Maybe I'm incredibly stupid but I still can't understand why everything in our lives have to be entirely devoted to "the economy". We are modern day slaves of "the economy". Many old people were left to die in the COVID-19 because of "the economy". The climate is going worse and the environment is being destroyed because of "the economy". But I can't see what is what "the economy" has given to us in return.
But, "the economy" is generally just a descriptor for what people need/want, and what they're willing to do for it.
A phrase like "slaves of the economy", with the implication that someone should be entitled to escape that condition, is about as ridiculous as thinking you are a "slave to nutrients" or a "slave to oxygen" or any other physical constraint. You can't escape it; you have to eat--what are you willing to do to get food?
However, what I think you're probably more upset about, and what you probably should instead be phrasing it as, is economic manipulation. That is something that can legitimately be unjust. Power and information are some tools to manipulate or benefit from economic conditions to a greater extent than others, and therefore have more boats or leisure time or political positions (or food or N95 masks or jobs etc etc)
I understand GP's post in a different way - While I consider economic indicators to be very important, I think they fail to measure properly "quality of life" while ate the same time being used as surrogate for it.
For example, a public park may be a great asset to the people that live around it. But it generates little to none in terms of GDP. Privatizing it and turning it into a parking lot has more economic activity, while making the lives of people meaningfully worse.
That we don't have good measurements to reconcile that contradiction is what turns us into "slaves of the economy"
Feels like a cousin of the McNamara fallacy: what can't be (or simply isn't) measured may as well not exist. (Probably most people who have encountered OKRs are familiar with this).
RFK (the original one, not the brainworm one):
> The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.
> That we don't have good measurements to reconcile that contradiction
We do have many measurements to reconcile that.
We know how much particulate air pollution from fossil fuel combustion increases health care expenditures. We know how not having save places to exercise outdoors affects general health and results in sedentary lifestyle diseases.
But most of our decisions, individually and as a society, are predicated on short term convenience and gratification, not long term health, so we ignore the measures we already have.
> It's weird to me that we organise our lives based on one social science and ignore all the others.
40-50% of most countries production goes to government projects, so no we don't ignore everything else than capitalism. We are about 50-60% capitalist at most.
Note that government projects also need you to work, work is a part of every system, it isn't capitalism that forces you to work people are forced to work in socialist and communist states as well.
> But, "the economy" is generally just a descriptor for what people need/want, and what they're willing to do for it.
It’s not exactly about what people want, but rather what capital needs to grow and increase its value. Most people have no say in these decisions and are left with only two options: comply or starve.
When someone complains about "the economy", they aren't complaining about the abstract idea of an economy, they're complaining about a particular economy (usually the one they live in). One could literally be a "slave to this economy" in a slave-based economy, or figuratively in an economy where other people own the land (for example) and force them to work.
But that makes these claims of "slavery" even more absurd. Would you have to do more or less living as a subsistence farmer? Would you have better or worse quality of life?
That's an easy one: no way in hell, it'd be SO much worse. Our society can only exist with extreme specialization.
Hell, if we take into account that the land available couldn't even remotely support the people living on it (~2km2 per person per year), so there'd be a famine under those conditions and you'll what's being suggested as "alternative" is effectively extreme suffering followed by death for 95%+ of the population, maybe 99%+.
Subsistence farming is orthogonal to slavery. A farmer could be free, and a slave could do specialized work. Even in the antebellum South, there were slaves doing advanced work, like James Derham who worked as a doctor.
Most people on this site are beneficiaries of this economy, fortunate to have many options and resources. Not everyone is so lucky.
I'd like to think it would be possible to build a specialized, prosperous economy without economic exploitation, but we certainly aren't there yet.
If you think the cushy white collar jobs most of us HN readers have "mangle and shred your body", try non-mechanized subsistence agriculture for a few years and see how that compares.
I mean, I see what you're doing there. But it is more of a fallacy of language to get to accusing me of rationalizing human slavery. So that is a bit crappy.
Again, "the economy" is just supply/demand. "The economy" exists with or without humans. Animals are subject to natural resources around them. A human living "freely" in the forest is subject to it.
What you did in your later lines was fulfill my exact original recommendation to OP -- they are not talking about "slave to the economy", they are talking about "slave to the slave masters who manipulate our economy to a greater extent than we have resources to overcome".
It's all semantics, but phrases like "slave to the economy" come off as something a 13-year-old shouts after seeing a couple pop-psych youtube vids.
As long as you have no monetary income and cause no trouble, the people with guns won't persecute you. The people with guns still persecute you?
Try another country with a less competent government.
It's not slavery as long as you have this choice - but I don't think you'll like that existence.
You are not a slave to the economy, you are a slave to violence.
Other people with a capacity for violence will hurt you and claim the land where you live. And that's nature.
The economy is just the soft-core version of that - with extra rules.
Oh, baloney. "Slave of the plantation" is different from "slave of the economy" because one was, you know, literal slavery. And the other isn't.
> If you don't participate in the economy, you die. Not through some physical impossibility, but because the owners and masters will not allow you food, water, shelter, medicine. If they could control air they'd sell that too.
It's not that they won't allow you food, as if they are consciously controlling whether you get a morsel today or not. It's that your food supply is not their responsibility. It's yours. You want food? Go do something to get it.
You know who is responsible for feeding others? Slave owners.
You have that control; they don't. Be glad of that, even if it means you have to go to work.
> If you don't get a job and sacrifice 98% of the income generated by your work to your owner and master, you die.
Not at all. You can work for yourself - start your own business. Most people won't take the risk - or take on the work - to do it. That doesn't make them a slave, though.
And, 98%? Have you seen the profit margins of, say, grocery stores?
Do you know how to grow vegetables, how to produce antibiotics, how to diagnose and treat diabetes, how to operate a farm, how to build up and run an electrical power grid, how to build a fridge, a TV, a car or a motorcycle?
No?
The “economy” allows you to trade something that YOU are capable of into an imaginary representation of currency which you can trade in return for things you need but are incapable of doing yourself.
And it does that so well and so effectively, that mankind has achieved a quality of life unseen in human history. Children don’t randomly starve to death during a winter, your mom doesn’t just randomly die from an infection any more and we have a pretty chilled live compared to our ancestors 10 thousand years ago I believe.
Yeah, I don’t know what the economy has given me in return either.
I guess the issue regarding the OP is that there needs to be some kind of balance. It's great that we have all these things, but it's at the cost of ever-increasing productivity and time. Perhaps in the modern age this trade off no longer seems fair, at least at current proportions.
I would describe that more as a distraction or a cope in response to something, not as a balance. With balance you wouldn't need excessive entertainment to begin with.
It'd be like saying we have cigarettes to deal with stress or mental health professions to deal with excessive expectations of society. They don't address the cause in the first place.
You used to start out at an entry level job, and work your way up to something better. You could see how to get to "better" from where you were, and what it would take. When you got to "better", you were glad for the improvement. Yeah, the guy owning the factory had it a lot better than you. But as long as he gave you a route to a better life, that was good enough for almost everybody.
What changed? In my view, three things.
First, the route to "better" is a lot narrower these days. People are a lot less convinced that they can get there from where they are.
Second, people don't expect to have to work their way up. They expect to have it all on day 1. They expect instant success. When they don't get it, they get discouraged.
Third, people are finding that the promise is empty. A better job gets you a nicer apartment that feels just as empty as the previous one did. You're just as lonely there. Your job feels just as much like a soul-crushing grind as it did, maybe more so. In some fundamental way, the stuff you can buy with money isn't enough. People don't know where to find it, but they kind of expect that their job will give them what's missing. And it doesn't.
It’s bullshit that I’m not able to watch Netflix all day and write poetry. My ancestors worked hard. So many people are so rich. The government should tax billionaires and give it to me
What an incredibly toxic way to view dissatisfaction with modern day hustle culture. There's an incredible amount of activities that contribute to society but aren't valued with money - only with wellbeing.
There’s a difference between “knowing how to”, “been able to” and make financial sense to do it.
What you’re describing is a “society”, ie everyone has a dedicated purpose, that’s similar to yours “knowing how to” and “been able to”.
Do you really need a monetary systeem, ie economics, around this? I’m not making a case for North Korea/Soviet Union, but do we as a humanity really need a lever (money) to push the society forward
They have nothing you describe -- no agriculture, no antibiotics, no farming, no electricity. (The fridge, however, they got covered.) They are quite happy that way. Certainly happier than the people around me in NYC.
Perhaps quality of life is about more than just material goods.
I read Kabloona by Gontran de Poncins a couple decades ago and it's stuck with me ever since. I don't think I've ever seen it mentioned online before. It's high on my list of books that should be top-rated classics, but as far as I can tell it's basically unknown. If you've never heard of it, seek it out, it's fabulous!
Edit: Since alecst has obviously already read Kabloona, I might as well give a few more that are on that "list": Winter Wheat by Mildred Walker, Goatwalking by Jim Corbett, and Hyssop by Kevin McIlvoy. Maybe you'd like one of them too.
> Perhaps quality of life is about more than just material goods.
With subsistence agriculture the US can support maybe 2-3% of it's current population. The EU is (far) worse on this front. And with the Eskimo's way of life it can support 0.01%. So what about that little problem? And this can't be fixed without changing that lifestyle ...
That this superior way of life is suffering and death for nearly everyone never seems to get discussed for some reason.
Currency as a way to trade value and skills is a beautiful invention, and that is to be credited for a lot of modern quality of life.
But everything else in the economy (extreme taxation, medical care, housing) has become increasingly predatory over the decades.
> how to diagnose and treat diabetes
Take this as an example. The "economy", as a machine, has learned to subsidize corn syrup, infiltrate every food with forms of sugar including what children eat at school (fuck chocolate milk, PB&J sandwiches, canned fruit in sugar syrup, none are healthy), then profit off of them when they get diabetes later in life. Insurance-scam them by making them pay premiums per month but still not cover their medical costs in full, make them pay for any preventative care they want to have because a doctor didn't "prescribe" it and it wouldn't be profitable to prevent disease. Make healthy food expensive, so that you can get as many people to get diabetes as possible. Lobby against having kitchens in schools so that they are forced to serve even more unhealthy shit. This is what capitalism as a machine has learned.
Diabetes shouldn't even be such a pervasive thing. It's highly preventable. It is in fact of the most preventable of common diseases. The economy machine, however, has realized that diabetes is profitable for the people who own and control the machine (Wall Street, insurance companies, banks).
This is just one example, but the entire system has become predatory.
In the country with the highest GDP per capita it may appear to be prevalent more because people seem to make VOLUNTARY choices with respect to their diet and exercise regime that do not tend to go well with their health.
Capitalism is not equal to “the economy”. “Currency” on its own doesn’t increase the wealth of a society. It is correct that unconstrained capitalism is unstable. Most countries in the world understand that.
1. In my career so far, I have paid enough taxes to buy 3 houses in cash but I still can't afford 1 house in cash. The machine says "you can buy a house with debt" which is yet another way to create a way to extract money from me when I should have just been able to buy 1 house in the first place. Most of the population has been brainwashed to think "I must pay my taxes, I must go into debt" and hasn't opened their eyes that the system is broken in the first place.
2. The company is taxed when they pay me, I pay taxes on that money again, and then I pay taxes yet again when I buy stuff with it (most of that money is being used to pay someone else's taxes), and then in some cases yet again just for owning it. It's frankly bonkers. 80%+ of money I make for the machine goes to paying taxes of sorts. I see very little of it.
Yeah, the country needs money to support infrastructure, you say. Fine. For what the US provides its citizens, it really doesn't need that much. There are countries that tax at similar rates to the US. They have well-developed railway systems, almost free healthcare, free university, they control crime effectively, they're delivering actual value to the citizens. If you dig into it, the US is a massive money laundering scheme -- the economy has learned to tax the fuck out of citizens without actually returning that value to the citizens themselves.
~40% of every dollar produced in the US gets collected to federal, state, or local taxes. It is entirely possible that this could be 80% for some people.
Tax as a percent of the economy has gone through the roof, both as a percent of GDP, and as inflation adjusted dollars.
If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4.5x. This means someone today pays about 10X the taxes (controlling for for inflation!). State and local taxes have grown even faster than federal taxes.
Is the typical taxpayer getting 10 time more back from the government? Do we have 10X the schooling? 10X the police and safety? 10X the roads?
>If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4.5x. This means someone today pays about 10X the taxes (controlling for for inflation!). State and local taxes have grown even faster than federal taxes.
That's cherrypicking. Income tax as % of GDP basically has stayed the same at around 8% since after ww2. Most people wouldn't think of the entire time period past ww2 as "over the decades".
How's that surprising? The duties of the state isn't fixed. It can grow with time, hence greater spending in absolute terms. Not to mention stuff like cost disease causing prices to go up even for the same stuff.
I think it is interesting because similar % GDP seems to be treated steady state function of government, not one that inherently expansive.
For those of us that have been around for a while, it seems shocking that real, inflation controlled government taxes and spending per capitia is >2x that of the 80's, because experientially, many of the services seems no different, if not in decline.
