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Tectonics and Growth

from Peter Radford

My wife is reading Kahneman’s “Thinking Fast and Slow”, somewhere in which he relates his reaction when he first came across the bedrock of mainstream economics: rational microeconomic behavior. I must admit I had a very similar reaction. The description of human behavior that underpins modern economics is so bizarre that my first thought was that it must be some form of Monty Pythonesque satire. Surely, I thought, this is a joke and in a few pages all will be revealed. But no. Economics really is built on a foundation that to outside eyes is not just odd, but what appears to be a deliberate spoof.

What is even more strange, and those of you who listen to economists and take them seriously  please suspend your sense of humor at this point, is that this total perversion of humanity is then taken as the essential starting point for all subsequent theorizing. Economists are all brought up nowadays to repeat the mantra that all “good” theorizing about the economy at higher levels — what economists call macroeconomic theory — has to be based on a foundation of theorizing at a lower level — what economists call microeconomics. So in the literature and in conversation it is common to come across the phrase that some higher level idea is based upon “micro foundations”.

Except that foundation is exactly what Kahneman and others laugh at.

You would too if you spent any time at all thinking about it.

Which brings me to another point: economics is full of these oddities that anyone outside the profession would dismiss a priori as some form of ludicrous joke. 

Take general equilibrium. You may have heard of it. Economists love to talk about equilibrium. It’s one of those early importations from 19th century physics that economists took on board so as to make their work look more scientific. And it fits neatly with Adam Smith’s casual observation that an economy appears to exhibit a mysterious sort of order. My interpretation of Smith is that he was simply saying that stuff seems to get done, and isn’t that wonderful. Unfortunately subsequent economists turned his almost flippant comment into a sort of holy grail and started looking for ways to prove the existence of such a general equilibrium. Their final triumph came with what is known as the Arrow-Debreu work not long after World War II, with that work proving the existence of a configuration of the economy that is indeed a general equilibrium. For those of you whose eyes are glazing over at this moment: economics has two sorts of equilibrium, one is “partial” in which stuff still is in motion in a general sense, but a small isolated sliver of the economy appears to have reached a nice balance; the other is “general” in which the entire economy has arrived at such a nice balance. Whilst partial equilibrium is sort of sensible because it is easy to understand that a small sliver of an economy could be in a balance, the idea that entire economy could end up in such a magical place is, well, magical.

Anyway, and here’s the satire, the so-called proof of general equilibrium is so ridiculous and other-worldly that no one in their right mind could ever take the concept of general equilibrium seriously. Even Ken Arrow, of Arrow-Debreu fame, said as much. But economists do. Yes they actually study it. Perhaps they study unicorns too.

One consequence of economics being packed full of all this self-satirical nonsense is that it has great difficulty in explaining real world situations. The entire body of thought of economics includes useful tidbits that anyone can pick up and play with because they are common-sensical. But when we rely on economics to explain big important questions it begins to stutter and creak under the weight of all that absurdity.

Which is why it fails to explain long term, or what I call tectonic, shifts.

Remember that economics only as recently as the late 1980’s bothered to contemplate technology as a factor explaining growth. You and I, steeped as we are in real world experience may have taken on board the idea that maybe, just maybe, technology was vaguely related to growth. Indeed we probably took it for granted. But economists arrived at that particular idea a full century and a half into the technological explosion we grandly call the Industrial Revolution. Up until the late 1980’s economists simply looked at technological change as something that sort of happened outside an economy.

Let me give you another example: economics had a hard time explaining economic growth at all until Robert Solow invented something called “Growth Theory” in the 1950’s. And even his breakthrough, which is treated, properly in the context, with awe and monumental respect inside the profession, left giant chunks of growth unexplained. Naturally economists came up with jargon to describe this unexplained chunk — they called it “Total Factor Productivity” — which is another of those spoofs I mentioned above. For all their subsequent efforts, including the aforementioned sudden realization that technology might have something to do with it, economists are still at sea when asked to explain growth, why it suddenly took off in the late 1800’s, and why it might be slowing down now.

This is all very relevant because we are now in a moment when growth rates in economies are very much a political topic. Here in the US, Trump made a big deal of it in the election. Worldwide there is much hand wringing over the possibility that we have fallen into stagnation and that all that fast growth since 1870 is now over. The socio-economic and socio-political consequences of stagnation as a longer term reality are enormous, and it would be nice if economics could say something other than wallow around in its self-satirical references to equilibrium and rationality.

