I think I will get me this book. Years ago I penetrated into economics, quite broadly, and deeply, but since 1) a career as a professional economist, or any professional, did not work out 2) I did not have the impression that I could reach the innermost invisible core of the entire discipline right then 3) other things came to my mind, it went off my radar, so maybe I should brush up and move on now. Maybe now some things come to my mind about economics and how it is situated, and mirrored, within the Welträtsel. That will feel good.
They say economics is a dismal science but this is due to its nature which is about predicting presumably rational behaviour, or events happening along a rational trajectory, within a complex environment. Predicting unfolding of rationality is (more or less) a complicated problem i.e. it is difficult to solve but it can be solved and a more or less definitive, finite solution can be given. A complex problem, by contrast, can never definitely be solved and is infinite, it can only be handled by trying to take everything possible into account and to be ever open to accept the seemingly impossible and to see everything as moving objects and to be quick to readjust. To tackle the complicated is a matter of a formalised language, but the complex probably can never be translated into a formalised system, and the ability to handle it will more or less remain an artistry than calculus (see e.g. Dietrich Dörner´s „The Logic of Failure: Recognizing And Avoiding Error In Complex Situations“). That interplay of complicated problems situated in a complex context makes economics an actually very difficult science which actually needs to be learned. It cannot be easily understood per se although, when you are somehow intelligent, it seems to be this way, creating and maintaining an illusion (which is resemblant to that what in psychology is called the Dunning-Kruger effect). Much within it cannot be drawn from logical conclusion or fluid intelligence and much of it is counterintuitive, lessons have to be drawn from practical experience and from history, i.e. as an economist you also need to have crystallized intelligence, through accumulation.
Economists are, practically, fond of calculus, and the critics of the (mainstream) economist branch mock that they are trying to do a kind of physics and put upon a physicist´s approach upon that which is actually the social realm, which can, therefore, „never work out“. That is, then, the ignorance of the crititics of economics which also never works out and usually comes in with the same, or even more pronounced, arrogance they – rightfully – attribute to the branch of mainstream economists. In an act which is actually an act of despair mainstream economists try to come to terms with an imperfect world by modelling a perfect world in which, then, law of „physics“ would apply. Herein they can offer perfect solutions. But in reality you always have imperfect situations and settings so that you practically would have to model second-best options. And it is very difficult, if not – ever – impossible to model second-best options. Much of the dismal character of economics can be attributed to that. In another light, as is noted in the article, economists often seem to be more concerned about the internal consistency of their approaches than of the external consistency and such „mentalities“ create path-dependencies along which problems generally are seen and tried to be tackled.
A practical dismal aspect, given the capability of the human intellect, is that in order to understand economics you have to get familiar with all schools of economic thought since they all contain truths, as well as errors. And when transforming those doctrines into economic policy it is, in addition to that, situational of what may practically be a truth or an error, respectively a right or a wrong approach, which is why policy makers should rather look for an appropriate approach which should be open to some incrementalism. That is to a good deal even beyond the capability of the more extraordinary minds. Keynes said that an ideal economist is so rare because she would have to combine such multiple and diverse intelligence traits that they seldom meet inside one person.
Keynes himself proclaimed that class struggle would find him on the side „of the educated bourgeoisie“ which reflects that economics is to a very high, actually abnormal, degree an ideological battleground, reflecting, of course, also the difference of interests within the social realm. In order to understand economics you not only have to be familiar with all economic schools of thought and their rights and their wrongs, but you have to try to sort this all out free of ideologically constrained epistemology. That is also difficult for humans. The most comprehensive and maybe greatest single economist, Karl Marx, was an ideological fanatic (not without reason, however). Therefore Marx was far less intellectually productive in the second half of his life where he presumably ruminated whether his architecture might not be too narrow or maybe wrong at all, without, however, being ready to draw any conclusions from those ruminations.