I also think it is interesting to think about what government duties become more and less difficult to maintain with growth, and the implications for what types of objectives the government is well and poorly suited to achieve.
I think the Baumol effect is a helpful lens for exploring this, so I think you.
>~40% of every dollar produced in the US gets collected to federal, state, or local taxes..It is entirely possible that this could be 80% for some people.
>This means someone today pays about 10X the taxes (controlling for for inflation!)....Is the typical taxpayer getting 10 time more back from the government
So the amount increased 10x , what does that have to do with getting 10x your money back?
Or are you saying that since it's 10x more there should be 10x greater quality?
yes, I would expect the quality or quantity to be vastly greater. Ultimately, 10x the utility in one form or another.
I dont think the changes in military or interstate justify a 1,000% higher taxes on an ongoing basis.
with respect to 40+%, property tax would be an easy way to eat up an arbitrarily large portion of income. Similarly, fixed fees and fines can eat up a lot for low earners.
Because generally, in broad strokes, a good economy causes good everything else. If it's easy for people to get a decent job, then people lead happier lives, fewer homeless, lower crime etc. If goods are accessible and affordable, everybody goes yay. Diseases get treated, lower suicide, etc.
Obviously when you zoom in it's not black and white at all, eg the US has incredible GDP but also lots of abject poverty. But even in some imaginary proto-USA where the inequality is 10x worse, if the economy shrinks, fixing that is going to be harder than when it expands.
I agree with your objection that it's ridiculous to do "everything" for the economy. But wanting the economy to be healthy should be a thing everybody can get behind, from far left to center to far right, even if they violently disagree about how to take it from there. So a paper called "the economist" worrying about the economy sounds pretty sane to me.
Well, diverse situations summarized by the word “economy”, right?
In general a good economy has opportunities, and stability. A bad economy is filled with many pitfalls, perverse outcomes, and human suffering. What’s interesting is how the effects of a bad economy divide between people who are devastated and those who weather the storm and maybe even profit—smaller and smaller groups, which is an inversion of what we want from a good economy.
All common sense, no? I think you’d have a peculiar life if these things dont effect you.
The economy is the abstraction for all aspects of getting people the goods and services they want and need. Literally everything you don’t produce on your own. How did you access this website if you have never received anything from the economy?
“But I can’t see what is what the economy has given us in return” is such an absurd statement that the only generous interpretation is that you really didn’t think through it before posting.
People rightly care a lot about the economy because they care a lot about the goods and services that they consume but don’t produce themselves. We don’t sacrifice everything to the economy, no country in the world does, but it holds extremely high priority.
He starts out by noting that the economy as an idea is very recent invention. And yet it tops the list of voters concerns.
"If you had told Mr Gladstone that "the economy has grown this year", he would not have understood what those words meant."
(William Gladstone was the British Prime Minister, on and off, between 1868 and 1894. He is considered to be one of the great British PMs.)
"Gladstone was the most financially literate statesman of the 19th Century. But the idea of something called "the economy", which could "grow" or "shrink", did not exist."
"It (THE economy) first appeared in a major manifesto in 1950 and didn't get its own section until 1955. That's also when terms like "economic growth" appeared in Parliament."
“What we now call "economics" was usually termed "political economy”. "Economy" was not a technocratic exercise, but a moral and political arena."
"… it subordinated a moral and political judgment (what is "good economy?") to a blunter question: how do we make "the" economy bigger? In reality, economic choices were still moral and political. But they were cast as technocratic questions about "competence" and know-how."
"(and) … it turned "the economy" into a "thing", to be weighed against other, different "things": such as "the environment" or "saving lives". And it encouraged a tendency to make "growth" the goal, without asking what was growing, why and to whose benefit."
I recommend reading the whole thread if you are interested to learn how we got here.
And looking forward?
"Recognising that our concepts are historically specific - that they have been different in the past and might be different in the future - helps us to imagine other ways of talking and thinking in the present. In an age of so many economic challenges, we surely need more of that."
I’ve spent decades thinking the same, and decided I don’t want to be a part of it. I work as little as possible and spend my time exploring the world, hiking, camping, eating cheap street food.
Even driving my own vehicles around the world I spend less than $20k a year, so I don’t need to work much.
I just don’t participate in the things I don’t want to - no phone, no tv, no new clothes, used car.
Cool, that’s your choice. But it also exists within the economy. Nobody demands you to play a particular part in a democratic market-based economy, but you exercising your ability to buy cars, hiking gear, airfare, tents, and cheap street food and your choices are all just as much part of the economy as the choices others are making.
It's given you a place to live, and groceries, and plane tickets, and magazines, and allergy medication. Modern consumers have been desensitized by abundance to the point where they are detached from physical reality. The economy is real, and damage to the economy has real consequences. Growth of per-capita GDP almost always leads to increased living standards, and shrinking per-capita almost always leads to decreased living standards. What are "decreased living standards"? It's more paying more for the conveniences of modern life like plane tickets, or restaurants, or homes with useful appliances. At the macro scale, it's having less money available for medical research and welfare. It's rising prices, without a corresponding raise in income, resulting in less to go around.
Political power is a function of economic strength. This is as true for individual politicians as nation states.
Victorian Britain has the biggest navy in the world because it could afford the biggest. Tony Blair has the most political discretion of any modern PM largely because the economy was so strong during his tenure.
Another reason it had the biggest navy is that it didn't need to spend much on an army to prevent invasions because it has no land border with any other power.
I think of "the economy" as a set of emergent principles that come from many people trading goods and services. For example, the USSR had a black market, which was an economy. No matter how much regulation was put into place, an economy (though hobbled) still emerged. Economists study this emergent behavior and use economic principles to accomplish their goals (whether that's to improve the well-being of people, or to increase a company's size, they're both applying these studied principles).
Our human systems are too complex for us to comprehend. So everybody's internal models of the world are often radically/tragically incorrect.
And our words are necessarily poor at defining an abstract conceptual system that defies our comprehension. The definition of emergent as apples to an economy is hard to grok. And hard to communicate, even when the two communicators have a common mental model (sometimes education, sometimes acquired via social media or propoganda).
You can see politicians on the receiving end of systemic forces - where it seems like the politician doesn't comprehend what is happening because their model is wrong. We then create stories about their incentives - layering unintended misdirection on top of our collective ignorance.
Reminds me of Heinlein's razor, lol: "Never attribute to malice that which can be adequately explained by stupidity."
On the topic of communicating complex systems, Dynamic Land[1] is explicitly working on explaining systems through interactive visualizations (among other things), you might find it interesting! It's still in the research phase, but I love that it engages as many senses as possible to help build intuition.
dynamicland is interesting. The website looks great - definitely some motivated graphic designers (although I had a few usability issues using mobile Safari).
That said, I would definitely love to visit the labs to have a play with some of the stuff they have been developing demonstrated in https://dynamicland.org/publications/ (Note: can't click/tap pretty tabs on right - the headings on the page are the links to click/tap)
Yeah. Unfortunately they haven't published any of the code or instructions (sometimes it seems like Bret Victor is a perfectionist), but folk computer[1] has been a lot more open (I've set up my own system). It still is missing a lot of features though.
Because the economy is the only thing about us that matters. It is the only thing that distinguishes us from the animals we rule over. Everything we do is in it's service (or disservice). Everything you have is because of it, and everything that is denied to you is also because of it. We aren't just modern day slaves, but biologically enslaved to it. Nothing about this is modern. It has existed every since people decided to live together and create society. To escape slavery and become absolutely "free" you need to escape society.
The real gap is "the economy" vs "living standards". For example, quality adjustments for inflation stats are so bad as to make comparison over long periods meaningless (a few years ago, the ONS had to retract decades of inflation data due to poor quality adjustments...and this was for components where quality adjustments are quantifiable).
One of the reasons why is because you can clearly see that life today in most rich economies has plummeted in quality. Technology has spilled over from the US but if you take away those gains, there is very little underlying improvement. Skills are collapsing, governments/companies struggle to provide basic services, disability is skyrocketing, it is a complete mess (and this is often linked to "the economy", look at Canada, look at the UK, set on paths of permanent decline for short-term political gain).
This. My boss had the nerve to tell me inflation is not a valid reason for a discussion of raises all the while company ( and its upper management ) had a rather good year and did not hesitate to reward themselves accordingly. Surely, previous year's bonuses would have sufficed. Honestly, it is a public company. Do they think we don't read quarterly results that they themselves publish?
I am effectively being paid less and the expectation is that I somehow work more. In fact, and this is genuinely the part that gets me more than anything else, when I mentioned it to my extended family during a social function, the response was: "can't you work on a train?".
I don't get it man. Is it some sort of weird generational gap? What gives?
This probably exists or maybe it's impossible to measure. But is there a widely adopted quality of life index? Or "fulfillment index"?
Like if someone is commuting an hour working full time in a LCOL area and can't afford a house, that would be scored lower than if someone is working remotely for a huge salary from a various resorts around the world, which would be a higher score.
You don't need an index. Are the people in your country happy or not? Are they having children? Are they participating in civic society? Crime? Signs of social unrest?
There is an issue with people being systemically negative but it is very obvious which countries are thriving at a high-level from aggregate behaviour.
The problem is that some societies (unsurprisingly the ones that have a problem in this area) do not want confront this. So you have countries where the economy is collapsing, it is obvious to everyone...and they are getting economic policies from corporate lobbyists...to fix "the economy". I think this is getting at the spirit of the OP's point, most people who talk about "the economy" just have a very short-term, very self-interested take.
No, it isn't. An index is a quantifiable measure. I said the behaviour of people in the aggregate, not measuring the behaviour of people in the aggregate.
How do you measure civic participation? Why would you even try? It is genuinely baffling to me that people view quantification as an end in itself when any understanding of human behaviour tells you that a huge proportion of the population just shut their brain off when a number appears (that is the point made in the original post, we have this problem with "the economy" that leads to people making such bad policy choices because of this mindset).
Quantification is not an end in itself.
I can think of many ways to measure civic participation and reasons I might want to, especially if I think it is healthy for society and wanted to encourage more of it.
As I said, this is the issue. "The economy" is a direct consequence of people thinking that everything can be quantified. It is so shallow until you realise that this thinking is pervasive in government, and explains why "line goes up" whilst everything valuable is collapsing is so prevalent. In other words, to explain why basic societal functions are collapsing whilst you have people saying things have never been so good requires an extremely reductive mode of thought.
When common people talk about the economy doing well, they mean that it's easy to make a good living. You can get a job, a house, a car and food. Maybe you can even have leisure and a bit of luxury.
When economists refer to the economy doing well, they talk about a bunch of indices being in a range they consider good. These indices are constructed in a way that is supposed to make them correlated with desirable outcomes on a large scale, but what's considered desirable is ideological and the indices themselves are often useless.
When capitalists talk about the economy doing well, they mean that they're getting richer at a satisfactory rate. People are buying their products, and can afford to pay a lot for them. Their assets are appreciating.
You probably guessed that these aren't the same things, but they're being conflated.
The indexes usually aren't "constructed", PALFP is literally just calling people and asking them if they have a job and are between 18 and 65.
There is some construction going on; seasonal adjustment is useful for the same reason you shouldn't assume the unemployment rate goes up every weekend.
Not to mention that considering full employment as the desirable state assumes a certain ideology (work is good, low unemployment pushes wages up which is good, etc.).
In Brazil the entity "the economy" is called "os mercados" meaning "the markets". It is handled by the press as a personality who has humor, wishes, preferences and power. It is actually somewhat funny or curious when you read things like "the markets didn't liked what was said and shares fell".
Of course, it is clear that politics has impact on investors but, other than being able to vote, there should be no other way to influence politics in a democracy.
The "economy" is just a word for how a group of people decide to allocate labor and resources. How to do this fairly and effectively is a subject of debate - whether its free markets, central planning, pillaging, piracy, or anarchy, I don't think there's any version of it where you aren't doing some kind of "work" to make sure your needs are met at the end of the day. Of course the overly complicated and abstract nature of today's economy would make anyone question if the (alleged) "value created" still corresponds to "real value", and if all this complicated stuff isn't more trouble than it's worth. Growing more food and building more houses is value that everyone understands. Keeping the bond yield curve from inverting.. not so much. Still there's no immediate alternative and no obvious fix, so we have to work with what we got.
The economy is us. The economy is how we express our needs and "haves" at scale. In smaller settings - family, friends - you can often just communicate the needs/haves directly, but anything beyond that needs some efficient tool. Now the current system how we do banking, money, who decides, etc... that's indeed broken at the very foundation.
On the flip side I can wholeheartedly recommend the Margaritaville episode of South Park! Such a beautiful satire.
> But I can't see what is what "the economy" has given to us in return.
Stuff. You like stuff, I like stuff. If you had more stuff of one kind you could do different stuff, good stuff, even. And the people out there doing good stuff could do even more if they had more stuff to do it with. Everywhere you look, people like stuff. People with more stuff are happier on average, every time it's measured. People with serious stuff deficits end up being the ones to start wars, even.
"The Economy" is just the stuff. There's no magic here. You're imagining a villain, but it's all just stuff.
