Saturday, March 31, 2012

EIEI-oh!

For obvious branding and sing-along reasons, I've decided to acronymize the energy intensity of employment index as "EIEI" even though the employment numerator is aggregate hours worked rather than persons employed. It works. Hours worked is also employment. Let's hear it now:
Old McSandwich had a chart - EIEI-oh!
and on his chart he had some ducks -- EIEI-oh!
with a quack-quack, here and a quack-quack there
Here a quack, there a quack, everywhere a quack-quack
Old McSandwich had a chart - EIEI-oh!

Reply to Amory Lovins

Dear Dr. Lovins,

Thank you for your thoughtful reply to my earlier message. I very much appreciate your spirit of dialogue and willingness to share your insights and criticisms. I would be delighted for you to post this exchange at RMI and I will do likewise at Ecological Headstand. I want to reiterate at the outset that it seems to me we are in agreement on the substantive issues, it is mainly in matters of interpretation of the relative significance and implications of them -- and where to go from there -- that we may differ.

Specifically, I agree that there is no evidence in the literature that energy improvements are "largely, wholly, or more than wholly [...] offset by extra economic activity caused by energy efficiency." I also agree that the metrics of economic growth are controversial. You cite the "Gross World Product" as being meaningless; I would extend the critique to country-level GDP. Finally, you refer to the serious problems of measurement that would arise in any attempt to isolate the interactions between energy consumption and employment, which in my view is indeed a daunting challenge. I will take the liberty of reviewing those points of common ground in reverse order to highlight apparent divergence in our respective interpretations.

First, with regard to the difficulty of isolating the interactions of energy consumption and employment, I would note that much the same difficulties pertain to the traditional question of the interaction between labor-saving technology and employment. That hasn't stopped mainstream economists from making unconditional pronouncements about the supposedly "unlimited" demand for labor. Such claims are backed by econometric studies that purport to show that the demand for labor is not "fixed" and therefore (by inference) may be assumed to be unlimited. There has been a rash of such studies over the past decade connected with the drive to "reform" public pension entitlement by raising the entitlement age. (See for example, Gruber and Wise (2010) Social Security Programs and Retirement around the World: The Relationship to Youth Employment.) What this suggests to me is that the "serious problems of measurement," while real are routinely discounted by economists operating in a conceptual silo where the question of energy consumption is excluded by ceteris paribus assumptions. I wouldn't want striving for perfection to be the enemy of improvement.

Second, with regard to the controversial metrics of economic growth, I would like to call your attention particularly to critiques of national income accounts by Roefie Hueting and Stefano Bartolini. Hueting has argued that "asymmetric entering" distorts the calculation of national income accounts -- that is to say there are no negative entries in national accounts for environmental damage or resource depletion but there are positive entries for environmental remediation. Hueting's critique specifically references Simon Kuznets's original critique of the Commerce Department's National Income and Product Accounts for including in the total amounts that should be discounted as intermediate goods. Bartolini presented the similar concept of "negative externalities growth", that is to say economic growth that is driven by the need to respond to negative externalities. Bartolini defined two types of negative externalities: positional externalities, related to the "rat race" of everyone seeking to improve their relative position, and the replacement of formerly free goods with commodities. The critical literature on national income accounts spans the history of those accounts from Kuznets's 1947 critique to the 2009 report of the Commission on the Measurement of Economic Performance and Social Progress (Stiglitz, Sen and Fitoussi). My point is that citing relative and absolute gains in "energy intensity of GDP" is no less fraught with "serious problems of measurement" than is the index I proposed of "energy intensity of employment."

Finally, with regard to the absence of evidence for the "hard core" version of the Jevons Paradox, I would cite the maxim that "absence of evidence is not evidence of absence." Aside from any demonstration of strict causality, we are still confronted with an association that has prevailed in 26 of the last 35 years, using your own figures. Furthermore, the expectation that efficiency gains would correlate with consumption increases in any given year, makes the questionable assumption that for a rebound effect to exist, it must be virtually immediate, with measured effects occurring in the same calendar year. What about the possibility of incremental efficiency gains whose effect on total consumption is a cumulative "external economy" that is only realized in the "long period"?