So, in the spirit of helping you frame your own thoughts about growth, and to help you ponder the tectonic shifts underway down beneath the froth of the surface phenomena of economics, here is the diagram I keep in front of me to remind where to look for problems and solutions. It is not a theory, it is a framework:

I apologize for the poor presentation, I haven’t reduced that file size for years. But this is the way I have been looking at growth since that late 1990’s. I will devote more time to it in future.

Meanwhile: chin up. This too shall pass.

  1. antireifier
    January 10, 2017 at 10:27 pm

    Love the chart. Any way to get a copy for myself?

  2. antireifier
    January 10, 2017 at 10:32 pm

    Read the book last year — or at least a lot of it and it is invaluable to understanding the psychology of human beings especially as they operate in a complex economic dynamic system. The notion of equilibrium theory upon which Radford expounds in the article made me think about how the universe is not in equilibrium over long periods of time although it looks to be so in the short run. When one galaxy encounters another the forces that begin to operate are quite fascinating but likely impossible to comprehend except historically or if you live a very long time. Like aeons.

  3. January 11, 2017 at 12:41 am

    This is an informative post. However,
    “Up until the late 1980’s economists simply looked at technological change as something that sort of happened outside an economy.”

    This statement may be true only for the hardcore neoclassical/market-fundamentalist economists, to them a sort of mysterious exogenous factor, to be treated much as the topics of finance and money were treated. Sometimes technological change simply was left for later (i.e., respectfully ignored), or rendered into a surrogate (sort of like revealed preferences) or, god forbid, aggregated.

    At Berkeley in the 60s I was taught — in several macro courses, a business cycles course, and in the history of economic thought — about Schumpeter’s dynamic theories that included Kondratieff (45-60 year) waves. Schumpeter’s theory was driven by a focus on technology. My teachers weren’t fools; in fact some of the luminaries had themselves been taught by Schumpeter, as was god-Samuelson (my elementary text plus Foundations), growthy Solow and today’s hero, Hyman Minsky. As well as my own father-in-law, an orthodox neoclassical. We also were taught about Kuznets cycles (and in grad school i was taught by Simon’s “smarter younger brother” George). A marvelous intellectual contradiction, as all the long waves incorporate the “exogenous” technological change. The problem: if something doesn’t fit the comparative-statics, pseudodynamic (because, well, time, you know) orthodoxy, simply set it aside in some way. But those wave theories, like the orthodoxy, are wonderfully elegant and mechanistic, feeling very like “laws”, so you can’t ignore them entirely.

    Unless you want to ignore economics “laws”. Just saying.

  4. January 11, 2017 at 12:49 am

    Yes Peter, I’m one of those outsiders (an actual scientist) who for 20+ years has kept thinking he can’t be amazed any more – and then another stupidity surfaces and my jaw drops again.

    Here’s another Kahneman quote I just encountered in Scientific American (Steve Mirsky, Antigravity, Jan 2017):

    “People can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers.”

    Perhaps you could move that the American Economic Society (or whatever) adopt it as its motto. :-)

  5. Caz
    January 11, 2017 at 9:08 am

    Do you have a reference for the framework, which looks v useful (similar to first comment!) ?

  6. patrick newman
    January 11, 2017 at 9:32 am

    In terms of microeconomics sociologists and psychologists are better able to infer ‘laws’ of consumer-producer behaviour than economists.

  7. January 13, 2017 at 4:36 am

    To paraphrase Bruno Latour in “Politics of Nature” and “We Have Never Been Modern,” human essence, human nature is something homo sapiens have been involved in creating and arguing about incessantly, from the beginning of the species. You see, in my view Kahneman has the same kinds of blind spots as the economists he satirizes. Kahneman believes there is something called “human psychology” apart from its creation in the relationships of humans with one another and with nonhumans. He accepts this “psychology” as real beyond any debate, discussion, or arguments about what it is, why it is, and how it is. His job is to study and describe it. But in doing this he fails to examine the most critical part of it. The historical processes of the creation of the thing called “human psychology.” This is no different in my view from economists and “rational choice” or “equilibrium.” A few examples might help clarify. Personality is important for psychologists and psychology. They analyze its parts, the varieties of its form, its failures, and how it produces different types of people. And they invent tests and scales to measure all of this. An older version of personality, Freud’s the Ego once held the rapt attention of psychologists. But think for a moment. Was the species formed from the first with a personality, an Ego, mental illness, Types A and B personality, etc? Or are these the result of the history through which the species has been created and recreated? I think the latter more likely. Psychologists are just as silly and odd as economists. They both (and the other social sciences as well) first work to create the world they study and then publish elaborate studies of it. On an exam in graduate “Human Ecology” I asked students to create three alternatives to psychology to explain humans. They presented dozens of alternatives. Showing that psychology, like “rational thinking” or “equilibrium” is invented. Just because humans can act as psychology predicts, or reason as described by one version or another of rationalism doesn’t equate to these being “human nature.” Economists have been more successful, than psychologists, sociologists, etc. thus far in convincing ordinary humans that their inventions about people are more important, more relevant, and more perfect. Why is that? I’m not an economic historian. So, I’ll be interested to read what economics historians conclude about that. You’re all welcome to contribute.

