Home > The Economics Profession > Individual rationality is the wrong starting point

Individual rationality is the wrong starting point

from Bruce Edmonds

Many economists used to assume that Economic Rationality (each actor evaluating possible actions in terms of predictions about resulting utility and choosing the optimal) is the right model for human decision making.  After Simon and others, this was moderated with various variations on that basic model (e.g. satisficing), or the introduction of various biases or noise. However this is surely starting at the wrong place – it is like saying bicycle wheels should be square just with slightly rounded corners to make them work. Surely, much better is to either (a) try to start from a model of rationality that more reflects how people actually behave or (b) try a wider variety of behavioural models.  Here, instead of taking an economic base, I consider what might be an evolutionary basis – what kinds of rationality we might expect given the evolution of homo sapiens

The “Social Intelligence Hypothesis” (Humphrey’s 1976, Kummer et al 1997 in this) tries to answer the question of exactly what selective advantage do our physiologically expensive brains give us.  In other words, why would a big brain (rather than, say, an ability to run fast or having big claws) allow one to survive rather than another entity.  The answer they suggest is that the crucial advantage it gives us is the ability to socially organise and act.  Thus a group of people can develop knowledge, technologies, ways of coordinating, social structures etc. that may allow them to survive within their own environment, such as the people of the Kalahari, or the Inuit nations in the North of Canada.  In other words a group’s culture (in the widest sense) allows them to inhabit different, specific niches (Reader 1980).  The ultimate survival value of inhabiting many different kinds of niche comes from the resistance this gives from unexpected catastrophes (such as an Ice age).  This hypothesis explains many of our characteristics: face recognition, a sophisticated imitation ability, language, fine tuned in/out group recognition, sensitivity to social context, social norms, etc.

If this view is correct then our social abilities are more basic to our cognition, and any individual ‘general’ intelligence a by-product of these.  In fact it means that any model of human behaviour that consists just of an individual and its environment is missing the point – it is not just Economic Rationality that is wrong but any model that looks at human behaviour from an over-individualistic standpoint.  It may well be that we have inherited simple learning and reasoning abilities from distant ancestors based upon feedback in terms of pleasure, pain or other simple indicators, but what is added in humans, our ‘higher’ abilities, has a social origin and scope.

[This view thus goes beyond Simon’s comments in the preface to “Models of Man; social and rational‘ (1957) which said in the preface that his essays “are concerned with laying foundations for a science of man that will comfortably accommodate his dual nature as a social and as a rational animal”. It is also beyond what is usually meant by ‘Social Intelligence‘ (which just means an individual’s ability to navigate the social realm).  However it is very similar to others, including: Paul Omerod’s vew of networked rationality (see talk on this but he is uncharacteristically polite about economics here),  that of ‘homo socialis’ (Lindenberg, Helbing), and Vygotsy’s view of intelligence.]

Clearly, we do not yet know what the best model of human thought and decision-making is – neither psychology nor neuroscience has yet determined this.  However, rather than clinging to a model that is clearly inadequate, insisting that it merely needs some adjustments, look to a variety of models with different bases.  Making models of economic phenomena when one is starting with the wrong basis is, at best, a huge waste of much research time and, at worst, misleading to all these policy makers who still take any notice of what their models say.  Let us start to look for the right shape of wheel to make our bicycles go.

[Appendum in the light of many of the comments below making clear a couple of things I might have just assumed. (1) the model of “economic rationality” has comprehensively empirically failed – the trouble is, it is more a “way of thinking” than a testable theory so that it can always be adjusted to make it seem right, but this is the point – Ptolemy’s theory of epi-cycles could always have been elaborated to fit observed data about planetary orbits, but ellipses are a much better starting point.  Contrary to the comments, cognition has not been examined to discover a “currency” of utility in our brains – again this is fitting facts to a flexible framework.  (2) of course individuals make decisions and learn as individuals, but using machinery evolved for a social purpose.  There is no such thing as a “general” intelligence, just intelligence adapted to particular situations, ours is well adapted for social coordination.  It is poorly adapted for individual intelligence, although does include a whole “rag bag” of abilities.  Following this, we did not evolve a general intelligence to cope with social life, but some quite specific abilities – hence the need for a rethink about the model of cognition used in economic (and other social) models.]

  1. Robert Locke
    October 12, 2013 at 6:35 am

    With this relentless assault on the assumptions behind the rationality on which economics is based in this blog, it is frustrating to see so many throw out the baby with the bath water by turning to social science in general for solutions to the “scientific” problem. Neoclassical economics has been considered the physics of the social sciences because it is the most “scientific” of them. There is not much credibility left there. But there aren’t any Nobel Prizes in other social science fields. The first time I looked at the subject for my 1989 book (Management & Higher Education Since 1940, p. 39), I wrote: “…the attempt to make the social sciences part of the new paradigm in management studies has been the most problematic, for effort to improve the scientific methods have not enhanced confidence in reliability very much. Professor Hubert Blalock, Jr. concluded after decades of statistical work that ‘the social sciences, lodged as they are between the natural sciences and the humanities, have almost inevitably become a battleground over the suitability of natural science models and approaches to the study of human behavior and social processes.’” (Basic Dilemmas in the Social Sciences, Beverly Hills, 1984, )

    The situation hasn’t changed, so why keep looking to social science for scientific models? I know that many of you have been trained in social science, because I see that you are not very good at dealing with specificities as to time and place. But study problems that are specific to time and place that real people are experiencing. You will end up with contested historical results, about which the researchers will argue, but at least we will stop endless, pointless, self-interrogation among social scientists about methodology and theory that is so eternally fruitless and boring.

    • bruceedmonds
      October 12, 2013 at 2:29 pm

      Just because I am pointing to the social roots of ‘higher cognition’ does not mean I am restricting its study to social science, far from it, and I completely agree about the sterility of much debate in the social sciences. Clearly it needs a combination of disciplines – an individual’s cognition and social interaction make much better sense when considered together.

      Whether cognition is primarily social in “purpose” and function is quite a seperate matter from the methods and approaches one uses to study it.

      • Robert Locke
        October 13, 2013 at 8:41 am

        An example of the need for specificity of time and place in our analysis is the current flap about “unions” at the Volkswagen plant in Tennessee. Most of the debates is about “fictions.” First a “Works Council” is not a union, and VW, which has Works Councils in all of its plants worldwide, with the exception of Tennessee is asserting the firm’s right to manage. Second, the anti-union people in Tennessee are not defending the rights of owners to run their firms. In the US we have had “managerialism” for some time, which means that the owners (stockholders) do not run the firms for the owners, but for the management caste, which is not necessarily an important stockholder in the firms they manage. We need specificity as to time and place in order to clarify these issues, not an endless repetition of old clichés.

    • October 13, 2013 at 2:00 am

      Robert, Good comments. In today’s reality, the individual itself may be the wrong starting point, whether rational (neoclassical) or irrational (Keynesian). If the individual really matters, then why do we have 99 percent of individuals being controlled by the one percent of oligarchs? Before one even talks about models, assumptions etc. one has to be specific about the problem in time and space.

      As you say, most discussions are “endless, pointless, self-interrogation among social scientists about methodology and theory that is so eternally fruitless and boring”. These discussions are far removed in relevance from the dramatic economic events which are unfolding before us and which demand economic interpretation and analysis (and not rhetoric).

      • Ken Zimmerman
        October 13, 2013 at 6:18 am

        So what you’re saying is the basic building blocks of our associations today are the controlling oligarchs (1% of us) and the controlled individuals (99% of us). If that is the case then the focus of economists should be on the economics arrangements this leads to and their consequences. If the actors involved have created this world you describe, then the economic arrangements they build-up should be consistent with this world. Are they? And if they are what does that mean for government, religion, law, opportunity, war, peace, etc? Also, does this the actors have constructed an economically determined world? Sound like interesting and important research to me.

  2. Ken Zimmerman
    October 12, 2013 at 10:33 am

    Bruce, Humphrey’s ideas are fascinating if somewhat disjointed. Let me propose that he actually got it backwards. The complexities of associational living lead to the evolution of certain types and forms of intelligences among primates. Among chimps and baboons this is where it stopped. However, human associations requires more to keep them going and make them durable. Chimps and Baboons literally spend almost all their time building and reinforcing their relationships. Humans have all kinds of devices, tools, etc. to increase the influence and durability of associational living. Economic rationality exits, individuals exist, learning exists. These are forms built-up over the long history of human involvements with all other actors, human and nonhuman. They are not necessary in any evolutionary sense but are results of living and interacting, mostly as ways to make sense of, or explain how humans “behave” and why. Some questions to consider involve the actual process of how and by which actors are these ways of living and understanding created.

    • bruceedmonds
      October 12, 2013 at 2:38 pm

      I do agree that Humphrey’s ideas were not very well thought out, but their re-statement in (Kummer et al 1997) was crystal clear. I also understand the argument that once social life starts, (social) intelligence gives further advantages, in a mutual and complex co-evolution of brain and social organisation. And of course I understand that individuals and learning exist (I do not think I ever denied this, nor would think of doing so) – in particular most higher learning for humans is social learning (from peers, parents, schools, books, blogs etc.).

      On the other hand, economic rationality may exist, but it is an exception rather than the rule, like elaborate planning – there are special circumstances where humans do something like this with some difficulty and needing supportive tools. However I am suggesting that it is not a sensible place to start if wishing to model human cognition – even when restricting consideration to decisions about the exchange or value!