To tag on, the economy gives us more than just physical "stuff" (though that's one of the easiest things to measure). Do you enjoy travel? How about clean water, yoga classes, or therapy? What about the ability to post a message to complete strangers over the internet? As much as we could, in theory, do all of those things without having an economy to support it, money is a shockingly good way to give you whatever it is that you value.
Yes, some people have more money than they know what to do with (and, I would argue, than is good for them or us), but I've seen no reasonable suggestions that as many of us can have what we want without a reasonably open market economy. I don't think we're at a local optimum in the fine details of the rules for that economy, but I don't think moving to a whole different part of the possibility space is likely to be better than where we are now.
It's stuff, but most importantly, food and shelter. It's the thing that builds places to live and claws calories out of the ground. When the economy grinds to a halt people start to go hungry.
(People do go hungry anyway. We often do kind of a bad job feeding everyone, considering the enormous technological and logistical resources available now, but that's a historical anomaly)
> “But I can’t see what it is “the economy” has given us in return.”
More wealth for more people faster than anything else in human history? Add in all the things that come along with that like reduced infant mortality, improved longevity, less violence, etc.
Compare that to what anti-economy marxists deliver: a lot of ideology followed by death of millions.
Markets are really good at solving problems and organizing resources efficiently - they’re not perfect and exist within political natsec concerns, can have bad incentives that lead to tragedy of the commons types of outcomes, but those can and often are mitigated when it’s in the interest of the parties to do so.
Uh, it’s given you a lot in return. It abstracts away a lot of the human condition for a lot of people. Personally, I don’t want to go back to growing food to feed myself and bartering. Most people are aligned with that point of view.
Edit: In fact, it works so well, you can ask what it does for you.
Many people do say they live paycheck to paycheck in surveys, this is true. But in the same surveys they say they have three months expenses in savings accounts. So it's pretty unclear what they think they mean by this.
the history of mankind is basically nothing but suffering. We are living in without a doubt the best time to ever be alive. The economy is the reason why we arent all killing each other
I think this is a pretty common and growing sentiment that I've felt too. One thing that has grounded me is learning and reminding myself that capitalism has driven extreme poverty across the world to the lowest share in known human history: https://en.wikipedia.org/wiki/Extreme_poverty#:~:text=Extrem...
I'm not sure if this on its own is enough to make up for the negatives, but it did personally restore some perspective that there is some real good to it alongside the bad. So I've personally shifted from more doomer sentiments on peak capitalism to feeling a little more hopeful. (That despite the dysfunctions of it there could still be a functional good foundation worth keeping and iterating on rather than the only solution being throwing the baby out with the bathwater.)
Capitalism is a concept, a tool to organize production in a society. It doesn't do anything by itself.
And the capitalist didn't do any of those things.
It was the social democracy that demanded and made capitalists around the world to share the benefits of the system to the rest of the society.
For example in the Victorian era Britain the working class people were dirt poor working 16h a way 7 days a week. The capitalists didn't give anything willingly the working people had to demand these things via unions, labor movements and social democracy.
Trying to understand what you're saying, especially with 'let's fix that right there'.
Is it basically the idea that the good we've gotten out of it (like driving down extreme poverty) has required 'social democracy' as another concept or force, to bend capitalism towards something better? And that a more useful perspective is zooming out from just capitalism by itself to include that?
I do feel like I still have a pretty limited understanding of how all of this fits together, so I appreciate you trying to teach me something here.
The fundamental precondition for all these changes is that capitalism massively increased the overall wealth of Britain. The market did the rest: higher wages, lower prices, new inventions improving life for everyone, increased living standards.
Workers negotiating and fighting for better condition, and joining forces with other workers have nothing to do with social democracy, it's a normal market mechanism to regulate the supply and demand of workers.
Where social democracy enters is with the political activism and the relative legislation, limiting working hours and banning child labor.
> Maybe I'm incredibly stupid but I still can't understand why everything in our lives have to be entirely devoted to "the economy".
Things like CPI are important because they underpin things like wage increases in contracts as well as government pensions. It's probably one of the most analyzed numbers that is released.
And while there's always measurement error, getting things accurately—especially trends—determines planning for things like factory expansions, production runs, supply chain contracts months out. These will determine staffing and employment needs—the livelihoods of many, many people.
"The economy" means employed people who have to pay rent/mortgages, groceries, etc.
What has the economy given us? Among other things, computers and network cables, so you could complain about the economy to the whole world, instead of just to your neighbors.
Some years ago (during covid? Can’t remember) i read that very often if you replace “the economy” with “rich people yatch money” many headlines suddenly make sense. And that struck with me because very often it does make way more sense that way (eg: forced RTO).
Are you saying focus on "the economy" is uniquely American? I do think some interesting arguments could be made to that end; I don't know enough about other countries to say.
I think it's more about a common lack of understanding that there is a world outside of America that actually matters, economically speaking and that the "economy" is actually a global system.
I think it's a misnomer that The Economy is a thing we created and it flows out of the government and federal reserve or whatever. Nomad hunter gatherers of the steppe are still beholden to the laws of supply and demand the same as a real estate developer or software engineer. There are just different inputs and outputs. You can opt out of conspicuous consumption or rampant consumerism, but everything that is scarce will obey the laws of economics. Money is convenient abstraction, but food, shelter, safety, dignity, health, peace are all scarce. All are in high demand and in variable supply. Capitalism as a means of allocating scarce resources falls thoroughly into the bucket "the worst form of resource allocation except for all the other ones". If you weren't worried about GDP, inflation or the stock market, you'd be worried about something much worse. Surely we can do better if we mature as a society, but that happens very gradually.
There’s certainly a line of thinking that economics is the profession of telling the capital class what they want to hear such as austerity [1]. We can’t let capital fail because… well, ask that guy!
Or more: what ideology says I and my heirs deserve to continue to be wealthy and in control? Funny how we’re in a Social Darwinist moment as wealth inequality rises again. But I’m sure people couldn’t possibly be working backwards to justify their position. Certainly the wealthy, who fund research, wouldn’t twist a science as pure as economics like they did the soft science biology.
Meanwhile extreme poverty levels have been steadily diminishing and quality-of-life broadly improving. But you're concerned with some people having more money. That is to say, equality of outcome. No safety net would ever be enough for communist ideologues, because results and well-being don't matter. Only ideology, and punishment.
There's a reason would-be socialist states have back-tracked from central control of economy and allowed competition (Lenin did this so quickly in spite of his zeal it would make your head spin). They kept the authoritarianism though. Once those tendrils get in, they're tough to get out. Only a few countries shed that in the 20th century, one of them being South Korea; places that embraced Liberalism, because they had the good fortune to have leaders with sense.
Liberty qua Liberalism is good, and the checks-and-balances are meant to evolve over time. The alternatives are abject failures, and you'll propose nothing that hasn't been one.
I can't help but suspect that the McNamara fallacy is the far more pressing issue than the quality of the data available. Wouldn't it be lovely though for tech-types and mainstream-economics-types to imagine that all we need is "better data", or "more data".
In the words of Roger Hallam, the problem, in reality, is that "it's all f*ked".
Our realities are warped. We're trapped in economic and social systems invented 400 years ago when we thought resources were infinite. We're "educated" (belittled and cajoled and propagandised) into believing that it'd be madness to try anything too different, as what we have is "less bad" than the alternatives.
We collectively refuse to take the risks involved in seriously and creatively experimenting with other ways of organising human societies, and instead pass the time indulging ourselves with the fantasy that our tech overlords will save us.
We need to update our economic theories to match reality, urgently, as a first step. Rags like the economist are the opposite of helpful when it comes to this.
It's quite simply growing wealth inequality, and economists don't know what's going on because they use mathematical models that don't account for this. Recommend this video if you are curious to learn more:
Not entirely true regarding the criticisms of economists. I am not dinging Gary, and I think he’s done a solid job of putting this topic front and center.
There are very specifically people who raised the issue of wealth concentration in economics, (Piketty) and theres been a Nobel as well (Bannerjee and Duflo).
A lot of the riches income depends on the volume of the working class, they destroy the value of that work at their own peril and would be wise to restore sharing some of the benefits of growth or they might find things sharply snap against them.
The ONS get some of their data on jobs by surveying a ton of companies each month. However the survey has gone from being a page or two to around 10 pages.
I sense the data quality being returned may have fallen off a cliff edge.
I think the implication is that it’s gotten so long that people can’t be bothered to finish filling it out… (Anecdotally I can back this up—the one time I’ve remembered to fill it out in time, it took like 10 minutes…I haven’t bothered to fill it since)
Because it lands on the desk of the head of HR, assistant to the COO, or MDs desk and in all honesty there not going to spend more than half an hour on it - so you've got 30 mins / number of questions.
> The episode hints at a wider trend: global economic data have become alarmingly poor.
Isn't the cause of this obvious? There is so much political interference in the metrics. Inflation, unemployment, whether it is officially a recession or not - all of these have been manipulated out of all relationship with reality.
The article goes on to wonder about the decline in citizens participating in surveys. If the obvious is going to be ignored then why bother helping them fabricate the lie?
There has been a culture of way too much interventionism that has crept in to too many parts of the structures for economic governance. Now it's a miracle that what remains of the free market pricing mechanism works at all given how many fingers are trying to tip the scales all over the place.
It suggests that the politicians aren't interfering with the statisticians but I have seen such manipulation occur multiple times in the past few years on important topics. We have been talking about the increasing bad definitions of "in work" in the UK for over a decade and the situation continues to get worse. The politicians are clearly "strong arming the nerds" and there has been plenty of evidence of it.
This article is interesting to me mostly because it appears totally incoherent.
> “Western politicians do not appear to be strong-arming the nerds to produce favourable numbers. At the same time, international statistical bodies worry about the example of Dominik Rozkrut, who at the end of last year was mysteriously dismissed as Poland’s chief statistician.”
At the same time as not strong arming these bodies, at least one might be? What is the implication here?
> “Economic “surprises” in rich countries, where the reported data point either beats or falls short of analysts’ expectations, soared during the pandemic. Years later, surprises remain 30% bigger than before it.
The confusion represents a reversal of a trend. In 1941 Britain’s…”
How is less trust/revisions in the data today connected with what Britain was doing 70+ years ago? We seem to just have two things said next to each other as if they were related?
Am I just being dumb or is this just ramblings, whether or not you agree with the headline?
> At the same time as not strong arming these bodies, at least one might be? What is the implication here?
Yes, exactly. Most don't but one looks like it might be.
> How is less trust/revisions in the data today connected with what Britain was doing 70+ years ago?
Because up until the pandemic the data had been getting steadily better with fewer "surprises", now it seems to have stagnated: "Two factors have now brought progress to a halt."
On the first point, ok sure - it may be the case that most aren’t but one is. So… what’s the reader supposed to take away from that? What’s the problem we’re looking at here - malpractice or corruption? Just both but maybe one more than the other? Seems like bad writing to me.
Second point - ok, great. Let’s actually structure the article around that. “We think that cuts in statistical departments, coupled with lower and more complicated survey engagement, have made it harder to rely on the data those departments produce”. Great, nice, coherent argument.
I’m totally not trying to get at you, I just think TFA did a pretty bad job of explaining the problem it’s trying to highlight.
Hmm. I am trying not to assume too much, but I will attempt to respond based on summaries of some real events in Russia and corporate America.
In organizations, where leadership style resembles Christmas tree more than a pyramid, people invariably are beholden to the leader. Depending on the organization's culture, the leader may allow little to no dissent. While leader may not explicitly tell you to do X, their wishes are known and some people do respond with trying to 'guess' what their leader wants.
In other words, the implication may be that no one is overtly influencing other people, but, in an attempt to save their positions, people produce documentation their leader may want to see.
Which, honestly, happens a lot more often than it should.
Thanks and yes, I agree with you! Reality is muddy and complicated and political tendrils reach deeply into all government functions. I would like to ask though: what do you think the author wants us to believe? a) that data is more unreliable because of corrupt influence, or b) data is less reliable because of statistical department cuts and a partisan audience? If it’s b, why mention a? It’s not that I disagree with b or a, just that if you are arguing for one, why mention the other except to say “yeah, this happened but it doesn’t contradict my view because x”
Data is useful! But it seems like (I am not an economist) the incentive structures around these offices are failing. Maybe the benefits need to be more immediate / obvious / visceral.
> Budget cuts meant that America stopped publishing some national-accounts data last year
Governments need to invest money to properly work. many countries have been following neoliberal policies, not only the USA. Cut everything that the government does to cut taxes for billionaires and to not fix the mega rich getting loans instead of profits to not be taxed, and countries will fall.
A modern country needs investment. Accounting is just one of the many things failing.
That's true. I currently work for a boutique real estate consulting firm. A senior guy, who has been working with Census-sourced data for two decades or more AND has good sources within the Census bureau--of the firm told me that Census department is considering of stopping some survey data (some sections of American Community Survey or some sort is what I recall as an example he used; but please don't quote me on that) due to lack of sufficient budget.