  8. January 13, 2017 at 12:44 pm

    Peter’s diagram is splendid, providing a new interpretation of mine. To reach that, fold up the three triangles surrounding ‘Potential’ to form a tetrahedon, then visualise this mapped back into a two dimensional crossed diamond, where (most directly) the triangle with ‘kids’ (i.e. mankind) at the apex has the potential, men (representing production) makes this practicable, women (representing distribution) makes its availability possible and old folk (representing development or Craig’s ‘wisdom’) seek opportunities to improve this real economy, which neo-Liberal economists financed by bankers would have us believe is equivalent to “making money”.

    Ken’s comment I find silly. One looks for human nature not in psychological behaviour but in the specifically human physiological structures which make possible linguistic behaviour (like logical reasoning and lying) and systematic personality differences. As for his question, think Maslow’s heirarchy of human needs. Proverbially, dogs don’t bite the hand which feeds them.

  9. robert locke
    January 14, 2017 at 11:48 am

    “human physiological structures” As a person who has lived in communities other than his own, I do n ot understand human physiological structures as a sources of human understanding more than culture. When I start to do research, I do my best to ignore reading into the social sciences until after the research is done. I select a topic, a time frame and a place, and I look for information from the people who lived in the time and place about what they thought of my topic. I learned to do it the hard way, since it took ten years of thinking, while under the influence of Marxism, to figure out that reading about Marxists, and anti-Marxist in all the available varieties at my disposal, blinded me to what the people living in a space and time were really saying about their world.

    • January 14, 2017 at 4:49 pm

      Human physiological structures are not sources of human understanding but conditions of it. When I say that what is specifically human is a split cortex specialised on the one side for language and on the other for vision, your comments make it pretty obvious that you use both sides. Academic training, however, is almost necessarily linguistic, so academics too often learn to think only linguistically, i.e. in terms of verbal or mathematical symbols and graphs rather than (as I do) paradigms, parables, proverbs and structural icons. (By ‘paradigm’ I mean roughly “ways of doing things”, interconnecting sight and action).

      My way of doing history is perhaps the reverse of yours, Bob. People speak to me from the time and place in which they lived, and I explore the meaning of what they say by imagining what was possible then. This morning’s insight came from doing just that.

      Around 1690 John Locke proposed the tripartite balance of power between the Legislature, Executive and Judiciary which Jefferson built into the US Constitution at a time when (in contrast to England) land there was freely available. Today I listened to a conservative American economist denouncing both central government’s interference with entrepreneurial enterprise and the post-1890 Catholic defence of common (as against communal) rights to landed property, arguing instead for patents and intellectual property rights. After what has happened to the average citizen in the US since it fell for Federal Reserve Banking in 1913, this seemed to me more than a little rich …

      What did we have before Locke? Largely taking the place of legislation was Tradition, the
      executive took the form of Chartered Institutions and arbitration of justice was the King’s job i.e. Government took the form of preventing injustice both internally and from without. With the prospect of President Trump looming, such a decentralised system of democracy seems to me more tangible and safer than our centralised interpretation of Locke’s balance.

      • January 15, 2017 at 4:53 am

        Dave, you misread my comments. Homo sapiens is distinguished in two ways. First, unlike any other species, including the other versions of humans, homo sapiens can imagine. Homo sapiens in its evolutionary development relies both on experience and imagination. This gives it an evolutionary advantage. Many anthropologists believe it was imagination that allowed homo sapiens to survive while neanderthal (without imagination) did not. Consequently, homo sapiens are wonderful inventors. And this includes inventing things like rationalism, capitalism, psychology, and the human soul. Kahneman studies one of these inventions, psychology. He needs to recognize that. Economists study another one, economics. They need to recognize that. With recognition the can they study how the inventing was accomplished, when it was done, and who was involved.