      • Ken Zimmerman
        October 12, 2013 at 10:44 pm

        Social life doesn’t start, if you mean by social interacting with other entities, of all sorts. It’s the basis of everything from the most elemental living and non-living things on the planet. Of course these interactions shaped humans and the human brain. In that sense humans develop certain interaction, or social skills and actions. They learn how to show respect, friendship, fear, etc. They learn how they protect and are protected by groups of their fellows. However, these “interaction” skills and tools are not sufficient to explain how the enduring and widespread and often non-direct associations are built and able to survive. For that more permanent and forms of commitment and training are needed. In the 15th century for example Spanish and Portuguese explorers sailed years out of sight of Spain and Portugal. How could it be assured that they would return and not only return but bring the treasure they had found with them? Spanish and Portuguese government officials had ingenious ways to accomplish this. For example, navigation instruments so advanced that sailors could find their equal nowhere in the world. They also trained the ship’s Captains and Navigators in specific ways of sailing and interacting with one another and the foreigners they met along the way. This is not “higher” learning but basic problem solving, which has allowed humans to build associations that went further and did more than any reliance on just being social. Similarly, “economic rationality” is another example of basic problem solving. Humans had to find ways to get people involved in and creative about economic actions and exchanges. “Economic rationality” is one way to do this.

  3. Herb Wiseman
    October 12, 2013 at 3:23 pm

    People function at a more elemental level. “I want this. I will buy it or barter for it.” That it will eventually present a disposal problem for example is not factored into the decision-making. Many people do not think about where it will go in their office or house. “Want. Buy.” The niche argument is interesting but why remain in a niche when better options are known to exit? For example, if rationality were important in decision-making we would all live in California where it is warm and pleasant. I live in Canada and do not plan to move to California. Why do I and millions of others make that decision?

    Economics and PR have looked at what it takes to change those patterns in areas of other decisions and have had limited success. Why did we go with VHS (less rational) rather than BETA (more rational)? Marketing and power. Make it look like the trend and we all jump on board. Social factors and the culture matter more than individual psychology.

    Just thinking in print here. Probably nonsense! lol

  4. sergio
    October 12, 2013 at 4:58 pm

    No, it is not just “wrong” or “nonsense”. Those words are too innocent. Whole neoclassical economics is built on the concept of individual rationality. But why? I do suspect that whole neoclassical economics just serve to promote idea of individualism. In fact it promotes egoism and greed. Why do it needs to promote those qualities? Remember that greed is only a monetary phenomenon. Can money exist in society free from egoism and greed? No!
    So who is promoting those qualities? Those who controls money.
    Promoting egoism and greed on one side and control availability of money on the other are two ways to control society. Neoclassical economics just performs those two functions.
    Otherwise how could nonsense ideas dominate economics education and policies throughout whole world? Or may be you think they promote those ideas so desperately because they are altruistically wish us happiness? Or may be you think that one day neoclassical economics “discovers” that individual rationality is wrong concept?

    Paul Samuelson: “I don’t care who writes a nation’s laws—or crafts its advanced treaties—if I can write its economics textbooks.” (Promote ego and greed or addiction to money). They tell you “You want more money!”.

    Mayer Amschel Bauer Rothschild: “Give me control of a nation’s money and I care not who makes it’s laws” (Control availability of money). They tell you “We don’t give you more money”.

    If you think that promoting individual rationality is “huge waste of much research time and, at worst, misleading to all these policy makers”, THEY do not think so, because ideology always serves to benefit from promoting it. If you think that religion is the largest scam in history, you know nothing about neoclassical economics, yet.

    • Ken Zimmerman
      October 13, 2013 at 10:56 am

      “Individual rationality” as a way of life, and a way for economic transactions is not wrong, if you believe and tell others it is right. What’s the difference between “individual rationality” and “collective rationality” in terms of its supporters saying it is right and telling others it is right, except that currently the former is winning the struggle between them and the latter is losing that struggle. If you’re expecting to find an imprimatur for one or the other you’re going to be disappointed. I’m more interesting in trying to understand how the former came to win the struggle and what that leads to in terms of our collective ways of life.

      • Robert Locke
        October 13, 2013 at 11:46 am

        “What’s the difference between “individual rationality” and “collective rationality” in terms of its supporters saying it is right and telling others it is right, except that currently the former is winning the struggle between them and the latter is losing that struggle.”

        “Individual rationality” is winning only if you think the US-UK view of society is prevailing in the world. If you think the Anglo-US ways of behavior will not be accepted by the rest of the world, as the rest of the world grows in wealth and influence, “individual rationality” might lose out to “collective rationality.” The US can afford “individual rationality,” only because it is a great big country that is sparcely populated. A country like China, if it succumbs to “individual rationality” will collapse into turmoil and chaos. The jury is still out in this respect, but the Chinese government knows that it is sitting on a social powder key that will explode if the sort of divisions between the rich and poor that are prevailing in the US happen there. As for other advanced countries on the Asian Pacific rim (Japan, South Korea, etc. and in Europe), they have chosen a “collective rationality” much more than a “individual rationality.”

      • Ken Zimmerman
        October 13, 2013 at 9:44 pm

        Robert, all good points. If you are correct then it is the modelers who are wrong as they make models of economic phenomena that start with the wrong basis. As Bruce suggests this is, at best, a huge waste of much research time and, at worst, misleading to all these policy makers who still take any notice of what their models say. Per Bruce, we need to start to look for the right shape of wheel to make our bicycles go. The objective should be then to demonstrate effectively to all the actors involved that the “individual rationality” models leads as you say to turmoil and chaos. So is the problem in carrying out this solution that economists oppose it? Business leaders oppose it? US and other governments oppose it? Environmentalists oppose it? Let’s figure out first who opposes it. The next topic is how to change it, assuming you’ve identified and mitigated the opposition. We need a plan!

  5. October 13, 2013 at 12:57 am

    I see the book with Kummer’s piece is edited by Richerson, who pioneered in the 80’s rigorous math formulation of cultural evolution, beginning with biology. E O Wilson with Lumsden and Feldman and cafelliSvorza had their own formulations earlier.

    Richerson is quite good (except for me that he is on Templeton payroll).

    However, i don’t think there is any inconsistancy with the notion of rationality in econ. The only difference is nomenclature—-biological and cultural evolutionists see behavior as guided by fitness maximization, as opposed to utility. Richerson also basically uses H Simon’s more general concept of imperfect (bounded) rationality, and human use of heuristics and information obtained individually and socially via communication (which can include price signals, money, etc—-and these can be also seen as ‘goods’ which appear in the utility function—eg the price of learning economics, and its value). This really is not very different from ideas for social learning or ‘learning by doing’ in technological evolution, except he begins with genetics . The math is almost (if not 100%) the same—eg replicator type equations, recursions, stochastic differential equations, evolutionary games etc..

    Of course no one really knows where ‘utility’ comes from (sexual desire? advertizing?) nor biological fitness either, but you can get some ideas and also realize such evolutions can be erratic—dinosaurs and civilizations can thrive and then dissapear.

    • bruceedmonds
      October 13, 2013 at 12:03 pm

      The point was that ‘utility’ was probably not something with great cognitive reality. This is a classic case of confusing indicators (pleasure, pain, etc.) with goals. See writings of Elijah Migram for more on this.

      • October 15, 2013 at 2:17 pm

        I glanced at MIgram’s web page and see he has 2 articles on utility behind a paywall—so forget it. Also, my view is philosophy in general is as much a mess as economics, or any other field. (I am vaguely part of a philo group, which most recently dealt with defining ‘nothingness’ which leads to physics and logic for example–set theory, the vaccum…)
        I don’t know what ‘cognitive reality’ is; its just a word, like utility or fitness. (Just like ‘nothingness’). ‘Operationally’ (Percy Bridgeman, etc.) one can’t really distinguish between an ‘indicator’ and a goal’ (despite ideas such as Judea Pearl, Granger causality, bayes vs frequentism), though you can try.

        My point was that your suggestion for use of ‘social intelligence’ as opposed to ‘individual rationality’ as a starting point is really not much of a stretch or ‘new thing’. I mentioned Richerson (who edited that book) but it goes back to the 30’s with N Rashevsky, who interacted with H Simon, and studied social conformity. The idea is individuals learn from others, so there is no such thing as ‘individual rationality’ except in the most simple ‘ideal gas’ model (which has been updated to include interactions a la fluid dynamics and condensed matter physics). In econ, one has ‘interdependent utility functions’.. In biology, one has ‘group selection’ and group fitness versus Dawkin’s selfish genes and fitness.

        These to me are just obvious, mild corrections to the individual model—instead of a straight line, you allow breaks, bends, curves, multiple dimensions, surfaces. Of course, it gets intractable almost immediately you leave the flatland.

        Also, i think the utility maximization model is a fine start—except people got stuck there (reification)—partly because they realized the moment it got off the simplest case they were in the wilderness—so the idea was just to pretend it didnt exist.

        People do count their money, time and other assets, consider what they want and then allocate their assets given a set of costly options, in a locally rational way. Life is, in Gary Becker’s terms, a rational addiction, thank god.

