1847. The world of algorithms

In the algorithmic world (my example)

Your iPhone knows to set up a meeting for you next Wednesday. Your computer delivers to you on Tuesday the things you need to read for that meeting and the next day the driverless Uber car arrives to pick you up having given you a 15 minute phone call warning. The car takes you to the place you never had to think about so you don’t know where it is. You arrive at the meeting in time. When the meeting is over another Uber car is there waiting for you and takes you to a hotel that meets your criteria but you’ve never heard of. You are notified that you will be picked up at a certain time by another Uber car for dinner and a date has been arranged for you. Etc unending.

You have been carried along in the flow with never having had to have a thought or a reflection or to make any input into the process.

Blessings,
Doug
http://dougcarmichael.com
http://gardenworldpolitics.com

1846. Politics and economy.

From Wolin,
Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism

At the critical moment when a volatile economy and widening classdisparities require a government responsive to popular needs, govern-ment has become increasingly unresponsive; and, conversely, when anaggressive state stands most in need of being restrained, democracyproved an ineffectual check. A public fearful of terrorist attacks andbewildered by a war based on deceit is unable to function as the rationalconscience of the American state, capable of checking the impulse toadventurismand the systematic evasion of constitutional constraints. Apolitics of dumbed-down public discourse and low voter turnout com-bines with a dynamic economy of stubborn inequalities to produce theparadox of a powerful state and a failing democracy.

How can economics not see that the political regime is the main product of the economy?

1845. Obligation to have a story

Provocation #84

Each person in society should have – and we need an education system to support this –  an obligation to have in mind a sense – your personal version – of where we are in history how we got here and what can happen.

Because of the domination of society by economics each of us also has an obligation to have in mind  an evolving model of what is economics.

These should be thought about,   continuing to look for ideas and facts that refine your version of the story.

——————

The history of economics is really messy reflecting the struggle over power and wealth mixed up with trying to keep society together and coherent enough to not fall into anarchy.

Here is a paragraph from a very interesting book , highly recommended;  Margaret Shabas, The Natural Origins of Economics.

“Previous economists, Ricardo most saliently, saw distribution as entirely subject to law. Given competitive conditions, profits, wages, and rents were completely determined. Mill recognizes this when he remarks: “Only through the principle of competition has political economy any pretension to the character of a science. So far as rents, profits, wages, prices are determined by competition, laws may be assigned for them . . . and scientific precision may be laid down.” But, he emphasizes, there is never pure competition. Custom al-ways enters in to one degree or another and is especially prevalent in the case of land tenure . In this respect, Mill opened the door to more human deliberation and rule making.”

You can feel the struggle to keep the economic discussion away from questions of social class and the good life for all.

Here is from Univ of Chicago page for her book

References to the economy are ubiquitous in modern life, and virtually every facet of human activity has capitulated to market mechanisms. In the early modern period, however, there was no common perception of the economy, and discourses on money, trade, and commerce treated economic phenomena as properties of physical nature. Only in the early nineteenth century did economists begin to posit and identify the economy as a distinct object, divorcing it from natural processes and attaching it exclusively to human laws and agency.

In The Natural Origins of Economics, Margaret Schabas traces the emergence and transformation of economics in the eighteenth and nineteenth centuries from a natural to a social science. Focusing on the works of several prominent economists—David Hume, Adam Smith, Thomas Malthus, David Ricardo, and John Stuart Mill—

Preface

1. Before “the Economy”

2. Related Themes in the Natural Sciences

3. French Economics in the Enlightenment

4. David Hume

5. Smith’s Debts to Nature

6. Classical Political Economy in Its Heyday

7. Mill and the Early Neoclassical Economists

8. Denaturalizing the Economic Order

Notes

1844. Auction the empire

No comment  helpful.

On March 28th, 193 AD, the Roman empire was auctioned off by the Praetorian guards to the wealthy senator Didius Julianus for the price of 6250 drachmas per soldier. 

