About doug carmichael

Philosophical psychotherapy,Psychoanalyst, organizational strategy consultant, futurist, writer, painter.. "I listen well try to be of use , and take my recreation in the arts" -Confuscius

1811. New draft intro to New Economic Thinking.

“Wealth is the parent of luxury and indolence, and poverty of meanness and viciousness, and both of discontent,” so wrote Plato
We need  to admit that new economic thinking cannot occur without adding some political modeling and ideas. This is because the economics we have is part of a political regime that favors the one percent, creates inequality, ruins the environment and furthered the division of the country in ways that create voting  out of anger and despair and potential violence. The result is a dysfunctional  government that ignores the serious issues and governs through  the theater of hyping the wrong issues.  Our economics supports a dysfunctional government.

The positive view is not bandaid for the current system. Most bandaids floating in the press leave in place growth without environmental discipline and leave in pale the accelerating monopolization and wealth concentration that has sparked such powerful criticism in the years since 2008.

But the criticism, often quite rigorous, does not reach to solutions, even imagined. There ia a failure of imagination and vision.

In political history this is classic. Elites make choices for their own benefit and are blind to the impact of their policies on most of the population. The results add up until violent regime change. Some of it bottom up and some  top down. The top down usually wins.

We need an economics that helps create an economy of  “The wealth of Nations”, recognizing  that Adam Smith knew what he was doing when he  made it plural, and included in his book lots of advice on education as a state  supported activity, and against any form of monopolization.  The world is more complex than Smith could see. There were almost no corporations, few factories, most people worked in craft guilds or farms. The path from Smith to the present is full of detours he would not have liked and have gone agains his specific recommendations.

We must recognize that governance is very difficult in a crowded world with an overworked economy. We need leaders, but how are they chosen and how rewarded? The complexity of the world and its interdependence with technology makes their task almost impossible, but part of the problem is that the current goal of the system is simple inequality and extending production of the unnecessary. If the goal was meeting real needs rather than just consumerism elites would have a meaningful alternative and would recognize the value of democracy and serious education for all – not for jobs but for community imagination.

We need an economics which helps people meet real needs of family, science, communities, interdependence, education, health and quality of life in all its richness.  The current model of providing the middle class a standard of living defined by consumerism rather than by livability of community.   We have  a lower class defined by their invisibility and whose work needs of computer and cell phone are treated as consumer items rather than as school and work necessities.

Economics as a guide to the wealth of nations would be a different economics. It would discuss values, political arrangements, quality of life, and be fundamentally  interested in what is good for humans in their private and community life in a more democracy tending society. Instead of dismissing most of these issues new economics would above all find them interesting – as reality can tend to be.

This will be very hard work, in part because it means redistributing careers,  power and assets, redesigning institutions and communities, and because we have not been educated for it.

Economics is the thinking and economy is the topic. But as we know the thinking affects the object it studies. Economics becomes the basis for justifications and regulation, yet much if what is economy has been increasingly avoided by economics, or left unspoken in hidden assumptions, especially issues of class, wealth, capital, land, war and political power.

There is a strong trend in economics toward mathematical formalism and deductive systems, such as complexity and game theory. Despite claims for how important these are for the future of economics, these are minor developments in what New Economic Thinking needs to be about if it is to help society restructure toward fairness and climate health. There is a struggle in economics between trying to be a science and its potential as a kind of engineering. The first is organized curiosity, the second is deeply pragmatic. New Economic thinking must break out of the mechanical cocoon it has tended to take as normal if it is to be socially relevant beyond a formalism that organizes careers and grants but no public policy or inform the population of what the economy is about.
New Economic Thinking, in that fuller sense, needs to be in partnership with neighboring disciplines, and be aware that what they can offer, sociology and psychology for example, has itself been limited by trying to copy the success of economics because of its success in attracting money and building careers.

The reason this outreach is necessary is because, with the limited range of concerns in current economics, the reason why we need to develop a new economics – inequality, the role of money in politics, the nature of capitalist culture – are excluded. You can’t fix the economics of the broken part if the broken part is seen as external to economics.
For me the idea of new economic thinking requires a framework of democracy. But we know that such a thought is not universal, so I will need to argue for it, and also discuss economics for non-democratic regimes.

Democracy is a developmental project. It requires the education and free development of the individual to be a knowledgeable participant in their society. It is because it is a development project for everyone that I am in favor of it, despite the difficulties.
The current thinking in society about economics is mostly driven by search for advantage. This is deep in the culture. A new economics requiring anew economy need a different basis inhuman motivation. Competition produces winners – and losers. We cannot afford more losers.