        I’m not a physical anthropologist (I’m cultural). But homo sapiens and neanderthals both have 2-sphere brains and very similar physiology. And until 70,000 years ago neither showed any evolutionary advantage one over the other. But about 70,000 years homo sapiens began to show evolutionary advantages over neanderthals. Imagination was a large of part of that. It gave homo sapiens organizational and community advantages over neanderthals that pushed neanderthals into extinction So here it was communication and coordination that gave advantage. Not physiology. This illuminates how the homo sapiens brain works. It’s a communal brain. In other words, homo sapiens think and act as a group. This is its other major evolutionary advantage.

        As to how to research homo sapiens, I agree with Robert. Homo sapiens invents itself constantly. And it invents stories about those inventions. Just pay attention and you can see and hear those stories, and the ways of life they portray. Then by all means invent your own theories to explain what the stories already explain.

      • January 15, 2017 at 9:45 am

        Are you missing my point or trying to change the subject from the constitutionally significant issue I made of it?

        In any case, the point is the physiological capability of language as the condition for developing it and becoming able to remember and communicate and reason about imaginations. Dogs have imaginations but their reactions are not mediated linguistically but emotionally. One doesn’t have to go back to the Neanderthals to see this: the said John Locke marvelled how in his day the obviously intelligent American Indians could count only to the number of their fingers, thereafter quantity becoming “as many as the hairs on your head”. Not that that would get them much further in my case …

      • January 15, 2017 at 12:02 pm

        My point from the beginning here is that the two most important evolutionary advantages of homo sapiens are imagination and a brain attuned to work in community with others of its species. In my view these allow us to consider inventions from these such as human psychology and economics, as well as such inventions as rationality and capitalism. Homo sapiens aren’t rational till they invent rationality. They aren’t capitalists till they invent capitalism. And they have a psychology till they invent it. And they don’t have language till they invent it. You are correct that all human species had the physical capacity to speak. Based on archaeological examinations it seems homo sapiens invented a form of language more extendable and useful than the other human species. Again the result, in my view of it two great evolutionary advantages. Fundamentally, I wanted to emphasize that such things as language, psychology, rationality, and economics did “come with homo sapiens.” Rather, they were invented by homo sapiens.

        And Locke was wrong about “American Indians.” Most did not use higher numbers because they did not need them. But the Mayas, Toltec, Comanche, Mound Builders, and Aztecs certainly did. Up to and including calculus.

      • robert locke
        January 15, 2017 at 8:07 pm

        Dave, I have noticed in your comments a tendency to defend inherited traditions, like those you learned in science systems-theory, and in religion, defending Catholicism. My view of intellectual activity is the opposite. An American from the working classes, with an inheritance from family milieu in working class democracy and New Dealism, I decided when embarking on my PhD not to study English history, because I was too much of an anglophile, but the study French, about which I could be more intellectually and emotionally neutral, and in French history, when selecting my PhD topic, not to look at Republicism, for which I was tempermentally predisposed, but French Devine Right Monarchists, steeped in Roman Catholicism (my heritage is Protestanism) because I thought I would learn more about France if I made an effort to understand traditions, with which I had little sympathy. I’ve never regretted this approach to expanding my knowledge.

      • January 16, 2017 at 5:50 am

        Robert, your approach and mine are similar. But I tend to spread out in lots of unexpected directions. Bouncing from one field to another. My jobs have always gone down this same path. Mixing lots of different areas of concern keeps my work exciting and fun. I’m always preparing for new things I don’t know a lot about.

    • antireifier
      January 15, 2017 at 9:57 pm

      As I understand the expression with which you are taking issue — namely “human physiological structures” — it is based on innate physical qualities (i.e. genetic factors which influence developmental factors and may, in turn, be affected by said developmental factors).

      First 85-95% of our behaviour is unconscious leaving 5-15% under conscious control. Secondly, three broad streams influence both the unconscious and conscious underpinning of our behaviour. They are Ability (What you can or cannot do — a hugely physiological factor), Motivation (Why you choose to do something — likely a large factor in conscious control of behaviour but not entirely responsible for it as many economists believe) and Temperament (How one does things, or one’s style, with at least 9 traits — also largely physiological).