(After writing the voluminous Grundrisse der Kritik der Politischen Ökonomie in only some months because he was expecting a major crisis of capitalism impending with it more or less signifying the great kataklysm of capitalism per se, and then seeing that an economic downturn actually came but, in reality, rather passed by like a cloud than confirming his intellectual sentiments, Marx became to be much less productive as a thinker. He wrote on Capital, to not ever complete it, although the main ideas for Capital had already been outlined in the Grundrisse. He contemplated whether, for instance, not class struggles but rivalries between nations could be the prime mover of history. In general Marx had important and illuminous insights which will be here to stay forever and he enriched our understanding of multiple things, enabled a more complex understanding, but actually never got the essence of anything right, neither of capitalism, nor economics in general, nor of society, of man, of religion, of ideology, of history; and the sophistical concept of the commodity fetisch he replaced with an unrecognized „capital fetish“ bewildering the anticapitalists. (Marx´ and Marxism´s system of thought is constantly oscillating between an open, dialectical one and a closed, finite, doctrinarian one, reflecting that as an internal inconsistency of Marx himself.) For instance I guess that if there is any prime mover of history it will be technological progress, but we don´t know how technological progress translates into the making of distinct social realms and what form class struggle or relations between nations will take. I will write a note about Marx and Marxism and, I guess, a second note about the concept of class society and class struggle. To outline the general argument of the second one: Marx proposed a dialectics, actually some kind of hydraulics in the evolution of society, along the line of class struggle. You have the development of the productive forces, creating a mode of production, and within the mode of production you have the members of classes acting as agents of the reproduction and finally the transformation of the system, resembling actually a structural functionalism with internal dialectics which will fuck everything up (i.e. a meta-structural functionalism or so). Seeing that such a perspective is not globally appropriate Marx then spoke of an Asian mode of production which obiously does not work along those lines (so easily). Wittfogel made an attempt how to tackle the problem of the Asian mode of production and that of the evolvement of societies in general, Jared Diamond is a famous example of a holisitic approach upon the development of societies and economic systems in our time #alwaysremember #neverforget. The concept of class society however seems to imply that classes are a reflection of something that is inherently productive. But when you look at many societies social stratification does not seem to be insanely dialectically productive with the ruling class or the elite being more or less only extractive based on social relations which are clientilistic, and they are in a deadlock for centuries or maybe forever; see e.g. Acemoglu/Robinson´s „Why Nations Fail“.)
I have read hundreds of books, papers, essays on economics, international political economy, globalisation studies, economic history, and development economics. For random reasons Porter´s „Competetive Advantage of Nations“ comes to my mind at the moment. It contains studies what (industrial) strategies have made several, and distinct, nations economically successful. It is somehow strange that the question about the benefits or fallacies of infant industry protection is hardly ever properly adressed in modern day economics and its textbooks, where infant industry protection is disfavored although successful Western and Asian nations relied on it, whereas, granted, in other nations it was a failure (or something resemblant to a failure). Well, the secret to successful infant industry protection lies in protecting the national infant industry from competition from the world market but not on the domestic market. Because of competition on the domestic market infant industries in successful nations increased their productivity and became therefore fit for competition on a global scale, whereas in Latin American or African countries infant industries were also protected from competition on the domestic market and therefore did not get very far. That is a key message of Porter´s book. I remember Keynes´ „General Theory“ to be badly written and not easily accessible. Hyman Minsky somehow always says the same. The time when I was obsessed about economics was the time when Kindleberger died. Kindleberger died in 2003 and I studied economics for my doctoral thesis which I completed in 2004. In 2005 I wrote a postgraduate thesis „Problems and Perspectives in Contemporary World Order“ where I tried to discuss all international problems of our time on 50 pages, and on p. 27 it says: „Nevertheless, one should avoid too optimistic thinking concerning the unlikeliness of serious economic trouble the USA might slip into at almost any point of time. Too many are the sins of carelessness within the American economy: saving rates are low, the sectors of the „old economy“ are relatively unproductive and at the real estate market a major bubble could burst.“ (I was familiar with such things because they have been frequently reported in, for instance, The Economist magazine but no one, apart from a few like Robert Brenner, took the warning signs serious enough, including me.) After having written the thesis I found it superficial, neglected it, became depressed about it, but of course my supervisors also never really understood what an omega mind I carry, respectively did not care. I also did not understand that I carry the omega mind back then since having the omega mind means permanently falling into the abyss and being somehow devoid of orientation as well as ususally operating at such a high level of abstraction that what the omega mind ejects then is in danger of being mistaken as „practically“ useless. The omega mind is actually not easy to understand, due to its complexity. People like me are seen as „intelligent, but strange“, and therefore neglected. But we are not strange. We are hypernormal. This is not very well understood about us. However it is true our proper place are not the institutions but is in the twilight zone. Jenseits des Gradienten. The omega mind is not academic and does not fit into disciplines, is also not interdisciplinary, nor transdisciplinary, nor a-disciplinary and is also not interested in doing complexity studies, it tries to establish a productive mimesis of the all seeing eye. And communication is impaired between the omega mind and other minds. Yet we will shoot back. Behold.
