An interesting conversation between two extremely smart economists with very, very different points of view.

Piketty:

We are very far, to say the least, from equality of opportunity. This is the least you can say, which is interesting because equality of opportunity is a theoretical concept that people very often say they are in favor of. But if you try to move in a concrete manner to have more equality of opportunity, for instance, by distributing inheritance, people get completely crazy and say, “Oh, how could you do that?”

I’m making a proposal about this in my recent book, saying, okay, maybe everybody at age 25 should receive a minimum inheritance. Let’s say it could be 60 percent of average wealth. In France today, that would be €120,000 if the average wealth is €200,000 euros per adult, so everybody, say, would receive €120,000 euros at age 25. People who today receive zero would receive €120,000 at age 25. People who today receive €1 million will still receive €600,000 after the progressive taxation of inheritance and wealth that’s paying for that, so we would still be very, very far from equality of opportunity.

If you want my opinion, I think we could and we should go beyond that. But just doing that would increase the share of the bottom 50 percent children in total inheritance, which today is between 2 percent in the US and 4 percent in France. It would be 20 percent to 25 percent, which is still much less than 50 percent because after all, they are the poorest 50 percent children. But I think it will make a big difference in terms of real opportunity to start a business. But also, more generally, wealth has a big impact on your bargaining power in life.

When you don’t own anything, when you just own zero or when you only have debt, you have to accept everything. You have to accept any working condition, any wage, any job because you need to pay your bills. You need to pay your rent. If you have a family, you need to do something, so you have to accept this. For people with millions or billions, maybe 100 is like zero. They don’t make the difference. But for people who are at zero, having 100, 200 puts you in a position in terms of bargaining power vis-à-vis the rest of society. It is very different.

I think it’s very complementary to control capital and human capital because €100,000, €200,000 — okay, that’s not going to make you buy an apartment in Paris. That’s not enough. But there are many other cities which, for many people, are more enjoyable, where you can actually buy an apartment or house. You can start a business. It makes a real difference for the bottom 50 percent people.

https://conversationswithtyler.com/episodes/thomas-piketty/

This is one of the most cogent critiques (from the left) of liberalism (in the sense of basing society on Enlightenment values like pluralist tolerance, the primacy of the individual, etc) that I’ve read. The author genuinely addresses a non-strawman version of liberalism, unlike a lot of the critique from the left which just dismisses it as (in Bright’s words) ‘a loser thing boring normies do‘).

Bright also links at the end to some response pieces, of which I found this one especially good.

When it comes to partisan fact-checking about complex issues—which describes much of the fact-checking that takes place in the context of political news—the truth as stated is often the subjective opinion of people with shared political views.

https://www.scientificamerican.com/article/the-psychology-of-fact-checking1/

https://warrenellis.ltd/jot/found-via-8ball-newsletter-i-think/

This is one of several reasons to worry that the US has really overreached in the situation with Russia.

From this exercise we have learned that sanctions are a far weaker economic weapon against Russia than interventions in energy markets. It could even be argued that Russia did not need access to their foreign exchange reserves this time around thanks to the impact the invasion and the sanctions had on oil prices. If history does judge the seizure of Russian foreign exchange reserves as a largely fruitless exercise, it will be a cruel irony because, as we shall see, the act of seizing these reserves could have long-term effects on American financial hegemony.

https://americanaffairsjournal.org/2022/03/the-end-of-dollar-hegemony/

https://www.mdpi.com/2223-7747/10/1/102

Highly entertaining read. Opens with:

I used to get lost all the time. I’d ask for directions, look for landmarks, fold maps, carry a guidebook, and keep an atlas in the glove compartment. I never knew when the next train was coming. I waited around a lot.

I memorized phone numbers, jotted things down in notebooks, had conversations with taxi drivers, talked to random people at bars, wrote checks, went to the bank, and daydreamed. I was grossly inefficient and terribly bored. I rarely got what I wanted and, when I did, I had to wait at least 8-10 days for it to be delivered. I was not archived, nor was I searchable; things I said just disappeared forever.

I had no idea how many steps I’d walked or stairs I’d climbed. My desk’s height did not adjust; I just sat in a chair and took it. I tolerated unstapled stomachs, breasts which subjugated themselves to gravity, and butts that were incapable of functioning as shelves. I had no influence and never disrupted anything. Strangers did not wish me a happy birthday or “Like” me. My personal brand was invisible.

https://mattruby.substack.com/p/the-most-unbelievable-things-about

I feel very seen here, although I have the good fortune of not needing to be nocturnal to make it happen (that’s a strategy I’ve used before, though).

