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As social scientists — and economists — we have to confront the all-important question of how to handle uncertainty and randomness. Should we define randomness with probability? If we do, we have to accept that to speak of randomness we also have to presuppose the existence of nomological probability machines, since probabilities cannot be spoken of — and actually, to be strict, do not at all exist — without specifying such system-contexts. Accepting Haavelmo’s domain of probability theory and sample space of infinite populations — just as Fisher’s ‘hypothetical infinite population, of which the actual data are regarded as constituting a random sample,’ von Mises’s ‘collective’ or Gibbs’s ‘ensemble’ — also implies that judgments are made based on observations that are

De intellektuella är själva redan så inprogrammerade på det som är avsett för deras isolerade sfär att de inte frågar efter annat än det som serveras dem under märket highbrow. Deras ärelystnad går bara ut på att vara orienterade i den tillhandahållna sorteringen, att komma på det riktiga slagordet. De invigdas outsiderskap är en illusion, det är bara disponibilitet. Att uppfatta dem som renegater vore än mer befängt: de döljer sin slätstrukenhet bakom hornbågar med fönsterglas blott för att inför sig själva såväl som i den allmänna kapplöpningen framstå som brilliant. Det är också just vad de är. Den subjektiva förutsättningen för opposition, självständigt omdöme, är i utdöende, samtidigt som dess yttre åtbörder reproduceras som gruppritual.
Theodor Adorno Minima Moralia

From Lars Syll

The fallacy of composition basically consists of the false belief that the whole is nothing but the sum of its parts.  In society and in the economy this is arguably not the case. An adequate analysis of society and economy a fortiori can’t proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts.
This fact shows up when orthodox/mainstream/neoclassical economics tries to argue for the existence of The Law of Demand – when the price of a commodity falls, the demand for it will increase — on the aggregate. Although it may be said that one succeeds in establishing The Law for single individuals it soon turned out — in the Sonnenschein-Mantel-Debreu theorem firmly established already in 1976 – that it wasn’t possible to extend

Även människors privata umgänge verkar utvecklas efter modell av industrins så kallade flaskhalsar. Även inom den minsta gemenskap blir det den mest okultiverade som kommer att ange nivån. Den som exempelvis i ett bordssamtal börjar tala över huvudet på någon enda av deltagarna bir taktlös. Av finkänslighet begränsas samtalet till det mest närliggande, ointressanta och banala om så bara en enda okänslig människa är närvarande. Alltsedan världen berövade människorna talförmågan har den som inte är att tala med haft ett övertag. Han behöver bara trumpet förskansa sig i sitt intresse och sin beskaffenhet för att driva sin vilja igenom. Redan det att den andre i sin fåfänga strävan efter kontakt intar en vädjande eller övertalande attityd gör honom ohjälpligt till den svagare.

Perché yours truly non è un neo-ricardiano

Così come la macroeconomia tradizionale del dopoguerra è stata criticata per essere fondata su una metodologia matematica assiomatico-deduttiva, ritengo che il nucleo del neo-ricardianismo sia basato sulla stessa metodologia.
Per risolvere il problema di trovare una misura del valore che non sia influenzata dai cambiamenti nella distribuzione del reddito, Sraffa — in “Produzione di merci a mezzo di merci” — costruisce la sua “merce standard”. Espressa in termini di questa specifica “merce”, la relazione tra il tasso di profitto e i salari diventa lineare. Nel sistema standard, il tasso di profitto è determinato come un rapporto tra quantità di merci indipendentemente dai loro prezzi. La merce standard di

Att bli gammal — några visdomsord

Hjälp mig att inte repetera ändlösa detaljer, ge mig vingar som för mig till saken! Försegla mina läppar angående mina krämpor och besvär. De tilltar och det känns alltmer frestande att älta bekymren.
Jag vågar inte be om ett förbättrat minne men jag ber om växande ödmjukhet och mindre tvärsäkerhet när mitt minne inte stämmer med andras. Lär mig den strålande läxan att jag tar fel ibland. Låt mig få bli någorlunda angenäm, jag vill inte vara något helgon, somliga helgon är så svåra att leva med.
Men en sur åldring är något av kronan på djävulens verk.
Ge mig förmågan att se det goda i oförutsedda sammanhang och att se talanger hos människor där man inte väntade sådant.
Och käre Herre, gör mig vänlig, så att jag

