Overweening Generalist

Monday, July 11, 2011

Potshots At Economics: Take Three

"In all recorded history there has not been one economist who has had to worry about where the next meal would come from." - social ecologist and management guru Peter Drucker

One of the big mistakes often made by cognitive scientists and economists is that humans try to figure out causality in a rational way. Joan Silk at UCLA found that one of the tried-and-true methods of alpha male baboons is to unpredictably and suddenly use brutal aggression, just to keep the competition off-balance. Think of terrorist "alerts." Is it better to try to keep up on all the latest info about where the market is heading or why the FBI has upped the terror alert, or just go on with your business? (Funny, I don't recall Adam Smith talking about this...)

It turns out that if we think about some possible disaster, we can try to use logic, but our muscles and organs and brains will be marinating in stress hormones and we're gonna feel pretty lousy. We'll find we can't think straight, or "logically." Much less "rationally."

But basic anxiety over having enough money is endemic to people in modern societies. When we travelled in packs (at least 90% of our time as homo sapiens) and the men did nothing for five days, while the women daily foraged for fruit, nuts, or whatever (the men get together and go off to hunt down some meat/protein eventually), the feeling of being tied to the group probably allayed much of the anxiety. Modern states, through various means, try to mimic this "group feeling" but it is never quite enough. Bureaucratic welfare states seem to fall short, emotionally. Who knows when they'll decide to cut you off? (In hysterical responses to this anxiety: totalitarian states: it's a real disaster for the human spirit.) The problem seems to be, in my opinion, Higher Barbarian's status hierarchy - their deep need to feel they are the top of the heap - and an enforced scarcity which probably is mostly manufactured.

Let me be more precise: I don't think the Ruling Class actually consciously thinks like this; I think it is part of a semantic unconscious social drive they have, and humans, being primates with 98% of the same DNA as chimps, behave like primates in this sense. Look at all the non-alphas who admire someone like Donald Trump. We're primates! We need a sense of status and feeling of where we stand in the pack (unless you have developed a way out of this). Enlightened self-interest is an emergent phenomena; by no means is it common. (I will discuss the new behavioral economics subsequently.) People make the worst decisions for themselves quite often, despite what classical economic theory says about "rational actors." Economists who still work under these 18th century ideas seem like theologians to me, and no wonder Economics is dismal, and a drag on culture, and the slowest to get with the program.

Why have we paid farmers to not grow food? Why are there office buildings that are empty, when there are homeless people? Why, when we see that we have the capacity to feed the entire human race, people still starve?

Here's an excerpt from an interview that Robert Anton Wilson did around 1996, with Randy Lee Payton:

Q: You've been writing and talking for some time, Dr. Wilson, about an emerging society where high technology is put in service of abundance for all. Alvin Toffler believes we're halfway between the old industrial model and the emerging, high-tech information processing society. Do you agree?

Wilson: I think we're there. The problem is the people who run our society can't figure out how to make the adjustment because they're still thinking in terms of an economy of scarcity. Actually, measurably, we've had an economy of abundance since 1974. There's been more than enough, but our rulers and owners just don't know how to run the new information society because the market and everything will jump in spooky ways when everybody realizes there's plenty to go around. Since the 1930's the State has paid farmers not to grow food while the people are starving. Now if anyone tells you this economy makes sense ask them, how sane is a world where people are starving in one place and over here people are being paid not to grow the food to feed them. How can anyone describe that as sanity?
-from Email To The Universe

Where Wilson gets 1974 I wish I knew but my researches into the abundance/scarcity question suggest he's probably right. The basic idea is that, suddenly, our technological know-how has so revolutionized reality in every way that the Old Order doesn't quite know how to act.

Here's a mad poet:

"Capitalism, which claims to produce Order by means of the reproduction of desire, in fact originates in the production of scarcity, and can only reproduce itself in unfulfillment, negation, and alienation." - Hakim Bey, Immediatism

I think that's mostly right; I do think the creativity unleashed by capitalism is not to be slighted. But basic human needs/rights must be factored in. 

"Adam Smith's 'invisible hand' metaphor made seeking profit into a moral act, since it supposedly maximized the profit of all. Utility replaces economic profit with well-being. The rational actor model then is seen as maximizing overall well-being for you - that is, utility: in other words, self-interest, whatever that self-interest might be. The failure of the old view of reason calls into question the old view of self-interest with it. It's not that self-interest disappears altogether. It still exists. But it does not simply define natural behavior. It is far from the whole story." - George Lakoff, The Political Mind: Why You Can't Understand 21st-Century American Politics With an 18th-Century Brain.

"Farmers are on government welfare and you pay for it. Good year, bad year - doesn't matter. They still get money. In a bad year - drought or floods - the crop is poor, incomes drop, farmers can't make their payments and they need financial help; you pay for it.  In a good year - favorable weather - there's a bumper crop, prices fall, income drops, farmers can't make their payments and they need financial help; you pay for it. Either way, farmers win, you lose. Oh well, I guess we should be grateful; at least there's plenty of tasteless food, all safely sprayed and filled with contaminants. You know, 'Bless us, O Lord, and these, thy gifts...'" - George Carlin, When Will Jesus Bring The Pork Chops?

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