Economic denialism?

wconnoll Well, the conversation over at Kevin Anderson: how numbers reveal another reality got rather silly and bad tempered, but more than that it also became totally, obviously pointless1. Remarkably, my attempt to enlighten people by pointing out that their attitude to and discussion of economics bore a powerful resemblance to discussions of science at WUWT did not bear fruit.

In other news, the image to the right is my submission for my work pass photo. I'm hoping they'll use it, even if cropped a little. The image below is prettier but I suspect wouldn't pass even the cursory scrutiny pass photos get.

Also, I'm looking forward to fun, frolicks and very little death2 in the near future in the Ecrins, so posting will be light for a while.



1. Although there was one bright point.

2. Assuming Trump and the NK nutter can hold off for a while.


* A brief roundup: the BBC and OMICS - ATTP can of course get the science right, unlike Nigel Lawson.
* Dept of Wrong Predictions -- No Tricks Zone edition
* IS GREENLAND BURNING? asks VVUWT (I'v corrected the hideous spacing in the headline, though)
* The Axis of Climate Evil -
- Paul Krugman in the NYT

More like this

After an unprofitable sojourn at ATTP, can I conclude that you think the science behind computing economic discount rates is as solid as that behind computing radiative transfer in the atmosphere?

[No; but that's the wrong comparison. A better analogy is between the "correct" discount rate and the value of climate sensitivity. The latter is somewhere between 1.5 and 4.5 oC, probably; yet no-one sensible would let that wide margin deter action; nor would anyone sensible put too much weight on values at the margin. Similarly the correct discount rate is unknown; but no-one sensible would suggest ignoring the concept entirely -W]

The collapse of human civilization is an Infinite cost .

The risk of total collapse is ?

Should we listen to lomborg or tol?
The discount rate must be a value judgement .

[Rather in the way that CS is a value judgement? If it is a value judgement, whose judgement shall we use? -W]

That takes it out of hard science's realm into social science were all things are subjective . That doesn't make economics valueless but it does make it a lot harder to weight the value of any given approach.

Pixie dust is valueless

We do have renewable energy and electric transport on the horizon .

Can we replace our CO2 intensive steel making, cement ,sea freight , air travel technology in time at reasonable cost ?
CCS is not a technology we have .

If projections are based on finding pixie dust or unicorn farts they are valueless no matter the discount rate applied .

"Remarkably, my attempt to enlighten people by pointing out that their attitude to and discussion of economics bore a powerful resemblance to discussions of science at WUWT did not bear fruit."

Because you gave it a poor attempt. Because telling people they are stupid doesn't suddenly make them realise it - you needed to explain yourself betterer.

[I think I made a reasonable start. But it was clear to me that no-one was listening. And I don't just mean the always silly people, I mean even usually / otherwise sensible people like ATTP. Do you think they were willing to listen? They didn't give that impression -W]

Discount rates are pretty much wild assed guesses when applied beyond a decade or so in a fairly well described market. When the time period is on a century scale and the market is the whole planetary economy, even guessing the sign of rate is unreasonable - it's trying to apply a concept well beyond its domain of applicability. The most important factor in a discount rate is uncertainty. Imagine that our best guess of climate sensitivity was - 5.0 C to + 5.0 C.

[This isn't my field, but I think you exaggerate the uncertainty, and perhaps lay too much stress on fringe opinions. Going back to CS, you can find (or could have, not long ago) estimates from people with some kind of sci credentials all the way from 0 to +10 -W]

" But it was clear to me that no-one was listening. "

would be good if you actually made an argument... What is the point you were making - people genuinely don't understand

[Well as you'll see from the comments it started with me objecting to "discount rate is irrelevant". ATTP's "I’m a bad, bad person" was a non-answer; I interpreted that as an attempt to laugh it off; obviously, that's bad. He then replies "My desire to have a serious discussion with those who choose to make it personal and who have a (strong?) tendency to interpret things as uncharitably as possible is fairly small. FWIW, I think your economic denier narrative is rather silly" I interpreted as "I'm not interested in talking". I think he really accepts that his approving quoting of "discount rate is irrelevant" was wrong, but isn't prepared to admit that; but it is hard to be sure. ATTP then goes on to ask why "ignoring discount rates is equivalent to ignoring the GHE". Notice that he has carelessly misquoted; I didn't say anything as binding as "equivalent", I said the far weaker "analogous". I think his "I didn’t say this. I pointed out that Kevin Anderson argued this" is just evasion.

Willard then muddies the waters; but he is an idiot so he can just f*ck off (his point about "TimW’s a money denier" is so stupid that some else even manages to notice it).

ATTP then goes on with "My understanding of Kevin Anderson’s argument is that the impact of 4oC of warming would be so great (incompatible with organised global community) that discount rates become essentially irrelevant, and such an outcome should be avoided at all costs" which essentially just repeats the error; as I point out with "The (economic) cost of the civil system breaking down entirely would be enormous; as would the death toll. Costs, even passed through discount rates, would show that. So why would you want to ignore them?"

At that point, we're at ATTP's "I can’t see this progressing in any constructive way, so maybe we can draw this to a close?", so I stop.

The point I'm trying to make, and I don't really see how I can make it any more clearly, it that the folk over at ATTP's get the science right and the economics hopelessly wrong. So wrong that they don't know how wrong. So wrong that they quote idiotic but respectable looking sources, without realising that they are quoting fringe drivel. Now, does that remind you of anything? It should. It should remind you of the Watties -W]

Newton's physics works well, most of the time that we humans can observe.

However there are people that don't realize that the physical world is more complex than described by Newton's physics. Some are very insistent. We might have a few terms to describe such people.

Adam Smith had some great ideas.

If we take a subset of Adam Smith's ideas, completely ignoring some of his observations and much of later economics, we get to Libertarianism. The world is more complex than they think. Some Libertarians are very insistent.