Alfred Marshall addressed the differences between short-period analysis -- where ceteris paribus assumptions and mechanical analogies are appropriate -- and long-period analysis -- where they are not -- in his 1898 essay, "Distribution and Exchange." I would like to cite a brief passage from that essay:
In the relatively short period problem no great violence is needed for the assumption that the forces not specially under consideration may be taken for the time to be inactive. But violence is required for keeping broad forces in the pound of Ceteris Paribus during, say, a whole generation, on the ground that they have only an indirect bearing on the question in hand. For even indirect influences may produce great effects in the course of a generation, if they happen to act cumulatively; and it is not safe to ignore them even provisionally in a practical problem without special study.Thus the uses of the statical method in problems relating to very long periods are dangerous; care and forethought and self restraint are needed at every step.

But the difficulties' and risks of the task reach their highest point in connection with industries which conform to the law of Increasing Return; and it is just in connection with those industries that the most alluring applications of the method are to be found. Long period supply curves in relation to such industries are fascinatingly clear and vivid: but they are made too clear and vivid to be at all near to reality.
As Jonathan Koomey has pointed out, increasing returns to scale play an important role in the energy industry. If I may back up a bit here, though, I want to reiterate that I am not a partisan of the Jevons Paradox. As I stated in my first email to you, the Jevons Paradox is based on an analogy with an argument I consider to be a "hasty generalization" and a "post hoc fallacy." I personally would prefer a much more complex analysis that looks at the interaction of the evolving and contingent constraints on "prosperity" imposed by credit, human agency and natural resources.

In a nutshell, my position is that the driving force of resource consumption is credit expansion and that finite resources impose a constraint on that expansion. The efficiency gains therefore don't literally "cause" increased consumption but they do relax a constraint, thereby potentially enabling increased consumption absent some other constraint. Unless there is a change in the defining economic logic of credit and growth, the end result is the same for most intents and purposes. In short, I don't think it's a question of Jevons vs, not-Jevons but of how to move beyond such an unfruitful dichotomy. I welcome any further thoughts you have on these matters and will be happy to share the results of my ongoing inquiry into the apparently unexamined question of the energy intensity of employment.

Yours sincerely,

Tom Walker

Unpacking the Decoupling Tautology

A couple of weeks ago, Lane Kenworthy asked, "Is Decoupling Real?" I've got another question: "is decoupling a tautology?" Laneworthy was referring to the gap between median family income and per capita GDP in the U.S. Along much the same lines is the chart below produced by the Economic Policy Institute's State of Working America, which compares median family income and productivity growth.



The Sandwichman is concerned with another kind of decoupling -- the much touted decoupling of energy consumption from GDP growth that technological optimists like Amory Lovins promote as the solution to environmental impact and resource exhaustion problems. Relative decoupling of energy consumption per dollar of GDP is a well established fact. What is in dispute is whether that can be translated into absolute decoupling through imminent technological breakthroughs.

The short answer is: it can't. The slightly longer answer is it can't because even the relative decoupling that has occurred over the last 39 years is questionable. Oh, there's no doubt that energy consumption per dollar of GDP has fallen; what's questionable is the composition and distribution of that growing GDP.

Even at the aggregate level, there is the question of the increasing proportion of economic activity that needs to be devoted to repairing the damage done by previous economic activity -- cleaning up toxic spills, recovering from extreme weather events, etc. This is what Stefano Bartolini referred to as negative externalities growth and Roefie Hueting called asymmetric entering. This is a kind of decoupling of GDP increase from any meaningful notion of expanded or improved utility. It is just running faster on a treadmill.

