Posts filed under “Philosophy”
Any reader of this site has likely heard about the book currently setting the world of economics aflame. “Capital in the Twenty-First Century” was written by a French economist named Thomas Piketty. It is on the New York Times best-seller list and is currently sold out, with its publisher scrambling to print more copies.
If you haven’t heard of Piketty, he is director of studies at the École des hautes études en sciences sociales and associate chairman at the Paris School of Economics, where he specializes in the study of economic inequality. If you had heard of him before the book’s publication, it probably was for his now infamous chart of income inequality in the U.S. It was widely adopted by many, especially the Occupy Wall Street crowd.
The book has dominated the media like no other work of economics since the writings of Milton Friedman or even John Maynard Keynes. I won’t spend too much space recounting the reviews, but suffice it to say they have been spectacular. The book has so dominated the economic debate, that it is hard to compare it to anything in recent memory.
The data-driven demolition of trickle-down economics has the Ayn Rand crowd panicked. But what I find so fascinating about this debate (having not yet read the book, though I plan to) is the inability of the economic right wing to respond. Thus far they have been rendered impotent, unable to construct an intelligent counterargument. The strongest response so far — and I am not making this up — has been to give the book a single-star rating on Amazon.com’s website.
Which raises a question about John Stuart Mill’s notion of the marketplace of ideas: Is the debate driven by the quality of ideas, or by the marketing, branding and PR behind it?
Ralph Waldo Emerson wrote “Build a better mouse trap and the world will beat a path to your door.” All tech entrepreneurs quickly learn that this isn’t true. The better mouse trap is merely the first step, which might get you some venture-capital funding if you have a good pitch book and a winning personality.
Regardless of your views on Piketty’s thesis, it raises an interesting epistemological question: Was Mill wrong? How could the “worse” idea win in the market place? If you believe trickle-down economics is a fraud, how did it dominate the world of economics for so many decades? If you think Piketty’s work is just so much nonsensical Marxism, why has it received so much acclaim from the economics profession and public alike?
Perhaps Mill’s marketplace of ideas suffers the same flaw as the efficient-market theory, or the idea that prices reflect all information and investors can’t beat the market over time. A decade ago, I called it “The kinda-eventually-sorta-mostly-almost Efficient Market Theory.” Markets are filled with all sorts of inefficiencies and friction. They eventually get it more or less correct, but along the way, they can deviate from the true path of efficiency. We just need to wait a decade or three for that efficiency to sort itself out.
“The weak recovery is proof that the Federal Reserve’s program of quantitative easement does not work.” You do not understand the Counter-Factual. That is the only conclusion I can draw from what the very common criticism of the Federal Reserve policies of ZIRP and QE (above), and its inherent analytical error. The…Read More
Death is not distant, it’s inevitable, and ever-closer. No one knows anything. Confidence is a front. Everybody is insecure. No one cares about your SAT scores unless they aced the test. We’re all lonely looking to be connected. You’ll regret choices earlier in your life, but you’ll accept them. You’ll want the decade back when…Read More
“This spending of the best part of one’s life earning money in order to enjoy a questionable liberty during the least valuable part of it reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England and live the life of a poet.” ~…Read More
“What you are aware of you are in control of; what you are not aware of is in control of you. You are always a slave to what you are not aware of. When you’re aware of it, you’re free from it. It’s there, but you’re not affected by it. You’re not controlled by it;…Read More
Robert P. Seawright is the Chief Investment & Information Officer for Madison Avenue Securities, a boutique broker-dealer and investment advisory firm headquartered in San Diego, California. Bob is also a columnist for Research magazine, a Contributing Editor at Portfolioist as well as a contributor to the Financial Times, The Big Picture, The Wall Street Journal’s MarketWatch, Pragmatic Capitalism, and Advisor One….Read More
> Its my annual mea culpas column for the Washington Post Business Section column. Here’s an excerpt from the column: “Once again, it is the time of year when I look back at the various investing, trading and other mistakes I’ve made. (Last year’s version is here; prior years can be found here). Why…Read More
“When will these guys ever learn that maybe, just maybe, these Fed policies aimed at targeting asset prices at levels above their intrinsic values is probably not in the best interests of the nation?” -Dave Rosenberg, chief economist and strategist at Gluskin, Sheff Not long ago, I was listening to former Federal Reserve…Read More
It’s a Myth that Conservatives Don’t Care About Inequality We’ve noted for years that it’s a myth that conservatives accept runaway inequality. Conservatives are very concerned about the stunning collapse of upward mobility. A poll from Gallup shows that a majority of Republicans think we’ve got too much inequality: Two out of three Americans are…Read More