LARS P. SYLL

Le salaire minimum

Une augmentation du revenu minimum pourrait permettre de corriger un peu ce déséquilibre. Le premier ministre a pourtant balayé cette option d’un revers de main, avec un argument parfaitement nébuleux. Selon lui, « notre politique, ce n’est pas de faire des coups de pouce au smic, notre politique c’est de faire en sorte que le travail paie ». Evidemment, si l’on augmente le smic, le travail paiera davantage. Mais le premier ministre s’appuie semble-t-il sur l’argument, développé par certains économistes, qu’une augmentation du smic entraînerait une diminution de l’emploi ou des heures travaillées, et par conséquent une diminution des revenus.

Pourtant, un grand nombre de travaux … ont démontré que cette thèse libérale en vogue dans les années 1980 était fausse. Non seulement une augmentation du salaire minimum ne nuit pas à l’emploi, mais elle peut même l’améliorer …

Une augmentation du salaire minimum a donc bien un effet positif sur le pouvoir d’achat des salariés les plus modestes. Il permet ainsi de réduire les inégalités …

L’inefficacité en termes de création d’emploi des politiques de baisse de cotisations sociales sur les bas salaires menées ces dernières années laisse penser qu’une augmentation du smic n’aurait pas davantage d’effet négatif significatif sur l’emploi …

Ce qui est le plus stupéfiant, c’est que l’augmentation du smic ne fasse pas même l’objet d’un débat. En Grande-Bretagne, le gouvernement s’appuie sur la Low Pay Commission, constituée de sept membres représentant les salariés et les employeurs ainsi que deux économistes. Il en est de même en Allemagne, où les deux économistes n’ont, au sein de la Mindestlohnkommission, pas le droit de vote. En France, le groupe d’experts sur le smic est constitué de cinq économistes, appartenant tous à la même école de pensée. Et c’est peut-être aussi cela que nous disent les « gilets jaunes » : il est temps de substituer un débat démocratique à des conciliabules d’arrière-salle menés par des experts.

Thibault Gajdos

Yes indeed — it is really against better knowledge to argue “qu’une augmentation du smic entraînerait une diminution de l’emploi.”

Back in 1992, New Jersey raised the minimum wage by 18 per cent while its neighbour state, Pennsylvania, left its minimum wage unchanged. Unemployment in New Jersey should — according to mainstream economics textbooks — have increased relative to Pennsylvania. However, when economists Alan Krueger and David Card gathered information on fast food restaurants in the two states, it turned out that unemployment had actually decreased in New Jersey relative to that in Pennsylvania. Counter to neoclassical demand theory we had an anomalous case of a backward-sloping supply curve.

Lo and behold!

But of course — when facts and theory don’t agree, it’s the facts that have to be wrong …

The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the pre-supposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.

James M. Buchanan Wall Street Journal (April 25, 1996)

Les certitudes de la science économique

Ainsi, la crise de 2008 a créé la surprise dans les rangs des économistes influents, qui croyaient voir le monde entrer au XXIe siècle dans le temps de « la grande modération » – c’est-à-dire la prévention des mouvements économiques erratiques grâce au pilotage « scientifique » des politiques monétaires. A vrai dire, la surprise reflètait la quasi-absence, toutes écoles confondues, d’un bon diagnostic des fragilités du système financier international.

Cet épisode a sans conteste révélé une défaillance sévère du savoir économique, alimentée par nombre de facteurs. L’un est la balkanisation du savoir, en l’occurrence sur le monde financier ; un autre – encore l’influence de l’histoire – est lié à la chute du mur de Berlin : pouvait-on encore douter du triomphe du marché ?

Mais dans les années qui ont suivi la crise, la contagion du doute a altéré la confiance en des analyses jusqu’alors communément acceptées. Qu’on pense au débat sur la stagnation séculaire ou au flou intellectuel des arguments justifiant la politique monétaire …

Pourquoi cette perte de confiance envers les analyses des économistes ? Nous vivons aujourd’hui une « seconde mondialisation », dont la complexité spécifique et croissante ne se résume plus à la mécanique des marchés. Un vaste chantier de retour sur le savoir existant s’est ouvert, dont voici, sans prétention à l’exhaustivité, quelques têtes de chapitre : la mécanique de l’innovation, la coordination des anticipations dans un monde élargi et ouvert, la distribution des revenus et les inégalités au sein des nations ou entre nations.

Roger Guesnerie

Contrary to Guesnerie, I think the ‘confidence’ mainstream economists have in their own theories and models, basically is a question of methodology. When applying deductivist thinking to economics, economists usually set up “as if” models based on a set of tight axiomatic assumptions from which consistent and precise inferences are made. The beauty of this procedure is of course that if the axiomatic premises are true, the conclusions necessarily follow. The snag is that if the models are to be relevant, we also have to argue that their precision and rigour still holds when they are applied to real-world situations. They often don’t. When addressing real economies, the idealizations necessary for the deductivist machinery to work, simply don’t hold.

