Monthly Archives: January 2017

What is New Economic Thinking?

By Amna Silim – The failure to predict or explain the financial collapse and recession has put neoclassical economic thinking in the dock, but such an interrogation is long overdue. Sharp fluctuations in economic growth are just one of the real-world phenomena that traditional economics is poor at understanding. From actual human behaviour through to constant innovation, there is much that traditional economic thinking struggles to explain.

This conventional model can be challenged on four fundamental fronts: the tendency to equilibrium, exogenous shocks, individual rationality and systemic consistency.

In the real world, economies are not static and geared towards equilibrium; they are dynamic and in constant flux. This dynamism is endogenous; it originates within the system, not from exogenous shocks. Consumer preferences are not formed by individuals acting solely on their own but are the result of a complex process that includes observing and interacting with other consumers.

Economic agents do not have a fixed set of preferences based on rational assessment; they are subject to whims and to mimicking the behavior of other agents. As a result, the nature of the economic system transforms over time. more> https://goo.gl/HX3RjA

Related>

  • A Conversation With Dan Ariely About What Shapes our Motivations, Jessica Gross, longreads.com
  • The atheist paradox

    BOOK REVIEW

    Twenty Trillion Leagues Under the Sea, Author: Adam Roberts.
    Religion for Atheists: A Non-Believer’s Guide to the Uses of Religion, Author: Alain de Botton.
    The Book of Atheist Spirituality, Author: André Comte-Sponville.
    The Satanic Verses, Author: Salman Rushdie.
    Gravity and Grace, Author: Simone Weil.
    One Hundred Years of Solitude, Author: Gabriel García Márquez.
    Grace Abounding to the Chief of Sinners, Author: John Bunyan.

    By Adam Roberts – The Islam described in the Qur’an is a religion consonant with the structures of social power. Crucial to it is the idea that submission to the law (since the law comes from God) is equally required for good social order and good spiritual health.

    Christianity is different. In part, that’s because of its bivalve holy book, which sets up, in the Old Testament, a set of social codes, restrictions and laws and then, in its New Testament, specifically overturns them.

    Moses brought 10 commandments; Jesus replaces them with two — to love God, and to love one’s neighbour as oneself. And those two commandments aren’t articulated like legal codes. Some of the New Testament attempts to work out the social and legal consequences of its new creed, but much of it gives up on that, and instead gives eloquent voice to the irrelevance of society and law in the face of the imminent end-times.

    The Old Testament is, in the largest sense, about the building of a temple. In the New Testament, the temple is redefined as Christ’s body, built precisely to be torn down, tortured to death and radically reconfigured. Instructions to give up all one’s money, to leave one’s family and job, not to marry (though St Paul concedes that it is better to marry than burn with lust), to live as spontaneously as the birds and the flowers — all these things are iterations of a powerful sense that the old ways have been overturned.

    Of course, as generation followed generation and the world stubbornly did not end, Christians had to find ways of getting on with life. more> https://goo.gl/vJs3n8

    Updates from GE

    GE Just Turned the World’s Most Powerful Jet Engine Into A 65-Megawatt Power Plant
    By Tomas Kellner – GE is taking the world’s largest jet engine and turning it into a power plant. The machine’s beating heart comes from the GE90-115B, which is the largest and most powerful jet engine, capable of producing 127,900 pounds of thrust, according to Guinness World Records. The electricity generator, which GE calls LM9000, will be able to generate a whopping 65 megawatts — enough to supply of 6,500 homes — and reach full power in 10 minutes.

    The technology is also a good example of what GE calls the GE Store — the system of sharing technology, research and expertise among its many businesses. Today, aeroderivatives power towns and factories but also oil platforms and ships. more> https://goo.gl/dSwnhF

    A Blunt and Counterproductive Travel Ban

    By Mohamed A. El-Erian – As designed and implemented, there are genuine doubts about the order’s effectiveness in meeting its stated objective of preventing terrorism. It also risks a lot of collateral damage and unintended consequences that ultimately could prove counterproductive and harmful to national security, the economy, and America’s moral authority, values and standing in the world. Even the order’s merits as a domestic signal are in doubt, and it risks damaging the credibility and effectiveness of future policy initiatives from the White House.

    This is an extremely blunt approach to an important issue. Early reports on its application suggest that even long-time holders of multiyear visas for the U.S., together with green card holders and dual nationals, are being refused entry at airports or being prevented from boarding planes destined for America. This includes people who have been living in the U.S. legally for many years, have been vetted, and are productive and integrated members of their local communities. more> https://goo.gl/sljXfS

    Related>

    Is greatness finite?

    BOOK REVIEW

    Round About the Earth: Circumnavigation from Magellan to Orbit, Author: Joyce E Chaplin.
    Utopia, Author: Thomas More.
    The Population Bomb, Author: Paul Ehrlich.

    By Joyce E Chaplin – To see human nature and the rest of nature as out of sync is important – if done consciously. Today it is easy to find repudiations of neoliberalism, the doctrine, ascendant since the 1980s of Margaret Thatcher‘s UK and Ronald Reagan‘s US, that private activities produce public good and personal happiness more effectively than any public investment or oversight.

    Nearly 40 years on, we finally query the wisdoms of a neoliberal society. But without knowing exactly what it got wrong, it’s impossible to do better.

    The Tudor humanist Thomas More and the Regency clergyman Thomas Robert Malthus, of all people, can help us. They are experts on our moment. Together, their key works turn a spotlight on the much disparaged, pre-neoliberal 1970s, when things could have gone differently.

