Jay Hanson’s post to EconCritique@yahoogroups.com that “Economics is rotten at the center: The “Math/Logic Paradigm.” was passed on to me. He basically found that economics is a social construct, of ideals that can’t be discovered in nature, and prompted this [edited] reply.
Jay, I like how you aim at finding the conceptual errors. It’s a good clue that problematic assumptions are neither possible to prove or disprove, suggesting they are just social constructs or definitions, rather than principles of nature discovered by observation.
A still greater fault may be found in our expectation that the world follows our abstract models at all. That nature would follow our social ideals itself seems to be a pure social construct unsupported by observation. Our beliefs we construct of our own abstract ideals are quite unable to articulate many features of how the systems of nature work, so it’s a mystery we haven’t acknowledged it.
The art of steering, timing the world for the moment to act
On our largely ineffective defense of the earth
and of our own prosperity
My critical reading of events is that “everything’s on hold”, speaking broadly about our need respond to how we’re altering the earth. As I see it, for as long as I’ve been watching every “hopeful response” that gets made has been gutted, when someone needed to add either a prominent or hidden “business as usual” escape clause.
The IPCC climate mitigation protocols are an example, saying that the costs are not to reduce the long term rate of economic growth. It’s as if to say “OK we’ll fix the problem as long as we can keep multiplying the causes”. People always feel forced to concede to money interests and when pressed admit they don’t know if multiplying the economy’s physical impacts will keep producing multiplying problems for us and nature, as we’ve been watching take place.
Posts on this site preceding this one were transferred from my oldest blog, I called “Alongshot“, from its blogspot.com site. My main archive of blog posts is still at my original “Reading Nature’s Signals” blog, perhaps to be transferred at some point, and quite worth site searching for key words like this one for mentions of Keynes.
The move is really from one directory to another, on Synapse9.com, needed to upgrad the format to WordPress 3.1.3. The old blog site just got to be a problem.
My original systems physics research is still at The physics of happening, and scattered around Synapse9.com, along with my collections of images, reference libraries, introductions and writing .
My subjects and writing style, of course, will remain just as “primitive” (whether you saw that as a liability or benefit I leave to you) so the software upgrade won’t really change anything but the look and feel. ;-)
Designing a “dashboard” of “Outcomes and Metrics” for guiding worldwide efforts for our pulling back from the brink of of environmental catastrophe, to begin healing our relationship with the earth, is of some considerable importance, and a fascinating task. Below is one email exchange and links.
Applying the transformational vision of Four Years Go a work group developed a draft plan and resources for a comprehensive transformational approach you can find linked to our draft 4YG Dashboard (image below). We wanted to use a wiki to develop key indicators of essential changes in direction, of material, political and spiritual transformation, within 4 years.
Our starting points had been other models, like the Ursula Project’s metrics of sustainability and the European Commission’s MDG Goals Dashboard. We also looked at different PES (Payment for Environmental Services) approaches, and found them objectionable, and CSR (comprehensive sustainability reporting) models, but found them nebulous for our purpose, of defining concrete achievement goals. We ended up having difficulty deciding what to include, not understanding each other’s definitions, and with other 4YG work groups getting more attention. We seem to have accomplished a lot in terms of the conceptual design, though.
The draft 4YG World Transformational Dashboard
Mark,
You’re right, there still is a need for a more ethical ‘dashboard’ than the approach the financial community seems to be taking with “Payment for Environmental Services” (PES) instruments, and “Sustainable Performance Indicators” seemingly for monetizing all of nature for trading in new commodities markets, like repackaged mortgages are!
The Ursula Project model does show considerable effort in constructing a holistic measurement system. Their metrics are interesting too. They seem to rely on consensus value judgments, though, and not to identify physical boundaries or thresholds.
The more general message I keep telling people, though, is to become explorers of the real world that will be grading our exams… That likens our circumstance to not having paid attention in class, and finding a couple hundred years of back homework suddenly coming due.
Nov 2013 note: Since this popular post was written I’ve kept pushing my search for better explanations. It’s basically a very simple universal principle for how growth leads to stability. Every successful ‘project’ in nature, of any kind or scale, starts with using its resources to build more access to resources, expanding on itself, and then stabilizes by changing its strategy before it is overbuilt. It’s easy to recognize that turning point in one’s own projects or new relationships. It’s that point when you “have enough to manage” and can turn to bringing it to fruition, not taking on more for seeing good reason to secure what you already have. Taking on more for no reason would threaten what you began.
As a shift from taking territory to homemaking
Your self-investment strategy begins with searching for how to expand on a great beginning, using gains to expand your gains, and is uninhibited at first. It’ll only succeed if sensitive to the approaching need to stabilize and switch to “homemaking”, and creating a secure “niche” in the environment for what was built. What changes in the investment strategy is its “targeting radar” for the best use of its resources.
