A Thai court has ordered the dissolution of the reformist party which won the most seats and votes in last year’s election - but was blocked from forming a government.
The ruling also banned Move Forward’s charismatic, young former leader Pita Limjaroenrat and 10 other senior figures from politics for 10 years.
The verdict from the Constitutional Court was expected, after its ruling in January that Move Forward’s campaign promise to change royal defamation laws was unconstitutional.
Okay, thank you for the information about econometrics, but the economics that goes from data to model tends to be heterodox, not orthodox. Occasionally orthodox economists will accidentally do real science and they usually don’t like what they see.
My question was about why you don’t see the data being presented when being taught about supply and demand, and you basically answered it by saying that the data isn’t there. Now, I see your point that the prices tend to be relatively stable and so the data doesn’t extend beyond these short line slopes, but then why are we told that supply & demand “sets prices” when there is no evidence of, for instance, a shock to the system upsetting prices which then follow a standard supply & demand curve to restabilise?
Well, because such a situation would not be “convex”, so economics has written an escape clause for this phenomenon whereby it can avoid ever making any real predictions about what the market will do in a situation that isn’t already “stabilised”.
And also, if it’s just short line segments, why is it fashionable to use a curve that implies more data than exists? Again, I would say that it is to ape the aesthetics of science without actually doing it.
And it’s very strange that you turn to your personal anecdotal experience to say that you’ve “seen supply & demand play out”. If that were true, then you should be able to gather the data and present it. The fact that data doesn’t exist should tell you that you are probably using confirmation bias to evaluate your personal experiences.
For instance, the housing market is something where ideally there would be very inflexible demand, because people don’t need more than one bed, typically. The reason the demand is flexible is because there are in reality two markets in the same space. The first market is the people who want housing to actually live in, and the second are landlords that hoard housing, speculate and leverage assets against loans and so on. The landlord market is responsible for both the short housing supply and high price, because they would often rather keep housing scarce and drive up rents, and speculate against one another than put their property back out on the market to go to a competitor. Selling a property you can’t rent out is a pretty bad financial decision, you’re better off waiting until the housing market flips and it becomes a seller’s market again. If a financialised housing market didn’t exist, housing would be much cheaper and homelessness would be much, much less.
The reality of all markets is that they are subject to boom & bust cycles which supply & demand cannot account for. Housing in particular is notorious for huge bubbles that burst spectacularly.
Here’s an example from a government consumer watchdog in Australia: https://www.accc.gov.au/consumers/petrol-and-fuel/petrol-price-cycles-in-major-cities
Here’s the really damning sentence:
They straight up say that it is not about supply & demand.
Here’s the heterodox explanation of this phenomenon: the Supply Chain Theory of Inflation
EDIT: Actually this is a separate phenomenon, but it does emphasise how prices are set by sellers, and not by supply and demand. Wherever a seller can get away with changing their prices, like for instance in petrol sales, they will, but then it follows boom-bust, not supply-demand.
And this is where the authors of that article talk about how orthodox economics institutions will launder heterodox theories. The point of doing this would be to maintain their prestigious position as the arbiter of all economics knowledge, as a result of which any damage such information might do to existing insitutions can be dampened by orthodox economists putting their own spin on the information. If they never acknowledge where the theory comes from, they get to rewrite it however they want. That’s distinctly unscientific.
I feel like I’ve seen that in person. When the pandemic hit here, petrol prices hit the floor, like less than half of what they usually are. After a while they went back up as the production end was slowed down to match. So there’s evidence, albeit not evidence you can really fit a whole curve to.
It could be convex. That’s not even an economics term, it’s math. In terms of gradient decent - like a market adjusting - it just means that the curves are “round” as opposed to having weird little pockets that it can get stuck in. A counterexample would be something where decreasing the price actually decreases sales, with Veblen goods being an obvious example - nobody would buy Gucci if it was just slightly more expensive than a normal bag. Graphed out, that looks like a hump in a curve (supplier profit, I think), until Gucci bags come out the other side where they’re cheap enough to compete as normal bags, as opposed to status items.