The Praetorian guards had murdered the emperor Pertinax, and after some discussion with the emperor’s father-in-law Sulpicianus, who offered 5000 drachmas each to the officers to be made emperor, they decided to sell Roman empire to the best bidder by public auction. In the words of Edward Gibbon, 

This infamous offer, the most insolent excess of military licence, diffused an universal grief, shame, and indignation throughout the city. It reached at length the ears of Didius Julianus, a wealthy senator, who, regardless of the public calamities, was indulging himself in the luxury of the table. His wife and his daughter, his freedmen and his parasites, easily convinced him that he deserved the throne, and earnestly conjured him to embrace so fortunate an opportunity. The vain old man hastened to the Praetorian camp, where Suplicianus was still in treaty with the guards, and began to bid against him from the foot of the rampart.

After outbidding Sulpicianus, Didius Julianus was named emperor, and he received an oath of allegiance from the guards. In Gibbons’ eloquent words:

A magnificent feast was prepared by his order, and he amused himself until a very late hour, with dice, and the performances of Pylades, a celebrated dancer. Yet it was observed that after the crowd of flatterers dispersed, and left him to darkness, solitude, and terrible reflection, he passed a sleepless night; revolving most probably in his mind his own rash folly, the fate of his virtuous predecessor, and the doubtful and dangerous tenure of an empire, which had not been acquired by merit, but purchased by money.

After the armies of Britain, Syria and Pannonia declared against Julian, a civil war began. The Praetorian guards eventually deserted Didius Julianus, and he was condemned and executed by the Roman Senate on June 2nd of the same year.

Source: Edward Gibbon, “The Decline and Fall of the Roman Empire”, chapter V, volume I, first published in 1776.

1843. Economics as science and narrative.

Provocation # 83

Economics  as science and as narrative.

Economics leans towards its identity in science because it allows for management of the discipline, especially by allowing for criteria for advancing careers. It also seriously enhances the prestige of the field despite the fact that the public that gives economics the status is not very interested in the results, nor are the other social sciences (and maybe even economists are less than enthusiastic about the next publication).

The claim for economics  to be a science got a boost from coming into public consciousness at the same time as Newton’s few equations for gravity with its mesmerizing magical  instantaneous  action at a distance. The mystery of the night sky puts the motion of the planets, including earth,  smack in front of us, and we can almost feel the curves of gravitational balance. Newton’s work on optics was much more observational.

The time of Newton/Adam Smith was  a period when the Catholic view of the universe with its secure place for humans was giving way. The post-christians of that generation were looking for a new security, a new grounding in invariance.  The universal and timeless achievements of science seemed to give that security.

But economics was also giving images of how circular flow and invariance across systems  (dollars from here to there and back again. c-m-c, m-c-m). As always, the system was owned mostly be elites  who set the rules, and the great fear was always that the peasants,  workers, army of the unemployed, would try to take charge and ruin the whole thing.

But if the whole thing were god made, not man-made, then it was a natural object and humans should let it function, just as the planets were set in notion by god and should not be interfered with.

This was an old logic. For example the great ancient empires always tried “law”, man made, as a natural object. The confusion between lw for things and law for humans is near universal, and of course we still use the same word for each. Persia, Egypt, referred to their city as a microcosm, a kind of fractal of the cosmos, so don’t disrupt the organization of the city or you will upset the universe. It is bad to challenge or question the system. Sound familiar?

Because the economy, or the market is considered to be a natural phenomena, it should not be interfered with or chaos might ensue. The message: don’t touch the system. About as pure a conservative principle as one can imagine.

While economics was aware of change, it was suppressed in favor of constancies. It took Schumpater to force awareness of creative destruction. Yet today most economists still assume most of the system will not change. We will have capitalism, ownership, interest, debt, conceptual instruments, like credit default swaps,  to manipulate within those constants. But the constraints are assumed to be timeless.

