California Expert Software
Truth is Everything
|
California Expert Software
Truth is Everything |
|
||
BORING THREE
My discussion of economics, continued ...
At this point, we need to ask, what is economics all about; i.e., what is the object of economic study? The answer to this question is a guideline on what an economic theory should look like.
My answer starts with, "economics" or, properly, political economics, is about how civilized people make a living. We could be concerned with plants and animals generally, but that would be similar to ecology. We could be concerned with behavior generally, but that would be ethology. My first delimitation of the subject is that it is about the interactions of people in society, not people alone or society in the abstract. Political economy is about the "internals" of human societies.
There may be some generalities that apply to all human societies, or arise from the economics of all (or most) societies. I think any such generalizations must arise from case studies of many societies. For example, I am pretty sure it is true that everyone must eat to live, and that many foods are eaten almost everywhere. If the means of getting those foods is the same everywhere, that would be an interesting economic fact. Or, it may be of economic interest that there are several different, workable agricultural systems that have little in common. In this case, what would be important are the factors governing which system works.
The second requirement is economic theories have to account for all aspects of human activity which we call "making a living." This is a very broad subject area; e.g., relative preferences for classical painting or cartoons will set values on works of art, hence what someone earns doing art. What I think economic explanations are required to do is show how what the artist does is related to what others do. The explanation is reflexive, interactive.
Classical, mathematized economic explanations - really descriptions of idealized situations - do not explicate in the sense I require. Supply and demand curves do not tell us anything about the relationship of a farmer, artist or production worker to others in society. What the mathematical descriptions do accomplish, however, is to tell us something about the "abstracted" process, in which immediacy and relationship is removed. Supply, demand, pricing, volume, etc are probably relevant in the generalized factory setting. Those mathematized variables do not consider Charlie on the assembly line, or his relatives and friends, the quality of his housing and medical care, or the education of his children. All of those "internals" are lumped into a few, averaged variables, such as Charlie's wages and productivity melded into everyone else's.
In (neo-)classical models, Charlie and all that is his life disappears in the number mixer; he could be anybody, which is to say no one. For that reason, it is not an immediate (classical) economic matter to consider whether Charlie's housing is adequate, or if the plant dumps toxic wastes in Charlie's water. The cost of a ruined environment, such as that near coal mines, is not calculated: it is assumed included in commodity prices or in some other price (such as a tax). Those concerns are all "externals," not considered in classical (capitalist) economics.
In contrast, I believe the economist has a much more difficult job. The internals and externals have to be evaluated. Charlie's life cannot be reduced to whatever wage the employer offers. If it is represented in a wage, that wage has to consider Charlie's costs in a reasonable manner (because Charlie is a human being, not a robot). Of course, I admit, right off this puts a value on human life and living conditions which cannot be ignored. It is true nothing in classical models prevents managers from considering all that Charlie is, but those models do make it easy to forget about Charlie.
The classical economic theory is much like a portion of the Darwinian notion of "fitness" with respect to Charlie and externals generally. An individual is "fit" when it succeeds in producing fertile offspring. All that matters in the grand scheme of evolution is that individuals live long enough to mate, that they have the requisite abilities of a mate, and that they have viable, fertile offspring which repeat the cycle. The quality of life is ignored; it doesn't matter if every individual is wretched. The irreducible minimum is living just well enough and long enough to reproduce, as attested by the global success of mice, rats, squirrels and rabbits.
Lives that are 'nasty, foul, brutish and short' are perfectly consistent with the highest levels of productivity and profit. Because this implies some people might live high off the hog while others starve, many economists hold Utilitarian values. While many ethical theories hold that exploitation of labor (of fellow creatures) is immoral, Utilitarianism justifies it in the phrase, 'the greatest good for the greatest number.'