It creates a “local minimum” where the market can stabilise (it usually is -ise in British spelling) in a way that’s counterproductive. You can talk about it in terms of second derivatives, too, but unless you’re actually crunching numbers the marginal change of marginal price is unintuitive and unhelpful.
As you add more dimensions things get more complicated. Giffen goods happen when each good individually follows convex logic, but not when you rotate the resulting (hyper-)surfaces into a coordinate basis where cross elasticities become important. The math stays the same, though.
I mean, nobody’s ever observed a part of the Sombrero potential other than the very bottom, but Higgs theory doesn’t make sense without the rest. That on it’s own isn’t a point against economics, or QFT. In fact, the physics example is arguably more of a stretch, because it’s supposed to be precise, as opposed to just a model.
You could critcise economics for only offering models, but that’s all of social sciences, and will be so for the foreseeable future.
I expect someone has been recording it, actually. I suppose I’ll actually go looking out of respect for you.
I know many people with a guest bedroom.
Hah, no. Nearly as often the market will keep going the way you don’t want, and the whole time you’re not earning on your principle. Eventually, it has always gone up again, but there’s no time limit on that - look at Detroit - and if the population stops growing in your country real estate becomes deflationary for good. Meanwhile, if you had just put it in an index fund you’re going to earn 10% interest per year, on average. If you go bonds it might only be 4%, but it’s almost guaranteed.
If you have literally any money saved, “don’t try to time the market” is the first thing that every advisor will tell you. It’s a dirty open secret that the big investors on wallstreet don’t actually beat the market, either.
At the small scale, yes. The economy is noisy. There are also cases where it does bad stuff at the big scale, but they tend to correspond to nonconvexities.
I’ll look into Australia when I have the time. I have to go pretty quick, though.
That sounds right.
Cynical and unfair? Definitely. Unscientific? No, academics is pretty much always like that; hard sciences too. You think you get tenure just by being the most honest?
Science itself is fine if worthy ideas make it to the top. Making the process fair is still a pipe dream. Gregori Perelman straight up refused the Abel Medal over this kind of shit.
My point about convexity being a handily-written escape clause was not to say that economists invented it out of whole-cloth, it’s to point out that it’s tautological. It’s basically saying, “Prices follow our law in all of the cases where they follow our law.” So it’s not a law then, is it? It’s an observation of extremely limited utility that just so happens to provide a justifying narrative: “our law says the market will be stable,” when we see the absolute opposite in many places.
And if you feel like you’ve seen it in person, then again the data should exist. Again I’d say if you’re saying this is an example of the effect, without seeing the data, then you’re admitting out loud that you are just confirming your own preconcieved ideas rather than seeing any real evidence. These are statements of faith, not science. Orthodox economists would be proud.
I’m not sure what you mean about the sombrero potential only being partially observed. It is a principle only, and you could observe it fully by simply making a sombrero shape and putting a ball in the middle and observing how it falls multiple times. That’s literally what the concept entails. It’s analogous to supply & demand in that the graphs are merely illustrative and it is only applicable in very specific situations. The difference is that supply & demand is presented as a foundational and ubiquitous law to high-school students, whereas the sombrero potential is presented honestly.
As for the “don’t try to time the market” advice, if you’re right about that then someone should tell all the real estate speculators that are leaving extremely expensive real estate empty because they can’t rent it out and don’t want to sell at a low price. It would help our housing shortage immensely. Either they don’t exist, or your story about that isn’t complete.
I don’t need you to look into Australia - price cycles and boom-bust cycles are well-documented economic phenomena. I linked an Australian case because I’m familiar with it.
And to the extent that other sciences engage in politics over actual science, they are also being unscientific. However I’ve never heard of a scientific discipline where there is an “orthodox” school, except in economics. It’s the orthodox school that I have a problem with. Supply & demand is just emblematic of that issue.
You can see the model do that, but not the actual quantum fields. The transition is supposed to have happened irreversibly once in the instants following the big bang.
It was never taught where I went, but that could be. High school teachers should knock it off, if so. It seems to work exactly as theorised in most sectors, bulk commodities being a common example, but there’s definitely other sectors that are broken, some of which I mentioned.
I’m a fan of regulation to address that. So are both orthodox and most heterodox schools, to various degrees.