One trivia that I learned: some parts of the Census building permits data is collected in the old fashioned way via mail. The Census bureau has to consolidate these disparate sources of building permits from 3100+ counties and deliver monthly, annual revised monthly, annual summary values. It's kind of labor intensive and error prone (and thus, revised data is released once a year) to collect.
The article highlights an important problem in several countries, but I am skeptical economists don't know what is going on. The FED has is own sources and means, and any of the best well funded investment houses do their own due diligence.
It's not like retail or supermarket prices are confidential, and somebody with enough hours and three or four interns can't have a clear view of real inflation. Or with the appropriate contacts at the HR departments of the Top 500 corporations can't have a clear idea of current hiring and layoff trends, or buy data feeds on sales and forecasts in core vertical markets.
I'll keep pushing my idea that it's all explained by over-urbanisation and the ongoing density-misery spiral.
Why? Because it heavily distorts the perception. And perception ultimately _becomes_ the economy.
For example, the US and Canada are doing AWESOME with housing. The number of units per household is near the historical highs, and it dwarfs the numbers seen in the 80-s and 90-s: https://fred.stlouisfed.org/graph/?g=15tRv
But ask anybody in the urbanist community, and they'll keep harping about how there's a "housing crisis". Probably due to NIMBYs, evil governments, and "corporations". Reptiloids from Mars are also a distinct possibility.
People are now forced to move into larger cities, and they don't make any new land. So rents in the desirable places are growing, while smaller towns fall into decay.
This in turn affects the overall economy. E.g. young people understand that they can't just hope to work as a car mechanic and live a comfortable life. They now have to get a university degree (number of enrolled college students is almost 2x than that in 1970-s) to qualify for an office job in a large city. So now they face college loan repayments.
This all keeps adding more and more factors that are simply ignored by the models. If your perception is that you'll be living in a shoebox, giving 50% of your salary for rent and college loans, you're far less likely to spend money on a new car. Or conversely, you might take a huge loan and buy a car that you can't really afford just to feel good about _something_.
And the old models are just failing to capture this kind of complexity. But I think that over time, the economists will recalibrate them, and they'll be more representative again.
Small towns have an opportunity to up their game by offering remote work hubs for the 'big city employers'. I'd return to office if I could just walk a few blocks instead of putting my life on the line commuting ten times a week.
Absolutely. But smaller cities can't really do that much to attract people. They typically already have very low regulatory burdens for new construction, and very cheap land.
What is needed is pressure on _companies_ to force them to consider offices in small cities. And this can be done only via economic forces. For example, with a tax on dense office space and/or tax breaks for remote employment.
> The number of units per household is near the historical highs, and it dwarfs the numbers seen in the 80-s and 90-s
Your link appears to only goes back to 2001.
Looking at Census data, it appears the reverse is true. Every year from 1984 to 1999 had a higher units/household than today, for the bulk of the 90s, dramatically higher, with it peaking in 1998 at 1.61 units/household compared to 1.11 today.
> The second issue is people’s relationship with the state. The average response rate to a crucial population survey produced by the BLS has fallen from 88% to 69% in the past decade. Canadians are 15% less likely to respond to a labour-force survey than pre-covid. Over the past decade the response rate to Britain’s labour-force survey has gone from 48% to 20%.
I think this is under-discussed in this thread. I do think people like their states less and it's an important trend.
> When people deign to respond, partisanship clouds their answers. This is a particular problem in America. Just before the presidential election 42% of Democrats believed that the economy was getting better, whereas just 6% of Republicans did. Today 6% of Democrats and 53% of Republicans respond in the same manner. Surveys find that Americans’ expectations of inflation are rising. The trend is worrying, but how meaningful is it? After all, Democrats’ expectations are soaring well above those of Republicans.
That one is a complex thing, partially because realities and expectations are in a mismatch. Republican and far-right allied media have been consistently pushing the narrative of Biden being incompetent and dragging the economy down, and now push that the economy is gonna skyrocket Just Next Day thanks to Trump's tariffs.
A second part is that "is the economy good or bad" is a very broad question. Democrats under Biden/Harris pushed for months that "the economy is good" and backed that by unemployment numbers, stock index charts and godknowswhat - all while millions of people faced the awful reality of exploding rents and, in the end, exploding egg prices as well, and the Democrats never cared to address this mismatch of realities: both statements were true, but only from a dedicated point of view. No wonder people were fed up with what they deemed to be outright lies when their reality completely crashed with the reported reality.
And it's just the same here in Europe, most importantly in Germany. On paper, our companies are still making billions of dollars in profit... but laying off people by the thousands. On paper, we're one of the richest economies in the entire world... but our housing markets are virtually dead with barely anyone able to afford to move, our infrastructure is literally collapsing (just in the last few months, a bridge in Dresden outright collapsed, and another bridge in Berlin was caught to be on the verge of immediate destruction). And again, the far-right populists are the only ones profiting politically.
> all while millions of people faced the awful reality of exploding rents
Because most people are homeowners, and the way rent prices are reported in CPI counts homeowners as renting to themselves, when this goes up it actually means people are making money.
This is especially true because everyone bought homes in 2021 right before interest rates went up.
Was the economy good under Biden? Yes for me, because I happened to have money invested in it; but no for me because the cost of groceries spiked. Even for just myself I can't give a straight answer because it's so heavily dependent on social context. The problem with all these statistics is that they're averages.
Economists have an ideological desire to not talk about "distributional effects". Talk about the size of the pie, not the size of your slice, and things like that. Look deeper at the distribution and you'll find that most countries are actually two:
- An indispensable elite of well-connected firms, their talent-level employees, contractors, and anyone else economically dependent upon them, and,
- An expendable periphery of... everyone else not on that list.
Because the elites are indispensable, they get the lion's share of profit from new economic activity. They can negotiate away everyone else's margin, they can lobby for favorable regulation, and will make sure as much money as possible stays in the hands of the elite. The periphery is thus slowly marginalized into worse and worse conditions until they either revolt or die.
We see this pattern everywhere. The UK has London's financial sector, and everyone else. South Korea has the chaebols, and everyone else. America has Big Tech, and everyone else. We no longer live in rich countries, we live in countries with rich people.
Liberal politicians can't do anything to stop this because they all bought into neo-"liberalism"[0]. Their job is to make the numbers go up, and the easiest way to make sure the nation has a good day is to make sure the elites have a good day. This results in profound corruption almost immediately. I mean, why bother spending money fixing bridges in Dresden when that money isn't going to make the Mercedes-Benz group richer?
But neoliberals also have to still pretend to be liberal, so they'll pursue policies that virtue signal well while still finding ways to screw over the periphery. Neoliberalism runs on predatory inclusion - i.e. breaking the US labor movement by giving Mexicans all the shitty jobs Americans are striking over. Far-right populists are profiting because far-right populism is more efficient at sucking money out of the periphery. Even when the far-right talks about getting rid of the elites, they're still serving the interests of the elite. They just want to thin their ranks and assume direct control. And the periphery voting for them have been lied to; they are being told that they can't eat their freedom, but they can eat their privilege.
This reminds me of my favorite jokes about economists...
>Two economists are walking down the street. One says, "Look, a $20 bill!" The other replies, "That’s impossible. If it were real, someone would have already picked it up."
>Did you know economists have predicted nine out of the last five recessions?
>There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, "Assume we have a can opener"!
>If trivial pursuit were designed by economists, it would have 100 questions and 3,000 answers - Ronald Reagan
It isn't. Some of their data has been suspect for a very long time, unfortunately (and ironically) there is also a partisan reason why the Economist doesn't mention the series that is most suspect: population estimates. These numbers are known bad for over two decades now...they have done nothing.
The US has had a far more serious approach to economic statistics, the ONS is a complete joke. It has never been easier or cheaper to collect stats but the ONS, for some series, is using collection methods that haven't changed since WW2. This is typical of government in the UK, completely isolated from the rest of society.
Complex systems are difficult to predict or reason about, especially in turbulent times, and when only partial information about the world is available, and only part of it is accurate. Nothing new under the sun. If you’d always know what’s going on, you could categorically beat the market or make central planning to work flawlessly.
This is a common misconception. A good understanding of economics might enable you to decide what kind of interventions to use (or to avoid) in an economy as a whole, but will not necessarily give you any insight into how well a particular company will do in the market. They are entirely different skills. As a very simple example, companies often fail for non–economic reasons such as fraud, negligence, incompetence, accidents, etc, etc.
Since we have allowed economic unions to become so huge that question is trivial to answer: huge unions concentrate wealth to an extreme extent. This is playing out both in the US and EU (slowly, or at least, slowly compared to the same playing out in China)
So which companies will do well? The already biggest ones, including the government itself. That's the only metric that matters, and this is indeed what we've seen since WW2.
S&P500 -> S&P100 -> FAANG -> MAG7 -> what do you think comes next? One, and only one, of the big 7 will win.
The problem is: everyone wants everything. The obvious "natural" fix is simple: go back to more power to smaller political entities. That will destroy large companies, as the smaller entities will change laws to make that happen, to protect themselves. Which means, no apple, no internet, no (significant amounts of) oil, no ... This is also ignoring that large entities will fight to defend themselves.
Since the US never fixes problems like healthcare or housing costs, I wouldn't be surprised that any tech savings are more than swamped by the costs of keeping up with competitive wages and benefits.
Good data analytical process still costs money and involves people
Maybe I'm incredibly stupid but I still can't understand why everything in our lives have to be entirely devoted to "the economy". We are modern day slaves of "the economy". Many old people were left to die in the COVID-19 because of "the economy". The climate is going worse and the environment is being destroyed because of "the economy". But I can't see what is what "the economy" has given to us in return.
Probably not "incredibly stupid"
But, "the economy" is generally just a descriptor for what people need/want, and what they're willing to do for it.
A phrase like "slaves of the economy", with the implication that someone should be entitled to escape that condition, is about as ridiculous as thinking you are a "slave to nutrients" or a "slave to oxygen" or any other physical constraint. You can't escape it; you have to eat--what are you willing to do to get food?
However, what I think you're probably more upset about, and what you probably should instead be phrasing it as, is economic manipulation. That is something that can legitimately be unjust. Power and information are some tools to manipulate or benefit from economic conditions to a greater extent than others, and therefore have more boats or leisure time or political positions (or food or N95 masks or jobs etc etc)
I understand GP's post in a different way - While I consider economic indicators to be very important, I think they fail to measure properly "quality of life" while ate the same time being used as surrogate for it.
For example, a public park may be a great asset to the people that live around it. But it generates little to none in terms of GDP. Privatizing it and turning it into a parking lot has more economic activity, while making the lives of people meaningfully worse.
That we don't have good measurements to reconcile that contradiction is what turns us into "slaves of the economy"
Feels like a cousin of the McNamara fallacy: what can't be (or simply isn't) measured may as well not exist. (Probably most people who have encountered OKRs are familiar with this). RFK (the original one, not the brainworm one):
> The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.
> That we don't have good measurements to reconcile that contradiction
We do have many measurements to reconcile that.
We know how much particulate air pollution from fossil fuel combustion increases health care expenditures. We know how not having save places to exercise outdoors affects general health and results in sedentary lifestyle diseases.
But most of our decisions, individually and as a society, are predicated on short term convenience and gratification, not long term health, so we ignore the measures we already have.
Yeah, but the rhetorical justification for all the crap stuff is the economy.
It's weird to me that we organise our lives based on one social science and ignore all the others.
> It's weird to me that we organise our lives based on one social science and ignore all the others.
40-50% of most countries production goes to government projects, so no we don't ignore everything else than capitalism. We are about 50-60% capitalist at most.
Note that government projects also need you to work, work is a part of every system, it isn't capitalism that forces you to work people are forced to work in socialist and communist states as well.
> But, "the economy" is generally just a descriptor for what people need/want, and what they're willing to do for it.
It’s not exactly about what people want, but rather what capital needs to grow and increase its value. Most people have no say in these decisions and are left with only two options: comply or starve.
When someone complains about "the economy", they aren't complaining about the abstract idea of an economy, they're complaining about a particular economy (usually the one they live in). One could literally be a "slave to this economy" in a slave-based economy, or figuratively in an economy where other people own the land (for example) and force them to work.
But that makes these claims of "slavery" even more absurd. Would you have to do more or less living as a subsistence farmer? Would you have better or worse quality of life?
That's an easy one: no way in hell, it'd be SO much worse. Our society can only exist with extreme specialization.
Hell, if we take into account that the land available couldn't even remotely support the people living on it (~2km2 per person per year), so there'd be a famine under those conditions and you'll what's being suggested as "alternative" is effectively extreme suffering followed by death for 95%+ of the population, maybe 99%+.
Subsistence farming is orthogonal to slavery. A farmer could be free, and a slave could do specialized work. Even in the antebellum South, there were slaves doing advanced work, like James Derham who worked as a doctor.
Most people on this site are beneficiaries of this economy, fortunate to have many options and resources. Not everyone is so lucky.
I'd like to think it would be possible to build a specialized, prosperous economy without economic exploitation, but we certainly aren't there yet.
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If you think the cushy white collar jobs most of us HN readers have "mangle and shred your body", try non-mechanized subsistence agriculture for a few years and see how that compares.