Wie eine höhere Vermögenssteuer die Wirtschaft verbessern kann

Das Deutsche Institut für Wirtschaftsforschung (DIW) in Berlin hat Rechnungen für eine Vermögensteuer in Höhe von einem Prozent angestellt, wie sie derzeit politisch diskutiert wird. In dem Modell gilt ein Freibetrag in Höhe von einer Million Euro für Privatpersonen und von fünf Millionen Euro, wenn diese in einem Betrieb stecken.
Das bedeutet: Privatleute müssen die Steuer bezahlen, wenn sich ihr Vermögen auf mindestens eine Million Euro beläuft, Unternehmen bei einem Vermögen von mehr als fünf Millionen Euro. Die Einnahmen beliefen sich dann auf 14,9 Milliarden Euro im Jahr. Nun ist es aber denkbar, dass Geld ins Ausland gebracht wird, wenn die Vermögensteuer wieder in Kraft ist. Dadurch

The teaching of economics — captured by a small and dangerous sect

The fallacy of composition basically consists of the false belief that the whole is nothing but the sum of its parts.  In society and in the economy this is arguably not the case. An adequate analysis of society and economy a fortiori can’t proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts.
This fact shows up when orthodox/mainstream/neoclassical economics tries to argue for the existence of The Law of Demand – when the price of a commodity falls, the demand for it will increase — on the aggregate. Although it may be said that one succeeds in establishing The Law for single individuals it soon turned out — in the

Barn av vår tid

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Ulf Dageby (1944-2024) In Memoriam

My youngest daughter, after a couple of years of tough studies and hard work, last week succeeded in getting into her highly sought-after program.
You never gave up.
You never gave in.
Congratulations, Linnea!
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Financial economics — science or chance?

Those of us who occasionally follow stock markets worldwide are usually well aware of the fact that ‘winners’ in these markets are largely the result of the harvest of chance. Occasionally, however, one hears so-called day traders express the view that it surely cannot be a question of pure luck that some stock traders consistently make winning transactions in the market.
To test the sustainability of these opinions, one can amuse oneself by using a little Python script yours truly has made to simulate a chance scenario throwing a die and calculating the probability that at least one person out of 100 gets heads at least 9 times when each person flips a coin 10 times:
import mathdef binomial_coefficient(n,

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Leave the city, go out to our summer residence in the Karlskrona archipelago, open the doors to the terrace, sink into the recliner with a cup of coffee, and just enjoy these wonderful tones flowing from my old Thorens record player…
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From Lars Syll
ZEIT: Today, the debate focuses on the labor shortages facing many industrialized countries.
Angus Deaton: I am always cautious when people talk about a scarcity of labor but don’t talk about wages. The argument always is: Americans don’t want to do these jobs, Germans don’t want to do these jobs. So we have to have migrants. But in many cases, it is not that Germans or Americans don’t want to do these jobs, but that they don’t want to do them at the wages we can pay immigrants to do them. So maybe we should increase wages. It would not be a bad thing if lower-paid Americans got more money and improved their working conditions …
ZEIT: If wages rise, it would likely get more expensive for you to fix the roof of your house.
Deaton: Yes, indeed. People tell me their Danish

Judith Butler — the art of branding fashionable mumbo jumbo

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Judith Butler’s theory of identity rests on the idea that there is nothing between the Scylla of the metaphysical ‘modernist’ subject and the Charybdis of the totally deconstructed identity where the subject becomes nothing but a fictitious fantasy. But this can’t be right. The social constructivist anti-essentialism is unsatisfactory and ends up in an idealist ‘slippery slope.’ Just shifting a biologically over-determined concept with a discursively over-determined concept is not enough to make us understand or explain gender. Merely inverting a reduction and redescribing it do not re-make it. If social science is to have an emancipatory potential it has to go beyond a