But that's not all. There is also the question of distribution and even the possibility that the growing gap between GDP growth and median incomes is a structural imperative. Now, by "structural imperative" I don't mean something that can't be changed -- only something that isn't going to be budged by moralistic pronouncements about fairness. To show what I mean by structural imperative, I would like to share a composite chart that integrates the data from the EPI productivity and median income chart above and data comparing the energy intensity of GDP to the energy intensity per hour of work. I have added an inverted productivity series (black dotted line) for reasons that will become clear as the narrative unfolds.

Sources: U.S. Bureau of Labor Statistics, Energy Information Agency, U.S. Census Bureau

The first thing that becomes clear from this chart is that productivity, median income and the energy intensity per hour worked tracked each other closely from 1949 to 1973. The latter year was chosen as the index year because energy intensity per hour of work peaked in that year. After 1973, energy intensity per hour of work declined for about ten years and then remained virtually flat up to the present. Productivity and Median Income diverge after 1973.

The inverted productivity series now presents a clue as to what exactly is being "decoupled" in all this decoupling. With productivity defined as GDP per hour worked, inverted productivity is hours worked per unit of GDP. Before 1973, inverted productivity appears as simply the mirror image of productivity, median income and energy intensity per hour worked. After 1973, though, it tracks energy intensity of GDP, while the stable energy intensity of hours worked can be understood as the axis around which productivity and energy intensity of GDP rotate and reflect one another. For all intents and purposes, then, one could say that "energy intensity of GDP" is a statistical tautology, which itself, prior to 1973, performed as the axis around which productivity growth translated into steady gains in median income.

Correlation does not imply causation. Sometimes, however, it reveals a hidden tautology. Hours, energy consumption, income and GDP are inputs and outputs of an economic system that transforms some of those into some of these. The inputs don't cause the outputs any more that cattle "cause" beef, they're just different names for the same thing in a different state.

The indexes I have plotted in the graph are ratios between inputs and outputs (productivity and energy intensity of GDP) or inputs and other inputs (hours of work and energy consumption). Median family income can be thought of as a circular ratio of inputs and outputs in which both income and the family can be viewed alternatively as either outputs or inputs -- income provides sustenance for the family; the family supplies labor to industry in return for income and so on.

Ratios between inputs do not wholly determine ratios between outputs or between inputs and outputs. Policies do that. But the quantities of outputs are constrained by the quantities of inputs. It is thus necessary when examining the energy intensity of GDP, for example, to ask what is happening with the other inputs and the other outputs.

In closing, I would like to present a third chart that compares the growth of population, labor force, employment and hours worked in the U.S. from 1950 to 2009.


When I initially chose employment as the numerator of an alternative index, I was aware that there was a rough coincidence with total population and thus would be similar to a per capita energy consumption index but would smooth out some of the cyclical variations. Aggregate hours of work presumably performs this smoothing function even more precisely. For the last fifty years, though, the growth in employment, labor force and aggregate hours has been steeper than population growth, with hours reaching a peak in 2000 of nearly 30% more per capita than in 1961. Employment as a percentage of total population peaked in 2008, even though labor force participation peaked in 2000 because the later ratio considers only the population 16 years and older.

Friday, March 30, 2012

"Full Marks for Imagination": Reply from Amory Lovins

Thanks for writing. A few brief comments are below. May we post this exchange on RMI's Jevons blog, http://blog.rmi.org/blog_Jevons_Paradox?

Amory B. Lovins
Chairman and Chief Scientist
Rocky Mountain Institute
1739 Snowmass Creek Road
Snowmass CO 81654, USA
Executive Assistant (Patty Heydenberk)
Special Aide (Clay Stranger)

On 23 Mar 2012, at 15:16, Tom Walker wrote:

Dear Dr. Lovins,

I have read (and replied to) your responses to David Owen regarding the Jevons Paradox at the New York Times, Room for Debate and the Rocky Mountain Institute blog. I have also written a blog post at Ecological Headstand and EconoSpeak, which has received over 700 views so far today. I remain unsure about what I perceive as inconsistencies in your position and would appreciate clarification.