Economics do not, for the most part, act as scientists. Scientists are primarily driven to understand phenomena, things that can be seen (often with sense amplifying instruments). The effort starts with something not understood and then thought about and experimented with. The phenomenon is always in the center. Economists are –  a tendency – more drawn toward formalisms of models and equations. My own undergraduate years at Caltech in physics and  working 20 hours a week as a lab assistant exposed me to a world unlike the classroom physics, but an environment of poking and pushing, “What would happen if…. ?” One does not often hear from economists “what would happen if we forgave the debt?”

One could easily think that economics should be a mix of accounting and engineering: how to make things that work for society. But economists show little intent in the phenomena of society. GDP is  useful for calculating but deeply misleading about the welfare of a disaggregated society – dealing with real people rather than averages or means. So GDP becomes normative.

As engineering economics would be concerned with how to make social organization in interaction with the material world work for humanity. Good accounting would be a support to that system. Take for example the balance sheet. Profit on one side as a benefit, wages on the other as a cost. The message: increase profit decrease wages. But in fact business exists to meet the needs of humans and managing business for the benefit of both owners and workers should be obvious  but it isn’t.

As the neoliberal view once again is under pressure there is a move to embrace complexity there and evolution as a safe island for economics. The reaction to complexity theory divided people into two groups: first, wow, ok, with complexity many more things are now within he scope of the calculable than previously thought. The other reaction was, wow, many things we thought were calculable turn out to not be. Economics leans towards the first as a new orthodoxy.

probability theories are often assumed to help in that effort, but any model that includes probabilities also includes some assumption of invariance. The sample space for example. If we really understand change and probability we recognize tat the real story keeps moving out of any space of assumptions. Economics should be about change.

This given force to the argument hat we need to learn to have better descriptive narratives of what is happening and what could happen. Such narratives can be clarified with mathiness,  but the center should be on the quality of the narrative. Imagine if comics was a healthy mix of engineering, accounting, investigative journalism. Most  of economic research including as published in the journals –  has a more or less implicit to explicit narrative. Yet very little effort goes into training for making better narratives. If we are to have an economics that works for all it has to gt beyond its easy alignment with the interests of the one parent.

On top of economics as engineering, accounting and journalism, there is space for a very much needed broad perspective of the great philosophical questions of the meaning of life, the possibility of belief systems. These require study of anthropology, literature, arts, history.

But notice how the circle moves. If economics were to be like this, engineering to make things that work for society, good numerical analysis to guide and evaluate, and journalism to ferret out the way our engineering is working or not to make a better society –  it would be a much better science.

notes ——

As we know economics comes from eco-nomos: estatemangament for Aristotle. Deeply organic holism. Tecne is also organic.

“The invention of agriculture was the first act of what we call technology. The Greek word techne not only described a form of knowledge (logos), as we have seen; it is also the abstract form of tikto, to “generate” or “engender.” Men, like the gods, were the teknotes, the creators, and what they made, the tekna, were their creations. The simple act of cultivation thus marked the beginning not only of humans’ independence from nature but of their long struggle to make themselves masters of nature. It was the beginning of the belief upon which, although it has been constantly challenged down through the centuries, the whole of modern society now rests: that nature exists, as the great astronomer Nicolaus Copernicus put it bluntly, “for our use,” propter nos. More prosaically, this newfound mastery over the natural world also demanded the “division of lands” or, as it was sometimes called, the “creation of nations,” since unlike hunting and pastoralism, agriculture, and the property rights it had created, could not easily be pursued without also establishing boundaries between one piece of territory and another. The hunter could, whenever he chose, pick up his bow, take his family, and move; even the shepherd could, as Condorcet phrased it, “drive his flocks before him.” But the agriculturalist is necessarily and inescapably “attached to the land he cultivates.”

From Pagden,  The Enlightenment and why it matters.

