Galbraith, the Conventional Wisdom and the current mess

by A swedish kind of death Sat Nov 3rd, 2012 at 06:50:53 AM EST

I recently came across John Kenneth Galbraith's The Affluent Society where he (afaik) introduces the concept of Conventional Wisdom. Since we are seeing a clash between the Conventional Wisdom in the Economics of today and what Galbraith calls circumstances having a look at what it is might be beneficial.

front-paged by afew

What is the Conventional Wisdom then?
Galbraith's Conventional Wisdom is the very persistent system of ideas upon which debates can be held over details but the great mass of ideas remain unchanged. Experts are called experts because they can easily and eloquently relate what happens to the Conventional Wisdom and explain it in terms of the Conventional Wisdom. Galbraith is primarily interested in the Conventional Wisdom of economics but also takes examples from military doctrine.

How does the Conventional Wisdom change?
Galbraith has a well expressed opinion on this: "Ideas are inherently conservative. They yield not to the attack of other ideas but to the massive onslaugth of circumstances with which they cannot contend." Sums it up. Yet here we are and so far the Conventional Wisdom appears to hold despite all the circumstances aligned against it. So lets dig deeper.

Why is a Conventional Wisdom needed?
Galbraith's view is that since Economics does not render itself easily to empiric testing, we need the Conventional Wisdom to fill the gaps. And why do we need that? Galbraith: "[O]ne must have an explanation or interpretention of economic behaviour. Neither man's curiosity nor his inherent ego allows him to remain contentedly oblivious to anything that is so close to his life." Eloquently put, but hides a class bias. There are lots of people that view the highs and lows of the economy as something to be suffered through rather then understood. Same as the weather.

But who exactly needs the Conventional Wisdom?
Leaving Galbraith and just asking who needs this persistent system of ideas on just how things really work that fills in the gaps, I think it is pretty obvious. It is most critically needed by the government and more so the higher up in government. If the ruler pulls policy lever A: what will happen? If his advisors can not tell him, they are no good. If he himself admits that he does not know the consequences of this actions, then what good is having a ruler? Wheter it is God or market that rewards the faithful, wheter history is run by Great men or the forces of production, there needs to be some way to estimate what will happen.

Revisiting how Conventional Wisdom changes
So if it is the rulers needs that are served, the Conventional Wisdom breaks when it is so assaulted by circumstances that it no longer serves its function to inform the rulers. This can of course rarely be admitted by the current rulers so we have to look for signs from those stepping down.

Like Trichet:

In an exasperated outburst, just before he left the presidency of the European Central Bank, Jean-Claude Trichet complained that, "as a policymaker during the crisis, I found the available [economic and financial] models of limited help. In fact, I would go further: in the face of the crisis, we felt abandoned by conventional tools."

To which Krugman answers:

So standard economics told him that austerity would depress economies; he chose not to believe that, and go with the confidence fairy; and he was wrong, wrong, wrong. How is that a problem with the inadequacy of economics?

But of course, Trichet does not mean the same as Krugman with the word "economics" and what we are interested in here is not economics as understood by Krugman, but as understood by Trichet. So Trichet being abandoned by economics is a good thing. So is the debates on the usefulness of economics.

How do you establish a new Conventional Wisdom?
Simple, you get the rulers ear, convince him that you know what is what and go on to be hired as economic advisor. Or wait, that is not easy at all. Maybe you write a book, like Galbraith did. Ok, this is the tricky and Galbraith being Galbraith only leaves clues to what you do once you already have a pulpit and the ears of the Serious People.

A note on Paradgims, Conventional Wisdom and Science
A final note, because this is something that is frustrating to many. Is Conventional Wisdom just Paradigms in Social Science? I think not, I think the main difference is how it treats unexplored territory. For there to be Science we need to accept areas that are not yet explored and also deconstruction of how previous explorations functioned. These are accepted within the construction of paradigms, but are largely unacceptable for the uses of Conventional Wisdom. So in order to inform the high and mighty and secure career paths in the bureacracy a Science that accepts the mantle of Conventional Wisdom must to an extent stop being a science and put what is politically acceptable before other considerations. Maybe we should be glad that it is Economics this happened to, think what would have happened had Physics been elevated to the Theology of the day.

