Provocation 248. The limits of bounded concepts.
Economics tends to treat its concepts as though they are rigidly bounded with fixed and universally – timeless- borders. The reality of economic life is its complexity and incompleteness, fitting an evolving complex system where things half emerge and vanish before they are complete. By treating the boundaries of things as fixed, like money, interest, capital as fixed, evolution, making good use of the permeability of concepts is thwarted even as the underlying reality economics is supposed to describe is flowing, kind of like a hot river of lava beneath the surface.
Einstein said “Every true theorist is a kind of tamed metaphysicist.” The problem in economics is there is very little metaphysical thought. (The word comes from meta, behind and physics, and the meaning of behind is more complex than we need right now.) Metaphysical in economics would be to question the meaning of wealth, ownership, capital, private, property, risk, commons and human nature and earth nature (such that human nature and earth nature can work together. But for the most part we just don’t.
Brian Greene endeavors to explore “the breathtaking ways in which restless and inventive minds have illuminated and responded to the fundamental transience of everything” Does this describe the minds of economistss? Some, but not enough. And those that do raise such questions have too limited a range of places to publish.
Economics fixates on growth and the market as though utterly essential for human well-being. In fact these have ratcheted up on each other to the breaking point, long predicted fromMalthus to Club of Rome, and some intermediate moments of threat to that system, such as the Luddites.
But consider the grieving of elephants. Maybe their world has more relationship in it that the commercial ones we have built.
Consider talking on the phone with a robot. The voice is pleasant, even attractive. In normal life if we heard that voice our natural inclination would be to discern the qualities of the person behind the voice, but in the robot case we are thwarted – our aroused human inclination to psych out the other comes up zero. Over time perhaps our willingness to reach out to the person behind the voice is weakened, impoverished, deadened.
Vaclav Smil’s book on Growth fits in with the anxiety of economists to stay with growth. Robert Wright’s earlier book Non-Zero, arguing for the triumph of complexity in biological and social institutions also hints at the need to feel growth is essential. But then we have Joseph Tainter’s great book The Collapse of Complex Societies and Jarad Diamonds’ Collapse. Why are we not thinking about these contradictions?
A recent conversation brought me the idea that history has in fact provided a slow opening cone of possibilities for human societies, possibilities that have led to art, science, democracy, a feeling for freedom and delight in the world. But as complexity creates cross links that end up binding everything in a single system, the openness is being lost and we are the last favored generation. A long opening is being transformed into a long closing.
I am moved to look for low probability scenarios since all the high probability ones are bad. I like Feynman’s
“We are at the very beginning of time for the human race. It is not unreasonable that we grapple with problems. But there are tens of thousands of years in the future. Our responsibility is to do what we can, learn what we can, improve the solutions, and pass them on.” And H.G.Wells’ “Man is a mere upstart.”
Ou ideas are really important. Now most observes see signs of physical decay, but they ignore the social (except in contemporary politics). The fact is that those who read about what is likely to happen are likely to walk away from useless – under catastrophe – jobs before the material events actually happen.
E.O. Wilson writes in his book Half Earth,
We are going to have to learn to become, on balance, less dependent upon complex technologies. Such learning will either be voluntary, or we will suffer the consequences of extending our technological dependence too far into a future that we cannot control. Our fantasies of being able to control nature are exactly why we are in the predicament we are now in. The model of conquest of nature has proven cataclysmic.
PS California needs to threaten to secede to push toward more equal senatorial and electoral college representation. Why doesn’t this happen? Does economics discuss this? Oh, it threatens the market. Oh well.
Silos allow for research that connects dots within the silo, but not connecting to dots in other silos. Silos exist probably as a least cost way of organizing a university. But so limiting. Things can be more interesting.
Harvey’s discovery of the circulation of blood (1628) was quickly followed by Petty’s (who began his career as Harvey’s personal assistant) concept of the velocity of circulation of money, and afterwards the circulation of blood in a body became a go-to analogy for the circulation of money in the economy.” From Malko’s great book Economics and Its Discontents.
When the Scottish physician Arbuthnot urged in 1773, “Let the corn flow like water, and it will find its level,” he encapsulated both the ends and means of the physiocratic argument. Freedom of trade must lead to the best possible results because market is both the providential and natural place of equalization. First, Divine Providence guarantees the proper functioning of the markets, and therefore all imbalance must be caused by human wrongdoings Second, the market mechanism is conceived in biological and hydraulic terms. Already Boisguilbert (Chapter 21) theorized market equilibrium in these terms, arguing that: “by immediately removing an “unnatural element” like a fallen boulder, the deviation of the natural course of a river ceases, with the ensuing reestablishment of the good conditions of nature. Consequently “the remedy of an ill is nothing more than the cessation of its cause.” No “disorder” has ever been found in nature without its “remedy”, as “there cannot be a mountain without a valley.”
Unaided flow supports a conservative view that governments should not interfere in markets. Metaphor’s unexplored implications can be a sign of ideological intent, not an effort in analysis. The river flows but integrated with the rain, pulled up by evaporation and cooled in the upper atmosphere (what happens to clouds in the warmer air of climate change?).The river is hardly self equilibrating. Economy “like the flow of blood”, but what is the equivalent in economics of the heart The blood is not in equilibrium by itself.
Malko BTW has chosen to be a high school teacher in Poland and runs a project where small press magazines with siloed points of view publish each others articles in order to create some dialog. See NYT https://www.nytimes.com/2019/01/29/opinion/poland-journalism.html
The monopolizing dynamics of the economy under capitalism are not dealt with by economics as science, , and, economics as social policy fails to protect those marginalized by concentrated economic power.
Economics has usurped, through success of its believers, the role of managing society but it is not managing the whole of society but only the dynamics of wealth while exploiting and or marginalizing the rest.