[AFAIK, L is irrelevant to this thread. So I've no idea why you said what you just said. Could you explain? As to AS, while there may be some virtue in your point (it is hard to understand what you're saying, as I said, so rather hard to be sure) the philosophy that chiefly disagrees with him is the Left; about the most typical AS quote is Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things -W]

Mainstream economics is not denialism.

[Yeeeees... that's what I was trying to say. But insisting that you can ignore discount rates doesn't sound like mainstream economics to me -W]

"So wrong that they quote idiotic but respectable looking sources, without realising that they are quoting fringe drivel."


By Phil Hays (not verified) on 11 Aug 2017 #permalink

Well, I just skimmed the thread and it looked to me as if you opened by being rude. You went on to assert your authority, as an amateur, over various professional economists (such as Piketty) without actually backing up your assertions with any argument. In other words, you drove by, spouted some abuse, and then cleared off.

[I didn't notice P commenting. I saw someone who is clearly woefully ignorant quoting P. P himself makes many mistakes. Let's return to analogy land: if you see someone quoting Lindzen's opinion that the CS is low, significantly less than 1 oC, do you say "oh yeah, L is a well respected and credentialed climatologist, I will defer to his opinion"? No, you don't. I feel no need to defer to someone selectively quoting P -W]

Anderson is an engineer, but he collaborates with economists and his work connects with global economic modelling, so he's far more of a professional economist than you are. He's saying that there is a consensus that 4C is unsurvivable. If that's right, then (he argues) it's worth spending anything (i.e. up to the whole global economy) to avoid it. I think that if all you've got to say about this argument is to rain abuse on it, then you deserve to be ignored.

[I think is it likely that 4 oC (by, let us say, 2100) is survivable. I think asserting that it definitely unsurvivable is wrong -W]

If you insist on a discount rate, an appropriate rate to use when costing the loss of any fixed proportion of the global economy is the same as your model's growth rate. Isn't it? If not, why not?

[I don't think so, no. If you were in a steady-state economy with zero growth, you'd still value £1 today more highly than £1 in 100 years time -W]

By Nick Barnes (not verified) on 11 Aug 2017 #permalink

Next time you go back there, just change the subject. Don't get banned for intransigence.

By Tom Fuller (not verified) on 11 Aug 2017 #permalink

"The point I’m trying to make, and I don’t really see how I can make it any more clearly, it that the folk over at ATTP’s get the science right and the economics hopelessly wrong."

Yes, you stated this over and over, it was very clear.

[I don't think it was; because I see several people telling me they aren't sure what I'm trying to say -W]

You provided no evidence or any argument, so you were rightly dismissed.

[I'm not spoon feeding you -W]

By numerobis (not verified) on 11 Aug 2017 #permalink

So the substance comes down to whether the discount rate is irrelevant at 4c warming?

By Nathan Tetlaw (not verified) on 11 Aug 2017 #permalink

Is the discount rate relevant at 100C warming?

[No. Is a 100 oC warming relevant? No -W]

I think it certainly is not a consideration compared to boiling the ocean. Consequently, we are, as (was it Churchill? Shaw?) someone clever once pointed out, we have established what you are, madam, we are simply negotiating the price.

That said, when an obviously concept leads to an obviously wrong conclusion, it may be worthwhile to consider what the limitations to that concept might be.

[Sorry, you lost me. What "obviously wrong conclusion" are we being lead to? I assume you mean lead to by DR, though you don't actually say so -W]

I think in fact the discount rate constitutes a consensus of long-term growth rate. Because to an economist everything is fungible, there is a peculiar sort of averaging that happens.

But the growth rate may depend critically on the climate trajectory. Indeed many people think it does. In the +4C scenario, it remains highly uncertain that we would have anything resembling an economy. But that's arguable. Let's consider for the sake of argument a +100 C scenario, and stipulate that terrestrial life would not survive. Let's consider that the +100C arrives abruptly after 200-300 years, meanwhile being put off by heroic geoengineering efforts, which abruptly fail in some stupid burst of neoTrumpism. What is the discount rate, if we know this with absolute certainty?

I submit that the total discounting of the entirety of human civilization in 200 years would not propagate much back to the discount rate.

[I think you've made that up. What makes you think it is true? -W]

Nevertheless, there is an absolute moral imperative to avoid this path.

Can the discount rate be saved, or is it merely irrelevant?

I can imagine an argument that there is a long-range discount rate which is zero. In principle I'd like it to be negative, but I think the whole edifice of economics fails in that case.

I wonder if this isn't behind the whole growth-addiction that is subtly and implicitly conveyed by economists.

[You're confusing economists with politicians -W]

I think huge swaths of their whole theory break down with a negative discount rate. Therefore, they seem to conclude, negative growth is impossible.

If you accept there is some dT at which the discount rate is relevant, your claim that ignoring the discount rate is always irrational fails. If you accept that at some temperature change less than 100C the discount rate is irrelevant, then we can reduce our discussion to a quantitative one. At what dT do we effectively destroy the world.

Anderson's argument is simply that morally unacceptable consequences are likely enough at 4 C that we should avoid 4 C at all costs. (I agree, but I have little idea which costs to personally incur.)

You have already agreed with that proposition if only we substitute 100 for 4. So it's just a matter of degrees, not a matter of principle.

Of course this raises the question. At what level of climate change do you think the existential risk does override attention to the discount rate?

Do you think this is an economics question? What light can economics shed upon it?

[You can turn this into a morality issue if you like, but I'm not sure it is helpful. I think it amounts to shying away from the economics; trying to turn it into "you're a bad person if you don't agree with me" kind of problem. We've been around this loop before, of course. I think that's an argument that works well for those already convinced, but poorly for those not. Also, i plays badly. Not to you, of course. It plays well to you. Do you realise that it plays badly to some? I can't tell. FWIW, I agree, at some level I agree we do indeed hit warming so high that we'll kill enough people that it would be morally unacceptable -W]

I don't care how my arguments strike people. I care whether they are true. In this we are alike.

