Post # 2020. Which scenario?  will economics help manage the choice?

Provocation # 171 which scenario?  will economics help manage the choice?

As the political situation deteriorates we can foresee several possible groupings of interests

1. The Democratic party of the professional class (The Clinton grouping)

2. The disaffected: economically injured or threatened. Ferguson, et al, described)

3. The progressives:  Scandinavian style  social democracy and identity politics.

4. The Catastrophe grouping: global heating, tech replaces workers, government is broken and illegitimate, collapse of food production.

5. The holders of assets.

How will mainstream economics play among these four? Can it help manage the choice, or will it simply work to maintain continuity and existing momentum?  

Seems to me like a serious opportunity for economics.

post # 2018. Economics and world management.

provocation #  169. Economics and world management.

The world definitely needs managing – or some equivalent. Everything overlaps. Specialties don;’t work. The world is one but specialties divide it. Is there any path for economics that will make it a partner in world management? Or are we locked in to an economics that serves academic departments, quantifying bureaucracies and career management?

A management approach  would start with an understanding of what the world and its parts are, how they got that way, and what can happen, and then engage to help make the world move toward an ecology which can support the people. A management approach would be very negative toward those who saw the world as a game to be played for private gain, but realistic about the need for leadership with a  perspective that requires education and rewards.

I realize that I have become increasingly skeptical about the ability of humanity to do this. The question then reverts back to: what is the best use of our time given actual conditions?

Mandatory sequestering? Possible. Unlikely. Many overlapping jurisdictions. Economics could help sort these out. Unlikely. Possible. 

——

Note. The argument about the anthropocene is that humanity created this mess by sucking too hard and becoming dependent on stored energy. Andreas Malm in his Fossil Capital argues that such a perspective fails to notice that it wan’t humanity, it was some humans, resisted by others, who built our energy dependent society. To see the climate and energy dilemma as caused by human nature is hopeless. To see that some of us, from hunter gatherers on, resisted suggests that we are not up against human nature, but confronting the character of some in their   exploitation others. 

Note. The current world chaos is the product of the organization of wealth  and population that increasingly marginalize many and, despite Steven Pinker style thinking, the living conditions of an increasing number (maybe all of us if we include the ethos in which we live, the moral climate) are seriously deteriorating.

post # 2012 Retrospective on economics’ failure to engage.

In retrospect people will ask – why did economics keep supporting the system, or at best making small tweaks (tax rates, bank reserves ) but nothing capable of doing the obvious: modeling and discussing what needs to be done to stop the momentum toward crises, to prepare for a post crisis world.The critiques of what’s wrong in society, the economy or economics are good, but stop short of proposing actions.

There is widespread agreement that the .01% have too much wealth which has been achieved through a combination of policies and taxes, but are there any proposals on how to get it back in a timely fashion capable of preventing disasters? Or is there the widely shared understanding that anything done to recalibrate the system would lead to cascading side effects that would bring the system down anyway?

Who does some interesting thought experiments? For example,

“As of this date no house can be sold for more than was paid for it.”

There is of course no way yet this could be done. But lets imagine and learn from the imaginings.

Immediate consequences are easy to imagine. Buying a house as an investment rather than as a place to live would cease. Totally unfair for example for people who have owned heir house for a long time and paid very little for it. Draconian? Messy. Yes. But are not the consequences of not doing anything radical also going to be very messy, maybe even messier? I think we learn from such experiments.

Look at the curves: global temperatures, population, adaptation of automation, lack of living wages, civil strife, student debt, bad management of the overall production process: raw materials, manufacturing, disposal – all terrible, and mutually reinforcing.

There is a tendency to avoid social engineering (mechanical socialism soviet style), but forget that the US Constitution was a social invention, now not going so well. Part of the goal of that invention was to create a system impossible to change (especially redistribution of property). So we are up against the limits of that design. Can the invention of America and the Constitution be redesigned?

