Home > Uncategorized > Economics is a form of brain damage

Economics is a form of brain damage

from Asad Zaman

Environmentalist David Suzuki hits the nail on the head. The number of ways that economic theory systematically blinds you to the realities of the world we live in is almost uncountable. When Henry George’s land tax became widely popular, economists “disappeared” land as a factor of production from economic theories, merging it illegitimately with capital. Money is made to “disappear” by using the quantity theory of money to claim that money is veil. This makes it impossible to understand how the mechanisms of creation of money ensure that the wealthy can get rich at the expense of the rest of us. The parasitical nature of the finance industry has been covered up by the idea of “wealth creation” — when wild speculation doubles the price of stocks, financiers have created wealth, which is a socially valuable activity, instead of a fraud and deception. The ideas of cut-throat competition, survival of fittest, and social darwinism have been used to justify a large number of free market activities which harm the masses to make profits for the wealthy. There is no doubt that believing all of the textbook economic theories leads to serious brain damage, as I myself have experienced — the process of unlearning has been slow and painful. Here is the 2 minute video by David Suzuki:

  1. Tom Welsh
    April 30, 2017 at 9:35 am

    I agree with the sentiments expressed in the article, but I feel that the headling is far too kind to economists. Rather than a delusion, experienced by some people against their will or without their knowledge, it is an illusion – deliberately and knowingly foisted upon the mass of people by the small, select elite of “economists”.

    I would liken economists to witch doctors, in that they teach beliefs that are mostly untrue – often with a slight leavening of truth to induce the belief of the ignorant. And they do this in service to the rich and powerful, in whose interests it is that the populace believe economic dogma.

  2. April 30, 2017 at 1:47 pm

    Yes, Asad, that’s close to the mark, in so many areas of thought that touch upon economics. This blog has had many postings, and follow up comments recently on just such an ingrained notion, if not worse – on Free Trade – that I’ll pass for now on that one.

    My own special area of interest is the militancy with which the boundaries around labor markets are policed under Neoliberalism. Thus instead of FDR’s “Right to a Job” from his Second Bill of Rights (1944) – and please note, it’s the very first Right – the discussion has been drifting to a universal guaranteed income, where parts of the Right might feel more comfortable (just minor parts, so far). I think the up and coming writer on the left Alyssa Battisoni has an excellent article, with reservations I share, on this here at Dissent: https://www.dissentmagazine.org/article/false-promise-universal-basic-income-andy-stern-ruger-bregman

    Non-interference with Labor Markets and the toxic aura surrounding the words “Federal Government” – those are the obsessions – a form of brain damage one might argue – that have caught my attention over the years.

    Oh yes, one more…Gar Alperovitz has broached – and very sly of him to do so in his upper-middle class academic low key style – the subversive notion that the Federal Reserve might use the same tools of “Quantitative Easing” that it used to rescue the banks in 2008-2009 – and keep the financial system (if nothing else) afloat in the West since then…to buy up the very resistant giants of the fossil fuel industry who are blocking progress against stopping global warming. I’m not sure Gar fully realizes the terrain he is entering here…and how irrationally charged the topics of “printing money, monetized debt, electronic keystroking” and Treasury-Fed-Congressional boundaries are…but…he should ask L. Randall Wray for some insights into just what such a proposition involves…all that is implied by me in the tensions between the financial community not yet endorsing “Modern Monetary Theory” (while very well practicing it…Gar’s point…he just doesn’t know how far behind the general public is…) Yet, all in all, I’m glad Gar has wandered into that “minefield.”

    • May 17, 2017 at 4:14 pm

      There is an issue with Stern’s view in your piece.

      “He eventually comes to the conclusion that the jobs that will remain after the robots come will be the best and the worst—Google programmers and Uber drivers.”

      No google programmer alive will be able to create software as well as the best AI’s of the 2030s or the 2040s and Uber drivers will become obsolete by 2025 or so when driverless cars have fully mainstreamed.

      • May 18, 2017 at 12:48 pm

        Jeff1089, I’m a planner, modeler, forecaster by profession. But I also study the history of planning, modeling, and forecasting. At the time of the 1964 World’s Fair, the forecasts and modeling around that event spent little time on future jobs. Most assumed that many jobs would go away within 50 years after the fair due to automation, the pursuit of more leisure, and the lack of desire for work by many in the world (mostly the USA). And would not be replaced. Other jobs would shift to different formats, e.g., community volunteers, part-time. The focus of the fair and the research was the future society of greater leisure and more options for pursuing things other than a job. The researchers were wrong, it seems. They did not forecast the invention of neoliberal thinking, intent on making as many as possible unemployed and poor. Turned the world of 1964 upside down.