At the RMI blog you referred to the energy rebound argument as "this old canard":
"There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard."
In 2005, however, you wrote, "Far from dampening global development, lower energy bills accelerate it."("More Profit with Less Carbon," Scientific American 293, 74 - 83). By "lower energy bills" I assume you were referring to lower prices resulting from improved energy efficiency
I was referring to lower bills, which are the product of price times consumption—in this case, impliedly, the net bill, namely the value of the energy saved minus the cost of saving it.
and by "global development" I assume you meant economic growth.
Loosely yes, although, as you know, the metrics are controversial, and Gross World Product is not a meaningful one for many reasons.
Although the increased efficiency would lower the energy intensity of each dollar of GDP, the "accelerated" development would inevitably offset at least some of those efficiency gains with respect to total consumption. Leaving aside the proportions between energy saved through efficiency and energy consumed through accelerated development, that sounds to me like a rebound argument. If it walks like a paradox, swims like a paradox and quacks like a (Jevons) paradox, can we not conclude that it is a version of "this old canard"?
I've agreed for the decades I've participated in these discussions that rebound is real. It is just small. There is no inconsistency. I've never said rebound does not exist—only that it's unimportant. The "old canard" I referred to is the notion, as various advocates claim about every decade, that based on coal use after Watt's steam engine, it is generally true that energy efficiency is largely, wholly, or more than wholly ("backfire" or "Jevons paradox") offset by extra economic activity caused by energy efficiency. The literature provides no evidence for such claims.

It is common ground that disruptive technologies, some of which happen to save energy, can disproportionately boost economic activity. This does not make the general backfire thesis valid. As my response to David Owen's 19 March 2012 NY Times posting, at blog.rmi.org/blog_Jevons_Paradox, notes:

James Watt's more-efficient steam engine did spark an industrial revolution that (as Stanley Jevons observed) created great wealth and burned more coal. But this is no proof that energy efficiency generally triggers economic growth that devours its savings (or more)—a "backfire" effect never yet observed. Rather, it shows that many disruptive technologies stimulate economic growth and wealth, sometimes sharply. Some disruptive technologies, like microchips and the Internet, incidentally save net energy even though they are not meant to be energy technologies; some disruptive energy technologies, like automobiles and jet airplanes, increase energy use, while others, like electric motors, probably decrease it, and still others, like electric lights, could do either depending on technology and metrics (which Owen's cited lighting analysis muddles); still other disruptive technologies that Owen doesn't criticize, like key advances in public health, mass education, and innovation, enormously increase wealth and have complex and indeterminate energy effects. Blaming wealth effects on energy efficiency has no basis in fact or logic.
In the posted Times comments, Dr. Jon Koomey at Stanford (formerly LBNL) correctly notes:
Many people on this thread (including Owen) confuse the effects of getting wealthier with the effects of efficiency. Rebound, properly defined, concerns the latter. The problem of wealth causing people to buy more stuff and build bigger houses is only peripherally related to efficiency (efficiency has a minor impact on the total cost of owning and operating most goods and services). And in addition, there are saturation effects, so that the additional time that I might drive because driving is cheaper is limited by how much time I want to spend in the car. *** Getting wealthy is caused by many factors, and [energy] efficiency is only one such factor (and a comparatively small one at that).
I understand your position is that potential energy efficiency gains are large enough to more than compensate for increased energy demand from economic growth, thus implying the possibility of an absolute "decoupling" of growth and resource consumption.
Yes (in the sense that resource use and GDP could long sustain changes in opposite directions) for energy, generally yes for water and minerals, but with some potential exceptions, notably phosphorus. Also, we've analyzed U.S. energy-saving prospects only for the first 6x improvements (www.reinventingfire.com) vs 1975 aggregate intensities, although clearly there's even more after that, probably with good economics.
The index you cite in support of this contention expresses the energy intensity of GDP. However, I would suggest that a more salient index would measure the energy intensity of employment. I make this suggestion because Jevons in his original statement of the paradox referred to "a principle recognised in many parallel instances," and cited specifically the eventual expansion of employment after "the introduction of new machinery, for the moment, throws labourers out of employment." Thus the energy rebound argument is explicitly based on the parallel idea of an employment rebound. Nor is this a merely conceptual analogy because fuel is consumed running the machines that, according to the principle, displace labor (momentarily) but eventually expand the demand for it. The fuel consumption, economy of fuel, machines, labor demand and economy of labor are thus united in a continuous cycle.
I don't recall anyone else who has proposed or analyzed energy intensity of employment. It's an intriguing concept in theory, but I have trouble understanding how it could be meaningful in practice. Even if you did it properly and tried to analyze an elasticity of substitution between energy and labor, you'd encounter serious problems of measurement and uncontrolled fluctuations in both variables, due e.g. to weather and interfuel substitutions for energy and to compositional, labor-market, wage, demographic, productivity, and business-cycle variations (among others) for labor.