      • October 16, 2013 at 2:07 am

        ishi, #16. You had me right up to the last paragraph. Sometimes people do count their money, time and other assets, sometimes they consider what they want and then allocate their assets given a set of costly options, in a locally rational way. Life is sometimes rational, sometimes calculative. At other times life is not at all rational or calculative. One of our jobs as scientists is to consider both and describe both, recognizing their differences.

  6. bruceedmonds
    October 13, 2013 at 12:00 pm

    I was definitely NOT contrasting individual and collective rationality as *choices* or alternative viewpoints/lifestyles. Yes there are alternative cultures that value these differently, and they are “competing” (in some sense). That is not the point here – my original point was addressing the question of how we might model the rationality of humans, in our theories about the collective phenomena concerning our social life (and, in particular, those parts concerned with the exchange, production, consumption, storage etc. of value). This is ultimately a scientific question rather than an ideological one (though it may be a while until we have the methods and data to sort this out).

    My point was that “Economic Rationality” was not the right basis for this, and speculating (supported by some arguments) as to what might be.

    • Ken Zimmerman
      October 13, 2013 at 10:11 pm

      Bruce, I understand what you’re saying. But you seem to assume in your beginning comments that the economic rationality most often used to model human actions is an “individualistic” one. That other ways of conducting economic transactions are disadvantaged in our modeling. You then suggest an evolutionary basis for modeling human decision making and actions. To do this you jump off from Humphrey’s and Kummer’s “Social Intelligence Hypothesis.” The notion of the “social brain.” As I said in my earlier comment I believe Humphrey got it backwards. Associational living lead to certain types and forms of intelligences among primates – social intelligences if you will. But these intelligences cannot explain what we see in human-involved associations. These are more durable and extensive than anything chimps or baboons can create. I suggested some of the tools and devices humans invent to make this possible. We really haven’t spent much time or effort studying these, being told over and over by social scientists, sociologists in particular that the naturalness of the sociality of humans is all the explanation we need. Wrong! Humans, in interactions with other actors built these devices and tools (from something as simple as calendars to something as complex as the Calculus) to use in creating enduring, dispersed, and activist (searching and wandering) associational structures. This is natural only in the sense that humans could have chosen not to do it. So there is no “best” model of human actions and associations. There is what humans choose to build up, its failure, and its rebuilding. This is about as real as it gets. Models of human actions and decisions are, as you suggest part of this process, and also attempts to translate the process for easier viewing and understanding.

      • bruceedmonds
        October 14, 2013 at 10:38 am

        I do understand what you are saying, and I agree about the weakness of the explanatory extent that sociologists are happy with (often they are just trying to assert some relevance for their own field). However, I am afraid that I reject the “blank sheet” idea of human rationality – yes it is extremely flexible and we can (collectively) develop very different sets of tools, ways of organising, cultures etc. however *how* this develops and the basis for this is not unconstrained, and thus it is the *basis* for modelling of human behaviour that needs to take this into account.

        We are pretty ignorant about what the best basis is, but this does not mean that some are not “better” than others (empirically). The economic rationality model has turned out to be pretty useless, the only defense being “well its ok as a framework, but needs X cludges to make it work” – this I directly attack, and suggest the need for a different starting point.

        Yes the economic rationality is hopelessly limited as a basis for understanding human behaviour, so I started with this as a target. However there is a deeper target here, that is more pervasive and more insidious and that is the conception of human intelligence that is focussed on the individual rather than situated and understood in terms of the group and its interactions. [Paul Omerod in his book and talk (http://www.youtube.com/watch?v=rBOJDIPE21Q#t=495) put this quite well but he is being uncharacteristically polite about the individualist model).

      • Ken Zimmerman
        October 14, 2013 at 12:20 pm

        Bruce, I understand I think where you’re coming from. But I’m still struggling to figure out why it’s necessary to have restraints on the ways and forms of human actions and thought. Is this a biological restriction? An historical one? Please help me out.

  7. Robert Locke
    October 14, 2013 at 7:53 am

    “So there is no “best” model of human actions and associations. There is what humans choose to build up, its failure, and its rebuilding. This is about as real as it gets.”

    Agreed, but there are parameters that human beings must respect. One is the natural environment. We must recognize that human beings cannot survive if the environment is so degraded by a system, say one based on individual rationality, that system must not be followed; another is the Malthusian problem of too many people, if a system, of defense, religion, etc. thwarts efforts by science and public hygiene to foster a system in which humanity can thrive, we need to oppose them. That is the modern message of Western Civilization in the past 500 years: that the aim of life is life itself, and our duty lies in this world to do all we can to foster this aim. If another aim exists, e.g.., that the aim of life is life after death, then if that manifests itself in ways that conflicts with the first aim, we need to oppose them.

    • Ken Zimmerman
      October 14, 2013 at 12:13 pm

      Its the fostering “…a system in which humanity can thrive” that throws me here. Humanity has proven adept at thriving under all sorts of economic, political, and educational systems, many of which were not pleasant to look at and had negative consequences for both humans and other actors. Picking the ones to oppose seems quite difficult to me. Maybe I’m missing something.

      • Robert Locke
        October 14, 2013 at 1:00 pm

        Picking the ones to oppose is quite difficult, because a constant self-education must occur to make sure that the ones you have picked or others have picked for you, really do constitute a system in which humanity cannot thrive. It is all the more difficult in an open world wherein people in ones own family marry Buddhists, Moslems,or even Republicans, and through interaction with you destroy the stereotypes that have been hibernating comfortably in your brain for a long time. In the confusion to arrive at a clarity that promotes humanity is tough but necessary, because for self and community an unexamined life IS not worth living.

  8. davetaylor1
    October 14, 2013 at 10:45 am

    Where to start? Robert is right on not looking to failed social science for models of scientific processes, but surely the end of that is not to leave social science based on Ken’s mistaken 1740’s beliefs about the nature of science which have caused its failure? The first fruit of Bacon’s proposal to take things to bits to see how it works was Harvey’s discovery of the circulation of the blood, not just out of curiosity but as a major contribution to the science of Medicine (He was in fact Bacon’s medic).

    Following Robert’s argument about looking at real events, in ancient Greece we had Pythagoras’s Theorem in Mathematics producing buildings which didn’t fall down, and Archimedes working out why boats floated so one could build boats which didn’t. The electrical revolution began with Volta’s discovery of batteries powering electric circuits and Galvano’s magnetic meter producing electric telegraphy; Maxwell’s discovery of electromagnet radiation led to radio and his mathematisation of heat to reliable steam trains as well as self-deceiving economists. Shannon’s discovery that electric switching circuits performed logic and redundant information capacity could be used to virtually eliminate errors not only created Information Technology but provided the necessary clues, interpretable by brain damage psychological findings, for understanding how our pulsating brains work.

    The Darwinian “elephant in the room” which Social Scientists are still failing to see (taking for granted Hume’s “black box” brain and Burt’s later, found-to-be-fraudulent intelligence measures), is the evolutionary archeology physiologists discovered when they”took the brain to bits to see how it worked”. At its centre is the chemical sensitisation by which microbes recognised their food; instinctively sensitised by that is the “old” brain of the simpler animals, and round that in the primates is the beginnings of memory and hence intelligence. In humans, however, this outer layer is split, with the halves further specialised: the neural circuits logic of sound processing on the left one side indexing the visual memories on the right, which complete four distinct processing circuits by indexing emotional and neurological reactions, including “tuning in” the senses to the settings which focussed the original perceptions. The rationality of economists has been conceived in terms of verbal logic, completely ignoring the fact that we are not only humans but animals needing food, warmth for it to grow and mobility to find and avoid being it, and time to be taught the instincts, skills and local mores. As of now, despite all our scientific achievements, these animal skills are dominating our still growing human knowledge for lack of our passing on understanding of communication and its understanding (not least that communication includes demonstration of both childish selfishness and mature responsibility).

    So, against Ken at #17, there IS a “‘best’ model of human actions and associations”, but it is not like a road map failing to explain why the roads exist, or an arithmetic rather than geometric dimensional understanding of the algebraic Calculus. It is of a normal family of children growing as either men or women into reflectively thoughtful old folks: simple enough for children to understand their own roles and futures in, and why Mum and Dad sometimes disagree. Human but still animal Children eating everything, so Dad has to go out and help grow or process some more, leaving baby-minding Mum to do the housekeeping, share out the food, and help the children learn to do things. Grandad and Grandma each help in their own ways, the one helping Dad with tools (including money) and Grandma with her wealth of household crafts and recipes.

    With Dads at work or children of the elite in boarding schools, too many children never grow up to learn the satisfactions of work, or that all that glitters is not gold. The problem with money has been that childish adults still want money for its own sake, the simple ones stealing it and the clever ones hiding the stealing of savings for tooling, old age and rainy days by printing money, buying up property with it, pushing up prices and laundering these ill-gotten gains by gambling with them in the stock exchanges. The family detail needs to be taught in primary schools; this financial story needs to made history by being taught in secondary schools.

    • Ken Zimmerman
      October 14, 2013 at 12:27 pm

      I understand the notions of a human child failing to develop in ways expected by her/his parents and other members of his group. But none of what you say helps me understand why one form of thought/rationality/action should be privileged over another. Constructions of “normal” living arrangements by humans in interactions with other actors have shown to be very diverse. Help me see the need that one in this variety, or even a certain subgroup should be preferred.

      • Robert Locke
        October 16, 2013 at 6:12 am

        “But none of what you say helps me understand why one form of thought/rationality/action should be privileged over another.”

