1993.Not facing issues leads to megacide.

The goal of recreating the Garden of Eden (as nice a life for humans as we could achieve) has long been replaced by turning it over to bankers and developers. The result is a megacide. This is an economy issue. We are not managing the estate well, we are exploiting the land and the people. Economics should be about how to manage the planet, for the good of people. (The nomos part of economy comes from early Greek meaning equal distribution.)

But without a clear sense of goal and necessary steps to get there we are playing the game with blank cards. We don’t seem to be able to make tough arguments and think them through to their implications.The people and the policy makers need us to be doing this thinking and sharing it widely.

The use of oil for transportation for example must be drastically cut IF we are to limit global warming. Do more than a handful of people really disagree? (Global warming is only one part of the megacide. The biomass of all fish falling by half or sea birds by 2/3 is not primarily climate. driven. )

Have any economists modeled out what would happen if gasoline use were to be cut enough by Jan 1 to reach the goal of no more warming by 2020?

(You probably already know that if we were to cut fossil fuel use by 100% global warming would continue to increase because existing co2 will continue to trap heat.)
We would need to look at some rough numbers as to how big the cut would have to be. And, as a first conversation starter, we could model out what would happen if we (sic) cut gasoline use in half by Jan1? (I am not sure that would be enough to prevent the suicidal bullet we have launched at ourselves from reaching its target.) What would happen to existing cars and their use, how would people and institutions cope,
reconfiguring the tasks the cars are used for, and the existing loans that have supported the purchase of the cars? Many loans would default because people won’t pay for cars they can’t drive. That brings down banks. The beginning of chaos. Is this so chaotic that we can’t begin to model the consequences of such a necessary action?

Why don’t we see this kind of conversation? My guess is it is taking place, but I haven’t found it.If you know of such, please let me know.

1990. The future, first draft.

There are thousands of experiments responding to or anticipating the climate crisis. Far fewer experiments in new forms of governance and new ways of having an economy. So long as the effect of economic activity is  to siphon off wealth from the society into a small, say the .01%, group of asset owners, cynicism will prevail and turn to bloody violence before too long. Thus we need experiments, we need good thinking about how these experiments interrelate so they are not compromising each other, and we need a new economics and a new governance. The odds are not terrific of getting from here to there in a straight line. Holders of wealth would rather kill off a large part of the world’s people, through the slow death of incarceration and civil strife while barricading temselves, than find ways to redistribute assetrs (which no one knows how to do).  Better odds, but frightening, is that we will get there but after some serious warfare, sorting out the world’s resources under a new climate.

Lets start with a plausible good future.

I assume for the moment that we have had crisis: maybe a lot. How can we come out of it? Assume the following distribution of needed work.

Since most people want to live in a mix of nature and civilization, why don’t we use our wealth to go there? Not a plan but intent. To humanize and green every aspect of our lives.

Society is facing a crisis. People will need to be included, and redeployed away from consumption and pollution to relationships, art and intense practicality. In the transition people will have a hard time. The goal however can give hope and roles. I see the following emerging major sectors of useful employment.

  • 1. Green everything, landscape remediation, aesthetics, climate remediation, and food.
    2. Health and the care, feeding and housing and occupying of all those hurt by the very messy process of  transitioning, since people will have to give up places of living for the new opportunities. Jobs will change and places to live will be repurposed. This is a combination of health, medicine and fitness. Distribution of income, distribution of food and temporary to permanent re-housing.
    3. Management of 1 and 2 will be huge. Including the unfortunately needed security as people are hurting and in flux.
    4. The art and education to support 1-3
    5. Making needed things.
    There will be more, but these are the main sectors.

1989. Iraq is Threatened by Catastrophic Drought

“I once rescued a friend from drowning when he was swept away by the force of the current as we were swimming in the Diyala river,” says Qasim Sabti, a painter and gallery owner in Baghdad. “That was fifty years ago,” he recalls. “I went back there recently and the water in the Diyala is
— Read on www.counterpunch.org/2018/07/04/iraq-is-threatened-by-catastrophic-drought/

we will get used to this. what ethos can we move toward?

Ethos is the moral climate we live in.

1986. Three thoughts.

Provocation #142  Three thoughts

Physics is a social creation and so we get histories of physics, which are different from say the history of the evolution of the atoms of the elements starting with the big bang and producing in turn hydrogen to helium to oxygen, etc.) Economics is the thinking about something – the economy, but a history of economics is very different from a history of economies. These histories are nearly totally absent in economics (but do exist in history departments, works such Braudel’s and Hobsbawm’s.) It is obstructionist to leave these histories of economies out (heterodox thinking stays close to the existing boundaries) because new economic thinking should take us outside the current economy and consider others. One can guess that the reason is that a history of economics can be written from within the boundary of thinking from Smith to Keynes, Hayek, Hirschman, etc, but to write of economies would lead to comparisons reminding us all that the economy we have is not the only one possible. Uncomfortable. But to cope with the current complexities and possible solutions, we need to go there.
————
On market dynamics, the market is seen as the interplay of supply and demand, but real markets of course are infused with the dynamics of interest, ownership, taste. The apparent attractive arrangement of a market in equilibrium leaves out those things which lead to concentration of wealth: rich pay lower interest rates and have access to better information. If these are added into the dynamics the equilibrium point of a market – unless there is government action – is one person ends up owning it all. This is simple dynamics. Why is this (so it seems to me) so rarely acknowledged?
—————
A further note, a bit more obscure. The Christian New Testament used the word economia frequently, but this was ignored within post Smith economics because the word was translated from the Greek of Athens and the New Testament into the English of the King James as “administration”. No wonder economists did not see the possible subtle infusion of Christian theology and metaphysics on economic thinking.

