Political Memes

These models don't work because they ignore the MOST significant driver of inflation

Wellll... they work just fine for their intended purpose - demonstrate the correlation between 2 variables in an understandable way.

What you are (correctly) referencing is that there is a much more complex system in reality than the simplified model - they literally exist to try and explain difficult concepts in digestible ways. Everyone's eyes glaze over if you try to do the "if this, then that, but if this then the other (at 45 variables level).

So yes, inflation is wildly more complex than just money supply or demand push inflation (the flavour the Phillips curve is looking at).

But the people in this thread bitching about economists dumbing stuff down so they can understand it resulting in simplistic models that don't reflect the real world would be just as quick to bitch about how they're in an ivory tower because they refuse to explain things in laymans terms.

Damned if you do, damned if you don't.

What's the loan money in your example if it's not an increase of the money supply?

"Econ 101" is just that and if you think it's representative of "economists" you're dunning-krugering.

There are a lot of very competent interdisciplinary socio-economic scientists. The problem is that no-one listens to them because everyone still has the hots for the ghost of fucking Milton Friedman and trickle-down raeganomics.

Populist ideologues will always promote simple economic models, that's not the economists' fault. Sociologists can tell you why bad economic policy is self-sustaining under democratic capitalism but they can't really do anything about it because no one asks for their opinion.

Hell, right now the US is ruled by a moron whose understanding of economics is so bad that even the most hard-line libertarian economists are saying "you wot m8".

No, but you can examine historical conditions with largely similar situations aside from the variable you're studying. And you can do more limited experiments without emulating a national economy.

You can also look at "artificial" economies in games like EVE Online; I seem to recall a few economics papers coming from behavior seen there.

Yeah, that's true, but that's not the only way to run experiments. "Natural experiments" where experimental conditions happen naturally can be exploited for scientific aims.

I think it should be treated similar to the medical field. They human body is super complex, and there's competing mechanisms for all sorts of things. You could discover a mechanism by which a compound decreases blood pressure. There could be another mechanism by which the same compound increases blood pressure by a much larger amount. A lot of economists would just take that first mechanism as ground truth, and recommend giving the compound to a patient with high blood pressure.

I think in lieu of perfect information (which is always the case for economy and medicine), it's best to just go for whatever is the least abstract benefit. The way I was taught macroeconomics (as a teen, I definitely don't have a degree in it or anything), a minimum wage places an artificial limit on the total amount of labor that will be done, and therefore decreases GDP, and therefore everyone is worse off. That could be the case (I don't think it is), but it's very abstract, so it needs an overwhelming amount of evidence. Contrast that to the fact that a person cannot survive off of $2/hr, which is not an abstract conclusion, and you have good rationale for a minimum wage.

One would think this limitation would give economists some humility when finding conflict with other fields, but it seems quite the opposite.

Another exception is how sometimes increasing prices will increase sales rather than the other way around.

Also a lot of the time, a discount will get more attention than the price itself. Like $1000 with a 60% markdown ($400 final) might sell more than the same thing at $350 with 0% markdown.

I love the implication that a "rational actor" would choose death over losing money

like there is definitely some truth to glean in economics. but as it stands, it’s a disservice to call it a science.

absolutely, my statement was real edgelordy, but the idea behind economics, that is to say "resource management" is a valuable field of study, but as you say, it's all been manipulated shit to make the rich richer.

Nobody ever looked at the laffer curve and went "huh, so we cut taxes for the rich, and tax revenue went down, that means we should raise taxes for the rich."

First “all models are flawed but that does not mean that they are worthless”

To be clear Graeber is an anthropologist and is not an economist. You might like what he says but his degree is in a different field

Cristobal Young is a sociologist again not an economist. You might like what they say that does not mean it has any merit economically speaking (I haven’t looked into any published work)

Blyth actually has a degree and background in political economics. Political economists are mixed bags as they tend to not be able to do the math to support their claims. As is the case with all social science the important part is to see if their claims were published in academic journals first. Blyth is ok not great IMO

The graph on the right only shows that more variables impact unemployment than just interest rates alone, which you obviously know. It doesn't prove or disprove the model on the left, which is a pretty simplified relationship. Monetary policy, like adjusting interest rates, was demonstrated to be quite effective just recently with the Fed successfully keeping inflation and employment under control with these tools over the past few years.

Introductory economics is a bit simplistic. It gets a bit more sophisticated at advanced & professional levels.

Some introductory textbooks give a glimpse of that: here's a more nuanced treatment of minimum wage with a more sophisticated model.

Economics goes further than the treatment you'll read in some economics 101 textbooks.

Minimum wages aren't necessarily a thing you must have, provided unions are strong in the labour market. We don't have a legally mandated minimum wage here in Sweden, but it only works because CLAs are so common and the unions are constantly working on it. If people start slacking and stop actively working within unions, or the capitalist asswipes keep trying to undermine the Swedish labour market model, that shit's going to fall apart quickly.

Musk and his garbage car company for example is one of the most recent occurrences of a company trying its best to undermine the Swedish model. There's a strike that's been going on since 2023 because of it. The strategy is essentially just enshittification; offer good terms and wages until the unions are weakened, then throw it all out, run over your workers and there'll be no recourse since the unions are gone.

I think the only argument against legally mandated minimum wages that I've heard that I personally think hold water is that politicians are notoriously slow at changing things so you might end up with a minimum wage that remains the same for 20-30 years. That said, I feel like that's easily solved if you have an institution that is assigned to keep track of the general expenses a person has on a year to year basis, and base a minimum wage on that. That's not to say I think minimum wage should be subsistence minimum, it should meet and exceed that, because the stress that comes with living on subsistence minimum isn't sustainable.

Having previously worked at a company without a CLA I can safely say I'll never do that again. Sure it was a lovely place to work at, but having the same salary several years in a row really sucked. At my current company we get the union negotiated yearly increases, plus potential bonuses if you meet (or exceed) your development goals.