Good background is Garry Wills’ book, Inventing America.
—————

Re E.O.Wilson. From
https://harvardmagazine.com/breaking-news/james-watson-edward-o-wilson-intellectual-entente

Will we solve the crises of next hundred years? asked Krulwich. “Yes, if we are honest and smart,” said Wilson. “The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology. And it is terrifically dangerous, and it is now approaching a point of crisis overall.” Until we understand ourselves, concluded the Pulitzer-prize winning author of On Human Nature, “until we answer those huge questions of philosophy that the philosophers abandoned a couple of generations ago—Where do we come from? Who are we? Where are we going?—rationally,” we’re on very thin ground.

Post #2008 Constraints within economics prevent engagement.

What are the self-imposed constraints on new economic thinking?

The purpose of science is to give as best we can a picture of relevant reality. It is not the results of applying a method to a problem only because the problem is tractable with the method. Aa Aristotle made clear, each un known has is appropriate method.The first criteria is to pick a good enough example of the problem that, if understood, would actually throw light on the problem, not just on the method.

Economics seems to operate under extreme constraints on what it can or should study. Big data can find the tiny fraction of you that correlates with the tiny fraction in many others, but it cannot find the Plato or Bob Dylan in you. So big data misses lots that is relevant to actual humans. The admonition to grad students and tenure seekers to find a good data set might be good careerism but bad science.

If we accept the constraints, like keeping economics separate from politics or the other social sciences, how can we live up to the challenge for new economic thinking? New economic thinking probably requires introducing new aspects of reality, new “variables”, into the discussion. To introduce new methods without considering new aspects of reality probably can’t bring us very far and reflect a conservative – “things have to change in order to remain the same” approach, which might provide an important clue as to the motive for the slow movement of new economic thinking.

Constraints emerge because we stay within assumptions that we do not violate:

The assumption of capitalism.
The assumption that ownership is not a legitimate category of economics
The lack of discussion of the caste system that divided us into owners and workers, labor and capital.The legitimacy of corporations

Economics bypasses all the interesting categories of how the day is spent by an unemployed spouse, by the retired, trust fund babies, artists choosing poverty, those filling out time to retirement by playing videos at their desks, adventurers. We don’t look at the content – much of which is not “economic”- of the lifestyles of the one percent.

Why do we stay within these constraints?

Good manners?
Not wanting to shake up colleagues?
Fear of consequences to career?
Fear of destabilizing society?

Put another way: the world needs managing of the relationship between humanity and the globe, which needs to be a mix if economics, ecology, politics, philosophy, historical understanding, dealing with human nature and civil society. Is economics up for it, or is it holding on to old assumptions that help prevent any integrated approach?

Is there a better way to frame the question?

Post # 2007. Numbers in physics and economics- the difference

Provocation #162 Numbers in physics and economics.

The fact of money as numbers is like catnip for the mathematically inclined. But for something to become a number subject to economic analysis it has to go through a very complex social process of culture building, trust, faith, shared intuition about the worth of something in dollar terms, and the growth of supporting institutions..
Physics is just the opposite.The numbers are given by nature. True, a social process of inventing physics is necessary to be able to see the numbers, but the numbers are not generated by a social process.

The result is that the potentially most interesting parts of economics are ignored: how trust develops, the interaction between the social and the physical worlds, how desires and needs are amplified by media, how style emerges, how preferences form (the Trojan Horse of a more human centered economics), for example the US style stand-alone house vs. the close structure of the European hill-towns. Reflexivity means dynamics of a social field, but people are treated as isolated with internal preferences a bit like Plato’s innate ideas.

Economics could be about how society works and how to manage the interactions between humans and environment more skillfully – but not if sych workings with all their complexity are not seen as a question.
Economics students are told “search for data bases” and apply math and create your career.

A a 50 to 150 million dollar severance package after sexual misconduct? This is a symptom, not the sex but the money, of a broken society. Does it get questioned? Or is it just the productive function working its logic and acquiesced to by economists?
I keep coming back to Tim Cook: where is the analysis that says his compensation is based on an adequate economic model of real contributions to Apple’s success? Its customers, for example, are able to use an iPhone because of an expensive education (yes, even a four year old has benefited from much of society allowing them to become customers), but that is treated by Apple as an external it can monetize without having to pay for it. Cook’s wealth is socially generated, privately consumed. This is crazy making – to wit, the current deteriorating state of society which is unnerving us all, and, as Stieglitz says, inequality will continue to get worse. As is often argued, being at the top of a large pyramid should pay more than being at the top of a small pyramid. but this ignores that the existence of both pyramids is the work of a whole society over a number of years. Even the increasing size of a hierarchy under the guidance of a leader pulls together people, ideas, and properties created by others. Each building block of an organization has a history before its incorporation.