I’m sure someone is dumb enough to try it, but I’m actually not convinced it’s widespread. In Canada, we literally just don’t have enough houses for a first-world nation of our population - which has been measured - and all of our tradespeople are swamped. (Sorry if I brought that up already, this has been a long-running thread)
Hmm, now that is a good point. There’s various small offshoots of anthropology and psychology, some of which are questionable (there’s people that still use Freud), but nobody really divides it up like that. Alright, you’ve sold me on economics probably having especially bad lab politics.
Right, so the quantum field model is designed to solve the assymetry paradox, but it’s just unconfirmed speculation. It’s a hypothesis, barely a theory, not a law. It’s discussed honestly for the most part, unlike the way orthodox economics discusses supply & demand. Just because you can find something roughly analogous in a hard science doesn’t make the problem substantively the same.
And do you really think supply & demand isn’t taught as a law? We hear the phrase “the law of supply & demand” bandied about whenever anyone does any pop-economics. Do you seriously not encounter that?
And you actually think housing speculation doesn’t happen on a wide scale? Like… what? Again, have you heard people talk about economics before? You said you understood a good amount of it, but you’re denying that housing speculation is real?
https://www.urban.com.au/expert-insights/property-speculation-to-continue-boom-but-will-a-bust-follow
https://www.nber.org/system/files/working_papers/w26457/w26457.pdf
The 2008 recession was literally a housing speculation bubble. I really don’t understand where you get off saying speculation isn’t a thing.
Also, in Canada, your tradespeople are swamped but there are about 1.3 million empty houses.
Here’s a quote that confirms what I just told you:
Like sure, there might be a housing shortage in the market but not in reality. In reality it’s a hoarding problem. We know from the pandemic that governments could house everyone if they simply made it a policy priority, but they don’t.
And as for the “lab politics” of economics, I’m glad you’ve been able to see that issue, and I think that’s a good term for it. The lab politics doesn’t come from nowhere. Sciences advance in a way that is exploitable by capital. When someone discovers a new kind of technology usually it can be turned into a profit. Often the details are obscured by charlatans looking to make a quick buck - see any tech hype cycle for an example of this - but interfering with the scientific process is usually going to be detrimental to the aims of capitalists.
Social sciences are a little different, usually capital can kind of just ignore the policies proposed by social scientists, even if they can cause minor problems for them.
For economics though, when someone like Marx comes along and points out that capitalists are stealing value from the working class and that working class can unite to overthrow their oppressors because in reality those oppressors create nothing and they depend on us, then that has real teeth. That causes problems, of the revolutionary variety. The ruling class has to respond to that, so they will use their influence to fund think tanks, sponsor economics departments that are friendly to them and torpedo institutions that say things they don’t like.
Richard Wolff talks about this:
https://www.democracynow.org/2013/3/25/watch_extended_interview_with_economist_richard_wolff_on_how_marxism_influences_his_work
Just like kings used to, they have raised up their own class of priests to proclaim to the commoners that their power and wealth is justified and good, and we should all bow to their blessed interpretation of the mystical movements of the market. That’s why they don’t do science, and they quibble on the minutiae of the interpretations of long-dead texts, just like the priesthood did, because they can’t work in the realm of science, because it would destroy their entire project.
Speculation happens, sure. I don’t buy that it drives things way out of equilibrium in the long run. As far as I can tell from a skim, neither do your sources.
I also hear about “Murphy’s law”, which is self-evidently not (literally) true in all cases. If you’re teaching an actual Econ 101-type course and you don’t mention market failure, you’re teaching it badly.
Not exactly. A drop in housing prices triggered it IIRC, but the actual chain of dominoes played out on paper in financial instruments.
In an ideal market the big banks would have just been replaced with new ones who take less risks of that sort, but they were too big to fail. That’s definitely a problem, but I don’t really know enough to comment on what the fix should be intelligently; banking economics is on a whole other level.
The total shortfall is in the neighborhood of 3.5 million units.
There’s always some, just because people move unpredictably - a “frictional” amount. I’m sure someone somewhere is sitting on an empty house for no good reason, but they’re losing money, so I doubt it’s a lot by comparison to the frictional amount.