So, what I have allowed to sneak into this discussion is values. Values appear when one considers life as experienced, not just in the abstract. Values are the result of human interactions, the reflexivity I mentioned. This leads to a dichotomy in economics:
There can be a value-free economics based on description. This is what the classical and neo-classical economists believe they attain, especially by using mathematical models. Economics seen this way always abstracts from observed behavior to models of behavior. It does not matter how people feel about their economic transactions, only that the transactions occur a certain way. This sort of economic theory is always apolitical, in the sense that it supports almost any sort of political judgement, value or system. Proponents of such theories are adamant that theirs is a science, not an art, because they suppose themselves to set aside values. They prefer just "economics" to "political economics" in titling their work.
Or, there can be an economics which is not value-free. This can happen in one of two ways, but actually one of those ways amounts to the previous way of thinking. If economic theories take account of people's "values" by incorporating them into the models as descriptions of behavior or as tokens for behavioral "complexes" (i.e., behavioral sets, or particular behaviors frequently associated or somehow connected), we still have a reasonably value-free theory. Such a theory accounts for what people say they believe, and what they do, in the manner of observation. This sort of theory does not make explicit value judgements as a premise of economic theory or criterion of behavior. Thus, it is "scientific" to study values, so long as they are only studied.
The clear distinction from the first type of theory arises when we set values among the premises of our studies; i.e., when we have a theory of "political economy." Such a theory selects social and governmental systems; it prefers one system over another. There can be competing economic theories, based on different political judgements, and such theories can be internally consistent. But, there is also a clear choice and difference among the theories in applying them to society. For example, there is a difference between an economic theory that disallows slavery and serfdom, and another that does not. Such theories come to very different conclusions about what is, or is not, economic in society.
My third requirement for the theories in which I am interested is that they are value-laden. That is, I hold that "political economy" is the proper subject of study; certainly, of my study. I admit right away that such theories are not, and never can be, "scientific." However, I also think that scientific studies - "economics" simplified - are useful in showing how different systems might work. I also think that the various behavioral studies in psychology, sociology and other disciplines are very useful in making decisions about how economic systems should work. My bottom line is always that one has to keep in mind how the theory will affect people in practice.
I have posited that political economy is about how civilized people make a living. I believe economic theories should describe all aspects of making a living, from the bottom up, starting with the interactions among people. I also believe that economic theories should start with some value judgements about human society.
From this, it should be clear that I think many economic theories are possible; i.e., there are many possible economic systems. I think my premise fits the historical evidence that there have been many different instances of human societies. Ancient societies worked on very different assumptions and had different institutions than modern ones. Even in the modern world, there are radically different kinds of societies. (I avoid the disputed term 'civilizations' for the moment.) All of these societies "worked," some for thousands of years.
Here, I must digress. Ancient societies eventually failed. Many societies have come and gone since ancient times. It might be argued that represents a failure of the economic systems then in use, so there must be a defect in the applicable economic theory. I don't think such an argument is a priori valid; it has to be proved a society fails for economic reasons. For example, if ancient Mycenae was destroyed by a volcanic eruption (was it?), then it did not fail for economic reasons. The same could be said of us moderns, if we foolishly have Word War III or IV (depending on what you count).
It could be that all human societies are doomed to destruction the day they are born. The overwhelming evidence of history suggests this notion, because nothing is permanent. Of course, to hold this view, one must also have a defining idea of "society." It could be countered that there is only a long term evolution of social structures, which are focused on certain values or institutions from time to time. But, I am not going to go further with ideas of society, as that gets us into the long standing controversy about "civilization" (what is and what isn't).
It is enough to say that the rise and fall of nations, societies, or civilizations, whatever they are, does not determine the validity of a political economic theory. It could be that such theories allow for a rise and fall, or that a decline arises from misapplication of the theory. From a theoretical point of view, what matters is the theory describes and applies to some actual circumstance; it is not just a theory.
