Should-Read: Simon Wren-Lewis: Public Investment and Fiscal Rules: “When I started writing this paper with Jonathan Portes…

…I was genuinely unclear about whether fiscal targets should be for the total deficit… or for the current balance (which excludes it)…. By the time the paper was finalised, and later when it came to proposing a rule that the Labour party could adopt, it was clear to me that any target should be for the current balance, with a separate target for the public investment to GDP ratio.

We can see a very strong argument for doing that right now. Jean Pisani-Ferry is one of a steady stream of economists saying that it really is time to increase public investment, and they are backed up by international organisations. But despite all this being true for some time, there is very little sign of governments taking much notice. As Pisani-Ferry notes: “On average, governments are using the gains implied by lower interest rates to spend a bit more or to reduce taxes, rather than to launch comprehensive investment programs.” The political economy reason… is straightforward enough…. Both current and capital spending have been squeezed…. In a recession it is generally easier and less painful to cut an investment project than fire some nurses or teachers. The danger with deficit targets is therefore than whenever these targets bite, public investment is the first to suffer…

Must-Read: Cosma Shalizi: Ernest Gellner, 1925-1995: “Most of these themes themselves revolve around the ‘great hump’ or ‘great ditch’, which divides the modern world from pre-modern civilizations…

…On the far side… from us lies Agraria, a realm of “agro-literate polities” subject to “the tyranny of kings or cousins (or both)”, consisting mostly of highly isolated, custom-bound, illiterate rural producers with magical, ritualistic, socially-oriented religions, dominated and exploited by “the red and the black,” expert coercers and literate classes practicing various technically ineffective, self-confirming, meaningful or enchanted forms of cognition, which tended more towards universalism, rule-boundedness and scripturalism than did the folk-cults. Those of us on this side of the ditch have “escaped from the idiocy of rural life”… through a lucky accident, a “miracle”… in an otherwise none-too-promising penninsula of Asia, circumstances conspired to bring forth a kind of cognition which was cumulative, technically effective, and of no value as either a social cement or an emotional comfort–science, and the epistemologies descended from Descartes (in Gellner’s view, much better as charters for science, and prescriptive accounts of how to go about it, than as descriptions of how the world works or how messy human beings actually think)….

Combined with classes of people… more interested in producing wealth than in either theological or political disputes, and polities…. in exchange for tax[es that] were willing to let them alone… production became dominant… eventually buying off the population at large…. Socially, these societies are (at least relative to their predecessors) liberal, permissive, rich, powerful, secularized, engaged in “single-stranded” activities (e.g., in buying food we worry about taste and cost, not marriage alliances or the need not to alienate our grocer lest he not stand with us in the next feud), peaceful, atomized, economically unstable and culturally homogenous. The last two, economic change and cultural homogeneity, are, Gellner claims, connected, and together give rise to nationalism: his theory of how this happens is brilliant, innovative and convincing….

There’s more, of course… thoughts on how to get beliefs to spread without their passing proper tests of cognitive legitimacy… the effects of crossing the ditch on the former “artisans of cognition”… the “Rubber Cage” of advanced industrialism, where rationality in science and production co-exists with exuberant nonsense in the rest of life… Ibn Khaldun… society; why contemporary Islamic societies are not secularizing; the problems with… Popper, Quine…. I’d recommend starting with… Plough, Sword, and Book, and Nations and Nationalism.

Should-Read: Simon Johnson: The Politics of Job Polarization: “Highly educated people at the top of the income distribution are doing better than ever…

…people with only a high school education face declining incomes, living standards, and prospects for themselves and their children. The middle class is being torn apart…. Many middle-skill, middle-income, middle-class jobs have disappeared. The new jobs that have emerged are well paid for highly educated people and poorly paid for people who have only a high school education. A leading symptom–but only a symptom–is the disappearance of well-paid factory jobs…. This technology-driven trend has been compounded by the effects of decreased transportation and communication costs, making it cheaper to move goods over long distances… easier to move manufacturing activity overseas to lower-wage locations….

The Republicans[‘]… policies… lowering personal and corporate taxes…. Repeal of… health-care reform… financial deregulation… confrontational trade measures…. Given the role of technology in displacing workers, protectionism–tearing up trade agreements and imposing tariffs on Chinese and Mexican goods–won’t bring back high-paying manufacturing jobs, and Trump has no plan B…