2009 Quotes

The first virtue of a young man today - that is, for the next fifty years perhaps, as long as we live in fear, and religion has regained its powers - is to be incapable of enthusiasm and not to have much in the way of brains.

The fallacy that dynamic processes must be modeled as if the system is in continuous equilibrium is probably the most important reason for the intellectual failure of neoclassical economics. Mathematics, science and engineering developed tools long ago to model outside of equilibrium processes. This dynamic approach to thinking about the economy should become second nature to economists.

There is one key area in which Zuma has made no attempt at reconciliation whatsoever: criminal justice and security. The ministers of justice, defence, intelligence (now called 'state security' in a throwback to both apartheid and the ANC's old Stalinist past), police and communications are all die-hard Zuma loyalists. Whatever their line functions, they will also play the role they have played so ably to date: keeping Zuma out of court—and making sure the state serves Zuma as it once did Mbeki.

Economics also has to become a fundamentally monetary discipline—from the consideration of how individuals make market decisions through to our understanding of macroeconomics. The myth of "the money illusion" (which can only be true in a world without debt) has to be immediately dispelled, while our macroeconomics have to reflect a monetary economy in which nominal magnitudes matter, precisely because they are the link between the value of current output and the financing of accumulated debt. The dangers of excessive debt and deflation simply cannot be comprehended from a neoclassical perspective.The discipline must also become fundamentally empirical, in contrast to the faux empiricism of econometrics. By this I mean basing itself on the economic and financial data first and foremost—the collection and interpretation of which has been the hallmark of contributions by econophysicists—and by respecting economic history, a topic which has been systematically expunged from economics departments around the world.

Of course all such conclusions about appropriate actions against the rich and powerful are based on a fundamental flaw: This is us, and that is them. This crucial principle, deeply embedded in Western culture, suffices to undermine even the most precise analogy and the most impeccable reasoning.

Remember one thing as South Africa prepares to go to the polls this week and the world grapples with the ascendancy of the African National Congress leader Jacob Zuma: South Africa is not Zimbabwe.In South Africa, no one doubts that Wednesday's elections will be free and fair. While there is an unacceptable degree of government corruption, there is no evidence of the wholesale kleptocracy of Robert Mugabe's elite. While there has been the abuse of the organs of state by the ruling ANC, there is not the state terror of Mugabe's Zanu-PF. And while there is a clear left bias to Zuma's ANC, there is no suggestion of the kind of voluntarist experimentation that has brought Zimbabwe to its knees.