As you are tired of hearing me say,  capital comes from latin cap, head, used as in new head of cattle. Economic activity is a modification of early organic processes. We might do better seeing the continuity as we search for alternative formulations of our interechange with nature  rather than imposing a break in development from past to present.

 

and hinting at the humanism we have lost.. This capacity for empathy

“As Smith recognized, once the basic necessities had been satisfied, the main stimulus to further acquisition lay in the desire for social prestige and approval. “The desire of becoming the proper objects of this respect, of deserving and obtaining this credit and rank among our equals is, perhaps, the strongest of all our desires.” But the importance attached to status made the possibility of loss of status appear “worse than death.” Man’s suffering was more intense, Smith declared, “when we fall from a better to a worse situation than we ever enjoy when we rise from a worse to a better.”  The desire of becoming the proper objects of this respect, of deserving and obtaining this credit and rank among our equals is, perhaps, the strongest of all our desires.” But the importance attached to status made the possibility of loss of status appear “worse than death.”

As always love to have notes back.

 

 

1842. No workable culture.

There are three  major views in the world about who we are and what we are doing.

  1. First is the technocratic Western view of modernization and problem solving. This approach reduces evertyhing to mechanical instrumentality with little room for a feeling for life, grace, love,or even dignity. We are all being drawn into a role of machine part in a whole that feels ike a giant earth moving machine, without purpose. Gobble the sea’s fish, gobble the land’s trees, squeeze the living room of the people to prison-like conditions in school, apartment, work.

2. The second is a fundamentalist drive to bring back some parts of the past that were deeply affecting in childhood – as though these could replace what was lost in #1 and add up to a workable solution.

The pain caused by #1 leads to a desperate attempt to try#2, or at least (Trump supporters, Bernie Supports)  to prevent #1.

#3. For all the desire,  #3. unformulated. Green? What about inequality and automation? Stimulus to security creating fuller employment? At what cost to climate?  The Internet of people to match and govern the Internet of things? What we see is that we have liberated alt-news and fake news and empowering everyone’s projections. Google and amazon, Maybe Facebook, are emerging as the core institutions of society – and we can’t even visit. These are Martians for most people. We do not yet have a #3. In the meanwhile people know the climate is in trouble, that the economy is in trouble, that war is too probable. But there is no leadership that yet can command the media and the political process that has a hope – in most people’s judgement – of actually coping.

The Democrats at the top are the professional elites and finance. The old core is not invited to do more than vote.  Listening to those on the Democratic side that are left out would mean a real seriousness about dealing with economy climate and society simultaneously. The top do not yet get how far from livable and believable #1 is. The majority of Democrats do not support the current Democratic party

The Republicans at the top are more non-coastal elites of farms, corporations,  smaller businesses (not real small), looking like they are prone to nostalgia, they are more drawn to anti #1 policies and would rather say no to #1. The majority of Republicans took a chance on Trump, not out of like but out of need for a wild card to shake up the system and allow something else to happen.

Needless to say, this is all very dangerous.

#3. is essential to attempt. Lots to do. Most of our progressive activites look lke they are part of #3 – local inititives, Internet for learning from each ohter, media to keep us more aware of those living far away or in ghettoes. As we think about larger inititiaves (lime evolving the culture) working on denetralized compassionate local inititives is worthwhile.

1841. The way forward for economics

Provocation # 82

Here are  two key points to be developed further.

