Sunday morning: How the three interweave is difficult to even imagine, yet it is happening.  Measures to stabilize the economy work at cross purposes to reconfiguring the economy for  climate heating.  Those who have been taking climate very seriously have been facing the problem of how to slow the economy down by a large percentage, say 40%. But that would also include some new economic activity – solar and wind for example – while cutting into much that has been central to lives: air and auto transportation, heating large houses. Meanwhile jobs lost, assets are in many cases in free fall, the economy is trying to run on cash without production.

The “stimulus” from congress will be  badly distributed.

I am stuck not being able to imagine how we pay people for not working een though it might be a very good idea).  Someone decides not to go to work and their employer is told to keep paying them. But the stimulus also pays them, or the employer just keeps the money.  The accounting seems awkward and gaming the system looks easy. Airlines who have been using profit to buy back shares to raise price of the stock and raise salary for execs. So tghey are cash broke and want a bailout.

And many of us fear that the increase cash out from the fed will give the Republicans the excuse, facing large deficits, to cut social security.

Addendum Sunday: no government action as congress can’t pass a bill that both meets the needs of working people and the corporate powers. This could lead to Trump taking the whole government under emergency powers.

The economy, capitalist centralism, caused this. The crisis is the result of policy. The result  is a vast weakening of the democratic state.

But we have to realize that the Democratic party became the party of the professional class.  Then the arrangements were designed  that class: school, college, job connections., neighborhoods…..

So we have three major problems to be solved by an absent government

• coronavirus
• income
• climate

And their solutions move against each other.

 

 

 

 

 

Provocation 249 march 2 Economics is  self-limiting.

Economics replaces politics as the major social dialog. This is a  big burden of responsibility for economics because it has assumed the role of making decisions for society. But economists do not study society. Maybe like choosing to be a GP after medical school  gives you the right to avoid the content of the specialties.

A few challenging quotes.

“..in economics to concert a model into a quantity formula is to destroy its usefulness as an instrument of thought.” Keynes. 

“As the master science of desire in advanced capitalist nations, economics and its acolytes define the parameters of our moral and political imaginations, patrolling the boundaries of possibility and censoring any more generous conception of human affairs. Under the regime of neoliberalism, it has been the chief weapon in the arsenal of what David Graeber has characterized as “a war on the imagination,” a relentless assault on our capacity to envision an end to the despotism of money.”

 from The Enchantments of Mammon Eugene McCarraher

As Keynes said, “the difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.

There is not much of a place up the ladder in the profession which allows you to question basic assumptions of  economics. From the top of the ladder thee is only insight down, not up or to the side into other interesting frameworks. 

You can see the problem. The history of economics is not the history of the economy, which is much larger. The economics  meta-story is too weak. We need a much more comprehensive story. 

These are up for rethinking

• Nation state

• World governance

• Dominance of capital as a decision maker rather than democracy in partnership with expertise

• Meaning of private

• Meaning of property

• Care for the weakest

• Stop strip  mining food and oceans

• Care for animals

• Care for children

• Care for wild spaces.

• Enjoy relationships more and material less.

• Take pleasure in being helpful

Economy  is  seen  as  a  natural  sphere  of  equalization, but it is like roulette – equal for the 32 but the 0 and 00 act like capital, always taking a cut from the game played by society.  The house wins.

 

Economics has struggled to be free from the other social sciences, those that deal with real people and real lives. It prefers to deal with systems that can be reduced to parameters that can be measured and are free from external trends. This misses the possibility for economics  being more significant – as science and as social policy. 

Capitalism, the preferred frame for economic assumptions, is a way of making devisions. Those with capital decided what to do with it and society mostly follows along. Coffee, tobacco, automobiles, smart phones. In fact capital is a method of making decisions that parallels the weakened political form of democratic participation,  but where elections do make a difference. If we look at presidential election, they have always been close, and if the other candidate had won it would, with patronage and media influence, have had some effects. But in the background the corporate interests carry a bigger weight.

In fact we have four interlocking  ways of making decisions on the future for society.

• Democracy votes (and is polled)
• Capital ownership decides ( and uses the media)
• Technologists innovate (and use the corporate form)
• Government funds (and uses a revolving door)

To put it more starkly

• Democracy
• Capital
• Technology
• Government

Looked at this way democracy is pretty weak. We can think of these ad four vectors which can align or not. To my eye capital has come to dominate the other three and has become the major way society makes decisions, sets the amounts and directions. Because economics generally concerns itself with the capital side,  avoiding politics, innovation and government projects, it is felt to be less interesting than it could be is it treated all four. 

Davos this year might get a bit deeper under pressure from climate concerns. It will be fascinating to see how this plays out: the intensity of climate talk will be high. The question is , will anyone – anyone- dare to raise the question, not of commitments to 2050, but to actions that actually curtail – stop – some fossil fuel use in the next year. 

Provocation 240 Development without growth

With climate change (and problems with oceans, governance, population) we need serious thinking, including economics.

If it is true that we must cut co2 7.5% per year and we are still dumping more, not less, then we are in the situation where we are either killing ourselves or must do something we can’t and wont. Any serious cut would cost jobs, lots of them, and cascading effects from there. The jobs proposed in GND are mostly energy and resource intense, and hence counter productive.

So, rethinking.

Aristotle wrote (in his book named either Coming to Be and Passing away, or more literally On generation and Corruption) that we can grow without development (adding water to wine) or develop without growth. A value creating rearrangement of what we have would be an example.

Would this be a model for no growth? Well, a value creating rearrangement is growth still. Who owns that new value? But if we did the rearranging without any further extraction (or dumping trash into the ground or into the atmosphere) we would be acting in the spirit of what he proposed.

But it would be hard. Repairing housing would take tools and materials, nails, piping. Insulation would be even more based on extractions. Bill McDonough has developed a design and development practice around making sure that the trash from any process be 100% useable as input to another project. “Cradle to cradle”.

If we did this really well: well thought, well managed, could we actually do the cut in co2? Economics, by modeling this process, could seriously help. Economics is mostly an analysis of input output input output…. , or, in the old Marx vocabulary MCMCM.. but tends to be limited to circles among the capitalists and the workers and consumers, avoiding the details for income and consumption, not noticing that the workers are the consumers, and willing to drive down wages thereby limiting consumption in a self destructive circle. Economics also avoids the obvious, that the input output circle includes the earth so that we go from earth to product to earth to product…

With the no growth approach is that many assets lose their value. For no growth to work the high earnings of the 1% up need a new model, not forthcoming from economics (I don’t see it in the AEA program abstracts.) Lots of resistance and politics at play.

Imagine that we have a four tier income regime.

Annual salaries starting with Yang’s $12,000 per year and then jobs limited to the following annual salary in 4 steps:

50,000
100,000
150,000
200,000

In such a regime would people not work hard to move to the next level and appreciate the value of the work they were doing? Perhaps voted to move up by the whole workplace or community. Be aware that cars, planes, yachts, big houses, would be very limited under any serious co2 cutting regime so the rich would have to have already given up much of what money is currently used for. Obviously this is very sketchy, but it would be terrifically helpful if it could be fleshed out.

Changes in social accounting might make this easier. In the old material culture mind-body favored body, things, fixed assets. Mind was treated as an artifact, without causal consequences. In the emerging economy digital favors mimd and the old feeling for stuff is dissolving. In the old economy change was difficult. In the new economy change is programming. Anything can change quickly in the digital culture.

For cradle to cradle https://en.wikipedia.org/wiki/William_McDonough