"Economists were in fact making up their own estimates of damage"
October 12, 2022 4:13 AM Subscribe
Steve Keen just won the Friede Gard Prize for Sustainable Economics (and has choice words for that other thing). Keen's talks about economists' denial and minimization of climate change are colorful (37 min) concise (15 min) and sometimes technical (30 min).
In his Economics Nobel prize acceptance, William Nordhaus asserted that +4°C over our pre-industrial climate provides the "optimal" compromise between climate change and the world economy. Actual climate scientists like Will Steffen project that +4°C makes the tropics uninhabitable by humans, and reduces the earth's maximum carrying capacity below one billion humans (and some project worse).
Nordhaus' DICE model, and later related IAM work, remain a prominent feature of economics sections of IPCC reports, meaning they de facto carry more weight with politicians than what climate scientists say.
Keen's The appallingly bad neoclassical economics of climate change tears down economists' IAM techniques, writing "economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists."
Keen's work echos Jason Hickel's earlier take down of Nordhaus in The Nobel Prize for Climate Catastrophe.
Another article, Lotka's wheel and the long arm of history by Steve Keen, Tim Garret, and Matheus Grasselli discusses how gross world product (GWP) correlates extremely closely with energy usage, implying "that inertia plays a far more dominant role in guiding societal trajectories than has generally been permitted in macroeconomics models or by policies that prescribe rapid climate mitigation strategies."
In his Economics Nobel prize acceptance, William Nordhaus asserted that +4°C over our pre-industrial climate provides the "optimal" compromise between climate change and the world economy. Actual climate scientists like Will Steffen project that +4°C makes the tropics uninhabitable by humans, and reduces the earth's maximum carrying capacity below one billion humans (and some project worse).
Nordhaus' DICE model, and later related IAM work, remain a prominent feature of economics sections of IPCC reports, meaning they de facto carry more weight with politicians than what climate scientists say.
Keen's The appallingly bad neoclassical economics of climate change tears down economists' IAM techniques, writing "economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists."
Keen's work echos Jason Hickel's earlier take down of Nordhaus in The Nobel Prize for Climate Catastrophe.
Another article, Lotka's wheel and the long arm of history by Steve Keen, Tim Garret, and Matheus Grasselli discusses how gross world product (GWP) correlates extremely closely with energy usage, implying "that inertia plays a far more dominant role in guiding societal trajectories than has generally been permitted in macroeconomics models or by policies that prescribe rapid climate mitigation strategies."
"Leaving those ideas aside for a moment, let's get empirical. "
I love this already, and I'd like to introduce (re-introduce) the blue to my favorite economics paper on the topic of empiricism in the field of economics, specifically to the graph on page 5, denoting "Uses of Quasi-experimental Terms in Top Economics Field Journals" over time. Specifically, I'd like to introduce you to that absolutely flat line to the left of 1992.
Put differently, as far as publication is concerned, empiricism - the experimental verification of fact - has not mattered to economics as a field for as long as The Simpsons have been on TV.
Without some sort of empirical basis, economics as a field is just made-up math-adjacent oligarch propaganda and has been forever. Economics bears an enormous culpability, on many different axes, for bringing the world to the state it's presently in.
posted by mhoye at 6:15 AM on October 12, 2022 [18 favorites]
I love this already, and I'd like to introduce (re-introduce) the blue to my favorite economics paper on the topic of empiricism in the field of economics, specifically to the graph on page 5, denoting "Uses of Quasi-experimental Terms in Top Economics Field Journals" over time. Specifically, I'd like to introduce you to that absolutely flat line to the left of 1992.
Put differently, as far as publication is concerned, empiricism - the experimental verification of fact - has not mattered to economics as a field for as long as The Simpsons have been on TV.
Without some sort of empirical basis, economics as a field is just made-up math-adjacent oligarch propaganda and has been forever. Economics bears an enormous culpability, on many different axes, for bringing the world to the state it's presently in.
posted by mhoye at 6:15 AM on October 12, 2022 [18 favorites]
It's worse.. I think Keen argues they abandoned reality quickly after the Great Depression, maybe like a decade.
