Nov 30, 2011

Wanted: Worldly Philosophers

Economists should see the big picture – and ask the big questions. But in a recent oped piece, Roger Backhouse and Bradley Bateman argue that the profession has been so preoccupied with the trees that it lost sight of the forest:

It’s become commonplace to criticize the ‘Occupy’ movement for failing to offer an alternative vision. But the thousands of activists in the streets of New York and London aren’t the only ones lacking perspective: economists, to whom we might expect to turn for such vision, have long since given up thinking in terms of economic systems — and we are all the worse for it.

Read their piece here.


  • It seems to me that the basic problem of economical parity isn’t with any of the ‘isms: capitalism, socialism, keynesianism etc, but rather with the nature of capital itself. The market, a dynamic, non-linear, multidimensional system is based on a relatively static, one dimensional (hence linear) entity known as capital. It should surprise no one, therefore, that capital pools and stratifies, depriving many of those participating in the system adequate access. I believe capital should have a system sensitive variable ‘inertia’ or ‘density’ ensuring that equal labors are rewarded with equal gains, while, at the same time, embodying an investment potential for the more successful competitors. As a simple illustration, imagine a capital that would inflate as a function of its local density. Those who had little, would still have valuable little pieces, if you will, while the investment class would have an abundant investment resource. The ‘center of gravity’ of this system would remain fixed, and the overall system stable. This could never have been possible before the computer age. More advanced programming and modeling could make capital even more sensitive to market pressure and need than in the preceding example. The potential is virtually limitless, as the inherent dynamics of capital could be programmed to evolve over time., rendering the system sensitive to new technologies and social structures.

  • I am not an economist, but I agree “that the profession has been so preoccupied with the trees that it lost sight of the forest.”

    And, I am impressed by the values expressed on this website, and I eagerly look forward to more of your work! What you are doing is immensely important in this day and age. “Occupy Economics” is a great idea.

    As a graduate of a Big Ten engineering university with a degree in computer technology, who also took journalism courses, I have always sought deeper, comprehensive solutions for the problems that affect our daily lives. As a journalist, I seek answers to deeper questions over problems that have afflicted our humanity throughout our collective history. I’ve turned to resources in human development, psychology, anthropology, archaeology, religion/spirituality, history, politics, economics and physics.

    Since the 1980s, when the Ethiopian famine first drew worldwide attention and response, my question has been: Why in this century, with all the technology we now have, is such a tragedy of vast proportions possible? That question puzzled me even further as I learned East Africa is the land of our human origins, not just our hominid ancestors, but modern day Homo Sapiens. What does this crisis – and that of Somalia today – say about our global economic and political system, and its implications for our collective future on this planet?

    The more I focused on these questions over the decades, I came to realize that, as a Filipino-American, I could finally claim and honor a global ancestry that extended not only around the world, but deeply into our past, with the beginnings of our human origins. I wanted to help heal the problems of how fragmented our collective ancestors have been from one another, but to a greater world.

    I believe it is time for a new social paradigm that values human development and potential rather than the simple acquisition of “scarce resources.” I feel the current economic system reflects a scarcity belief system that – in the 21st century of technology and instant communication anywhere in the world – has become woefully out of date: Exploit scarce resources, “eat or be eaten”, survival of the fittest and develop ever more superior technology and weapons of mass destruction (including today’s exotic financial instruments).

    This is a survival mindset that served the evolution of Western Civilization as it emerged from the Ice Age and led to the “discovery of scarce resources” via military conquest, subjugation and colonization of the southern hemisphere – the vast majority with cultures that had never undergone the survival pressures of the four seasons.

    (From the point of view of those from the southern cultures, it’s as if Western Civilization is in overdrive, an extreme case of PTSD, post-traumatic stress disorder. Ok, now, it’s time to put down your weapons and “chill” a little bit. Why do you really need millions and billions of dollars you can never spend, even in 10 lifetimes? It’s a reality show in the making, like Hoarders.)

    It is only in recent decades through science and technology that have we attained what seems to be god-like knowledge of our beginnings; to witness the miracle of life at the DNA level, and the moment of conception; our true place in the universe; and the ability to destroy all life on the planet. And indeed, like the proverbial banishment from the Garden of Eden – we have yet to use god-like wisdom.

    We now have the ability to communicate anywhere in the world instantly and send resources anywhere overnight to avert the worse aspects of scarcity. For the first time in our collective history, we have the technological means to create a world that our ancestors never could, but have always wanted for us – to lead lives where we not only survive the elements and warring factions over scarce resources, but ones in which we and our loved ones can thrive in world that values our human development in order to create a world of true peace, stability and meaningful existence. In short, a world that gives our lives true meaning during our short existence in the universe.

  • Edward Gibbon’s The Decline and Fall of the Roman Empire reads like the morning newspaper. The military put down rebellions in foreign lands or waged civil war. The ruling class robbed the treasury while the praetorian guard assassinated the good emperors and
    installed their own lackeys.

    Recent history has demonstrated that while rewarding producers is a better system than feeding the idle, capitalism must be regulated to prevent the ruling class from enslaving the working class. Once regulation is compromised, the pendulum swings from democracy to oligarchy.

    Someone on this excellent website please to me how we restore economic sanity. I’m thinking
    the present institutions are corrupt beyond repair. Only by sidestepping the conventional
    financial system and creating an alternative counter system can any progress be made.

    What do economists think of BitCoin or some alternative currency?

  • It is interesting to see that there are a quite a few qualified economists on this site….and yet, Keynes did not have a degree in economics, and ofcourse Karl Marx was self-taught!!! Ofcourse, economic as an academic discipline has become something of a joke if we examine such sites as Toxic Textbooks, Positive Money, Institute of New Economic Thinking, Heterodox Economics, the work of Steve Keen et cetera, et cetera..

  • Not just Milton Friedman but academia played an active role in laying the foundation for the repeated economic crisis. And the way in which free-market fundamentalism has overwhelmed the economics departments of academia parallels the way in which neoliberal political economics has taken over at Johns Hopkins, Harvard’s Kennedy School, and Columbia’s SIPA etc.

    Look at the trustees, deans and heads of departments at the top universities. They are all beholden to or profit from the system they are busy reproducing.

    Is there a draft code for deans, department heads, scholars and university administrators that might steer and guide our country’s universities to a truth-seeking mission instead of one that serves the elite, the status quo, and power?

    • That’s a psoting full of insight!