[I don't think you can quite get away with that; at least, not in this discussion. I think that your, and the ATTP-types, way of talking about economics will make you less likely to be heard; and ditto the KA types, who clearly do want to be heard. But, I make no great attempt to temper my language in order to be heard and reject people telling me I ought to, so meh -W]

"at some level I agree we do indeed hit warming so high that we’ll kill enough people that it would be morally unacceptable "

OK, I appreciate the concession. In that case I fail to see where your "WUWT-like denialism" claim comes from.

[I don't understand you. That claim on my part isn't founded merely on that one point; it is founded on all the reactions there. I find I don't have the patience to explain it all, all over again; sorry -W]

If you disagree with Anderson's suggestion that it's at 4C, that's an impacts question, not an economics question. By all means, please come up with the level at which you personally believe the risk to be too high to take. And then explain how you reconcile that with the discount rate without being an econ-denier.

[Now you've lost me. Suppose we agree that it is reasonable to consider 4 oC not too high for a discount rate to be ignored. Then my objection to his comment is sustained -W]

As it happens, I am indeed something of an economics denier. In fact, I think the concept of a discount rate is fundamentally inappropriate for this conversation altogether.

This may be why I have more patience for climate deniers than most of those with a good grasp of the climate issue. I think some of the arguments deployed against climate deniers can indeed be deployed against economics deniers. I don't like those arguments and have often, to the irritation of the activist crowd, opposed them.

It is entirely possible for an academic discipline to be wrong. I think this is far less likely to be the case for climatology than for economics. The epistemic grounds for this belief aren't something I've expressed in a way that satisfies me, as yet. That said, I'm quite sure of both my confidence in climatology and my lack of confidence in economics as applied to climate and other long-term global issues.

In particular, I haven't seen a sign that economists have even dreamed of the fluid dynamicist's core concept of regimes of applicability of particular theories. This is relevant in the case at hand. There are plenty of good reasons to think about the discount rate on a decadal time scale, but that theory seems to fail utterly on century scales.

[Yes, but I think that's all instinctual on your part; and again, we're at the analogy point. You sense where it is going, you don't like the implications, and your instincts tell you not to go there. That is a (very mild) version of the Watties approach to science -W]

Sorry wmc I think you're some way off the mark here. In context "discount rate is irrelevant" means that any reasonable choice doesn't affect the conclusion. Which is a fair conclusion from the premises. In the limit, infinite loss with infinite discount could potentially be finite depending on how the limits are approached, but there is no meaningful debate over infinite discount, rather it's whether we should use conventional discounts versus the ultra-low values that e.g. Stern relied on for his results.

[I confess that I didn't actually listen to the talk, so didn't realise he was assuming infinite loss. That itself seems unreasonable to me. Does it to you? I certainly agree that collapse-of-civilisation makes discount rates irrelevant; I just find it hard to believe that 4 oC corresponds to collapse of civilisation -W]

By James Annan (not verified) on 11 Aug 2017 #permalink

I think there is an important distinction between "don't like the conclusions" and "find the conclusions absurd".

As an undergrad, I recall a professor being exasperated at the students coming up with an output voltage of 11 megavolts in a passive circuit driven by a five volt battery. He suggested that one ought to be able to reject such an answer on intuitive grounds.

If economics concludes that it is optimal behaviour to destroy the world, I feel that I am on sound footing in rejecting the argument. The conclusion is so obviously wrong that the right thing to do is to look for the flaw in the reasoning.

[Well, yes, agreed. But since it doesn't, I don't see where you're going with that. "If black is white then X" isn't an interesting line of argument -W]

It turns out that for conventional environmental issues, a discount rate that is "too low" can be thought of as motivating some wealth extraction (clear-cutting forests) that we find intuitively unsound. This is well-trodden ground but I think it's incomplete. It argues that sustainable forestry is eschewed in favour of extractive forestry on account of the discount rate, so finding a discount rate that is somehow lower in this context might help.

[I'm not at all sure that is true. To the same degree of hand-waving, I could assert that private property rights solves this problem -W]

This doesn't help in the case of ecosystems with no intrinsic economic value. Nevertheless, a few decades ago, it was generally agreed that we ought to protect them regardless of economic arguments. (Unfortunately the policies that were put in place, like the Endangered Species Act in the US, are inadequate under climate change.)

If we consider ecosystems with no economic value when sustained, this was economically unsound regardless of the discount rate. Nevertheless I think it was correct. The reasons are in this case ethical, or as Anderson puts it "aesthetic". It's about what sort of creatures we are, not about how we compete for resources.

[Yes, this is kind of fine. There are some things you're not allowed to do even if rich. You can't pay to kill people for example. The question is where the border line is between "things that are forbidden" from moral or societal grounds lies. Largely, it lies at things that everyone considers wrong; that's how the social compact works and is constructed. But it doesn't obviously apply when large section of the populace disagree, implicitly or explicitly -W]

When economics suggests that we are the sorts of creatures who always optimize for our own interests and are so incapable of altruism that ethics can be altogether neglected, if it offers advice on that basis, I think it is not denialism to reject it.

(There are other more technical reasons this sort of thinking is inappropriate for the climate problem, but that's enough for now.)

WMC wites:[I confess that I didn’t actually listen to the talk...]


By Kevin ONeill (not verified) on 11 Aug 2017 #permalink

Again for emphasis, whether it's 4 C or some other temperature which should be avoided at all costs is an entirely different sort of discussion than whether there is such a temperature at all.

Well whether you or I consider collapse of civilisation at +4C reasonable or not, that was certainly the premise and if you disagree, it's not a disagreement about discount rates.

Personally, no, I'd expect a lot of the organised society to carry on at +4C, though it would be rather different and some hotter/drier areas could certainly struggle. But we are looking a long way ahead and the rate of change is an important factor.