(All quotes are from The Affluent Society, Chapter 2)

Galbraith, the Conventional Wisdom and the current mess | 39 comments (39 topical, 0 editorial, 0 hidden)

Galbraith, The Affluent Society (4.00 / 11)

The Affluent Society is a really good book. Easy and enjoyable to read. Realising how we have slipped from the hopes of the 50ies is less enjoyable, but enlightening.

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by A swedish kind of death on Fri Nov 2nd, 2012 at 12:51:35 PM EST

Re: Galbraith, The Affluent Society (4.00 / 9)

I'm tending more and more to assuming that our leaders are actively psychotic and evil rather than merely wrong in some abstract academic sense.

If you're aware of massive privation and suffering - and I don't believe the Troika etc aren't aware of what's happening in Greece and elsewhere - the normal human response is to try to minimise it.

If you have some other emotional response you're unlikely to be normal, at least not using the standard metrics that psychologists use to quantify emotional responses.

So at best you're emotionally disturbed and at worst you're sociopathic.

Emotionally the academic explanations don't matter. We're far beyond the point where we should care about what Galbraith or Minsky or Keynes would have said, and deep into economic holocaust territory.

If this seems far-fetched, consider that the UK establishment is now beating up disabled people who collect facts about suicides and other deaths caused by the Tory government's workfare programs, and that some NHS hospitals have been caught receiving extra cash for euthanising the elderly by denying them food and drink as part of what have been called 'death pathways.'

These are documented examples of human rights abuse, and not conspiracy theories or notes from wackyland. They're actually happening in the UK. And I can only assume that anyone who isn't shocked and outraged by them has some serious mental health issues - especially if they're the ones causing them to happen.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Nov 2nd, 2012 at 01:27:12 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 8)

But do they see themselves as causing it to happen? Or are they each just dealing with their little part of a bad situation?

Psychopaths exist and are over-represented at high levels of power (but do they get along with each other?), but we also know that ordinary people are capable of performing horrendous acts if someone in authority tells them to or they perceive that their group loyalty and institutional role demands it. Being a minister even in normal times involves a responsibility for people dying but I don't think anyone who accepts that responsibility is going to be a minister. Swedish movie/theater writer/director Lukas Moodysson (most famous for Show me love or Fucking Åmål in original Swedish) wrote a play about 23 people died at the same day as Swedish foreign minister Anna Lindh was murdered, except they died trying to get into Europe. This was the year after the murder and writing a play that highlighted the murderous consequences of Anna Lindh was to sensitive so I don't think it was ever performed. Nobody (except fringe people like Moodysson) saw her as a murderer and I doubt she did either.

If most in the ruling group are not psychopaths but acting on perceived institutional restraints (for example a lot of parliamentarians probably believes that the state is out of money) then analysing the restraints does matter. Or well it does if a way is found to act upon them.

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by A swedish kind of death on Fri Nov 2nd, 2012 at 04:09:48 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (none / 1)

Stop it. Soon you'll be treating the evil elite as human beings an we'll have to exile you.

Repeat after me: "The elite are not human."

by Colman (colman at eurotrib.com) on Fri Nov 2nd, 2012 at 04:31:22 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 6)

I think we need to take into account what I call The First Law of Narcissism: Everyone needs to think well of themself. People will go to great lengths to be able to maintain a good opinion of themselves, and a lot of those lengths involve psychological tricks. These include rationalizations, projection, splitting, and, especially, denial. I am certain that George Washington and Thomas Jefferson thought well of themselves - even though they were slaveholders. The injustice of slavery even bothered Washington enough for him to take action. He willed that his slaves be emancipated upon his wife's death. She emancipated them a year after his death. Jefferson would have liked to do so also but debt prevented him and his estate from freeing more than a few, though he was more conflicted on the subject of slavery. These are just two examples on one subject from US History.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Nov 2nd, 2012 at 04:52:09 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 7)

That's true, but I've yet to see any evidence that anyone in the Troika or the ECB is losing any sleep over the horrors happening in Greece or Spain - and I mean losing sleep because they have a conscience and they're finding the consequences of their actions disturbing, not because they're worried about pitchforks and torches?

There's certainly nothing but cheering coming from Tory HQ about the chance to finally put the boot into disabled 'scroungers.'