In fact, so-called economics as practiced in the modern world is almost never free of assumptions about the social order. In the United States, the dominant Chicago School is a development and offshoot of classical economics (Adam Smith's theory) which supports political conservatism. While supposedly an objective science, in reality practitioners of the Chicago school's theories rarely support the political left. This is because, at its root, Adam Smith's theory is about the individual, not society. It is especially favorable to, and accepted by, those captains of industry, or the successful generally, who prefer to believe they are the Chosen Ones by whatever "Invisible Hand."
Those who claim to know something about economics, the art or science of making a living, can be every bit as important to "society" as medical doctors. If one knows the truth about economic activity, then how far off can untold riches be? In World War II, the Keynesian masters ran the United States in every detail, from sugar rations to atomic bombs. They were successful in unlocking secrets of the Universe, as well as winning the War. So, it is no wonder that economists are highly regarded in our society.
From the other side, successful economists have an interest in the maintenance of their status. It would not do for things under their administration to go bad. Famines and depressions, and other bad times, tend to bring out vengeful feelings: someone must be held responsible. The first dodge of all those in authority is to blame the gods or devils, or the people for not sufficiently placating the supernatural. The second dodge is blaming the people for not following the authoritative prescription. Both of these fingers point away from the human, earthly authorities: it is not our fault, they say.
But, if perchance the people do not feel sinful, and believe they followed the masters' prescriptions, the masters have yet one more defense: this is a new circumstance. It is not the authorities' fault they haven't solved the problems raised by something never before encountered. On the contrary, the authorities are working as hard as they can to understand and fix fix the problem. If they succeed in finding new solutions, it will all the more show the genius of the authorities and give reason for the people to believe in them.
To put the matter plainly, those who attain prominent positions in society are interested in keeping it that way. The consequences of failure are usually punished, sometimes by death or dishonor. For this reason, those in the middle say 'I was only following my orders,' while those at the top try the ploys just mentioned. Honesty, such as "I don't know," or my theories didn't work, is only appropriate as a last resort. If you are certain of being punished, but the prosecutors say they will reduce the sentence if you plead guilty, only then plead guilty.
Covering of behinds and saving of skins are very ancient skills practiced by cowards of every rank. They know there is security in numbers, and that it is difficult to hit a target that fades into the background. They also know whistleblowers will be punished, unless they overthrow the old order. In the event of revolution, the cowards will say they were for it all along when it safe to do so. In the event of counter-revolution, they will say they were forced to do whatever they did.
All of this normal human behavior makes it very difficult to get rid of well protected, entrenched and camouflaged parasites. They certainly won't do it to themselves, and they will use every power, every trick, to keep what they have. In this situation, what happens to others not of their class or belief matters little.
I think this sort of thing happens in every successful country. The very success changes a city into a nation, the nation into an empire. Along the way, success is a pyramid that empowers some and crushes others. Eventually, those most endowed by empire become a great weight that must be juggled to stay on top. Imperial Courts are like the plates and balls jugglers spin on top of long sticks to entertain the courtesans.
The difference is the end of empire is rarely skillfully managed, so all the plates are broken. The juggler's skill is temporary. Very few see any problems in the performance, and even fewer see the end coming. So, do not expect admission of error or constructive criticism from those in power. They are jugglers of truth, for whom even a single mistake would have catastrophic results.
I cannot expect the economic high priests who serve our corporations and government to accept anything I say, unless it perpetuates their existence. I cannot expect anyone to do anything except heap abuse on me for my thoughts, unless they themselves are abused and oppressed by the system, or unless they are the occasional honest person. So, my tract is couched as a revolutionary text, for it must state what is to be achieved in applying my economic theories; what must be changed in the present order.
So, I will discuss some things that need to be changed, and why they should change. This critique of the present order should provide a glimmer of what a different system - a different political economy - would look like.
Not Bored Yet? Read on.
March 6, 2004
Last update: 11/02/2007
© Copyright California Expert Software 2007
All rights reserved.