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#304560 - 12/22/17 12:13 AM Heretics welcome! Economics needs a new Reformation
NW Ponderer Offline
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Carpal Tunnel

Registered: 09/09/11
Posts: 16236
Heretics welcome! Economics needs a new Reformation - Guardian, Opinon.
Quote:
Economics needs its own Reformation just as the Catholic church did 500 years ago. Like the medieval church, orthodox economics thinks it has all the answers. Complex mathematics is used to mystify economics, just as congregations in Luther’s time were deliberately left in the dark by services conducted in Latin. Neoclassical economics has become an unquestioned belief system and treats anybody who challenges the creed of self-righting markets and rational consumers as dangerous heretics.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304576 - 12/22/17 03:12 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
logtroll Offline
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Registered: 04/26/10
Posts: 8888
Loc: New Mexico (not old Mexico)
_________________________
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#304581 - 12/22/17 07:06 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
NW Ponderer Offline
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Carpal Tunnel

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Thanks, Log. What I hadn't realized is that my entire post did not post. (That link was included in it). I think I had a device crash as I was composing it, and sent what I had and forgot to go back.

I'm sorry there hasn't been more discussion of this. Because of the passage of that abomination of a tax cut, we are going to see, in spades, what traditional economics has wrought. It is not going to be pretty. We SO need to rethink our economics, as the status quo ante is disastrous. Thinking economists have realized this for a very long time, but the sad reality is there are so few of them in the field.

It's been decades since I took my last formal economics class, but I have learned a lot since then about economics in the real world. It has been obvious for 50 years that the standard model doesn't work, yet policy makers and academics stick to it like duct tape. I suppose this is what Copernicus and Galileo had to contend with in their day, too.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304582 - 12/22/17 07:34 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
chunkstyle Online   content
journeyman

Registered: 10/02/07
Posts: 987
Given the creative financial investment products and similar hi-jinks coming from financial institutions there seems to be a certain amount of creativity from the graduates of these economic schools NWP.
Why do you think there is so little imagination at the schools?


Edited by chunkstyle (12/22/17 07:35 PM)

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#304583 - 12/22/17 07:53 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
NW Ponderer Offline
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There is a great mythology that has arisen about economics. The first question, really, is how does one define economics? Perhaps it is best to identify what it is not. It is NOT a science - although scientific principles can be applied to it. Painting is not a science, yet scientific principles can be applied to the application of paint to canvas - color, proportion, the interplay of perception and light. It is not a mathematical system, although mathematical formulae can be applied to understanding it. It is certainly not precise. Its closest analogy would be a social science. It provides theories of behavior that can be tested in the real world, much as psychology and sociology do. Economics is not a political system, although there is no question that economic theories drive political decisions, and many economists approach economics as a political tool.

What I like about the "33 theses" is that it approaches the various effects of economics. Economists tend to think of economics as a stand-alone. It most assuredly is not. It is a subset of considerations of human behavior.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304584 - 12/22/17 08:13 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
chunkstyle Online   content
journeyman

Registered: 10/02/07
Posts: 987
Well it's gratifying to know that the long suspicion of the 'invisible restorative hand of the markets' is more akin to religious thinking than some kind of observational truth. It has always bothered me that there are so many adherents to economic schools of thought like differing denominations of a church, each having a certain disconnect with the historical reality. The Austrians, Randians, neoliberalists, etc...
I will try to keep your description of economics in mind, NWP, the next time I lissen at an economist. There does seem to be a fragmentary realization that all is not well with capitalism/consumerism. The Occupy movement threw a fear, the video production of 'The Story of Stuff', The Guardians many articles criticizing modern capitalism or Thomas Frank's polemics, etc. Maybe this Economic Reformation will gain traction out there. I have shared it on social media where it's gaining some lookey-loo's.
A timely post during our most engorged holiday celebration.


Edited by chunkstyle (12/22/17 08:16 PM)

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#304585 - 12/22/17 10:06 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
logtroll Offline
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Registered: 04/26/10
Posts: 8888
Loc: New Mexico (not old Mexico)
I think this movement has been swelling for several decades, just not amongst the academicians of economics. I have posted alternative approaches to economics many, many times here, usually without stimulating a lot of discussion. That is mostly, I believe, due to the fact that any economic reformation is intimately tied to a cultural reformation, and we are far too entangled in the current system, generically called 'capitalism', and cannot easily escape it without abandoning a plethora of real and imagined risks and comforts. And it doesn't work for a person here or there to attempt it solo, because you can't really have an economic system without enough parts to make a 'system'.