“Administration was at times the meaning of “economy” but it was in the context of the proper arrangement of God’s project for humans which allowed god’s practical administrative tasks to also characterize the universe, which has echos in the physics-lust of later economics and tells us more about the invisible hand metaphor in Smith. We of course do have administration but it has lost any sense of a shared goal towards which administration should aim. For the early christians it was god’s plan for humanity to develop itself.
The modern scientific use of “economy” gets in the way of seeing economy as the administration of things, not a science, not an episteme, but as a practical activity of the arrangement of the earth to meet human needs.

We might be better off (Keynes says “like dentistry”) if we had sophisticated accounting and good engineering and planning in the place of a theoretical and detached math appropriate to physical forces. With the math focus one can imagine an infinite series of journal articles that detail after detail never get to the question: what kind of an arrangement of the physical and social world should we have for human being as they are?
————
Addendum
This morning’s email had an article from Scientific American, almost ironic.
How Physics Lost Its Way
Scientific American · by John Horgan · July 2, 2018

Does anyone who follows physics doubt it is in trouble? When I say physics, I don’t mean applied physics, material science or what Murray-Gell-Mann called “squalid-state physics.” I mean physics at its grandest, the effort to figure out reality. Where did the universe come from? What is it made of? What laws govern its behavior? And how probable is the universe? Are we here through sheer luck, or was our existence somehow inevitable?

Link to the rest..
https://blogs.scientificamerican.com/cross-check/how-physics-lost-its-way/

 

1981. Post crisis economics

Provocation # 140. Post crisis economics.

It is hard to discuss new economics when the tendency of most discussions is to reform enough to , as Giuseppe De Lampadusa said in the Sicilian-set novel The Leopard, “Things will have to change in order to remain the same.”

An alternative approach is to assume major shocks to the global society, and model what happens. For example, taking the US, if we lost the electric grid, what would happen, or better, how would the economy and economics respond? ? If food shortages emerged and the result was much less food delivered to poor communities and the current levels of food distribution to the 10% remained as they are protected by money and militarized police?
The purpose of such modeling is not to get the numbers right, but to raise questions and surface assumptions.

Along this line, interesting to read some discussions of art in 100 years.

https://news.artnet.com/art-world/art-in-2218-1296347?utm_content=from_newscta&utm_source=Sailthru&utm_medium=email&utm_campaign=Sunday%20Morning%20Newsletter%206.17&utm_term=artnet%20News%20Daily%20Newsletter%20USE

Maybe the question is, given “collapse” of climate, markets, finance, cities, can we put side by side models of what might then work and what would not work, and discuss the differences, discuss what makes the differences?

 

1979. Need for governance trumps the needs of economics.

provocation # 139, Must economics support governance?

“The economy is broken and the politics to fix it is broken. So what do we do?”

Economics, appearing to be independent, is an instrument of governance. It is probably best seen as a sign of legitimacy for the governance we have and probably has to appear to be supportive of that governance.

Economics has to be the “normal  science”, to use Kuhn’s vocabulary , the science that fills in rather than expands outward, not  revolution in thought but making facts fit the accepted paradigm: capitalism, private property, corporations, individualism, law to protect property, journalism to help accelerate the flow of products and services, Keynesian wars that stimulate he economy.

Very few economics papers (less true of books) start with any mention of a serious problem to be solved. Inequality is the one that most likely breaks into the text. But there the efforts are to shift the resulting inequality but not to deal with underlying causes. But even with inequality it is usually a bloodless sweatless reference without any description of human consequences. Nothing like the opening  chapters of Richard Russo’s memoir, Elsewhere,  describing the impact on the human lives of the decline of industrial Pennsylvania where he grew up, nor Umair Haque’s Why America is the World’s First Poor Rich Country – Eudaimonia and Co, nor the New Yorker’s “How George Orwell Predicted the Challenge of Writing Today” in a society of all lies and schizophrenia.

The New Yorker · by Masha Gessen · June 10, 2018

Perhaps the reality is that governance is crucial for society. We just have to have it. This means thinking through elites and the  how are they chosen, how rewarded, how kept enough under control that they don’t rip out the wealth and destroy the society. But all societies seem to require an underclass and miserable working and living conditions for a significant part of society to create the wealth to motivate the elites. 

If this is true then it follows that the task of economics is to help the elites govern in which case we need to understand the world from their point of view. We hope we can do better towards creating a more humane society, the kind that Smith, Keynes and many others hoped would emerge from the further evolution of society. Can we do it? Or maybe we just should stay out of the way. These are very uncomfortable thoughts. Provocations, not conclusions.