I'll share this with a couple of colleagues more expert than I in econometrics to see if they have any further thoughts.

I have extensively researched the original principle upon which Jevons's "parallel" paradox is based and have traced it to a pamphlet, "Thoughts on the Use of Machines in the Cotton Manufacture" written in 1780 by a Lancashire magistrate, Dorning Rasbotham, esq. I must confess that I find the original conception to have been a hasty generalization and a post hoc fallacy, so I would have to concede that the Jevons version must indeed be somewhat of an "old canard", as you call it. But, as Cecil Pigou pointed out a hundred years ago, "If it were a good ground for rejecting an opinion that many persons entertain it for bad reasons, there would, alas, be few current beliefs left standing!" Therefore the investigation must be carried further, specifically to the linkage between the energy rebound argument and the employment rebound.
I'm not clear how this would illuminate rather than obscure the existing conversation about energy rebound. However, you deserve full marks for imagination.
I have compiled indexes based on U.S. employment and energy consumption data from 1949 to 2009 and world data from 1980 to 2006. My calculations show that the energy intensity of per person employed in the U.S. increased substantially from 1949 to 1973, decreased from 1973 to 1986 and hovered around the 1986 level for the next 23 years. Globally, energy intensity per labor force participant (employment only data was not available) was around five percent higher in 2006 than it was in 1980. Thus, when examining the energy intensity of employment, there has been no sustained relative decoupling of employment from energy consumption. Without evidence of sustained relative decoupling, it is difficult to imagine how absolute decoupling could be achieved without a radical, fundamental change in economic paradigm.
That's a big logical leap. Analogously, U.S. primary intensity fell faster than GDP grew in nine of the past 35 years, just as you show a decline in energy intensity of employment during the energy-saving boom years of 1973-86, but you can't validly infer from these results' not occurring every year that they could never do so. I see no basis for that conclusion. — ABL
I have posted a chart at my blog showing my calculation of the energy intensity of employment and would welcome any criticism you might have of my analysis.

http://ecologicalheadstand.blogspot.com/2012/03/lovins-paradox-this-old-canard.html

Yours sincerely,

Tom Walker

Thursday, March 29, 2012

An Open Letter to Amory Lovins

[I am posting below the email I sent to Amory Lovins last Friday. Tomorrow I will post Dr. Lovins's reply to me and the day after my reply to Lovins.]

Dear Dr. Lovins,

I have read (and replied to) your responses to David Owen regarding the Jevons Paradox at the New York Times, Room for Debate and the Rocky Mountain Institute blog. I have also written a blog post at Ecological Headstand and EconoSpeak, which has received over 700 views so far today. I remain unsure about what I perceive as inconsistencies in your position and would appreciate clarification.

