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Home Publications Blogs Beat the Press Why On Earth Does Anyone Pay Economists for Their Work?

Why On Earth Does Anyone Pay Economists for Their Work?

Saturday, 13 July 2013 15:21

That is what readers of this interview by Binyamin Appelbaum with Stephen King must be wondering. King's main point is that growth is grinding to a halt and we are facing an era of prolonged stagnation. Okay, how does this fit with the story that we will see mass unemployment because robots will do all the work?

The answer is that it doesn't fit at all. The weather person on channel 5 told just told us that it will 95 degrees and sunny, while the weather person on channel 9 told us to expect blizzards and sub-zero weather.

This is the state of economic debate in the United States. If either of these views are right, then the people arguing the other one are out of their gourds. Yet in this great country, both views are exposed side by side in elite circles, probably even by the same people.

This says everything anyone needs to know about the quality of economic debate. It is complete nonsense. Policy is designed of, by, and for the powerful, end of story. If we can't do anything about policy, why don't we just save a few bucks and fire all the damn economists. Let's shut down the econ departments in universities, the Fed's research department, the I.M.F., the OECD. Let's get real, no one cares about economics, they are just going to pursue the policies they want to follow.

(Yes, I'm happy to go too. If we get rid of the rest of the bastards, I would gladly spend the rest of my days shoveling poop in dog shelters.)

Comments (18)Add Comment
Time to find a plan C
written by David M, July 13, 2013 4:37
Robots will be shoveling dog poop soon enough, try again.
Not a great way...
written by Carl Weetabix, July 13, 2013 7:48
To spend your birthday. Shoveling dog poop as it were.

You are completely right though. Basically these bastards are just giving cover to predetermined positions.
If they're not part of the solution they're really just another part of the problem.
written by Perplexed, July 13, 2013 9:09
I watched a past episode of "How the Universe Works" on the science channel earlier this week. It was absolutely amazing to see how much progress science has made in our understanding of the universe over the last 30 years. The contrast with economics is rather startling. We've now spent six years in the midst of a crises making the same "political" arguments, the economics of which were were mostly resolved 70+ years ago, only to discover that what we knew then had been largely unlearned in the interim. "We the People" need good information based on the best possible science in order to make enormously consequential decisions. If economics can't, or won't, provide that then we certainly shouldn't be paying them for it and should instead be looking for a branch of science that might be able to help. So what's the rents/GNP measurement these days, and how do we address the growing inequality and concentration of wealth if we don't know "scientifically" what's causing it and refuse to even attempt to answer questions that might challenge our deeply held religious beliefs? It appears economists have really learned from the mistakes of the Catholic Church in the 14th & 15th centuries: don't allow those heretics to challenge the "marginal products" canons or they might cause all kinds of trouble! It looks like monopolies really do kill innovation wherever they're permitted.
Amen brother!
written by indiana boy, July 13, 2013 11:21
....and no American economist has ever heard of trade deficits or how they might impact the US economy.

Y = C + G + I + X - M
is just way too advanced for any econ phd or elite "policy wonk" to grasp

also the idea that tariffs generate dead weight loss, but apparently not income taxes or sales taxes, implicit in all standard discussions of "comparative advantage" is also baloney
Dentist envy
written by wkj, July 14, 2013 5:21
As Keynes wrote: "If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!"

Happy Birthday!
Dean Baker Takes Off the Gloves and Nobody Cares
written by Last Mover, July 14, 2013 6:44
Policy is designed of, by, and for the powerful, end of story. If we can't do anything about policy, why don't we just save a few bucks and fire all the damn economists.

More than just economists would be fired under this standard. "Policy" at the manager-supervisor-employee level has evolved into one of those weasel words transformed by lacky servants of economic predators at the top into feel good terms like "empowerment" and "action plans" under some "strategic plan" just implemented by the last head lacky who already moved on to another position of predator-in-chief.

The impact on the workplace by economic predators in the 1% cannot be overstated. The hollowed out meaningless of the work, the complete suppression of delegated authority to employees to decide how to do something within broad directives, the strange made up context designed to justify job titles and pay linked to useless performance.

Dean Baker and a few others are rare because they still rise up from the treadmill and name names in protest against their own kind. The rest keep their head down lest it get lopped off by the predators for dare challenging anything beyond the color of the wallpaper in the cubicle, in which case said challenge would be celebrated with an employee award for creativity.
The Implications of Cumulative Productivity Growth
written by A Populist, July 14, 2013 10:52
On the ever-present question: "Are they evil or stupid?", I must agree that there is indeed evil involved. It takes many forms, including willfully dismissing of inconvenient facts, following of social norms which prevent discussion of those facts, and a whole lot of people just going along to get along, under the assumption that nothing will change, so they might as well get theirs.

However, I do believe that there is plenty of "stupid", and that it really is worth attacking - and I truly believe you (Dean) are the best attacker of "stupid" that I have ever seen!

I think it might be useful to look at actual productivity data, and the implications.


I am constantly hearing people say things, which lead me to believe that they don't really understand this graph, or it's implications - including "liberals".

