1972.How does economics change to fit new circumstances?

Provocation # 134

In a time of crises, what is the role of institutions, in particular economics? To the extent economics maps adequately onto the real world as it has recently existed, what happens to that mapping when the world rapidly changes? The models that have been in use tend increasingly to not fit, and cannot be made to fit because they use existing “variables” that are not representative of the new world? Does economics just drag its feet as it is pulled forward reluctantly, actually being part of the conservative momentum?

Economics could be an amazingly challenging and interesting social science as it spans both theoretical – like science – and pragmatic – like journalism and law and lets face it, interesting gossip – No other social science is as close to the pragmatics of human action yet much of the time so far removed in its concepts from the phenomena of the economy.

We tend to believe that there is some substantial permanent world and we have found it. Hence we are smarter than the others, closer to power, closer to the core of unfolding events. Probably not true: all is flux, some long term, some short, and we get it all mixed up. Certainly smugness is one of the chief sins of many economists. As such we miss much of what is interesting and worth study.

 

Here is a beautiful example of cross boundary thought, from Seaford Richard Seaford-Money and the Early Greek Mind_ Homer, Philosophy, Tragedy-Cambridge University Press (2004)

“Whereas gifts create solidarity between individuals from different groups, solidarity within the group is created by distribution, or redistribution. “

The Geeks of Athens believed that civilization starts with legally mandated redistribution toward equality. First came hunters who shared the kill, then sacrifice which maintained the tradition of distribution, and the use of law – the nomos of eco-nomos came originally from neimen, equal distribution. There would not be a law created if not needed, in this case equal distribution mandated against greed and inequality.

This is so rich because it hints at ways out of our current dysfunction.

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