Economists – A Poverty of Reason…

Joe Romm reviews a funny topical book by “environmental” economist Matthew Kahn, Climatopolis: How Our Cities Will Thrive in the Hotter Future

Romm:

A key “thesis” of this book is that people will just move to northern cities and be fine. To see how poorly thought out this notion is just start searching the book on Amazon for northern cities. Yes, the obvious first choice is Moscow, where you will learn on page 7 … wait for it … “Moscow is unlikely to suffer from extreme heat waves.” Talk about your badly timed books

Epic facepalm…
But he’s an economist, after all. Economists say stuff like

There are no … limits to the carrying capacity of the earth that are likely to bind any time in the foreseeable future. There isn’t a risk of an apocalypse due to global warming or anything else. The idea that we should put limits on growth because of some natural limit, is a profound error…

Larry Summers, 1991, then World Bank’s chief economist, currently Director of the White House National Economic Council for President Barack Obama… ooops…
[Update: Summers returns to Harvard 21.Sept.2010]

Suppose that, as a result of using up all the world’s resources, human life did come to an end. So what? What is so desirable about an indefinite continuation of the human species, religious convictions apart?

— Wilfred Beckerman, 1975, author of A Poverty of Reason: Sustainable Development and Economic Growth (2002)

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9 Responses to Economists – A Poverty of Reason…

  1. Phil Henshaw says:

    Well chosen quotes!! There’s a battle recently won against the sub-basements of the economic establishment, you could say, that should come out in the next year or so.

    It seems that the world’s measures of environmental impacts for business choices are based on the traditional economist’s method of tracing receipts indicating what it paid for, and in that way is responsible for. Counting only what you can find receipts for omits the direct impacts you’d never have receipts for, the larger part of the total one can trace using physical causation as your “receipt”. For measures of energy use it seems to generally result in estimates that increase by several hundred percent…

    What happens, is that though everyone sees businesses as operating as whole systems of services and machines, the economists end up only counting the energy use of the machines. They don’t have a right to request itemized receipts for what their employees or other providers of businesses services did with the money they are paid, so the energy uses employed that way are never counted. This week I won a major battle with a research institute that tried to squash the paper proving it.

    The comeuppance is that we can’t be doing competent sustainable design if our measures of environmental cause and effect are usually off by several hundred percent… A careful demonstration of accounting practices that would correct the error is Wind EROI by the SEA method

    The simple short-cut answer is, if you don’t know the impact of something, your best initial estimate will be “average” since every dollar in a market economy represents one equal share of all that the whole economy is doing.

  2. Well, I didn’t choose the quotes – I ran into them. There might be more out there.

    Time to mock this flat Earth society by throwing quotes at them.

  3. Eyal Morag says:

    And the suitable cities (or habitable) will invent addition to NIMBY NIMNC Not In My City for all the southerners.
    (nimic means nothing in Romanian)

    Climatopolice the police department in charge of deportation of climate refugees

    Dear Martin
    I see that I really had some influence.
    Best Eyal
    PS I add some remark after your comment in my blog.
    I exposed that the chief “scientist” of the education ministry is not only climate change denier but also deny evolution. So Monbiot article is on the twin brother of Gaby (Gavriel) Avital the chief “scientist”

  4. Florifulgurator says:

    Krugman almost gets it…:

    http://www.nytimes.com/2010/12/27/opinion/27krugman.html?_r=1&hp

    Paul Krugman: The Finite World

    Oil is back above $90 a barrel. Copper and cotton have hit record highs. Wheat and corn prices are way up. Over all, world commodity prices have risen by a quarter in the past six months.

    So what’s the meaning of this surge?

    Is it speculation run amok? Is it the result of excessive money creation, a harbinger of runaway inflation just around the corner? No and no.

    What the commodity markets are telling us is that we’re living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices.

    (…)

    Inconsistency aside, however, the big problem with those blaming the Fed for rising commodity prices is that they’re suffering from delusions of U.S. economic grandeur. For commodity prices are set globally, and what America does just isn’t that important a factor.

    And those supplies aren’t keeping pace. Conventional oil production has been flat for four years; in that sense, at least, peak oil has arrived. True, alternative sources, like oil from Canada’s tar sands, have continued to grow. But these alternative sources come at relatively high cost, both monetary and environmental.

    Also, over the past year, extreme weather — especially severe heat and drought in some important agricultural regions — played an important role in driving up food prices. And, yes, there’s every reason to believe that climate change is making such weather episodes more common.

    So what are the implications of the recent rise in commodity prices? It is, as I said, a sign that we’re living in a finite world, one in which resource constraints are becoming increasingly binding. This won’t bring an end to economic growth,
    ……

  5. Phil Henshaw says:

    No, it won’t end the growth of the most productive economic sectors, wherever they are. They’re the ones that will keep being able to push up the base costs of resources to have an increasing share of shrinking resources, and sustain their growth, at the expense of less adaptive and developed economies built for cheap resources…

    But that’s not “growth” as we knew it, then, is it?

  6. Paul Krugman, March 17, 2011, 3:34 pm:

    The point is that while economics certainly did have some of the characteristics of a science three decades ago, you can make a good case that significant parts of the field have lost those characteristics since then.

    Brad DeLong, March 20, 2011, 11:16 pm:

    As I say, before you ask whether economics as an intellectual discipline rises to the standards of a science, you first have to ask whether it rises to the standards of an intellectual discipline at all.

  7. Phil Henshaw says:

    Good quotes! When ‘science’ is based on theory rather than marveling at how nature works, when nature changes without your noticing, theory becomes naturally disembodied.

    I think that’s what literally what’s been happening, best exemplified by how the entire global economic resource network changed its response to increasing demand since 2001. I saw it coming ages ago, but didn’t realize it had begun for a while after it started, and then wasn’t sure at first what it meant.

    Now we see that same pattern of commodity price escalation that led up to the 2008 collapse is continuing on, in concert with peak oil, water and everything else. It’s ever more clear that the response of the whole resource network to growing demand is not flexibly growing supply as before, but rigidity and skyrocketing prices instead.

    So creating wealth by stimulating ever increasing demand is no longer a solution (!!)… which seems to solve the riddle of wealth and throw the strange science of economics topsy turvy (call for suitable replacement parts if desired). For a while it seemed as if the more you asked from nature the more she always provided, but now we have the correct answer.

    http://synapse9.com/blog/2011/03/16/the-difference-between-cash-cows-and-crash-cows/

  8. “Our supplies of natural resources are not finite in any economic sense. Nor does past experience give reason to expect natural resources to become more scarce. Rather, if history is any guide, natural resources will progressively become less costly, hence less scarce, and will constitute a smaller proportion of our expenses in future years.”

    “The standard of living has risen along with the size of the world’s population since the beginning of recorded time. There is no convincing economic reason why these trends toward a better life should not continue indefinitely.”

    Julian Simon http://www.worldofquotes.com/author/Julian-Simon/1/index.html

  9. p.f.henshaw says:

    Well, that’s very very true, based on “if history is a guide”.

    Consider Hans Rosling’s marvelous animated graphs of globally improving human welfare at “Gapminder.org” . But there’s a telling mental gap. All that linear progress in welfare has come from exponential consumption of non-renewable resources… 😉
    http://synapse9.com/blog/2011/05/30/the-telling-mental-gap-at-gapminderorg/

    Making things ever cheaper is predicated on using them up ever faster… It’s like how easy acceleration seems to be with gravity, but still the faster you go the more quickly it shortens the distance to the end. It’s that natural point deceleration approaching that matters, something new in the future, for which history is NOT a guide.

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