People look at the recent declining slope of the graph of productivity *growth* and mistakenly believe that productivity *itself* is declining. Sure, in some cases, people are intentionally misrepresenting this graph, but whether fighting "evil" or "stupid", I think it is well worth shoving this graph under people's noses repeatedly, and helping them understand it.

Even at the current low rate of about 0.8% annual productivity growth (12-quarter), per-capita consumption must increase by 0.8% over the year before, or else the per-capita hours worked must decrease. Am I missing something here? (Other than that I should probably be using the 30 quarter average)

Of course I this number is extremely volatile - even a 12-quarter averaging changes from .5% to 1.5% in about one year, as an example. But the key take-away, is that Productivity *growth* continues to be positive, and that, given the volatility of this graph, it would be silly to extrapolate any trends, at this point - except that historically, long term productivity *growth* appears to always be positive, and is unlikely to go negative for a sustained period.

How about it? With increasing Productivity, (Productivity *growth* higher than zero): Can we maintain full employment without either increasing per-capita consumption, or reducing per-capita working hours? And can consumption rise continually without rising wages? And, given that workers have been short changing their retirement savings to consume, isn't even the *present* consumption level unsustainable, given low wages?
written by Ellis, July 14, 2013 11:08
"Policy is designed of, by, and for the powerful, end of story."

Dean-- The problem with that statement is that it is too vague. Who are the powerful? Can you be more specific?
written by John Emerson, July 14, 2013 1:27
Aren't conservative hack economists well worth the money they are paid, to the people who pay them? Even if they just confuse the issue they're earning their pay, because confusion and cynicism work for the right.
Maybe there is a way to have robo-unemployment and stagnation.
written by LSTB, July 14, 2013 4:10
If a minority of the population owned most of the land and replaced the wage-earning workers with robots (turning the former workers into landless, jobless tresspassers), and if the landowners then stopped inventing new robots as their needs were sated with the current series in existence, then you can thread this contradiction.

Of course, the robots aren't the issue, and land ownership is, but that's always been true. I'm also incredulous of this general stagnation idea in the Times.

(Do I get my PhD and cushy think-tank job now?)
Sunshine, snow . . . and mush
written by keenan, July 14, 2013 4:27
This is a frankly confusing post. While I sympathize with Baker’s lament about nonsensical economic debates, the articles he cites as examples (King interview and robot commentary) don’t support his point, at least as far as I can tell.

Baker apparently believes these two articles are presenting radically different views, like one weather channel predicting sunshine while another predicts a snowstorm. But they don’t seem terribly contradictory.

To begin with, Baker misstates King’s central idea. Baker says, “King's main point is that growth is grinding to a halt.” What King actually says is, “I’m NOT suggesting that growth is going to come to a grinding halt” (emphasis added). Kings states various times he expects growth to continue, just at a slower pace than many others predict.

But even if King were predicting no growth, how is this in contradiction to the robot piece? The robot post is just an offhand remark that robots replacing human workers could contribute to unemployment, and that mass unemployment could spark social unrest.

How are these ideas contradictory? You can have slow or even flat growth AND robots doing work, can’t you? It doesn’t seem like sunshine versus snow.
written by pjm, July 14, 2013 5:19
@Keenan. The stories don't jibe because the robot story implies productivity growth. I.e., robots implies imply that a given level of output requires less human labor hours as input. Even with no increase in the amount of the output there would be an increase in leisure time. But in general, productivity growth implies absolute growth because, if for no other
economic activities in which human labor is a constrained input should have more output as productivity increases (i.e, technology
relaxes the constraint and/or the price of labor falls so more workers can be hired
in the "constrained" sectors).

Of course, the big worry about the robots is the inequality resulting from massive unemployment. But the robot scenario is "growthy".
Do not despair
written by TomL, July 14, 2013 7:49
There is an element of despair among sane economists. Resist it. The bastards know you are right and are aware of their prostitutive status. Sooner or later there will be an integrity attack, most likely in the wake of another major collapse, and there will arise the possibility of making things right.
written by Lrellok, July 14, 2013 8:15
"-nomics" meaning "Law of"
"Echo" meaning "bouncing noise".
Thanks for trying to tell us about the dog poo.
written by watermelonpunch, July 15, 2013 6:19
Shoveling dog poop is not a bad gig.

Stepping in dog poop you didn't know was there is yucky.
written by Fed Up, July 15, 2013 11:31
Here is a challenge for you.

Go to just about any economics blog anonymously. Suggest firing all the economists, especially since they are overpaid for being so wrong.

See how fast you get blocked!
written by John Emerson, July 15, 2013 12:38
Actually, I frequently suggest that economics is a broken science at Brad DeLong's. He even frontpaged me once.
Professor Emeritus of Sociology
written by R Coughlin, July 16, 2013 4:56
No need to shovel dog poop. You could join the ranks of sociologists and get paid -- at a rate somewhat below that of economists, to be sure -- to produce the poop. Rest assured no one will pay any attention anyway. (Spoken by a sociology professor of 35 years.)

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.