A good book about a critical assessment of economics is the one by Amitai Etzioni whose title I cannot remember and cannot find now on the internet.
I have, however, never read Adam Smith. #theroadahead
I have bought an old textbook about industrial economics at a cheap price at the university some years ago but still not have read it. Same thing goes for the big bad book by Kahnemann. I have, however, read Thaler and Sunstein´s book „Nudge“ about behavioural economics.
This week it came to my mind I also want to write a note about the „Dostojevski Idiot and the incompleteness theorem within human morals“. As I have mentioned the concept of mimesis I came to remember that I also want to finally read sociologist Gabriel de Tarde who based his grasp on society on a concept of mimesis. He is not very well known but was one or the other time mentioned by Deleuze and Guattari; at his time he was overshadowed by Durkheim as well as modern French sociology is overshadowed by Bourdieu. I have read some Bourdieu, but no Durkheim so far.
My somehow sincere penetration into economics has resulted in that I find myself to have practically nothing to say about economics respectively about economic affairs. That is too difficult. I would need to study a lot about every case until I feel ready to say something about it. Everyone on Facebook for instance said something about Greece, notably the referendum triggered by Tsipras a while ago. Yet in the case of Greece it was difficult to see through the fog and to get what information presented by different channels even was correct and reliable, and because 1) I was not responsible for the situation 2) I cannot do anything about the situation I did not engage a lot about the Greek case; but I checked out that Leela Papadioti from Greece who in the World Genius Directory is listed with a 180 IQ issued a statement at the day before the referendum in which she very thoughtful, non-triumphant, trying to be as objective and unideological as deemed possible to her made an assessment (in favor of Tsipras), admitting that the situation is troubling and confusing; whereas people with IQs much lower than that all seemed to know so well what should have been done, in their usual demeanor to make Greece, and everything else, a toy with which they play in their ideologically motivated games. – With an eminent IQ score one should become eminently rational, at very high IQ levels hyper-rationality should come into being. That means an ever reflexive or meta-rationality and being unpersonal yet intellectually highly involved and emotionally sympathetic in assessments, like e.g. Einstein or Wittgenstein exercised. Viewed from the outside, hyper-rationality appears like overthinking, which is sometimes ridiculed by people as well as by overthinkers themselves. But without overthinking nothing would have ever come into being at all and we would still live in the stone age, not discussing the Greek case. Thinking IS overthinking. As anyone can, within certain ranges, be rational, everyone can be hyper-rational. Be like Leela. I also asked Evangelos Katsioulis, a Greek who probably has the highest IQ in the world (maybe around 200), about his assessment of the referendum, but he did not reply.
Book review: Michel De Vroey and the problems of macroeconomics
„The master-economist must possess a rare combination of gifts …. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must be entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician.“ – John Maynard Keynes