Are Steven Pinker's Numbers Cooked?

Steven Pinker is a favourite for bougie lefties looking for reassurance that everything's ok

Steven Pinker makes a pretty strong argument using statistics to demonstrate that mankind has been making steady progress on social ills like violence over time.

David Graeber questions the validity of these statistics and asked if there were any available statistics that "prove" a different narrative. Pinker accused David of simply ignoring the empirical data based on ideology (something David accuses Pinker of doing, or at least selecting statistics that fit his narrative).

I thought about this for awhile, and in the shower just now it hit me...there ARE statistics that paint a very different picture, they come from the emerging field of economic inequality. We are getting more data every year thanks to an explosion in research on the topic. So what does the research show so far? In Wilkinson and Pickett's 'The Inner Level' they track a range of social ills from violent crime to overall health and teenage delinquency, and on every single one, when comparing the available statistics from different countries, things are worse in more unequal countries. So things like violent crime track with the level of inequality, not overall wealth. It's not how rich or poor your country is that produces bad results, it's how unequal it is.

So if social ills track with inequality and inequality gets more severe over time, it follows that social ills get more severe over time, not less. Or to put it another way, if we are experiencing the highest levels of inequality in human history and inequality is linked to domestic violence, sexual assault, poor educational outcomes, increased status competition, poorer mental health, etc, then Pinker's figures must be wrong.

I thought all this then Googled "Wilkinson Pickett Pinker" and found out that I'm not the first person to think this.

https://www.theguardian.com/commentisfree/2018/feb/18/letters-inequality-poverty-steven-pinker

I still need some time to think this through.

NSW RSL Fraud Related Articles

 https://www.9news.com.au/national/former-rsl-nsw-head-convicted-for-fraud/2d89ab1e-3cb5-4d85-96d7-e6b4e1d7c4cb

https://www.smh.com.au/national/nsw/former-nsw-rsl-boss-don-rowe-fined-for-credit-card-fraud-20200417-p54krn.html

https://www.abc.net.au/news/2017-05-15/nsw-rsl-to-undergo-largest-probe-ever-amid-fraud-allegations/8525418

AstraZeneca - Landmark Court Case

https://youtu.be/lDWdXXclQvs

Kandiaronk on Law and Punishment

Excerpt from 'The Dawn of Everything: A New History of Humanity' by David Graeber and David Wengrow

Lahontan: This is why the wicked need to be punished, and the good need to be rewarded. Otherwise, murder, robbery and defamation would spread everywhere, and, in a word, we would become the most miserable people upon the face of the earth.

Kandiaronk: For my own part, I find it hard to see how you could be much more miserable than you already are. What kind of human, what species of creature, must Europeans be, that they have to be forced to do good, and only refrain from evil because of fear of punishment?...
You have observed that we lack judges. What is the reason for that? Well, we never bring lawsuits against one another. And why do we never bring lawsuits? Well, because we made a decision neither to accept or make use of money. And why do we refuse to allow money into our communities? The reason is this: we are determined not to have laws – because, since the world was a world, our ancestors have been able to live contentedly without them.

Raising the Minimum Wage

 

Does it hurt the economy?

So...why mainstream economists say that if you increase the minimum wage it has a damaging effect on the economy, and why this isn't necessarily true...

Neoclassical economists would say that raising the minimum wage adds to the running costs of a business which increases the price of output. If the purchasing power of consumers is constant, that would mean that higher prices would lead to lower sales, and a slowdown in the economy.

But a heterodox economist would point out that the purchasing power of consumers in this instance is not constant. The majority of consumption is fuelled by wages, and the incomes of those consumers has increased. The workers buy more goods and services.

So unfortunately economic theory cannot provide a decisive answer.

"Economists are well aware of this conundrum: empirical correlation never proves causation. Causation itself is a deeply complex topic. While we can put together theory and models and data to make a case, we probably will not be able to prove that 'X causes Y' when it comes to the most significant questions in economics."

This is extremely frustrating for policy makers.

Which principle ends up guiding policy often comes down to who makes the stronger argument. But it is clear who wins and who looses in THIS debate. Businesses will always seek to reduce costs. Workers will always benefit from higher wages. There is a conflict of interest. Unfortunately the business lobbyist are a powerful force in politics, which is why we only hear one side of the debate.

Fiscal Austerity and the Fallacy of Composition

Extract from 'Macroeconomics' by William Mitchell, L. Randall Wray & Martin Watts

An explanation of why all countries can't rely on fiscal austerity or export led growth.

“During the global financial crisis (GFC), the conservative reaction to increasing government deficits was to enact fiscal austerity measures by cutting government expenditure and/or increasing taxes, and to encourage nations to cut domestic costs in order to stimulate their export sectors via increased competitiveness.

If one nation does this in isolation while all other nations are maintaining strong economic growth, this strategy might have a chance of working. In a similar way, one individual saver might reasonably assume that changing their consumption choices would not cause a wider effect that could impact their income. But if all nations engage in austerity and cut their growth rates, then overall spending declines, and imports will fall across the board, as will exports. This is another example of a fallacy of composition.

It is the interdependence between countries via trade, as well as a fall in net government spending, that undermines the policy prescription in this case. It is also clear that not all countries can rely on export-led growth (to more than offset a decline in net government spending) since for every exporter there must be an importer.”
~ William Mitchell, L. Randall Wray & Martin Watts, 'Macroeconomics'

The Paradox of Thrift

Extract from 'Macroeconomics' by William Mitchell, L. Randall Wray & Martin Watts

Compositional Fallacies are errors in logic that arise when we infer that something which is true at the individual level is also true at the aggregate level.

Compositional Fallacy Example #2:

I've already posted an example of the compositional fallacy as it applies to unemployment using dogs and bones as an example

Here's another one.

“A contemporary example of the flawed reasoning that follows a fallacy of composition is the paradox of thrift, which is that while an individual can increase their saving if they are disciplined enough, the same reasoning does not apply at a macro level. By reducing their individual consumption spending a person can of course increase the proportion they save, and enjoy higher future consumption possibilities as a consequence. The loss of spending to the overall economy caused by this individuals adjustment would be small and so there would be no detrimental impacts on overall economic activity, which is driven by aggregate spending. But imagine if all individuals (all consumers) adopted the same goal at the same time and started to reduce their spending en mass? Surely this would impact sales and hence employment and income at the aggregate level. It is not so clear that after all adjustments are made, we would find that the aggregate saving had risen. This is what Keynes called the paradox of thrift.

Why does the paradox of thrift arise? In other words, what is the source of the compositional fallacy?

The explanation lies in a basic rule of economics, which you will learn once you start thinking in a macroeconomic way: that spending creates income and output. This planned economic activity powers the generation of employment to produce the goods and services. Thus, adjustments in spending drive adjustments in total production (output) in the economy as firms react to higher (lower) sales by increasing (reducing) employment and output.

As a consequence of increased saving, total spending falls significantly, and national income falls (as production levels react to the lower spending) an unemployment rises. The impact of lost consumption on aggregate demand (spending) would be such that the economy could plunge into a recession. Certainly, total saving will be less than individuals planned due to the fall in equilibrium national income. As we will see later, if poor sales due to an increased desire to save negatively impact on investment, aggregate saving would certainly fall.”
~William Mitchell, L. Randall Wray & Martin Watts, 'Macroeconomics'