I mean, I see what you're doing there. But it is more of a fallacy of language to get to accusing me of rationalizing human slavery. So that is a bit crappy.
Again, "the economy" is just supply/demand. "The economy" exists with or without humans. Animals are subject to natural resources around them. A human living "freely" in the forest is subject to it.
What you did in your later lines was fulfill my exact original recommendation to OP -- they are not talking about "slave to the economy", they are talking about "slave to the slave masters who manipulate our economy to a greater extent than we have resources to overcome".
It's all semantics, but phrases like "slave to the economy" come off as something a 13-year-old shouts after seeing a couple pop-psych youtube vids.
Go in the woods, hunt and forage your food.
As long as you have no monetary income and cause no trouble, the people with guns won't persecute you. The people with guns still persecute you? Try another country with a less competent government.
It's not slavery as long as you have this choice - but I don't think you'll like that existence.
You are not a slave to the economy, you are a slave to violence.
Other people with a capacity for violence will hurt you and claim the land where you live. And that's nature.
The economy is just the soft-core version of that - with extra rules.
And a fish doesn’t recognize water.
Oh, baloney. "Slave of the plantation" is different from "slave of the economy" because one was, you know, literal slavery. And the other isn't.
> If you don't participate in the economy, you die. Not through some physical impossibility, but because the owners and masters will not allow you food, water, shelter, medicine. If they could control air they'd sell that too.
It's not that they won't allow you food, as if they are consciously controlling whether you get a morsel today or not. It's that your food supply is not their responsibility. It's yours. You want food? Go do something to get it.
You know who is responsible for feeding others? Slave owners.
You have that control; they don't. Be glad of that, even if it means you have to go to work.
> If you don't get a job and sacrifice 98% of the income generated by your work to your owner and master, you die.
Not at all. You can work for yourself - start your own business. Most people won't take the risk - or take on the work - to do it. That doesn't make them a slave, though.
And, 98%? Have you seen the profit margins of, say, grocery stores?
Do you know how to grow vegetables, how to produce antibiotics, how to diagnose and treat diabetes, how to operate a farm, how to build up and run an electrical power grid, how to build a fridge, a TV, a car or a motorcycle?
No?
The “economy” allows you to trade something that YOU are capable of into an imaginary representation of currency which you can trade in return for things you need but are incapable of doing yourself.
And it does that so well and so effectively, that mankind has achieved a quality of life unseen in human history. Children don’t randomly starve to death during a winter, your mom doesn’t just randomly die from an infection any more and we have a pretty chilled live compared to our ancestors 10 thousand years ago I believe.
Yeah, I don’t know what the economy has given me in return either.
I guess the issue regarding the OP is that there needs to be some kind of balance. It's great that we have all these things, but it's at the cost of ever-increasing productivity and time. Perhaps in the modern age this trade off no longer seems fair, at least at current proportions.
There is a balanace, the size of entertainment markets, like video games, shows that
I would describe that more as a distraction or a cope in response to something, not as a balance. With balance you wouldn't need excessive entertainment to begin with.
It'd be like saying we have cigarettes to deal with stress or mental health professions to deal with excessive expectations of society. They don't address the cause in the first place.
What is the balance referring to then, what is the stress
No, I think the issue is a bit different.
You used to start out at an entry level job, and work your way up to something better. You could see how to get to "better" from where you were, and what it would take. When you got to "better", you were glad for the improvement. Yeah, the guy owning the factory had it a lot better than you. But as long as he gave you a route to a better life, that was good enough for almost everybody.
What changed? In my view, three things.
First, the route to "better" is a lot narrower these days. People are a lot less convinced that they can get there from where they are.
Second, people don't expect to have to work their way up. They expect to have it all on day 1. They expect instant success. When they don't get it, they get discouraged.
Third, people are finding that the promise is empty. A better job gets you a nicer apartment that feels just as empty as the previous one did. You're just as lonely there. Your job feels just as much like a soul-crushing grind as it did, maybe more so. In some fundamental way, the stuff you can buy with money isn't enough. People don't know where to find it, but they kind of expect that their job will give them what's missing. And it doesn't.
It’s bullshit that I’m not able to watch Netflix all day and write poetry. My ancestors worked hard. So many people are so rich. The government should tax billionaires and give it to me
What an incredibly toxic way to view dissatisfaction with modern day hustle culture. There's an incredible amount of activities that contribute to society but aren't valued with money - only with wellbeing.
There’s a difference between “knowing how to”, “been able to” and make financial sense to do it. What you’re describing is a “society”, ie everyone has a dedicated purpose, that’s similar to yours “knowing how to” and “been able to”. Do you really need a monetary systeem, ie economics, around this? I’m not making a case for North Korea/Soviet Union, but do we as a humanity really need a lever (money) to push the society forward
I recently read a book (https://en.wikipedia.org/wiki/Kabloona) about a "modern" (1930s) man who sought out the Eskimos to check out their way of life.
They have nothing you describe -- no agriculture, no antibiotics, no farming, no electricity. (The fridge, however, they got covered.) They are quite happy that way. Certainly happier than the people around me in NYC.
Perhaps quality of life is about more than just material goods.
I read Kabloona by Gontran de Poncins a couple decades ago and it's stuck with me ever since. I don't think I've ever seen it mentioned online before. It's high on my list of books that should be top-rated classics, but as far as I can tell it's basically unknown. If you've never heard of it, seek it out, it's fabulous!
Edit: Since alecst has obviously already read Kabloona, I might as well give a few more that are on that "list": Winter Wheat by Mildred Walker, Goatwalking by Jim Corbett, and Hyssop by Kevin McIlvoy. Maybe you'd like one of them too.
> Perhaps quality of life is about more than just material goods.
With subsistence agriculture the US can support maybe 2-3% of it's current population. The EU is (far) worse on this front. And with the Eskimo's way of life it can support 0.01%. So what about that little problem? And this can't be fixed without changing that lifestyle ...
That this superior way of life is suffering and death for nearly everyone never seems to get discussed for some reason.
Currency as a way to trade value and skills is a beautiful invention, and that is to be credited for a lot of modern quality of life.
But everything else in the economy (extreme taxation, medical care, housing) has become increasingly predatory over the decades.
> how to diagnose and treat diabetes
Take this as an example. The "economy", as a machine, has learned to subsidize corn syrup, infiltrate every food with forms of sugar including what children eat at school (fuck chocolate milk, PB&J sandwiches, canned fruit in sugar syrup, none are healthy), then profit off of them when they get diabetes later in life. Insurance-scam them by making them pay premiums per month but still not cover their medical costs in full, make them pay for any preventative care they want to have because a doctor didn't "prescribe" it and it wouldn't be profitable to prevent disease. Make healthy food expensive, so that you can get as many people to get diabetes as possible. Lobby against having kitchens in schools so that they are forced to serve even more unhealthy shit. This is what capitalism as a machine has learned.
Diabetes shouldn't even be such a pervasive thing. It's highly preventable. It is in fact of the most preventable of common diseases. The economy machine, however, has realized that diabetes is profitable for the people who own and control the machine (Wall Street, insurance companies, banks).
This is just one example, but the entire system has become predatory.
In most countries it is not.
In the country with the highest GDP per capita it may appear to be prevalent more because people seem to make VOLUNTARY choices with respect to their diet and exercise regime that do not tend to go well with their health.
Capitalism is not equal to “the economy”. “Currency” on its own doesn’t increase the wealth of a society. It is correct that unconstrained capitalism is unstable. Most countries in the world understand that.
>extreme taxation
Can you provide an example of this?
1. In my career so far, I have paid enough taxes to buy 3 houses in cash but I still can't afford 1 house in cash. The machine says "you can buy a house with debt" which is yet another way to create a way to extract money from me when I should have just been able to buy 1 house in the first place. Most of the population has been brainwashed to think "I must pay my taxes, I must go into debt" and hasn't opened their eyes that the system is broken in the first place.
2. The company is taxed when they pay me, I pay taxes on that money again, and then I pay taxes yet again when I buy stuff with it (most of that money is being used to pay someone else's taxes), and then in some cases yet again just for owning it. It's frankly bonkers. 80%+ of money I make for the machine goes to paying taxes of sorts. I see very little of it.
Yeah, the country needs money to support infrastructure, you say. Fine. For what the US provides its citizens, it really doesn't need that much. There are countries that tax at similar rates to the US. They have well-developed railway systems, almost free healthcare, free university, they control crime effectively, they're delivering actual value to the citizens. If you dig into it, the US is a massive money laundering scheme -- the economy has learned to tax the fuck out of citizens without actually returning that value to the citizens themselves.
I apologize not including your full quote.
"has become increasingly predatory over the decades."
Can you show this for taxation?
Also this isn't true "80%+ of money I make for the machine goes to paying taxes of sorts"
I'll take a shot.
~40% of every dollar produced in the US gets collected to federal, state, or local taxes. It is entirely possible that this could be 80% for some people.
Tax as a percent of the economy has gone through the roof, both as a percent of GDP, and as inflation adjusted dollars.
If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4.5x. This means someone today pays about 10X the taxes (controlling for for inflation!). State and local taxes have grown even faster than federal taxes.
Is the typical taxpayer getting 10 time more back from the government? Do we have 10X the schooling? 10X the police and safety? 10X the roads?
>If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4.5x. This means someone today pays about 10X the taxes (controlling for for inflation!). State and local taxes have grown even faster than federal taxes.
That's cherrypicking. Income tax as % of GDP basically has stayed the same at around 8% since after ww2. Most people wouldn't think of the entire time period past ww2 as "over the decades".
I picked 1940 intentionally because that was before the shift. [1]
I think the more interesting part is that the expenses grow with GDP, more than the % itself changing.
https://fred.stlouisfed.org/graph/?g=ockN
How's that surprising? The duties of the state isn't fixed. It can grow with time, hence greater spending in absolute terms. Not to mention stuff like cost disease causing prices to go up even for the same stuff.
I think it is interesting because similar % GDP seems to be treated steady state function of government, not one that inherently expansive.
For those of us that have been around for a while, it seems shocking that real, inflation controlled government taxes and spending per capitia is >2x that of the 80's, because experientially, many of the services seems no different, if not in decline.
I also think it is interesting to think about what government duties become more and less difficult to maintain with growth, and the implications for what types of objectives the government is well and poorly suited to achieve.
I think the Baumol effect is a helpful lens for exploring this, so I think you.
Why is it interesting? Why would expenses be tied to GDP. For example wars are extremely expensive and occur independent of the GDP
>~40% of every dollar produced in the US gets collected to federal, state, or local taxes..It is entirely possible that this could be 80% for some people.
How?
>This means someone today pays about 10X the taxes (controlling for for inflation!)....Is the typical taxpayer getting 10 time more back from the government
So the amount increased 10x , what does that have to do with getting 10x your money back?
Or are you saying that since it's 10x more there should be 10x greater quality?
Ok... the interstate system, the military, etc
yes, I would expect the quality or quantity to be vastly greater. Ultimately, 10x the utility in one form or another.
I dont think the changes in military or interstate justify a 1,000% higher taxes on an ongoing basis.
with respect to 40+%, property tax would be an easy way to eat up an arbitrarily large portion of income. Similarly, fixed fees and fines can eat up a lot for low earners.
property tax is not 40%. The highest seems to be 20% but that's based on income as well. 10% or lower is more common
> I dont think the changes in military or interstate justify a 1,000% higher taxes on an ongoing basis.
It's not 1000% higher.
Occam’s razor has a simpler explanation that this conspiracy.
Seems like you’re struggling
Most of the population is struggling because the economy has become predatory. That's my point.
If you're not struggling, congratulations.
Everyone I know who has chronic medical conditions is certainly financially struggling, no matter how good their job is.
Because generally, in broad strokes, a good economy causes good everything else. If it's easy for people to get a decent job, then people lead happier lives, fewer homeless, lower crime etc. If goods are accessible and affordable, everybody goes yay. Diseases get treated, lower suicide, etc.
Obviously when you zoom in it's not black and white at all, eg the US has incredible GDP but also lots of abject poverty. But even in some imaginary proto-USA where the inequality is 10x worse, if the economy shrinks, fixing that is going to be harder than when it expands.
I agree with your objection that it's ridiculous to do "everything" for the economy. But wanting the economy to be healthy should be a thing everybody can get behind, from far left to center to far right, even if they violently disagree about how to take it from there. So a paper called "the economist" worrying about the economy sounds pretty sane to me.
Well, diverse situations summarized by the word “economy”, right?
In general a good economy has opportunities, and stability. A bad economy is filled with many pitfalls, perverse outcomes, and human suffering. What’s interesting is how the effects of a bad economy divide between people who are devastated and those who weather the storm and maybe even profit—smaller and smaller groups, which is an inversion of what we want from a good economy.
All common sense, no? I think you’d have a peculiar life if these things dont effect you.
The economy is the abstraction for all aspects of getting people the goods and services they want and need. Literally everything you don’t produce on your own. How did you access this website if you have never received anything from the economy?