“The economy is doing well but society is doing badly.” Employment and the stock market are up, but impact of new jobs on the environment is continuing to increase the stress.

It is all very interesting and very important. But the siloed contributions found in most economic journal articles do not touch on these issues. If you Google “guaranteed annual income and inflation” simple issues like increases in rents and befits to owners and banks are not discussed or brushed over quickly. “The amount of cash put into society by a GAI is small in comparison to the overall GNP.” The reality of a homeless person with their GAI check trying to rent when all the spaces are rented is not explored. It is all gobbledygook with grammatical but not empirical integrity. Lets strive to be more relevant and interesting.

Meanwhile global temperatures and effects ratchet upwards where physics numbers and economic numbers occupy the same space.

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.

1992. More on Trump

The US that trump attacks is the US that in fact has been in many ways the enemy of the people who voted for him, or support him now. The country was run for the benefit of the 1% and the professional class and is most associated with the Clinton’s, Obama and less well known, Geithner and Larry Summers.

If we are to recreate the country as a good place to live we must take on this issue, which requires recognizing the legitimacy of Trump support in the concrete details of what was happening to the majority prior to Trump’s announcing his candidacy.  As we know, peple were losing out, incomes down, social mobility less, and – let’s give people some credit – climate change  not being addressed, hence not serious.  Remember, a support in politics always is in the context of the alternatives. The Democratic party has not been presenting itself as – well, as anything. Not a good alternative.

I am reading The Crisis of the European Mind 1680-1715 by Pail Hazard, It contains the wonderful

“Spain alone had dimmed her radiance. We will not say that even now she did not fling over Europe some rays of a light that could not be extinguished; but it is a hard task for a nation to go on indefinitely keeping ahead of her rivals. It means she must never falter, never exhaust her strength, never cease to keep bright, and to diffuse around her far and wide the radiance of her pristine glory. But by this time Spain had ceased to live in the present. The last thirty years of the seventeenth century, and, for the matter of that, the first thirty of the eighteenth, were with her well-nigh completely barren. Never before, throughout her whole intellectual history, says Ortega y Gasset, had her heart beat so feebly. Wrapt up in herself, she presented an attitude of lofty indifference towards the rest of the world. Travellers continued to visit her, but they did not conceal the disdain with which she inspired them. They harped on her defects—a populace wallowing in superstition, a court sunk in ignorance. They enlarged on the decay of her commerce and spoke contemptuously of the sloth and vainglory of her people. As for her writers, he foreign critics repeatedly gave instances of their pretentious and affected style.. people were begining to say not only that Spain had lost her power and influence, but that she was a traiter to her wn genius  Her romantic spirit, her national pride, her nice sense of honour, her love of justice, her complete unselfishness—all those qualities which had been her particular pride and glory, Cervantes in his Don Quixote had held up to ridicule. And the Spaniards by applauding Don Quixote had belied their nature and disowned their birthright. Absurd as it was, this idea was not more absurd than a host of other reproaches with which nations competing for leadership have sought to give the coup de grâce to their already weakening rivals.”

 

 

1991. Progress vs cycles. Implications for us.

Provocation # 143Progress vs cycles. Implications for us

The current state of society brings into question the necessity, even the likelihood, of progress. But is progress actually so wonderful? Paul Valery wrote in 1900, “We later civilizations, we too know that we are vulnerable.” This was a shock to me when I read it in high school. It has continued to put an edge to all my thinking. My current thinking about “progress” is pushed by recent research on the quality of life – better diet, few working hours – of hunter gatherers, and their obvious resistance to settlements (James C. Scott, Against the Grain).