At the RMI blog you referred to the energy rebound argument as "this old canard":
"There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard."
In 2005, however, you wrote, "Far from dampening global development, lower energy bills accelerate it."("More Profit with Less Carbon," Scientific American 293, 74 - 83). By "lower energy bills" I assume you were referring to lower prices resulting from improved energy efficiency and by "global development" I assume you meant economic growth. Although the increased efficiency would lower the energy intensity of each dollar of GDP, the "accelerated" development would inevitably offset at least some of those efficiency gains with respect to total consumption. Leaving aside the proportions between energy saved through efficiency and energy consumed through accelerated development, that sounds to me like a rebound argument. If it walks like a paradox, swims like a paradox and quacks like a (Jevons) paradox, can we not conclude that it is a version of "this old canard"?

I understand your position is that potential energy efficiency gains are large enough to more than compensate for increased energy demand from economic growth, thus implying the possibility of an absolute "decoupling" of growth and resource consumption. The index you cite in support of this contention expresses the energy intensity of GDP. However, I would suggest that a more salient index would measure the energy intensity of employment. I make this suggestion because Jevons in his original statement of the paradox referred to "a principle recognised in many parallel instances," and cited specifically the eventual expansion of employment after "the introduction of new machinery, for the moment, throws labourers out of employment." Thus the energy rebound argument is explicitly based on the parallel idea of an employment rebound. Nor is this a merely conceptual analogy because fuel is consumed running the machines that, according to the principle, displace labor (momentarily) but eventually expand the demand for it. The fuel consumption, economy of fuel, machines, labor demand and economy of labor are thus united in a continuous cycle.

I have extensively researched the original principle upon which Jevons's "parallel" paradox is based and have traced it to a pamphlet, "Thoughts on the Use of Machines in the Cotton Manufacture" written in 1780 by a Lancashire magistrate, Dorning Rasbotham, esq. I must confess that I find the original conception to have been a hasty generalization and a post hoc fallacy, so I would have to concede that the Jevons version must indeed be somewhat of an "old canard", as you call it. But, as Cecil Pigou pointed out a hundred years ago, "If it were a good ground for rejecting an opinion that many persons entertain it for bad reasons, there would, alas, be few current beliefs left standing!" Therefore the investigation must be carried further, specifically to the linkage between the energy rebound argument and the employment rebound.

I have compiled indexes based on U.S. employment and energy consumption data from 1949 to 2009 and world data from 1980 to 2006. My calculations show that the energy intensity of per person employed in the U.S. increased substantially from 1949 to 1973, decreased from 1973 to 1986 and hovered around the 1986 level for the next 23 years. Globally, energy intensity per labor force participant (employment only data was not available) was around five percent higher in 2006 than it was in 1980. Thus, when examining the energy intensity of employment, there has been no sustained relative decoupling of employment from energy consumption. Without evidence of sustained relative decoupling, it is difficult to imagine how absolute decoupling could be achieved without a radical, fundamental change in economic paradigm.

I have posted a chart at my blog showing my calculation of the energy intensity of employment [see below] and would welcome any criticism you might have of my analysis.

Sources: World Bank, U.S. Bureau of Labor Statistics, U.S. Energy Information Agency



Yours sincerely,

Tom Walker

Friday, March 23, 2012

The Lovins Paradox II: Cognitive Dissonance Edition

"Far from dampening global development, lower energy bills accelerate it." -- Amory B. Lovins, "More Profit with Less Carbon," Scientific American 293, 74 - 83 (2005).

Walks like a Paradox, swims like a Paradox and quacks like a Paradox. Let's call it "this old canard"!

Thursday, March 22, 2012

The Lovins Paradox: "this old canard"

Amory Lovins has responded to David Owen's commentary at the New York Times on "Efficiency’s Promise: Too Good to Be True." In his Times comment, Lovins cites his complete response at the Rocky Mountain Institute blog, wherein he asserts: "There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard."

