From: Thomas Lunde <[EMAIL PROTECTED]>
>Excuse me for posting this on two lists, however in my opinion it covers
>the topics of both lists. As to Junk Economics, the question has to be,
>"Is this the result of economic theories and if so, what rational
>conclusion could be drawn about those theories?
MONSTROUS RUBE GOLDBERG MACHINE
In reality, the economy is nothing but a monstrous -- energy gulping -- Rube
Goldberg machine to deliver "needs" to people. These people still "need"
the same things that people "needed" 35,000 years ago: shelter, health care,
clean water, clean air, and about 2,000 calories a day.
How did our society get so screwed-up? It's due in large part to education.
The human mind is not a general purpose computing machine as researchers
once thought. The best analogy for the human mind is a Swiss Army knife
where each blade is a problem-solving response (algorithm) to a specific
situation. Over many millions of years, through countless species, the
human mind evolved a package of problem-solving algorithms. For example, an
uneducated someone with extra food sees "starving person", and that in turn
triggers the innate "give food" algorithm.
But the economist is trained to associate every problem with same introduced
algorithm: "economic development" -- he only has one blade left in his Swiss
Army knife. In other words, education sharply reduces the economist's
natural problem-solving potential.
Consider the endless, brain-dead ecol-econ and futurework discussions:
"how can we fix the market"? To anyone who has more than one blade left in
his or her Swiss Army knife, it's obvious that we can't!
NEW SOCIETY
Step one is to break out of the money/market/advertising/consumption
death grip. A new society would NOT be based on money because it's
inherently unsustainable. It would be based on something like Hubbert's
energy certificates.
The key to the new society is to find meaning and happiness in
non-consumptive activities such as religion and the arts. With modern
technology, probably less that 5% of the population could produce all the
goods we really "need": shelter, health care, clean water, clean air,
and about 2,000 calories a day..
A certain number of "producers" could be selected and trained by society
to produce. The rest can stay home and sing, pray, and practice birth
control.
Wouldn't it be simple? AND nice?
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(Permission to reprint is expressly granted!)
"The Market" is simply "Too Cheap to Meter"
by Jay Hanson
BEFORE WE CAN proceed to the discussion of the laws governing
a market economy, such as the nineteenth century was trying to
establish, we must first have a firm grip on the extraordinary
assumptions under-lying such a system.
Market economy implies a self-regulating system of markets; in
slightly more technical terms, it is an economy directed by
market prices and nothing but market prices. Such a system
capable of organizing the whole of economic life without
outside help or interference would certainly deserve to be
called self-regulating. These rough indications should suffice
to show the entirely unprecedented nature of such a venture in
the history of the race.
Let us make our meaning more precise. No society could,
naturally, live for any length of time unless it possessed an
economy of some sort; but previously to our time no economy
has ever existed that, even in principle, was controlled by
markets. In spite of the chorus of academic incantations so
persistent in the nineteenth century, gain and profit made
on exchange never before played an important part in human
economy. Though the institution of the market was fairly
common since the later Stone Age, its role was no more than
incidental to economic life. -- Karl Polyani
...
Can "the market" solve the problems that it has caused? Can disease
cure the patient? Consider the analogies between the two technologies
"nuclear power" and "the market".
Confident of their ability to overcome all problems with the new
technology, policymakers simply KNEW [1] that nuclear power would
ultimately be "too cheap to meter". But this knowledge was not
empirical; it was "belief" based on false assumptions.
Besides driving some utility companies into bankruptcy, it now appears
that the United States will be lucky if the nuclear industry eventually
produces as much energy as it has consumed. [2]
We see history repeating itself! Most economists simply KNOW that the
market can be used to solve many or most of our environmental problems.
But economics is not empirical science; it is more "belief" based on
false assumptions.
For instance:
.A. The assumption that "Homo economicus" accurately describes human
behavior, and its corollary, that the media provides "information" rather
than "manipulation". This assumption has been shown to be false. [3]
.B. The assumption that governments can regulate "the market" for the
common good. But $650 billion of perverse subsidies [4] show us the
inverse is true: market interests regulate our governments.
In his new book, Douglas Booth sheds light on the problems of market
regulation by describing economic development in the Schumpeterian term:
"creative destruction".
According to Booth (and I agree), economists will never "get the prices
right" because economic development is not like the model encountered in
neoclassical microeconomic theory (which he describes as "competitive
equilibrium driven by price competition"). Instead Booth sees old
technologies replaced by new technologies which bring new environmental
problems and new "vested political interests" who oppose environmental
regulation.
"The combined economic and political cycle can now be summarized.
Specific industries emerge and grow, creating new environmental
problems. Inside interests, or, as Bosso (1987) calls them,
subgovernments, rule the regulatory process in the early stages of
industry development before environmental issues enter the glare of wide
public awareness. Problems are quietly solved by concerned parties and a
few affected politicians. When publicity brings environmental problems
to broad public attention, new interests favoring regulation organize
and win legislative and legal victories against industry interests. When
the issues recede from public attention and concern, the newly organized
environmental interest groups remain, but vested industry interests are
able to recover, and regulatory stalemate results. The regulatory war
continues, battles are won and lost, but the rate of real regulatory
change slows dramatically. Evidence for this process is provided by the
U.S. political history regarding air pollution, water pollution, and
pesticide regulation as well as management of the national forests." [5]
Booth concludes (and I agree) that economic-growth-as-we-know-it can not
be made “sustainable” and calls for a new type of “steady state”
economy.
History teaches us that "the market", money [6], and advertising are
technologies that can not be controlled for the common good. In truth,
they will all be largely eliminated from Spaceship Earth -- one way or
another.
Any incremental gain made by activist-martyrs throwing themselves in
front of bulldozers only displaces the problem slightly into the future
and makes the ultimate crash even worse. Logic dictates that one should
either change the fundamental nature of the system or simply take names
and wait.
After all, it’s just a matter of time...
Although it is an ancient fact of life, or rather an ancient
technique, money has never ceased to surprise humanity. It seems
mysterious and disturbing... It was a novelty more because of what
it brought with it than what it was itself. What did it actually
bring? Sharp variations in prices of essential foodstuffs;
incomprehensible relationships in which man no longer recognized
either himself, his customs or his ancient values. His work became
a commodity, himself a "thing." -- Fernand Braudel
Jay – www.dieoff.com
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[1] "The human mind evolved to believe in gods... Acceptance of the
supernatural conveyed a great advantage throughout prehistory, when the
brain was evolving. Thus it is in sharp contrast to [science] which was
developed as a product of the modern age and is not underwritten by
genetic algorithms." The Biological Basis of Morality, E.O. Wilson
http://www.theatlantic.com/issues/98apr/bio2.htm
[2] See Titanic Sinks at: http://dieoff.com/page143.htm
[3] See Lunatic Politics at: http://dieoff.com/page141.htm
[4] Natural Wealth of Nations, by David Roodman; Worldwatch, 1998;
http://www.worldwatch.org/pubs/ea/nwn.html
[5] p. 104, The Environmental Consequences of Growth,
Douglas Booth; Routledge, 1998;
http://www.amazon.com/exec/obidos/ASIN/0415169917
[6] See It’s the Money, Stupid! At: http://dieoff.com/page149.htm and
Opposing Globalization Could Justify Resource-Based Basic Income,
by Mary Lehmann http://dieoff.com/page152.htm
