Current situation


(new posts below this sticky post)

The current situation.

Apocalypse we have to say,  is not coming – we are already in it. Climate, finance, impact of robots, health, population. and more.

We have two populist Partie vs. one mainstream “progressive”. .The populists are of course Trump and Sanders. The mainstream is Hillary. It is just possible that Trump will raise real issues to get at Clinton. Could actually be very interesting season of more than usual open debate.

But as we get closer to the election, we need to be thinking about what to do about a Clinton presidency. Too close to the banks and the military industrial complex. Perhaps she can deal with these rather than for them. Long shot but its the hope.

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1724. What in economics and economies needs to change?

Provocation # 53

There is a  broad understanding that much has to change, some with economics, some with economies. What has to change? Amazing how undeveloped that conversation is. The tendency in economics is to think through one or two variables at a time: tax, interest rates, bank regulation, production and consumption. But these hardly add up to the system which needs to change (by system i don’t mean some platonic idea, but the ensemble of opportunistic innovations adapted slowly over a long period of time).

The current system as postulated in economics is (these are a crude suggestive approximation. You can each add your own – but probably not subtract any)

rational isolated individuals
the firm
the market System. (monopolizing, hardly free in Smith’s sense)
big data
trade balance
efficiency (for what? we could speak of the efficiency of distribution)

But these, instead of leading us to a good outcome for society (the well being of society is the chief product of an economy) leads to devastating inequality, the likelihood of war, climate destruction and the deep corruption of politics.

The real system is

siloed education (fragmented, career oriented, not system management or citizenship
income and wealth distribution
private property
influence of wealth
interest (lower for the richer)
democracy – republic – tyranny: the mix
increasing segmentation of society
legal system

And because these are systems, change in one part requires change in most of the others.

How do we get from dealing with the first set of the present time to dealing with the second set where soon we need to be? It looks like for any one or several in the first list to get to the second, a number of things have to change relatively simultaneously. How do we do that? The well-being of society is the main output if an economy.

Change is hard. Most people actually want to hold on. “Habit is the great flywheel of society,” wrote William James in Principles of Psychology. An example of system change from ancient Greece: which evolved from the hunter’s kill to the sacrifice to the market. Ritual elements were brought along while change was occurring.

“That (privileged status of religious institutions) status allowed the distinctive institutions of the sanctuary to become the dominant institutions of the polis: sacrifice, feasting, and dedication constituted a nexus of practices that led to prescriptions on ritual behavior, which in turn served as a model for law giving.” From Mcinerney Cattle of the Sun.

Our modern conglomerate of rules and beliefs needs to change, but we are not, so it seems, system thinkers. Fragmentation is normal, leaving us locked in silos in universitys and business. Bureaucratic efficiency can be social dysfunction. What is being made efficient? The efficient production of things is not the efficiency of developing good and healthy people or a meaningful culture that can think systemically about itself.

The consumer with a basic approach to self optimization is not a good system citizen. This will be hard to change.

Aristotle recognized as much:

“For the law has no power to compel obedience beside the force of cus
tom, and custom only grows up in long lapse of time, so that lightly to
change from the existing laws to other new laws is to weaken the power
of the law. Again, even if alteration of the laws is proper, are all the
laws to be open to alteration, and in every form of constitution, or not?”
(Aristotle, Pol. 2.1269

What do we need to change that will make a change significant enough to make a significant change? A change adequate to the problems we face?

1723. Deep history and the obscure future.

Provocation 52 Deep history and the obscure future.

The awareness of current problems within economics is now widely shared. But how do we get from accurate criticism of the present to a new economic thinking that is different enough to have a chance of making a real difference in the outcomes for society? In recent interviews Adair Turner and Eric Weinstein have called out for truly new thinking. Stieglitz writes:

..we need to rewrite the rules of the economy once again, this time to ensure that ordinary citizens benefit. Politicians in the US and elsewhere who ignore this lesson will be held accountable. Change entails risk. But the Trump phenomenon – and more than a few similar political developments in Europe – has revealed the far greater risks entailed by failing to heed this message: societies divided, democracies undermined, and economies weakened.

While we are clearer about the present mess, we are not clear about

1. How we got here. (The past)
2. What can happen. (The future)

We lack good narratives on how the past got us to the present. I don’t mean narratives such as the housing bubble (ingenuous because all house prices were going up and rents even faster. What were lower income people supposed to do?)

I think of rather different narratives that go much deeper into origins, such as..