[Ah; well, as I said, I didn't listen to the talk. If it's not important enough to bother write down, it can't be important. I had parsed He suggests that 4oC is incompatible with organised global community and should be avoided at all costs (discount rate is irrelevant) as He suggests that 4oC is <opinions about stuff> and should be avoided at all costs (discount rate is irrelevant) not as [collapse of] organised global community [] should be avoided at all costs (discount rate is irrelevant). The latter is, I agree, trivially true; as such I assumed he hadn't said it, because why would you bother saying things that are trivially true? -W]

By James Annan (not verified) on 11 Aug 2017 #permalink

The entire discussion of discount rates, by KA and then in the comments at ATTP, was in the context of an essentially unsurvivable dT (not his phrase). KA made a throwaway remark about discount rates being irrelevant *in that context*. Someone repeated it, *in that implicit context*, in the comments, and you went off on one about economic illiteracy, without realising that context, *because you didn't watch the talk*. Frankly you look like a bit of an eejit right now (I know you're not an eejit).

[Well, I refer you to my comments above about listening to entire talks. I'm sorry that I come over like an eejit. But I'm still not convinced you can consider it a throwaway remark, in context, because the context for poor text-based me is the words that ATTP quoted. If you're saying that ATTP quoted irrelevant throwaway stuff then I think he misled me.

Also, and I hope this has become clear by now, my claims of "economic denialism" aren't based purely around this one narrow point around discount rates. It is even around this one post (isn't that obvious? You really think I'd say this just for one post?) - it's the entire discourse. People quoting Richard Murphy as though he wasn't an idiot -W]

I don't agree that +4C is necessarily the end of the world, at least not at 2100 (although it just might be, if it causes some long-tail things such as a RUD of the WAIS). I do think it might lead to enough radical restructuring of the global economy that discount rates might still be irrelevant: a phase transition, of sorts. Because I think you really need a smooth domain to talk about things like discount rates, just as large-scale pressure gradients aren't meaningful across a shockwave

[FWIW, I think 4 oC would be a massive perturbation -W]

If, for instance, we get into either some really big climate wars (entirely plausible, with several nuclear-armed countries in the Really Hot and Messed-Up Belt) or some existential crisis-response command-economy situation (like WW2 in the UK, Germany, or Japan, or like post-war reconstruction in Japan, or 1970s Taiwan), then we don't have a smooth domain and using any sort of fixed discount rate is just a sign that your model is fucked.
Anyway, I think KA has useful and sobering things to say about (a) the integrated models being used, (b) the magic wands being waved (such as BECCS), and (c) why it's important to be up-front and honest, and loud, about these things. The politicians believe, on some expert advice, that we're can get dT<3C). They also believe, also on expert advice, that various kinds of magic wands (such as BECCS) are available which let us delay action. That's wrong too. So why are the politicians wrong, and how much does it matter? This is important stuff. I recommend that you go ahead and watch the talk.

[For IAMs, see-also…. For BECCS, I can't say I've thought about it deeply, but it sounds stupid -W]

By Nick Barnes (not verified) on 11 Aug 2017 #permalink

Ah, less thans and greater thans messed up. "that we can get dT much less than 2C, and possibly dT of 1.5C. That's wrong. We're going to get dT more than 3C."

By Nick Barnes (not verified) on 11 Aug 2017 #permalink

In the long term, well past 2100, dT of 4C will presumably give us SLR of +20m or more. Politicians don't talk about that either.

By Nick Barnes (not verified) on 11 Aug 2017 #permalink

We've already agreed that at some point, the discount rate isn't anything.

We're left arguing with what dT is (or might sufficiently likely be) so bad that overlaps with "discount rate isn't anything".

This is, I think, worth doing,,

[It might be worth doing, but it wasn't the discussion I was hoping to have here; it is largely irrelevant to what I wanted to talk about here -W]

But proposing to avoid 4 C "at all costs" is consequently not WUWT-style denialism. So, QED, and thanks for all the fish.

[Agreed. I'm sorry that my words are so hard to parse. That wasn't what I was trying to analogise to. Please see my first reply in #20. See-also -W]

Also we learned WTFV is the equivalent of last century's RTFM. ("W" stands for "watch".)

Humid heat waves at different warming levels,Simone Russo, Jana Sillmann & Andreas Sterl, doi:10.1038/s41598-017-07536-7

The abstract:
"The co-occurrence of consecutive hot and humid days during a heat wave can strongly affect human health. Here, we quantify humid heat wave hazard in the recent past and at different levels of global warming. We find that the magnitude and apparent temperature peak of heat waves, such as the ones observed in Chicago in 1995 and China in 2003, have been strongly amplified by humidity. Climate model projections suggest that the percentage of area where heat wave magnitude and peak are amplified by humidity increases with increasing warming levels. Considering the effect of humidity at 1.5° and 2° global warming, highly populated regions, such as the Eastern US and China, could experience heat waves with magnitude greater than the one in Russia in 2010 (the most severe of the present era). The apparent temperature peak during such humid-heat waves can be greater than 55 °C. According to the US Weather Service, at this temperature humans are very likely to suffer from heat strokes. Humid-heat waves with these conditions were never exceeded in the present climate, but are expected to occur every other year at 4° global warming. This calls for respective adaptation measures in some key regions of the world along with international climate change mitigation efforts.

The model runs show temperatures in many populated urban areas higher than *anything* we observe today. Hotter than Death Valley. Hotter than the highest temperature ever recorded.

Perhaps not the end of civilization, but not compatible with *this* civilization.

By Kevin ONeill (not verified) on 11 Aug 2017 #permalink

I don't think you can reasonably proclaim economics denial on the basis of some purported discount rate estimates.

[That is true; but obviously so. Which is why I didn't do it -W]

Discount rate isn't properly a part of economics at all - it comes from finance.

[That sounds like a really weird thing to say. Would you prefer $1 now, or in a year's time? -W]

In finance you make estimates of discount rate when you have reasonable expectations not only of the prospects of an investment but also of the future cost of money. This situation is not much like that faced in climate amelioration.