So how should we evaluate the search for ever greater precision and the concomitant arsenal of mathematical and formalist models? To a large extent, the answer hinges on what we want our models to perform and how we basically understand the world.

For Keynes,​ the world in which we live is inherently uncertain and quantifiable probabilities are the exception rather than the rule. To every statement about it is attached a “weight of argument” that makes it impossible to reduce our beliefs and expectations to a one-dimensional stochastic probability distribution. If “God does not play dice” as Einstein maintained, Keynes would add “nor do people”. The world as we know it​ has limited scope for certainty and perfect knowledge. Its intrinsic and almost unlimited complexity and the interrelatedness of its organic parts prevent the possibility of treating it as constituted by “legal atoms” with discretely distinct, separable and stable causal relations. Our knowledge accordingly has to be of a rather fallible kind.

To search for precision and rigour in such a world is self-defeating, at least if precision and rigour are supposed to assure external validity. The only way to defend such an endeavour is to take a blind eye to ontology and restrict oneself to prove things in closed model-worlds. Why we should care about these and not ask questions of relevance is hard to see. We have to at least justify our disregard for the gap between the nature of the real world and our theories and models of it.

Keynes once wrote that economics “is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world.” Now, if the real world is fuzzy, vague and indeterminate, then why should our models build upon a desire to describe it as precise and predictable? Even if there always has to be a trade-off between theory-internal validity and external validity, we have to ask ourselves if our models are relevant.

Models preferably ought to somehow reflect/express/correspond to reality. I’m not saying that the answers are self-evident, but at least you have to do some philosophical under-labouring to rest your case. Too often that is wanting in modern economics, just as it was when Keynes in the 1930s complained about Tinbergen’s and other econometricians lack of justifications of the chosen models and methods.

“Human logic” has to supplant the classical, formal, logic of deductivism if we want to have anything of interest to say of the real world we inhabit. Logic is a marvellous tool in mathematics and axiomatic-deductivist systems, but a poor guide for action in real-world systems, in which concepts and entities are without clear boundaries and continually interact and overlap. In this world,​ I would say we are better served with a methodology that takes into account that “the more we know the more we know we don’t know”.

The models and methods we choose to work with have to be in conjunction with the economy as it is situated and structured. Epistemology has to be founded on ontology. Deductivist closed-system theories, as all the varieties of the Walrasian general equilibrium kind, could perhaps adequately represent an economy showing closed-system characteristics. But since the economy clearly has more in common with an open-system ontology we ought to look out for other theories – theories who are rigorous and precise in the meaning that they can be deployed for enabling us to detect important causal mechanisms, capacities and tendencies pertaining to deep layers of the real world.

Rigour, coherence and consistency have to be defined relative to the entities for which they are supposed to apply. Too often they have been restricted to questions internal to the theory or model. But clearly,​ the nodal point has to concern external questions, such as how our theories and models relate to real-world structures and relations. Applicability rather than internal validity ought to be the arbiter of taste.

Le débat autour de la MMT

La MMT est-elle une lubie d’économistes de second ordre, ou peut-on au contraire en tirer une réflexion sérieuse ? Ses partisans rétorquent que, si l’inflation réapparaît, c’est le signe que le plein-emploi est atteint et que l’on peut alors freiner la création monétaire ; ou encore que les taux d’intérêt ne peuvent repartir à la hausse dans un contexte de création monétaire.

Leur point de départ est en tout cas le constat de la faiblesse de l’inflation, même au plein-emploi, en raison essentiellement du fonctionnement nouveau des marchés du travail. On observe par exemple aux Etats-Unis que, même au plein-emploi, les salariés ne quittent pas leur entreprise pour obtenir un salaire plus élevé ailleurs, ce qui était traditionnellement la cause principale de l’inflation. Le phénomène est attribué à la collusion implicite (et dans certains cas explicite) entre entreprises pour ne plus essayer d’attirer les salariés des autres sociétés.

S’il n’y a plus d’inflation pour des raisons structurelles, alors la politique monétaire peut rester expansionniste, comme le suggère la MMT, pour financer un déficit public très important sans prendre le risque d’un retour de l’inflation et d’une hausse des taux d’intérêt. C’est d’ailleurs le cas du Japon, qui est au plein-emploi grâce à une politique budgétaire continûment expansionniste (la dette publique y atteint 230 % du PIB, le bilan de la Banque du Japon a atteint un an de PIB), mais où l’inflation est quasi nulle, et les taux d’intérêt, aussi bien à court terme qu’à long terme, nuls. Ceci n’a pas conduit, pour l’instant, à des sorties massives de capitaux, ni à une forte dépréciation du taux de change du yen.

Patrick Artus / Le Monde

Krugman vs Krugman

Paul Krugman wonders why no one listens to academic economists …

One answer is that economists don’t listen to themselves. More precisely, liberal economists like Krugman who want the state to take a more active role in managing the economy, continue to teach an economic theory that has no place for activist policy.

