Economics ?

RufusDawes

What are your opinions on the discipline of Economics ? Do you think it has the potential to be used to help people or do you think it is simply a tool used by the rich and powerful.

Is Economics a science ? Is the mathematics behind it sound ?

I have friends who say it is fluff, that it is nothing more.

What do you think about Economics ? I have noticed as of late that policies that can be demonstrated to help the average person (such as higher minimum wages) under the right conditions are largely ignored.

I am interested to hear what some of you sound mathematicians think of Economics.

russ_watters

You have a degree in economics and can't answer these questions yourself? What do you think the answers are?

Saying that economics is a too for the rich and powerful sounds pretty silly to me. Economics is merely the study of how the economy works. Anyone who wants to understand how the economy works can use it and benefit from the knowledge (and presumably get a job in a related field).

Policies like a higher minimum wage are problematic due to the secondary effects. As you know, the labor market is a real market, and supply and demand applies. So if the price of labor increases, the demand will decrease - unemployment will increase. How much....well, that's what economists are for. But such policies are also understandably politicised.

RufusDawes

frankly...we can do so many cool things with science and engineering with perfect precision but we can't somehow organise our economy, to FEED and give everyone a job...and not have to live in relative poverty.

What ? the mathematicians can't figure that one out ? or are we being run by flambouyant retards (economists) ?

DaleSpam

I am not sure whose economy you are talking about. It certainly isn't the US economy.

There is no real poverty in the US (relative poverty is rather meaningless), nor is hunger a real problem (obesity is the number one health problem for our "poor"), and unemployment is about as low as it can be without causing real problems (full employment would be disasterous to the economy).

The flambouyant retards (politicians) try to mess things up, but so far the people have managed to keep them away enough to not cripple the economy.

RufusDawes

That is exactly what I mean. 'Relative poor is rather meaningless" why so ? who's purpose does it serve to ignore relative poverty ?

You're just excluding the concept of poverty based on a comparison to a different beast (a developing nation). Could an engineer get away with similar ? comparing an aspect of his design to something made in the 50's ? ''Relative inefficiency is meaningless".

DaleSpam

Relative inefficiency is meaningless too, an engineer would never quote an efficiency number in terms of other designs, past or present. An engineer would simply tell you what the efficiency of his design is. It is a meaningful number on its own.

Relative poverty is a silly concept precisely because it is relative*. A person living in a $500k home eating 5,000 calories per day would be considered impoverished if his neighbors had more. That is a meaningless definition of poverty, and since it is meaningless it best serves everyone (including the relative poor) to ignore it.

A better question is "relative poverty is a meaningless concept so whose purpose does it serve to support it?"

*Relative numbers can only be meaningful in general if they are referenced to a stable standard. This is the case for e.g. kilograms, but not the case for poverty.

RufusDawes

The poverty line is at something between 10,000-18,000 per year I fail to see how many people living that cheap would have a 500,000 home. What you described is relative wealth not relative poverty.

russ_watters

Are you really an economist? I guess it shouldn't surprise me, I have seen such things before, but it truly disappoints and disturbs me when I see such things.

russ_watters

The point is that using that standard as our poverty line then requires defining probably about 90% of the world population as impoverished. The way we define poverty enables people with cars, refrigerators, and air conditioning to be labeled as "impoverished" while in other places in the world there are people in real need of basic necessities such as food and shelter. The way the word is used by those in a position to define it (ie, government agencies and the UN) is not based on real need/material condition. And this is in an era where technological and economic advancement have enabled rapid and truly spectacular improvements in material condition. The way the word is used it is intentionally deceptive and manipulative - it is used for political purposes only and has no real basis in objectivity. It is unscientific.

Ie, it can be said that the poverty rate in the US has not decreased significantly in the past 50 years or so (using the definitions given by the government agencies responsible for tracking it). A logical person would take this to mean that the human condition is not improving in the US. But that isn't true. In fact, living conditions have improved dramatically in the US in the last 50 years.

You asked the question and you yourself may be the answer: Economics is capable of being science and probably should be scientific (it claims to be, afterall), but whether it is treated scientifically by economists is another matter entirely. It appears to me that a great many economists are more politicians than scientists and use economics as a political game rather than a real scientific endeavour.

I believe that a field that claims to be scientific really should be scientific. It should be based on math and logic.

RufusDawes

I don't see the need to try and be so insulting. Mine is simply a different point of view based on my experiences.

DaleSpam

You obviously missed my point completely, so I will try again.

My point is that no honest person would consider someone in a big house eating lots of food to be impoverished, but that is precicely the sort of thing that can happen under the current relative definition of poverty.

The definition of poverty is someone that makes less than half of the median income. So, let's say that the median income level today is $36k. A median income of $36k provides for a comfortable lifestyle that nobody would call impoverished: 4,000-5,000 calorie/day diet, ~2400 sq. ft. home, utilities, health care, car, cable tv, a/c, etc. Now, assume that GDP goes up by 6%/year and that inflation goes up by 3%/per year over 25 years. After 25 years it will take an income of $75k to purchase the exact same comfortable lifestyle that nobody would call impoverished. However, the median income is now $155k, so suddenly the $75k (4,000-5,000 calorie/day diet, ~2400 sq. ft. home, utilities, health care, car, cable tv, a/c, etc) is considered impoverished. That is silly.

Similarly, by this definition of poverty (half the median income), if half of the population were starving then there would be a large portion of the population between the median income and the poverty income that would be starving but not considered poor. That is also silly.

Anyway you look at it a relative definition of poverty is silly and it benefits noone other than politicians.

RufusDawes

"Anyway you look at it a relative definition of poverty is silly and it benefits noone other than politicians."

It benefits the relatively poor people when the government decides to try and help them specifically.

Ronnin

Economics is far from "fluff". The mathematics are very sound and are used to a very high degree of accuracy. Now, the models or statistics being used in calculations may not be as accurate as one would like. If the methods of economics were just "fluff" I doubt Wall Street would employ the amount of intelectual capital, man and computer power that they do. The purpose of economics is not to establish any kind of "fairness" in the marketplace, that is regulated by economic policy and trade law. Knowlege of economics would certainly benefit anyone who wishes to learn it. Perhaps the knowlege of economics and its application helped contribute to the acquisition of some of that wealth those wealthy people obtained.

DaleSpam

I disagree completely. It does a man no good for someone else to do something for him that he can and should do for himself. It ruins his integrity, his work ethic, his self respect, his value to the community, and his capacity to do good. It breeds in him a sense of entitlement and corrupts his morals to the point that he thinks it is virtuous of him to forcibly take another man's property at the point of a gun.

RufusDawes

We are never going to agree on any of that. To me what you are saying is total madness, to you a pay rate of $20 an hour for a retail worker would seem crazy. However, that is the reality of things in my country, a retail worker does get paid roughly $20 an hour. Many goods that in the United States are on a user pays basis are provided and regarded as a basic human entitlement. However this is obviously not without its costs.

DaleSpam

Given the lack of thought and reason displayed in your posts this is hardly surprising.

RufusDawes

Yes, ok in a global context any reference to poverty in the western world silly.

In local context I think it is a very useful measure that should not be ignored. Largely has been ignored to the detriment of the local economy. In that regard I am questioning the merits of economics as a means of helping people.