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Dean Baker’s screed, Bill Gates Is Clueless On The Economy, keeps getting recycled, from Beat the Press to Truthout to Real-World Economics Review to The Huffington Post. Dean waves aside the real problem with Gates’s suggestion, which is the difficulty of defining what a robot is, and focuses instead on what seems to him to be the knock-down argument: Gates is worried that productivity growth is moving along too rapidly and that it will lead to large scale...

from David Ruccio Noah Smith is right about one thing: mainstream economists tend to use the word “capital” pretty loosely. It just means “anything you can spend resources to build, which lasts a long time, and which also can be used to produce value.” That’s really broad. For example, it could include society itself. It also typically includes “human capital,” which refers to people’s skills, talents, and knowledge. But then Smith proceeds, like the neoclassical equivalent of Humpty...

In a comment on Nineteen Ninety-Six: The Robot/Productivity Paradox, Jeff points out a much simpler rebuttal to Dean Baker’s and Jared Bernstein’s uncritical reliance on the decline of measured “productivity growth”: Let’s use a pizza shop as an example. If the owner spends capital money and makes the line more efficient so that they can make twice as many pizzas per hour at peak, then physical productivity has improved. If the dining room sits empty because...

from Lars Syll [embedded content] From a more theoretical perspective, Simpson’s paradox importantly shows that causality can never be reduced to a question of statistics or probabilities, unless you are — miraculously — able to keep constant all other factors that influence the probability of the outcome studied. To understand causality we always have to relate it to a specific causal structure. Statistical correlations are never enough. No structure, no causality.   Simpson’s paradox is...

Same story, expectations trumped up but actual numbers not so good: Bad: Highlights Just when existing home sales seemed to be showing lift the pending home sales index, which tracks initial contract signings, is down 2.8 percent in the January report. This points to weakness for final resales in February and March. The West is the culprit in January’s data, with contract signings down 9.8 percent in the month for year-on-year contraction of 0.4 percent. The Midwest is also...

from Dean Baker Last week Bill Gates called for taxing robots. He argued that we should impose a tax on companies replacing workers with robots and that the money should be used to retrain the displaced workers. As much as I appreciate the world’s richest person proposing a measure that would redistribute money from people like him to the rest of us, this idea doesn’t make any sense. Let’s skip over the fact of who would define what a robot is and how, and think about the logic of what...

I’m no expert on South Africa, but I did some reading and pieced together a brief history of the country’s last 50,000 to 150,000 years. It begins with the San. Depending on who you ask and what evidence they are looking at, the San people have been in Southern Africa for somewhere between 50,000 to 150,000 years. For most of that time, the San and a related population, the Khoi Khoi (more on them below) have been the only people in Southern Africa. As a...

from Norbert Häring With big fanfare, Deutsche Bundesbank announced on February 9 that ahead of plan they had repatriated 300 tons of gold from New York. This put a positive spin on a rather disturbing fact –1236 tons of gold that is supposed to be part of Germany’s currency reserve will continue to be kept outside of German control in New York – indefinitely. The German gold in question is being kept in storage at the New York Fed, an institution that is owned and controlled by...

from Lars Syll Vielleicht ist diese Grundperspektive der radikalen Trennung von Form und Gehalt hilfreich, einige zunächst überaus paradoxe Äußerungen von Lucas etwas zu erhellen. Erinnert man sich der Forderungen von Lucas, die Makroökonomik zwingend auf Basis der klassischen Postulate, die Lucas und Sargent (1978) als (a) „Markträumung“ und (b) „Eigennutz“ umrissen hatten, zu errichten, so erstaunt man doch angesichts Passagen wie der folgenden: “In recent years, the meaning of the...