Provocation #115. Economics should be about the the full spectrum of the basics, Some musings:
Economics has become increasingly abstract, mostly through the influence of mathematics and the marginalists. But the reality of economy is organic. Manuel De Lande in his book Assemblage Theory says that in mechanical systems the parts maintain the integrity of their properties, but in organic systems the parts do not maintain the integrity of their properties.
Human society starts with concerns for food and reproduction. The institutions build out from this ground. The first signs of trade and craft start there, with pots and cutting instruments and grain grinding slabs. Activity we call economic is organized around feeding clothing and housing a few generations ay a time.
Early counting systems dealt easily with grain because it is a measurable commodity and when economists now think of markets they are drawn to commodities that fit that logic, still thinking of grain or stocks (root word as grocery stocks or stock up), or shares in a market that are fully quantified.
“the city-states were dependent on grain: wheat and barley in Mesopotamia, millet in China, maize in Mesoamerica. The reason is that cereals are easy to tax: they ripen at predictable times, the size of the harvest can easily be assessed, and the grain can be divided, transported and distributed in precisely measured rations by weight and volume.” (from Scott, Against the Grain)
Where this has gotten economics to is a field that feels autistic, lacking in feeling for people, obsessed with quantification and commensurability.
Economics ought to be about food and population management in the context of protecting the environment. Instead I can take a casual walk through some land covered with redwoods and the owner sees nothing but board feet. Even the roots holding the soil are unnoticed.
The middle class whose passing is lamented emerged during and after WW2 as the class of intermediate managers coordinating the new complex corporations (McNamara at Defense oversaw the B-29 which had a million parts). The GI bill trained millions to be managers, but independent of the product. Chocolate and refrigerators, same management issues. Their job was to gain control and turn their businesses into monopolies.(a Xerox ad for television shows a group of managers. One puts a folded shirt of the table and the CEO says “what’s that?” and the junior officer says “It’s what we make.”)
Hunter gatherers moved in open terrain catching gazelles, birds, squirrels, rabbits.. 120 different kinds of meat moving in seasonal cycles with 100 different edible plants.. Early settlements remained porous as people took the opportunity of planted crops but maintained the freedom to move out when the local cropped failed. The density of grain, population, and livestock in a concentrated space is the source of a state’s power.
“The primary purpose of the walls around the merging city-states may have been to keep people in, not to keep the barbarians out. In some early states human domestication took a further step: written records from Uruk use the same age and sex categories to describe labourers and the state-controlled herds of animals. Female slaves were kept for breeding as much as for manual labour.” (again Against the Grain)
Economy is, as Aristotle meant it: estate management, the care and feeding of the people on land well managed. Remember home ec in high school? How we looked down on it. Big mistake. It is the core competency for humans.
As the middle class is being replaced by computers (everything from the management of the care and use a Caterpillar diesel to a law firm or bank), we end up with an elite and an underclass. The elites will own the robots (German for slave).
The function of government is to prevent the majority being the prey of the elites.” (Jonathan Israel), but government seems now to be too weak and acquired to be able.
Economics is fascinating because it (should) crosses lines from theory to pragmatics and really includes everything. Yet it is taught as a narrow formalism.
So what might be new economic thinking?
3 thoughts on “1923. Economics should be about the full spectrum of the basics.”
Economics has become more abstract, and (the practice of it) less real, because it is based on a relatively few assumptions. These assumptions are typically implicit, often not even recognized for what they are, and usually not well understood. (Consider the social implications of “homo economicus.” All members of such a society are fully understanding of, and so responsible for, the consequences of their acts. Consider using that assumption to base social policy in a society whose average IQ = 100, and most of whom are not, and sometimes cannot, be all that well informed.
What happens is that “theorems” are developed from these assumptions, theorems of increasingly limited application. The assumptions, themselves, however, are very rarely questioned. See, eg: http://anamecon.blogspot.com/2015/06/the-standard-definition-of-money-is-in.html. The assumption that the market itself is not a force which aggravates inequality is another one.
In economics, unlike in physics, say, a great many factors bear on any particular event. These factors cannot be separated out, in the hope of re-assembling the event from the action of ‘understood components.’ The system is non-linear. And complicated.
You seem to like to read, so let me recommend for you: “Thinking in Systems. A Primer.” By Donella H. Meadows. And I do intend to check out some of your recommendations.
i knew her and her death was a serious loss to the rest of us. she was really coming into her iwn and working in some major initiatives.I am currently am working kn s a complete rewrite of Garden world politics. Here arfe a few o the books that have recently shaped my thinking.
Dotan Leshem’s Origin of neoliberalism: which shows that the West is a more social place than we realize, the inheritor of the Greek “estate management” extended to the proper use of god’s home and the idea of community.