Hunter gatherers shared the kill. As they became more sedentary the kill in the field was replaced by the “sacrifice” with ritualized distribution to everyone at the encampment. Herd management was key to early settlements and on into empires. We tend to think of the empires as agricultural, but the place of animals in the food chain and central cultural activity was larger. Cattle were the source and measure of wealth from Mesopotamia to Greece to Rome. Cattle breeding was central to the herd management, and the new head of cattle was named “cap”, latin for head, from which comes capital. Hence modern capital is a direct descendent of breeding in the herd, the use of what we have to produce more. The question emerged of who “owned” the new “head” (Even the word “interest” as from loans, used in Rome and Athens was “tokas“, “offspring”). The leaders of the tribes, as population and social complexity increased, came to be experienced as the. decider about the herd and its use. Sacrifice was still the way the wealth of the community was distributed. The chief’s “ownership” became slowly protected by laws , nomos , as in eco-nomos, (the early Greek Nomos came from the earlier Greek, nomia , meaning distribution). Capital was then and is now is new production, especially production beyond the reproduction rate. Who’s owns that surplus, what could be done with it? (Bride price throughout the Greek and Roman empires, tends to equate breeding and human reproduction. Slaves and cattle were beasts of burden and women were to produce “offspring”. ). These customs protecting the strong leaders in relation to the rest of the community became the regime for handling “cap” down to our own time.

What I like about this is, it suggests possible ways of rethinking “capital” now.

Which gets us to the possibilities for freeing the Imagination to reinvent the future. Imagination needs to be released from its chains of TINA and the implications of treating the economic system as though it is a universal natural system rather than the slow accrual of local opportunities.

We need more imagination because of the complexity of feedback among problems such as Low growth and inequality.

The establishment pushes growth as the solution to both.

The alternative would be a different regime of distribution of income  and wealth, which could cope with climate warming but would require really tough decisions and policies. The establishment approach  cannot because ir will feel as if we dodged the bullet of redistribution and low growth and fail to take on the tough issues. In a way we are back to herd management, what to do with the new head of cattle, the cap, and now, with capital.
Suggested reading on the cattle question.

Sahlins, Christopher : Stoneage Economy
Seafford, Richard: Money and the early Greek mind
Heichelheim, Fritz Early economy
Heichelheim An Ancient Economic History.
Goetzman Money changes everything.
Schabaz, Margaret The Natural Origins of Economics.
McInerney, Jeremy The Cattle of the Sun: cows and culture in world of the ancient greeks.
Merchant, Carolyn. Reinventing Eden: the fate of nature in Western Civilization

1722. Revenge escalates in Homer.

I am sure most of us feel that the trading of escalating insults can lead to serious danger, and should stop. Reading literature is part of a good education. Here, From The Odyssey (commentary from Mcinerney Cattle of the Sun..

Consider, for example, the astonishing remark Odysseus makes in telling Penelope not to fret over the livestock consumed by the suitors: he says he will replenish their losses by raiding and by exacting tribute “until the pens are full again.”3 Protecting his goods has just led to the killing of dozens of rivals and the prospect of untold numbers of vendettas. Won’t these raids simply incite more violence, triggering off further instances of retribution? Laertes, in fact, raises this very point, so the poet and audience are well aware of the dreadful ambiguity of Odysseus’ triumph, but heroic society is characterized by a cycle of recurring violence in which raiding is catalytic: Katreus is mistaken for a raider and killed by his son, Althaimenes; Herakles kills Geryon and is attacked by Alebion, Derkynis, Cacus, and Eryx; Kastor is slain by Idas during a cattle raid; Amphitryon…..

We can suspect that Trump has not read Homer. Has Clinton? Political Science at Wellesley?  May or may not. She was busy in politics.

1721.Confusion. Trump the left and the right.

One side has the right leader and the wrong diagnosis. The other side ahs the wrong leader and the right diagnosis.

Josh Marshal at Talkingpoints memo writes:

Is it desperation? The themes and instincts of the anti-Semitic radicals and extremists his campaign stews in? A “global conspiracy” of the political elites, international finance and the media who have “robbed our working class, stripped our country of its wealth and put the money in the pockets of a handful of large corporations and political entities.”

But this is the same critique as given by the progressives, especially the progressive left.

The one percent manage the economy so that they have grown richer and, the rest, the bottom 80 0r even 90% have been losing out for decades. The one percent created the conditions ripe for a strong populist leader, and we got Trump who play acts the role. But the other Republican candidates did not take on the role because they really represent the small town millionaires, not the unemployed.