  3. April 30, 2017 at 11:53 pm

    Asad,

    Your paragraph shown above is such a wonderfully cogent statement I’ll use it — with full attribution, of course — as a verbatum quote in something I’m writing for local reading. One item missing from your statement, tied to each of the issues you list, is growthism, as much a part of the brain damage as anything. It puzzles me why, even on this blog, people who are on board with your criticism (and mine) of neoclassical continue to use the words “economic growth” or simply “growth”. As if these words meant anything to seriously consider other than in criticism. Never associated with the use of those words are the factors contributing to this cultural disease: fruitlessly trying to cope with unsustainable population growth; rampant and unsustainable ostentatious luxury consumption; and blind faith that technology will save us.

    I personally experienced your penultimate sentence: “There is no doubt that believing all of the textbook economic theories leads to serious brain damage, as I myself have experienced — the process of unlearning has been slow and painful.”

    It’s taken me decades and I’m still unlearning (someday I’ll post on this blog my essay-in-progress, “Unlearning Capitalism”). No longer seeing the neoclassical as more than what it is — an intellectual cover for predatory corporate capitalism — I recall vividly the seductions in my training at a prestigious university and still feel the tug of the mathematical elegance of such as the Edgeworth Box, Cobb-Douglas functions, and the Cobweb Theorem.

    Keep up the good work and please keep posting.

  4. May 1, 2017 at 1:10 am

    Econoclast: Thanks for the appreciation — the list of economic delusions is truly endless. I would add: Economists disappear the human being by reducing him to homo economicus — without hearts, compassion, and social dimensions. They disappear income inequality by measuring GNP per capita, which is the same regardless of how wealth is distributed. Human capabilities, put at the center of the growth process by Mahbubul Haq and Amartya Sen, disappear from the Solow-Swan growth models which consider accumulation of capital as the sole source of growth. Free Trade theories encourage poor countries to sell food and buy luxury goods, creating hunger and malnutrition, and preventing development of self-sufficiency at the same time. This just scratches the surface; we could go on and on …

  5. May 4, 2017 at 1:10 pm

    In terms of biological evolution and cultural variation, the means by which human societies change and survive, economics stands as a path that hinders survival. In other words, economics furthers the maximization of the welfare of each individual member of the species. Other variations further communal welfare. The term applied for these is “average effects.” Human variation, biological and cultural follows both paths with survival of members of the species moving the species toward one or the other direction. An interesting experiment with chickens shows what I mean. When the best egg-layers are grouped into cages with one another, eventually egg production fails. Turns out these became the best by suppressing the other chickens. When the “mean” chickens are caged together the result is continuous fights and other psychopathic behavior. The chickens kill one another, egg production falls to zero, and this version of the chicken decreases in population and may even die off. This experiment bears a striking resemblance to what’s happening today with humans, fostered by many economists. The individuals best able to suppress and least concerned with their fellows’ welfare develop into psychopaths furiously attacking everyone. This reduces, as with the chickens, the survivability chances of the human species as a whole. So, yes economics (neoliberalism) is a threat to the continued existence of humanity. We really can’t wait for biological evolution to work on fixing this, if it can. Cultural variations is our only option. For example, controlling the aggression of so called “type A’s” or through revised care in childhood preventing the emergence of such aggression. Such actions are not new. Public schools and youth programs (Scouts, YMCA, 4H, etc.) can do much of this. We need only find ways to make the decisions and deploy the resources for the efforts.

    One final comment. Alyssa Battisoni says utopia is possible. It isn’t. But if we keep working we can improve our future prospects.

    • May 17, 2017 at 4:18 pm

      “This reduces, as with the chickens, the survivability chances of the human species as a whole.”

      But “fortunately” these chickens lose their base of support in a major crisis every 80 years or so…

      • May 18, 2017 at 12:37 pm

        Jeff1089, perhaps from a cultural perspective but not from the view of biological evolution.

      • Jeff
        May 24, 2017 at 2:40 am

        “Jeff1089, perhaps from a cultural perspective but not from the view of biological evolution.”

