One of the most extraordinary things about the equations that describe planetary motion is that they allow us to predict the positions of the planets in the future. We can forecast solar and lunar eclipses with great accuracy. Furthermore, small deviations from predictions allowed astronomers to guess the existence of the previously unknown planets Uranus and Neptune. This predictive power is very impressive – and therefore very, very beguiling. In a complex and messy world, we like being able to predict things.
As a consequence, as David Orrell describes in his book Apollo’s arrow, Newton’s great achievement has led modern western society and most of its practising scientists to believe that all other natural phenomena also can be described mathematically and, more importantly, accurately predicted.
Further to Be careful what you wish for:
Brian Fallow from the New Zealand Herald writes about the fiscal risks facing the New Zealand Government.
The chapter on ‘Risks and Scenarios” from the Budget Economic & Fiscal Update 2008 makes for interesting reading too.
What worries me is that we might be heading for a political “perfect storm”: A right-wing (National) government, governing without the encumbrance of coalition partners, facing a recession and a (tax-cut caused) fiscal crisis, amplified by an Exchange Rate crisis (forcing interest rate rises that compound the recession) etc…in such circumstances I’d be willing to bet on deep and extensive privatisation of State assets (education, health, water, Kiwibank); benefit system “restructuring” (i.e. cuts); and other expenditure cuts (e.g health, education, social services).
Throw in a couple of extreme weather events, and given the level of our external debt, we might end up on the phone to the IMF begging for structural readjustment.
Let’s hope not!
Unless there is a huge political earthquake in New Zealand, the coming General Election is going to give us a government led by Labour or by National. Both parties have promised tax cuts. In deciding who to support, voters need to be aware of the consequences of those tax cuts, and to consider the likely response of the next government (depending on its make up) to those consequences.
People are certainly feeling the pinch from higher fuel and food prices, and from higher interest rates – the hope of some kind of relief must be appealing. But tax cuts won’t offer much relief, even in the short-term, and the likely longer-term consequences may give many pause to think (if they pause to think).
Sure, studies might show that economists are more selfish, but they’re not all bad :,)
Economists for Peace and Security works to inform social scientists, citizens, journalists and policy-makers worldwide about the full costs of war and conflict, and to propose feasible alternative approaches to building international security.
They offer, for example a U.S $2 trillion estimate of the full cost (…well, for the U.S. economy, at least…) of the U.S. invasion and occupation of Iraq (by Joseph Stiglitz and Linda Bilmes) assuming pull-out by 2010.
Note: A trillion dollars is a million million dollars.
In his book The Future of Capitalism, Lester Thurow, professor of economics and management at Massachusetts Institute of Technology, posed the following question:
“What should a capitalistic society do about long-run environmental problems such as global warming?”
His answer sounds a little too cynical, even for an economist:
“Using capitalist decision rules, the answer to what should be done today to prevent such problems is very clear – do nothing.”
Was Thurow was being unfair? What do business people themselves have to say on the matter?