      But then the whole system becomes complicated by the expectations from one’s family, peers, culture, religion, nationality, etc. and the goodness or poorness of fit of those sets of expectations (which are also complicated) with Ability, Motivation, and Temperament. They also interplay with each other to produce what we are capable of imagining.

      For economists to imagine that they are capable of quantifying the collective behaviour of multiple individuals into laws of economic choices people make is hubris beyond belief and then deciding that there is a system (capitalism, communism, socialism, fascism, religionism) that explains much if anything goes beyond the pale.

      But the struggle is worthwhile and makes life interesting for some of us because of the challenges involved.

      • January 16, 2017 at 6:27 am

        Those involved in inventing economic actions and decisions have already explained these things. They know what they’re up to and what it means to them. Economists at best are writing theories to explain theories. Or, at worst writing theories to obscure and cover over these first theories. As if that isn’t bad enough economists insist on getting involved directly in creating a “better,” or with real chutzpah a “perfect” economy that we poor non-economist slobs are just too stupid to understand. We have been reaping the whirlwind of economists’ arrogance and limited imagination for 40 years. It’s time to end it.

      • January 16, 2017 at 1:16 pm

        Ken, Robert, Antireifier

        I doubt Ken’s first two sentences here but the rest is well said. What I can’t seem to get across to him is that the difference between physiology and psychology is effectively that between a computer and its programming.

        If linguistic programming is not kept separate from the data it refers to, then its results become unreliable. In our brain it is kept separately, in a dog’s it is not. Which is not to say a dog cannot react to our verbal language as it reacts to body language; but it reacts emotionally: it doesn’t think about it.

        Antireifier, I was not referring to the details of genetic and cultural inheritance you are bringing up, but to what (barring accidents) is common to humans: a split cortex in which one side is specialised for sound and the other for vision. So we read and well as hear, but when we read we (usually silently) translate the words we see into sounds, making it much easier to reason about what we see. Our problem is with academics not translating words they read (or have been programmed to come up with) into realistic (as against reified) images, so becoming unable to imagine the real effects of them happening.

        Robert, at 80 I am not defending inherited traditions of Catholicism and Science but rather, my mature conclusions about them, having started with no reason not to believe unlikely but historic catholic doctrines which made sense, and good reason to be dubious about anti-catholic scientific assertions when I found these to be based on hearsay. Like you, I didn’t choose to go into science because I knew enough about it to like it, but I’ve found the differing points of view enabled me to consider each critically

        So, I’ve found good reason to take context into account when interpreting Christian language, and good reason to take clerical judgements with a pinch of salt given their different personalities, contexts and trust of misinformation; but also a need to decide between a Christian story of creation and redemption compatible with post-Einsteinian cosmology and Hume’s 18th century assumption of a purposeless, infinite, pre-existing universe, intending to replace the laws of God-given Nature with human law given objections to “the divine right of kings” to fulfill their Christian responsibilities. Given what has happened to our world since then, my choice is clear – and hopefully my gratitude if the ‘Big Bang’ was God blowing himself up “that we might live”.

      • robert locke
        January 16, 2017 at 2:59 pm

        ” when we read we (usually silently) translate the words we see into sounds, making it much easier to reason about what we see”

        Depends on the language, Dave. My colleagues in Chinese history tell me that Chinese characters are not phonetic, so that at a conference if a person puts a name tag on a lapel for people to read, they have no idea how it is pronounced. French, German, Spanish are phoenic languages, but most people in the world’s written language is not phonetic, imagine what that means for poetry, which is visual not audial and not to be appreciated as we do Shakespeare.

      • January 16, 2017 at 8:52 pm

        My understanding is that there are many verbal languages united by the iconic Chinese symbols referring to equivalent spoken words for the same thing. So without knowing the dialect (?) of the name writer, Bob, readers might have no idea of how it was intended to be pronounced. … Your comment on Chinese poetry is certainly thought-provoking!

      • January 17, 2017 at 5:38 am

        Dave, your view is too mechanical. The dichotomies you like, like most dichotomies are made up by humans. Several surgeries that even with the loss of one of the brain’s hemispheres, the other can and does take over many of the functions of the lost hemisphere. And speaking of the world’s most sophisticated and complex computer, the human brain is it actions physiological or psychological? It is both. And that’s the main problem with dichotomies. They make up a division of things that constantly bleed into one another. As to the first two sentences, ask anyone how they make a living, how the nation behaves, why people make decisions? They can and will explain it to you.

        Robert, language expresses our imaginings. The particular form of the language may take many forms. But the focus remains the same.

