From: crb7q@kelvin.seas.Virginia.EDU (Cameron Randale Bass)
Newsgroups: sci.energy
Subject: Re: What is Econ? (was Re: Running out of oil  -
Date: 4 Oct 92 16:08:57 GMT
Article-I.D.: murdoch.1992Oct4.160857.17661
Distribution: na
Organization: University of Virginia

In article <1992Oct4.091952.8065@gallant.apple.com> ems@gallant.apple.com (Mike Smith) writes:
>In article <1992Sep16.030723.1396@murdoch.acc.Virginia.EDU> crb7q@kelvin.seas.Virginia.EDU (Cameron Randale Bass) writes:
>>In article <30643@goofy.Apple.COM> ems@Apple.COM (Mike Smith) writes:
>
>>>The reason for inflation is that we print more money.  That is all.
>>>You increase the money supply, you get inflation.  IFF the rate of
>>>increase in money supply matches the real increase in productivity
>>>are you 'in balance'.  (i.e. money supply growth of about 1.5%).
>>
>>      This is a rather extreme monitarist viewpoint. See below.
>
>One persons 'extreme monitarist viewpoint' is anothers 'classical
>monitarist viewpoint'... 

     Gee, E. Mike.  Did I escape your kill file? 

>>>Get the picture?  With NO VOTE BY ANYONE and NOONE TO BLAME, you can
>>>plunder the folks who have loaned out money; to the benefit of the
>>>government and corporate contributors.  And since the Banks and S&Ls
>>>are insured, the public will bail them out when the piper has to be paid...
>>
>>     To the benefit of everybody large and small.  We gave ourselves
>>     large handouts which must now be paid back at government (i.e. our) 
>>     expense.   
>
>Wishfull thinking and over simplification.  The folks Keating hurt
>were not the same ones he benefited.  The folks paying for the bailout
>were neither.

     Who did Keating hurt except shareholders and us?  Shareholders
     for the most part are the same people he helped.

>>    At a certain point this argument fails.  Imagine a dollar fixed
>>    to a fixed gold supply so that you can have no monetary growth
>>    whatsoever.  Imagine OPEC somehow is able to raise the price of oil 
>>    to $4000 a barrel.  I suspect that you would see substantial inflation
>>    immediately prior to the economy collapsing completely (or alternatively
>>    using barter as the sole means of economic transactions which
>>    imposes its own penalties). 
>
>Or you see a massive reduction in the purchase of oil without attendant
>inflation.  I didn't say the outcome would be 'better', only that you 
>could have oil price hikes without inflation.  It is most likely that
>the scenario you propose would result in a disasterous recession/
>depression and fall of production beyond belief.  

     Not initially.  You'd see debt and prices increase as production
     fell through the floor.  The economy depends on oil in so many ways,
     managers would try to maintain what production they could.  
     I think you'd also see a rather precipitous increase in drilling
     operations.

>What else would you expect from a REAL price increase of that size
>in that key an economic resource?  Now, it you can STEEL the resource
>by not paying the REAL price, but rather paying a ficticious price
>since you will be inflating the value of the money away, then the
>REAL impact on the productive capacity will be lower, but at the
>expense of inflation.

     Absolutely.  The point was that there are limits to monitarism.
     You noted no such limits in your previous commentary.

     As far as the 'real' price of oil goes, what the heck is that?
     I seem to remember the well-head price in Saudi is about $1.50.
     Is that the 'real' price?  Or are you worried about some other
     'real' price?

>>
>>    Oh.  Economics is the study of understanding 'what the power elite
>>    is up to'?  I must have missed that.
>
>While the original paragraph is laden with cynicism (and maybe even 
>a touch of sarchasm ... ;-) it is sadly rather true for some parts
>of the field of Econ.  Tends not to be the case for things like 
>micro-econ.  Tends to be rather completely the case for Political 
>Economy.  The rest grades out in between.  Given that almost all
>the money and productive assest are, by definition, owned by the
>rich (and, thus,  powerful), I'd expect the study of money 
>and productive assest to be concerned with the rich and powerful ...