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Nov 2nd, 2012 at 05:34:47 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 3)

And yet the Tories as well as the members of The Troika manage to think well of themselves, just as did the top officials in the Nazi Government under Hitler. This is where the need for TINA becomes especially important. It enables those who embrace TINA to rationalize that they are only doing what has to be done. That is another major reason for the resilience of the CW in economics - it justifies those in power doing what they really want to do and also what they are under great pressure from their wealthy backers to do. That psychological gallon of salve covers over anything that might be annoying from a vestigial conscience.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Nov 2nd, 2012 at 05:59:14 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 6)

Perhaps coincidentally trending news headlines and the prospect of a libel suit or two suggest that some of the architects of Thatcher's Tory Party and possibly of New Labour too are literally child murderers and child rapists.

Again this might sound far-fetched. But the BBC's Newsnight was close to naming names last night - with evidence - and apparently only dissuaded by violent legal action.

Meanwhile some of the names have appeared on Twitter. And at least one lawyer has gone further and implicated four individuals. It might be relevant that the lawyer is himself an institutional 'care' survivor and has some personal interest in seeing justice served.

Clearly someone who gets off on torturing children to death isn't going to be too bothered about the fate of a few disabled or unemployed people.

Which brings me back to my original point, which is the increasing evidence that these individuals are criminally and morally insane, and incapable of rational policy of any kind.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Nov 3rd, 2012 at 07:58:15 AM EST
[ Parent ]

Re: Galbraith, The Affluent Society (none / 1)

I don't think it is a case of either/or, but more one of both/and.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Nov 3rd, 2012 at 11:31:48 AM EST
[ Parent ]

Re: Galbraith, The Affluent Society (none / 0)

But isn't this evidence of Jefferson's narcissism?

...Jefferson would have liked to do so also but debt prevented him and his estate from freeing more than a few,...

Specifically the debt he accumulated because his land and slave holdings didn't produce enough income to support him in the style he felt entitled to.

by Marie2 on Sun Nov 4th, 2012 at 05:20:42 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (none / 0)

«[...] about 23 people died at the same day as Swedish foreign minister Anna Lindh was murdered, except they died trying to get into Europe. This was the year after the murder and writing a play that highlighted the murderous consequences of Anna Lindh was to sensitive so I don't think it was ever performed. Nobody (except fringe people like Moodysson) saw her as a murderer and I doubt she did either.»

I don't understand. In which way Lindh was more guilty than most Europeans?

res humà m'és aliè

by Antoni Jaume on Fri Nov 2nd, 2012 at 07:28:20 PM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 5)

Lindh was foreign minister during the negotiations of common carrier sanctions that prevent asylum seekers from using normal commercial transportation like aircrafts. Apparently on the foreign minsters table in the Council, I find a question in Swedish parliament that confimrs that. The answer to the question of why the government did nothing to stop it in the Council despite massive majority against among Swedish MEPs is mostly avoided and the traditional answer of "Now we have to pass this, EU says so" is trotted out.

Essentially it means that if a company transports somebody who applies for and is denied visa it is fined 5000 euros and the costs of repatriation. Here is a summary of the consequences:

Carrier Sanctions - European Council on Refugees and Exiles

The adverse consequences of carrier sanctions on asylum seekers have been pointed to by many observers, most recently by a study carried out for the European Parliament. Yet the use of carrier sanctions continues across the EU. Moreover transport companies will continue to comply with the rules as long as it is more economically beneficial to avoid a fine by not allowing a passenger to travel rather than let a potential asylum seeker travel and risk making the wrong decision and incur a fine as well as the costs of repatriation.
ECRE objects in the strongest terms to the very existence of carriers' liability, which strips many refugees of the possibility to reach a country of asylum.
Also problematic is the way carrier sanctions confer on private actors responsibilities which by nature pertain to public authorities. They privatise functions in the field of migration control to non-state agents that cannot be held accountable for ensuring the rights of refugees under international law.

So people crossing into Europe in unsafe vessels instead of flying in and applying for asylum is a consequence of the carrier sanctions for which Lindh was the primary.

Exactly what part Lindh was considered to have in the negotiations in the play is unclear, in particular since it appears never to have been performed. Moodysson says in one interview that she was a leading proponent of this legislation, but that the focus of the play is not really on Lindh. But it is clear that the theather (Dramaten in Stockholm) that commissioned the play thought it would paint Lindh as a murderer. And that was unacceptable no matter what facts there was.