Homeless people aren’t let in for a really sad reason that has nothing to do with necessity: few voters care and nonprofits can’t raise enough money - or alternately donated space - without government help. A lot of those people have “high needs”, and are at risk of causing damage or just leaving a mess, so it’s not like it’s free to let them stay in a building until the next tenant shows up.
Capitalism is neither necessary nor sufficient for politics. Look at the USSR and all the various times they flip-flopped on whatever issue or person. Or Republican Spain and it’s many warring factions, if that’s more your idea of non-capitalism.
It’s true that some scientists are on the hook to say things convenient for a sponsor. The nice thing is that a valid observation will stand the test of time regardless of who makes it. Marx made a huge impact on social sciences, and you don’t have to agree with him on any particular thing (left or right wing - he was still a Victorian white man) to appreciate economics as a driver of history. The same goes for marginalism and friends.
Your link isn’t talking about actual housing supply, it is talking about affordability. If you think that addresses my point, you don’t understand what I’m saying. Like on a fundamental level, you don’t get it.
And you keep throwing up vague, unsourced opinions like:
Like, okay? You don’t buy it, but you’re not going to bother much more with it, you’re not going to make an argument, it’s your opinion so you can just handwave anything I say away. If you’re not convinced, fine, don’t be, but there’s literally nothing for me to respond to here.
This is incredibly frustrating. I don’t even know what your point is anymore, you seem to just be knee-jerk arguing with every point no matter how weak or irrelevant your response is, and you seem content to throw up smokescreens of details rather than actually engage with anything in a substantive manner.
You seemed responsive for most of this, so I was giving you the benefit of the doubt, but this is going in circles and you’re not actually taking on board anything I’m saying. Just focus for a second, deal with the speculation thing. Make a point. If you can’t do that, I’m not going to keep giving you the benefit of the doubt.
That probably means we’ve reached the end of the useful period of conversation. It happens, human working memory is small and language is slow, relative to the complexities of the things we’re talking about. I feel like it’s been pretty successful anyway; my mind has been changed about a few things, you seemed to like the yardsale model.
If we were to keep going, we’d need to rely heavily on data. Yeah, speculation resulting in “few” empty houses is my stance. Your stance is the opposite. It’s empirical, and no amount of abstract arguing can answer it. Ditto for supply and demand in general - you know the abstract arguments about entrepreneurs not leaving money on the table already, and you’re not convinced. The trick, of course, is that this isn’t an economics journal, and we’re not full time economists (hetero or orthodox). That limits how much data we can use to not enough.
I thought markets were garbage once too, and the thing that convinced me, besides the alternate explanation for billionaires I shared, was just having to budget out things myself. Everything runs at cost plus investor dividends, and every investment gives about the same return per principle, assuming similar risk profiles. That’s a life experience I can’t share, though.
Just in the name of explaining myself: I didn’t actually check the methodology again. What I’ve seen in the past is an actual measure of the physical housing stock, and then a comparison of it per capita to other developed countries. It’s smaller.
“We” haven’t “reached the end of the useful period of conversation”, you have reached the end of your capacity or willingness to engage with what I’m saying, and I’ve laid out very clearly how you’re displaying that, and instead of engaging with the points, you fell back into passive-voiced vague notions about human working memory and the speed of language, drawing on sciency language to lend credibility to some absurd notion that nobody could possibly be expected have this conversation, but you just made that up.
We’re not at the limits of human mental capacity, you’re doing specific things that I’ve pointed out, with details, and instead of engaging with what I said in any specific way you’ve done more vague waffle that says nothing.
And if you didn’t even check what you were sending me, why are you so confident about everything you’re saying?
My sources gave very specific numbers -which I directly highlighted with quotes - about the state of the housing supply compared to the unhoused population that you completely ignored in favour of economic rationalism.
This is precisely the kind of thing orthodox economists do, and this is how economics students are taught to think. It’s a real shame, it looks like your critical thinking skills have been pretty badly sabotaged by miseducation. I’m sure you’re intelligent in many ways, but intelligence is domain specific, and if you don’t learn the kind of rigour it takes to think critically, then you won’t be able to.