Monday, 14 October 2013

My rejected hatchet-job review of a book by today's Economics Nobel prizewinner Robert J Shiller




dearieme said...

Come, come, Bruce, it's not a true Nobel you know. I prefer to call it the counterfeit Nobel.

dearieme said...

Aha, now I've read your review, I conclude that "counterfeit" is perhaps too mild an epithet.

Oh well; Professor Shiller is jolly good at collecting and tabulating house prices across the USA, which may well be a more reality-related pastime than those pursued by most economists. Perhaps he shouldn't have veered off from that modest but useful activity.

Bruce Charlton said...

@d - One problem is that Economics *long since* ran out of worthy recipients, and is now down to trawling the hundreds of third raters (i.e well above average, but eminently dispensible, Professors); who are distinguishable only in terms oftheir political or national allegiances.

Hence the Economics Prize has been like the Literature prize for quite a while - i.e. awarded for non-academic reasons

eg Paul Krugman

However, all the Science Nobels are now in more or less the same situation - there just aren't enough (or any!) people now who are as good as the best people were a couple of generations ago.

Titus Didius Tacitus said...

As well as I can judge without having read the original book that negative review is excellent, but silencing is an effective tactic.

One quibble: people treat Keynes a little unfairly in using his quote "in the long run we are all dead". He meant it as a demand for analytical helpfulness, not as a guide to action. In context, he was saying it's not good enough for economists to say that everything will work out "in the long run", and provide no more advice to the lawmaker than that. "In the long run we are all dead." Keynes was saying economists should be more ambitious to provide predictions and recommendations for specifiable time frames. He was not saying, "do any reckless thing you like, provided that the destruction will fall on your posterity rather than you in your short life".

I think that on much more important topics than "the economy" the governments of historically white countries are governing in the spirit, "in the long run we are all dead" in the bad sense, so I looked up Keynes' "smoking gun" quote, thinking I would find others in the same spirit, and trails leading back to earlier Western intellectuals who had the same ideas on reckless government and forward to modern academics and politicians influenced by Keynes and thinkers with similar ideas. Not a bit of it.

Bruce Charlton said...

@TDT - Naturally, what we get is merely soundbite Keynes - but even so, his influence has been bad; and when he said that in the long term we are all dead, he meant it in the most realistic way possible (he was, at heart, a Bloomsbury group decadent, after all).

Even if people did think ahead a few decades ahead, up to their expected time of death (which, clearly, they are not doing at present), it would still be an inadeuate time-frame for humans to operate within - unless we have an eternal perspective we go crazy in one way or another (or several ways).

(An eternal perspective is necessary, but obviously NOT sufficient.)

Bruce Charlton said...

BTW - I didn't particularly enjoy writing such a negative review of this book - but it turned-out there was nothing at all to be said in its favour.

'Animal Spirits' wasn't just not-good, it was ACTIVELY-bad.

Emile said...

I think modern mainstream economy suffers from two problems. First, the role of intelligence get neglected. Second, the merits of free market economy is downplayed. This study (H. Rindermann, J. Thompson. Cognitive Capitalism: The Effect of Cognitive Ability on Wealth, as Mediated Through Scientific Achievement and Economic Freedom.) clearly showes that it does matter.

As a libertarian I always wondered what was the intelligence threshold to understand the merits of free market policies. As the study shows there indeed seems to be a relatively high threshold. So considering the dropping intelligence levels of our leaders crisis's in the future will be "fixed" by exceedingly draconian economic restricted policies. We may heading for an everlasting crisis a la Argentina who never recovered as a shadow to it's former self.

And lastly I want to mention our education system as a culprit for a lack of free market orientated economists. E.g. Libertarians are of the low conscientiousness/agreeableness type. We need economists with this kind of personality profile, alas our current educational system has weeded them out. The Paul Krugman's of this world are not only career hunters but also the perfect serves for the elite.