Arnold Kling  

Another Macro Metaphor

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Sumner on Neoliberalism... Paging Hyman Minsky...

Howard Bloom writes,


Over three billion years ago, bacteria already had a cycle of boom and bust built into their DNA. The cycle of boom and bust is a search strategy. It's a cycle that uses us to explore the new, then to focus on the flaws in our latest innovations and to build fail-safe systems to prevent future outbreaks of the problems those innovations produce--whether those new innovations are credit default swaps, bundled mortgage securities, or super-banks that span the globe and make high-risk investments with their depositors' money. And the cycle of boom and bust is built into our biology.

I was repelled by his use of a biological metaphor to describe macroeconomics. I wanted to denounce the use of metaphor from a methodogical perspective. Then I thought of my own metaphors (Recalculation, flood of refugees). So rather than denounce the use of metaphor in general, I will say that I do not find Bloom's particular metaphor convincing, based on this article.


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CATEGORIES: Macroeconomics



COMMENTS (3 to date)
O Beatson writes:

Is it not trying on the uncontroversial Darwinism-to-social Darwinism analogue? Nevertheless, though more superficially, the general tone and style of the article is a bit too corny to make for good economics reading.

'Is the Business Cycle In Your DNA?'. Honestly.

David Chester writes:

The question is one of how general a view we should take of the 'big picture' of macroeconomics. If we study it too closely we loose sight of "the wood for the trees", but when we change our perspective and move as far away as this we tend to look on the human species as a kind of biological bug of a new kind, whose cyclic wars and population migrations are as natural as maintaining the food chain between the plankton, krill and the larger fish and sea mammals.

The answer is surely that the way we look on things depends on the scale of the answers that we are interested in finding. Although the subject of macroeconomics has yet to be properly defined and even though it means different things to different schools of thought, its aim is not one of anthropological study and analysis but a bit less general. It should be dealing with the social systems organization within and between countries. Unfortunately many thinkers in this subject have not yet recognized that the differences between micro and macro thinking in this subject. These differences are so profound that a whole new philosophy of communities is needed before getting started.

What is good for the individual or group can be bad for the whole system at large, and in particular the privilidge groups which our present system supports are the reason for many of its failings. I refer specifically to the current economic crisis and its connection to the lack of opportunity that land ownership and speculation in its values confers on many of us. Namely high prices, low demand, unemployment, homelessness, increased poverty, squalor, petty crime and self-abuse by drugs

Chris Koresko writes:

Arnold,

You might try reading the paragraph you quoted without the first and last sentences:

The cycle of boom and bust is a search strategy. It's a cycle that uses us to explore the new, then to focus on the flaws in our latest innovations and to build fail-safe systems to prevent future outbreaks of the problems those innovations produce--whether those new innovations are credit default swaps, bundled mortgage securities, or super-banks that span the globe and make high-risk investments with their depositors' money.

Read this way, the bacteria-and-DNA sentences are simply trying to emphasize that the search strategy is more fundamental than its application to the modern economy. In other words, it's not really metaphor at all.

In fact, it looks like it's describing something akin to Recalculation.

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