      • January 17, 2017 at 6:30 pm

        Ken, the fundamental dichotomy is the distinction between dichotomies and differences. We use dichotomies to be able to talk about differences. Do the three dimensions of a brick simply merge into each other, or are combinations of three absolutely distinct directional measures required to formally distinguish its edges and faces from its volume?

        Likewise with a computer, its programming and its database. These are functionally different even though they are physically intermingled and new programming is initially processed as data. The significant differences here are not direction but order in and rate of change with time.

        On those first two sentences: as Antireifier put it, “85-95% of our behaviour is unconscious”. Looking again at your first contribution here, did you notice how you diverted Peter Radford’s discussion of technological change dramatically affecting the prospects of growth into an ad hominem attack on his opening remarks? Or was that conscious “spoof”?
        You assert that reality is created by us; I disagree. Our creations follow discoveries, not only by travel and the Baconian scientific method of taking things to bits to see how they work, but also of ambiguities in perception of motion and (not least) of the needs of others.

      • January 18, 2017 at 5:05 am

        Dave, never said that people don’t use dichotomies, or set up “differences.” My point is a simple one. These are created as people experience the world (or what they assume is the world). They are useful for people. As to the brick, do you mean the one in the building wall, of which we can experience only two dimensions, the one on the page of a novel, of which we can experience only two dimensions, or the one holding down the papers on my desk, of which we can experience three dimensions. They’re all bricks. Scientists would want to examine the brick in as many ways as possible, in order to distinguish the three bricks. You keep wanting to assume things are a certain way before you’ve done the work to examine them.

        What a computer is, or how it functions depends on using information, whether inputted as data or inputted as operating instructions to do something. In that doing something data and instructions often overlap one another. Such as when the data coming into the computer turns into new instructions which change the original data given the machine. Just like with humans. A human may begin to do one thing but then change to do another based on the interactions of the human with the things and events around it.

        I know how Freud and other psychologists come to the conclusion that a lot of human actions are unconscious. Some of these are simple reflexes set in nerves or muscles. Others are routines based on long experience. Still others are unresolved conflicts of direction with the person. And others are simply the brain changing it’s waves. We know of other such actions. In what sense are they “unconscious?”

        Finally, regarding my first comments, these are not as you put it an ad hominem attack.” Again the point is simple. Kahneman studies human psychology. What is that and how did it come to be? Shouldn’t that be the first question we ask before we launch into explanations of things and people using psychology?

  10. robert locke
    January 17, 2017 at 2:39 pm

    The particular form of the language may take many forms. But the focus remains the same.

    How is it possible for the focus to be the same if language takes many forms. I have always thought that the first step to comprehending people is to learn their language well. If a German talks about order he does not mean the same thing as a Pole and the difference is embedded in language. My Polish friends tell me that snafu is readily understood by Poles because it mirrors reality. When I wrote letters in French to French people, my French friends advised me not to try to learn the subtle distinctions of how to sign off/ Just use the English words, “Sincerely yours.” And a good French friend told me once, when I offered to take care of a rather delicate problem,, “no, let me do it, you don’t know how to discuss such matters with the French.”

    • January 18, 2017 at 5:15 am

      Robert, the focus of language I refer to is for humans to express their understandings of the world they experience. Of course those understandings may not be the same. In fact, may be quite different. The things you discuss make the use of language often confusing and sometimes infuriating. But each language, like each human culture is created through a particular historical process. Unless you are involved in and intimate with that process it’s often difficult to master the language fully. Although I’ve spoken German since I was three, my cousins in Germany still find my accent amusing (I learned to speak German among Texas Germans) and my use of sentence structure just plain wrong. What can I say. I speak Texas-German. But this often gets me into trouble when I have technical discussions in German. But I do okay with taxi drivers and train station attendants.

      • robert locke
        January 18, 2017 at 11:56 am

        It is all gained by looking through a glass darkly. I am trying to explain myself to myself and do it imprecisely. The big collective nouns, i.e., Frenchmen, Germans, family, etc. are referred to constantly without clarity and little understanding.

      • January 19, 2017 at 5:30 am

        Robert, the best we can do is muddle through. But that’s no excuse to skip asking basic questions about origins and history for all the words and actions we take for granted.

      • robert locke
        January 19, 2017 at 4:19 pm

        I agree and am not complaining, except to say that the specificities of historical experience enrich my life of understanding much more than reified analytical categories.

      • January 19, 2017 at 6:18 pm

        “Robert, the best we can do is muddle through”..