        Some years ago I read a paper by a German expert involved in modeling labor markets, in order to plan what qualifications would be needed in the future. He said that for immediate needs they were good but long term (10 years) terrible. The actually qualifications needed had not been predicted or prepared for, but it didn’t matter, because the people were sufficiently adaptable to meet the needs. So, it is not the modeling of the market but the adaptability of the people that matters. What sort of education does it take to meet the unexpected. It turns out to be the basics, reading, writing, and numbers. If people are literate and numerate they can learn anything quickly. That’s the kind of education that should be privileged over one that, in a fast moving technological world, tries to keep up with the latest techniques, an impossible task. And for adaptability; that education can be taught with a blackboard and a piece of chalk. Because US students lack numeracy and literacy, they have trouble competing with other advanced countries. So don’t give Nobel prizes to people who trying to predict how markets function, but to teachers who enhance adaptability.

    • bruceedmonds
      October 15, 2013 at 8:45 pm

      Although social science has been poor in models of scientific progress and processes, this is changing with a bunch of recent agent-based models of scientists interacting. Science, is not something that people do alone, despite the stereotype of the lone genius, but a supremely social activity – all being on the shoulders of previous scientists.

  9. davetaylor1
    October 14, 2013 at 6:51 pm

    Ken @ 24, I’m sorry if (having to rush out because of my slowness) I’ve still not made myself clear. I’m NOT saying one form of thought of thought/rationality SHOULD be privileged over another, I’m saying that in practice it IS, i.e. the “male” verbal logic directed by emotions and directing what is sensed, with the grounding of language by reference to the fourth resource (accumulated memories of largely visual first-hand experience of external events) hardly getting a look-in. I am trying to saying is that at all the members of the family group are equally important, but they are at different stages of development and engaged in different phases of “nested” biological, reproductive, distributive and intellectually creative processes, with each needing to be given priority in its own context and the inner (biological) needs taking precedence in the event of conflict. The intellectual level is most able to give way, but least likely to when its attention is so largely on itself.

    On the issue of failure to develop, what counts is not what the parents want but whether or not people’s genes and circumstances enable them to accumulate the experience necessary for wise judgement. Stuffing most people in dead-end jobs and the rest in roles where they see only symbols is hardly the recipe for mutual understanding and wisdom.

    On the issue of diversity, it seems you are still not seeing that “the one” is not one of the details, but rather a form of representation which can account for all the details and be detailed as far as is necessary for particular purposes. Does one want an infinite variety of rules of logic, or a family tree on which an infinite variety of us can hang own family details? One can have an infinite variety of rectangular jigsaw puzzles, but turn them over and they all look the same: broken down into interlocking pieces with four male and female locators. Perhaps the most important to understand is the concept of an algorithm. Roman numerals became a pain for scientists because they had to create and remember new unit symbols as numbers increased. Algorithmic arabic numbers use a small and easily remembered set of symbols, and procedures which repeatedly reuse them, shifting them to visually indicate increased significance. Scientific variations on this theme allow even almost infinite numbers to be represented very simply. The diamond-shaped algorithmic model I am using accounts algorithmically for everything from the Big Bang to the chemical structure of DNA, the difference between microbes, plants, mobile animals and intellectually mobile humans, and thence to the differences between humans as consumers, producers, distributors and developers in the economic system. Financiers have recently completed their own no longer humanly biological chrematistics with the evolution of derivatives. The value of such models, I suggest, lies as much in communicating understanding as in specifying the context of whatever it is we are looking for.

    • Ken Zimmerman
      October 14, 2013 at 11:32 pm

      Dave, all very interesting and certainly one possibility, if that’s what our interactions with others creates. But not the only possibility. So I ask again, are you supporting this possibility and working to built it up? Otherwise, we’re just shooting holes in theoretical clouds.

  10. davetaylor1
    October 15, 2013 at 8:27 am

    Ken @ #26, again, this NOT one possibility for an economic system, we are discussing individual rationality and the assumption that the word ‘rationality’ has one meaning, so that the differences within and between orthodox and heterodox economics appear to be about different analyses of the existing economy (with you saying that as science, only the dominant analysis counts). I am in effect replacing Hume’s 1740’s “black box” reactive model of rationality with an up-to-date brain-damage/developmental psychology and communications science analysis of the commonsense observations that people and their situations actually differ. The analysis provides analytic space for all possibilities, not just Right vs Left prejudices, locating an individual’s rationality/specialisation in it shows (like the shadow in Jungian psychology) not only what s/he tends to be but what s/he is not. So here I’ve tried to illustrate its realism in the context of real (household) economics: that being one digit in an algorithmic [number] sequence where the previous ones add up to biological necessity and the next one to the malign failing of letting clever rather than wise financiers control the money supply. I’ve previously used it to communicate my own experience of specialised roles in scientific method, which incidentally has been independently offered in the DREI(c) and (R)RREI(c) models in Bhaskar’s “Dialectic”.

    So my model is a form of relational analysis which can be derived using the SSADM method. SSADM doesn’t support one possibility.. It analyses what you’ve got, what’s wrong with it, and half a dozen different ways in which you might improve it. The object is not simply to propose a solution, it is to get all parties who will have to live with the results to understand the options, explore any problems with them from their point of view and so come to agreement on what is the best way forward. There is no “best” option in the sense that the best way forward will depend on the circumstances, so it is not a question of my supporting one, it is about our coming to an informed decision. Broadly, the issue is whether money is power, information or both. As information, the model can be interpreted as a PID control system, and that as macro control (as with centralised computing) or [family] self-control (as with PC-aided family budgeting coordinated via the internet). The analysis phase of SSADM this enables one to decide what one wants, the development phase then has to work out how to make this work.

    • October 15, 2013 at 11:35 am

      Sounds interesting and exciting. But as a conservative at heart (not one of those who today often falsely label themselves with that name) I find it difficult to accept that humans can control their wills and emotions to accomplish the precision you suggest. History is more about muddling through, about not understanding, about acting with no plan in mind, about a journey down a river we can’t quite map or fully understand. That too is exciting and interesting, although considerably more uncertain and frightening. That’s why I like most conservatives warn against grand schemes and emotional grand standing about rationality and fixing things as they should and must be. We’re much more likely in these things to create tragedy and regret than a better world. In simple terms rationality of any sort must be tempered with good sense, modesty, and humility. Easy to say, difficult to do in practice.

  11. davetaylor1
    October 15, 2013 at 10:48 pm

    Ken (@ #29), as I’ve said earlier, you can take a horse to water but you can’t make it drink. I’m probably more a conservative at heart than you are, but I DON’T want to conserve what we have had since Thatcher sufficiently to have spent thirty years trying to work out what would be worth conserving, and that certainly doesn’t involve the present world of “grand schemes [of self-enriching world government] and emotional grand standing about rationality and fixing things as they should and must be”. Nor does it involve being satisfied with the spectacle of history “muddling through”.

    Listen to that individualist rationality saying “I find it difficult to accept that humans can control their wills and emotions to accomplish the precision you suggest.” When did I suggest precision at the micro level? What I claimed was all-inclusiveness at the macro level, and I pitched my theory at that level because, even in a society as small as a family, our differing strengths, weaknesses and needs make monistic precision even of aims impossible, and sufficient control of wills, emotions and precision only likely to be achieved by “give and take” and helping each other put right what has gone wrong before it has time to do serious damage. That is precisely what I want to see facilitated, but global control of finance is preventing: kept that way by misconceptions of the nature of money, government, education and intelligence.

    A credit card economy which reflected the reality that we start working life with a negative balance and the more we have, the more our lives need to repay society in kind, would at least be honest and an incentive not to hoard more than we need. An “invisible hand” theory of the economy as a system with four aims and PID error control has the implications that if one cyclic process is taken as the aim the other three must be its corrective feedbacks, and that reversing the aim without reversing the feedbacks has the effect of applying positive feedback where negative is needed and vice versa, destabilising rather than stabilising the system. You must be complacent rather than conservative if you are prepared to believe that is not significant, given what has been happening for centuries, not just recently.

    • October 16, 2013 at 3:42 am

      Dave (# 32) The micro/macro division is just one of dozens of dichotomies created via the interactions of actors through which our shared realities are built up. Micro and macro actors are still just actors, with different histories and lists of connections. Humans fit in both. Humans can be micro actors, but via lists of interactions and connections they can also be macro actors. I cannot accept that in either case emotions and wills can be controlled so precisely as to make rationality living always a possibility. In simple terms, most of the time life cannot be planned in advance with success beyond a few days or our immediate locale. What you seem to be advocating is one type of interaction among actors – interaction focused on fixing mistakes (assuming we can identify which are these) before they can do serious (whenever that threshold is reached) damage. An interesting “grand” scheme.

      Now the perverseness of finance. Again, is that all finance, some finance? And how do we know the difference? The problems you mention are, like most problems not 100% problems. Sometimes “invisible hand” capitalism actually has positive results, even if by accident. I’m not saying we shouldn’t work to make education more available and more diverse, to make wealth distribution more equitable, to remove hindrances to democratic government, and to questioning our intelligence. But these don’t produce grand societies of any size, and they don’t change history from “muddling through.” Living is a mess. Just admit it. You’ll feel better.