That doesn't mean that we shouldn't try to evaluate the costs and difficulties of transitioning from a fossil fuel economy, but I doubt that discount rate is the right tool.

Anderson s talk was pretty good. He laid the problem at the feet of the top 10%. Perhaps if those folks are the ones to drive us to 4c then folks would not object to a final solution. .After all we should avoid it at any cost.

I had made a similar observation to wc in another thread where tax policy was discussed. ..amateur hour like wuwt.

By Steven Mosher (not verified) on 11 Aug 2017 #permalink

Change the subject. You'll end up being tossed in the denier bin. We've seen it happen.

They don't understand economics. So they deny it. If only there were a lukewarm position to take...

By Thomas Fuller (not verified) on 12 Aug 2017 #permalink

One scheme to provide so-called negative emissions is found in "Irrigated Afforestation of the Sahara desert and the Australian outback ..." by Len Orstein et al. A companion scheme is the enhanced growth of kelp. Combined with the eventual elimination of the use of fossil fuels the carbon dioxide levels will decline, possibly avoiding the dreaded 4 °C global warming.

This will be expen$ive. So given the moral imperative of this or a similar scheme, what is the discount rate?

For a ready reference on 4 °C warmer, see "Six Degrees" by Mark Lynas with a summary available online in the Guardian archives.

By David B. Benson (not verified) on 12 Aug 2017 #permalink

“So wrong that they quote idiotic but respectable looking sources, without realising that they are quoting fringe drivel.”

Sometimes holding up a mirror is useful.

"the philosophy that chiefly disagrees with him (Adam Smith) is the Left"

If we take a different subset of Adam Smith’s ideas such as on the inequality of riches and lack of the market power of labor, stir in a little Karl, we have Marxism. The world is more complex than Marxists think. Some Marxists are very insistent.

Is Marxism Left or Right?

[I think M is uninteresting. If you think he has anything relevant to say you can quote him; I've provided my relevant AS quote -W]

I was searching for some specific Adam Smith quotes and Marxism, and found this instead:…

Which wasn't from the Marxist world, but has the advantage of being more readable. What is it about Marxism makes many of the followers of Marxism into such terrible writers?

Both the Libertarians and the Marxists tend to ignore some of Adam Smith. Just different parts.

"But insisting that you can ignore discount rates doesn’t sound like mainstream economics to me"

In the context of the discussion of, "for some delta T the discount rate does not matter", I think that mainstream economics would agree that some delta T exists.

[But that is an uninteresting discussion, since it is trivially true -W]

There could be an interesting and reasonable discussion about what delta T that statement would be true for, 2C, 4C or 10C or more. I don't know what the answer is. The answer might depend on complexities of human society that can't be modeled or predicted, as well as on time scales, rates of change and more.

As far as I've observed, Real Libertarians of the USAian variety generally do not agree that such a delta T is reachable by the normal course of market economies.

Is the English variety different?

[I've never seen them discuss the matter so I've never seen them "not agree" in the manner you describe. Ref? -W]

By Phil Hays (not verified) on 12 Aug 2017 #permalink

In the context of the discussion of, “for some delta T the discount rate does not matter”, I think that mainstream economics would agree that some delta T exists.

[But that is an uninteresting discussion, since it is trivially true -W]

This may have already gone too far, but I'll see if there is some chance of reigning it in. The context was *always* about there being a dT for which the consequences would be so severe that discount rates become essentially irrelevant. I thought this was so obvious that it didn't initially cross my mind that WMC had somehow interpreted it differently. Instead, WMC seems to have interpreted people as endorsing/approving of a suggestion that the concept of discount rates should be ignored. This is so ludicrous that it might have been nice if WMC had checked that this was indeed the case before deciding that it warranted calling people names; I guess he really does think some of us are actually this stupid. Oh well, what's the internet for if not for having a good rant?

[As I've (several times?) already: that there is adT that destroys civ and therefore renders DR irrelevant is trivial. So I naturally assumed you weren't discussing that. That I was suggesting that many of your commentors would like to eish wawy the concept of DR is true; but my complaint against their econ is much broader than that -W]

p.s.: Unless I missed it, I don't think anyone quoted Richard Murphy either, but please don't let that stop you from regarding me, and those who comment on my blog, as economics deniers.

[Its where W rants about Timmy being a tax denier; but I can't blame you for not reading that drivel -W]

By ...and Then Th… (not verified) on 12 Aug 2017 #permalink

Did the rich or the poor contribute most to whatever human contributions there have been to climate change?

There were no rich or poor when the great deforestation began, burning in pursuit of the last remaining megafauna (and introducing barbecue to ancient proto-culture). And thus began the Anthropocene.

There were no rich or poor when cultivation began to change the albedo of the planet, although this is when riches began to emerge. However it was the poor who kept bringing land under the plow.

Cement has been used for rich and poor alike. So has petrol. The poor use as much plastic as the rich, perhaps more. The poor also are fond of electricity.

The sober debate by the climate consensus on how best to stop Indians from adopting air conditioning pretty much gives the lie to those blaming emissions on the rich.

I've been poor. I've been rich. I am now comfortably middle class. I don't believe for one second that my emissions or those emissions made in servicing my needs are one bit different now than they were at previous levels of income. I will note that I couldn't afford to give up my car when I was poor. Virtue signaling is not a poor man's game.

By Tom Fuller (not verified) on 12 Aug 2017 #permalink

[As I’ve (several times?) already: that there is adT that destroys civ and therefore renders DR irrelevant is trivial. So I naturally assumed you weren’t discussing that. ]

And this somehow justifies you assuming I was talking about something else? Okay.

[That I was suggesting that many of your commentors would like to eish wawy the concept of DR is true]

You misinterpreted what was said, but you're still right?

[Its where W rants about Timmy being a tax denier; but I can’t blame you for not reading that drivel -W]

No, it's not, but - as I said - don't let that stop you.

