1994. Trump and cold war.

David Graeber on twitter

“I’m not sure which i find more entertaining, Trump’s still somewhat random efforts to dismantle the American empire, or Cold War liberals special shock & outrage about pretty much the only good thing he’s doing.”

I agree. an opening of friendship to Russia and China is good statesmanship. When Trump came to the presidency Russia was a minor player on the world stage. Trump, probably with echoes form the fifties and sixties in New York, assumed Russia was a big deal. This was a big mistake because a world divided between China and the US areas of influence is much easier to manage than a three part (or 4 given Europe., but less important geopolitically as time goes on.)

But having raised Russia in the world’s eyes, and its own, getting out of the cold-war mentality is still a very good idea, now ruined.

Trump seems to want to play king of the mountain and like the idea of just one mountain, ours, Too bad because he too cannot be trusted with his own impulse to treat the rival street gang as a somewhat friend.

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/

 

1984. Christian use of “economy.”

Recent scholarship is pointing out that the idea of economy, from Aristotle as Estate Management eco-nomos, moved into the early christian world as god’s project for humanity. Bu the connection with economy is not made because the translators use the word “administration” instead of economy The idea that the economy was god’s project helped set the culture of the West to  “economy” a place that was to be made perfect, without interference. The impact of Christian thinking on economics is much deeper than realized by Tawney  in his Religion and the Rise of Capitalism, which starts in the time of forgetting, the 15th century, or Weber’s  Protestantism and the Spirit of Capitalism. Modern sources are

Dotam Lesham Neoliberalism from Jesus to Foucault (2016) and

Agamben, The Kingdom and the Glory_ For a Theological Genealogy of Economy and Government (2011)

 

Screen Shot 2018-06-28 at 2.02.28 PM.png

This photo is from

http://biblehub.com/interlinear/ephesians/1.htm

 

 

 

 

1983. Conservative and progressive.

Conservative and Progressive

Conservatives believe in a rich texture of society and tradition, where families and forms of governance arise through a constant and slow adaptation of institutions to the reality of managing the human species in the real world. Conservatives like the idea of mixing churches, families, communities, officials, press, banks, and local geography, all in a complex arena of mutual adapting. They see this structure as vulnerable, and needing constant attention. Conservatives are not egoists centered in self, but care about society, knowing that the whole affects the development of the individuals who then care for society.

Conservatives appreciate the histories and achievements of the different nations, and enjoy learning from others, travel, reading history and bringing home what they have learned. Conservatives tend to be modest and not flamboyant. Conservatives prefer solid friendship to opportune relationships, and they are suspicious of motives, yet kind to those they find worthy. They are protective of their own and challenging of others. They prefer complexity of character supporting selfless love rather than the blatant psychology of the deal. They tend to see decisions in multigenerational terms more than in multi-factional differences. They see time more than opportunity and tend to accept hierarchy as the price of stability. Their basic tendency is to want to hold on, fearing loss. Conservatives at their best are organic. At their worst attracted to frozen hierarchy and militarism, using technology but hostile to science.

It is clear that we do not have a healthy conservative leadership.

Progressives tend to have a delight in growth and development, in expression and talent, and also have a good ear for the pain and suffering caused by social life and institutions. They tend to love the stranger and be casual towards those at home, feeling that we can learn from others and that those around us are good natured and can figure it out for themselves, and good at cooperating for the good of the nested communities from local regional national and international, and see their mutual interdependence. Progressives know that our fate is dependent on institutions and rules. They want openness with some security. They tend to be open to all comers who are willing to join us. Progressives like change and find the past constraining of action. At their best progressives hope more than despair and are good experimentalists naturally aligned with science. At their worst they are self satisfied, mechanical, and shallow. It is clear that we do not have a healthy progressive leadership.

1982. Can economics break out?

Economics Journal articles are mostly written at a level of detail within an argument about a technical point. If one is interested in large questions: capitalism and governance under climate change for example, there is no place within the article, or most articles, to fit that perspective. Its like trying to get a regular screwdriver into the slots on a Phillips. Just won’t fit.

