You are right to separate the two strands.
However, my separation would be different.
The "science" you speak of I think is mostly mathematics. Mathematics is a great tool, but is never better than its premises. And they are often highly suspect.
These scientists have drawn around themselves a self consistent world which is not part of the real world. (As is said, Arthur, to an economist, reality is a special case!)
This is why they are completely unable to predict.
Of course they make a hundred predictions, one of which might be close. Then, as soon as one is shown to be close, they grab it and forget the other 99. This can be funny when you watch and listen. They are scared to pronounce precisely - in case they are wrong, and they are scared to criticize in case the other bloke is right.
And, of course, when things happen they didn't expect, they look learned and say "Fancy that!" - then point out that the unexpected was what they really forecast every time.
Both you and Steve are looking at the stock market - trying to guess what will happen next. Well, it doesn't matter - except to those who have money at risk. As I have analogized before - the stock market is like a thermometer. Just as the thermometer doesn't affect the temperature of the room, so the stock market doesn't affect the economy.
Yet the temperature of the room affects the thermometer, just as the economy may affect the stock market,
When the factories slow and stop, the stock market might properly reflect the fear and trembling of investors.
But, the economy in no way is affected by the stock market. Now, I am not talking about the real world where people invest in a new business, or something. The stock market may well serve as an agency for the transmittal of real capital (money isn't capital - why on earth don't the economists realize that?)
But, the glamor of the market is wrapped up in its ups and downs and the supposed importance of them Particularly the high end which acts like a collectible market with its attention to price and is uncaring of earnings.
I read a learned paper by a "scientist" in which he discussed the difficulties and problems of reducing inflation, and offered ways to attack the problem. Completely self-consistent, but utterly ridiculous.
Your second strand, Keith, is the "literary science". I suppose that's mine. However, you say:
*Economics also has to try and make sense of the oft-irrational
side of human nature that erupts from time to time. And, like the other
human sciences, economics can't be said to have made much headway so far.
The latter is much more complex. What do we make of it?"
The first thing is to disabuse ourselves of the notion that there is such a
thing as "human nature" per se. Our "human nature" is really an
accumulation of all sorts of different "drives", "instincts", "genetic
propensities", call them what you will.*
This is a real mess isn't it, Keith? A veritable anthill of humanity from which come the premises of mathematical economics leading inevitably to inadequate conclusions.
However, the Classical Political Economists didn't hide behind mathematical jargon. They looked at people and particularly at persons. And they hypothesized the rules that would apply to all the different "drives", "instincts", "genetic propensities". And as you know they came up with the two Basic Assumptions of human nature that described the behavior of everyone - every single person. You must know them by heart, now.
"Man's desires are unlimited."
"Man seeks to satisfy his desires with the least exertion."
(Gender sensitive people can change "Man" to "People".)
There again, you'll recall that the single complicated human being is not analyzed in Classical Political Economy. Rather we look at his connection with the economic world, which is the way he exerts. The manifest indication of the person (no matter how complex) is found in the way he exerts.
What other evidence have you?
Once we have people somewhat pinned down, we have to look at the equally complicated world - so complicated that it is impossible to think about, which doesn't stop people trying.
Well, as you know, the Classicals handled this enormous complication by cutting everything into three bite-sized logical chunks - Land, Labor, and Capital. Of course, the names don't matter - the concepts do. And to use these concepts scientifically, you must define them. That's putting a fence around them. Defining a concept isn't easy - for nothing in one concept must overlap into another. They must be mutually exclusive.
You offered some other terms - but the names don't matter - though they can be appropriate. What does matter is what they mean. Are they as rigid as the Classical terms? Are they mutually exclusive? Do they fit together to make a whole?
We've talked about this before and had enjoyable discussions. Which sounds more like a meaningful science - the careful establishment of basics that we have gone through, or the use of mathematics with doubtful premises? Not to mention your constant plaint - the use of a value measuring tool that changes more often than the things it measures.
You speculate on the increase of our knowledge in "neurophysiology,
anthropology, game theory and the like" but all of them depend not only on the two Basic Assumptions, but also on the manifest indications of the human being, shown to us by his exertion.
Harry
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Keith wrote:
But, returning to Arthur's cry of pain about the writing of some
economists, the problem is really because economics is a double-stranded
subject.
I was tempted to compare it with DNA, but the metaphor isn't accurate
because the two strands are not complimentary. They don't fit well together.
One strand is of economics as a science. When we look at the mechanical
processes of production, distribution, employment and so forth, then
there's no reason why economics shouldn't be considered a science. I think
this will be greatly helped one day when money is able to be used as a true
scientific unit of measurement. That is, when money ceases to be the modern
(and, historically, recent) form of paper tokens of arbitrary value as
decided by politicians from year to year, or even month to month, for
populist reasons in one country or another. (One of the biggest dangers in
the forthcoming recession. Threatening noises are already being made
concerning Japanese attempts at devaluing the Yen [while pretending not to]. )
The other strand of economics is due to human nature -- that is, economics
as a "literary science" in much the same way as sociology, or psychology or
history is. Economics also has to try and make sense of the oft-irrational
side of human nature that erupts from time to time. And, like the other
human sciences, economics can't be said to have made much headway so far.
The latter is much more complex. What do we make of it?
The first thing is to disabuse ourselves of the notion that there is such a
thing as "human nature" per se. Our "human nature" is really an
accumulation of all sorts of different "drives", "instincts", "genetic
propensities", call them what you will. As a species, we are the product of
evolution which has made many huge twists and turns throughout the last
3,000 million years according to vast geological changes and, often,
dramatic climatic changes caused by accidental hits by large asteroids or
eruptions of super-volcanoes.
All the life-forms at present on earth are the results of particular
conditions which existed right up to the time when they reached their
'final' form. The DNA of every species is a sort of layered cake or
sandwich, the result of all the previous environmental regimes which
occurred previously. There's no rhyme or reason to any of our "natures".
None of us are unified -- man least of all.
We, as the most advanced species (it seems), have the longest evolutionary
history behind us, and our "nature" is correspondingly more complicated
than most. Understanding all this in a fairly balanced way is just about
the most difficult intellectual task there is. I think this will gradually
make more and more sense as the "literary sciences" already mentioned
become more scientific -- as we know more and more about neurophysiology,
anthropology, game theory and the like.
Despite the slurs made about the subject, economics has always been of
interest to the greatest minds throughout history from Aristotle onwards.
And not only philosophers. Some of the greatest scientists, such as
Copernicus (one of the first monetarists), and Isaac Newton (when Master of
the Mint) have made big contributions. Although it still has many loose
ends which probably won't be resolved for decades, I think it's a
fascinating subject.
Keith Hudson
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Harry Pollard
Henry George School of LA
Box 655
Tujunga CA 91042
Tel: (818) 352-4141
Fax: (818) 353-2242
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