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Holy Email, Batwoman! Is Economics Stuck in the Mud?

Name: Jean Maier

Question: Hello Mr. Solman,

I enjoy your economic reports on the NewsHour often.

I imagine that you will be attending the AEA meeting this January. I’ll have to say that I question a lot of what I consider their conventional dogma. It will however be an interesting meeting in a world of uncertain economic issues.

I come across a lot of economic voices that never make it into the media. Yet they are professors from around the world with opinions that I think the public deserves to hear.

For example, I came across an interesting conference in Europe on stabilizing an unequal economy:

These heterodox economists come in many persuasions. The ecological economists also get very short shrift in the media. I suppose they are too controversial since many of them question the holy grail of both the left and right in this country — “economic growth”. Clearly an idea that would be unorthodox and unpopular to question. Actually there are a few in European circles calling for economic “degrowth.” http://www.degrowth.eu/v1/index.php?id=56

Well, I hope someday that you may look into presenting some of these unconventional opinions.

I also wonder about this economy of labor. We seem to talk about outsourcing jobs to foreign countries; but should we not consider how many jobs are outsourced to machines (or technology)? We replace people with robotics for all kinds of work- in manufacturing like the auto industry as well as elsewhere. Rarely do I speak with a person on the phone without a mechanized voice being my first “human” contact. We say this is less expensive. But machines and technology are expensive to buy and maintain too; and they need energy resources of some type. So what does that do to the ledger sheet of costs, the environment and our energy dependence? In addition, replacing human labor also creates costs, human and financial, for the unemployed and their communities.

Somewhere in the history of the economy, didn’t we think machines were going to be labor-saving, i.e. so we could work less and have more leisure time? In a sense many do, but not without threatening a standard of living for those in the unemployment lines. In addition, many workers have shifted from manual work to desk work which contributes to all kinds of health problems and higher costs of health insurance.

Oh, and one more thing. I think the public needs some awareness of the NIIP (net international investment position) “debt”. Could you explain the significance to me?

Thank you for considering my thoughts.

Paul Solman: Yikes, Ms. Maier, or as TV’s Robin might have said to his boss: “Holy email, Batwoman!” Ie, that’s a whole lot of issues for just one missive. I could spend nearly an entire week answering you, one point per day.

And come to think of it, so as not to exhaust the readership, that’s just what I’m going to do. Let me take your first “question” today — economic heterodoxy. I’ll follow up with “degrowth,” automation and NIIP in the next few posts.

First, the American Economic Association (“AEA”) meetings and “heterodoxy.” As you must know, the meetings are actually held by the ASSA — the Allied Social Science Associations — which include some 50 organizations, 16 of which started with the letter “A,” last time I counted. Yes, they’re led by bastions of relative orthodoxy like the AEA or the American Finance Association, but URPE is there too (the Union for Radical Political Economists, which held a panel on “Inequality in North America”), as is the National Economic Association, the profession’s organization for economists of color. Moreover, there were plenty of European economists in attendance in Denver — enough for us to interview one from each of the PIGS*, with backups had we needed them.

I think your real concern isn’t the lack of alternative views but that the profession hasn’t adopted them. That should come as no surprise. Economics is like any profession or academic discipline: it’s slow to change. Paradigm shifts, as Thomas Kuhn famously called them in his 1962 book “The Structure of Scientific Revolutions,” can take quite awhile. It’s true of science — look at how long it took for the establishment to abandon Ptolemy for Copernicus. It’s true of social so-called science as well.

*-Portugal, Ireland, Greece and Spain

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