What’s he misunderstood now?

So I’d want to teach now. And what? I suspect it would be on finding the new state of well-being to replace the economist’s conventional idea of equilibrium.

Equilibrium has never appealed to me. It is antithetical to everything I believe in: change that drives increase in well-being; doing better, just because it’s what we as people are really meant to do; exploring new ideas, relationships and experiences because they are how we grow. None of that suggests this state where nothing can change or all will be worse off has any merit to it at all. In fact, I simply do not believe that state exists, or should, so aiming for it is positively harmful. It is merely a statement of the conservative mind set made manifest in economic theory.

But equally, I do not think that opportunity is unfettered; we now know that and so choice is inevitable, but the choice we make cannot be driven by the absurd notions of Pareto optimality.

Eh?

Please, someone explain!

51 thoughts on “What’s he misunderstood now?”

  1. My first explanation would be straw man, but since he seems to believe this, I’m guessing plain ignorance.

    Is that any help?

  2. He’s confused about at least two things.

    One is equilibrium as an end-state in economics. He thinks equilibrium means a lack of progress (however you define that.) And he is correct. Because he is confusing simplistic models with economies. Which rarely reach equilibrium (and never stay there) because the inputs that would eventually generate the equilibrium state keep changing – preventing equilibrium being reached or, if it has got there, making that no longer the stable position.

    As far as making choices with regard to “absurd notions of Pareto optimality”, I’m not aware of anybody who is actually able to calculate a Pareto Efficient state for any practical real-world position, never mind then force everybody else to help reach that state, therefore, as Ian said straw man or, frankly, merely throwing terms out that he knows few of his worshippers will understand, therefore he looks like he actually understands this stuff, therefore whatever …

  3. For a start he thinks equilibrium means static and is unaware of dynamic equilibrium. For example an endogenous growth with Schumpeterian creative destruction, model still uses equilibrium solution concepts

    (also he doesn’t understand that economists do not think the economy is ever in equilibrium, or think that equilibrium is something to be aimed for etc.)

  4. It’s a weird lack of understanding of the word equilibrium. Equilibria are just outcomes – when supply meets demand and prices and quantities are set. I think he has some weird idea that progress is not possible with an equilibrium, without understanding that each moment of equilibrium is just a point in time. We may model things in discrete steps and simple models have just one time, but this doesnt prevent change, it’s just a simplification for the purpose of understanding something more complex. The maths and solving continuous time models is a pain. (well beyond Murphy’s limited intellect).

    It is truly frightening to see an individual with such a limited understanding of such a basic concept being unleashed on City University.

  5. Surely he is supposed to be teaching a course on something that does not permit him to just make crap up ?

  6. He thinks equilibrium means a lack of progress (however you define that.)

    He’s obviously not a physicist, then. Forces being balanced doesn’t mean an object is stationary, it means it’s not accelerating.

  7. Has he mentioned ceterus paribus. That would be the true mark of a towering intellect, getting a bit of Latin in there.

  8. It is this sort of thing….

    ‘Lorem ipsum dolor sit amet, eos ne ludus possim, porro dicam omnesque ex sed, vel homero copiosae persecuti id.’

    Used by, for example, magazine and web designers as text filler when there is nothing actual to say but they need to see layout.

    Don’t drive yourself crazy looking for any meaning… it has none.

  9. He has been reading mass-market self-help paperbacks and is trying to become 0.2 of a Daoist.

    Probably the arse in Murph’s case.

  10. To my mind, seeking to reach equilibrium is the driving force behind markets & thus economics in general. It’s the absence of equilibrium provides the gradients cause things to change.It’s hard to see,therefore, why any sort of economist would favour equilibrium. Attained, economics & thus economists would cease to have any relavence.

  11. Does anyone have a link to Murphy’s “quadrant” graphs from a few years back? He tried to replace supply and demand curves with a circle and four axes.

  12. I think Mao articulated this ‘No Equilibrium’ stuff better as the doctrine of continuous revolution. His Murphness is just a poor sort of acolyte.

  13. There are two ideas that might help make sense of it. Feynman’s cocktail party philosophers, and perhaps the.fairytail, the emperor’s new clothes.

  14. “A progressive tax to limit consumption”

    Um, wasn’t his idea of “temporary money” to force people who have money to use it to consume stuff they don’t necessarily want?

  15. He really had been let loose on students hasn’t he. This isn’t big joke? This ‘Enough Economics’ shit is the sort of crap he’ll be marking soon. These diagrams will now be on a real college syllabus.