  12. davetaylor1
    October 16, 2013 at 8:23 pm

    Robert @ #27, Bruce @ #20, myself @ #25 para 3, Ken here.

    Robert, spot on about education being about getting the basics right; that’s where I’m coming from having started from computers that, like infants, didn’t know anything but logic they didn’t know they knew.

    Bruce, except for your claim that WE “are pretty ignorant about what the best basis is”, I’ve been supporting your position on “social intelligence” by basing it on the architecture and programming of the brains we have to have before we can become intelligent. I am therefore pretty disappointed you have not reacted to my arguments about how biological roles and time needed to acquire experience lead to all-round intelligence being a group function in which differing individuals with differing experiences in different phases of their lives help make good each other’s limitations. Might I ask you to read (again?) and comment on my argument at #25?

    Ken, thank you at least for keeping this crucial discussion going, for of course I don’t know whether you are being deliberately abstruse in order to enable me to further unpack my argument (in which case, good for you)! For the sake of this, let me go by appearances and see reincarnated in you the sceptical spirit, seductive rhetoric and (pardon me) wilful ignorance of David Hume, which have for so many generations kept “educated” Anglos and Americans looking for truth in superficialities which conceal it. Your treatment of the words “macro” and “micro” as if specific to the economic theory in which you most commonly see them used.

    Have you read Philip Mirowski’s “More Heat and Light” and been left puzzled by what he means by a “field” theory? A field of what? Force? Magnetism? Corn? People? The word ‘field’ is being used as a metaphor for space, and there are two ways of saying what’s in it. One can use another word like ‘corn’ or one can pinpoint its position so one can look for oneself, where you will find not just corn but a variety of weeds. A ‘micro’ theory of what’s in it will use words and struggle to account for all the weeds; a ‘macro’ theory will pinpoint the space it occupies so one knows where to look, no matter what’s in it. I’ve previously used the familiar analogy of an index to the content of pages in a book, but once one is into using words one is into information science, which – whether you look at the library science branch, Shannon’s encoding and decoding of information type references in a computer program, is all about classifying meanings sufficiently well to locate them unambiguously, whether static or in a communication channel.

    “What you seem to be advocating is one type of interaction among actors”? No, two types of interaction more or less simultaneously, the first doing whatever it is we want to do, and the other accepting help from people with different perspectives to stop us making a mess of it, whatever it is. The one micro, the other macro.

    “The perverseness of finance”? No, the perverseness of the system as it now is, acting as if money were physically valuable and not simply information about credit-worthiness.

    “I’m not saying we shouldn’t work to make education more available …”. Nor am I, but I am also saying what Robert is saying, that such education we are offering is predominantly ‘micro’ when it is much more important to learn ‘macro’. To learn to read, write and understand mathematics (not just be skilled with bits of it) is the condition of being able to study a necessarily arbitrary sample of literature or economics. Better macro, less micro.

    “These [education, democracy etc] don’t produce grand societies of any size …”. So I have never suggested I want them to: quite the opposite. “Small is Beautiful”.

    “Living is a mess. Just admit it. You’ll feel better.” Here you are judging me by your own standards. My own feelings barely enter into my consciousness; other people’s distress does, and I won’t feel better until (whether or not with my help) that reduces substantially. I’ve always admitted that living is a mess: that’s why I’m grateful when I see people helping each other. But I thought John Stuart Mill put the issue rather well in Utilitarianism: “It is better to be a human being dissatified than a pig satisfied”.

    • davetaylor1
      October 16, 2013 at 8:45 pm

      Correction to third para: “HENCE your treatment of ‘micro’ and ‘macro’…”. With apologies.

    • October 17, 2013 at 6:54 am

      Dave, thanks for the clarification. You are doing here precisely what I noted in my last comments. You are “making” a micro/macro division. In fact, you point out several such micro/macro constructions. I’d be interesting in looking into how and why Mirowski created his dichotomies, as well how and why the other dichotomies you mention were made. And again, I’m not doing the bidding of Hume here. And I sure as hell am not searching for truth in any absolute or final sense. But I do recognize that actors build-up truths in their work to build collective lives.

      I know you call the two types of interaction you say you advocate micro and macro. I’m okay with that, so long as you accept that others may not see them as micro and macro. And I’m certainly not arguing against you advocating those two, and supporting their adoption by actors in general. The same goes for the analysis of money you present. Although again you need to recognize that right now that analysis is not widely accepted. And also “credit-worthiness” is not an unproblematic notion. It has its own history of assembly.

      Your notions of which parts of education (in schools I assume) are micro and which macro is also arbitrary. Saying that it is better to “study and understand” mathematics as a whole, rather than be skilled with just bits of it is not a new notion. But to have a chance of this working in practice you’ll need to be more specific about what “knowing mathematics v. being skilled in bits of it” entails.

      By “small is beautiful” I assume you mean you favor building societies from the bottom up rather than the top down. Again to make this work in practice, you’ll need to be specific about what is involved in local community building and how that is involved in the build-up of something that gets called a society, or state, or city, etc.

      As to helping reduce other people’s distress, be cautious. What looks like distress isn’t always, in looking to reduce it we may actually make it worse, and you should really ask the people involved whether they want what you’re offering. And you got me with the Mill quote.
      Dividing humans from pigs seems quite straight forward. Dividing humans from other actors, like technology and science is not quite so straight forward.

  13. davetaylor1
    October 17, 2013 at 12:59 pm

    Thanks for taking #35 so well, Ken! You make it clear that even with my discussion of the ‘field’ metaphor I am still not making clear enough the concept I have in mind by distinguishing ‘macro’ from ‘micro’, i.e. that the one can be completely empty of content and the other is specified by its content.

    This is not an arbitrary distinction: it is the only sense which is absolutely distinct, or – in the analogy of direction – at right angles: ‘orthogonal’, like latitude and longitude. (What is going straight up is not going across). Following Hume, most people have failed to understand the significance of Cartesian coordinates and continue to map the world in the old way (radially, with themselves at the centre, hence ‘methodological individualism’). “Locations” are here defined as one-dimensional measurements instead of “so much up, so much across”, and there is no way of accounting for the world being spherical and therefore limited. ‘Micro’ can only be seen as you are seeing it: as arbitrarily near the centre, with ‘macro’ arbitrarily far from it. For me, though, however far from the centre one is thinking of, the one is ‘up’ and the other ‘across’, and field of interest is the area (not distance) between them and the centre. A distance cannot contain content, an area can, though it doesn’t have to. Such conceptual distinctions provide the sort of basic understanding that ‘educates’ as against ‘trains’, i.e. draws one to where the truth can be ‘seen’ as well as ‘re-cognised’.

    I am well aware this is not how most other people see it, which is why – the issue being so fundamental – I keep trying to explain it. Less mathematically minded people have said much the same thing in other words, notably Christians trying to express the difference between the concepts of God and Man and the “personality” differences within the Trinity. The bigger the ‘macro’ the smaller the proportion of its content is perceptible in our ‘micro’ sample of it. The more global a government, therefore, even if it understands what it is doing, the less it is possible for it to know the mistakes it is making. Hence the Catholic arguments for ‘subsidiarity’ – your ‘bottom-up’ government – with decisions taken at local level in light of wider advice, insofar as that is possible.

    “Small is Beautiful” was of course a reference to the book by E F Schumacher, a draft title of which had been “Chestertonian Economics” (after the Distributist arguments of G K Chesterton’s “Outline of Sanity”, which he himself jokingly caricatured as “three acres and a cow”). Both these guys ended up Catholics. As to how bottom-up government might come about, given the insights of Orwell’s “Animal Farm” I think it more likely (and far better) if it comes about by conversion of rising generations (by leavening their cultural indoctrination with fundamental education) rather than by bloody revolution which simply ends up with other pigs in charge. However, I’m surely going further than most Catholics in seeing ‘banking’ needing to become bottom-up and advisory, businesses cooperative and limited by specialisation, and ‘governments’ needing to become more advisory than coercive (i.e. “commending” instead of “commanding”), the wider their scope. Contracts need to be interpreted as aims rather than enforcible absolutes, with achievement respected or honoured and sanctions (loss of authority and creditworthiness) being applied only to those personally at fault.

    As you are a historian, Ken, let me draw your attention to the post-war history of Europe beginning with the Catholic leaders of Germany and France eliminating a major source of conflict by forming a cooperative Iron and Steel community, later developing this more widely into a cooperative European Economic Community with advisory Commission. When Britain was allowed in, it become a Trojan Horse for American-dominated big business and centralised government financed by fraudulent Federal Reserve Banking, dominating world trade by means of the oil dollar and protecting itself by stirring up competition between other businesses and neighbouring countries (cf. the Munroe Doctrine). Since then EEC has been surreptitiously transformed into a United States of Europe, unified by the Euro and more dictated to than advised by its Commission.

    This thread being about individual (hence centralised) rationality being the wrong starting point, it is about understanding our different types of limitation and consequent need for democracy right down into the biological social unit of the family. Looking at the current condition of the United States of America and Europe now financial con-men are looking for easy pickings there, do you really think centralised representative government enforcing competition between small businesses is a better place to start than wise elders simply facilitating and coordinating local cooperation in many fields and at many levels?