In his speech at the 1974 Nobel banquet, awardee Friedrich Hayek stated that had he been consulted whether to establish an economics prize, he would "have decidedly advised against it" primarily because "the Nobel Prize confers on an individual an authority which in economics no man ought to possess... This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally." (wikipedia)
posted by jeffburdges at 7:10 AM on October 12, 2022 [6 favorites]
In his speech at the 1974 Nobel banquet, awardee Friedrich Hayek stated that had he been consulted whether to establish an economics prize, he would "have decidedly advised against it" primarily because "the Nobel Prize confers on an individual an authority which in economics no man ought to possess... This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally." (wikipedia)
posted by jeffburdges at 7:10 AM on October 12, 2022 [6 favorites]
Tim Garret pointed out that Dimensions and Economics: Some Problems by William Barnett II has an addendum (pp. 11/37) in which economics referees argues that units do not matter in economics. LOL
No way out? The double-bind in seeking global prosperity alongside mitigated climate change by Tim Garret looks interesting too.
Blair Fix's work has an empirical core too, see The Truth About Inflation, A Case Study of Fossil-Fuel Depletion, and How to Make the Oil Industry Go Bust.
posted by jeffburdges at 7:22 AM on October 12, 2022
No way out? The double-bind in seeking global prosperity alongside mitigated climate change by Tim Garret looks interesting too.
Blair Fix's work has an empirical core too, see The Truth About Inflation, A Case Study of Fossil-Fuel Depletion, and How to Make the Oil Industry Go Bust.
posted by jeffburdges at 7:22 AM on October 12, 2022
specifically to the graph on page 5, denoting "Uses of Quasi-experimental Terms in Top Economics Field Journals" over time. Specifically, I'd like to introduce you to that absolutely flat line to the left of 1992.
Not an economist but watching them from afar as regards similar trends/pressures in political science.
One of the key questions is how much of that is finding good quasi-experiments and natural experiments for the important questions that demand answers, and how much of that is just ignoring important questions and studying the shit out of whatever happens to have a decent-seeming natural experiment. See also and again only an impression from afar: studying the shit out of different types of auctions because they're easy to model.
My reaction to instrumental variables is that they should only ever be methods of last resort and are only kinda empirical since they necessarily involve throwing away the real data the universe presents you with and replacing that with data you've made up and assert are the data that "should have" existed.
posted by GCU Sweet and Full of Grace at 7:48 AM on October 12, 2022 [2 favorites]
Not an economist but watching them from afar as regards similar trends/pressures in political science.
One of the key questions is how much of that is finding good quasi-experiments and natural experiments for the important questions that demand answers, and how much of that is just ignoring important questions and studying the shit out of whatever happens to have a decent-seeming natural experiment. See also and again only an impression from afar: studying the shit out of different types of auctions because they're easy to model.
My reaction to instrumental variables is that they should only ever be methods of last resort and are only kinda empirical since they necessarily involve throwing away the real data the universe presents you with and replacing that with data you've made up and assert are the data that "should have" existed.
posted by GCU Sweet and Full of Grace at 7:48 AM on October 12, 2022 [2 favorites]
Learning how the Nordhaus model works was a real blackpill moment for me.
posted by grobstein at 7:50 AM on October 12, 2022 [3 favorites]
posted by grobstein at 7:50 AM on October 12, 2022 [3 favorites]
Most economists are essentially the court wizards of capital, divining in the stars the precise answers their masters want to hear and imagining a vast array of omens and portents to prove those answers correct.
posted by One Second Before Awakening at 9:06 AM on October 12, 2022 [18 favorites]
posted by One Second Before Awakening at 9:06 AM on October 12, 2022 [18 favorites]
"[GDP] measures everything .. except that which makes life worthwhile" — Robert F. Kennedy
posted by jeffburdges at 3:19 PM on October 12, 2022 [2 favorites]
posted by jeffburdges at 3:19 PM on October 12, 2022 [2 favorites]
Thank you for this extraordinary post, jeffburdges-- I cannot wait to work through these links. Thank you thank you thank you.
posted by lazaruslong at 8:31 AM on October 13, 2022 [1 favorite]
posted by lazaruslong at 8:31 AM on October 13, 2022 [1 favorite]
Learning how the Nordhaus model works was a real blackpill moment for me.
Same, and for me that even happened quite recently and here on MeFi! Thanks again for that, jeffburdges! Gonna have to buy you a cuppa one day, hah
posted by lazaruslong at 8:36 AM on October 13, 2022 [1 favorite]
Same, and for me that even happened quite recently and here on MeFi! Thanks again for that, jeffburdges! Gonna have to buy you a cuppa one day, hah
posted by lazaruslong at 8:36 AM on October 13, 2022 [1 favorite]
“The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents. We live on a placid island of ignorance in the midst of black seas of the infinity, and it was not meant that we should voyage far.” ― H. P. Lovercraft
I've used quotes like the above on twitter before, but it all feels more dark green than black to me now. Activism helps many people btw.
