellectual deconstructions have existed for decades. They have a much better predictive record than mainstream 'wisdom', but they continue to be ignored by the profession. How do you explain this? I'll explain it by pointing out that mainstream economics has always been a purely political exercise, funded by those who would benefit from it, and created as a deliberate attempt to eliminate the political leverage of those they considered their social and economic inferiors. I wonder how many fans of mainstream economics know anything about the real history of Hayek, or of the Mont Pelerin Society, or the influence of Harold Luhnow and his administration of the Volker Fund, or how the so-called political consensus around free-market liberalism is a wholly manufactured PR exercise and has absolutely no relationship with honest, objective, evidence-based economic science?

Mikeb85 12y ago

The problem with economics is that its trying to make sense of the single most dynamic, difficult problem ever contemplated. Its basically an attempt to model the entire world's behaviour. There's 7 billion people in the world, we're all connected in various ways, and we all buy, sell, engage in work and other economic activities multiple times per day. Oh and nothings reproducible, so good luck trying to recreate experiments. That's one huge model to attempt to simulate. And if any programmer/engineer thinks they're smarter than the people currently working on these problems, I'm sure some hedge fund will pay you millions to 'solve' the problem of modeling economics.

arca_vorago 12y ago
As a matter of fact, it's something I've thought about (large model economic et al simulation) for quite some time. It was only recently after my work with "big data" in a genetics lab that I think it might actually be doable. I also think part of the problem is that it's the blood-sucking octopus entities that pay all the money normally for such development and then use it to sharpen their fangs on the public.