        So says Mr Know-All. “Promoting a sense of ‘there is no alternative’ – or so the unofficial slogan of the Establishment goes – has proved a tremendous ideological victory, fostering widespread acceptance and resignation, and sapping a will to resist. … [shifting] the terms of acceptable political debate: the ‘Overton Window’, which describes the boundaries of the politically possible. Everything within the Window is seen as mainstream, common sense, centre ground, sensible and so on. Ideas that are outside the Window are dismissed as extremist, dangerous, impossible, ‘what-planet-are-you-living-on’. … The outriders relentlessly propagated ideas that were not too radical to be instantly written off as too extreme, but radical enough to put pressure on and create political opportunities for mainstream-sympathetic politicians”. [Owen Jones in ‘The Establishment’, Penguin, 2015].

        When the tectonic plates shift and cause massive disruption, the opportunity arises to abandon the ruined city and start afresh in a safer place. The Establishment has repeatedly done this, reintroducing usury after 1545, reserve banking after 1688, pauperism after 1834, world war after 1913, mass bankruptcy and unemployment after 1929, Keynesian centralisation after world War II, finance capitalism and off-shoring after the 1970’s oil crisis and stagflation; now a corporate take-over of government and finance after the 2008 “bankruptcy of the banks”. The Establishment hasn’t “muddled through”, rebuilding the future on the ruins of the past: it has seized its opportunities and moved on. The best we can do is to learn from them. Let us listen not to Ken but to a more vigorous mind sowing the seeds of the post-war Golden Age at the beginning of World War II.

        “When things look dark and difficult, there is a very natural tendency to procrastinate – to push the future away INTO the future. ‘We can’t do anything about it now’, we say; when the war is over it will be time to begin’. That will not do. Whatever it is we are fighting for, now is the time to see about getting it. … [I]t is not too much to say that, whoever wins the war, the peace will be won by those who, throughout the struggle, remained alter and ready, with a clear idea of what they wanted and an active plan for bringing it about.

        “While a war is going on … any effort at planning for the new order is made to appear untimely and out of place. We ask ourselves, ‘What is the use of making schemes that may never be wanted?’ The answer is that they ARE wanted’ that we want them now, and that is we want a thing badly enough, we can make it happen. If we let ourselves be discouraged, that is a proof that our wanting was inadequate, and that the future lies in the hands of those who, more energetically, wanted something different”.

        [Dorothy L Sayers, “Begin Here”, 1940, Gollancz. One of the inspirations for the 1941 Malvern conference convened by Anglican Archbishop William Temple, which helped legitimise Britain’s unexpected post-war Attlee government].

        Anticipating Ken’s probable objection, I do have “a clear idea of what I want and an active plan for bringing it about”: first the two-phase objective of (a) theoretical paradigm change, from mechanistic control of things by force to control by the information-theoretic method of elimination of communication errors, and (b) control of economic errors via true knowledge (conscience) and a true understanding of money as an “IOU work”, to be written off by “I have earned my keep”. The active plan is to plant seeds rather than throw mud, for the seeds planted by my scientific heroes Heaviside and Shannon changed our world even though economists seem never to have heard of them. As E T Bell wrote, “The Heaviside tragi-comedy degenerated in three acts into broad farce: the Heaviside method was utter nonsense; it was right, and could be readily justified; everyone had known all about it before Heaviside used it, and it was in fact almost a trivial commonplace in classical analysis”.

      • January 20, 2017 at 5:40 am

        Robert, 100% with that.

      • January 20, 2017 at 6:11 am

        Dave, as with the devil’s greatest achievement of convincing us he didn’t exist, so the greatest achievement of the “establishment” is to convince us they know what they’re doing and are in charge. They don’t and they aren’t. They’re muddling.

        I’ve been a forecaster and planner for 30 years. No forecast is ever correct. And plans fail almost every time. So when the “establishment” guys grab those opportunities, they might be grabbing the wrong. Or even the one that will be there undoing. And that’s doesn’t even consider the feedback consequences of any choice made. The Nazis were great planners. The Russians not so much. But in the end guts, patriotism, and an insane dictator at their backs produced Russian victory over the Nazis.

        For me this all means that intentions and expectations are more important than precise and explicit planning and forecasting. In my work to get to a desired future can be achieved in two ways. Pull people into by pushing them out of dysfunctional situations. Or pushing them into it by forecasting a great prize to them for going that way. Propaganda and politics play a big role in these efforts. And that’s how things get done.