    • October 18, 2013 at 9:14 am

      Dave, Arbitrary or not, it is a distinction. I understand you say its origin is mathematical. Specifically, you mention Cartesian coordinates. I’ll just point out that mathematics has never shown itself a particularly source of establishing divisions among actors. And mathematics is not a source of truth, of any sort. And your disdain for global and centralized control is clear, but it’s a dead end. It leads nowhere. However, the notion of ‘subsidiarity’ is worth exploring. And making government, business, banking, etc. more advisory or cooperative is an interesting discussion. But I’ll note to you that the Catholic Church has not followed this path in most instances, except when forced to by rank-and-file Catholics or by civil authorities. So be careful here.
      “American-dominated big business and centralized government financed by fraudulent Federal Reserve Banking, dominating world trade by means of the oil dollar and protecting itself by stirring up competition between other businesses and neighboring countries (cf. the Monroe Doctrine)” surreptitiously transformed Europe into a United States of Europe, unified by the Euro and more dictated to than advised by its Commission. Please! American-style big business and centralized government isn’t either that strong or that smart. Efforts to unify Europe have been around at least since Napoleon. The major mistake the EU seems to have made is being too eager to allow countries with unlike economies and governing traditions (e.g., Greece) to join the EU too quickly, and of launching a common currency without sufficient safeguards. Britain is doing what Britain has been doing in Europe for three centuries – trying to become its king.
      Centralized representative government enforcing competition between small businesses v. wise elders’ simply facilitating and coordinating local cooperation in many fields and at many levels is not the only comparison possible. How about the “Golden Mean” of Ancient Greece v. Republic style democracy? Point being, naming what you prefer is simple and easy. Making it happen in the lives of actual actors is something else, and very difficult and delicate.

      • davetaylor1
        October 18, 2013 at 5:45 pm

        Ken, you obviously think of my knowledge of my own history what I think of your understanding of mathematics, so let’s leave that there. Perhaps someone else will check out and think through what happened in post-war Europe and America after Keynes’s defeat at Bretton Woods.

        What I will say is that Catholic authorities are just a more or less normal mix of people, most but not all temperamentally conservative, with their understanding of Christian values very much biassed by ancient traditions and the world they live in. Theirs is not the only organisation which has found top down communication easier than bottom up. What they have done consistently is to recognise they are not experts on economics, stick by and large to condemning injustice and tell lay people like me (or in post-war Europe: Maritain, Schuman, Monnet, Adeneur and de Gaulle), it is our job to try (as “salt of the earth” or “yeast in the dough”) to help improve the world we live in. That is how G K Chesterton and Hilaire Belloc became involved c.1904, and if it is the Golden Mean you are looking for, try Belloc’s “The Servile State” (misrepresented as anti-Socialist but not anti-Capitalist in Hayek’s “The Road to Serfdom”). Long before Stalin and Hitler he saw how “simple and easy” it was for cooperative democracy to degenerate via competing representative parties into dictatorial extremisms in which capitalism is indistinguishable from socialism. You don’t need to tell me that fighting evil will be a never-ending job.

        On Britain, you are out of date: we are nearer opting of Europe. Here anyway was another American’s view (i.e. Chomsky’s, in 2005): “During the Second World War, Britain recognised – we have plenty of internal documents about it – the obvious: Britain had been the world-dominant power, but the United States was going to become the dominant power after the war. Britain had to make a choice. Was it going to be just another country, or was it going to be what they called a “junior partner” of the United States? It accepted the role of junior partner. And that’s what it’s been since then”.

      • Ken Zimmerman
        October 18, 2013 at 11:08 pm

        As that may be I know this about mathematics – neither certainty nor consistency can be had with it. At St. Mary’s College and in Jesuit high school I was subjected to hours of lectures on “Catholic” economics. I haven’t kept track but I assume it still exists and exerts influences. Actually I had the “Golden Mean” as presented by Aristotle in mind. UK opting out of Europe. Maybe. But my friend Niall Ferguson is very clear about how Europe has messed up things without the UK’s leadership to keep them upright.

  14. davetaylor1
    October 18, 2013 at 5:47 pm

    Bruce, just seen your post-script. Thanks for that.

  15. Robert Locke
    October 18, 2013 at 11:36 pm

    #39,40, 41, I have spent my life supporting the unification of Europe after it tore itself and its civilization to pieces in two major wars in the first half of the 20th century. The great benefactor of the conflict was the US, in terms of wealth and power, but America and Britain are not the core of European civilization, which is what I treasure and always have. So when I decided to study modern European History, I concentrated on the Continent. I’m at home there, in its great cities and brillant regions. If Anglo-Saxonia wants out, then, fine with me. Let Europe go its way without them under the leadership of the new democratic Germany because most of Europe’s problems today have been foisted upon them by US-UK Investor Capitalism. Europe only has a chance if it frees itself from its thraldom.

  16. Robert Locke
    October 19, 2013 at 9:48 am

    ” Britain had to make a choice. Was it going to be just another country, or was it going to be what they called a “junior partner” of the United States? It accepted the role of junior partner. And that’s what it’s been since then”.

    Dave, Thread # 40. There was a 3rd choice — for Britain to assume leadership in 1945 in the building of a new democratic Europe. Britain choose not to do that, instead it did everything possible to stop European Union, from opposing the Treaty of Rome (and organizing a group of 7 against it), to today. DeGaulle recognized that Britain was a Trojan Horse for the Americans and blocked UK entry into the EU when UK obstructionist tactics had failed from without. But European countries have not done much better. As the late historian Alan Milward noted repeatedly in his work, each country just wanted to get something for itself out of the union. The number of enthusiastic Europeans on the continent has always been relatively small. When I was in the European Institute for Advanced Studies in Management (1982-84) in Brussels I use to joke with my colleagues (from Holland, Belgium, Sweden, Finland, the UK) that there was only one European in the European Institute and he is an American (myself).

  17. davetaylor1
    October 19, 2013 at 9:27 pm

    Robert @ #43, I would be entirely in sympathy with your position were it not for two things. First, the extremely important issue of the FORM of reunion: whether it be as a family of nations (each reaching out to its own circle of friends), for which “blood is thicker than water”; or as a UK/US-style financial union (or rather, empire) of lands, run from the centre to exploit the periphery. Secondly, the fact that there around 60 million people in the UK, who would be far better off both economically and morally as part of a European family of nations than as a “junior partner” on the periphery of an American empire (itself imploding since globalisation of its own policy of preaching competition elsewhere). At #44, I don’t think you realise just how run down and debt-ridden Britain itself was in 1945. The Treaty of Rome was 1957.

    Ken, I seem to have been luckier than you with my Jesuit teacher of mathematics, who in my last weeks at school taught me the point of calculus in the economics of production. But mathematics and religion are about “neither certainty nor consistency”. The one, “maths technik”, means literally “techniques of learning”: ways of forming things so we CAN learn from them. The other, “re-ligare”, amounts to commitment to the one who (we are told) has untied us, which requires faith to produce trust, and experience sufficiently consistent with that trust to produce the feelings of certainty needed to sustain the well over half of us who reach decisions via their feelings or knowledge as against logic or understanding.

    [I’m sorry to go on about this, Ken (and any other readers), but instances like this – rooted in personality differences – of cross-purposes, misunderstandings, personality clashes and teachers/leaders not understanding basics – are little discussed but crucially significant: situations we all have to live with or sort out as we “muddle through” our lives].

    On the continuing influence of “Catholic” economics, its medieval tradition was also rooted in Aristotle’s “Golden Mean”, though without maintenance of Roman roads the small, self-sufficient sharing communities of the Acts of the Apostles, exemplified by Benedictine monastic communities, were more or less built into the feudal system. Its new mainstream originated in the UK (whose Constitutional Monarch is still forbidden to marry a Catholic), when a convert Anglican, Cardinal Manning, alerted Pope Leo XIII to social conditions in the new industrial cities and Leo published world-wide his reflections on the rights and wrongs of them (“Rerum Novarum: In this New Age”) in 1891. Here Belloc and the Chesterton brothers founded not so much a Party as a “Think Tank”, the Distributists, focussed on the right to a livelihood (e.g. land) as against employment at the whim of others. Its weakness – which I’ve tried to remedy – has been not understanding how money is created at the whim of financiers, so the traditional view of it as gold fits easily but at cross purposes with the Reserve Banking lie that individuals must earn it.

    History shows both continuing influence and continuing cross-purposes. The Distributists demanded generous enough incomes to provide for misfortune and old age; the Government c.1906 introduced insurance and pensions paid for by compulsory saving from earned incomes. In 1926, the year things got so bad after post-war reintroduction of the pre-war gold standard that Britain had a General Strike, G K Chesterton put Keynes’s 1935 thesis in the mouth of a fictitious Trades Union leader: “But if I say”, answered Braintree, “that we also want the extension of effective demand, isn’t that also above party”? The post-war extension of fair rationing while Britain broke the back of its war-time debts was perhaps more due to the influence of Anglican Archbishop Temple, but Thatcher – following Hayek’s misrepresentation of Belloc – was all in favour of a “property-owning democracy” – seen as selling off council housing. Long after I fed my own views to the Conservatives, their present generation sponsored the traditional Distributist think tank of “Red Tory” Philip Blond, the Campbell government is increasing the need for communal sharing by selling off local government, education, welfare and health services (in traditional Catholic cultures, provided voluntarily via the church); and seeing a more adequate basic income only as a one-size-fits-all safety net for the unemployable, thereby penalising the most needy. Previous governments having sold off vital public utilities as profit-seeking monopolies and permitted the theft of contributory insurance and pensions, competitive job-seeking and rising utility prices are leaving increasing numbers with neither time nor surplus to share

    • Ken Zimmerman
      October 19, 2013 at 11:03 pm

      Dave, I knew there were reasons I didn’t go into European history, religious or otherwise. Your level and breath of knowledge and understanding is astounding. Thanks for walking me through some of it. I just went into what I liked, American history and the history of science. If I get braver sometime you and I must go into Catholic history more deeply. Like I said I attended Jesuit high school (mostly at my father’s insistence to teach me discipline) and St. May’s for graduate school (mostly at my mother’s insistence for more understanding). I liked the non-religious parts of both but sort zoned out the Catholic stuff. Maybe an error on my part,. Not my first or last.