Now, "this old canard" -- the Jevons Paradox -- is based explicitly on an even older canard the Sandwichman has dubbed the "Rasbotham rebound", the truism opposite to the so-called lump-of-labor fallacy. Although he may not be aware of it, in trivializing the Jevons Paradox, Lovins is implicitly trivializing the Rasbotham rebound as well. So, in effect (as many economists would claim) he is embracing the lump-of-labor fallacy. You cannot categorically reject both the Jevons Paradox and the lump-of-labor fallacy because the two are diametrically opposing principles. If "A" is absolutely false, then "B" is absolutely true. However is "B" is absolutely false, then "A" is absolutely true.

There is, however, a third possibility, which is that both "A" and "B" are only conditionally true. They are true in some circumstances but false in others. In that case, their relative importance vis a vis each other can only be gauged in context. It is not sufficient to find circumstances where "A" is true and other circumstances where "B" is false. One must examine the relationship between "A" and "B" in a given circumstance. Or -- to bring it back to the language of energy efficiency, energy consumption and employment -- one must look specifically at the energy intensity of employment, not the energy intensity of GDP or the micro-level effects of energy efficient light bulbs on the demand for lighting.

The Lovins Paradox thus can be stated as: even if Amory Lovins is right about the Jevons Paradox (or rebound effect) being an "old canard", the implications for energy consumption are troubling because of the intricate linkage between energy consumption and employment. In other words, dispensing with the rebound still leaves us with what David Owen calls The Conundrum (see video embedded below). The following chart compares the energy intensity of GDP in the U.S. with the energy intensity of employment (energy consumption per worker). The green line shows the index Lovins likes to cite, energy intensity of GDP from 1949 to 2009. The blue line shows energy intensity of employment in the U.S. for the same period. The red line shows the energy intensity of the labor force (because employment data is not available) for the world from 1980 to 2006.

Sources: World Bank, U.S. Bureau of Labor Statistics, U.S. Energy Information Agency

World energy intensity of employment in 2006 was around five percent higher in 2006 than it was in 1980. This is not an improvement, not even a relative improvement.

Tuesday, March 20, 2012

The Rasbotham Rebound

At the New York Times "Room for Debate" today there is a discussion of The Siren Song of Energy Efficiency featuring David Owen of the New Yorker, Annie Leonard (The Story of Stuff) et al. A prominent theme in the discussion is the question of the rebound effect, which was also discussed in a U.N. Environment Programme report, Decoupling Natural Resource Use and Environmental Impacts from Economic Growth issued last May. That report contained a section on the "rebound effect," which I reproduce below:

Wednesday, March 14, 2012

"Bring Back the 40-hour Work Week"

Sara Robinson cites "Tom Walker of the Work Less Institute" in an article at Alternet, "Why We Have to Go Back to a 40-Hour Work Week to Keep Our Sanity", picked up by Salon "Bring back the 40-hour work week".

One minor correction: it was the Work Less Institute of Technology and the Technology part was important. It alluded to the fact that adjusting the hours of work is literally a productivity-enhancing technology but is not recognized as such by most economists.

Monday, March 5, 2012

Memorable: "Neither my co-authors, nor I, have any recollection of reading your article...

Walker, June 15, 2005: "Economists call this allegedly widespread delusion the 'lump-of-labor fallacy.' Those who make the fallacy claim neglect to offer specific evidence of the supposed belief in a fixed amount of work."

Jousten, et al., February 2008: "Economists call this allegedly widespread view the 'lump-of-labor fallacy.' <P> Those who make the fallacy claim fail to offer specific evidence of the supposed belief in a fixed amount of work."

"We were very surprised to learn that one of the sentences in our paper... is very similar to a sentence in a draft of an article you posted in 2005. Neither my co-authors, nor I, have any recollection of reading your article during the course of our research."

"...we fully recognize the importance of acknowledging divergent analyses and the value of placing these issues in historical context as you do."

Sunday, March 4, 2012

Ethical Conduct for Economists?