Die Wokeness-Bewegung — eine Kritik

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Die Verteidigung der Aufklärung und die Kritik am Wokeness von Susan Neiman ist sowohl kraftvoll als auch überzeugend.
Die Ideen der Aufklärung sind trotz der zahlreichen Kritiken, die gegen sie erhoben wurden, immer noch relevant. Die Aufklärung war gekennzeichnet von einem Geist der Erkundung, der zu neuen Entdeckungen sowohl in der Wissenschaft als auch in der Kultur führte. Anstatt eine enge Weltanschauung zu fördern, ermutigte sie die Menschen, Annahmen und religiöse Überzeugungen zu hinterfragen. Sie bietet immer noch einen Rahmen für die Bewältigung einiger der drängendsten Probleme der Gesellschaft, wie zum Beispiel den Klimawandel und soziale Ungleichheit.
Obwohl die Aufklärung für ihre

Throughout European history the idea of the human being has been expressed in contradistinction to the animal. The latter’s lack of reason is the proof of human dignity. So insistently and unanimously has this antithesis been recited … that few other ideas are so fundamental to Western anthropology. The antithesis is acknowledged even today. The behaviorists only appear to have forgotten it. That they apply to human beings the same formulae and results which they wring without restraint from defenseless animals in their abominable physiological laboratories, proclaims the difference in especially subtle way. The conclusion they draw from the mutilated animal bodies applies, not to animals in freedom, but to human beings today. By mistreating animals they announce that

Shine On You Crazy Diamond

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Deaton on labour shortages and wages

ZEIT: Today, the debate focuses on the labor shortages facing many industrialized countries.
Angus Deaton: I am always cautious when people talk about a scarcity of labor but don’t talk about wages. The argument always is: Americans don’t want to do these jobs, Germans don’t want to do these jobs. So we have to have migrants. But in many cases, it is not that Germans or Americans don’t want to do these jobs, but that they don’t want to do them at the wages we can pay immigrants to do them. So maybe we should increase wages. It would not be a bad thing if lower-paid Americans got more money and improved their working conditions …
ZEIT: If wages rise, it would likely get more expensive for you to fix the roof of your

Does free trade — really — benefit everyone?

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Two hundred years ago, on 19 April 1817, David Ricardo’s Principles was published. In it, he presented a theory that was meant to explain why countries trade and, based on the concept of opportunity cost, how the pattern of export and import is ruled by countries exporting goods in which they have a comparative advantage and importing goods in which they have a comparative disadvantage.
Although a great accomplishment per se, Ricardo’s theory of comparative advantage, however, didn’t explain why the comparative advantage was the way it was. In the beginning of the 20th century, two Swedish economists — Eli Heckscher and Bertil Ohlin — presented a theory/model/theorem according to which the

Links und rechts — passt das Schema noch?

Heute scheint unklarer als je zuvor, was das politisch überhaupt genau bedeutet, links und rechts. Die Unterscheidung hat zwar eine lange Tradition, die auf die Sitzordnung der verfassungsgebenden Versammlung in Frankreich im Jahr 1789 zurückgeht, wo die Royalisten rechts vom König Platz nahmen, die revolutionseifrigen Jakobiner hingegen links. Doch mit dieser Klarheit ist es lange vorbei. Und zwar auch deshalb, weil Populisten wie der Rassemblement National oder das Bündnis Sahra Wagenknecht die Lagergrenzen absichtlich verwischen und auflösen wollen. Sie sind gewissermaßen die politische Variante des niederländischen EM-Hits: “Nach links … nach rechts … nach links … nach rechts. Döpdödödöp” …
Deshalb sehen

