Re: The (or an) Economists's Can Opener

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

The US has the world's most efficient economic data collection mechanism with
the shortest lag time and the highest accuracy.  The problem is not the
mechanics of data collection which Greenspan implies, but the conceptual
relevance of the conventional data base. Greenspan has repeatedly told Congress
that bigger budgets for government data collection will be well worth the
money, yet it seems obvious that the system is already suffering from
information overload.  Kant insightfully asserted that the definition and
organization of data are affected by subjective bias.  Alice in Wonderland asks
: "How do you know what questions to ask if you don't know what answer you
want?"  Biases are unavoidable, even for scientists. Some biases are socially
useful and others are socially harmful.  Thus bias towards full employment is
good and bias toward the intrinsic value of money is bad, though both biases
can be sustained by "scientific" construction.  The Keynesian starting point is
that full employment is the basis of good economics.  It is through full
employment that all other economic inefficiencies can best be handled, through
an accommodating monetary policy.  Say's Law turns this bias up side down with
its bias toward supply/production.  Monetarist in support of Say's Law thus
develop a bias against inflation, claiming unemployment to be a necessary tool
for fighting inflation and that in the long run, sound money produces the
highest possible employment level. It is hard to see how sound money can ever
lead to full employment when unemployment is necessary to maintain sound
money.  Within limits and within reason, unemployment hurts people and
inflation hurts money.  And if money exists to serve people, then the choice
becomes obvious.

Greenspan has been seeking to cover his tracks and his behind by claiming that
life is unknowable, which is probably true, but the cure for unemployment and
economic disaster is not a mystery.   Greenspan cannot deal effectively with
unemployment not because of any deficiency in data collection, but because he
refuses to identify full employment as a worthwhile goal.

The fact is that if a central banker sets his goal on full employment, any high
school graduate holding the post can achieve full employment.  There is no
mystery, only denial.

Henry C.K. Liu

John Gelles wrote:

>         A physicist, a chemist and an economist are stranded on an island,
> with nothing to eat. A can of soup washes ashore. The physicist says, "Lets
> smash the can open with a rock." The chemist says, "Lets build a fire and
> heat the can first." The economist says, "Let's assume that we have a
> can-opener..."
>         Joke sent by: Paul Samuelson
>
> The source offered by Alan distinguishes between amateur and
> professional economists. Sometimes the joke is on the former.
> other times it is on the latter. Or it is on both.
>
> The correct remark would have been, "Let's make a can-opener."
> It would have been offered by anyone not so hungry he could not
> think. A propensity to assume for purposes of thought experiment
> is good. But the thought experiment must lead somewhere. Like to
> making a can-opener once it's features are in mind. A sharp pinted
> stick or stone struck with a flat rock ought to do for thin soup.
>
> Hearty soup will require a wedge to widen the puncture. This
> chemist, guy, is dangerous. The physicist is merely stupid. So why
> did Samuelson want to make algebra out of literary criticism?
>
> If you go to the post-autistic economics home page you can reach
> Susan George on globalization, Seattle, etc. Fine writing. I would
> post her essay if it were not so long.
>         John G.
>
> ----- Original Message -----
> From: Alan G. Isaac <aisaac@xxxxxxxxxxxx>
> To: <pkt@xxxxxxxxxxxxxxxx>
> Cc: Paul Davidson <pdavidson@xxxxxxx>
> Sent: Wednesday, March 28, 2001 11:47 AM
> Subject: Re: The (or an) Economists's Can Opener
>
> On Tue, 27 Mar 2001, John Gelles wrote:
> >         So what's the joke -- please?
> >         Let me guess:  It only works from inside the can?
>
> Search for can-opener at
>  http://www.etla.fi/pkm/JokEc.html
> Alan Isaac