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by A swedish kind of death on Sat Nov 3rd, 2012 at 06:59:53 AM EST
[ Parent ]

Re: Galbraith, The Affluent Society (none / 0)

Psychotic, narcissist, ignorant tendencies are indeed easy to assume. But they may form mostly proximate causation. What I imagine that there are power holders, advisors that see the nature and extent of what is happening, but they do not see a "nice" solution, or other course more profitable or benefiting them at all. So they deliberately go for management of worsening (overall) situation, focusing more on manipulative narratives than actual resolution. Someone is sure that the civilization is taking a long turn downwards, or something.

by das monde on Sat Nov 3rd, 2012 at 06:48:53 AM EST
[ Parent ]

Re: Galbraith, The Affluent Society (4.00 / 3)

the UK establishment is now beating up disabled people who collect facts about suicides

This immediately reminds a key part of the film The Lives of Others, about DDR.

by das monde on Sat Nov 3rd, 2012 at 06:38:38 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 1)

Good stuff.

So what's the difference between Conventional Wisdom and Zombie Ideas?

by Number 6 on Fri Nov 2nd, 2012 at 01:08:03 PM EST

Two syllables (n/t) (4.00 / 2)

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Nov 2nd, 2012 at 01:17:20 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 5)

Number 6:

So what's the difference between Conventional Wisdom and Zombie Ideas?

I would say it is that the Conventional Wisdom encompasses so much more.

That is actually a good point Galbraith makes. Keynes ideas won on areas where the Conventional Wisdom crumbled in the 30ies, but where the Conventional Wisdom did not crumble the old ideas remained. So the new Conventional Wisdom - real existing Keynesianism we can call it - came to include a good deal that Keynes was actually opposed to.

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by A swedish kind of death on Fri Nov 2nd, 2012 at 01:23:17 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 0)

OK, sounds like a good summary.

by Number 6 on Fri Nov 2nd, 2012 at 01:29:57 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 8)

Also, while zombie ideas have power, isn't the key point about the CW that it marks out the territory of thought, the division between "serious" and "non-serious" people.

by Metatone (metatone [a|t] gmail (dot) com) on Fri Nov 2nd, 2012 at 02:22:04 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 9)

Indeed. People outside it are talking in strange terms wheter it be Keynes before the 30ies or the current MMT-ers.

Reminds me of an anthropological study of nuclear weapons researchers which noted that in the nuclear weapons talk there was no word for peace. If you started to talk about peace you had removed yourself from the group of serious people and placed yourself among hippies that also believed in unicorns.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Nov 2nd, 2012 at 04:16:40 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 4)

great diary...

finance does have an uncanny resemblance to nuclear energy:

it's ROI is illusory, the capacity to poison huge swathes of society through no fault of their own, and the clean up after disasters is lengthy, painful and expensive, both
industries' too big to fail, and un-insurable, what could possibly... (cont. p.92)

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Nov 2nd, 2012 at 06:23:42 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 2)

.. You are yourself demonstrating a version of conventional wisdom in that very post. You have - in very strong terms possible - denied the possibility that any form of nuclear energy can be beneficial, despite extant examples of nuclear electricity being both cheap, low carbon and reliable.
You do this because doing so marks you out as.. Serious. About the environment, and questioning the orthodoxy carries social costs.

..Hmm. How to demonstrate. Ah. Right.
Answer me this: What would you consider sufficient empirical evidence to change your view on nuclear?

I can tell you exactly what would cause me to dismiss it as unnecessary: Germany getting its carbon emissions per capita below France.

by Thomas on Sat Nov 3rd, 2012 at 07:52:43 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 2)

Thomas:

What would you consider sufficient empirical evidence to change your view on nuclear?

as opposed to unempirical evidence, you mean?

Thomas:

You do this because doing so marks you out as.. Serious.

serious? moi? unsurely you jest.

nuclear power is seriously screwed up, in my distinctly unserious opinion.