Nationalekonomi — mer fiktion än vetenskap

Den värld vi lever i är i grunden osäker och kvantifierbara sannolikheter är undantaget snarare än regeln. Om ”Gud inte spelar tärning” som Einstein hävdade, skulle jag tillägga: inte heller människor. Världen som vi känner den kan endast i begränsad omfattning förstås utifrån antaganden om säker och fullkomlig kunskap. Dess inneboende och nästan obegränsade komplexitet och ’organiska’ samband förhindrar möjligheten att behandla den som bestående av ’atomer’ med diskret skilda, separata och stabila orsakssamband. Vår kunskap måste därför vara av en ganska bristfällig art.
Om den verkliga världen till övervägande delen är ’öppen’ och ’genuint osäker’, varför ska då våra modeller byggas på en önskan att beskriva

Proteste gegen die internationale Schuldenpolitik

Das Bündnis erlassjahr.de, das sich mit Unterstützung von 500 deutschen NGOs seit Jahren für eine Entschuldung einsetzt, sieht beim IWF und der Bundesregierung als einem der wichtigsten Anteilseigner des Fonds eine Mitverantwortung für die Proteste in Kenia. Und damit auch für die Toten durch Polizeigewalt.
Der IWF habe Demonstrationen gegen die massiven Steuererhöhungen vorausgesagt, aber trotzdem gegenüber der Regierung darauf bestanden – wohl wissend, wie die kenianische Polizei mit Protesten umgeht. Für erlassjahr.de gibt es nur eine kurzfristige Lösung, um Kenia und anderen überschuldeten Staaten wieder auf die Beine zu helfen: Ausländische Gläubiger, die mit ihren Krediten und den hohen Zinsen

Is Israel committing genocide in Gaza?

ZEITmagazin: Professor Walzer, is Israel waging a just war against Hamas?
Michael Walzer: Yes. Of central importance, however, is the distinction between ius ad bellum, the just reason for going to war, and ius in bello, the just conduct in a war. The massacre of October 7 is a just cause for going to war; Israel obviously has the right to defend itself. However, there is much to criticize about the way Israel is waging this war …
ZEITmagazin: The heavy bombing of the Gaza Strip is being compared to the bombing attacks on Dresden, Aleppo and Grozny. Is that fair?
Walzer: In Dresden, the Allies’ goal was to create a firestorm in which as many people as possible would die. There were hardly any relevant military

Theory and reality in economics

So, certainly, both non-theorists and some theorists have little patience for research that displays mathematical ingenuity but has no value as social science.  But defining this work exactly is impossible. This sort of work is like pornography quite simple to recognize when one sees it.
Jeffrey Ely

As researchers, we (mostly) want to try to understand and explain reality. How we do this differs between various disciplines and thought traditions. Creating a ‘map’ at a 1:1 scale of reality is of little help. We have to rely on some kind of ‘approximation’ to grasp an often inaccessible reality. Exactly how this approximation is done varies significantly between different research traditions.
In mathematics, by simply

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When your belly’s empty and the hunger’s so real
And you’re too proud to beg and too dumb to steal
You search the city for your only friend
No one would you see
You ask yourself, who’s watched for me
A solitary voice to speak out and set me free
I had to say it
I hate to say it, but it’s probably me

Regeringen och Trafikverket saboterar landets järnväg. Men järnvägsbranschen bidrar själv kraftigt till förstörelsen. Initiativet ”Omtag svensk järnväg”, som leds av SJ och Tågföretagen, är dessutom dömt att misslyckas på grund av avgörande systemfel som gör att branschen är del av problemen. 
Multinationella miljardkoncerner som Flixbus och MTR flyr också tågverksamheten i Sverige eftersom vår järnväg inte tycks ha någon framtid.
Vårt järnvägssystem med vanskötta främst enkelspåriga 1800-talsbanor har fragmentiserats, privatiserats och öppnats för konkurrens med uselt resultat. Trots Trafikverkets svindlande budget försämras infrastrukturen. Decenniers omorganisation av trafiksektorn har misslyckats. Det orsakar samhället och näringslivet miljardkostnader och hindrar