All biospheres work kinda like islands. Island bound animals can become extinct after hitting their limits, but many adapt by becoming less fecund, less expansionist, and consuming less energy & resources. Adaptation is bloody of course.
“No civilization can possibly survive to an interstellar spacefaring phase unless it limits its numbers” (and consumption) ― Carl Sagan
We could shrink our economy while retaining "that which makes life worthwhile", doing so requires fighting massive inertia, but once real nations become violent much becomes possible. All our non-violent direct action looks small, but could inspire real actions by future governments in say India and/or Pakistan.
We do also need tools to hang onto modern science and technology as the economy, trade, etc. all collapse: Agrivoltaics show incredible promise, aka power generation that provides sun screen and elevated humidity for crops. Agriculture experimentation more broadly too of course. Adaptation maybe picks up thanks to the Ukraine war wrecking Europe's economy. Around 10min here I discuss anonymous rationing that mitigates cert fraud so common in TLS certs, covid certs, etc., which could facilitate some nicer paths. Awful lot of paths worth exploring..
posted by jeffburdges at 5:06 PM on October 13, 2022 [2 favorites]
I've used quotes like the above on twitter before, but it all feels more dark green than black to me now. Activism helps many people btw.
All biospheres work kinda like islands. Island bound animals can become extinct after hitting their limits, but many adapt by becoming less fecund, less expansionist, and consuming less energy & resources. Adaptation is bloody of course.
“No civilization can possibly survive to an interstellar spacefaring phase unless it limits its numbers” (and consumption) ― Carl Sagan
We could shrink our economy while retaining "that which makes life worthwhile", doing so requires fighting massive inertia, but once real nations become violent much becomes possible. All our non-violent direct action looks small, but could inspire real actions by future governments in say India and/or Pakistan.
We do also need tools to hang onto modern science and technology as the economy, trade, etc. all collapse: Agrivoltaics show incredible promise, aka power generation that provides sun screen and elevated humidity for crops. Agriculture experimentation more broadly too of course. Adaptation maybe picks up thanks to the Ukraine war wrecking Europe's economy. Around 10min here I discuss anonymous rationing that mitigates cert fraud so common in TLS certs, covid certs, etc., which could facilitate some nicer paths. Awful lot of paths worth exploring..
posted by jeffburdges at 5:06 PM on October 13, 2022 [2 favorites]
I find this fact disturbing: eating cows remains legal in some of India.
posted by jeffburdges at 6:18 AM on October 15, 2022
posted by jeffburdges at 6:18 AM on October 15, 2022
Although not "black pilled" per se, Rachel Donald change course dramatically her podcast after interviewing Steve Keen. She interviewed his coauthor Tim Garrett too.
posted by jeffburdges at 9:55 AM on November 9, 2022 [1 favorite]
posted by jeffburdges at 9:55 AM on November 9, 2022 [1 favorite]
Steve Keen's Friede Gard Prize Lectures:
Lecture 01: Banks, Money, and Credit
Workshop 01: Fiat And Credit Money
Lecture 02: Falling Marginal Cost is the empirical rule
Workshop 02: Loanable Funds fantasy versus real-world BOMD
Giving a "Nobel" Prize to Bernanke for his work on banks is like giving a Nobel Prize in Physics to a Flat-Earther
Lecture 03: The Market Demand Curve
Lecture 04: The Fantasy Production Function
Workshop 04: from Goodwin To Minsky
Lecture 05: Energy In Production Functions
Workshop 05: Combined Godley-Flowchart Model
Lecture 06: Method And (the lack of Scientific) Revolutions in Economics
...
See his site for subsequent lectures and workshops.
posted by jeffburdges at 1:50 PM on November 9, 2022 [1 favorite]
Lecture 01: Banks, Money, and Credit
Workshop 01: Fiat And Credit Money
Lecture 02: Falling Marginal Cost is the empirical rule
Workshop 02: Loanable Funds fantasy versus real-world BOMD
Giving a "Nobel" Prize to Bernanke for his work on banks is like giving a Nobel Prize in Physics to a Flat-Earther
Lecture 03: The Market Demand Curve
Lecture 04: The Fantasy Production Function
Workshop 04: from Goodwin To Minsky
Lecture 05: Energy In Production Functions
Workshop 05: Combined Godley-Flowchart Model
Lecture 06: Method And (the lack of Scientific) Revolutions in Economics
...
See his site for subsequent lectures and workshops.
posted by jeffburdges at 1:50 PM on November 9, 2022 [1 favorite]
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