Are w stuck with capitalism and collapse, or are we smart enough to think our way to a new culture? Sounds unlikely but hey we need a good challenge. If economics could see capitalism as one system among several and dispassionately give narratives for each so we can chose, the alternatives might have a chance. (capitalism is monopolistic, socialism feels like bureaucratic capitalism. Is there another way?
Joseph Tainter who wrote (1990) the widely read Collapse of Complex Societies has now written a paper that suggests three scenarios.
Complexity is a primary problem-solving strategy, which is often successful in theshort-term, but cumulatively may become detrimental to sustainability. Historicalcase studies illustrate different outcomes to long-term development of complexityin problem solving. These cases clarify future options for contemporary societies: collapse, simplification, or increasing complexity based on increasing energy subsidies.
Complexity is costly and fragile. Don’t go there
What forces sustain the hegemony (from Greek leader) pf economics.
• There is no alternative
• Leadership requires mystification and economics does that
• Economics is a strange attractor.
• Things are terrible, economy offers hope so people bet on it.
• Psychology of mind: abstraction resonating plus needs creates social power
• We can do capitalist economics, we cant see our way to doing anything else.
• The rich can hire a proportion of the poor to protect themselves from the rest of the poor.
• Better to stay rich now and die (or our children) in a few years than live poor from now into the future.
It seems like the distribution of power is the glue that holds the economy and society together. The problem is we are speeding toward a dead end. The mainstream economists say trust us even now. They won’t give up.
Awareness of climate collapse is wide-spread, talking about it is catching up. Potential leadership doing the necessary to stay under 1.5 is badly dividing up into conflicting interests.
The rise of the super rich is vast distortion of society, but not dealt with in economic theory (I hope for some push back on that assertion). Having citizens with such wealth is clearly a malfunctioning of society. How can economics fail to anticipate and criticize such outcomes?
Ricardo divided us caste like into labor, land and capital, with no discussion of how people moved from one to the other. Each became a self contained organism with well defined flows among them.
An alterative theory would start with human nature and the earth and how to put them together. Economics, with a focus on capital as control point, ends up with a theory of society that only includes those who contribute to capital wealth as owners, employees and consumers.
Obviously the vast rich, the billionaires, could not have done it themselves. They needed educated customers and workers. The disproportionate payout to a few of what is obviously a social achievement is destructive for a free society (people can be themselves, not the freedom of capital alone). It is interesting how free from political speech and actions the super rich seems to be, but it is a disguise, because they have their lawyers to work the system to their own advantage.
Not only is the current regime a concentrator of monopoly wealth, but also gives rise to tremendous mount of corruption. People at work are frequently confronted with the pressure to go along with cheating, lying, environmental destruction. This is also destructive of their character. Seems to me there is room for an economics that deals with the whole, bot just the capitalist part, that gets at the texture of real lives, not just the flow of dollars between key variables
Provocation 244 Economics and reality.
Economics is fairly self contented, a kind of technical world of self referential concepts that means that economics, usually implying stability in institutions, does not map well onto the real world of serious changes and serious impacts on the lives of people. That could be the realm of a revitalized political economy.
A key fact in economics has to be that humans survived with about a billion people by living off the surface of the earth. Penetrating the earth to reach the oil and gas deposits allowed the increase to the approx. 8 billion we have now. Running out of that underground reservoir used to hint at limitations: can’t do this after it is used up. But that limit has been replaced by the sober recognition that we were merely transferring the coal and gas from under the ground, through our industrial machine, into the atmosphere, and this fouling of the air puts amore recently discovered limit on the fossil fuel culture.
Imagine an economics where, if even one person was suffering from poverty, the world management system would go into action.
Physics maps pretty well onto the serious unknows. Biology is more distorted because of the amount of money in biotech. Physics is weakened by the extent that its grad students are looking to develop math that works in economics. Their ear is not attuned to gaps isn our physical knowledge. Economics seems much worse in that it does research into the gaps in formalism more than it seeks out good narratives about the state of society in its relation to the earth.
The discussion of the conflict between socialism and capitalism is really lame, lacking in imagination and responsibility.
Davos had some high points.
Greta Thornberg https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwiW8ca2rKTnAhUOac0KHQGgDFgQwqsBMAB6BAgKEAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D51u4JECraLQ&usg=AOvVaw1pDPsdb-uxHWWgKOXk0reG
All three spoke directly and with logic to core issues, taken together, amount to a powerful and challenging agenda.
I am thinking…. We must transition to a continual decline in fossil fuel extraction and burning. What are the best targets on where to start? What plan do we have for those who are hurt in the process (live’s disrupted, assets reevaluated downward)?
actual specifics on what needs to stop.
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
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.
Why we probably won’t cut co2
Each person is enmeshed in
Cut in fossil fuel use will disrupt parts of each person’s pattern, and because things are interconnected, it would disrupt probably all. So where is a person to go, how to cope?
The result is we will not cut fossil fuels.
So what do we do?
We need to develop a global capacity to impose uncomfortable actions. This will cross constitutional lines.
This will create local disruptions and loss of life
We need to develop local responses that can respond to local details.
Economics has developed the management of the market but not the management of society in its relationship to nature. Corporations have been active in extracting wealth, while claiming it is creating it.
Putting two and two together – we will understand it but not act. The NewYorker has
“Really waking up, and not just dreaming to ourselves that things will be O.K., has become urgent—beyond urgent, in fact. To paraphrase Victoria’s fire authority: The world is in danger, and we need to act immediately to survive.”
But only a few try to describe what that “act immediately” means – the act and the terrible consequences. My own conclusion is that we need world government with regulatory muscle to cut extraction and stop the use of fossil fuels. And we probably won’t get it. Is this enough of a nudgve to look for alternatives?