We need a new culture based on compassion. Adam Smith used is as the basis for organizing his first more important book The Theory of Moral Sentiments. Confucius used it as the basis for a social society. Buddhism is full of it. The Dali Lama says “All religion comes down to one step, it of yourself towards another.” Martin Buber said the most important act is to set another in front of you.

These together add up to a choice: compassion and democracy. The alternative is more authoritarian and hierarchical and probably war based.

An economics that makes democracy and compassion important…

—————

These are my personal thoughts on what economic thinking has been, is, and could be. Economy is so much a focus of world wide urgent concern that good thinking is being published daily. Much of what appeared to be radical in this short book has already become common sense. So the book is a not quite up to date progress report to clarify my own thinking of what new economic thinking should be about. I keep a blog, dougcarmichael.com, where new thoughts are recorded in a more timely but less integrated way.

Most important, economies is about humans and their relationship to the material world that sustains them. People look to economics for guidance on how to manage that relationship. But economics falls far short, because it takes the one percent economy as given and sane and beyond modification. At its best economics embraces the view that society is on the planet, its people interact with many, and economics is a system within society, its politics and power relationships. A few words about the alternative view of economics.

Mainstream economics is obviously a vast reduction of that complexity to the isolated individual in a market of other isolated individuals, passing each other as though in hazmat suits. Economics should help understand and manage that relationship between people and world, taking into account anything that might be relevant.

1810. Values for the future

When thinking about what to do, two frutis of culture stand out: compasssion and democracy as adding up to an aequate approach to the future.  Both require the fuller development of each of us.

Democracy does not mean voting, it means educated participation in continuous conversation.

Compassion (think of Adam Smith in The Theory of Moral Sentiments) does not mean christianity, though it borrows from some of its core beliefs. The Dali Lama said  in the Natioanl Cathedral in Washington, “all religions come down to the same step – out of ourself and toward another”

Compassion and democracy. It is cleaer because Trump seems to have no interest nor instinct for either. His “the people ” is an audience, not a co-creator

To deal withh inequality, climate chane, automation, population – each requires a near sacrificial atitude toward all our acts and deeds – much to gain, but much to give up. If we keep compassion and democracy always in mind, we will do well.

 

 

Thinking over the landscape of the rolling present – the recent past and the anticpated future, and taking an occasional dip in the longer view

 

I thi

1809. Economics and political thought

Provocation # 73 Economics and political thought.
These provocations are in the spirit of emerging thoughts, incomplete, even contradictory.

Society has gotten itself in ever deeper dysfunction and faces frightening futures. What role has economics played in that emerging dysfunctionality?

I lately have been reading lots of political science, political theory, political philosophy. It is striking how the shift toward more formalistic analysis has played in economics the most of the social sciences and political thought the least. Politics is more a question of ideas and feelings and belief and less of material relationships. But the real story may be the reverse. Political thought is closest to real human concerns and economics has slowly eliminated all social feeling.

Economics has not been innocent. Ideas in economics such as the firm as person supports the crazy idea in politics that a corporation is a person, or the idea in economics of equilibrium supporting a politics of “don’t touch”. or the idea of the rational individual supporting the isolated individual of consumerism where one dollar one vote has replaced citizenship. “Free market” Hayekian thinking supports the “marketplace of ideas” in politics. But the Economic market is not free. It depends on regulations, contracts, laws. banks. So the imputing of “free” to marketplace of ideas hides the way that market is also skewed by money and regulations. We all know that big corporations own most of the press, yet we don’t let ourselves think through how distorting this is.

Economic thinking always has a political implication just as political thought always has economic implications. If we had a functioning democracy of educated people, media and value savvy, it could work out, but given the distortions in wealth, we are in sad shape. Economists have since 2008 generated a lot of prose about what is wrong, but very little about what to do beyond “more growth” . Growth is probably bad for the environment and motivates increased automation. Growth is usually paired with “competitive advance”. But are we stupid? “Competitive advantage” guarantees that there are losers. What kind of society is that? I think we cannot afford more losers.

We have a near consensus that things are going badly, but no consensus about what to do.
Economists seem still to want to find solutions from within economics rather than taking seriously political issues and quality of life outcomes that are outside current economic thinking (I am clearly talking about “for the most Part.” There are of course some economists who are struggling more broadly. But as for proposing solutions? Very little. Show me examples).

