Category Archives: Economics

Post-Modernism and Economics

I’m neither an epistemologist nor an economist; I offer this nonetheless.

  1. Post-modernism is, at root, a rejection of the view that knowledge has foundations.  This does not entail that there is no knowledge or no objective truth.  Nonetheless,
  2. Some post-modernists seem to mistakenly believe there is no objective truth.
  3. Economics, as the study of exchange, accepts—indeed, relies upon the assumption—that people have subjective preferences.  This does not entail that all preferences are equally good or that there is no such thing as “objectively better.”  Nonetheless,
  4. Some economists seem to mistakenly believe there is no objective value.

I’ve long wondered whether those in 4 making the same sort of mistake as those in 2.

Note that for those in 2, there is no objective truth to discover, so nothing other than the (somehow always subjective or inter-subjective) project of learning why people believe what they do and how this affects them. This is, to be sure, an interesting and valuable project, but not one that can be objectively defended if it’s own reasoning is right.

Similarly, for those in 4, there can be no objective defense of their project–whatever value it has is subjective.

Better views of both post-modernism and economics are, obviously, available. Lack of foundations can leave us finding objectivity in coherence, pragmatics, or reliable truth-finding methods (or even correspondence). Reliance on the subjectivity of preferences for one purpose is consistent with objectivity (of the goodness,* for example) of the same preferences for other purposes—and with objective value elsewhere. Indeed, I think the group noted in 2 only includes some (the worst) post-modernists and I think the group noted in 4 only includes a few (and not the best) economists. I worry, on the other hand, that students in many college departments (not, usually Philosophy Departments) do fall into 2 and many economics students fall into 4. We should seek to prevent both.


*People can subjectively value, or not, items without objective value and people can fail to subjectively value items with objective value.

The Quadruple Threat to America Today

America faces a quadruple threat. The four threats are related in various ways, too often mutually supporting. I am not including COVID-19, though it could easily be considered a 5th threat. My reasons for doing this are: (1) it’s a threat everywhere, in no way distinctive of American life; indeed, it would be best considered a global natural disaster; (2) it is related to the threats I do discuss; indeed, like all natural disasters, it’s impact is determined by our responses—and the other threats make bad responses more likely. I offer these for consideration as I think they must all be addressed if liberalism is to survive.

The first threat is straightforward. We might call it xenophobia or extreme in-group bias. It manifests in multiple ways, especially racism, sexism, anti-immigrant biases, and anti-semitism. This may seem to be largely confined to those on the so-called “right,” but it applies to many on the left as well. On the left, one need only think of Bernie Sanders’ anti-immigrant views or Joe Biden’s recent pro-American economic policy; on the right one need only think of talk of the “Wuhan flu” or “China flu” instead of “COVID-19”—both play on the insider/outsider distinction to blame someone else for our problems (or at least prevent outsiders from becoming insiders). Maliciously shifting the blame provides cover for those who seek to refuse to take action to limit the harm. Taking responsibility (not necessarily blame) means working to fix the problem. Many of our governments—and many individuals—refuse to do so. This, of course, is at least part of why the number of COVID cases and deaths in the US is on the rise. Like all natural disasters, how we react to it determines the overall impact it has. Of course, the Black Lives Matter movement is currently the most straightforward evidence of in-group bias, in the form of racism, as protestors correctly point out how institutional racism, especially (but not only) by way of police actions, are extremely unjust and, indeed, a matter of life and death for many. This seems to be a concern primarily of “the left,” but with leading support from libertarians (defying the standard left/right dichotomy). For those interested in that, see Radley Balko’s and Chris Coyne and Abigail Hall’s books (CE*).

The second threat is the economy, as we fail to institute a reasonable response to the COVID-19 pandemic and as we face the repercussions of widespread use of collateralized loan obligations (see this Barron’s piece and this piece in The Atlantic), much as the 2008 recession was at least partly caused by widespread use of collateralized debt obligations. Regarding the latter, it is unfortunate in the extreme that the federal government failed to learn any lessons from the collapse of the housing market bubble or its past support for big banking and the latter’s issuing of bad debt (itself encouraged as the big banks correctly realized that even if the debts really went south, they would be bailed out by taxpayers—because in the US the one thing we like to socialize is big business’s losses). Unfortunately, we may see the same thing repeat. Indeed, it may be worse since there is more invested in CLOs than there was in CDOs and the CLOs largely include commercial debt—and the pandemic is hard on many commercial enterprises. Regarding the government response to the pandemic, we can only note what has been often noted—widespread, enforced, and complete shut-downs of multiple markets may or may not help reduce spread of the disease, but would only do so at the obvious cost of making it more difficult—and more expensive—for people to get necessities. While middle and upper class professionals are often able to work from home with no or little loss in pay, many—especially those in the restaurant and entertainment businesses—cannot. At the end of the day, shutting everything down to save lives is foolhardy as it will cost lives. If markets are all closed, we won’t have food and other necessities. Those who live paycheck to paycheck (and many more) won’t be able to pay rent, etc.