Anyway, this is unfortunate but maybe not all that surprising. If you ever feel up to clarifying what consensus economic position it is that others are denying, I might be interested in knowing what it is. I certainly have no idea. I'm not even sure what economics discussions on my blog have got you so up in arms - I had thought that my own view was actually quite similar to yours - carbon tax - but maybe I'm confused even about that.

By ...and Then Th… (not verified) on 12 Aug 2017 #permalink

"But that is an uninteresting discussion, since it is trivially true "

Isn't that what your disagreement was all about? Libertarians often think that The Market is more than half of the answer to everything, and if damages outside of marketplace, then suing is most of the rest. Ok, since that clearly doesn't work, then maybe a carbon tax.

Defending the future existence of civilization just doesn't fit into the Libertarian schema, as I perceive it. Is your position that human caused climate change can't be large enough to threaten the existence of civilization?

"Most libertarians who engage in the global warming debate contend—vehemently—that anything short of “just saying no” to mainstream science and public policy to address climate risk is a gross violation of nearly every principle libertarians hold dear."……

Any writer that references "Annan and Hargreaves" can't be all bad.

Yet they are Libertarian, reference:…

And not mainstream economics, of course. Rejection of any action other than a carbon tax. The point to a carbon tax is to reject alternatives:

"The alternative to a carbon tax is not a policy of ignoring climate risks. The alternative to a carbon tax is a plethora of command-and-control regulatory interventions at every level of government and subsidies for low-carbon technologies and practices. Those interventions already impose a sort of carbon tax. Regulatory costs increase the price we pay for energy-related goods and services. But unlike a carbon tax, the increased costs are invisible to consumers."

They even quote Hayek:

"Personally, I find that the most objectionable feature of the conservative attitude is its propensity to reject well-substantiated new knowledge because it dislikes some of the consequences which seem to follow from it—or, to put it bluntly, its obscurantism. I will not deny that scientists as much as others are given to fads and fashions and that we have much reason to be cautious in accepting the conclusions that they draw from their latest theories. But the reasons for our reluctance must themselves be rational and must be kept separate from our regret that the new theories upset our cherished beliefs....
By refusing to face the facts, the conservative only weakens his own position. Frequently the conclusions which rationalist presumption draws from new scientific insights do not at all follow from them. But only by actively taking part in the elaboration of the consequences of new discoveries do we learn whether or not they fit into our world picture and, if so, how. Should our moral beliefs really prove to be dependent on factual assumptions shown to be incorrect, it would hardly be moral to defend them by refusing to acknowledge facts."

And come to a point I've been making for over 30 years.

"Conservatives are risking a great deal by embracing a policy of militant denial regarding climate risks. If conservatives are found to be wrong, the political response would likely prove devastating."

By Phil Hays (not verified) on 12 Aug 2017 #permalink

Shall we just look at recent history? What would happen to interest rates, inflation, and the value of the dollar, if the USA government introduced a large economic stimulus plan circa 2008 - 2009.

All those brilliant conservative/freemarket-leaning/Libertarain economists that predicted what we *actually* saw happen please raise your hand. Do we need more evidence?

Real Business Cycle theory, Rational Expectations, Efficient Markets Hypothesis? LOL. Yes, there do exist economics deniers. And then there are people that look at real world data and say, maybe all those theories are just horse-puckey.

By Kevin ONeill (not verified) on 12 Aug 2017 #permalink

I observe here an attempt to use the discount rate in prediction and prescription, which is overdue and laudable. I observe "complete disaster" or perhaps "catastrophe" remain quite undefined. A cliff becomes a slope at what angle? How do you project rates when slopes [death rates, disaster relief occasions rise by 200-400%, property insurance coffers empty, etc.] steepen? Where's the knee of the curve?

By Russell the Stout (not verified) on 12 Aug 2017 #permalink

What if there is no knee?

(apologies for use of reserved parentheses above)

By Russell the Stout (not verified) on 12 Aug 2017 #permalink

William, did you even read Willard's response to your charge he quoted the "idiot" Richard Murphy? If you did, and thereafter had taken even the slightest of effort of clicking on the link he provided, you would have seen that Willard *did not quote Richard Murphy*.

Six Degrees was relegated to the remainder tables by the retreat of more recent IPCC reports to 4.5 degrees, , but Lynas has survived to change his mind . As to the comparative analysis of existential threats, a significant proportion of humanity have electively exposed themselves to rather more than an extra two degrees in the last generation by swarming ashore on urban heat islands.

This cannot help endangered species,locked in biogeographic niches , but it speaks volumes to human adaptatbility -

Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations – the relations of bourgeois production – are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any. There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society, which the economists try to pass off as natural, and as such, eternal.

By willard (@nevaudit) (not verified) on 12 Aug 2017 #permalink

Yes, that's a knee. I assume the other knee would look like it's flattened somewhat by small insufficient efforts which grow and so change the resulting slope increase. As if the dinos could shoot missiles and break off some pieces which then fly by.

By Russell the Stout (not verified) on 12 Aug 2017 #permalink

Wrong boundary. Think trilobites with water hoses.

By Russell the Stout (not verified) on 12 Aug 2017 #permalink

Wrong boundary. Think salamanders with trebuchets.

By Russell the Stout (not verified) on 12 Aug 2017 #permalink

Denialism comes down to a conflict between what we know (or strongly believe) to be true and the consensus. What we believe to be true is based on either our own knowledge or those of our trusted sources; both of these are confounded by how adept we are at knowing our own limitations (D-K).

If you're unwilling to do the work necessary to understand the different sides of an argument in detail or lack a good bullshit detector your chances of relying on poor trusted sources is greatly increased. Every time your trusted source is wrong you'll probably follow along in lockstep. So a trusted source that also occasionally marks-beliefs-to-market is advantageous. Brad DeLong is the champion of marking-beliefs-to-market; he constantly revisits his past views on topics and points out where he was wrong, why he was wrong, and what he should have seen that he missed. This is opposed to the general internet adage that no one ever admits they're wrong.

