I would still maintain that science will make increasing inroads into our understanding of economics. And within both "strands" too -- the mechanistic (overall production, distribution, patterns of unemployment and trade, etc), and the human.
No-one on FW has yet countered my suggestion that the mechanistic aspect will not be sufficiently analysable or understood until we have a currency system that has constant purchasing-parity across all countries. This can be either one world-wide currency of known and constant value (that is, a dependable human unit and also a truly scientific unit of measurement) or the frictionless exchange of individual currencies (that is, national currencies not being interfered with by politicians or central banks). My case is weaker, of course, in the more complex area of human nature and individual decision-making (and also of collective "fashions" of decision-making that occasionally sweep over us, as in stock market booms and busts). However, I've mentioned some scientific disciplines such as neurophysiology (which, inter alia, already goes far to explain the degree of selfishness that we each possess -- the "pleasure/pain centre"), anthropology (which will increasingly illuminate the evolution of "social genes" within us) and also game theory (the pay-offs that each of us allow ourselves and others to have in prescribed situations). As regards game theory, a most interesting article appears in this month's Scientific American, "The Economics of Fairplay" by Karl Sigmund (University of Vienna), Ernst Fehr (University of Zurich) and Martin Nowak (Princeton Institute for Advanced Study). They describe two games in particular which have both been studied and experimented with over several years -- the Ultimatum Game and the Public Goods Game. It is the Public Goods Game which is highly illuminating as regards welfare policy. I won't attempt to describe the set-ups here but the main result of this game (as with many other games studied) is that the human individual is not completely selfish (as classical economics supposes, or at least assumes for the sake of simplicity) but has a strong and enduring capacity for altruism. However, the Public Goods Game also shows that unless participants are able to punish those who are malingering or who are greedy, then support for co-operative endeavour falls off very steeply -- and everybody becomes greedy over the longer term. The ability to punish depends, of course, on the participants being able to know the other participants, or at least their strategies. This is now beginning to explain why the Friendly Societies of 19th century England, and whose local voluntary organisers were locally based, were fully aware of malingerers (the "undeserving poor" of Victorian times) and were not afraid to discriminate when giving help to those falling on hard times. The Public Goods Game is also beginning to explain why, in England at least, one million people (and probably nearer two) of working age who are fit and available for work, don't take jobs for one reason or another (e.g. those who have 'doctor's certificates', early 'retirees' who prefer not to seek another job, etc) and are then supported by the rest of us. (Indeed, the total number of National Insurance claimants is several million more than the total number of people who are at work or who have ever worked in their lifetime.) In short, we have a non-localised system of welfare which is therefore prone to massive abuse. The important point, however, is not the financial cost of this. A rich nation like England can easily support 1 to 2 million lead-swingers. The point is that all those in work are aware of individuals who not in work but who are rooking the system. The Public Game Theory shows very clearly that when this happens widespread demoralisation takes place and the population in general becomes more abusive and selfish. We all make increasing claims on the system. And this, of course, is exactly what is taking place in our public services in England, and mediated by a very large number of other people (e.g. bureaucrats in health and social services) who have an interest in maintaining the status quo -- indeed in its further deterioration. How much of this is happening in other countries is not for me to say but, from what one reads, and human nature being as universal as it is, I would imagine that the "English disease" is pretty widely spread in all developed countries with state welfare systems -- and the more distant and cetralised they are, the worse the abuse. For those who are prepared to allow that scientific experimentation into human nature can, in principle, be as productive as in other mechanistic areas which have hitherto led to a cornucopia of consumer goods in the last two centuries, then I would strongly recommend the reading of this article. Keith Hudson __________________________________________________________ �Writers used to write because they had something to say; now they write in order to discover if they have something to say.� John D. Barrow _________________________________________________ Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] _________________________________________________