Thomas:

Germany getting its carbon emissions per capita below France.

me too, it's so encouraging to see the progress, isn't it?

saving the planet is serious. the nuclear era is come and is going away, like the blunderbuss it is. it had decades to get it right, and still fails the test for security that wind/solar have in spades, as well as the epic, entirely predictable-as-a-swiss-clock cost over-runs.

yes we will learn to do with less watt wastage, and we'll be happy we did. present utility companies are the main polluters, along with the infernal combustion engine, we have the science to do much better, what's throttling renewables is lobbying from dinosaurs capturing the political process, allowing at best one country in the whole of europe to do more than just a symbolic move into a wiser, cleaner future for our families.

the yoyo-ing of incentives and tariffs is a deliberate ploy to undermine, sabotage and brake this transition. coal is bad enough, but it doesn't leave fuel rods that need to be babysat for centuries, needing lots of fresh water we hope we'll still have on a drying planet.

either one is a deal with the devil. gas too for that matter, but even with fracking that's orders of magnitude less malign, and seems to have become the fuel of choice till we finish pulling our heads out of our collective fundament.

at least we could produce some of that at home for pennies, at a pinch, compared to presently enriching the putinocracy and raving about LPG terminals.

wind and sun? got any? how many wars are those energy sources going to get us into? how many dictators will we have to prop up for them?

look, if nukes were good for us, we'd have got that message by now, on their merit. they had their moment pretending to be the sun-in-a-box, now the real one has come out, no more need for superannuated hack-jobbing energy from the environment, when elegant solutions exist, and could abound with enough support.

instead we have the industry with the worst track record on truth and lies of any, and they can't find insurance from the precious free market can they? the government/taxpayers have to clean up after a whoops, right?

no need for that with renewables... it's common sense not to go backwards technologically if we can help it, deriving energy from near-infinite sources without political fallout or antipodean resource rape.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Nov 3rd, 2012 at 01:36:55 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 0)

Thomas:
What would you consider sufficient empirical evidence to change your view on nuclear?
as opposed to unempirical evidence, you mean?

Evidence? moi?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Carrie (migeru at eurotrib dot com) on Sun Nov 4th, 2012 at 05:34:57 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 0)

touche!

self-evident ever?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Nov 4th, 2012 at 07:12:03 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 2)

What evidence would change Thomas's view?

by Katrin on Sun Nov 4th, 2012 at 08:15:02 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 1)

I specified. Germany succeeding in decarbonizing. More generally, I will stop shilling for more nukes once the coal plants are all scheduled for demolition and and the loadfactor for the NG burners either very low, or their fuel synthetic rather than natural.

It is an urgency thing, more than anything. The potential kill count from global warming is in the billions, and people have been preaching the gospel that renewables will do the job and thus we do not need to resort to fission for over 40 years. 40 years of failure.

... Question. If 2054 comes around and Germany still burns coal, will that make you reconsider your standpoint?

by Thomas on Sun Nov 4th, 2012 at 03:17:41 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 0)

The coal plants are a result of corrupt structures and they will go before 2054. Renewable is the real enemy of nuclear, not coal.

Either you didn't finish your reading list or you didn't take my point of the danger of nuclear plus its cost. Sixty years and they still need subsidies!

by Katrin on Sun Nov 4th, 2012 at 04:46:33 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 1)

The status quo is both vastly more costly, and vastly more deadly. Every nation that elected to burn coal instead of Uranium in 1970, elected to kill many thousands of people. If the nasty climate change projections turn out to be the correct ones, make that millions to billions.
Nuclear is not harmless. Nothing is harmless. But you do not die extra permanently because you happened to die from radiation. Cancers from coal plant pollution are not somehow fluffy and cute. Birth defects from mercury poisoning are not less heartbreaking to parents than those induced by xenon isotope leakage.

by Thomas on Sun Nov 4th, 2012 at 05:24:15 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 0)

Damn. Hit the button by mistake.

You are downplaying the danger from nuclear. Well, unsurprisingly. Additionally you make the mistake of claiming coal was the competitor of nukes. Rubbish. Nuclear is the direct antagonist of renewables. You can't switch to wind and solar and have nukes at the same time. You've got to decide now if you want nuclear or renewables. Killing coal is the next step.

by Katrin on Sun Nov 4th, 2012 at 05:45:39 PM EST
[ Parent ]

picking losers (4.00 / 3)

What would you consider sufficient empirical evidence to change your view on nuclear?

How about: a commercial entity building a plant on time, on budget, without subsidy, and without the State providing unlimited liability insurance? And then operating it safely, and disposing of all the waste successfully, and no weapons proliferation.

What, no takers, anywhere in the world? Hmmm.

Doesn't that make the economist in you just a little bit suspicious - that there is no such thing as a market price for nuclear? That nuclear is a loser that only governments can pick?

by LondonAnalytics (Andrew Smith) on Sun Nov 4th, 2012 at 03:51:45 PM EST
[ Parent ]

Re: picking losers (4.00 / 3)

In a word, no. The private sector never built a modern rail infrastructure either, and it never will.