I had never heard of Tim Worstall before reading Stoat. I daily visit at least a dozen different economic blogs mostly written by academic economists actively publishing and teaching economics and have been following most of them for a decade or more. That Worstall's name rarely if ever came up on these blogs in retrospect is a pretty telling clue, but putting his bona fides aside, a quick glance at some of his columns is all one needs to dismiss him as a trusted source.

I don't even know which of Worstall's columns WMC first pointed to that had me ROFLMAO. Could have been literally any one of hundreds if not thousands. Yes, there's the assumed ideological bent, the condescension, sarcasm, etc - but boiling away the political spin and concentrating on just the economics showed me someone that either by intent or design almost always gets *something* wrong. If Worstall wrote it - you know there are errors in it. He obviously is a firm believer in the imperfect stitch.

What this means to the reader is you simply can't take anything he says as reliable unless you're willing to research it further yourself. Just as important he's not going to come back a day, week, or month later and say - Hey, I got this wrong.

Here's a little example. I stumbled across it because the Laffer Curve and Reaganomics is what first got me interested in macro-economics. It's a topic I've followed as a layman now for close to 40 years.

Andrew Fieldhouse (economics PhD candidate, Cornell) writes a column in the Fiscal Times citing an economics paper. In a Forbes post, Worstall claims Fieldhouse read the paper wrong. Fieldhouse responds, that no, he read the paper correctly and that Worstall got it wrong. To my knowledge Worstall never admits he was wrong. There's clearly no correction accompanying his Forbes article.

Well, Worstall did get it wrong and Fieldhouse had it right. Again, this is typical for Worstall. I've pointed out many of those flaws in his facts or reasoning here before. Why did Worstall get it wrong? Did he read the papers cited? Did he understand the papers cited?

I mean, why wouldn't Worstall just contact the authors of the paper and ask *them* if Fieldhouse had characterized their results correctly? You see, this is *exactly* what the denizens of WUWT do - read a science paper, misinterpret the results, claim the paper supports their pseudoskeptic position, and dismiss any criticism.
Fieldhouse's original Fiscal Times article
Worstall's Forbes column

Fieldhouse's followup

Saez & Diamond

Slemrod, Giertz & Saez

And even though Worstall's mistakes have been pointed out to WMC numerous times it's apparent he still goes to him as a trusted source. Now, is that the behavior of someone seeking truth or someone looking to bolster their ideology with whatever happens to be at hand?

By Kevin ONeill (not verified) on 12 Aug 2017 #permalink

Russell in #39 doesn't know whatof he scribbles.

By David B. Benson (not verified) on 12 Aug 2017 #permalink

Worstall’s (woefully inadequate) response continues to lean on theory filled with problematic assumptions, in an effort not just to explain away but to actually deny real-world developments. It is the economic equivalent of insisting that a smoker could not get cancer because leading experts say the body is supposed to heal itself.

Addressing one of my primary points—that Worstall’s tax analysis assumes a false relationship between lower tax rates and increased investment—he argues that, as a matter of accounting, increased payouts resulting from tax cuts must be productive because, to paraphrase, “that money’s gotta go somewhere!” Unfortunately, if you look at the numbers, as the Roosevelt Institute has, there is simply no evidence that payouts are spent productively (or, at least not as productively as in decades past). To be fair, though, Worstall’s is a common misconception. So common, in fact, we included a detailed analysis of it in a list of FAQs about short-termism. [...]

Worstall’s next point of contention centers on whether increases in investment and growth would lead to higher average wages (the so-called “productivity-pay gap”). Here, Worstall makes another common mistake (or, perhaps, sleight-of-hand trick), which is swapping average wage with national income. Vox’s Matt Yglesias did this, Larry Mishel refuted him, and Jared Bernstein (no relation) summed it all up with a brilliant Microsoft Paint transposition of Larry’s head on a wrestler’s body. The problem, as Mishel and the other Bernstein explained, is that national income includes incomes of the top 1 percent and thus skews the relationship between productivity and median wage, which is what we are actually concerned with.

Whoever quotes TimW &c.

By willard (@nevaudit) (not verified) on 13 Aug 2017 #permalink

Wiki gives us various definitions of 'economics' starting with Adam Smith up through Lionel Robbins, which it cites as "perhaps the most commonly accepted current definition of the subject: Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."

What is common to all of them is you cannot divorce humans from economics. This isn't mathematics. This isn't physics. This isn't any of the hard sciences. Atoms don't care what's destined to take the place of the mudshark in your mythology. Economics might very well care.

The stance that Timmy, Mosher, and our host have taken is a denial of the very definition of economics. You cannot separate economics from human behavior with its complex and varying ethical, moral, and emotional meanderings.

Yes, things would be a lot simpler if it just came to down to pure math. And??? The problem would go away if I were in charge of the climate fairies. So??? That ain't the world we live in and economics is not just math.

By Kevin ONeill (not verified) on 13 Aug 2017 #permalink

If economics studies human behavior, then let's study the behavior of those who are actually replacing fossil fuels today.

By Paul Kelly (not verified) on 13 Aug 2017 #permalink

Dang, This is good reading.

They don’t understand economics.

Nobody understands economics. The dumbest of all are those who are certain they do understand economics.

W, inline to mt:

[You can turn this into a morality issue if you like, but I’m not sure it is helpful. I think it amounts to shying away from the economics; trying to turn it into “you’re a bad person if you don’t agree with me” kind of problem... FWIW, I agree, at some level I agree we do indeed hit warming so high that we’ll kill enough people that it would be morally unacceptable -W

Economics is sometimes called the dismal science; all the more reason not to shy away from it. If nobody had to pay random, disproportionate, open-ended prices for our 'free' fossil carbon emissions, nobody would care about AGW. If no one was hurt by AGW, disputes could all be resolved by negotiation. But people are already being killed, impoverished and dispossessed by AGW. That makes it a moral issue, whatever else it is.