We of course are too formed by the goods of modern society to be able to become cooperative foragers, and the world is too crowded to escape the needs of technological supports, but that doesn’t prevent us from looking at other lives as preferable, even if not for us. We do not know the extent of changes in living that will be demanded of he next generations, but they may be extreme. It is our opportunity to be helpful by pointing out things that may be positive in these forced changes. Aristotle wrote “We can have growth without development and development without growth.” Instead of struggling to get more which has led to inequality and climate damage, a rearrangement of what we have. Intriguing, as we are looking for clues to what, in difficult times, we can do.

There have been two main views of the structure of history: progress and cycles. The West is strongly committed to the perspective that history is a progression: if we can just keep going, things will continue to get better. We have accepted the idea that there is “progress”: fire, electricity, railroads, smartphones. And yet there is concern now that progress may have stalled. Most societies outside the West seem to have held on to a belief in the dominant role of cycles. Rome believed that emperors came in cycles – good, mediocre, bad, good mediocre bad. I think China had a similar sense of emperors coming in cycles. Christian culture has only one: from God’s creation of the world to his ending it. This is a true suicidal wish for a society. The Christian view of dominating the earth and the needs of the mission made growth seem essential.

Our Western civilization is very materialist and technological. Often we hear that a new tech can save the situation. But the human side of history is largely ignored by our dehumanized culture. All societies made of humans show people in roles of leadership, follower-ship, dominated and submissive that are easy to recognize.

Proposition: while material culture changes and some sense of “progress” can be discerned (though nuclear war, surveillance culture, iatrogenic diseases, our inability to cope with climate and population should lead us to question this), the range of human types does not. The inter-generational and cross class dynamics are easy to understand in all societies. Stephen Greenblatt’s new book Tyrant is about how deeply Shakespeare explored these moments. (And its resonance with Trump is constantly present in the book but not stated.)

Put differently: however radical the shifts in technology, the human repertoire of responses remains constant. The benefits of materialism may be seductive but illusory if the quality of lived life of humans with each other is the goal.

All civilizations go through a rise and a fall. Anthropologists explore how the rise starts and writers like Joseph Tainter have explored some of the aspects of the Fall In his Collapse of Complex Societies as does Castells in his book about network induced collapse,  Aftermath. Toynbee in his Study of History uses civilizations as the unit of analysis (he discusses 23, most of which I had never heard of).

As a first approximation lets look at empires (civilizations) as having three phases. (This is of course arbitrary, and much is still to be said about how the phases move from one to the next. Eric Voegelin has written extensively about the mythic structure of three part histories) The three phases are start, middle and end, or rise, stability and decline.)
The major human repertoire within all society are the recognizably the same. In the phase of rising: euphoria and awe and thanking the gods mixed with fear of change and loss of the old; a feeling of stability and smugness and superiority during the middle phase, and fear, dread and scapegoating (see Rene Girard on imitation of desire) during decline. The phases are long enough that people and intellectuals come to accept the quality of the phase as the way things are. The transitions between phases are long and chaotic. Cycle-minded societies, such as the Aztec or classical Greek have ready explanations for change, but the linear minded West, mostly through Middle Eastern influence, has held on to progressive explanations even through bad times. The current mood in the West assumes progress is normal and asks why we are stalled. Asking to speed up progress might actually hasten decline.

As decline begins to be noticed elites restructure law so they continue to benefit at the mid phase rate, but since there is actual decline they must extract more from the poor in order to maintain the illusion of progress. This speeds up the decline. In all societies we can say that there has been progress on the material side (though the collapse of the environment, wars, plagues should put even this in question.) But on the human side the emotional philosophical and political feelings and thought are fairly much the same for every culture’s phase in the cycle. The culture of the phase tends to be perceived as human nature by the people living it. This is actually a barrier to imagination about human possibilities. We get for example books with titles like Religion in Human Evolution (Robert Bellah), assuming evolution and hence progress. (The word evolution implies the un-folding of predetermined structure.) The unit of thought is the species, not empires or civilizations.

