Friday, December 11, 2009

Quick Round Up

Thesis: Machiavelli ushered in the entire scientific project because his thoughts on Virtù and Fortuna can just as easily be applied to the material world.

Evidence:
For my part I consider that it is better to be adventurous than cautious, because fortune is a woman, and if you wish to keep her under it is necessary to beat and ill-use her; and it is seen that she allows herself to be mastered by the adventurous rather than by those who go to work more coldly. She is, therefore, always, woman-like, a lover of young men, because they are less cautious, more violent, and with more audacity command her.

I compare her to one of those raging rivers, which when in flood overflows the plains, sweeping away trees and buildings, bearing away the soil from place to place; everything flies before it, all yield to its violence, without being able in any way to withstand it; and yet, though its nature be such, it does not follow therefore that men, when the weather becomes fair, shall not make provision, both with defences and barriers, in such a manner that, rising again, the waters may pass away by canal, and their force be neither so unrestrained nor so dangerous. So it happens with fortune, who shows her power where valour has not prepared to resist her, and thither she turns her forces where she knows that barriers and defences have not been raised to constrain her.

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Paul Krugman:
There are a lot of good things you can say about international trade. But it does not, repeat not, do anything to alleviate a shortage of overall demand. Yes, if you liberalize trade countries will export more. But they will also import more. If you’re worried about C+I+G+X-M, it’s a wash, because X and M rise equally.

I was thinking about this yesterday because something didn't seem quite right. And I finally think I hit on the answer. Krugman is correct ceteris paribus. However, when you factor in that the US dollar has been falling against the South Koran Won and even the Colombian Peso, and even more importantly the euro because they make more similar products that South Koreans or Colombians would want to buy, this would seem to spark more exports from the US than imports to the US. All things considered, I don't think it would make much difference, but, again, I think Krugman isn't telling the whole story.

In fact, dave.s. sent me a link to a Reihan post that sums up Krugman nicely:
The debate highlights the extent of Krugman's efforts to deliberately misrepresent, and condescend to, those who disagree with him.

Honestly, I think Paul Krugman is the best columnist in America. If conservatives and libertarians had a polemicist of his caliber, with his clarity and reach, the country would be a better place.

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It pisses me off that two people who I am certain know less about economics than I do (FULL FUCKING STOP) are having a discussion about the economic merits of Green Jobs on bloggingheads. Not because I want to be on bloggindheads, but because if people are getting their info from these guys we've got a problem.

Christopher Hayes talks about capital versus labor intensitivity of products, points on which he is correct, and Matt Welch offers a completely unsatisfactory rebuttal based on, I'm not quite sure but seems like, the lack of economic expertise and innate cynicism of politicians plus some incoherent argument about costs.

Mr. Hayes: You are correct about domestic consumption or shifting from capital to labor intensive production would create jobs. However, that misses the point. The basis on which to judge economic policy is not whether it creates jobs, but whether society is better off economically. And given how weatherizing is very much like breaking windows (albeit through fiat rather than physically), you really ought to address how the creation of green jobs would overcome the destruction of wealth. And specifically what makes you think that shifting from the market determined distribution of labor intensive verus capital intensive to a higher quantity of labor intensive jobs would make us better off economically in the long-run?

Mr. Welch: Given that you write for Reason, I bet we agree on a lot of policies, but you really ought to bone up on the economic analysis.

2 comments:

Withywindle said...

I would take Hobbes, not Machiavelli to usher in science. Because he uses the word "science," in capital letters. And Machiavelli doesn't think the river will always be contained -he knows it will flood the banks sometimes, no matter what you do. Mr. Hobbes, he want that river tamed; he scientist.

But people I disagree with agree with you. Somebody or another, I think a Frenchman, noted that Machiavelli uses the Italian word "calculate," used by merchants, to discuss the form of foresight he approves; this is a textual key that he's shifting from prudence to science. I am trying to ignore this argument as much as I can.

FLG said...

First, Hobbes isn't really all that interesting in this for me because Hobbes was Bacon's secretary and so Hobbes was trying to apply Bacon's scientific method to politics explicitly.

Second, I stole the thesis from Deneen.

Lastly, who cares of the river overflows its banks as long as it doesn't effect humans? The important thing, one I always make in relation to computers, is that it's about how these things are important to humans.

 
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