“But I can’t see what is what the economy has given us in return” is such an absurd statement that the only generous interpretation is that you really didn’t think through it before posting.
People rightly care a lot about the economy because they care a lot about the goods and services that they consume but don’t produce themselves. We don’t sacrifice everything to the economy, no country in the world does, but it holds extremely high priority.
Robert Saunders, Reader in Modern British History at Queen Mary’s London, wrote an interesting thread about “the economy”.
https://bsky.app/profile/robertsaunders.bsky.social/post/3la...
He starts out by noting that the economy as an idea is very recent invention. And yet it tops the list of voters concerns.
"If you had told Mr Gladstone that "the economy has grown this year", he would not have understood what those words meant."
(William Gladstone was the British Prime Minister, on and off, between 1868 and 1894. He is considered to be one of the great British PMs.)
"Gladstone was the most financially literate statesman of the 19th Century. But the idea of something called "the economy", which could "grow" or "shrink", did not exist."
"It (THE economy) first appeared in a major manifesto in 1950 and didn't get its own section until 1955. That's also when terms like "economic growth" appeared in Parliament."
“What we now call "economics" was usually termed "political economy”. "Economy" was not a technocratic exercise, but a moral and political arena."
"… it subordinated a moral and political judgment (what is "good economy?") to a blunter question: how do we make "the" economy bigger? In reality, economic choices were still moral and political. But they were cast as technocratic questions about "competence" and know-how."
"(and) … it turned "the economy" into a "thing", to be weighed against other, different "things": such as "the environment" or "saving lives". And it encouraged a tendency to make "growth" the goal, without asking what was growing, why and to whose benefit."
I recommend reading the whole thread if you are interested to learn how we got here.
And looking forward?
"Recognising that our concepts are historically specific - that they have been different in the past and might be different in the future - helps us to imagine other ways of talking and thinking in the present. In an age of so many economic challenges, we surely need more of that."
I’ve spent decades thinking the same, and decided I don’t want to be a part of it. I work as little as possible and spend my time exploring the world, hiking, camping, eating cheap street food.
Even driving my own vehicles around the world I spend less than $20k a year, so I don’t need to work much.
I just don’t participate in the things I don’t want to - no phone, no tv, no new clothes, used car.
I Enjoy time, not money & things.
Cool, that’s your choice. But it also exists within the economy. Nobody demands you to play a particular part in a democratic market-based economy, but you exercising your ability to buy cars, hiking gear, airfare, tents, and cheap street food and your choices are all just as much part of the economy as the choices others are making.
Further, all those choices are only available to you because others are ‘part of it’ and making services available to you.
So you participate, just with less hours, that's part of the economy
Hear, hear. I've worked for software companies for 18 years. In that time, I've taken 4-5 years off on sabbaticals to travel the world.
Life is too short to _not_ do that, in my opinion.
> Even driving my own vehicles around the world I spend less than $20k a year
20k is higher than 90% of the global population.
Absolutely, I’m well aware that what I’m doing is only a choice for people in the developed world.
Of course if I were content with walks in the park, I’m sure $10k/year would be enough.
More people should know, think and reason about this. As soon as you reach about 34-35 k$/year you’re in the top 1%, globally.
Most people thinking “the top one percent” are the problem don’t realise they are part of the one percent (and thus part of the problem)
It's given you a place to live, and groceries, and plane tickets, and magazines, and allergy medication. Modern consumers have been desensitized by abundance to the point where they are detached from physical reality. The economy is real, and damage to the economy has real consequences. Growth of per-capita GDP almost always leads to increased living standards, and shrinking per-capita almost always leads to decreased living standards. What are "decreased living standards"? It's more paying more for the conveniences of modern life like plane tickets, or restaurants, or homes with useful appliances. At the macro scale, it's having less money available for medical research and welfare. It's rising prices, without a corresponding raise in income, resulting in less to go around.
Political power is a function of economic strength. This is as true for individual politicians as nation states.
Victorian Britain has the biggest navy in the world because it could afford the biggest. Tony Blair has the most political discretion of any modern PM largely because the economy was so strong during his tenure.
Another reason it had the biggest navy is that it didn't need to spend much on an army to prevent invasions because it has no land border with any other power.
I think of "the economy" as a set of emergent principles that come from many people trading goods and services. For example, the USSR had a black market, which was an economy. No matter how much regulation was put into place, an economy (though hobbled) still emerged. Economists study this emergent behavior and use economic principles to accomplish their goals (whether that's to improve the well-being of people, or to increase a company's size, they're both applying these studied principles).
Our human systems are too complex for us to comprehend. So everybody's internal models of the world are often radically/tragically incorrect.
And our words are necessarily poor at defining an abstract conceptual system that defies our comprehension. The definition of emergent as apples to an economy is hard to grok. And hard to communicate, even when the two communicators have a common mental model (sometimes education, sometimes acquired via social media or propoganda).
You can see politicians on the receiving end of systemic forces - where it seems like the politician doesn't comprehend what is happening because their model is wrong. We then create stories about their incentives - layering unintended misdirection on top of our collective ignorance.
> We then create stories about their incentives
Reminds me of Heinlein's razor, lol: "Never attribute to malice that which can be adequately explained by stupidity."
On the topic of communicating complex systems, Dynamic Land[1] is explicitly working on explaining systems through interactive visualizations (among other things), you might find it interesting! It's still in the research phase, but I love that it engages as many senses as possible to help build intuition.
[1] https://dynamicland.org
dynamicland is interesting. The website looks great - definitely some motivated graphic designers (although I had a few usability issues using mobile Safari).
That said, I would definitely love to visit the labs to have a play with some of the stuff they have been developing demonstrated in https://dynamicland.org/publications/ (Note: can't click/tap pretty tabs on right - the headings on the page are the links to click/tap)
Yeah. Unfortunately they haven't published any of the code or instructions (sometimes it seems like Bret Victor is a perfectionist), but folk computer[1] has been a lot more open (I've set up my own system). It still is missing a lot of features though.
[1] https://folk.computer/
Because the economy is the only thing about us that matters. It is the only thing that distinguishes us from the animals we rule over. Everything we do is in it's service (or disservice). Everything you have is because of it, and everything that is denied to you is also because of it. We aren't just modern day slaves, but biologically enslaved to it. Nothing about this is modern. It has existed every since people decided to live together and create society. To escape slavery and become absolutely "free" you need to escape society.
The real gap is "the economy" vs "living standards". For example, quality adjustments for inflation stats are so bad as to make comparison over long periods meaningless (a few years ago, the ONS had to retract decades of inflation data due to poor quality adjustments...and this was for components where quality adjustments are quantifiable).
One of the reasons why is because you can clearly see that life today in most rich economies has plummeted in quality. Technology has spilled over from the US but if you take away those gains, there is very little underlying improvement. Skills are collapsing, governments/companies struggle to provide basic services, disability is skyrocketing, it is a complete mess (and this is often linked to "the economy", look at Canada, look at the UK, set on paths of permanent decline for short-term political gain).
This. My boss had the nerve to tell me inflation is not a valid reason for a discussion of raises all the while company ( and its upper management ) had a rather good year and did not hesitate to reward themselves accordingly. Surely, previous year's bonuses would have sufficed. Honestly, it is a public company. Do they think we don't read quarterly results that they themselves publish?
I am effectively being paid less and the expectation is that I somehow work more. In fact, and this is genuinely the part that gets me more than anything else, when I mentioned it to my extended family during a social function, the response was: "can't you work on a train?".
I don't get it man. Is it some sort of weird generational gap? What gives?
This probably exists or maybe it's impossible to measure. But is there a widely adopted quality of life index? Or "fulfillment index"?
Like if someone is commuting an hour working full time in a LCOL area and can't afford a house, that would be scored lower than if someone is working remotely for a huge salary from a various resorts around the world, which would be a higher score.
You don't need an index. Are the people in your country happy or not? Are they having children? Are they participating in civic society? Crime? Signs of social unrest?
There is an issue with people being systemically negative but it is very obvious which countries are thriving at a high-level from aggregate behaviour.
The problem is that some societies (unsurprisingly the ones that have a problem in this area) do not want confront this. So you have countries where the economy is collapsing, it is obvious to everyone...and they are getting economic policies from corporate lobbyists...to fix "the economy". I think this is getting at the spirit of the OP's point, most people who talk about "the economy" just have a very short-term, very self-interested take.
Measuring what you described in aggregate is an index.
No, it isn't. An index is a quantifiable measure. I said the behaviour of people in the aggregate, not measuring the behaviour of people in the aggregate.
How do you measure civic participation? Why would you even try? It is genuinely baffling to me that people view quantification as an end in itself when any understanding of human behaviour tells you that a huge proportion of the population just shut their brain off when a number appears (that is the point made in the original post, we have this problem with "the economy" that leads to people making such bad policy choices because of this mindset).
Quantification is not an end in itself. I can think of many ways to measure civic participation and reasons I might want to, especially if I think it is healthy for society and wanted to encourage more of it.
As I said, this is the issue. "The economy" is a direct consequence of people thinking that everything can be quantified. It is so shallow until you realise that this thinking is pervasive in government, and explains why "line goes up" whilst everything valuable is collapsing is so prevalent. In other words, to explain why basic societal functions are collapsing whilst you have people saying things have never been so good requires an extremely reductive mode of thought.
When common people talk about the economy doing well, they mean that it's easy to make a good living. You can get a job, a house, a car and food. Maybe you can even have leisure and a bit of luxury.
When economists refer to the economy doing well, they talk about a bunch of indices being in a range they consider good. These indices are constructed in a way that is supposed to make them correlated with desirable outcomes on a large scale, but what's considered desirable is ideological and the indices themselves are often useless.
When capitalists talk about the economy doing well, they mean that they're getting richer at a satisfactory rate. People are buying their products, and can afford to pay a lot for them. Their assets are appreciating.
You probably guessed that these aren't the same things, but they're being conflated.
The indexes usually aren't "constructed", PALFP is literally just calling people and asking them if they have a job and are between 18 and 65.
There is some construction going on; seasonal adjustment is useful for the same reason you shouldn't assume the unemployment rate goes up every weekend.
GDP, CPI, PPI, PMI, CCI...
Not to mention that considering full employment as the desirable state assumes a certain ideology (work is good, low unemployment pushes wages up which is good, etc.).
I would say that the main thing is that crop failures no longer reliably produce famines (outside of war zones anyway).
You know how some countries are, well, poorer than others? That's what economic measures are measuring, among other things.
In Brazil the entity "the economy" is called "os mercados" meaning "the markets". It is handled by the press as a personality who has humor, wishes, preferences and power. It is actually somewhat funny or curious when you read things like "the markets didn't liked what was said and shares fell".
Of course, it is clear that politics has impact on investors but, other than being able to vote, there should be no other way to influence politics in a democracy.
The “zeroth” rule of economics. Wants are infinite, resources are limited.
Everything is the economy, its just how its set up, and how it can be taken advantage of, is the problem.
The "economy" is just a word for how a group of people decide to allocate labor and resources. How to do this fairly and effectively is a subject of debate - whether its free markets, central planning, pillaging, piracy, or anarchy, I don't think there's any version of it where you aren't doing some kind of "work" to make sure your needs are met at the end of the day. Of course the overly complicated and abstract nature of today's economy would make anyone question if the (alleged) "value created" still corresponds to "real value", and if all this complicated stuff isn't more trouble than it's worth. Growing more food and building more houses is value that everyone understands. Keeping the bond yield curve from inverting.. not so much. Still there's no immediate alternative and no obvious fix, so we have to work with what we got.
> But I can't see what is what "the economy" has given to us in return.
Travel, entertainment, and healthcare for example.
>But I can't see what is what "the economy" has given to us in return.
Food, housing, etc
> I can't see what is what "the economy" has given to us in return.
Reductions in extreme poverty, increases life expectancy, improved access to education and healthcare.
I’d go one step further and say why are economists so fixated on growth and specifically production? We don’t need to constantly grow the economy.
Growth is necessary unless you have a balanced budget. Otherwise debt will crush you.
That's it, you should be an economist. It's about the people.
Now complete the ritual. Take their place and bring peace and prosperity to your new empire.
The economy is us. The economy is how we express our needs and "haves" at scale. In smaller settings - family, friends - you can often just communicate the needs/haves directly, but anything beyond that needs some efficient tool. Now the current system how we do banking, money, who decides, etc... that's indeed broken at the very foundation.
On the flip side I can wholeheartedly recommend the Margaritaville episode of South Park! Such a beautiful satire.
https://en.m.wikipedia.org/wiki/Margaritaville_(South_Park)
You want health care right? How else would you get that without employment?
That's it, you solved it. It's all about healthcare.
Now, complete the ritual. Take their place and bring health and care to your new empire.
> But I can't see what is what "the economy" has given to us in return.
Stuff. You like stuff, I like stuff. If you had more stuff of one kind you could do different stuff, good stuff, even. And the people out there doing good stuff could do even more if they had more stuff to do it with. Everywhere you look, people like stuff. People with more stuff are happier on average, every time it's measured. People with serious stuff deficits end up being the ones to start wars, even.