As the organization is built up it first prospers by expanding its control of its environment, creating new internal organization and overhead costs. The value of building by bigger and bigger steps (creating more overhead while depleting the availability of resources) naturally reverses. Then like homemakers who “see success in sight”, the radar shifts to caring for what they built as a whole and that “near environment” it needs to be secure. It’s a switch from taking territory and building bigger things, to caring for how things fit together and work smoothly throughout the whole, from aggression to caring.
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Mar 12 2010: Twenty-five years ago I learned that Keynes had come to the a similar conclusion I then had had, about how to achieve a stable steady state economy. At the same time I found out Ken Boulding, the leading economic theorist and leader of the General Systems Theory community, had been talking about it for decades after Keynes too. But their efforts had gotten culturally buried.
Because it was pure systems ecology, without any cultural roots in the business or finance community, his proposal seemed utterly radical. He first called it “the widow’s cruse” after a biblical story about Elijah giving an old widow an inexhaustible cup of oil and bowl of flower (1, 2).
How natural systems can remain profitable at limits to growth.
Keynes’ had realized that capitalism would produce an over-investment crisis when the environment started producing diminishing returns. At that time acting to stabilize growing investment, as his main work had been about, would destabilize the economy as a whole.
The real crisis would come from those with wealth continuing to increase their investment savings and so multiplying their investments and demands on the productive economy for growing returns. The Increasing demands on the non-growing economy would then undermine the economy’s profitability to the breaking point.
It was called “the fallacy” by everyone around him, though, and so it broadly remains considered today, by the few who know of it.
Sometimes it pays to recognize circular arguments with no escape, and realize one or more of the core assumptions causing that needs to be questioned.
The presently brutal and worsening job market in the developed countries is often discussed with a circular argument: that stimulus isn’t working so we need more, but governments run a risk of collapse if the jobs are not productive… That is now heard over and over, and it’s worth looking at it as painting a circle of common assumptions that everyone would like to escape.
The problem caused by economies becoming unresponsive to Keynesian stimulus was actually brilliantly studied by Keynes… His simple conclusion was that when stimulus provided by governments filling in as “spenders of last resort” didn’t work then investors would need to take that role, even to the point of ending the accumulation of investment to make economies physically sustainable. The assumption that is not variable is that we live in a finite world. Continue reading Switching the “spender of last resort” when government goes broke…→
Yes, the overweening influence of corporate lobbyists has effectively neutralized policy and confused the public debate on our most serious problems. Yes, the capitalistic system favors short-term concentrated profits over long-term public good. And yes, the simple human preference for happy talk over sad stories plays a role in our denial. The real problem is much more pervasive. Those actors cannot explain more fundamental questions:
Why has our economic theory failed us?
Why is the reality of climate change so hard to accept?
Why does climate change dominate public dialogue while the more proximate threat of peak oil remains far off the radar?
Why do we have such resistance to change?
Why would anyone ever think Dubai World was a good idea?
Why is talking about population control — arguably the only real way out of our predicament — taboo?
Chris,
The issues you raise (12/11/09 “Energy and Capital”) are rather close to what I’ve used as conceptual levers for understanding the deeper problem for some time. The simple part of our cognitive difficulty is fairly easy to state and understand I think. Continue reading Real Solutions for “our change of life” crisis→
If we could choose in this moment to will one thing, that is to say, to take a single step along a new path to a sustainable future (recognizing that one step will be only the first of many more to come), what would that step be? Other ways of asking this question are, “How do we take the first step forward in a new direction? What does taking that initial step look like? Precisely what first step is required to begin anew?
Steve,
Any new path appears to be a learning process, usually one we may have already taken many steps on but don’t see it. At the beginning of a learning process there’s a period when all you seem to have to show is your mistakes.
It’s those loose ends that you eventually find a way to connect. The path is through the unexpected connection of loose parts, so stay open to questioning . It would help things if more people were willing to question their own beliefs, though. Not knowing which ones are truly reliable, and which beliefs “just ain’t so”, is one of the main problems. Continue reading To end the “rat race” – Chasing our own tail & falling behind→
Hi Phil – it is a critical point you make. Efficiency has to be a core part of the response, but what is lacking are the other measures to prevent the rebound effect of increased efficiency on resource use. What are your thoughts on what these might be? John
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John,
Right, that’s the rub. We need to efficiently use the earth, but at the moment our efficiencies are being used to multiply our uses of the earth. Our most popular mental failing in that regard, though, is seeing the obvious “dumb question” that raises, and then not doing what you just did, asking it.
(1) 