Is it an oxymoron? The first group of papers has been posted for the online WEA conference, Economics in Society: the Ethical Dimension, among them Crisis, Credit and Credulity: the incredible circulation of a counterfeit idea by Tom Walker (AKA Sandwichman):
Abstract: Even as the first warning signs of the global credit crisis were emerging in 2008, the IMF published a working paper that sought to analyze the youth employment effects of early retirement schemes in Belgium but ignored the historical context of those policies as part of the response to an earlier crisis – the "steel crisis" of the 1970s and 80s. Instead, the authors dwelt on a dubious but well-worn fallacy claim that advocates of early retirement policies believe there is a "fixed amount of work to be done", a "lump of labor." In the context of the astonishing history of the fallacy claim, what might seem a questionable paradigm choice for the paper's authors constitutes an inexcusable ethical lapse for the economics profession. Not only is the fallacy claim notoriously unsubstantiated, it originated as a propagandist's forgery and gained currency as a viciously partisan polemic against trade unions. Subsequent textbook versions of the fallacy claim may have toned down the vitriolic rhetoric but their ad hoc rationalizations neglect to offer any substitute for the original's fabricated evidence for the alleged belief. Financial credit depends on trust and today that foundation of trust extends to the scientific knowledge and technical analysis of experts. What does the enduring credulity of economists toward a demonstrably counterfeit fallacy claim suggest about the prospects for the economics profession to confront and remedy its ethical failures?
Meanwhile, the Sandwichman has compiled a list of economists, journalists and a few politicians over the past decade or so who have invoked the fraudulent fallacy claim, either in unvarnished credulity or with malice aforethought:

Peter Antonioni, David Autor, Ryan Avent, Martin Neil Baily, James Banks, Bruce Bartlett, Andrew Biggs, Matthew Bishop, Olivier Blanchard, Walter Block, Richard Blundell, Tito Boeri, Axel Börsch-Supan, Antoine Bozio, Samuel Brittan, Michael Burda, Pierre Cahuc, Laura Carstensen, Philip Coggan, Peter Coy, Diane Coyle, Andrew Coyne, Bruno Crepon, Clive Crook, Ed Crooks, Michael Cuneo, Reginald Dale, Jaap de Koning, Klaas de Vos, Werner Eichhorst, Carl Emmerson, Marcello Estevão, Sean Flynn, Thomas Friedman, Ed Glaeser, Robert Gordon, Jonathan Grubel, Matthew Hancock, Alister Heath, Ruth Hubbard, Jennifer Hunt, Will Hutton, Richard Jackman, Juan Jimeno, Alain Jousten, Adriaan Kalwij, Arie Kapteyn, Laurence Katz, Joshua Katz, Achim Kemmerling, Jacob Funk Kirkegaard, Dylan Kissane, Francis Kramarz, Paul Krugman, Simon Kuper, Jason Kuznicki, Oliver Landmann, Richard Layard, Ruth Lea, Mathieu Lefebvre, Melanie Luhrmann, Landis Mackellar, John Macnicol, Bill McBride, Francois Melese, Giles Merritt, John Micklethwait, Kevin Milligan, Jack Mintz, Casey Mulligan, John Munro, Stephen Nickell, Kristian Niemetz, Gilles Paquet, Jamie Peck, Sergio Perlman, Pierre Pestieau, Christopher Rhoads, Matt Ridley, Nick Rowe, Filipa Sá, Gilles Saint-Paul, Xavier Sala-i-Martin, Thorsten Schank, Amity Shlaes, John Shoven, Robert Simmons, Hans-Werner Sinn, Dennis Snower, Guy Standing, Nigel Stanley, Will Straw, Timothy Taylor, Marian Tupy, Ernst van Koesveld, Matthias Weiss, Niels Westergaard-Nielsen, Alan Wheatley, Charles Wheelan, David Willetts, David Wise, Tim Worstall, Asghar Zaidi, Jeffrey Zax, Klaus Zimmermann, Andre Zylberberg

He who gives credit to the calumny before he has investigated the truth is equally implicated. -- Herodotus