I doubt that we, as a culture, will consciously choose to drastically alter our economic system intentionally and sincerely. But I have little doubt that our current system will collapse. My thinking is that as many of us as possible should try to be ready with a viable alternative when the need arises. To prepare for that requires learning to think easily in a new way, so that the changes will not seem foreign and incomprehensible when they force themselves upon us. The 33 theses may be useful to that, though I wouldn't think that they are the starting point.

The starting point is much simpler - the triple-bottom-line. We need to practice valuing all three profit motives, not just the money one. We need to learn to trade in environmental benefits and social benefits with the same facility that we trade money. And we need to question, and perhaps come to despise, economic schemes that value only money (Bitcoin comes to mind, among many other 'financial products'...).
_________________________
"You can't fix a problem until you understand what the problem is." Logtroll

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#304587 - 12/23/17 01:06 AM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
NW Ponderer Offline
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Carpal Tunnel

Registered: 09/09/11
Posts: 16236
Macroeconomics has become the bastion of charlatans and prostitutes. There is no moral code, there. It is merely an opportunity for making scads of money.

Financial markets are no longer the engine of commerce that they once were, but are "fake news." - or fake economics, as it were. Rather than providing grease for the use of capital (investment in things), they have come to represent themselves as a thing in an of themselves. With money you can make money. Think about the derivatives markets that were created to hide bad loans and "monetize" them. That was, pure and simple, a scam. This tax bill is, likewise, a scam. It is created solely to give cover to the economic rape of the populace. There is no legitimate economic purpose for it other than shifting more money to the monied. Both Adam Smith and Franklin Roosevelt warned against this.

Log, you have, and frequently, urged a rethinking of economics, a position I heartily endorse. Economics, as it is currently practiced, ignores the impact of commerce on the people and the environment. Theses 5 and 6 address that directly:
Quote:
5. The nature of the economy is that it is a subset of nature, and of the societies it emerges within. It does not exist as an independent entity. Social institutions and ecological systems are therefore central, not external, to its functioning.
6. The economy cannot survive or thrive without inputs from the natural world, or without the many life-supporting systems that the natural world provides. It depends upon a continual through-flow of energy and matter, and operates within a delicately balanced biosphere.
An economic theory that treats the natural world as external to its model cannot fully understand how the degradation of the natural world may damage its own prospects.


The Republican party does exactly the opposite of what a government is supposed to do. Our Constitution makes clear that its purpose is "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity" - not use the mechanisms of government to enrich the rich and punish the less affluent. We have banks to do that for us.

One of the biggest problems we, as a society and a country, have is economic ignorance. We deliberately fail to educate the masses to how economic activity works.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304590 - 12/23/17 03:03 AM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
chunkstyle Online   content
journeyman

Registered: 10/02/07
Posts: 987
As a layman that started fending for ones self in the mid-eighties, my impression of economics has been an ascending stair of exploitation. Our social organizing principle of conspicuous consumption serving to signal to others our station in life. The desire to 'rise' in society creates the demand to move product. Any criticism of this system is met with derision and scorn. The economic wheel demands fealty and criticism of it is punished this way. Status quo is maintained and a lesson is observed by others who might have an impulse to question the 'system'.
I think these culture wars might be proxy fights for the economic status quo being questioned or challenged. Does economic theory study the conflict between the gun manufacturing industries benefitting from another societal tragedy facilitated by their products? Creative destruction?
It is odd that something that impacts our life in such a meaningful way isn't given serious treatment in our public education but then that could be applied to a lot of subjects. History comes to mind.

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#304604 - 12/23/17 07:34 PM Re: Heretics welcome! Economics needs a new Reformation [Re: NW Ponderer]
NW Ponderer Offline
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Carpal Tunnel

Registered: 09/09/11
Posts: 16236
Again, this is akin to the Catholic Church's hold before Martin Luther. They kept the masses ignorant so They could control the flock. They taught only what they wanted to be heard from the Bible, since most couldn't read, especially Latin.

Translated to economics today, academia doesn't WANT average Joe to understand. If they did teach "economics", it would be supply-side dogma. It wouldn't be balanced or rational. Think about what is taught in business school now.

The US is about to be taught a huge lesson in silly-side economics. Unfortunately, the lesson will come too late. Here's my prediction: this next year markets will soar as Dow companies get a huge influx of cash for nothing. People will THINK the economy is doing great because they've been conditioned to watch stock markets for clues. In the meantime, real wages will continue to stagnate, benefits will continue to be cut, healthcare costs will skyrocket, and the safety net will be under constant attack.

Those in the bottom 80% of the economic ladder will be hosed. And, it doesn't matter whether Democrats take Congress and the White House in 2020. The die is cast. The coup has happened. Raising corporate tax rates will "kill the economy". The deficit will be out of control. Republican donor coffers will be stuffed. In 3 years we won't recognize government anymore.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
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