      • robert locke
        January 20, 2017 at 9:50 am

        Dave, until recently (post WWII) a classical education was considered best for the leadership classes, because knowledge was not considered to be the most important aspect of leadership; it was moral integrity. Learning systems theory won’t give you that. Will learning the classics do it?

      • January 20, 2017 at 10:26 am

        Robert, prior to Renaissance of the classics, Christian [Jewish/Muslim/Buddhist …] leadership was local and protective, while education was primarily moral (what to do and what not to do). As for your dismissal of systems theory,, have you never heard of a “moral compass”?

      • January 20, 2017 at 10:49 am

        Dozens of article and surveys have concluded that history is the best preparation for business education or business careers. Jack Cummin, an actuary and research director for the National Continuing Care Residents Association wrote this in 2014. “My career illustrates an opportunity that historians and humanists often overlook by leaving the preparation of business leaders principally to business and engineering schools. Skills familiar to historians—analysis, writing, integrity—are what distinguish great business leaders. While case studies can bring a semblance of historical dynamism to business education, there is nothing like a historical perspective as preparation for business in a time of rapid change.” i submit that many of the problems of businesses today (e.g., short-term focus, over emphasis on quantitative measurements, failure to accept or even recognize limits on profit-making, minimizing worker participation and pay, shirking legitimate taxes) are the result of this lack of perspective (both in terms of time and moral guidelines) and integrity.

      • robert locke
        January 20, 2017 at 11:10 pm

        Dave, the second chapter of my book Confronting Managerialism, is entitled US Managerialism and Business Schools Fail to find their moral compass.” (2011). Not only have I been aware of the idea of a moral compass, I spend a good 20 years of my scholarly life working on it. My First book, at Princeton University Press, in 1974 has the title French Legitimists and the Politics of Moral Order in the Early Third Republic. Sorry Dave, don’t need any lecture about moral compass, moral order, and how they relate to educational systems in various countries. I had a graduate student in Hawaii, who did a Masters under me, who worked for years teaching in Japanese primary schools. My long conversations with him about the difference in moral education in the Japanese classroom and the American appear in discussions about Japanese Management in my book, The Collapse of the American Management Mystique. OUP, 1996. .

    • January 20, 2017 at 10:08 am

      Ken, your throwing mud is splattering friends as well as enemies. Look in a mirror. So far as you are concerned the Establishment’s greatest achievement is “to convince you that you know what you are doing and are in charge [of this discussion]. You don’t and you aren’t. You’re muddling [i.e. error correction with planning]”.

      Perhaps I had better spell out what Jones meant by ‘outrider’. ” There have always been men and (occasionally) women of conviction, who are – on the whole – convinced that their prescriptions are for the good of society as a whole. But their beliefs do coincide with the interests of wealthy private and corporate interests, ensuring an extraordinary marriage of convenience”.

      Where the coincidence of beliefs occurs is clearly not about your “intentions and expectations”, which are often other rather than self-centred. It is in beliefs about method: that the only way to get things done is by “propaganda and politics”. It isn’t. We can continue to be persuaded to be taken for a ride on a cruise liner and have to go where it takes us, or we can teach our kids the rudiments of navigation and enable them to paddle their own canoe.

      • January 20, 2017 at 10:33 am

        From the beginning I’ve focused on sharing what I’ve been involved with and my convictions. I muddle just like everyone else. But there are patterns to muddling. I’ve shared some of mine. Basically, I work from the premise that the future cannot be known or planned. But it can be invented (with errors, blind alleys, and of course just plain dumbness involved). I’ve been lucky enough to take part in doing some of that inventing. I try to follow two maxims. Do no harm (that can be avoided or isn’t over shadowed by benefits) and be up front and honest with people. I proudly use propaganda and politics. These have a long history. Propaganda is just persuasion with pictures I tell my clients. And politics is just discussion with a strong desire to get things done. I trust these methods. But of course the rub is they can be used to pursue all kinds of goals. That’s why when I get into a new project my first question is always, what are the intentions and expectations from the project. Upon the answers to those questions I make the determination as to whether I want to be involved or not.

        As to “kids” paddling their own canoes, I support the notion. But not before these “kids” have considerable experience, not just instructions in that paddling and all the risks and uncertainties it involves. Look at all those folks paddling to protect their lives and jobs (the ones lost and not coming back) and the results of that. We get to deal with Donald J. Trump for the next 4 years.

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