Toynbee’s unit of analysis – the civilizations, shows a different approach criticized by most historian who do not want to think outside the boundaries of the single civilization of which they are a part. We get for example the very good history The Rise of the West, by McNeill, made confusing by his sub-titling it A history of the Human Community. Gibbon’s famous history, The Decline and Fall of the Roman Empire, by focusing on one phase (or Is that two?) makes it easier to not see that there is a whole cycle. I remember in school that the book was treated a fairly irrelevant since the Romans made mistakes leading to their decline but we, having had the Enlightenment, were not going to make similar mistakes and so we had nothing to learn from Rome. Toynbee’s view takes on more relevance as we begin to question the possibilities for Western Civilization now. Can we imagine we are at the end? Many people think so and having a hard time with it. Westerners who study Asia can more easily deal with cycles for empires as in the very interesting book, Strange Parallels by Victor Lieberman ,which actually compares rise and falls in the West with those in Asia.

Deep thinking says don’t get hysterical about the phase we are in as though continuous progress were possible if we would just do the right thing. For Example, the push for more innovation that just happens to be owned by corporations that are helping to concentrate wealth. Realize that the management, leadership, and cultural tasks shift with each phase. We should face where we are, and respond realistically
The shift to the next phase in the cycle can probably be hastened or delayed, but not overcome Human consistently respond with awe and delight in the beginning, self satisfaction and narrowness of theory in the middle, fear and blame as decline sets in. Leadership tends to share participation (everyone is needed) in the beginning, but starts to maneuver for advantage in the second, and abandons the society in the third.

This whole dynamic of human response is not part of physical nature but a blend of human cognitive, emotional and cultural capacity. “Education” is an attempt to overcome this dynamic but each generation, each person, starts to slowly wake from the dream of their own life into an awareness of the historical moment, and a new generation takes over before he process of education has gone very deep.

The proposal here is that for empires the way people are thinking and the felt quality of their life is determined by the phase they are in . “Progress” is understandable as a way of seeing the world as their society is in the rise and into the stability phase, just as fear and despair and blame are understandable as necessary reactions to decline.

People being what they are and organized into classes, will vary in their response since the poor will feel the effects (though maybe not the awareness) of decline first and the rich last, just as the rich will feel the effects and opportunities of the rise long before the poor (who will suffer even in an upward “progressive” era. Though a rise in expectations tends to draw in more participation from the poorer because of the increase in constructive activity requiring workers. This happened after the plague of 1340’s when the die off of workers led to a rise in wages as rebuilding required more effort.

This view, that progresses is limited to a phase in the life of empires, and that human nature shows itself in similar ways in all societies, has implications for leadership and policy.

The task :
1. Recognize the impact of empire rise and fall. Recognize that the cycles overlap and describe some segments of society but they are not all in synch. Decline can begin in one part of society while another part is still on the rise. But note the emotional reactions of people are fairly consistent with the phase their whole society is in. Contagion and imitation are powerful across a whole empire, even the globe. People across class lines are part of the same culture and there is a homogeneity to the emotions released by the phase the society is moving through.

2. Understand that the year does not come with a label as to where in the cycle we are. It is a question of comparing narratives, being intuitive, doing lots of reading and traveling, and still maybe getting it wrong. But we can do well enough that it is worth the effort.
2. Try to avoid the negative impact on the poor of the shift of society from one phase to the next. A major opportunity for serious thinking can happen as one empire gives way to another: Macedonia to Rome or Feudalism to Industrialization as examples. The tendency is for class interest to prevail through such transitions. Raymond Williams in The Country and the City describes how many country landholders became urban industrialists in England’s 18th and 19th centuries.

3. Design new institutions and governance, as well as infrastructure for flexibility because static “permanent” structures are actually frail under conditions of real change. Most of the world elites’ large estates were built with the idea of dynasty and continuity of inheritance across at least a few generations. In the US most of those became schools, institutes or condos within a generation as major changes were constantly at play.

4. Realize that lives have to be lived now , children born, food to be eaten sociably, sleep to be secure, building and participating should be encouraged and rewarding. Encourage belief in the value of coping in the rolling present (a few years back and a few years into the future.). Self development and social development should work together to make the best of what might be a bad situation.

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.