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.
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.
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.