Why Are Economists Giving Piketty the Cold Shoulder? (2017) • Hacker News Board

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#131

Post by Mirioron » Sun, Mar 31, 2019, 11:46 PM UTC

burlesona wrote: post #122

Mirioron wrote: post #121

Earlier quoted context omitted.

> That’s one factor, but the core problem is that we can’t build enough inventory to match demand to live in the city, largely due to artificial restrictions. Even if you don't consider zoning laws, could we build enough supply to satisfy demand? People want to live in the city, but many are unwilling to live in (small) apartments. Many even want houses, but obviously the density of that type of housing is too low to…

The "city" is already sprawling, and the outskirts are already far from where people want to live. A lot of my coworkers commute in from places like Fremont, an hour away from the city in good conditions and who knows how long if BART or the Bay Bridge gets backed up. Meanwhile, I understand your point that "many people are unwilling to live in small apartments" but those people are by default not part of the demand…

What you need to keep in mind is that those people willing to live in small apartments or row houses are competing with other housing - including the millionaires that like having a backyard and all of that.

Most of the housing problems in western countries, from my point of view, seem to be that people want to live in places where they can't afford to live at.

I agree that housing is ridiculously regulated in many of these places, but I'm not sure that that's the only problem you have to deal with.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#132

Post by nateburke » Mon, Apr 01, 2019, 1:19 AM UTC

cletus wrote: post #48

We are in some ways victims of the Long Peace. There hasn't been a large-scale war since WWII. Obviously there have been numerous conflicts since but these haven't occurred in the developed world and have largely been contained geographically. Obviously those conflicts are bad for those stuck where they occur and it's good there hasn't been such a conflict, particularly now we're in the nuclear age. But war and revol…

Piketty implied but came short of saying this very thing.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#133

Post by mcguire » Mon, Apr 01, 2019, 1:48 AM UTC

ericd wrote: post #126

Mirioron wrote: post #121

Earlier quoted context omitted.

> That’s one factor, but the core problem is that we can’t build enough inventory to match demand to live in the city, largely due to artificial restrictions. Even if you don't consider zoning laws, could we build enough supply to satisfy demand? People want to live in the city, but many are unwilling to live in (small) apartments. Many even want houses, but obviously the density of that type of housing is too low to…

Most people in the middle of the city won’t get their dream home, there can only be so many penthouses. But at least they’d be able to afford to live there, and not be shut out of the economic opportunities that cities provide. And as another commenter mentioned, the current density of SF is incredibly low. One and two story buildings cover much of the area. Even if it just looked like Paris (wall to wall 5 story bui…

Out of curiosity...

Paris: 27€/m^2 ($30/m^2)

SF: $4.95/ft^2 ($53/m^2)

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#134

Post by ericd » Mon, Apr 01, 2019, 3:40 AM UTC

mcguire wrote: post #133

ericd wrote: post #126

Earlier quoted context omitted.

Most people in the middle of the city won’t get their dream home, there can only be so many penthouses. But at least they’d be able to afford to live there, and not be shut out of the economic opportunities that cities provide. And as another commenter mentioned, the current density of SF is incredibly low. One and two story buildings cover much of the area. Even if it just looked like Paris (wall to wall 5 story bui…

Out of curiosity... Paris: 27€/m^2 ($30/m^2) SF: $4.95/ft^2 ($53/m^2)

Yeah, Parisian apartments are even cheaper than this implies, since SF apartments tend to be larger than the average Parisian apartment. So the rent that most people pay is generally a good bit less than half.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#135

Post by ericd » Mon, Apr 01, 2019, 4:04 AM UTC

Mirioron wrote: post #130

ericd wrote: post #126

Earlier quoted context omitted.

Most people in the middle of the city won’t get their dream home, there can only be so many penthouses. But at least they’d be able to afford to live there, and not be shut out of the economic opportunities that cities provide. And as another commenter mentioned, the current density of SF is incredibly low. One and two story buildings cover much of the area. Even if it just looked like Paris (wall to wall 5 story bui…

Sure, but that's what you think. We can't really tell that people would be fine en masse living in Soviet style apartment blocks for example. I look at average apartment sizes in the US and they're pretty big when compared to Eastern Europe. Building permits and zoning laws definitely cause a lot of problems, but the trend of housing being unaffordable for young people in cities seems to be happening everywhere. I th…

I agree that not everyone will want to live in small apartments. And not everyone has to, they can decide what tradeoffs are right for them. If they want a big house with a yard and they're fine commuting 1.5 hours to work across perpetually jammed bridges, that's still an option.

I live in the SF Bay Area, and I've spent a decent amount of time studying this problem. These debates are raging in the city council meetings, with homeowner groups fighting against city councils who were elected on a platform of trying to get more apartments built.

I agree that job vs. housing density disparity is the cause of many of the problems. The way you fix the disparity is that you boost the housing density - you upzone near transit (SB 50 in the CA state legislature is trying to do this across the state), you increase property tax rates to discourage people from waiting for the land to appreciate without doing anything useful with it (ideally by gradually phasing out prop 13), and you streamline the redevelopment process by making it such that if you comply with a clear set of rules, you can start building with the knowledge that homeowners associations won't bog you down in endless lawsuits. And in my dreams, you change the zoning to mixed use commercial/residential so that you can colocate offices, restaurants, stores, and residential, making everything way more walkable and easing the burden on road infrastructure.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#136

Post by jcranmer » Mon, Apr 01, 2019, 4:32 AM UTC

brmgb wrote: post #129

snowwrestler wrote: post #82

Earlier quoted context omitted.