Charles Mann, 1491, which reconfigures our view of the americas and its larger place in the flow of history with all its tragedies, and the more limited place of the United States in that flow, a mere pimple on that flow, this insight is the core of being helpful).,
Andro Linklater Ownership of the Land which show how recent the idea of private land is, and its power in fueling the financial power of an elite which can borrow from the increase in land prices.
Joseph Tainter’s Collapse which provides a fair analysis of two key facts. Maintenance costs of a civilization (education, health, law preventing infrastructure collapse – rise faster than the profit of the society – till collapse. Moreover the elites which own or live off of the infrastructure (communication, transportation, energy, irrigation, banking) ac to take costs out of the system rather than repair or innovate.
Graham Alison’s Destined for War: can America and China Escape Thucydides’ Trap? The largest power is threatened by the rise of another that looks like it will overtake. War results.
A few others Chalmer’s Johnson’s trilogy including Blowback, and the idea that American can either be a republic or an empire but not both.
James Scott’sAgainst the Grain: a deep history of the earliest states. They are more interesting and we are more derivative, than we realize. This history (for me)stared 30 years ago reading Cronon’s Changes in the Land .
Deeper background Erich Voegelin, Jean Piaget, Ernst Cassier, Lewis Mumford, and very affected by Erich Fromm and his search for a unity between Marx and Freud. Social energy is human energy in community.
We seem to be thinking along similar lines.
That’s pretty neat. Her book was great. Really clarifying.
Yeah. OK. You seem to be more nose to the ground than I am, so I’m thinking you probably have a better picture of some of the inner details. Tainter I read long ago. Maintenance costs increase, yes, but the situation is actually worse because the costs of extraction also reach a turning point and start to increase, so all costs increase.* The increasing costs of real extraction are one of the reasons the economic elites turn to financial exploitation. Fraud, basically: The (fictitious) financial profits start to exceed the financial profits which can be derived by providing real goods and services. The (still) increasing ‘GDP’ grows as a result of financial expansion, rather than real expansion. Now the costs of financial extraction are increasing and starting to become prohibitive, as the 99% become poorer in wealth. The 1% own 40% of the wealth. That means that the market they are trying to derive profit from is only 1.5 times bigger than their ‘factory.’
I have to think that if you had read Graeber: “Debt The First 5000 Years,” you would have mentioned it. I will check out “Against the Grain.” Other cultures and civilizations are one of my long standing interests. Here’s a joke: Wouldn’t the best time to study a dead civilization be when it’s still alive?
When social wealth is destroyed, so are external inputs to a hierarchy, especially those brought in by persons on th lower rungs. Especially initiative. And initiative is needed for the underling to fill in the details, because it is impossible to completely give complete detail in instruction from above. CF: The sheer unmanagable length of the laws passed by Congress more recently. Hmm. This chain of thought is just being born. The eventual conclusion seems to be that extensive information inputs from outside the hierarchy directly to the lower echelons of a hierarchy are necessary in order for the hierarchy to be functional. Otherwise, information loss at each level in the hierarchy will lead to a degree of impotence at its active face. The taller the hierarchy, the greater the effect. This would seem to happen when the elites control information input through media ownership. Or consider North Korea, perhaps.
Read about Thucydides’ trap. Not sure all the parallels are there, though. Sheer distance reduces the overlap in our spheres of influence, and the ability of both nations to project force upon the other. So while I see some conflict, to the degree of the ancient Greeks seems- well, a maybe. From a purely economic standpoint, our policies, especially our malinformed trade policies of the past thirty or so years, have basically destroyed our ability to go toe to toe with China in any extended conflict. The fact that the deluded run our foreign policy is the problem, here. And there are issues of maintainable technology in the face of complexity, here, too.
I do have a pretty good background in math and physics, which I try to bring to my analyses. Enough that I understand, and pretty much agree with, the HANDY “End of Civilization” model that received brief public attention back in the spring of 2014. Publicly repudiated, BTW, but never, to my knowledge, refuted.
Also, BTW: do you know anybody who can get me information, (and maybe spread some information,) on tree diseases? Where I live, the woods are being devastated by one. It looks like a lichen, but all I can get off the Internet is that lichens are supposedly benign. You can stand in some places, though, look all around, and all around it looks like a battlefield. The deadfall is so extensive as to be really disruptive of animal trail systems. Thanks.
*The decrease in Energy Return on Investment (EROI) implies that the ‘depth’ of an economy gradually decreases also. This would correspond to a decrease in the trophic levels of an ecology, as each level became more difficult for the one above it to extract energy from. For an economy, besides a kind of flattening, this means that the level of technological complexity cannot be maintained, nor any systems which rely on it. It may be that the US already cannot maintain the technology level, at scale anyway, of China.