"The Economy" is just the stuff. There's no magic here. You're imagining a villain, but it's all just stuff.
To tag on, the economy gives us more than just physical "stuff" (though that's one of the easiest things to measure). Do you enjoy travel? How about clean water, yoga classes, or therapy? What about the ability to post a message to complete strangers over the internet? As much as we could, in theory, do all of those things without having an economy to support it, money is a shockingly good way to give you whatever it is that you value.
Yes, some people have more money than they know what to do with (and, I would argue, than is good for them or us), but I've seen no reasonable suggestions that as many of us can have what we want without a reasonably open market economy. I don't think we're at a local optimum in the fine details of the rules for that economy, but I don't think moving to a whole different part of the possibility space is likely to be better than where we are now.
It's stuff, but most importantly, food and shelter. It's the thing that builds places to live and claws calories out of the ground. When the economy grinds to a halt people start to go hungry.
(People do go hungry anyway. We often do kind of a bad job feeding everyone, considering the enormous technological and logistical resources available now, but that's a historical anomaly)
> “But I can’t see what it is “the economy” has given us in return.”
More wealth for more people faster than anything else in human history? Add in all the things that come along with that like reduced infant mortality, improved longevity, less violence, etc.
Compare that to what anti-economy marxists deliver: a lot of ideology followed by death of millions.
Markets are really good at solving problems and organizing resources efficiently - they’re not perfect and exist within political natsec concerns, can have bad incentives that lead to tragedy of the commons types of outcomes, but those can and often are mitigated when it’s in the interest of the parties to do so.
Marxists definitely aren't officially anti-economy, the original idea was that communism was supposed to give you more stuff.
Many of the people who call themselves that misunderstand it though and indeed are just opposed to having to produce anything.
Uh, it’s given you a lot in return. It abstracts away a lot of the human condition for a lot of people. Personally, I don’t want to go back to growing food to feed myself and bartering. Most people are aligned with that point of view.
Edit: In fact, it works so well, you can ask what it does for you.
"If genocide is good for the economy, then I am for it.
If genocide is bad for the economy, then I'm against it."
https://youtu.be/UOJ0zY14EbI?si=NRLz9TnH8mNfMv5m
The economy gave you your entire existence. You’re not subsistence farming, raising your own sheep, spinning your own yarn.
You’re not bartering potatoes for a dowry. Seriously man get over yourself
We are slave to digital devices and screens and have to jump when our government says so though.
Many people live paycheck to paycheck, but I guess it's better than running from cannibals and dying of dysentery at age 22.
Many people do say they live paycheck to paycheck in surveys, this is true. But in the same surveys they say they have three months expenses in savings accounts. So it's pretty unclear what they think they mean by this.
the history of mankind is basically nothing but suffering. We are living in without a doubt the best time to ever be alive. The economy is the reason why we arent all killing each other
> but I still can't understand why everything in our lives have to be entirely devoted to "the economy"
We all live in a global trading economy. This has been the case for thousands of years. We don't have a global dictatorship. This is good.
Also, this is a thing:
https://ourworldindata.org/grapher/gdp-worldbank?tab=chart&c...
I think this is a pretty common and growing sentiment that I've felt too. One thing that has grounded me is learning and reminding myself that capitalism has driven extreme poverty across the world to the lowest share in known human history: https://en.wikipedia.org/wiki/Extreme_poverty#:~:text=Extrem...
I'm not sure if this on its own is enough to make up for the negatives, but it did personally restore some perspective that there is some real good to it alongside the bad. So I've personally shifted from more doomer sentiments on peak capitalism to feeling a little more hopeful. (That despite the dysfunctions of it there could still be a functional good foundation worth keeping and iterating on rather than the only solution being throwing the baby out with the bathwater.)
Let's fix that right there.
Capitalism is a concept, a tool to organize production in a society. It doesn't do anything by itself.
And the capitalist didn't do any of those things.
It was the social democracy that demanded and made capitalists around the world to share the benefits of the system to the rest of the society.
For example in the Victorian era Britain the working class people were dirt poor working 16h a way 7 days a week. The capitalists didn't give anything willingly the working people had to demand these things via unions, labor movements and social democracy.
Trying to understand what you're saying, especially with 'let's fix that right there'.
Is it basically the idea that the good we've gotten out of it (like driving down extreme poverty) has required 'social democracy' as another concept or force, to bend capitalism towards something better? And that a more useful perspective is zooming out from just capitalism by itself to include that?
I do feel like I still have a pretty limited understanding of how all of this fits together, so I appreciate you trying to teach me something here.
The fundamental precondition for all these changes is that capitalism massively increased the overall wealth of Britain. The market did the rest: higher wages, lower prices, new inventions improving life for everyone, increased living standards.
Workers negotiating and fighting for better condition, and joining forces with other workers have nothing to do with social democracy, it's a normal market mechanism to regulate the supply and demand of workers.
Where social democracy enters is with the political activism and the relative legislation, limiting working hours and banning child labor.
> Maybe I'm incredibly stupid but I still can't understand why everything in our lives have to be entirely devoted to "the economy".
Things like CPI are important because they underpin things like wage increases in contracts as well as government pensions. It's probably one of the most analyzed numbers that is released.
And while there's always measurement error, getting things accurately—especially trends—determines planning for things like factory expansions, production runs, supply chain contracts months out. These will determine staffing and employment needs—the livelihoods of many, many people.
"The economy" means employed people who have to pay rent/mortgages, groceries, etc.
What has the economy given us? Among other things, computers and network cables, so you could complain about the economy to the whole world, instead of just to your neighbors.
Some years ago (during covid? Can’t remember) i read that very often if you replace “the economy” with “rich people yatch money” many headlines suddenly make sense. And that struck with me because very often it does make way more sense that way (eg: forced RTO).
"The economy" gave you freedom from being a hunter-gatherer.
> Maybe I'm incredibly stupid but I still can't understand why everything in our lives have to be entirely devoted to "the economy"
"The economy" is a sum of all human activity. Not the other way around. We don't work for "the economy". "The economy" is the result of what we do.
Trying to understand what we do, why we do it and how to make life better for everyone seems like a pretty good goal IMO.
Are you American?
Are you saying focus on "the economy" is uniquely American? I do think some interesting arguments could be made to that end; I don't know enough about other countries to say.
It's literally a question
I think it's more about a common lack of understanding that there is a world outside of America that actually matters, economically speaking and that the "economy" is actually a global system.
Nope just a question
I think it's a misnomer that The Economy is a thing we created and it flows out of the government and federal reserve or whatever. Nomad hunter gatherers of the steppe are still beholden to the laws of supply and demand the same as a real estate developer or software engineer. There are just different inputs and outputs. You can opt out of conspicuous consumption or rampant consumerism, but everything that is scarce will obey the laws of economics. Money is convenient abstraction, but food, shelter, safety, dignity, health, peace are all scarce. All are in high demand and in variable supply. Capitalism as a means of allocating scarce resources falls thoroughly into the bucket "the worst form of resource allocation except for all the other ones". If you weren't worried about GDP, inflation or the stock market, you'd be worried about something much worse. Surely we can do better if we mature as a society, but that happens very gradually.
There’s certainly a line of thinking that economics is the profession of telling the capital class what they want to hear such as austerity [1]. We can’t let capital fail because… well, ask that guy!
[1]: https://press.uchicago.edu/ucp/books/book/chicago/C/bo181707...
https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fl...
Or more: what ideology says I and my heirs deserve to continue to be wealthy and in control? Funny how we’re in a Social Darwinist moment as wealth inequality rises again. But I’m sure people couldn’t possibly be working backwards to justify their position. Certainly the wealthy, who fund research, wouldn’t twist a science as pure as economics like they did the soft science biology.
Meanwhile extreme poverty levels have been steadily diminishing and quality-of-life broadly improving. But you're concerned with some people having more money. That is to say, equality of outcome. No safety net would ever be enough for communist ideologues, because results and well-being don't matter. Only ideology, and punishment.
There's a reason would-be socialist states have back-tracked from central control of economy and allowed competition (Lenin did this so quickly in spite of his zeal it would make your head spin). They kept the authoritarianism though. Once those tendrils get in, they're tough to get out. Only a few countries shed that in the 20th century, one of them being South Korea; places that embraced Liberalism, because they had the good fortune to have leaders with sense.
Liberty qua Liberalism is good, and the checks-and-balances are meant to evolve over time. The alternatives are abject failures, and you'll propose nothing that hasn't been one.
I can't help but suspect that the McNamara fallacy is the far more pressing issue than the quality of the data available. Wouldn't it be lovely though for tech-types and mainstream-economics-types to imagine that all we need is "better data", or "more data".
In the words of Roger Hallam, the problem, in reality, is that "it's all f*ked".
Our realities are warped. We're trapped in economic and social systems invented 400 years ago when we thought resources were infinite. We're "educated" (belittled and cajoled and propagandised) into believing that it'd be madness to try anything too different, as what we have is "less bad" than the alternatives.
We collectively refuse to take the risks involved in seriously and creatively experimenting with other ways of organising human societies, and instead pass the time indulging ourselves with the fantasy that our tech overlords will save us.
We need to update our economic theories to match reality, urgently, as a first step. Rags like the economist are the opposite of helpful when it comes to this.
https://archive.ph/eZPMQ
It's quite simply growing wealth inequality, and economists don't know what's going on because they use mathematical models that don't account for this. Recommend this video if you are curious to learn more:
https://www.youtube.com/watch?v=CivlU8hJVwc&list=PLXuOBKrmFY...
That's not what the article is about at all and also not true.
Not entirely true regarding the criticisms of economists. I am not dinging Gary, and I think he’s done a solid job of putting this topic front and center.
There are very specifically people who raised the issue of wealth concentration in economics, (Piketty) and theres been a Nobel as well (Bannerjee and Duflo).
A lot of the riches income depends on the volume of the working class, they destroy the value of that work at their own peril and would be wise to restore sharing some of the benefits of growth or they might find things sharply snap against them.
The ONS get some of their data on jobs by surveying a ton of companies each month. However the survey has gone from being a page or two to around 10 pages.
I sense the data quality being returned may have fallen off a cliff edge.
if you fill in the questionnaire indicating that everything is great then nothing needs improvement
Why would more data imply worse data?
I think the implication is that it’s gotten so long that people can’t be bothered to finish filling it out… (Anecdotally I can back this up—the one time I’ve remembered to fill it out in time, it took like 10 minutes…I haven’t bothered to fill it since)
Oh, I assumed it was mandatory, like tax returns or the census.
People don’t fill out the 10 pages accurately, they just want it off their to-do list.
Because it lands on the desk of the head of HR, assistant to the COO, or MDs desk and in all honesty there not going to spend more than half an hour on it - so you've got 30 mins / number of questions.
Because people aren't form-filling robots.
hey, I just had an HN AI startup idea! /s
> The episode hints at a wider trend: global economic data have become alarmingly poor.
Isn't the cause of this obvious? There is so much political interference in the metrics. Inflation, unemployment, whether it is officially a recession or not - all of these have been manipulated out of all relationship with reality.
The article goes on to wonder about the decline in citizens participating in surveys. If the obvious is going to be ignored then why bother helping them fabricate the lie?
There has been a culture of way too much interventionism that has crept in to too many parts of the structures for economic governance. Now it's a miracle that what remains of the free market pricing mechanism works at all given how many fingers are trying to tip the scales all over the place.
It suggests that the politicians aren't interfering with the statisticians but I have seen such manipulation occur multiple times in the past few years on important topics. We have been talking about the increasing bad definitions of "in work" in the UK for over a decade and the situation continues to get worse. The politicians are clearly "strong arming the nerds" and there has been plenty of evidence of it.
This article is interesting to me mostly because it appears totally incoherent.
> “Western politicians do not appear to be strong-arming the nerds to produce favourable numbers. At the same time, international statistical bodies worry about the example of Dominik Rozkrut, who at the end of last year was mysteriously dismissed as Poland’s chief statistician.”
At the same time as not strong arming these bodies, at least one might be? What is the implication here?
> “Economic “surprises” in rich countries, where the reported data point either beats or falls short of analysts’ expectations, soared during the pandemic. Years later, surprises remain 30% bigger than before it. The confusion represents a reversal of a trend. In 1941 Britain’s…”
How is less trust/revisions in the data today connected with what Britain was doing 70+ years ago? We seem to just have two things said next to each other as if they were related?
Am I just being dumb or is this just ramblings, whether or not you agree with the headline?
> At the same time as not strong arming these bodies, at least one might be? What is the implication here?
Yes, exactly. Most don't but one looks like it might be.
> How is less trust/revisions in the data today connected with what Britain was doing 70+ years ago?
Because up until the pandemic the data had been getting steadily better with fewer "surprises", now it seems to have stagnated: "Two factors have now brought progress to a halt."
On the first point, ok sure - it may be the case that most aren’t but one is. So… what’s the reader supposed to take away from that? What’s the problem we’re looking at here - malpractice or corruption? Just both but maybe one more than the other? Seems like bad writing to me.
