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Environmental and Urban Economics Blog
Jamais Cascio, 14 Aug 05

I must admit to some deep-seated skepticism around academic economics, primarily concerning the superficially "scientific" arguments economists often make that nonetheless remain devoid of the rigor of real science. Economics is most closely related to sociology and politics, yet some economists seem to want to present themselves as Real Scientists, using language (and sometimes models) derived from physics or biology. I'm trying to get over this knee-jerk response to economics, however, and have been looking for interesting websites and weblogs discussing economic issues particularly relevant to WorldChanging topics.

My latest find is the new Environmental and Urban Economics weblog by Matthew Kahn, Associate Professor of International Economics at the Fletcher School at Tufts University. E&UE just started up a week ago, and Kahn has already started grappling with some meaty topics, from sprawl to whether "shame" is a viable tactic for encouraging good corporate behavior. His latest post (as of this morning) concerns the connection between incarceration of African American men for drug crimes and the incidence of AIDS in black women.

I haven't yet decided whether Kahn's blogging will give useful insights into WorldChanging issues, but there are hints of that possibility; at the very least, I've found Environmental and Urban Economics to be sufficiently able to push my own thinking that I've added it to my regular RSS list.

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Economics is basically applied mathematics just like any other science. If you have taken any advanced economics courses or read any economic journals you'll see that it all is indeed very real and applicable. I recommend the Journal of Economic Perspectives, American Economic Review, and/or the Journal of Economic Literature. However, if you are not a student it may be difficult without going to a public university library.

Posted by: dd on 15 Aug 05

I should say economics is applied mathematics like MOST sciences not all because I suppose life sciences may not be math based. Then again, I guess they would be mathematics in the sense of observed patterns and the use of data analysis. I digress, but economics is without a doubt a logic based scientific pursuit.

Posted by: dd on 15 Aug 05

Thank you very much, Jamais, for this post.

As a young engineering student, I and my fellow barbarians were forced by a wise administraton to take economics, among other unpalatable subjects.

I remember being enraged by the realization that economics was a game played with arbitrary rules, using elegant mathematics to optimize what struck me as nonsense, even criminal, so that this game had disasterous real world consequences. My professor told me to quit thinking that way, shut up and do my homework.

The current issue of Scientific American talks a little about this problem at the root of economic theory, and wiser friends tell me there is now lots of activity to make economics relate to common sense and ethics, so perhaps there is hope for a better future.

Posted by: wimbi on 16 Aug 05

along those same lines, you might want to take a look at . Although infrequently updated, it can be quite interesting. Also, I can't recall if I originally found through WorldChanging, but even if so, it's worth re-mentioning.

Posted by: katuah on 16 Aug 05

Sigh. And it was so easy for Hari Seldon.

Posted by: Pace Arko on 16 Aug 05

Poeple dont understand economics.

Economics is simply telling you if I CAN do this.

Common sense and morality tells you IF you SHOULD.

Now I could explain how this interesting mix made kyoto such a tricky bugger... but then your head would explode.

Posted by: wintermane on 17 Aug 05

I have a master's degree in resource economics. All that means is I spent 18 months in an insane asylum. The mathematics behind economics are not particularly advanced - any high school kid in an AP calculus class would get them. About 95% is a rarefied demonstration that things are "optimal" when their derivatives, or the sum of their partial derivatives, equals zero.

In the real world, though, there is absolutely no information whatsoever to be found in an "instantaneous rate of change." A guy named Shannon at Bell Labs proved in the 1950's that information is an integral - a sum of changes over time. Time is a necessary ingredient of information. Right there, most of textbook economics is rendered obsolete.

Economists also assume "perfect information", which is an oxymoron. Information always contains some "noise." That's just physics.

If you take standard economic theory and add time and noise to it, you get behavior closer to the real world - oscillations like commodity cycles, business cycles and so on. But economists, by and large, aren't interested in the real world. Real-world behavior at odds with their models is considered an "aberration." When one isn't not willing to revise one's hypotheses despite overwhelming evidence to the contrary, one is hardly being "scientific."

Textbook macroeconomics shows a beautiful closed loop that couples "producers" and "consumers". When you "produce" stuff people want to buy, you make money. That enables you to be a "consumer", spending your money for stuff and signaling "producers" to make more of it. A beautiful concept, except it forgets resources from a source, "waste" products to a sink, and the entire 2nd Law of Thermodynamics. Whoops, once again, not too scientific.

One of my professors was delighted to learn that chickens will eat their own dried feces. He practically gushed that the cost of producing chickens could be cut to practically nothing - you could raise chickens, feed them their own poop, raise more chickens, feed them more poop, and so on. There wouldn't need to be any purchased grain. When I pointed out to him that this would violate the 2nd Law, he said, "Oh that's just a that's just a theory - technology will overcome that."

The guy was an idiot. How he ever got a doctorate and became a professor of anything is beyond me.

Posted by: David Foley on 17 Aug 05

Actauly economics does deal with resources.. when starting a venture one of the things you do is determine lifetime of the operation involved and thus how many years you have to make back your investment and any profits.

Your resources are a fundamental limit to operational lifespan. If your resource will only last you 15 years you can build a plant that will only last 15 years and maybe that will let you profit from it fast enough.

Posted by: wintermane on 17 Aug 05

Economics doesn't deal with resources in any physical sense at all. It deals with a theoretical mathematics of valuing and trading off resources. Conventional economics believes that money can actually create resources, through a kind of automatic process called "technology".

To be fair, prices are a pretty good way to signal the scarcity of a resource relative to demand, to encourage people to use the resource more efficiently, to search for substitutes, or to find more of the resource. It's a flawed system, but the best we've got for short-term allocation. Markets are a useful tool, but a worthless god.

But academic economists have a cult-like faith that money can actually, physically, create something from nothing. They also believe that, since future earnings are worth less than current ones, there's no point in thinking more than 10 to 20 years into the future. Still, they're confident that a continuous exponential increase in our consumption of physical resources and energy is possible, and necessary, forever.

For a real education in real economics, start here:

and here:

Posted by: David Foley on 17 Aug 05

Oh I wasnt talking about academics after all they are well as you say .... I was talking real world economics principles such as making wure you can make moola before you leap.

Posted by: wintermane on 17 Aug 05



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