Notes in 1999: (1) A 1999 UNDP report describes the Eastern European situation as disastrous, and calls for a quick joining up to the EU (De Volkskrant October 16 1999). It is courageous that an international body speaks up like this - and it indicates the seriousness of the situation. (2) The journalist Peter Michielsen in NRC-Handelsblad October 30 1999 rightly calls attention to the original borders between the empires of Rome and Byzantium. The Eastern European countries that are doing relatively well belong to the Roman area, the others to Byzantium. He mentions that this cultural distinction has also been noted by Andreas Oplatka of the Neue Zürcher Zeitung 1994, who again refers to George Kennan in 1945. I was a bit surprised by this, hadn’t thought about it in this way. (3) These points however nicely fit what I have been argueing for ten years now. Enabling people to help themselves starts with taking account of the local conditions; and overall the barriers to trade should go.
Book V
Methodology: Definition & Reality
18. How to check ?
At the Dutch Central Planning Bureau, I helped making the Athena model (CPB (1990)) with its 7000 variables. I had this model at my computer and could let it do tricks like an obedient dog. But a proposal to an exercise effectively like the above was rejected by the directorate, and nowadays I am no longer in the position to make such proposals. The desktop computer that I have now, in 2004, might have more power than the 1990 mainframe, but I don’t have the data, the programs, and the possibility of discussion with colleagues. I have Word for Windows, Mathematica, some crucial books, an occasional visit to the Dutch Royal Library, and the internet (at low speed). Moreover, I have to make a living, in a different kind of job, and my time constraints thus are severe. This explains why I am forced to a logical argument - and this explains again why I emphasise logic anyhow.
Thus, crucially: it is up to the fellow economists to check my findings. They / you should actually do this anyhow, since a critical perspective always is best. For example: What are the data on the minimum wages in the other OECD countries ? OK, the OECD internet site shows that 1997 statutory minimum wage is 39% of median wages incl. overtime in the USA, 60% in France, 30% in Japan, etcetera, quite sizable [ [53] - but what about the tax void, the development, the indexation, the discouraged workers below the minimum, etcetera ? [ [54] What about the shifts of the Phillipscurves in this light ? What about the effects of the dynamic marginal rate ? How are these topics in all nations ? And what would happen, if all nations gain confidence about growth policies again, and they fire up each other and move all to a new higher growth path ? Clearly, the research agenda is huge.
The situation since 1989-1991 has been a bit like this: Me stating that unemployment has been solved (analytically) and inviting the fellow colleagues to check it - and nothing further happening. This book should make a difference in that I collect the various articles that I have been able to write since then. When others see the whole route then they will also better see the crucial junction where to take the other turn.
This may also concern the novel contribution to methodology below. [55]
19. Dealing economically with concepts
Maximising information power
Methodology may be seen as ‘economics applied to science’. The methodology of economics is the fixed point in that construct - even economic methodology in the traditional form as presented by Tintner (1968).