Second point - ok, great. Let’s actually structure the article around that. “We think that cuts in statistical departments, coupled with lower and more complicated survey engagement, have made it harder to rely on the data those departments produce”. Great, nice, coherent argument.
I’m totally not trying to get at you, I just think TFA did a pretty bad job of explaining the problem it’s trying to highlight.
<< What is the implication here?
Hmm. I am trying not to assume too much, but I will attempt to respond based on summaries of some real events in Russia and corporate America.
In organizations, where leadership style resembles Christmas tree more than a pyramid, people invariably are beholden to the leader. Depending on the organization's culture, the leader may allow little to no dissent. While leader may not explicitly tell you to do X, their wishes are known and some people do respond with trying to 'guess' what their leader wants.
In other words, the implication may be that no one is overtly influencing other people, but, in an attempt to save their positions, people produce documentation their leader may want to see.
Which, honestly, happens a lot more often than it should.
Thanks and yes, I agree with you! Reality is muddy and complicated and political tendrils reach deeply into all government functions. I would like to ask though: what do you think the author wants us to believe? a) that data is more unreliable because of corrupt influence, or b) data is less reliable because of statistical department cuts and a partisan audience? If it’s b, why mention a? It’s not that I disagree with b or a, just that if you are arguing for one, why mention the other except to say “yeah, this happened but it doesn’t contradict my view because x”
I re-read the article. I will admit that this question stumped me, because the answer here is an honest: I am not sure.
"Economics is not a science. It is an uncontrollable force of nature." -My mom, ca 1992
Data is useful! But it seems like (I am not an economist) the incentive structures around these offices are failing. Maybe the benefits need to be more immediate / obvious / visceral.
> Budget cuts meant that America stopped publishing some national-accounts data last year
Governments need to invest money to properly work. many countries have been following neoliberal policies, not only the USA. Cut everything that the government does to cut taxes for billionaires and to not fix the mega rich getting loans instead of profits to not be taxed, and countries will fall.
A modern country needs investment. Accounting is just one of the many things failing.
That's true. I currently work for a boutique real estate consulting firm. A senior guy, who has been working with Census-sourced data for two decades or more AND has good sources within the Census bureau--of the firm told me that Census department is considering of stopping some survey data (some sections of American Community Survey or some sort is what I recall as an example he used; but please don't quote me on that) due to lack of sufficient budget.
One trivia that I learned: some parts of the Census building permits data is collected in the old fashioned way via mail. The Census bureau has to consolidate these disparate sources of building permits from 3100+ counties and deliver monthly, annual revised monthly, annual summary values. It's kind of labor intensive and error prone (and thus, revised data is released once a year) to collect.
The US federal government, broadly speaking, does not invest money. It is an insignificant part of the budget.
For example, infrastructure is ~2% of the budget, and that includes both maintenance and waste.
The vast majority of federal tax funds are spent on non-investment welfare consumption of one form or another.
I don't think they ever did.
You’d think it improves over time with more digitization.
The article highlights an important problem in several countries, but I am skeptical economists don't know what is going on. The FED has is own sources and means, and any of the best well funded investment houses do their own due diligence.
It's not like retail or supermarket prices are confidential, and somebody with enough hours and three or four interns can't have a clear view of real inflation. Or with the appropriate contacts at the HR departments of the Top 500 corporations can't have a clear idea of current hiring and layoff trends, or buy data feeds on sales and forecasts in core vertical markets.
I'll keep pushing my idea that it's all explained by over-urbanisation and the ongoing density-misery spiral.
Why? Because it heavily distorts the perception. And perception ultimately _becomes_ the economy.
For example, the US and Canada are doing AWESOME with housing. The number of units per household is near the historical highs, and it dwarfs the numbers seen in the 80-s and 90-s: https://fred.stlouisfed.org/graph/?g=15tRv
But ask anybody in the urbanist community, and they'll keep harping about how there's a "housing crisis". Probably due to NIMBYs, evil governments, and "corporations". Reptiloids from Mars are also a distinct possibility.
People are now forced to move into larger cities, and they don't make any new land. So rents in the desirable places are growing, while smaller towns fall into decay.
This in turn affects the overall economy. E.g. young people understand that they can't just hope to work as a car mechanic and live a comfortable life. They now have to get a university degree (number of enrolled college students is almost 2x than that in 1970-s) to qualify for an office job in a large city. So now they face college loan repayments.
This all keeps adding more and more factors that are simply ignored by the models. If your perception is that you'll be living in a shoebox, giving 50% of your salary for rent and college loans, you're far less likely to spend money on a new car. Or conversely, you might take a huge loan and buy a car that you can't really afford just to feel good about _something_.
And the old models are just failing to capture this kind of complexity. But I think that over time, the economists will recalibrate them, and they'll be more representative again.
Small towns have an opportunity to up their game by offering remote work hubs for the 'big city employers'. I'd return to office if I could just walk a few blocks instead of putting my life on the line commuting ten times a week.
Absolutely. But smaller cities can't really do that much to attract people. They typically already have very low regulatory burdens for new construction, and very cheap land.
What is needed is pressure on _companies_ to force them to consider offices in small cities. And this can be done only via economic forces. For example, with a tax on dense office space and/or tax breaks for remote employment.
> The number of units per household is near the historical highs, and it dwarfs the numbers seen in the 80-s and 90-s
Your link appears to only goes back to 2001.
Looking at Census data, it appears the reverse is true. Every year from 1984 to 1999 had a higher units/household than today, for the bulk of the 90s, dramatically higher, with it peaking in 1998 at 1.61 units/household compared to 1.11 today.
???? Where are you getting your data from?
https://www2.census.gov/programs-surveys/popest/tables/1990-...
> (ST-98-46) Estimates of Housing Units, Households, Households by Age of > Householder, and Persons per Household: July 1, 1998
Total housing units: 112,499, total households: 101,041. The ratio was 1.11, just as today.
If you look further, for 1984 the data was:
> The second issue is people’s relationship with the state. The average response rate to a crucial population survey produced by the BLS has fallen from 88% to 69% in the past decade. Canadians are 15% less likely to respond to a labour-force survey than pre-covid. Over the past decade the response rate to Britain’s labour-force survey has gone from 48% to 20%.
I think this is under-discussed in this thread. I do think people like their states less and it's an important trend.
> When people deign to respond, partisanship clouds their answers. This is a particular problem in America. Just before the presidential election 42% of Democrats believed that the economy was getting better, whereas just 6% of Republicans did. Today 6% of Democrats and 53% of Republicans respond in the same manner. Surveys find that Americans’ expectations of inflation are rising. The trend is worrying, but how meaningful is it? After all, Democrats’ expectations are soaring well above those of Republicans.
That one is a complex thing, partially because realities and expectations are in a mismatch. Republican and far-right allied media have been consistently pushing the narrative of Biden being incompetent and dragging the economy down, and now push that the economy is gonna skyrocket Just Next Day thanks to Trump's tariffs.
A second part is that "is the economy good or bad" is a very broad question. Democrats under Biden/Harris pushed for months that "the economy is good" and backed that by unemployment numbers, stock index charts and godknowswhat - all while millions of people faced the awful reality of exploding rents and, in the end, exploding egg prices as well, and the Democrats never cared to address this mismatch of realities: both statements were true, but only from a dedicated point of view. No wonder people were fed up with what they deemed to be outright lies when their reality completely crashed with the reported reality.
And it's just the same here in Europe, most importantly in Germany. On paper, our companies are still making billions of dollars in profit... but laying off people by the thousands. On paper, we're one of the richest economies in the entire world... but our housing markets are virtually dead with barely anyone able to afford to move, our infrastructure is literally collapsing (just in the last few months, a bridge in Dresden outright collapsed, and another bridge in Berlin was caught to be on the verge of immediate destruction). And again, the far-right populists are the only ones profiting politically.
> all while millions of people faced the awful reality of exploding rents
Because most people are homeowners, and the way rent prices are reported in CPI counts homeowners as renting to themselves, when this goes up it actually means people are making money.
This is especially true because everyone bought homes in 2021 right before interest rates went up.
Was the economy good under Biden? Yes for me, because I happened to have money invested in it; but no for me because the cost of groceries spiked. Even for just myself I can't give a straight answer because it's so heavily dependent on social context. The problem with all these statistics is that they're averages.
Economists have an ideological desire to not talk about "distributional effects". Talk about the size of the pie, not the size of your slice, and things like that. Look deeper at the distribution and you'll find that most countries are actually two:
- An indispensable elite of well-connected firms, their talent-level employees, contractors, and anyone else economically dependent upon them, and,
- An expendable periphery of... everyone else not on that list.
Because the elites are indispensable, they get the lion's share of profit from new economic activity. They can negotiate away everyone else's margin, they can lobby for favorable regulation, and will make sure as much money as possible stays in the hands of the elite. The periphery is thus slowly marginalized into worse and worse conditions until they either revolt or die.
We see this pattern everywhere. The UK has London's financial sector, and everyone else. South Korea has the chaebols, and everyone else. America has Big Tech, and everyone else. We no longer live in rich countries, we live in countries with rich people.
Liberal politicians can't do anything to stop this because they all bought into neo-"liberalism"[0]. Their job is to make the numbers go up, and the easiest way to make sure the nation has a good day is to make sure the elites have a good day. This results in profound corruption almost immediately. I mean, why bother spending money fixing bridges in Dresden when that money isn't going to make the Mercedes-Benz group richer?
But neoliberals also have to still pretend to be liberal, so they'll pursue policies that virtue signal well while still finding ways to screw over the periphery. Neoliberalism runs on predatory inclusion - i.e. breaking the US labor movement by giving Mexicans all the shitty jobs Americans are striking over. Far-right populists are profiting because far-right populism is more efficient at sucking money out of the periphery. Even when the far-right talks about getting rid of the elites, they're still serving the interests of the elite. They just want to thin their ranks and assume direct control. And the periphery voting for them have been lied to; they are being told that they can't eat their freedom, but they can eat their privilege.
[0] Slow fascism
>Economists don't know what's going on
This reminds me of my favorite jokes about economists...
>Two economists are walking down the street. One says, "Look, a $20 bill!" The other replies, "That’s impossible. If it were real, someone would have already picked it up."
>Did you know economists have predicted nine out of the last five recessions?
>There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, "Assume we have a can opener"!
>If trivial pursuit were designed by economists, it would have 100 questions and 3,000 answers - Ronald Reagan
Business as usual then
Absolutely not. What is going on with the ONS is unprecedented
It isn't. Some of their data has been suspect for a very long time, unfortunately (and ironically) there is also a partisan reason why the Economist doesn't mention the series that is most suspect: population estimates. These numbers are known bad for over two decades now...they have done nothing.
The US has had a far more serious approach to economic statistics, the ONS is a complete joke. It has never been easier or cheaper to collect stats but the ONS, for some series, is using collection methods that haven't changed since WW2. This is typical of government in the UK, completely isolated from the rest of society.
Complex systems are difficult to predict or reason about, especially in turbulent times, and when only partial information about the world is available, and only part of it is accurate. Nothing new under the sun. If you’d always know what’s going on, you could categorically beat the market or make central planning to work flawlessly.
haha came here for this.
There are probably Youtube economists that have a better track record than “professionals”.
Same for “man on the street” style YouTubers.
Having an above-average track record should be worth more money than you can make on YouTube.
This is a common misconception. A good understanding of economics might enable you to decide what kind of interventions to use (or to avoid) in an economy as a whole, but will not necessarily give you any insight into how well a particular company will do in the market. They are entirely different skills. As a very simple example, companies often fail for non–economic reasons such as fraud, negligence, incompetence, accidents, etc, etc.
Since we have allowed economic unions to become so huge that question is trivial to answer: huge unions concentrate wealth to an extreme extent. This is playing out both in the US and EU (slowly, or at least, slowly compared to the same playing out in China)
So which companies will do well? The already biggest ones, including the government itself. That's the only metric that matters, and this is indeed what we've seen since WW2.
S&P500 -> S&P100 -> FAANG -> MAG7 -> what do you think comes next? One, and only one, of the big 7 will win.
The problem is: everyone wants everything. The obvious "natural" fix is simple: go back to more power to smaller political entities. That will destroy large companies, as the smaller entities will change laws to make that happen, to protect themselves. Which means, no apple, no internet, no (significant amounts of) oil, no ... This is also ignoring that large entities will fight to defend themselves.
Well let's first distinguish between macro and micro economists, traders and finance guys, etc.
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"America’s Bureau of Labour Statistics (BLS) has faced a real-terms cut of 20% since 2012. "
I would be shocked to learn that data collection, retention, analysis, and distribution costs haven't dropped by 50% or more since 2012.
(In the USA, the article does note that a real problem is some of the data is from unverified self-reported surveys and the response rate is low)
Since the US never fixes problems like healthcare or housing costs, I wouldn't be surprised that any tech savings are more than swamped by the costs of keeping up with competitive wages and benefits.
Good data analytical process still costs money and involves people
Healthcare costs actually haven't been rising as much as they used to, for unclear reasons.
It doesn't matter if they're unverified as long as nothing external makes the rate of false responses change over time.