      Mathematics I learned from Rueben Hersh mostly. Especially his rejection of Platonism and formalism in favor of mathematics as a historically evolved activity of culture. I’ve modified his and my views since graduate school but through it all I hold onto this central insight.

    • davetaylor1
      October 20, 2013 at 8:39 am

      Thank you, Ken, for those extraordinarily kind words. Getting there has been for me a question of listening to the Dephic Oracle: “Know Thyself”.

      Walking alone from a Catholic into a Scientific culture at 16, I compared its (and at 21, Hume’s) arguments with Newman’s and stayed with his as better. I was given Chesterton’s “Orthodoxy “and realised I didn’t (then) understand it.

      Chancing on Sawyer’s “Prelude to Mathematics” I learned there I had a mathematical mind,and from it, Whitehead’s advice:

      “The art of reasoning consists in getting hold of the subject at the right end, of seizing on the few general ideas that illuminate the whole, and of persistently organizing all subsidiary facts round them. Nobody can be a good reasoner unless by constant practice he has realized the importance of getting hold of the big ideas and hanging onto them like grim death”.

      Relative to economics and individual irrationality, perhaps the “biggest ideas” I’ve hung on to have been the Jung/Myers-Briggs explanation of what I am and why my wife usually misunderstands me, and the reflections of a wise old Jew, Erich Fromm, reflecting on the Biblical story of the Ten Commandments and the worship of the Golden Calf: “The First Commandment of the Decalogue is also the First Commandment of Logic: Thou shalt not mistake the image for the reality”.

      A lesson children all need to learn, but most never do: “All that glitters is not gold”.

      Do we not continue to judge ourselves and others by our good fortune, glamour, wealth and eloquence: not seeing the gold beneath the mud thrown at Christ and the “undeserving” poor?

      Individual rationality is clearly not Whitehead’s “right end of the subject”; I’ve found that the Chesterton/Jung explanation of our IRRATIONALITY is one of “the few general ideas which illuminate the whole”.

  18. Robert Locke
    October 20, 2013 at 7:30 am

    Threads 44 & 45. Dave & Ken, I know that people imbibe world views from family, the little school house, church, and nation, and then judge the world through them. I followed a different maxim, learn from others. So, an anglophile, I did not study English, British, or Empire history in the University, knowing that it would be hard for me to be “objective.” So I studied French history. When I choose my PhD topic, I wrote about French Legitimists Royalist, ultraMontagne Catholics, not, as a republican and a protestant, to condemn them but to learn from them (French Legitimists and the Politics of Moral Order in the Early Third Republic (Princeton UP, 1974). And when I found myself getting interested in management, I did not study US management, the birthplace of the modern version of the subject, but German, where I discovered that, although greatly influenced by the Americans after 1945, German Management and Management Education was different from American. My point, spread your wings and open your minds.

    As a final step, I was asked in Hawaii in 1974 to teach a course on World Civilizations (every student at the University of Hawaii was required to take this course). Imagine the challenge to you, if you were asked to prepare a year’s lectures about World Civilization. What a scary prospect and an enlightening one.

    At the European Institute for Advanced Studies in Management (1982-84) I was just asking people from different countries to try to embrace a European ethos. I live with one everyday in Germany, as a European, valuing the contributions of each part of Europe to that common heritage. If you do that you’ll discover Europe’s a wonderful place.

    • davetaylor1
      October 20, 2013 at 8:45 am

      Appreciated, Robert. Thank you.

      • Robert Locke
        October 21, 2013 at 6:39 am

        Got an email from Mike Rother, who wrote a book about Toyota Kata, about the difficulty of getting new ideas accepted, which should be a reminder for those impatient ones in this blog.

        “I suppose you do your best and try to remind yourself of what Haldane wrote:

        “Theories have four stages of acceptance. i) this is worthless nonsense; ii) this is an interesting, but perverse, point of view, iii) this is true, but quite unimportant; iv) I always said so.”

        I read the other day that the change process is like silt eroding a stone. Seems like we better hurry though.”

      • October 21, 2013 at 6:59 am

        Robert, not sure about that. Hitler changed Germany almost from top to bottom in less than 20 years. Including all the theories scientists held so dear. And look at Soviet science. Some of the theories called “cold war” artifacts are now being accepted in the best scientific circles.

  19. Robert Locke
    October 21, 2013 at 10:15 am

    Graeme Woodrow, made the same point in an email to me. The tipping point comes and change can occur rapidly. But change can be “good” or “bad.” And as you say, sometimes what a generation considers bad turns out to be “good.” One text I assigned to my students when teaching German history 20th century, was something Hitler’s Social Revolution, which was about the very thing you mention, how much under National Socialism the Nazi’s carried out a social revolution, so that much of the favorable parts of German society after WWII were a result of the changes fomented between 1933-1945. Even the hated SS was much more democratic, and upward mobile than older institutions like the German Army officer corps because people of low social origins could rise quickly to higher positions in the SS. That’s social leveling.

    • davetaylor1
      October 22, 2013 at 9:04 am

      Ken’s comment chimes with something I’d just been thinking: the four roles in Plato’s “The Republic”, from the perspective of defending households threatened by a hostile world. Interesting lines of thought for someone on the psychology of Vikings plundering resources because of their barren Northland, and successive waves of invaders (including the present one) by families driven by plunderers out of their homelands.

  20. October 22, 2013 at 10:10 am

    Fascinating stuff. Many will conclude, wrongly I believe that what has occurred in the intervening years since the fall of German National Socialism is and some would say dangerous revised history of National Socialism. National Socialism is at its core evil and that is it only reality. To say anything else makes you just as guilty as the Nazis who carried out WWII atrocities. But history is not interpretive in this sense. Beginning in the late 20s German National Socialists began making a way of life. That way included many things – a new kind of nationalism, anti-Semitism, a whole new philosophy of class and ways for people to interact, etc. They were successful and not successful, as is the case with most society building and eventually the failures overcame the successes and National Socialist Germany became dysfunctional but did not disintegrate. Most historians, politicians, being human and from the winning sides in WWII choose to focus on only certain elements of National Socialism, mostly those that allowed them to move forward with some society building of their own in Germany. But none of that changed what National Socialists did in their society building efforts, and its results. What David Schoenbaum captures in “Hitler’s Social Revolution” is some aspects of the work of National Socialists and what they left behind. His is not a revised history of Germany during National Socialism but rather an effort to tell us about some of the things National Socialist did, how they did them, and how they played out. Now obviously he’s looking at these things from his time period and his life. So his is not an effort to white wash National Socialism, as some have claimed but rather an effort to describe it more fully. This is difficult for some to accept. Few years ago I presented a paper to a sociological gathering on the effects of National Socialist youth programs. It appears I said the program were the only effort in German history up to that time to provide poor and orphaned German youth with effective means to become full and productive members of German society. I was nearly lynched on the spot. I get the same reaction on this blog when I dare to say nice things about neoliberal economics or its related construction of markets. But not everything these folks created negative than positive results for more people. Some actually worked to the betterment of a majority of US and world citizens. Heterodox economists that refuse to look at the entire picture for those in economics they like and those they do not will always create what historians of Germany after WWII created, a narrow and misleading view of the world before us.

    • Robert Locke
      October 22, 2013 at 1:59 pm

      In 1977 I spent a year in Goettingen on a Senior Fullbright Scholarship at the Max Planck Institute for History; my landlady, who had taken her Abitur in 1932 used to sit with me in her parlour and discuss her life. I seized on the opportunity to ask about the 1930s under National Socialism. Just as I get from my wife, who lived in Communist Poland, the report is mixed and the explanations different when not fused with hindsight. I am not an apologist for any regime, but as an historian, I seek to understand people within the framework of the times in which they lived. My landlady told me that her brother, who was a pastor, argued vehemently with her, when she tried to accept the idea of a Nazi Christian Church. He was involved in the resistance, but she never knew anything about it because if she had her life would be in great danger, since she would have had to denounce her brother as a traitor, or face death herself for not doing so. He told his sister nothing. So she lived naively thinking it was possible to reconcile the Nazis with Christianity.

  21. October 22, 2013 at 12:53 pm

    >
    As that may be I know this about mathematics – neither certainty nor consistency can be had with it. At St. Mary’s College and in Jesuit high school I was subjected to hours of lectures on “Catholic” economics. I haven’t kept track but I assume it still exists and exerts influences. Actually I had the “Golden Mean” as presented by Aristotle in mind. UK opting out of Europe. Maybe. But my friend Niall Ferguson is very clear about how Europe has messed up things without the UK’s leadership to keep them upright.

    you are friends with niall ferguson? got it. belgian congo.i guess he switched from harvard to nyu.
    catholic economics is around, free markets, the pope—but some don’t like the new one since he is not down with 100’s millions euros to fix up the house for a german ‘cardinal’.. i hear hitler made the trains run on time.