    I’m gobsmacked; he’s a bigger cretin than even I thought

  16. He believes consumption is bad for the soul. His “Enough Economics” is typical asceticism; we get “enough” to survive, but no luxuries (as defined by Lord Murphy of Much Wittering).

  17. Bloke in Costa Rica

    It is the triumph and the curse of the modern era that Murphy’s writings gain currency beyond Letters to the Editor of the Downham Market fishwrap (which would probably have been penned in mad chicken-scratch using green ink).

  18. “Um, wasn’t his idea of “temporary money” to force people who have money to use it to consume stuff they don’t necessarily want?”

    No, I think it was his wheeze to tax everyone on all inflows and outflows from their bank accounts. It was fucking brilliant.

    Wealthy single people who owned their homes outright would pay virtually no tax, while poor people with families were hammered. All this to ensure the country ‘enjoyed’ a standard of living which was entirely arbitrary and pulled out of his anus.

    We all spent a happy afternoon thinking up scenarios which totally ridiculed it.

  19. He believes other people’s consumption is bad for the soul. He is happy to live in a large house and hoover up tax free grants.

  20. J said:
    “He tried to replace supply and demand curves with a circle and four axes.”

    Was that after he’d been chopping logs one afternoon?

  21. The mind boggles.
    It’s not just misunderstanding equilibrium – I mean, you can say that about just about everything he writes. It’s the overarching self regard, that “equilibrium” is to be evaluated on the basis of whether Murph likes it or not:

    …has never appealed to me. It is antithetical to everything I believe in…

    No consideration that the concept might be useful, or might represent some actual phenomenon (how does he feel about, say, chemical equilibrium, or Kirchhoff’s Laws for instance?). It’s enough that the Murph ‘believes’ in something else.
    Lord help his students; their 20% professor certainly won’t.

  22. Hmmm.. he’s quoting the Pareto principle there. Which is by no means “absurd” , because all that one is, is a pretty particular way of looking at a bell curve.

    Given that a bell curve is something you get where a (fair) number of interrelated factors are left alone to Do Their Thing ( all the other distributions involve [something] interfering with Things, elevating one factor above the others) you can fairly state that as a generalisation of economy and Ownership the Pareta principle is solid.

    You can flatten the “bell” all you want, it would still end up with the peeps on the right side owning a fair chunk more than the average, and with peeps on the left who own next to nothing.

    All things considered, you can at best strive to flatten that bell as much as possible, but you simply cannot escape it.
    Unless you start enacting pretty artificial and drastic measures, of course. Which throughout history, especially Modern History, has been tried, usually at the cost of a lot of other things we tend to hold dear.. Liberty, freedom of expression, personal property, y’know… Stuff…

  23. “…has never appealed to me. It is antithetical to everything I believe in…”

    So is gravity to me, but them’s the breaks

  24. Rob – fair point…
    But can you imagine some student in his second term, having to understand the current work based on the background knowledge passed on by the Murph?

  25. Bloke in Costa Rica

    dcardno: “…can you imagine some student in his second term, having to understand the current work based on the background knowledge passed on by the Murph?”

    To be fair, this is City University. It’s not like any of them are going to be recruited as chief economist for BNP Paribas.

  26. BiCR no, but I assume that at least some of them would like to pass their second year courses! That being said, I suppose the retention of the 20% professor is a revealed preference indicating CU’s insistence on top-notch staff and academic rigour. Maybe it will work out okay for their students after all.

  27. “To be fair, this is City University. It’s not like any of them are going to be recruited as chief economist for BNP Paribas.”

    BNP Paribas may not have been the best example.

  28. he’s quoting the Pareto principle there.

    No, unfortunately. Pareto “optimal”, also known as Pareto efficiency, is a different idea from the Pareto principal or the 80:20 rule.

  29. @samuelbuca “It just looks like he’s missed the ovaries off his diagram from enough economics…”

    Every passenger on the bus just turned round to see why I was laughing so hard. Thanks.

  30. City University really should be proud of the towering intellects it attracts. Not just Murph but Connie St Louis – the students there really are privileged…

  31. It’s not nice to laugh at the village idiot but sometimes you just can’t help it.

    That’s a quote from the bloke who lives next door to Murph. The guy is beyond stupid, beyond categorising…. Just beyond

  32. Our Murph may think G K Chesterton too conservative, but in cases like this his advice on removing a fence seems to me to be sound: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.” [http://www.chesterton.org/taking-a-fence-down/]

    It’s just a pity that, for all his “charitable campaigning”, he is so incapable of charitable thinking that he will not see what use equilibrium may be as a concept.

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