A return to humanism in economics would mean taking people seriously. We would recognize that to satisfy humans with needs and desires requires much more than economy. People have much more to do than participate in the consumer or asset markets.

Economics works for the rich because it provides them with more than their fair share. All the institutions, from infant care, grade school, college, and access to good jobs is class based and – why do economists put up with this? Obviously to talk of Capital and Labor is evocative of a caste based system. We are all against caste and slavery – but we are in the middle of sustaining it.

If economics was more scientific it would be more interested in things like

  • What is capital?
    How did it get entwined with ownership?
    What is the relation of social power to economics.
    What is the impact of the way we organize our economy with the health of our environments?
    Why do we treat firms as people?
    What is quality of life?
    Is there an alternative to money as the leverage for political power?

Economics sticks with the applications of formalist models but this is closer to engineering than science , interested in formalism rather than understanding phenomena. This is a cover for protecting the rich. A scientific attitude is more interested in finding a method to explore the most important phenomena, not to find a domain data that can be mapped into the model.

Both the progressives and the weird right are afraid of losing what they gained in the post ww2 period. Labor lost out first, starting in the 60’s with Regan, and the middle class through till 2000, and since. It is the one percent tho are afraid now because they see that the system that developed them is coming apart, and the professionals that supported the one percent are also afraid.

But there is no new narrative.
Here is a comment quoting Stiglitz. (sorry lost the source)

Indeed, in light of China’s insulation from the worst effects of the crisis, Joseph Stiglitz reversed The  Economist’s  contention,  arguing  that  the  Chinese  success  was due precisely to not having given up  gradualism in favor of the shock therapies  advocated by  the  so-called  Washington  Consensus. Unlike Russia, he  claimed,  China  “never  confused  ends  [the  welfare  of the population]  with  means  [privatization  and  trade  liberalization] .”

It recognized  that  if  it  was  to  maintain  social  stability,  it  had  to avoid  massive  unemployment.  Job  creation  had  to  go  in  tandem with restructuring.  When  China liberalized, it did so gradually  and in  ways  that  ensured  that  resources  that  were  displaced  were redeployed  to  more  efficient  uses,  not  left  in  fruitless  unemploy­ment.

We do not do as well.

Joseph Tainter’s Collapse of Complex Societies is a good example or a more scientific approach. His powerful argument: as society grows larger, infrastructure costs go up faster, until infrastructure maintenance costs move past the capacity of the society. Worse, elites own the infrastructure and when it gets in trouble, instead of new investments, moves to cut costs and maintain profits.

This sounds like good science But where is economics on this? Absent.

To summarize, economics is more like engineering with its measurable than like political thought with its concern with thought and value. We can’t make picking a party or a vote based on a model that looks like rational man in the market. . Understanding political decisions require an expansion of rational beyond logic to belief, deep tradition, emotions and relationships.

But strikingly there is no consideration there of the implication for politics (Not regulation but party appeal to voters) and the basic model of ownership and wealth concentration, aided through investment, is left in place (appear to be progressive but support the base).

So, there is a strong tendency in economics to leave out the kind of thinking that goes into political science, and even more broadly, political thought. Without an expansion of he boundaries, economics will become increasingly marginalized.
We can act as if things are not real changing but Schumpater makes clear that we are always in creative destruction. Math does not help much when nothing is constant. We can respond to the times, or ignore them. But this from Brookings (Robert Kagan)

In recent years, the liberal world order that has held sway over international affairs for the past seven decades has been fragmenting under the pressure of systemic economic stresses, growing tribalism and nationalism, and a general loss of confidence in established international and national institutions. The incoming U.S. administration faces a grave challenge in determining whether it wishes to continue to uphold this liberal order, which has helped to maintain a stable international system in the face of challenges from regional powers and other potential threats, or whether it is willing to accept the consequences that may result if it chooses to abandon America’s key role as a guarantor of the system it helped to found and sustain.

Economics is not terrific at such narratives.

From a good historian

The complex psychology of commercial society, which Smith had devoted his life to understanding John Stuart Mill abolished. – From John Buchan, The Authentic Adam Smith

And, in a difference voice, from across the aisle in the arts,

Marquez is an exemplary storyteller in a tradition which to us in our NATO culture has become rare. By understanding better Marquez’s storytelling, we can perhaps learn more about most people in the world and even about our own future, when our culture falls apart. –  From John Berger Landscapes

What doe he know that we don’t, that he can say this?