Economics has become the most common language to discuss the current state of society but that vocabulary does not do well at helping us deal with current problems – the big ones: climate, inequality (really immiseration of a significant part of the population.), automation, governance, population, international conflicts. Nor the really big ones: culture, values, the meaning of life, nor the way to establish a community of conversations around these questions. That is what politics was meant to be to be about. We have nothing like the generation of founding fathers who could discuss the history of republics for hours at the Constitutional Convention.

Economics has a hard time dealing with large issues about the economy (what its purpose is, how to get to that purpose) because it is configured to help elites manage quantities without reference to visceral human beings. Issues of value are hard to get into a discussion that is dominated by questions of technical detail. Issues of value might raise uncomfortable questions about ownership and distribution. Thee is no possibility of discussing class in either micro nor macro economics.

It is striking to me how much progressive economic discussions stay close to the technical level where it is hard to raise big questions.

How can we break out of that cocoon? Is it turning out to be harder to change the direction of the economics monster than we thought? Are careers and department management so aligned with neoclassical economics that people can’t see how to break loose? Are the proposals being made powerful enough to reach escape velocity? Perhaps trying to break out by looking at where we are is not enough. We have to have a vision of what might be out there to get the motive to risk the changes.

———
From the Recent INET paper

The Focus of Academic Economics: Before and After the Crisis
Ernest Aigner1, Matthias Aistleitner2, Florentin Glötzl1 and Jakob Kapeller2, 3, *
May 22, 2018
https://www.ineteconomics.org/research/research-papers/the-focus-of-academic-economics-before-and-after-the-crisis

Our results suggest that – unlike the Great Depression of the 1930s – the current financial crisis did not lead to any major theoretical or methodological changes in contemporary economics, although the topic of financial instability received increased attention after the crisis.

In this paper, we document that the financial crisis did not have much impact on the paradigmatic development of contemporary economics. In contrast to the experience of the Great Depression, which led to the emergence and acceptance of novel theoretical concepts on a large scale, the financial crisis and its consequences have, by and large, been rationalized with reference to existing theoretical concepts. Although we do observe a slight shift away from the idea that financial markets are efficient by default and prices only follow random walks, the basic conceptualization of (financial) markets as being efficient and equilibrating in principle seems unquestioned. On the contrary, the rising prominence of the concept of “liquidity” – understood as the availability of funds to absorb financial assets to be sold – in the aftermath of the crisis indicates that the financial crisis is seen by economists as a major external shock, unforeseen because of the limits imposed on rational behavior by asymmetric information, and not as something intrinsic to the economic process. Similarly, our analysis of the reception of major crisis-related books shows an only temporary increase of interest in classic contributions dealing with financial and economic instability, which was even weaker for more distinguished journals. These observations signify a key difference in terms of the ‘lessons learned’ from past crises when compared to the Great Depression, which gave rise to a broad consensus that capitalist economies are not self-sustaining, a consensus that eventually helped to forge the mixed economies dominating the richer parts of the planet.

And

From the Durham report on Educating Economists with an introduction by Robert Skidelsky, from the Durham Society for Economic Pluralism.

http://www.rethinkeconomics.org/re-group/durham-society-for-economic-pluralism/

1 Introduction The economy is changing at increasing speed. Automation questions the role of labour and production. Money is changing form. Environmental change challenges our understanding of economic growth, while the digital economy confronts the way we understand ownership and property. The global economy raises issues of trade and regulations. Distribution of wealth is increasingly unequal. Understanding the economy as an integrated part of an increasingly complex society has never been more important. Nevertheless, whilst the economy is increasingly complex, what economics students are taught is increasingly narrow. Economics teaching is separate from the other social sciences, and has less diversity in theories and schools of thought. Students of economics insufficiently examine history, ethical frameworks, or what is happening in the world around them. Not so long ago, understanding the development of economic theories – the history of economic thought – was a core part of an economics degree. Now, most economics degrees do not include this content at all…. Modern curricula tend to focus heavily on just two aspects: quantitative skills and teaching a particular neoclassical brand of economics.

 

 

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?

 

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’?”