Telling scientists to stick to physics and chemistry for "real science" seems like telling rock climbers to stick to ladders for "real climbing." It's possible to produce useful predictions with small errors when you define very simple systems, which is what the foundational scientific topics have done. Of course it took centuries of hard work to do even that. Physicists and chemists and biologists and economists all…

> It seems kind of short-sighted to me to say that the people who are trying to build those aren't doing "real science." I don't understand the theory there... that they haven't figured it all out yet, so it's not worth doing? It's not about heuristics. It's about experimental validation. Both physicists and chemists take great pain in actually rigorously confronting their theories to reality. Biologists try. Most ec…

> Both physicists and chemists take great pain in actually rigorously confronting their theories to reality.

I guess string theorists haven't gotten the memo yet?

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#137

Post by Gibbon1 » Mon, Apr 01, 2019, 5:21 AM UTC

pytester wrote: post #87

Gibbon1 wrote: post #67

Earlier quoted context omitted.

I think you'd agree with me that the problems with post WWII "social science", "political science", "psychology", "architecture" are precisely that they're trying to ape the physical sciences and not just be art. And this is utterly true of Economics more than anything. And actually while a lot of arts have been pulling themselves back from that rat hole economics just keeps digging deeper.

The problem with economics is the money riding on it. If one day the consensus becomes "raising the minimum wage by $5 only impacts profit; it doesn't impact employment" then a lot of very rich people stand to lose a lot of money as it becomes more politically palatable. Economics is the most highly paid soft science for a reason. Climate science has the same issue but fortunately they have managed to resist the corr…

There is a good good comment by Martin Gardner about fallacious science. Which is when the evidence and scientific feedback are weak[1] then scientific theories strongly mimic the cultural biases of the people involves.

That's modern economic orthodoxy in a nutshell.

It's not just economics that's an issue a friend used to date a lady that was getting (25 years ago) a double major in anthropology and artificial intelligence. She said from an anthropological perspective AI research was nothing but white academic introspection.

[1] Example of strong feedback, two 737-MAX's crashing within a few months.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#138

Post by coldtea » Mon, Apr 01, 2019, 8:42 AM UTC

taffer wrote: post #119

mcguire wrote: post #113

Earlier quoted context omitted.

It is neither ignorant nor prejudiced to notice that your standard of living, and that of your children, have been rather stagnant in recent memory.

The ignorant part is blaming Mexicans, Chinese or cyclists when reality is much more complicated than that. Building a wall won't improve healthcare, and insulting diplomatic partners won't return manufacturing jobs.

A reality being "more complicated" doesn't mean it doesn't have simple constituent parts (kinda like FFT).

Our reality is still created by a contribution of several factors, some of which have greater weight, it's not some intangible mass of confusion with no alternative but "business as usual" as the "non-populists" present it.

It might not have been Chinese themselves, for example, but it was the outsourcing and migration of industries that left many people without a job (and no real prospect for "re-education" and a new career, at most a crappy lower deal).

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#139

Post by coldtea » Mon, Apr 01, 2019, 8:44 AM UTC

closeparen wrote: post #89

mcguire wrote: post #18

Earlier quoted context omitted.

To an extent, I suspect you're right. I further suspect that economists, as a field, will continue to claim that their models, metrics, theories, and policy advice are good, while complaining about the inexplicable rise of populism, right up until somebody sets up a guillotine in front of Goldman-Sachs. (Populism is easy to explain: the peasants are revolting.)

We’ve actually had a taste of a world without Goldman Sachs and its ilk performing their functions: the credit freeze right after the crash. Was that better?

That's like: "We had a taste of a world after segregation, the LA riots. Was that better?".

The "credit freeze right after the crash" still happened within the crash that Goldman Sachs and its ilk caused, and still happened in a world where Goldman Sachs and its ilk set the rules.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#140

Post by CamTin » Mon, Apr 01, 2019, 11:05 AM UTC

s17n wrote: post #103

lusmd wrote: post #39

Earlier quoted context omitted.

Yes, that paragraph is very, very bad, because it's not people of equal education that would have equal wages, but equal productivity---which will vary depending on what firm you're at! Not just because of sorting and poaching of talent, but some firms' production and capital structure will be such that the marginal worker will be more productive.

That makes no sense, equivalent workers should get paid equivalent wages regardless of their firms’ productivities. Apple doesn’t pay more for aluminum than a soda can maker.

It doesn't but it would continue buying for longer if the price went significantly and permanently up. But the point of this whole thread is that labor isn't just another commodity like aluminum. It's a special, weird thing and the market in it is just different and probably less "efficient" than the markets for metals and grain. The question isn't "how can we best model this using our existing theory?" It's "what is the best way to model this?", so if the existing theory isn't very helpful, we should look for new ones that are better.