     But 'political economics' *is* the study of what the 'power
     elite' is up to.  The rest of Economics does not necessarily
     seem to be.

>>>If this all sounds cynical, well, it is.  There are some wonderful
>>>Economists who represent the average Joe.  (Heck, there are even
>>>a bunch of radical Marxist Economists).  The problem is one of number
>>>and position.  Who do economists work for?  Who decides what gets
>>>published?  Who controls the ability of those economists to gain
>>>grants and funding?  So they work and publish, but always with the
>>>understanding that they have to be careful not to offend the Patrons...
>>>Government and Business.
>>
>>     Is economics an advocacy profession?  
>
>I'm not sure what you mean by 'advocacy profession'.  Guessing that
>it means 'a profession based on advocacy of positions rather than 
>scientific physical experiment' I'd have to answer:  Often, yes.

     'Represent the average Joe' = advocacy.
     
>>     Also, what is 'government' in this context?  
>
>Exactly what it says it is.  The agencies of power that govern nations
>and states.  Government.

     'Government' is hardly a monolithic bloc.  'Government' is
     rather ineffective at eliminating alternative viewpoints.

>>     Heck, Senators of both
>>     political parties seem to make a good living leaking classified
>>     documents that have the potential of being very detrimental to 
>>     our national security.  
>
>FAR too narrow a view!  Economics deals with all kinds of governments
>from all over the world with far more than just 2 parties!  Part of
>what makes it a fun field is watching the folks from opposing political
>systems trot out thier competing economists!  (Again:  Remember that 
>there are economists from the MARXIST as well as the MONITARIST schools!).

     This does not strengthen your point, he said dryly.

     In fact, you just did a fine job of strengthening mine.

>>     I have a hard time with the contention
>>     that 'government' is a monolithic bloc that 'controls' the voices
>>     of economists.  
>
>What you have 'a hard time with' is of little influence on the world.

     Assertions made with no evidence, given the obvious inability of
     government to 'control' much else, are of little worth.

>I've not said that government is a monolithic bloc.  In fact, it
>is many strongly competing antagonistic blocks around the whole world.

     You have implied, at least in a national context, that 'government'
     is able to control the voice of economists.  Ha.

>Large numbers of ecomists work for government agencies, departments,
>research facilities, ...  If you step too far out of line, you lose
>either your funding or maybe even your job.  Don't get me wrong, I'm
>not saying that there is some great organized conspiracy to 
>explicitly control ALL economists the world over.  I'm just stating 
>the (rather obvious) fact of life than an Economist for the AEC is
>going to put the best positive spin on nuclear economics that his 
>EMPLOYER can get for his money.  If he is a rabid nuke hater, he 
>won't likely be promoted to department head!  (BTW, you could make
>the same statment for someone in the Dept. of Solar Power ... if
>we had one ..)

     So?   I suspect that the NRC's economists think differently from
     EPA's and the CIA's, or the State department or Shearson's or
     IBM's or the State of California's.   You seem to see national
     government as one non-competing entity when, in fact, it
     competes with itself all over the place (and all over the world).

     By the way, an economist for the AEC would probably not be very
     happy, with the unemployment situation and all.

>>     As far as the 'radical left' goes, we certainly have not been deprived 
>>     of their point of view.  However, if you wish to make Economics
>>     entirely point-of-view dependent then you will lose whatever
>>     utility it may have.
>
>Not all the utility ... and not entirely point-of-view dependent.  
>But is does have some parts of the field, and these are disproportionately
>the ones involved in setting national monetary policies, that are
>point of view dependent ...
>
>(BTW, my primary news box died and I havn't got my kill files over
>on this new one yet ... but it is only a temporary thing..)

     In which case, I would have thought that you would have had the
     courtesy to not reply while you were performing the onerous and
     burdensome task of transferring *all* of the kill files to your
     new machine.  How do you do it these days, mule train?

     You'll want to hurry, though.  You might be irreparably injured
     by exposure to other viewpoints.

                             dale bass
-- 
C. R. Bass                                           crb7q@virginia.edu
Department of Mechanical and Aerospace Engineering
University of Virginia
Charlottesville, Virginia                            (804) 924-7926