May 5, 2019 in Economics
I’ve certainly made no secret about how important monetary economics is to my thinking, but I also have never clearly laid out the arguments that convinced me of monetarism, let alone explained its central theories. This isn’t by design. There’s almost an introduction to monetarism already on this blog, if you’re willing to piece together thirty footnotes on ten different posts. It is obviously the case that no one wants to do this. Therefore, I’d like to try something else: a succinct explanation of monetary economics, written as clearly as possible and without any simplifying omissions or obfuscations, but free of (unexplained) jargon.
Last week I explained how poor decisions by central bankers (specifically failing to spur inflation) can make recessions much worse and lead to slower wage growth during recovery.
(Briefly: inflation during recessions reduces the real cost of payroll, cutting business expenses and making firing people unnecessary. During a recovery, it makes hiring new workers cheaper and so leads to more being hired. Because central bankers failed to create inflation during and after the great recession, many businesses are scared of raising salaries. They believe (correctly) that this will increase their payroll expenses to the point where they’ll have to lay many people off if another recession strikes. Until memories of the last recession fade or central bankers clean up their act, we shouldn’t expect wages to rise.)
Now I’d like to expand on an offhand comment I made about the minimum wage last week and explore how it can affect recovery,...
The Economist wonders why wage growth isn’t increasing, even as unemployment falls. A naïve reading of supply and demand suggests that it should, so this has become a relatively common talking point in the news, with people of all persuasions scratching their heads. The Economist does it better than most. They at least talk about slowing productivity growth and rising oil prices, instead of blaming everything on workers (for failing to negotiate) or employers (for not suddenly raising wages).
But after reading monetary policy blogs, the current lack of wage growth feels much less confusing to me. Based on this, I’d like to offer one explanation for why wages haven’t been growing. While I may not be an economist, I’ll be doing my best to pass along verbatim the views of serious economic thinkers.
When dealing with questions of inequality, I often get boggled by the sheer size of the numbers. People aren’t very good at intuitively parsing the difference between a million and a billion. Our brains round both to “very large”. I’m actually in a position where I get reminded of this fairly often, as the difference can become stark when programming. Running a program on a million points of data takes scant seconds. Running the same set of operations on a billion data points can take more than an hour. A million seconds is eleven and a half days. A billion seconds 31 years.
Here I would like to try to give a sense of the relative scale of various concepts in inequality. Just how much wealth do the wealthiest people in the world possess compared to the rest? How much of the world’s middle class is concentrated in just a...
The Cambridge Analytica scandal has put tech companies front and centre. If the thinkpieces along the lines of “are the big tech companies good or bad for society” were coming out any faster, I might have to doubt even Google’s ability to make sense of them all.
This isn’t another one of those thinkpieces. Instead it’s an attempt at an analysis. I want to understand in monetary terms how much one tech company – Google – puts into or takes out of everyone’s pockets. This analysis is going to act as a template for some of the more detailed analyses of inequality I’d like to do later, so if you have a comment about methodology, I’m eager to hear it.
Under the Partial Test Ban Treaty (PTBT), all nuclear tests except for those underground are banned. Under the Non-Proliferation Treaty (NPT), only the permanent members of the UN Security Council are legally allowed to possess nuclear weapons. Given the public outcry over fallout that led to the PTBT and the worries over widespread nuclear proliferation that led to the NPT, it’s clear that we require something beyond pinky promises to verify that countries are meeting the terms of these treaties.
But how do we do so? How can you tell when a country tests an atomic bomb? How can you tell who did it? And how can one differentiate a bomb on the surface from a bomb in the atmosphere from a bomb in space from a bomb underwater from a bomb underground?
I’m going to focus on two efforts to monitor nuclear weapons: the national security apparatus...
Why do things happen the way they do?
Every day, there are conflicts between decision makers. These occur on the international scale (think the Cuban Missile Crisis), the provincial level (Ontario’s sex-ed curriculum anyone?) and the local level (Toronto’s bike lane kerfuffle). Conflict is inevitable. Understanding it, regrettably, is not.
The final results of many conflicts can look baffling from the outside. Why did the Soviet Union retreat in the Cuban missile crisis? Why do some laws pass and others die on the table?
The most powerful tool I have for understanding the ebb and flow of conflict is the Graph Model of Conflict Resolution (GMCR). I had the immense pleasure of learning about it under the tutelage of Professor Keith Hipel, one of its creators. Over the next few weeks, I’d like to share it with you.
GMCR is done...
Oct 16, 2017 in Politics
“We knew the world would not be the same. A few people laughed, a few people cried, most people were silent. I remembered the line from the Hindu scripture, the Bhagavad-Gita… ‘Now, I am become Death, the destroyer of worlds.’” – J Robert Oppenheimer, on the reaction to the successful test of the first atomic bomb.
Sep 3, 2017 in Politics
I’ve been ranting to random people all week about how much I love the Westminster System of parliamentary government (most notably used in Canada, Australia, New Zealand, and the UK) and figured it was about time to write my rant down for broader consumption.
Here’s three reasons why the Westminster System is so much better than the abominable hodgepodge Americans call a government and all the other dysfunctional presidential republics the world over.
And more importantly, the head of state is a figurehead.
The president is an odd dual-role, both head of government (and therefore responsible for running the executive branch and implementing the policies of the government) and head of state (the face of the nation at home and abroad; the person who is supposed to serve as a symbol of national...
Utilitarianism for and against is an interesting little book. It’s comprised of back-to-back ~70 page essays, one in favour of utilitarianism and one opposed. As an overview, it’s hard to beat something like this. You don’t have to rely on one scholar to give you her (ostensibly fair and balanced) opinion; you get two articulate philosophers arguing their side as best they can. Fair and balanced is by necessity left as an exercise to the reader (honestly, it always is; here at least it’s explicit).
I’m going to cover the “for” side first. The “against” side will be in later blog post. Both reviews are going to assume that you have some understanding of utilitarianism. If you don’t, go read my primer. Or be prepared to Google. I should also mention that I have no aspirations of being balanced myself. I’m a utilitarian; I had much more to disagree...
It can be hard to grasp that radio waves, deadly radiation, and the light we can see are all the same thing. How can electromagnetic (EM) radiation – photons – sometimes penetrate walls and sometimes not? How can some forms of EM radiation be perfectly safe and others damage our DNA? How can radio waves travel so much further than gamma rays in air, but no further through concrete?
It all comes down to wavelength. But before we get into that, we should at least take a glance at what EM radiation really is.
Electromagnetic radiation takes the form of two orthogonal waves. In one direction, you have an oscillating magnetic field. In the other, an oscillating electric field. Both of these fields are orthogonal to the direction of travel.
These oscillations take a certain amount of time to complete, a time which is calculated by observing the peak value...
To answer that question, you have to think about another, namely: “what makes an action right?”
Is it the outcome? The intent? What is a good intent or a good outcome?
Kantian deontologists have pithy slogans like: “ I ought never to act except in such a way that I could also will that my maxim should become a universal law” or “an action is morally right if done for duty and in accordance to duty.
Virtue ethicists have a rich philosophical tradition that dates back (in Western philosophy) to Plato and Aristotle.
And utilitarians have math.
Utilitarianism is a subset of consequentialism. Consequentialism is the belief that only the effects of an action matter. This belief lends itself equally well to selfish and universal ethical systems.
When choosing between two actions, selfish consequentialist (philosophers and ethicists would call such a person an egoist) would say...