        I don’t see a connection between biological evolution and economics. In both the case of the chickens and the human CEOs, Plasticity plays an enormous (and in my opinion, defining) role in phenotype. A psychopath likely has a genotypic range that falls to the right of most “normals”, but it is my opinion that the number of true psychopaths we have today are a tiny fraction of the number that would develop given universal early cues of an inhospitable and cruel environment. The unit of evolution here would not be selection of individuals based on trait but rather selection of large populations based on plasticity and bottlenecks.

      • May 25, 2017 at 7:28 am

        Jeff1089, from the perspective of the species plasticity is just another way of saying culture. Culture is experience collected and set into rules of thumb and then more permanent guides for action such as laws and status rankings. Since evolution is an average effects process there are always plenty of psychopaths. Best estimates from clinicians today are about 3-4% of the population are psychopathic. Some are the result of evolution. Others from culture. As individuals the psychopath often responds effectively to threatening environments. But they offer little towards species survival, unless the entire species becomes psychopathic. The two together, evolution and then culture determine the forms of human life, including the how humans acquire and use resources – including humans as resources.

  6. robert locke
    May 4, 2017 at 2:09 pm

    “Cultural variations is our only option. For example, controlling the aggression of so called “type A’s” or through revised care in childhood preventing the emergence of such aggression. Such actions are not new. Public schools and youth programs (Scouts, YMCA, 4H, etc.) can do much of this. We need only find ways to make the decisions and deploy the resources for the efforts.”

    I happen to agree that cultural variations is our only option. But real world economists do not or they would not spend so much time and effort on this blog looking for culture free solutions a la Steve Keen.

    • May 5, 2017 at 12:06 pm

      Robert, agree. Wish it wasn’t so. This situation is similar to the response of many economists and conservatives to climate change. Cultural variations are a conservative solution. That means they are slow and progressive. No strong arm tactics. But many conservatives for some reasons I don’t fully understand reject such slow cultural changes. Their resistance has slowed down such changes. Makes dealing with climate change and with the insanity of neoliberalism now almost impossible without strong arm tactics.

      • robert locke
        May 5, 2017 at 6:12 pm

        Ken, I sometimes wonder what happens to assumption, like “from each according to his/her ability, to each according to his/her need.” This assumption requires a concept of community (as opposed to individualism, where people try to base reward not on circumstances in a community but on the value that an employee’s work brings to the firm, a silly idea). My wife, who lived in Poland under communism, points out that need, especially because of family size, was taken into account when providing benefits, housing, and pay for employees. .

      • May 6, 2017 at 7:24 am

        Robert, the distinguishing feature of humans is their imagination. Their ability to create ideas and places they’ve never experienced or don’t exit, or both. This is an evolutionary advantage that gave homo Sapiens an edge in surviving. And it was completely accidental and is not yet fully understood by us who possess it. But like all evolution it can go astray. To each according to need, from each according to ability is a cultural adaptation. It supports safe, efficient, and useful community life. It does not support unrestrained individual choices. Both are possible ways of life for humans. Our biological evolution favors the former, not the latter. Which we choose has important, life or death implications for the species. Our imaginative brains work out the potential consequences of each. But like biological evolution, cultural adaptation can go astray. With survival the goal, which option seems to serve that goal and which to subvert it? We have a choice to make!

  7. May 4, 2017 at 3:09 pm

    Great comment Ken, that’s an insightful story about chickens and humans in A type driven culture. Any thoughts on how that might apply to China, which seems to me historically to have always suppressed A types for the sake of communal survival, but now has chosen to “let them loose” hoping they can be reigned in when the next 1929 or long depression (aside from the secular stagnation we’re already mired in…) arrives…good luck with that.

    I like Alyssa’s writing a great deal because of her ability to pull the fragments together, but I think we’ve already parted ways over precisely what you mentioned: utopianism. In some respects, I’m just a “rotten social democrat,” to borrow an old leftist phrase tossed towards the moderate’s way in the late 19th and early 20th century…and I have no illusions about Social Democracy being anything more than an middle term unstable compromise…but right now, given the range of forces in the political economy, I don’t see how it’s possible to go further and keep democracy, or what’s left of it, to put Yanis Varoufakis’ reservations up front. By the way, I dropped my subscription to “Jacobin” recently, and renewed one from my old Michael Harrington Irving Howe days, Dissent magazine. Alyssa has somehow managed to write for both.