The third threat is authoritarianism, partially with a populist demagogue. We now have a president who is likely more of a demagogue than any president since Andrew Jackson. Of course, he was enabled by changes to the office and the workings of the federal government over the last several decades. The expansion of presidential powers under the past several presidents—Republican and Democrat alike—enabled what we have now. The populism is perhaps as dangerous as anything else—promising voters bread and circuses is always worrisome. Those voters are often not well informed about how government works or about science. Now, of course, we see both the populism and the authoritarianism emerging from the debased Republican Party. The populism is clear in the MAGA crowd’s following their leader in insisting on not wearing masks. The authoritarianism is perhaps worse, as witnessed in federal law enforcement agencies frightening behavior in Portland—with the threat that such behavior will go national. The use of ICE and The Border Patrol Tactical Unit deep within the US Border started months ago (see this in the NYTimes) but seems to be picking up steam—ostensibly because the federal government is so worried about graffiti on federal buildings that they are unwilling to leave such crimes to local authorities. (See Jake’s great piece, which also indicates why this is also about populism.) In reality, of course, this may be merely a piece of political theater, aimed at distracting voters and rallying the president’s base. As already indicated, though, this is not an issue for the current Republican party alone. Presidents Clinton and Obama also expanded their powers while in office. And even now, we see scary authoritarianism from the left, when local authorities claim to have knowledge about what is necessary to prevent further spread of COVID-19 and claim that such knowledge justifies them forcing people to live under house arrest (see this piece about a couple in Kentucky) for refusing to sign a paper saying they would not self-quarantine (whether or not they would self-quarantine). Neither left nor right is blameless and neither seems to recognize that their actions are as scary (at least to their opponents) as those of the other side are (at least to them). Those on “the right” seem to think the Feds behavior in Portland is worthwhile because local authorities aren’t stopping looters. They seem to forget the value of federalism and the freedom of individuals that helps ensure (though they remember it clearly when it serves their interests). Those on “the left” seem to think the Kentucky authorities are doing the work needed given public health concerns. They seem to work with a reified sense of “the public” and forget the freedom of individuals that threatens (though they remember it clearly enough when it serves their interests).

The fourth threat is related to my last post. Its a dangerous lack of commitment to there being anything that is objectively true and to seeking such. Its not just our president that seems to lack any commitment to truth. Our culture is riddled with people who claim their beliefs form “their truth” which may be different from “your truth” or “my truth” but that must be treated as if of equal value. Never mind that there really are experts out there in all sorts of areas. Some believe their views of morality are as valuable as those of academics who spend their lives working out intricate details of moral theories and defending those theories against all manner of objection—though they themselves never subject their own views to criticism. (Why should they, when their view is “true to them,” whatever that means?) No wonder people now consider their views about disease transmission (and curing) as valuable as the CDC’s or Dr. Fauci’s. Or who consider their view of other countries as valuable as people who have actually travelled to or lived in those countries. Or who think their views of politics and economics as valuable as academic political scientists and economists who have been studying these things for decades? Admittedly, insisting that there is objective truth might sometimes sound dogmatic to those who feel insulted when faced with any intellectual opposition—as if insisting that a proposition is true entails rejecting any objection or evidence to the contrary, which it decidedly does not. Giving any belief its due can be considerably difficult. As Schumpter said, “To realise the relative validity of one’s convictions and yet stand for them unflinchingly, is what distinguishes a civilized man from a barbarian.” We must remain open to the possibility that we are mistaken even when we are convinced we are not—that is what genuine commitment to truth and truth seeking entails.

I’ll end by making some of the connections between the threats explicit: 

-Its easier to favor economic policies that favor the rich (2) when one thinks everyone else is “other” (1). Its easier to favor authoritarian actions (3) when one believes they are only used against people vary unlike oneself (1). Its easier to deny there is any objective truth (4) when one is constantly told those unlike oneself have different values and beliefs (1)

-Its easier to hate outsiders (1) when one mistakenly (4) think they threaten one’s own livelihood and that of those one cares about (2). It is likely easier to endorse authoritarian policies (3) if one thinks they are necessary to maintain economic stability or growth (2). (Less related to this discussion: it is apparently easier to deny there is any form of objectivity (4) if one believes that the only think that matters is subjective preferences (2).)

-Its easier to distrust or hate others (1) or to favor an economic policy (2) when blinded by an authoritarian repeatedly making false statements about them and grandstanding (3 & 4). Its easier, in general, to doubt there is any objectivity (4) when both that same authoritarian (3) and many others—including, if we are honest, many leftist college professors—encourage those doubts.

-Its easier to hate outsiders (1) when one refuses to learn about them (4). Its easier to favor an economic policy (2) when one refuses to consider objections to it (4). Its easier to favor forcing people to live as one thinks they should (3) without doing the hard work of listening to them (4).

I hope its clear we need a response to these threats. Liberalism—and the great American experiment—depend on it.

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