Let me give a concrete example.

One of Krugman’s bugaboos is the persistence of claims that expansionary monetary policy must lead to higher inflation … But where could someone have gotten this idea that an increase in the money supply must always lead to higher inflation? Perhaps from an undergraduate economics class? Very possibly — if that class used Krugman’s textbook. Here’s what Krugman’s International Economics says about money and inflation:

“A permanent increase in the money supply causes a proportional increase in the price level’s long-run value. … we should expect the data to show a clear-cut positive association between money supplies and price levels. If real-world data did not provide strong evidence that money supplies and price levels move together in the long run, the usefulness of the theory of money demand we have developed would be in severe doubt …

A permanent increase in the level of a country’s money supply ultimately results in a proportional rise in its price level but has no effect on the long-run values of the interest rate or real output.”

This last sentence is simply the claim that money is neutral in the long run, which Krugman continues to affirm on his blog … The more thoroughly a student understands the discussion in Krugman’s textbook, the stronger should be their belief that sustained expansionary monetary policy must be inflationary. Because if it is not, Krugman gives you no tools whatsoever to think about policy …

Liberal Keynesian economists made a deal with the devil decades ago, when they conceded the theoretical high ground. Paul Krugman the textbook author says authoritatively that money is neutral in the long run and that a permanent increase in the money supply can only lead to inflation. Why shouldn’t people listen to him, and ignore Paul Krugman the blogger?

J. W. Mason/The Slack Wire

The nature of social reality

En av de ledande metodologerna inom den ekonomiska vetenskapen i dag heter Tony Lawson. Denne engelske ekonom har i flera böcker på djupet undersökt och kritiserat de vetenskapsteoretiska och metodologiska fundamenten för den moderna nationalekonomin.

Ekonomer uppvisar ofta ett svalt intresse inte bara för det egna ämnets idéhistoria, utan också för vetenskapsteoretiska reflektioner kring förutsättningarna för och antagandena bakom den egna kunskapsproduktionen. De nöjer sig oftast med att konstatera något i stil med att ”nationalekonomi är vad nationalekonomerna gör” och att ”nationalekonomer är de som sysslar med nationalekonomi”. Något djupare filosoferande anses inte vara nödvändigt. Detta är en föga upplysande inställning som inte är hållbar. Vetenskapsteoretiska, filosofiska och metodologiska analyser av den ekonomiska vetenskapen är både viktiga och nödvändiga. Metodologisk kunskap fungerar som en ‘vägkarta.’ När vi upptäcker att vi inte befinner oss på vägen, måste vi då och då kasta en blick på den karta eller modell av vetenskapligt framåtskridande som vi alla bär med oss, medvetet eller omedvetet.

Oavsett intresse för metodologi bygger ekonomiska teorier alltid – medvetet eller omedvetet – på metodologiska teorier och ställningstaganden. Frågan är därför inte om man som ekonom bör syssla med metodologi eller ej, utan snarare hur det bäst ska ske. Metodologisk analys är både önskvärd och oundviklig i den ekonomiska vetenskapen. Som Lawson ofta påpekat kan den inte minst fylla en kritisk funktion genom att göra ekonomen medveten om att den ekonomiska teorins grundläggande brister kan bero på att de begrepp, teorier och modeller som man använder är oförenliga med själva undersökningsobjektet. De verktyg som man lånat in från framför allt fysiken och matematiken konstruerades med tanke på helt andra uppgifter och problem, och kan ha bidragit till en icke-korrespondens mellan den ekonomiska vetenskapens struktur och den ekonomiska verklighetens struktur. Detta kan i sin tur ha lett ekonomerna till tvivelaktiga förenklingar och generaliseringar.

Tweedledum and Tweedledee Economics

Krugman’s entire essay is about two groups, both deeply entrenched at (what
they believe to be) the top of academic economics. Both are deeply preoccupied
with their status and with a struggle for influence and for academic power and
prestige — against the other group. Krugman calls them “Saltwater” and “Freshwater” economists; they tend to call themselves “New Classicals” and the “New Keynesians” …

The two groups share a common perspective, a preference for thinking along similar lines. Krugman describes this well, as a “desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.” Exactly so. It was in part about elegance — and in part about showing off. It was not about the economy …

Professor Krugman contends that Tweedledum and Tweedledee “mistook beauty for truth.” The beauty in question was the “vision of capitalism as a perfect or nearly perfect system.” To be sure, the accusation that a scientist — let alone an entire science — was seduced by beauty over truth is fairly damaging. But it’s worth asking, what exactly was beautiful about this idea? Krugman doesn’t quite say. He does note that the mathematics used to describe the alleged perfection was “impressive-looking” — ”gussied up” as he says, “with fancy equations.” It’s a telling choice of words. “Impressive-looking”? “Gussied up”? These are not terms normally used to describe the Venus de Milo.

James K. Galbraith

Nancy Cartwright on causal inference

Uskali Mäki on the ’empirical turn’ in economics