 

1978. addendum to 1977.

The G20 has the following on its webpage: (actually the wiki page for G20 because the footnote to the text has gone missing. (https://www.g20.org/about_faq.aspx#5_What_are_the_criteria_for_G-20_membership)

https://en.m.wikipedia.org/wiki/G20Purpose

Purpose: Bring together systemically important industrialized and developing economies to discuss key issues in the global economy.[1]

The language. “global economy” looks innocent but read closely it suggest that there is a global economy that is different from the global society (just a part of it) and different from the global intersection between humans and nature. These are, as the leaderships  tend to want it, pushed to the side. The economy can improve but we don’t have to consider those marginalized and other “externalities,” except to the extent their inclusion supports growth and stability. In particular issues that question growth are avoided and the use of green to accelerate growth is not questioned.

Language is powerful and we need to learn how to read it. The justification, not spoken, is that the world needs to be governed, however uncomfortable. That means holding elites together and in place and subordinating the economy to that purpose.

 

1977. Phases in the history of Economics

Many economists assume that economic history comes in two phases

1. Early and casual up to Adam Smith
2. Commerce and industry, From Adam Smith

What is striking to the broad ranging reader is how much detail and analysis there is before The Wealth of Nations. Instead of two phases, a better match is in four or five. (Each of the following paragraphs could make a long discussion.)

1. Greek “Economy” as estate management. A holistic concept that deals with every activity of production and social life on the estate which was the only social unit inside the greek communities. There was no market in Athens, but the estates were complex, producing the food and crafts. Plato and Aristotle were aware that the well managed estate could produce a surplus, and it should be used for leisure for study for politics and philosophy. In non western societies there is no single concept that contains all of what we mean by economic activity. It is an achievement of classical Athens that still affects economy and economics. It is an open but interesting question if this use of economy and economics helps us evolve in a crisis time, or freezes the current state of thought.

2. The early Christian phase where estate was re-designated as God’d kingdom made for humans, and the management became the us of the estate, the christian community and the monasteries, to create ethical humans oriented towards god and humans activity  to carry out god’s purpose. Key ideas were the Christian community as an economy segmented off from the society as a whole and explicitly called “the economy” as a design project with a clear goal – becoming a better human closer to god, and growth as needed to reach the infinite god. (Good references, Neoliberalism from Jesus to Foucault by Dotan Leshem, and “THE KINGDOM AND THE GLORY: For a Theological Genealogy of Economy and Government” Agamben, Giorgio, Mandarini, Matteo, Chiesa, Lorenzo. Our current understanding, while dropping the specific christian goal, keeps much of the feeling of what an economy is : closed system, competitive, growth, good for humans, and more to be explored.

3. The shift from god domination to nature as the totality of the world. Certainly several generations of economic thinkers (not yet so named) worked to understand local productive activity in nature, the physical organic process, rather than in god’s project for us. The legacy of this period is huge, Best Source is Margaret Schabas The Natural Origins of Economics. I can hardly nudge you enough to read this amazing book. The thinking about blood, water, oil, air, electricity as flows had a major impact.

4. The industrial where value s produced not by land but by human action. Most 19th and 20th century activity in society and hence in economics, now named, elaborated on the mechanical and the industrial. The engineers and the mathematicians play a large role in keeping the focus on the physical stuff of life but away from the agricultural and social.

5. We might add treating digital, informational and the algorithmic as the whole economy. Good source is Manuel Castells Aftermath (the state of the world after institutions – states and corporations) are undermined by the internet).

What is important is the extent to which economics exists within these cultural shifts. The normal assumption, that economics is an ensemble of discrete and stable topics, such as interest, debt, trade, taxes, profit, labor, becomes a very different set of assumptions when we focus on historical and cultural context. Is the future of economics based on rethinking the details, or shifting the culture?

1976. Economy more like soccer than golf.

Economics  looks at the world segment called economy and thinks of it as a system of a finite number of discrete variables that can be dealt with a few or a handful at a time.. These might share correlations or work with or against each other. It compares to the constraints of golf. A real economy is different from what economics presupposes. A real economy has people moving against each other, looking for gaps  in the system,  trying to break out into new possibilities for profit or capital gains. The real economy is more like soccer, where some go for where the ball is, others for where it might be, than like golf. There must be equations? Stubborn.   The real sport is in the scatter, Schumpeter’s “creative destruction”.

Economy is not just  trends toward stability. These exist but are constantly undone by human action, from corruption to creativity.  The economy is not a closed system of quantifiable parts, a single representative agent,  but like a warm pond in springtime, buzzing, confusing, mating, devouring. The literate would say economics is baroque. Economics would be better off if it tried to characterize the economy. We desperately need good stories of what is actually happening. Quantification can be a powerful helper, but not if its culture dominates the field. As it is, Economics is mostly a submaximizer: more wealth for the wealthy at the expense of the whole. More for the whole, but existing and forseeable distribution means less for the majority.

Capital began as the birthing of cattle. The question then and now is, who owns it? It has always been an elite organized against the rest.  As Rosencrantz and Guildenstern ask, “was there ever a time we could have said ‘no’?”