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Comment by pjc50 | Hacker News Reader

Economics has an honesty problem. Financially motivated obfuscation is a problem in other sciences: global warming denialism, sponsored studies claiming that cigarettes aren't carcinogenic, all manner of food health and safety claims, and so on. Generally the evidence is overwhelmingly against them and the battle is mostly over PR and communicating to the public.

Economics is different; arguments that are very convenient to people who are wealthy under the status quo are very difficult to challenge, resulting in failed austerity programmes, "trickle down", and so on.

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I partially agree with this view; however, to be fair, this is not a problem with academic economics, but rather with "pop economics".

There is no lack of academic economists who can (and do) prove how austerity programs and trickle-down are wrong; in fact, they're the only ones really leading the charge on this matter in the political world at the moment.

The problem is that policy leaders not trained in advanced economic studies (most of them lawyers by trade, as you would expect in the business of writing laws) are awash in "pop economics", cheap literature peddled by suspect gurus sponsored by interested parties. This creates a hegemonic but distorted view of the field that is then very hard to shake.

> There is no lack of academic economists who can (and do) prove how austerity programs and trickle-down are wrong; in fact, they're the only ones really leading the charge on this matter in the political world at the moment.

The thing is you can pretty much find an academic economist to back up whatever argument you want to make.

It's not just lawyer-politicians, but economic organisations like the IMF and the ECB. Stiglitz' book on the subject is excellent, including the anecdote about how we know that their advice is the same whatever the country and situation because someone once forgot to search-and-replace the country name before sending it out.

Then there's the Rheinhart-Rogoff excel error: http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-...

Those organisations are sclerotic because they ultimately answer to politicians, not to academics; they are political constructs first and foremost, serving specific national interests, with heads nominated by political leaders and (surprise) often lawyers themselves (e.g. Lagarde). In fact, during recent events in Greece it became clear how their own researchers disagreed with the policies being pushed from the top. It's like developers were forced to write websites in PASCAL because their employers told them to.

The Excel error is also exemplary of what I referred to as "pop economics": a single argument was "divulged to death" and transformed into mainstream orthodoxy even though it was still being confuted in academic circles.

The membrane between academia and pop economics (i.e. the suspect gurus) is exceedingly porous.

Most austerity program fail because there is no true austerity. Outside of Greece which has had to make real cuts simply because it hasn't the money the vast majority of countries which claimed some form of austerity never actually cut spending, some kept increasing it.

In the US it is all a shell game where the deceit of baseline budgeting allows Congress and the President to claim cuts when spending increases. The US could balance its budget in a manner of years if budgeting were honest and they actually reduce spending increases below inflation.

Plenty of economists argue against things like austerity, trickle-down, etc...

The problem is that politicians aren't interested in implementing the most ideal economic policies, they're interested in policies that give the effect they want - which is often at odds with the common good.

To summarize, "I represent truth in the service of mankind. Those with whom I disagree if not stupid, must be acting out of the most base self-interest."

> trickle down

I was just reading the convention speech of the Democratic candidate for president in 1896, William Jennings Bryan. In his speech ( http://historymatters.gmu.edu/d/5354/ ) he says "There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it." So some Democrats had to counter this trickle down nonsense even back then.

As an aside, in the speech he says "we shall fight them to the uttermost, having behind us the producing masses of the nation and the world". Can you imagine a Democratic presidental nominee saying that today, even if by some miracle it was Bernie Sanders? It's impossible - the heirs, and rentiers, and LPs and VCs and "job creators" and other parasites on those of us who work and create wealth have gained too much control of the system. And for the past two weeks signs are around that it could be entering one of its periodic crackups.

Thats a much better argument, trickle up, than people make today.

The Democratic idea has been that if you legislate to make the masses prosperous

Assuming that were even possible. Whether it is or not is a pretty big open question. More to the point, can you do it without needing the hammer of government sanctioned violence (or threat of violence).

It is safe to say, that the economic theory a person subscribes to is highly related to their income.

Unless, of course, you're a politician, in which case it is related to vote count.

>It is safe to say, that the economic theory a person subscribes to is highly related to their income.