What makes me suspicious of nuclear power is the fact that we keep getting leaks revealing an appalling lack of safety culture and safety inspection agencies who are in bed with the plant operators.

Usually, those leaks take the form of documents, but every so often one of them takes the form of fallout.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Nov 4th, 2012 at 04:43:20 PM EST
[ Parent ]

Re: picking losers (4.00 / 4)

The private sector never built a modern rail infrastructure either, and it never will.

Not without massive subsidies and subsequent banruptcies, most likely. But the US transcontinental railroads WERE built by the private sector WITH such subsidies and subsequent bankruptcies. Amazingly, those who built the railroads got away with keeping the alternating square mile checkerboard of land grants through the process. Ah! the glory of spin-offs, even in the 19th century. It was the existence of that real estate that made George's single tax anathema to the Robber Barrons.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Nov 4th, 2012 at 09:12:33 PM EST
[ Parent ]

Re: picking losers (none / 1)

Actually, George's direct attacks on these land grants (much more extensive in the West) and his proposal that it would be better for the state to directly fund railway construction might already have been enough to make him anathema to them.

by gk (gk (gk quattro due due sette @gmail.com)) on Mon Nov 5th, 2012 at 01:29:22 AM EST
[ Parent ]

Re: picking losers (4.00 / 3)

I think a compelling case can be made that the transcontinental railroad is neither modern nor built by the private sector.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Nov 5th, 2012 at 01:41:52 AM EST
[ Parent ]

prescient stuff, JakeS (4.00 / 3)

What makes me suspicious of nuclear power is the fact that we keep getting leaks revealing an appalling lack of safety culture

From Penn Energy, two days after JakeS posted the above comment:

South Korea's nuclear power watchdog has extended an investigation into forged safety certificates for thousands of reactor components in use at several nuclear facilities.

by LondonAnalytics (Andrew Smith) on Wed Nov 7th, 2012 at 10:44:34 AM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (none / 1)

The difference I see between CW and ZI is that ZI are obsolete, maybe because of changes or because they were never good.

res humà m'és aliè

by Antoni Jaume on Fri Nov 2nd, 2012 at 07:31:17 PM EST
[ Parent ]

Re: Galbraith, the Conventional Wisdom and the cur (4.00 / 4)

Krugman blog: The Ultimate Zombie Idea (November 3, 2012)

The controversy over the withdrawal by the Congressional Research Service of a report showing no connection between tax cuts for the rich and economic growth is a reminder that in U.S. politics, at least, the tax cuts/growth notion is the ultimate zombie idea.
I mean, when the CRS report first came out I didn't write about it because it was basically old news (which is not to criticize the report, which did a fine job of putting the evidence together). Nobody has ever been able to find clear evidence of a link between high-end tax cuts and growth. The raw fact, after all, is that the US economy did better in the first half of the post World War II era, with high top marginal rates, than it did in the second half: growth was both somewhat slower and much more unequal in the years after Reagan's 1981 cut than before.
...
There is, of course, no mystery here: just ask who benefits from the dogma that ever-lower taxes on the wealthy are just what we need, and you understand why there is always plenty of money for both economists and politicians who promote the dogma.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Carrie (migeru at eurotrib dot com) on Sun Nov 4th, 2012 at 05:33:14 AM EST
[ Parent ]

Re: Galbraith, the CW and the current mess (4.00 / 7)

Trichet does not mean the same as Krugman with the word "economics" and what we are interested in here is not economics as understood by Krugman, but as understood by Trichet. So Trichet being abandoned by economics is a good thing.

Trichet is not an economist, he's a functionnary. He has lived his entire professional life in the conventional wisdom, first as "expert" purveyor of CW himself, finally elevated to policymaking user of CW.

Trichet's comment about being abandoned by conventional wisdom are similar to Greenspan's admission that his economic worldview had collapsed under the onslaught of circumstances. Although Greenspan't collapse was short-lived. He must have spent a couple of years rereading Ayn Rand, and he's back to his old form.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Carrie (migeru at eurotrib dot com) on Sat Nov 3rd, 2012 at 07:48:16 AM EST

Galbraith, the Conventional Wisdom and the current mess | 39 comments (39 topical, 0 editorial, 0 hidden)

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Galbraith, the Conventional Wisdom and the current mess

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