    The 1970s represent the last serious discussion of whether and how humans can manage the rest of nature for the greater good. We need that forthright mix again, bitter Malthusian tea served, nevertheless, with a sweet lump of Utopia.

    The last days of disco, the 1970s, were the glorious times before the buzz of neoliberalism. Before greed was good and environmental limits were negotiable, people worried about staying alive and danced to ‘Stayin’ Alive’. Circumstances warned against the easy acquisition of happiness, yet people sought it, indeed, preached that it should be available to all.

    Now, nations, states, innovators and cultural leaders have accepted the dubious promise of neoliberalism, that to extract private wealth from everything is an excellent way of being.

    The good news is that the upcoming arguments – indeed they have already begun – about what to do next can do more than repeat the nearly parodistic Adam SmithKarl Marx confrontation that has dominated for at least a generation. more> https://goo.gl/sjnI4f

    The Ten Behaviors of Strong Personal Leadership

    BOOK REVIEW

    The Next Level: What Insiders Know About Executive Success, Author: Scott Eblin.

    By Scott Eblin – Great leaders practice and exhibit strong personal leadership. They endeavor to live at their best so they can lead at their best. Their lives are structured for continuous improvement.

    Here are the ten behaviors of personal leadership:

    1. Self reflection. Great leaders take the time to identify and articulate how they are at their best and then organize their life so they consistently show up with those qualities
    2. Self awareness. Great leaders are aware and intentional
    3. Self care. Great leaders understand that they perform at their best when they take care of their health and well being.
    4. Continuous learning. Great leaders never stop learning.
    5. Listening. Great leaders listen. They ask open-ended questions and pay attention to the answers.
    6. Operating rhythm. Great leaders know and leverage their operating rhythm.
    7. Gear shifting. Great leaders know how to quickly shift gears
    8. Focus. Great leaders focus on who or what is in front of them
    9. Clarity of purpose. Great leaders know what they’re in it for
    10. Gratitude. They recognize, acknowledge the good things in their life
    11. more> https://goo.gl/qXCpL1

    Updates from GE

    By Kristin Kloberdanz – Virtual reality became domesticated last year — at least in America — when the VR viewer Google Cardboard arrived for the first time with the Sunday New York Times. Today, you could use it to explore Pluto’s frigid heart or climb to the top of 1 World Trade Center in downtown Manhattan.

    As thrilling and immersive as these experiences are, they are just a playful precursor of what’s coming. Companies such as GE have started using VR to optimize the electric grid, service nuclear power plants and plan complex supply chains.

    For example, for the past two years, GE engineers in Rugby in the U.K. have been using VR to optimize and even design factories, a task typically done with computers in two dimensions. As good as that approach is — virtually all modern factories have been designed this way — the method can make it difficult to anticipate problems that crop up once the building is in actual use in the three-dimensional world. But by then, it’s too late to fix the design without expensive retrofitting. more> https://goo.gl/C9zIdn

    The US has been downgraded to a “flawed democracy,” but not just because of Trump

    By Eshe Nelson – The US has been “teetering on the brink of becoming a flawed democracy” for years, the report says. Regardless of the result of the 2016 presidential election, the US was due a downgrade.

    Trust has been declining in the US for decades, leaving the country’s institutions battling a “legitimacy crisis” and struggling to sustain representative democracy in its current form, the report says.

    The decline began in the late 1960s with the Vietnam war, civil rights movement, assassinations of Martin Luther King and Robert F. Kennedy, and the Watergate scandal. Over the past decade, it got worse following wars in the Middle East, a financial crisis, and persistent gridlock in Washington. And along came Trump:

    By tapping a deep strain of political disaffection with the functioning of democracy, Mr Trump became a beneficiary of the low esteem in which US voters hold their government, elected representatives and political parties, but he was not responsible for a problem that has had a long gestation.

    In total, democracy, as measured by the EIU, declined in 72 countries and increased in 38 countries last year. more> https://goo.gl/4DCag4

    The Curse of Econ 101

    BOOK REVIEW

    Economism: Bad Economics and the Rise of Inequality, Author: James Kwak.

    By James Kwak – In a rich, post-industrial society, where most people walk around with supercomputers in their pockets and a person can have virtually anything delivered to his or her doorstep overnight, it seems wrong that people who work should have to live in poverty.

    Yet in America, there are more than ten million members of the working poor: people in the workforce whose household income is below the poverty line.

    Looking around, it isn’t hard to understand why.

    The idea that a higher minimum wage might not increase unemployment runs directly counter to the lessons of Economics 101. According to the textbook, if labor becomes more expensive, companies buy less of it. But there are several reasons why the real world does not behave so predictably.

    A higher minimum wage motivates more people to enter the labor force, raising both employment and output. Finally, higher pay increases workers’ buying power. Because poor people spend a relatively large proportion of their income, a higher minimum wage can boost overall economic activity and stimulate economic growth, creating more jobs. more> https://goo.gl/tZkyjV

    Trump’s Two-Step Strategy To Take Over The Truth

    By Robert Reich – Donald Trump is such a consummate liar that in coming days and years our democracy will depend more than ever on the independent press – finding the truth, reporting it, and holding Trump accountable for his lies.

    It is the two-step strategy of despots. And it’s already started. It was officially launched the first full day of the Trump administration.

    • Step 1: Disparage the press and lie about them
    • Step 2: Threaten to circumvent the press and take the “truth” directly to the people

    Trump and his advisors – Steven Bannon, formerly of “Breitbart News” as well as Sean Spicer and others – understand that if a significant portion of the public trusts Trump’s own words more than they do the media’s, Trump can get away with saying – and doing – whatever he wants. When that happens, our democracy ends. more> https://goo.gl/NZ8D7w