1808. Education and community resource

I wrote in response to a friend’s musing on education

On the paper, two quick thoughts,  not elaborately considered.

1. I would love to see it move into the real of writers like Montessori and Rudolph Steiner (Waldorf). As it is it feels to me too strong on the technical side not enough on the humanities, history, poetry, arts..

 

2. I like the idea of school as community center. Small park with school, senior center, art center, performance area, and startup incubator center. We have too many old people without children and too many children without adults.  Garden and local food a serious plus. I think of the Carnegie Library model, but more extensive.

1807 Trump as Person (1806 expanded)

Seems to have no resonance with compassion nor. democracy. Only with wining with the goal of impressing others to impress himself. A very limited character with world ambitions  dangerous to the world.

Trump thinks the bully dominates, but only during recess in the school yard. Otherwise he is ignored. Real relationships are based on care, empathy, humor, cooperation, grace. The prestige of the US has depended upon good will (though the US has behaved badly way too often), hope, human development. We have badly wasted it for several decades, thought Obama’s being helped. The last weeks have shown the fragility of social perceptions and we have wasted a great deal. We also have raised Russia from a backwater to a serious world player (may not last long) and weakened the prospects for “The West”.

It is hard to see that there is anything in D T’s  character to appeal to on the side of humanity.  Wile the press, the  academics and the professionals  (legal, financial, etc) are perilously associated with the rise of the one percent, their combined awakening from their dogmatic slumber  (I include myself)  is the solid hope for coping, but it will require serious thinking and reworking  US institutions . Climate, inequality and automation give us the opportunity.

1805. A new note on Trump

A new note on Trump

Trump’s path to the presidency was more like falling into a vacuum produced by about three decades of a political system that was working for the rich and creating inequality (and environmental damage). It is Trump’s Long Island construction industry character and low exposure to other worlds that makes him such a bad leader.

He does not understand the need for calm. He thinks  we all admire a gamester who likes to win. He does not understand that he has to be the president for the losers as well as the winners. He acts as though he  is head of a team that is out to win for self and defeat others. But once the election is over the president must be head of the league and protect all the teams in an atmosphere of compassion thoughtfulness – consider all sides to a question – and fairness, whereas in the construction industry bullying bluster braggery and bloat seem to work well. The loser can just go jump in front of a limousine.

Trump is obviously a spoiled child who is deeply identified with mother  and thinks being a bully will either force others to back off and to admire him and agree with him. Childhood bad behavior got him sent to military school. Through he had some college at Wharton we do not have his transcripts but evidence seems to be of basically “no show”. His paper trail – transcripts, taxes, sealed legal proceedings – seem to hint at a mode of operation that would be a disaster for a country. His pathetic adolescent need to show independent from mom by instilling fear and constant sexual exploitation of 10’s is pathetic. (see photos of his mother’s hair treatment – much like Donald’s).

He seems to have no understanding that his actions create enemies, not only for himself but in the much larger global society where extreme diplomacy and wise historical understanding are essential. The resulting decline in the perception of America is one of the greatest good will collapses in history. While this decline has been under way for decades, Obama did much to repair the America as perceived, and it has been trashed in a few weeks.

Trump has no connection to the idea of democracy. His business has been perks for the one percent: golf, retreats – and casinos for the unfortunate.   He rode he silly money arising from the real estate bubble and did most on badly borrowed money or leverage.He seems – and is – unsocialized to the American ambience that most of us carry as a kind of social DNA that combines reasonableness with humility.

But it is important to realize that Trump is more result than cause. The Republican Party is led by a strange bunch of power brokers who play on myth of christian self righteousness and whose personal goals are neither Christian nor democratic. In fact neither party is sufficiently  led by people concerted with the issues we need to be concerned about: climate warming, population, migration, inequality, neo-colonialism, weak governance, deep corruption.

A serious problem is that the pace of events will outpace any proposed plan of recovery. The result is we will live in a world trying to remake itself while it is coming apart. We need to realize this as a human crisis and be prepared, all of us, to respond meaningfully to the pain of those who are hurt by what we are about to go through.

Trump’s mean egoism is truly dangerous in a dangerous situation. His reaction to humiliation could be extreme.The social reaction against Trump is deep and suggests realistic and humane resources among the people that are awesome. A better future is possible if we think toward a world that is less driven by consumerism and more driven by meeting people’s needs and desires. We produce enough. It is poorly distributed, and it is the wrong stuff. There is a lot to do and the crisis of getting rid of Trump may be driven by an awareness of this overall situation.

This gives hope.