This is an overly pessimistic view that ignores the philosophical aspects of economics. E.g. I lived on under $15k per year for a couple of years before I moved into software development, but during that time I still supported a very liberal approach to economics. This is because I hate violence (I can't even bring myself to crush spiders that wander into the house), and view redistributive economics as necessarily violent, as in a roundabout way it's forcing people to give goods/services/tokens of exchange to me that they may not want to give (since they're forced to give it via taxation lest they face imprisonment, I cannot assume it's voluntary). Other people may not care so much about this and take a more utilitarian approach, focusing on maximising some particular metrics (such as GDP or income equality), so they'll reach different conclusions.

Assuming people subscribe solely to the theories (economic or otherwise) that maximise the financial benefit to them is ironically a rather economics-style view of the world, and I'm fortunate enough to say that most of the people I'm close to don't fit this characterisation.

In terms of actual data, there's a correlation, but it's far from being the strongest factor: http://www.theatlantic.com/business/archive/2012/11/does-you...

Well, I studied economics and this is where my economic-style view of the world comes from. :)

Yes, it's quite a pessimistic view of things, I agree. I speak mostly from personal, anecdotal experience. That may of course vary.

It's interesting that you view taxation as a violent fundamental wealth redistribution. Taxes do suck and I'm not going to argue that point, but it's interesting because without taxes we would be living in a fundamentally violent society (since there is no government support a monopoly on violence - e.g. Somalia - everyone then may be violent to achieve personal goals).

How about we all try getting rich (or just keep our wealth out of violent neighboring hands) without violence or a government. Try to even significantly increase any meager income in that situation.

My point is that without taxes and the government they support, there is nothing but violence to support any type of venture. This has historical bearing with places that were lawless yet aplenty with resource for ventures (e.g. North American colonies, Wild West, etc...).

If in particular you meant a progressive tax policy that increases the percentage of taxation with your income level is what you're describing as violent then I can see your point a bit more clearly. Why punish the people who are being more productive, right?

Well the thing is that the owners of capital get the most extreme benefit from government. Never the other way around. It makes sense to me that the biggest recipients become the biggest supporters.

For a brief anecdote, poor people who earn wages get social programs to help sometimes, which are then largely obfuscated from public comprehension so you'll need a social worker just to get started. Rich people who own capital get business subsidies in the form of cash on the books. They are both paid from taxes and supported by the government. Who do you think benefits most from the government here? The business owner or the wage earner? Who is being stopped more readily from using violence with this support from government?

So taxes support all of this precarious balance in a capitalist society because the government is the only thing we have found to solve this problem of violence.

How about we all try getting rich (or just keep our wealth out of violent neighboring hands) without violence or a government.

There's a pretty broad range of what you could call "government" in that discussion. The question of how to reign in would be aggressors isn't fully settled, but it certainly hasn't been proven that it takes the kind of government we have today. Especially given that the system we have today doesn't stop aggression, it just shuffles it around and renames it. See, for example, "civil forfeiture".

On violent taxation: when you don't pay your taxes, eventually someone with a gun comes to take your freedom (prison for tax evasion). So the threat of violence is always held over the head of the taxpayer. Taken a step further, the primary relationship of a government to its people is the threat of violence for not following the laws.

Please don't let your observation of present society confuse your ideas about a free society: The poor use the violence of the government to take money from others and give it to them via social programs. The business subsidies are a form of government privilege that is a corruption of free markets in which the rich use the violence of government against competitors.

Free market thinkers challenge the assumption that government should be granted a monopoly on force but rather there should be competition in all areas of society. As it stands, we see abuse of power in the courts, police, legislatures, and bureaucracy, all for the enrichment of those who have a legal monopoly on force.

> Taken a step further, the primary relationship of a government to its people is the threat of violence for not following the laws.

This is true in pretty much the same sense that it is true that the primary relationship of a people to its government is the threat of violence by the former against the latter for failure to deliver on demands. (The extent to which either is actually truly the primary relationship in practice is pretty much precisely the extent to which the government has lost legitimacy.)

> Free market thinkers challenge the assumption that government should be granted a monopoly on force but rather there should be competition in all areas of society.

The government is simply whatever entity (including a collection of entities) in practice holds a monopoly on the legitimate use of force. You can question what the nature, scope, composition, and role of government should be, but questioning whether it should have a monopoly on the legitimate use of force is exactly like questioning the assumption that a triangle should be a three-sided polygon.

Careful, I think your politics is showing.

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