Thursday, October 4, 2012

Sticking up for Skidelsky (in a rambling kind of way)

I've been blog lite for a month or two. I thought I'd kick start what will hopefully be a busy few months of writing with a little miscellaneous/money post.

I've been struggling to write an 'About' page for this blog for a while. 2/3rds of the way there now. I think that's been the block to my writing.

Anyway, I've just read Oh no, not happiness again! on Diane Coyle's The Enlightened Economist's blog (my favourite economics blog). I read it when she first published it, but just came back to view the comments.

It's about what good old Robert Skidelsky says in his review of Adair Turner's new book. The links are all in the piece if you fancy reading it, but basically its about the correlations (or lack of) between GDP & happiness. I saw another piece asking us to stop calling Skidelsky (& Turner) economists. I can't find it now but, you get the jist; proper economists hate Skidelsky. So of course, I like him.

I have a soft spot for Skidelsky - he got a mention in this post about Hayek (2/3 of the way down) - because he's one of the only people I've ever heard try to draw out the connections between Keynes and Freud. And to regard them as important. So despite me not agreeing with the good Lord, I'll stick up for him in a fight. That's how I roll.

There's one more thread to this little ramble, before I get to the point. I stumbled across this - Value Judgements in Economics. I'm not a fan of this site - too much economic jargon - but can't seem to stop myself coming back to it.

So anyway, there I am amongst all this econo-babble. And then Diane Coyle says "Growth doesn’t mean more handbags and bigger cars, it means innovation"

Now bear in mind that this LSE-educated money burning pervert - i.e. me - spent last night carry water in plastic bottles up several flights of stairs to some of the richest people in the world (in SW1X). We've had mains water for a few hundred years. We have water filters. And yet economic innovation seems to says that somehow utility is maximised by putting water in a bottle, sending it to Hatfield, driving it from Hatfield to London, and then having some underpaid and over-educated Burk - i.e. me -  haul it up 4 or 5 flights of stairs to a toff's kitchen.

You can perhaps see that my recent personal experience doesn't support the idea that growth = innovation.

Maybe I'm just unlucky. Or bitter? Or maybe the economic idea of what Growth is, is wrong. I did this A Ramble on Growth and Value post on it a while back (it been surprisingly popular). So I guess in terms of our questioning of the link between the human condition and GDP, Skidelsky and I are in the same camp.

'Economic Growth' is one of those terms - like Value or Quality - that can be described but not defined. Of course, you can define them if you want, but any Economist worth their salt will baulk at saying Economic Growth is such and such. Because the simple truth is we don't know.

This GDP thing that's accessible to measurement isn't Growth itself. Just like a price isn't Value itself. It looks like there's some relationship between the two things, but no-one has figured out what it is yet.

So leave Skidelsky alone. Like his hero Keynes, he makes moral arguments. He thinks what's good is right, rather than what's right is good. (That's my shorthand for the metaphysics of Keynes/Hayek debate)

We'd do well to remember the limits of our understanding. And to remain open to alternative explanations of the links between the human condition and economic growth.

(NB That's defending Skidelsky with an argument that sounds very Hayekian)

(NBB I'm super happy to say that I mentioned ZenMM to @Sam Bowman in relation to our conceptions of Value and he downloaded it straight away. There is hope for economics' understanding growth & value, yet)

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