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Came across this this morning and found its premise very interesting.
Comparing the economy to an engine means that it's made up of parts that interact in precise ways and that, if they break down, can easily be fixed by smart technicians. It suggests that pushing the right buttons and flipping the right switches, adding the right mix of fuel in the proper amounts will keep it running smoothly.
The metaphor ends up driving reality, and economic policy prescriptions. Yet these policy prescriptions almost never work as intended. Stimulus plans don't stimulate. Fed rate hikes often cause the recessions they're supposed to prevent. As Paul Krugman put it, "bad metaphors make for bad policy."
The more accurate metaphor for the economy is an ecosystem.
"The economy is too complex to be engineered," noted Max Borders in an article for the Library of Economics and Liberty. "It is dynamic and organic. "
"We can no more fix an economy," he says, "than we can fix a rain forest or a coral reef. At best, we can leave it alone."
Andrew Coyne, writing in Canada's National Post, makes the same point. "Leave its self-equilibrating processes to work, and watch it flourish. Start monkeying about at one end, on the other hand, and be prepared for all sorts of unintended effects to spread throughout."
Because it refers to an alternative to government intervention for every little hiccup in the economy.This article is about an argument for hands off market economics, why is this in the "government spending and debt" area of the forums?
When?The engine metaphor may be lousy, but history has already proved that ignoring the economy completely doesn't work either.
Possibly but we've had inflation and recessions with the Fed trying to use those tools.DifferentDrummer said:You left out a key point, that the article opened by complaining about the Fed's rate hikes. Right or wrong, these are the only tools available to a nation to curtail inflation pressures.
1929, for a start.When?
The Fed is far from perfect. Unfortunately, rate changes are the only tool they have.Possibly but we've had inflation and recessions with the Fed trying to use those tools.
"Ecosystem" is a bad metaphor for neocons to be enamored with since even ecosystems can become deserts without man.Because it refers to an alternative to government intervention for every little hiccup in the economy.
Came across this this morning and found its premise very interesting.
Came across this morning and found its premise very interesting.
I made that analogy to Bulls years ago on another forum when I compared the US economy during the crash to a patient having a heart attack and the need to provide care, not simply to expect the patient to improve by being left alone on a streacher.Ummmm... We engineer ecosystems all the time. We farm, we cut down trees, we build dams and levees, we create global warming, we manage hunting seasons. There are a number of different endangered species that we've been able to bring back from the brink of destruction by managing our ecosystem. In truth, an ecosystem is a machine so the supposed distinction between these two analogies is idiotic. The fact that some of the things we try don't work doesn't mean it isn't possible. Just because something is complex doesn't mean it can't be understood. It can take longer, but we can still study it, and better understand it all the time.
Libertarians want economic chaos because almost all of them are upper-class white men who stand to benefit the most from that chaos. They are already in positions of power and see the government as they only check to their power. They'll believe any dumb argument that supports that position regardless of how nonsensical it is. This analogy is no better.
The analogy that I prefer best and have been using a lot lately is that of a doctor's patient. When a patient comes in with certain symptoms there are generally things the doctor knows he can do to try and make you better, but they don't always work. No matter good your doctor is, they can't always prevent you from doing dumb things to yourself that get you hurt or make you sick. That doesn't mean there aren't good choices or better choices that can improve our odds of success, and that doesn't mean we can't continue to re-evaluate them over time.
Nonsense. Ecosystems are so complex and interconnected that no machine could ever approach.Ummmm... We engineer ecosystems all the time. We farm, we cut down trees, we build dams and levees, we create global warming, we manage hunting seasons. There are a number of different endangered species that we've been able to bring back from the brink of destruction by managing our ecosystem. In truth, an ecosystem is a machine so the supposed distinction between these two analogies is idiotic.
Actually, in most cases we just create environment for the ecosystem to heal itself and flourish.MrWonka said:The fact that some of the things we try don't work doesn't mean it isn't possible. Just because something is complex doesn't mean it can't be understood. It can take longer, but we can still study it, and better understand it all the time.
Yet you claim to lean libertarian.MrWonka said:Libertarians want economic chaos because almost all of them are upper-class white men who stand to benefit the most from that chaos. They are already in positions of power and see the government as they only check to their power. They'll believe any dumb argument that supports that position regardless of how nonsensical it is. This analogy is no better.
But that doctor analogy is just a subset of the economy as a machine mindset. Both are far more progressive than libertarian. Change you lean choice immediately. :lol:MrWonka said:The analogy that I prefer best and have been using a lot lately is that of a doctor's patient. When a patient comes in with certain symptoms there are generally things the doctor knows he can do to try and make you better, but they don't always work. No matter good your doctor is, they can't always prevent you from doing dumb things to yourself that get you hurt or make you sick. That doesn't mean there aren't good choices or better choices that can improve our odds of success, and that doesn't mean we can't continue to re-evaluate them over time.
Don't care, this thread is about the nature of the economy.How does Trump imposing tariffs fit into your hands-off approach?
I agree to completely disagree.Came across this this morning and found its premise very interesting.
Ummmm... We engineer ecosystems all the time.
Because it refers to an alternative to government intervention for every little hiccup in the economy.
This has nothing to do with right wing vs left wing, or trade wars.I agree to completely disagree.
Trade wars are one prime example of public sector interference. Yet, the right wing only refers to social services when they want cuts in spending.
Which has nothing to do with the nature of the economy. Whether it's a machine or an ecosystem or some other model, the government is still going to spend in order to perform its functions. What you do see is that "G" is taken out of the economy from entities who would put that money back into GDP more effectively and efficiently than the government.If the calculation for GDP = C + I + G + (X – M) and "G" is government spending, what do you guys think will happen if G disappears?
Between government spending going up or down as a means to help with aggregate demand, or using interest rate to handle economic conditions contributing to inflation or recessions there are few other tools to be used to handle the economic cycle. What do you guys think will happen with a completely hands off model?
Not really, it a pedantic argument about how the US economy is described in simplified terms, not about its inherent features.Don't care, this thread is about the nature of the economy.
Wrong again, that IS a description of its inherent features. Get a dictionary and stop using the bullsictionary.Which has nothing to do with the nature of the economy.
Don't care, this thread is about the nature of the economy.
Which has nothing to do with the nature of the economy. Whether it's a machine or an ecosystem or some other model, the government is still going to spend in order to perform its functions. What you do see is that "G" is taken out of the economy from entities who would put that money back into GDP more effectively and efficiently than the government.
what part of "this thread is about the nature of the economy" do you find hard to grasp?Why support a man who is in opposition to your viewpoint on the nature of the economy?
Ummm...no it didn't. And that's just one small example. The army core of engineers regularly builds and maintains all kinds of dams and levies that manipulate our rivers for beneficial reasons. ****, the Chicago River now flows in the opposite direction thanks to engineering.No, we don't.
Do you remember that isolation dome experiment? It failed badly.
Sure we can, but we're not really trying, and that's not the point. The point is that we can use engineering to manipulate the environment for our own benefit. Another good example is the reintroduction of wolves into Yellowstone national park. The resurgence of the bald eagle.When we try to build an ecosystem, we can't build in the same level of complexity or resilience.
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