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?

 

1980. dream

last night, dream of my visiting an art school. I start in a studio, architecture students all straight lines in their drawings. the kind of design we can call “dollar per sq foot architecture.”, post bauhaus, bauhaus without quality. i wonder down the hall, well, not wandering, searching. I come to a dance studio, the same kind of room, concrete high windows, cubed, painted institutional green. Somehow a conversation and the students between moves on the floor are talking about asking for organic spaces. I am thinking, each has the answer for the other, how to get them together? One dealing with the body and its aliveness, and the other with materials. Two worlds. in the background my thoughts turn to Kenneth Burke’s “scene-act ratio” – the scene contains the action to be performed there.

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’?”

1975. The need for Gardenworld

I think it is absolutely essential that we have a vision of where we are going, otherwise there is no guidance on our choices. It seems to me that the human condition beginning with hunter -gatherers is to feed ourselves and we have gone through agriculture and empires and wars as an unfolding of that initial condition. As the climate is in  difficulty many areas will cease to provide food. Indeed we are already seeing this.
A few footnotes as essential background:
 The word economy for the Greeks meant eco home nomos laws of or management.. But the earlier form of nomos in yet earlier Greek was neiman, meaning equal distribution.  In fact throughout history maintaining equal distribution has been the ethical press against concentration of wealth and power.
The word capital comes from Latin for head, as in a new head of cattle. Early civilizations were basically Argentinian cattle ranches the meat distributed through sacrifices maintaining and I think if not a complete reality of equal distribution. The idea that capital comes from the birth of new cattle seems to me very suggestive of what we are working with and how we might evolve.
To me the obvious thing  is to create an environment for growing healthy interesting people taking into account of the human life cycle and its needs of different ages. I have been calling this  Garden World and thinking through the politics of how to get there. GardenWorld is both productive and aesthetic and is the place for growing people. I have been drafting the book toward that end called GardenWorld Politics. The core idea is that since most of us want to live in some combination of civilization and nature why don’t we use our wealth go there? It has to be an intent, not a plan, because we don’t know  enough for planning. Everyone will have to figure out their place in such a transition. Decentralization is probably key, by centralized systems of some kind are probably necessary to keep solutions scaling. Imagine a focus on improving your watershed.
Our current system has failed us because it is killing us. We talk about raising people out of poverty in the underdeveloped world without being aware that we are moving them by force off of the land for other economic uses and placing them in high rises where perhaps their income is up by factor of three but  the costs are up by factor of five. We have  some basic thinking to do and then get on with the project. The basic thinking has to do with how we choose elites and reward them, do we expect to save everyone? What do we do about migrations and the pressures on all asset prices?
The world can be beautiful but we are not organizing ourselves to realize it. I love what David Hockney says in his new book, the history of pictures,” After money for necessities there is nothing to spend more money on except beauty.”
rethinking jobs is crucial and I admire the effort here. I think I proposed last year that, under conditions of transformation/collapse there will be five main categories of work to skill and organize
1, Green everything, economic and aesthetic (design will be crucial)
2. Take care of those hurt by the transition (well-fare on a huge scale)
3. Manage 1 and 2 (a huge management task, way beyond the Manhattan Project and maybe building on Herbert Hoover’s experience feeding Europe after World War I)
4. The education to do 1,2, and 3
5. The arts and sciences to support 1 through 4.
Governance will be important. to create the conditions for voluntary not wage work that is cooperative, experimental, interesting and develops people.