1. causes. The US was in a special situation after WW 2.. We could sell almost anything, – all business made money – till some time in the 60’s profits started to decline. The elite moved, through Wall Street, the big corporations, he media and the Reagan Presidency, to keep the curve of profit from declining. The path chosen was to take income and wealth (pensions, welfare, infrastructure, selling public assets, outsourcing, privatization of functions) to keep the curve up (in the background neo-colonialism, neo-liberalism. ). Historical embedding could go fruitfully further,

But the country was not integrated and then split. We had never been one country. What of the perspective that the country was always split? The Europeans and the people who were here first, more indigenous by a few thousand years, were certainly split. And later the people dragged here from Africa and never allowed to integrate, Then we have the divide between the New England settlers with their religious motives and the Virginia settlers: different religion, different class, different motives. The rurals who came from europe and moved west, never settled in the established communities. . The urban/rural divide was there from the beginning (Boston, Philadelphia, New York). Only part of the rural, as it was being destroyed not by factories but by finance, moved to the factories, not integrated into the north but in new cities, again split in industrial cities like Chicago and Pittsburgh and the older cities of finance, media, trade and culture..

The embededness of our analyses could go further if we want to explore causes: from industrialization back through the rise of Napoleon and Lincoln and their impact on bureaucracy, and the tendency of western civilization since the Greeks to follow materialist values, thereby enhancing power and downplaying the human, and the split between Europe and Asia the Gordian knot of Alexander. More relevant than ever.
2. What to do?  The idea is powerful and drives a lot of “hope” that the only good future is a high paid job in the tech sector and its supporting professionals. More education when work is disappearing is only a very partial solution and that actually maintains the split, integrating a few of the children on the periphery of professional class. Tax the rich? OK, how? What politics can get us there?
Can we imagine beyond the split? A society more decentralized, more democratic, where the highway planned in Washington does not cut our town into decaying pieces?

I think there is a growing consensus that we need to face the interdependencies of automation, environment, migrations, governance failure – all at the same time. We get taught as children, solve problems by dividing them Perhaps this is wrong. To solve a problem within its definition is not strong enough because the forces that created the problem lie outside its definition. Only by expanding the scope of the problem can solutions be worked on.My own way of thinking is to take an issue and embedded it in larger issues.

We have in Trump a corporatizing while simultaneously privatizing the government. The only possible outcome of continuing Trump, who is creating a well funded dynasty, will be war. Is it possible to take this Trump regime apart? We have a rabid Republican Party, a self-serving Democratic elite and no party for the vast majority of the people. (From NYT yesterday Now, Macron is taking advantage of current circumstances to blow up the tripartite system. Macron’s great insight, which few initially recognized, was that the right-left divide was blocking progress, and that the presidential election amounted to a golden opportunity to move beyond it, without the help of an organized political movement. At a time when the French people are increasingly rejecting the traditional party system, Macron’s initial weakness quickly became his strength.)

I think the 1% or the top 10% however are more nervous than the interview suggests. If we just take today’s (last Friday) NYT editorial page with the critique of Kelley as destroyer of security and David Brooks on the end of Western Civilization, and the article about LePen. I Have to ask, does Temin/Paramour go far enough?

And what is the role of economics and hence INET, in extending Temin/Paramour in the future for 1 and 2? I say we just take it on.

A few thought on reading

Lasch, Christoper TheTrue and Only Heaven. He shows that decade by decade since the Revolution the social critics have been penetratingly correct about the state of the US, and decade by decade the critique made no difference

Handlin’s   The American Home (Oscar’s son) Shows how decade by decade since the Civil War American movements toward regeneration caught on, and then failed, as larger forces tore through the rebuilt villages.

I just read the wonderful book by Joe Earle, Econocracy. He was interviewed by Rob at
Curriculum Reform is Vital if Economics is to Serve Humanity

I am torn reading this between an approach which repairs economics from within, kind of like the goo inside a puncture proof tire, or do we need to break out and consider literature which violates economics, that makes us uncomfortable, that says economics is the wrong, or perhaps incomplete handle for imagining a better society or trying to manage one?

In that background Sheldon Wolin’s Politics and Vision shows painfully how much we have lost by shifting from political economy to economics. A forceful rereading of economic history is in Geoff Mann’s In the Long Run we Are All Dead. He shows that Keynes was not a blip in the history, but that we have all been Keynes, not just since Nixon, but since Adam Smith, and always will be.