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Topic: Rabble Book Club: The Ingenuity Gap
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Tackaberry
rabble-rouser
Babbler # 487
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posted 31 July 2004 02:34 PM
I picked up a copy of this book when I was back in Canada a while ago. I've just started reading (P 50 or something) but so far I am so impressed. It is the most refreshing and perhaps smartest thing Ive ever read.Anyone read it? What did you think? BTW, why dont we have a book club? [ 31 July 2004: Message edited by: Tackaberry ]
From: Tokyo | Registered: May 2001
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Hinterland
rabble-rouser
Babbler # 4014
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posted 31 July 2004 02:57 PM
I read it a few years ago. I really enjoyed at the time, but I didn't really read it all that critically. The insight I came away with (that I didn't have before) is that the modern economy, with the de-skilling of jobs and the conformity or lack of real variety in consumer products (among many other things, which I don't remember very well) are creating all these single "points of failure" that eventually lead to huge disasters. Homer-Dixon was brought up briefly in the media last year during the power-failure, that being a significant example of what he was talking about.
From: Québec/Ontario | Registered: Apr 2003
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Rand McNally
rabble-rouser
Babbler # 5297
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posted 19 August 2004 01:35 PM
The author of the article seems to share your concern about the importance of developing a mathematical model. quote: I do not have precise measures for ingenuity; the argument here is heuristic and illuminative, not quantitative. But I believe researchers can eventually operationalize the key variables and specify the general shapes of the key functions. In time, on the basis of measurable data, we should be able to predict when and where ingenuity gaps will appear.
However he also wants to show quote: the generation and dissemination of productive ideas is endogenous, not just to the economic system, but also to the broader social system that includes a society's politics and culture.
Since he is expanding a economic theory out into the “the broader social system”, do you think that is going to limit his ability to achieve a mathematical model? What exactly drives you crazy about this book; do you dislike economic theory being generalized into wider use, or do you think that theory without a proper mathematical model is dangerous? Or is it something else? I am just curious, in both this thread, and the one on Marx you seem to dislike non-mathematical social theory. I think most people on both of these threads saw what was discussed as social/political theory; in both cases you attacked the non-mathematical nature of those theories. Are you, because of background, reading both of these theories as purely economic, or do you think mathematical social theory is possible. Just curious.
From: Manitoba | Registered: Mar 2004
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Stephen Gordon
rabble-rouser
Babbler # 4600
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posted 19 August 2004 03:19 PM
quote: Originally posted by Rand McNally:
What exactly drives you crazy about this book; do you dislike economic theory being generalized into wider use, or do you think that theory without a proper mathematical model is dangerous?
The second one. There are lots of things going on in these models, and the reason why Romer and Aghion-Howitt are such highly-regarded people in this field is that the were able to work out the implications for their insights in a fully-developed and internally-consistent dynamic general equilibrium model. That's not enough, of course: they also had to be able to explain what was going on to non-specialists, and why. The notion that much of R&D is profit-driven is a very old idea, but their contribution was being able to develop a formal model. We've had any number of bad economists who were willing to jump from interesting conjecture (and the ingenuity idea certainly seems interesting) to making recommendations about policy, without fully exploring the implications of their idea. Some of them don't even respect the laws of arithmetic: Paul Krugman's characterisation of Bush's Social Security reforms is that 2 - 1 = 4. When you have a formal model, these sorts of mistakes are glaringly evident after a couple of pages. But if you don't have a model worked out, it's all-too-easy to tap-dance through a couple of hundred pages of prose without even realising that there might be a fatal flaw. Especially if you're a good writer. Of course, there's no guarantee that the Law of Unintended Consequences won't kick in anyway. But we've found that a formal analysis does a good job eliminating ideas that sound good, but whose results have unpleasant outcomes. It works the other way, as well: there are any number of proposals that sound like bad ideas at first blush, but which turn out to have surprisingly good consequences.
From: . | Registered: Oct 2003
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Fidel
rabble-rouser
Babbler # 5594
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posted 20 August 2004 12:13 AM
quote: Originally posted by Tackaberry: Steffie, it is a pretty easy read, all in all. You'll be fine.I think part of the point of the IG is that mathematical models have failed to capture all of the effects of our systems, and that is is part of the problem.
That's what the socialist theorists have said about capitalism during the 1930's. Earlier economists wanted to make economics into a science and a popular study in universities. The model is flawed because it was easier for economists of those eras to use a distorted model of human behaviour as a predictor of economic events. Eliminating all but one aspect of human nature, self-interest, made describing the economy with mathematical formulas and equations that much easier. But one socialistm Karl Polanyi, said that Adam Smith's homo economicus doesn't fully represent human nature as the basis for an accurate model. We are more than just one dimensional prisoners of our own greed, and the model isn't as scientific as it could be. He said that not only would human behaviour within the homo economicus model be distorted towards self-interest and to extremes of greed, so would economic results - from sporadic growth to more severe economic depressions. Polanyi said that besides measuring the costs of labour and capital, economies should account for something called social capital in the production of goods and services. Any economy that does not give a full accounting of the costs of production cannot adequately meet the needs of society. And Polanyi proposed a rather complex economic model in the 1930's that almost resembles the modern political model for separation of power into several branches of government as a means for providing checks and balances and preventing the abuse of political power by any one of those political entities. Since Polanyi, a somewhat socialist-lite version of economics has shaped the major economies of the world - Keynesianism. However, it hasn't prevented certain opposition to the new economics from sabotaging and reversing the progress made by more Keynesian economists before them or being in lock step with Keynesian's after they are unseated from power. In light of corporate and financial scandals in N. America over the last several years, perhaps an update to the economic model is in order ?. cheers! [ 20 August 2004: Message edited by: Fidel ]
From: Viva La Revolución | Registered: Apr 2004
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