But the one percent is blaming the rural right beer drinking know-nothing idiocies, the desperate – who do not really exit in large numbers: but the disaffected do and instead of being taken seriously are caricatured by  the one percent.

The reason this is important is because we do have to take their grievances seriously or  the system will turn uglier and collapse or turn authoritarian. In face it is not clear whether Clinton or Trump would move closer to the path taken by Mussolini in Italy in the 1920’s. Remember the early Mussolini was the candidate of the corporations and the government. it took him a while to become the fascist Mussolini (I’ have read Dennis Mack Smith’s  critical biography.)

So we have

Clinton is with the one percent – and encapsulated in a steely ambition whose real humanity can be surmised, but why earn half a billion dollars since secretary of state? As one critic said, “What was she selling?” I would like to think she is better, much better, than just the lesser of two evils. I would like to believe that we are lucky to have a president who is so smart, so experienced and so capable. But I am not sure. Part of the problem is that the mainline progressives tend to come from the professional class who have more of a stake, they feel, in the success of the one percent than of the 90%.

And Trump, the braggart oaf who does see that the left-behinds are angry and he can lead, but who is prone to violence and other ego-centrist dangers, and has no reason to protect the one percent as a class, so he stacks and voices the serious concerns of the red state majorities (and the blue state minorities). I agree with those who have said that he did not expect to get this far and is just winging it.

Clinton represents the only legitimate power (barely legitimate), and Trump represents the only diagnosis  that cuts to the core of privilege, of the one percent and its manipulation of the finance system, taxes and corporations – and the supporting press to the mainstream .

In fact we can say that the Mainstream is the one percent, and the left behinds are the trump supporters. That adds up to about fifty percent of the voters. Clinton is the competence we need, Trump has the diagnosis that is real (as in the quote at the top). The idea that Trump’s diagnosis might be anti-Semitic might be real, but it is being used to break down his diagnosis.

One side has the right leader and the wrong diagnosis. The other side has the wrong leader and the right diagnosis. We are drawn in to criticising how bad the trump voters are rather than seeing how right they are on core issues Bt seeing them as white supremacist misogynist nationalists we miss the important part of the message to be read in their desperation and have been side tracked from criticising the policies of the one percent to indulge in self congratulations of our own.

Since this will not get sorted out  till long after the election, get ready to ride through the ensuing chaos.










. So what to do? We mostly think that Clinton must win, and then what? I suspect she ignores me domestic stuff and becomes the foreign policy war leader.

1720. Plan for analysis: where are we, how did we get here, what can happen?

This has a long history but I am taking it more seriously. In the standard scenario analysis, the focus is on getting from the present to the future. It seemed to me like the runner on the block waiting for the gun to go off. All future. But good planning is more like the surf-boarder sitting on the board, watching the wave come, riding it up, letting it go, and watching for the next. After a while the dynamics of the waves is clarified and good choice can be made as to which wave to ride.

So it led me to want to have three large graphics in a room where strategy is being discussed.

  • A mess map of the present difficulties
  • A time line on how we got here (starting perhaps in the bronze age..
  • Several plausible scenarios, not comprehensive, but suggestive.

These three remain on the walls throughout the conversation.

Here are some preliminary considerations for each.

The Present.Where are we? Current map of intractable issues

  • Population
  • War
  • Inequaity
  • Climate
  • Quality of life
  • Loss of culture
  • technology
  • governance
  • media
  • land

The Past. How did we get here?

  • Primate evolution
  • Mutations
  • Cooking
  • Speech
  • Symbolism
  • Settlements
  • Cattle
  • Villages
  • Empires
  • East west divide?
  • Agriculture
  • Technology
  • Metals
  • Feudalism
  • Crafts
  • Trade
  • Colonialism
  • Religious-tech conflict
  • Nation state; Westphalia
  • Individualism – democracy
  • Steam electricity
  • Chemicals
  • Post ww2 superheated economy
  • Slow decline
  • Elites take over economy
  • Entropy

The Future.What can happen?

  • Authoritarian
  • Breakdown,  mafias
  • Gardenwotld
  • Bourgeois  hegemony

on the walls it might look like

Scan 9.jpeg

1719.”Capital” from head of cattle.

Recent draft thoughts in progress….