    But I also have to say that Richard Smith – “Green Capitalism: The God that Failed” (as well as Naomi Klein) points out, being further to left than social democracy’s old meanings, that the changes we need to make in the economic system, setting aside all the traditional failings well cataloged by the ancient left on equality and economic justice, that have to be “doubled time” to stave off the environmental catastrophe rapidly falling all around us, well, it’s hard to imagine that social democracy as we’ve known it historically, stirs the passions enough to carry the day…passions which must be constructively paired with reason’s policies…It’s a daunting gauntlet and I just don’t know, can’t see yet how “we’re” going to run it and come out intact on the other side. Reason didn’t do so well in the November 2016 American election.

    • May 6, 2017 at 8:57 am

      gracchibros, a thought experiment that’s always presented to first year anthropology students is the desert island and goodness. It’s a series of questions. What happens with a good person and evil person on a desert island? Most common student answer: murder. What happens if you place all good people on one island and all evil on another? Cooperation and happiness on the first, perpetual war and eventual extinction on the second. What happens with one evil person on the good island? Here the situation is not clear. Is complex. And this is the case with most evolution, biological and cultural. The point of this exercise is that goodness can evolve, when the appropriate conditions exist. Simply put: groups of individuals that exhibit good traits are likely to survive and reproduce better than any other kind of group. The problem with goodness is its vulnerability to subversion from within. To the extent that natural selection is based on fitness differences within groups, the traits associated with evil are the expected outcome. Where individuals battle within groups, as in capitalism and neoliberal groups, the expected outcome is selfishness, deceit, hatred, avarice, cowardice, betrayal, spite, etc. To the extent natural selection is based on fitness difference among groups, traits associated with goodness are the expected outcome. Where individuals assist one another within groups, the expected outcome is altruism, honesty, love, sacrifice, bravery, loyalty, forgiveness, etc. I think you can see our situation today.

      • robert locke
        May 6, 2017 at 12:10 pm

        In Darkness at Noon Arthur Koestler talks about the “fish-eyed stare” that he encounter in communist bureaucrats, which revealed nothing about the inner thoughts that existed in a person — it was a defensive mechanism necessary for survival in a totalitarian state. I bought that notion, and even encountered the fish-eyed stare when crossing borders into Eastern Germany. I expected to find the same thing in Poland when I arrived at the airport in Warsaw on June 20th 1990 to meet my Polish bride (arranged through a marriage agency). I did find the passport people “unfriendly,” but to my surprise there were no fish-eyed stares in my Polish family. You could read them like a book, moreover, it did not take me long to discovered that the sort of anxieties, brought on by insecurity in the American middle class, was no detectable in the eyes of Polish people. Had Polish Commujnism been different from Communism in other countries. I think the answer is yes, culture made a great difference in communism.

        But I also found a sort of naiveté in my new Polish family. I took my new wife to London to live for 4 months, she was shocked to see people begging on the street in such a rich country. Also, when I tried to tell my wife and my 18 year old stepson not to believe everything they heard on commercials, they would not believe me. For example, if Libby can peas were on sale and cheaper than another brand, they thought there much be something wrong with the cheaper can. They couldn’t understanding merchandising, nor did they think people would lie to them about commercial transactions. Why or how could people who came from a communist country think that people were basically honest in their personal dealings (dealing with the government is another matter).

        In other words, I found out that people in civil society were much more honest in Poland than in the US. Once they had lived for awhile in the US, my Poles learned to distrust.people like Americans do. It is a sad sort of civic education the US provides immigrants.

      • May 9, 2017 at 1:23 pm

        Robert, humans have a genetic tendency to trust other humans. Cultural arrangements have redirected this trust over the last 10,000 years. Now we are in the situation you describe. The “fish-eyed” stare of always defending. And the constant effort (and failures) to figure out who can be trusted and who not. As Yuval Noah Harari notes in an article in the Guardian yesterday entitled “The meaning of life in a world without work, “But what about truth? What about reality? Do we really want to live in a world in which billions of people are immersed in fantasies, pursuing make believe goals and obeying imaginary laws? Well, like it or not, that’s the world we have been living in for thousands of years already.” It’s the world humans have always made via imagining. Now their imaginings are frightening, anti-human, and perhaps portend humanity’s last days.

  8. Craig
    May 6, 2017 at 3:11 pm

    What we’re all trying to awaken to and apply to economics is a concept that is, and represents the thorough and thoughtful integration of a bothness, a duality, and a thirdness-oneness at the same time.

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