5 thoughts on “Heterodox economics? No, just cheap applause-craving”

  1. Posted 15/11/2013 at 16:04 | Permalink

    I agree that Ha-Joon Chang’s article is nonsense. However, Kristian Niemietz’s article is equally nonsensical. He takes just one heterodox article (Chang’s), demolishes it, and claims that that shows that all heterodox economists are deluded.

    I suggest Neimeitz spends the next month reading the views of a large range of economists. When he has finished, he’ll learn that heterodox views encompass in a huge range: from the well thought out and well researched to the idiotic.

  2. Posted 15/11/2013 at 16:18 | Permalink

    They come at us in darkness and in the shadows and when they finally pounce they say their intent is to rob the rich in order to enrich the poor.

    Is their intent more likely to deceive us or are they seriously demented?

    Whatever their motive, government simply needs to increase the level at which tax becomes payable in order to increase the income of those it pretends to protect through the living and minimum wage.

    People like Chang are at best tribalist and at worst apologists for stupid government policies that serve to impoverish us all.

  3. Posted 15/11/2013 at 17:38 | Permalink

    The advanced machinery and technology came first, and wages then rose as a consequence.

    Is that right? Why did the wages rise? Why does capital pass the gain to labour? I thought the conventional industrial revolution story was that you have investment in technology where labour is expensive and therefore it makes sense to invest in plant. Is that the causality?

  4. Posted 16/11/2013 at 09:54 | Permalink

    TobinPIgou – fair point. Supply and demand are like the blades of scissors and, yes, expensive labour could have come first. If the expensive labour, though, is economy-wide then one has to ask why that is the cause. If you use supply-demand arguments then you cannot argue that labour could be made expensive by legislation without consequences. Other things (training, hard work, education, application) may be making labour more productive. However, there might be another issue that Chang (and Kris) missed. It is stupid to just focus on one sector. Here finance is a huge valued-added sector. In Germany, advanced engineering is. Total factor productivity is very high in these sector sin both countries. However, that is not true for all people in all industries in either country. Average labour costs in Germany are only 4% greater than those in Britain. So Chang’s article is no more robust than if I wrote an article comparing salaries in banking in London with those in pubs in Germany. He could have written an article suggesting that the low paid all become bankers. The point is that there is more to low pay than people simply not being paid enough – though I am sure you realise that.

    Ralph – I am sure that Kris does admire many heterodox economists (Paul Ormerod and Vernon Smith to name two) but is just making a point in something of a rhetorical way.

  5. Posted 16/11/2013 at 10:48 | Permalink

    @Ralph, I make no such claim anywhere. I’m not suggesting that all heterodox economists are dummies. What I’m saying is that the term has become devalued.

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