But in trying to draw connections between people and cultures—to describe what we all share, despite our myriad differences—researchers may be papering over variation in even these most elemental traits. Some social needs are probably universal up to a certain age; babies need connection to their caregivers, to have eye contact and touch and warmth. But for adults, needs may be less definitive. “I think there are some people so unusually low in that need that for them it basically doesn’t exist,” DeYoung, the University of Minnesota psychologist, told me. “We should take seriously the possibility that there are people who really don’t need social connection.” Psychologists may be missing those people altogether: If they remain in solitude—if they’re not even awake at the same hours as the rest of us—we might not notice they’re there.

Of note:

Herman, for instance, sees his wife when their schedules happen to overlap, but much of his time at home is spent by himself, watching sports on TV or exercising on his stationary bike while she sleeps. (She’s introverted too, he told me, and their marriage works well because they can function well independently.)

https://www.theatlantic.com/family/archive/2022/02/ultra-introverts-nocturnal-lives/622856/

The suspension of a common rational standard of judgment to allow for the toleration of deception, abuse, violence, and hypocrisy—so long as it is committed on one’s own side of the culture war divide—conforms neatly to the definition of doublethink: “To know and not to know . . . to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them.”8 This is, of course, one of the few remaining things that can bring the Left and the Right together in perfect harmony.

To many Americans, such comparisons will be nothing short of blasphemous. To imply that the political tribes are engaged in a mutually beneficial racket and to suggest that politics would be better served by reorganization around strictly material economic questions would be to deny or unduly trivialize what for them are the very real moral stakes involved. So long as issues are defined in such Manichaean terms, the thought of diverging in any way from the culture war paradigm is inevitably met with one of the following retorts: “So, do you support racism, sexism, homophobia, transphobia, xenophobia, etc.?” or, “Do you support critical race theory, vaccine tyranny, and the chemical castration of children?”

But, of course, a reflexive and reductive tribalism that precludes any prospect of programmatic change is the whole point. As dramatic material disparities increasingly separate and cordon off the country’s uppermost elites from everyone else, the ensuing discontent can only find expression in the inadequate symbolic vocabulary of the culture war, that is, through mostly aesthetic and performative gestures that have no power to move the levers of economic policy.

https://americanaffairsjournal.org/2022/02/victory-is-not-possible-a-theory-of-the-culture-war/

I find it frustratingly difficult to evaluate which claims economists make actually have empirical backing and which don’t. This certainly isn’t the first thing I’ve read that suggests that the field has a real problem with believing theory over facts.

For the workers who are curious why their wages have not increased in the past decade – while the incomes of some, such as footballers, have soared – the Bank of England’s website has a reassuring message: ‘There is a method to this madness: the economic theory of supply and demand’. The bank’s website provides an ‘idiot’s guide’ to the economy that explains how ‘Supply and demand is a bit like an economist’s version of the law of gravity. It decides how much everything costs: a cup of coffee, a house and even your salary.’

The US Federal Reserve Bank provides similar explainers for Americans who want to understand how their country’s wealth is created or allocated, including a colourful downloadable infographic that shows how higher prices create additional supplies of goods, and lower prices create additional demand. On its website, the International Monetary Fund notes that supply, demand and price are ‘magic words’ that make the economist’s ‘heart beat faster’.

For the economists in the neoclassical tradition, as most are, the world can be understood as a series of supply-and-demand curves – the X-shaped graphs that Alfred Marshall first made for his book Principles of Economics (1890) and that now litter almost every chapter of almost every economics textbook. Humans might be occasionally irrational but, en masse, orthodox economics says they respond to prices in a consistent and proportional way. People have what economists call ‘price elasticities’ that make their behaviour predictable and open to manipulation.

[…]This neoclassical perspective is widely, although not uniformly, accepted by world political leaders. It informs and underpins policies on taxation, spending, labour market regulation, health, the environment and more.

The problem, and a key reason why economic policy often fails, is that, while Isaac Newton’s law of gravity can predict behaviour at all times anywhere on this planet, these and other supposed economic laws often fail.

https://aeon.co/essays/economics-is-once-again-becoming-a-worldly-science