On Monday, December 3, 2001 at 22:04:33 (-0800) Michael Perelman writes:
>For 2 centuries, economists have attempted to emulate physics as
>a justification for their individualistic model of the world,
>following Atom Smith. This article says that solid state
>physicists are pushing a different fundamental view of the world
>based on complex processes.
>
>http://www.nytimes.com/2001/12/04/science/physical/04SQUA.html
The author makes the link between physics and economics explicit:
[Laws of relativity] may have emerged from the roiling of the
vacuum of space, much as supply-and-demand and other "laws" of
economics emerge from the bustle of the marketplace.
Paul Krugman authored a pathetic little book on this topic in 1996
called *The Self-Organizing Economy*, which has direct intellectual
roots in the "Hayek programme". Though actually late to the scene,
this didn't stop Krugman from producing profoundly ignorant statements
about society. Here he is expatiating on the causes of racial
segregation in Los Angeles:
[Los Angeles] is a patchwork of areas of very distinct character,
ranging from Koreatown to Hollywood, Watts to Beverly Hills....
What is so striking about this differentiation is that it is so
independent of physical geography: there are no rivers to set
boundaries, no big downtown to define a gradient of
accessibility..... The strong organization of space within metro
Los Angeles is clearly something that has emerged, not because of
any inherent qualities of different sites, but rather through
self-reinforcing processes: Koreans move to Koreatown to be with
Koreans, beautiful people move to Beverly Hills to be with other
beautiful people. (p. 4)
Hmm... a long history of racist laws, rules, and behavior has nothing
to do with this? Just how is the absence of "physical" impediments
evidence of "self-organizing" behavior? What is the use of focusing on
these impediments while ignoring human-made ones? Do poor Blacks in
Watts move there to be with other poor Blacks? Has Krugman never
heard of the practice of blockbusting? What if we were to write this
of South Africa of the not-too-distant past: "Capetown is a patchwork,
beautiful whites living together in self-organized bliss, and blacks
living together, somewhere, ..., else"? Why is there is no entry for
"racism" in the index? Why does Krugman display such confidence while
uttering such foolish pronouncements?
And why does Krugman ignore the relatively sage words of Schelling, on
whom Krugman relies for inspiration for this idiotic model? Schelling
writes: "Some segregation results from the practices of organizations.
Some is deliberately organized." Schelling gives implicit, though
ambiguous, affirmation of the importance of macrostructural effects:
"At least two *main* processes of segregation are outside this
analysis. One is organized action---legal or illegal, coercive or
merely exclusionary, subtle or flagrant, open or covert, kindly or
malicious, moralistic or pragmatic. The other is the process, largely
but not entirely economic, by which the poor get separated from the
rich.... Evidently color is correlated with income, and income with
residence; so even if residential choices were color-blind and
unconstrained by organized discrimination, whites and blacks would not
be randomly distributed among residences." (I believe this is from
Schelling's *Micromotives and Macrobehavior*, p. 137)
Here, incidentally, is Krugman's justification for decorating economic
ideas with technical baubles:
...it seems to me that an economic idea flourishes best if it is
expressed in a rather technical way, even if the technical
difficulty is largely spurious. After all, a teacher wants
something to do at the blackboard, and a clever student wants
something on which to demonstrate his or her cleverness. If a
deep idea is conveyed with simple examples and elegant parables,
rather than with hard math, it tends to get ignored. (16)
Of course, this has the helpful effect of tending to focus one on the
*math* and not the assumptions, nor, most importantly, on the
politics.
As Doug Henwood rightly observed, "most social analysis in America is
powered by caricature rather than fact" (LBO #72, April 1996). One
glaring problem with Krugman's adoption of self-organizing principles
to describe social activity is that *anything* can be described as
self-organizing. The same degrees of "order" that Krugman espies in
today's (US) economy can certainly be seen in South Korea, Stalinist
Russia, and peasant societies. In short, Krugman's caricature is to
ignore the wide variety of explicit and implicit rules both in law and
in the practices of politics (through the mechanism of the state)
which create the necessary social structures for accumulation and
"order".
Bill