Economics is dominated by urgency about growth. Why do we care so much about it? If I run a small business, say selling cheeses, and I do as well this year as last, I can be happy – unless. Unless I borrowed money to support the business in the expectation that growth would allow me to pay back the loan with interest and have some left over. Then growth becomes necessary. If I had stayed happy with last year’s result (It did feed the family, support education costs and pay taxes) my situation would be very different. But over time the dynamics of borrowing and having to pay back plus interest, has driven the economy – and war and poverty. In fact the drive for creating and paying off debt can be seen as the major thread that runs through history since the first villages to the 8 billion we have today. Needing to pay back with “more” tears apart old social arrangements as it creates new ones. The change masters seem to benefit, but for the rest of us, well, a mixed story. Growth seems obviously necessary – and a bit mysterious. I want to take the mysterious side seriously and do some exploration.
I am going to make a proposal about growth. which is that the economics we have is a clear development out of antique culture and its ways of handling our species interchange with nature. In short the early practices of protecting herds and the relationship of those herds to the well-being of the population, and modern capitalism are intimately related and current practice is a recognizable extension of ancient practice. What has shifted is that sense that the herd was managed for the good of all, with strong practice of distribution (of which more in a minute) But production now, justified as using market forces to meet needs broadly and at lowest cost, has failed to care for society and its fragile place in nature.

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1718. Who cares about economics?

Provocation # 51.

(remember these are called “provocations” because I am trying to be provocative to stimulate debate from which a better understanding can emerge).

Who cares about economics (as distinct from the economy)?

Most obviously, the profession with graduate training and research and faculty on the treadmill to first jobs and then tenure. For these economics is like a jungle gym and the journals and conferences are mostly good for scanning for those slippery hand holds and foot placements to go up.

Could this process turn more positive?

There definitely are economists who care about society and actually thought entering economics would be to gain leverage to make a better society.

Some of these economists are quite vocal -and ignored within the profession. Perhaps even a large percentage of those going with the mainstream would prefer not to go with the mainstream but can’t imagine how to do it and survive.

If graduate students learned what we think would be better economics: more history, humanity, sociology, anthropology – could they get jobs, or is the jungle gym the main source of employment?

The choice of supporting the mainstream or being scientific is painful, and made worse because “being scientific” is often used as the argument to support the abstract quantification (method centric) at the expense of avoiding phenomena, like banking, wealth, class, and the emerging unknowns that effect change in the structure of the economy.

Does current economics interest people outside the jungle gym?

What of bureaucrats with economic portfolios? They also do not read the journals but justify their own positions based on the impression given by the existence of the journals, departments, and conferences that economics is serious and hence seriously informed people are running the economy. Serious people are in charge.

There are signs that the jungle gym is coming apart. You all know of the problem with the Nobel for economics. Mirowski among others had been eloquent showing that the prize is more political than scientific. But the critique is spreading

The Political Slant of the Nobel Prize in Economics
Avner Offer, the co-author of a book on the award, explains how it has legitimized free-market thinking over time.

The core problem is that, since the prize is given for orthodoxy, it cannot be given for anything else. That market orthodoxy (that free markets are good and possible is used to justify the monopoly and regulation based market we have) keeps us from thinking.

Larry Summers probably in quest for a Noble and or a good job in the next Clinton administration, is struggling to be relevant (secular stagnation) but is trapped, and trapping us, in orthodoxy. His almost good arguments too quickly carry the baggage of existing assumptions. He published yesterday [my comments in [….]’s

Voters sour on traditional economic policy.

It is hard to escape the conclusion that the world is seeing a renaissance of populist authoritarianism.” [But you will notice that populist anxt is seen asdriven by lack of growth, and no other possibility is to be considered.]

As the world’s finance ministers and central bank governors came together in Washington last week for their annual global financial convocation, the mood was sombre. The spectre of secular stagnation and inadequate economic growth on the one hand and ascendant populism and global disintegration on the other led to widespread apprehension.

[“Secular stagnation” is interesting because it mixes religious associations (secular, not religious, with decay and death – a potent piece of rhetoric. “Secular” means not universal but of an age, hence not transcendent nor religious, and “stagnation” means sitting water with hints of decay, as pond or swamp. The impression given by the phrase, “secular stagnation,”. is we should have something that is neither secular(what is the unspoken alternative) nor stagnation. The implication is that we should return to the natural state of growth ( a natural state which is not secular and not stagnant.)]

Unlike in 2008 when the post-Lehman crisis was a preoccupation or 2011 and 2012 when the possibility of the collapse of the euro system concentrated minds, there was no imminent crisis.

Instead, the pervasive concern was that traditional ideas and leaders were losing their grip and the global economy was entering into unexplored and dangerous territory.

[so far correct. Which continues..] Continue reading