    • Ken Zimmerman
      October 23, 2013 at 10:13 pm

      Is there a problem with Niall Ferguson? He writes and lectures a lot on finance and economics, even though he’s just an historian. I don’t necessarily agree with all he says about the world needing the UK to save it. But he is who he is. And he has a lot to say about markets, capitalism, and the way forward, economically speaking for the world. As for what Hitler did, he actually did little himself. But the National Socialists created greater social and economic equality in 20 years in Germany than had existed in Germany since it became a single country in the 19th century. They actually began their programs in the German states in the 1920s and moved them to the national level when Hitler was elected. Life is complicated. So the Nazis did some things that changed Germany beyond building the world’s largest armed forces and inventing racial ideologies that can only be described as callous and anti-human. But ideologies that reflected those in other places such as France and the US.

  22. davetaylor1
    October 22, 2013 at 9:40 pm

    My #53 seems to be the odd one out in this discussion of the Nazi rate of change. I was looking back, not forward, thinking of the responsibility of Versaille for causing the problems addressed by the Nazis with the help of money made out of thin air – much as, in personal life, abusers often have a history of being abused. This doesn’t make Nazism any better, but it doesn’t show neoclassical economics in a very good light either, and it does help to explain the attraction of a leader – not yet seen as a self-glorifying abuser – prepared to react to abuse. When a nation has a problem, it wants a leader prepared to do something about it.

    As I read the psychology of the post-war situation, with Hitler exposed and defeated, Germany learned its lesson and – with help rather than abuse from the Americans – chose leaders with home economics rather than empire-building priorities: not just building up but sharing its wealth around the “family”. Seventy years on, with its own problems resolved but its EU neighbours being plundered via fraudulent finance, has a later generation of leaders forgotten the sharing, not yet understood how fictitious money can be used for both good and evil, and become like kids squabbling to grab all they can get? With the problems of abusive energy and property pricing looming, exacerbated by floods of refugees from economic warfare, can we not use fictitious money for good by an honest interpretation of it, i.e. as a mere authorisation of credit, with all that implies? Here are some other recent views on alternatives to “Vulgar Keynesianism”: http://www.bbc.co.uk/programmes/b01qw93v.

    • Ken Zimmerman
      October 22, 2013 at 11:29 pm

      Sorry I was not more clear. The point I was trying to make is that even the best historians tended to over simplify National Socialism. They would not take the time to consider all its history and actions. This lead to the omission from discussion of many aspects of National Socialism we still see today in Germany, and in fact also in many countries around the world, including the US. National insurance is an example here. I was wondering out loud if heterodox economists might not be committing these same omissions when considering neoclassical, neoliberal, neoclassical-Keynesian economics and economists. The posting on Greenspan-Bad Economist, Bad Person also pushed me to this question. Thanks.

    • davetaylor1
      October 23, 2013 at 8:45 am

      Thank YOU, Ken. I may be seeing the wood where you are looking at the trees, but your reference to the posting on Greenspan is spot on the point I’ve been trying to make about social psychology being made up of and led by people with different ways of thinking, often “spoiled” (i.e. frozen at particular stages of development) by family or work.

      This from Lars’s link to psychopathic philosophy on Ayn Rand’s (1920’s) mass-murder:
      “born with a wonderful, free, light consciousness — [resulting from] the absolute lack of social instinct or herd feeling. He does not understand, because he has no organ for understanding, the necessity, meaning, or importance of other people … Other people do not exist for him and he does not understand why they should”.

      As a historian you might perhaps look back to Darwin, to Spencer’s Social Darwinism, to crazy Nietzsche imagining the evolution of the Superman and Fabian Socialist George Bernard Shaw popularising the idea, as well as to Hitler identifying with it. From my Chestertonian “not using all [four] parts of the brain” interpretation of Jungian psychology, I see an extreme example of my own psychological type taking emotional input from an imaginative memory which has not been stocked by sensory social contact. (In autism, sensation may be feared because of hypersensitivity, which needs to be resolved before the rules of social contact can even be taught, see Donna Williams, “Autism: an Inside-Out Approach”, 1996, JKP).

      • davetaylor1
        October 23, 2013 at 9:06 am

        Just had this from EU [?] via a Critical Realist correspondent:

        “[para 6]. At present young people face new challenges and problems that former generations did not experience. There is a transformation of the social order taking place which is characterised by a fragmentation of the normative framework, weakening social institutions such as the family, the church, schools and trade unions and the disappearance of collective rites. Former vehicles for social integration are vanishing and the path to adulthood is no longer paved in advance. Therefore young people are forced to show initiative to find their own way. These highly individualised life struggles put young people under pressure. This sense of uncertainty about one’s place in a less socially cohesive world and about a future marked by greater flexibility and a lesser degree of common purpose, characterised as social dislocation, may be a more important explanation of psychosocial disorders in young people (crime, alcohol and drug abuse, depression, anorexia, bulimia, etc.) than social disadvantage”.

        http://assembly.coe.int/ASP/Doc/XrefViewHTML.asp?FileID=10345&Language=en.

      • Ken Zimmerman
        October 23, 2013 at 9:57 pm

        Ever since the West invented adolescence it’s been one of the more interesting of its inventions. Publications such as this are part of the ritual of adolescence. We “baby boomers” had ours. Remembers the Congressional Reports decrying the “problems of youth” in the 1950s, “Rebel Without a Cause” (switchblades, playing chicken, etc.), “devil” rock n’ roll. Humans have problems at all stages of life. We actually set-up adolescence to have more than its fair share of problems by isolating adolescents in schools, with their general place among us murky at best, and providing few outlets for their abilities and frustrations. Best solution is to de-invent adolescence. Baring that a good model to follow, in my opinion is the Hitlerjungen. Before it Germany had disastrous levels of youth crime and suicide. Somehow I don’t think this recommendation will be acceptable to the EU Parliament, however.

  23. January 21, 2014 at 3:41 am

    I would take Bruce Edward’s thought two steps forward. The basis for cognition is social cognition, and a necessary condition for social cognition is morality, which is an expression of the moral emotions. Moreover, the bio-cultural coevolutionary logic of the moral emotions is rooted in bioenergetics, as follows.
    1. The human brain uses about 20% of the body’s energy metabolism directly, and much more indirectly. Most species get away with under 5%.
    2. The brain has to pay back that energy debt by supporting increased efficiency in energy acquisition and use. Otherwise, the human brain could not be evolutionarily stable.
    3. This task is accomplished by formulating and carrying out complex plans, e.g. in hunting and agriculture and technology. A complex plan can be defined as an instance of a cognitively determined pattern of behavior that either creates a new biological niche (e.g. hunting mammoths) or improves adaptation to an existing niche (e.g. making clothing).
    4. Complex plans are always collective rather than individual endeavors. Any individual implementing a private plan draws on a huge collective resource of cultural capital, the cumulative product of social cognition. Social cognition is accomplished via distributed processing based entirely on private cognition, but it is still a social resource.
    5. Complex collective plans suffer from free rider problems. These problems can only be solved using institutions (e.g. the hunters are obliged to feed the arrow-maker). Bilateral compacts are not evolutionarily stable as a basis for complex plans.
    6. An institution is an interrelated set of roles. A role in turn consists in interrelated rights and obligations. It follows that institutions always rest in part on altruistic ethical behavior, for if people cheat on their obligations when they can get away with it, then no institution would be evolutionarily stable (in terms of either cultural evolution or biological evolution).
    7. Therefore the correct model of institutional behavior is institutional realism: individuals generally assume they are acting for all individuals so situated (i.e. Kantian ethics) when they act within an institution. That is, they solve free rider problems by making a collective decision.
    8. Hence an institution is a self-replicating pattern of collective behavior. That is, institutions exist because collectively rational decision making subject to institutional constraints recreates their conditions for existence at each moment.
    9. Ethical behavior is acculturated but rooted in biologically given moral emotions. Human moral emotions are vastly more complicated than those of any other animal, precisely because our intelligence depends on it. (Note: existing research underestimates the complexity of moral emotions because researchers haven’t taken evolutionary stability into account.)
    10. Hence the paradigm of methodological individualism can’t possibly be correct in a complete or ultimate sense. Nevertheless the individualist paradigm is intellectually essential for demonstrating the free rider problem and the counterfactual of failed institutions. (Similar remarks apply to the selfish gene hypothesis.)
    11. In particular, the assumptions of methodological individualism necessarily include the notion that people are deeply unethical, in so far as they would not obey institutional norms unless it were in their narrow material self-interest to do so. This assumption is quite obviously counterfactual: individuals do in fact altruistically obey institutional norms with sufficient regularity to keep the institutions going (e.g. the so-called paradox of voting.)
    12. Cognitive intelligence can be seen as a collective ethical problem in many other respects. Most importantly, it depends on honest reporting of private facts for public use.
    13. Other aspects of intelligence are individually adaptive. Most importantly, intelligence is needed to survive within the complex environment of multiperson institutions. This is not a side effect but rather a necessary adaption for intelligence to exist. However the initial evolutionary driving force for high intelligence is the need for complex institutions to implement complex plans.

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