William, from your response to mt it sounds like you're saying fewer than 'enough' deaths would be morally acceptable, not just economically cost-effective. Do you agree that some number of deaths have already occurred due to AGW? Do you feel that number is morally acceptable? Am I only a bad person if my acceptable number is greater than yours?

[I think that at the moment measuring deaths from GW would be difficult, because they are mixed in with deaths from "weather"; just as attributing individual storms to GW would be difficult. This is a measure of how not-terribly-bad it is yet. At some future date, if we continue our current trajectory, I would expect this to change.

But note how one-way your question is: what about the reverse: how many deaths have occurred as a result of efforts to prevent GW? Do you accept that "some number" have occurred? Do you feel that number are "morally acceptable"? -W]

Damn, AGW is a hard problem. Once again I'm glad I don't have offspring.

By Mal Adapted (not verified) on 14 Aug 2017 #permalink

David in #46 seems blissfully unaware that the largest migration n human history is our contemporaries move from rural to urban habitats,- citires now contain more than half of mankind.

In a further insult to the climate-fearing and cliche'-repeatig classes, new urbanites more often than not move to cities closer to the eqautor than thier place of birth.

too funny.
Remind me once again, what are our favorite topics?
Yes. Thanks.
Can pick us all out in there.
Might even make Stoat smile.
Stoat, nice picture.
Fortunately camera lens break around me.

William, any idea why my comment of yesterday is still awaiting moderation?

[Because I was on holiday, sorry. As to why you were in moderation at all: no idea -W]

By Mal Adapted (not verified) on 15 Aug 2017 #permalink

Humans are bad enough. How about the rest of the species on this planet? Not a single economy out there, let alone a discount rate.

By Toby Brown (not verified) on 18 Aug 2017 #permalink

How about the rest of the species on this planet? Not a single economy out there, let alone a discount rate.

This is what I don't get: much of biology is made out of economies (there's a whole discipline called Ecology for starters), and yet most economists seem to have zero idea about the fundamental set of relationships that pay the bills. By Pay The Bills, I mean a) provide oxygen for those of us who breath, b) feed all the humans on the planet, and c) provide livable environments/moderate climates.

I find it bizarre that ECOnomics is solely concerned with human financial relationships, while our unbelievably fantastic and generous Growth Economy continues to unsustainably eat away at both "our" biological capital and the very systems that provide food and oxygen. The dismal science indeed...

A number of commenters here are cavalierly sanguine about the impact (or perceived lack thereof) of a 4 °C increase in mean global temperature. To support their optimism they appear to be resorting to analyses that consciously and unconsciously omit a number of parameters as "externalities", and they assume coefficients for other parameters that are not necessarily based on anything related to empirical reality.

The biosphere integrates such fluctuations in mean global temperature, and it will do so in the current circumstance - slowly, (or not so), implacably, and with absolutely no regard to the desires of people who wish or hope otherwise.

Empirical evidence from past events suggests that the magnitude and rate of fluctuation of the current human-caused warming event will have profound biological consequences. The recorded and archaelogical histories of human civilisations similarly suggest that societies are more vulnerable to perturbation than 4 °C warming-optimists posit.

When it comes to biological calculus, which in the end is the only calculus that matters, I would rather pay attention to the empirical record than the hopes and the Suda-scribbled estimates of folk who are a little too rooted in anthropocentric and egocentric priors.

By Bernard J. (not verified) on 30 Aug 2017 #permalink

A coda to the issue of warming...

There's a profound difference between the coping ability of humans moving to different temperature regimes (and usually aided by the manifold benefits of fossil-fueled technologies in the process), and the shifting of the planet's mean global temperature baseline by the same amount.

Amyone who thinks otherwise is shouting to the world their ignorance of the issue.

By Bernard J. (not verified) on 30 Aug 2017 #permalink

Economists Are the New Astrologers |
| from the A-Star-To-Guide-Us dept. |
| posted by mrpg on Wednesday August 30, @03:42 (Business) |
| |

An Anonymous Coward writes:

When Christopher Nolan was promoting his previous film Interstellar,
he made the casual observation that "Take a field like economics for
example. [Unlike physics] you have real material things and it can't
predict anything. It's always wrong." There is a lot more truth in
that statement than most academic economists would like to admit.

[...] several famous Keynesian and neo-classical economists,
including Paul Romer, [...] criticized the "Mathiness in the Theory
of Economic Growth" and [...] Paul Krugman. In this instance, though,
Krugman is mostly correct observing that "As I see it, the economics
profession went astray because economists, as a group, mistook
beauty, clad in impressive-looking mathematics, for truth."

[...] But more fundamentally, as Austrian economist Frank Shostak
notes, "In the natural sciences, a laboratory experiment can isolate
various elements and their movements. There is no equivalent in the
discipline of economics. The employment of econometrics and
econometric model-building is an attempt to produce a laboratory
where controlled experiments can be conducted."

The result is that economic forecasts are usually just wrong."

"[Levinovitz] approvingly quotes one economist saying "The interest
of the profession is in pursuing its analysis in a language that's
inaccessible to laypeople and even some economists. What we've done
is monopolise this kind of expertise.[...] that gives us power.""

[...] because economics models are mostly useless and cannot predict
the future with any sort of certainty, then centrally directing an
economy would be effectively like flying blind. The failure of
economic models to pan out is simply more proof of the pretense of
knowledge. And it's not more knowledge that we need, it's more
humility. The humility to know that "wise" bureaucrats are not the
best at directing a market "

[0]Economists Are the New Astrologers


[1]Original Submission

Discuss this story at:


[This may be somewhat truer than you know, though possibly not in the same sense as you think. Astrologers - like Copernicus or Galileo - were well aware that their forecasts were worthless. But they produced them to fill demand. I hope you're not suggesting that many economists are also well aware that forecast isn't their primary goal; read Popper or Hayek -W]

By Hank Roberts (not verified) on 30 Aug 2017 #permalink