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Changing economics

from Steve Keen

The pedagogic pressure from students and the wider community has to be matched by the accelerated development of alternatives to neoclassical economics. Though we know much more today about the innate flaws in neoclassical thought than was known at the time of the Great Depression (Keen 2001), the development of a fully-fledged alternative to it is still a long way off. There are multiple alternative schools of thought extant – from Post Keynesian to Evolutionary and Behavioural Economics, and Econophysics – but these are not developed enough to provide a fully-fledged alternative to neoclassical economics.

This should not dissuade us from dispensing completely with the neoclassical approach. For some substantial period, and especially while the actual economy remains in turmoil, we have to accept a period of turmoil in the teaching of and research into economics. Hanging on to parts of a failed paradigm simply because it has components that other schools lack would be a tragic mistake, because it is from precisely such relics that a neoclassical vision could once again become dominant when – or rather if – the market economy emerges from this crisis.

Key here should be a rejection of neoclassical microeconomics in its entirety. This was the missing component of Keynes’s revolution. While he tried to overthrow macroeconomics shibboleths like Say’s Law, he continued to accept not merely the microeconomic concepts such as perfect competition, but also their unjustified projection into macroeconomic areas – as with his belief that the marginal productivity theory of income distribution, which is fundamentally a micro concept, applied at the macro level of wage determination.

From this failure to expunge the microeconomic foundations of neoclassical economics from post-Great Depression economics arose the “microfoundations of macroeconomics” debate that led ultimately to rational expectations representative agent macroeconomics, in which the economy is modelled as a single utility maximising individual who is blessed with perfect knowledge of the future. 

Fortunately, behavioural economics provides the beginnings of an alternative vision as to how individuals operate in a market environment, while multi-agent modelling and network theory give us foundations for understanding group dynamics in a complex society. They explicitly emphasise what neoclassical economics has evaded: that aggregation of heterogeneous individuals results in emergent properties of the group which cannot be reduced to the behaviour of any “representative individual” amongst them. These approaches should replace neoclassical microeconomics completely.

The changes to economic theory beyond the micro level involve a complete recanting of the neoclassical vision. The vital first step here is to abandon the obsession with equilibrium.

The fallacy that dynamic processes must be modelled as if the system is in continuous equilibrium through time is probably the most important reason for the intellectual failure of neoclassical economics. Mathematics, sciences and engineering long ago developed tools to model out of equilibrium processes, and this dynamic approach to thinking about the  economy should become second nature to economists.

Developing an economics for the post-crisis world

  1. May 7, 2019 at 11:54 pm

    I have a 30 lecture sequence with video-lectures, readings, and everything else needed for Advanced Microeconomics I – the first of a core Ph.D. course in Micro – which is completely unorthodox.
    https://sites.google.com/site/az4math
    The first 10 lectures cover Hill & Myatt Anti-Textbook, settting out conventional Micro theoriies in order to knock them down. Basically MICRO is about human behavior in the market context. After rejecting axiomatic approach based on homo economicus, we turn to an experimental and behavioral approach. This second part focuses on REPLACING supply and demand with a better model of what happens in real world markets.
    THEN I have a 24 Lecture sequence on Advanced Micro II at the following website
    https://sites.google.com/site/uzmaexpeco/home
    This course is bullt on two ideas to replace the optimizaiton/equillibrium. Human behavior is based on heuristics, and we can study it by experiments (and it is NOT optimizing behavior) – so we go through Holt and Davis Experimental Economics textbook to establsh patterns of human behavior as revealed by experiments. Next, I teach rudimentary form of agent based modeling as a substitute for equilibrium. Just put in humans with heuristic behaviors into the computer and let them interact and observe what happens. I ran a lot of experiments within the class, which is why there are fewer lectures.

    • Helge Nome
      May 8, 2019 at 1:49 am

      You are on the right track Asad

    • MichaelLucasMonterey
      May 12, 2019 at 3:14 am

      Asad, without diving deeply into your content, it seems promising. I would suggest considering additional R&D of qualitative/ethical ecometrics to serve as potential “weighting” factors, individually or collectively or, depending on the experiment, compare the results using both individual and averaged collective ecometrics. Good luck.

  2. May 8, 2019 at 1:26 am

    Apart from his faith in behavioural economics, I’m with Steve Keen all the way until the very last sentence. (Mechanical) dynamics and math doesn’t get one anywhere either: if economic elements, in the reality of having been booked entries somewhere, are indeterminate ex ante to be resolved (determined) at a later time, to as such allow for economic continuity. Such an economy isn’t on a 2-dimensional path from here to there while accumulating and depleting micro assets. Its determinants are multiplicative inverse in a macro sense, but without its coefficients being fixed timewise. And money is strictly a unit of accounting for claims; never mind institutionally sanctioned saving/investment propensities that, while seemingly micro persuasive, are macro impotent. From that perspective I’m afraid, he’d have to give up way more “economics” than he’d be prepared to do, regardless of a general agreement in thought otherwise. But then again my perspective could be critically deficient also. Please someone tell me why, so I’m no longer wasting anybody’s time including my own.

    • MichaelLucasMonterey
      May 12, 2019 at 3:20 am

      LOL!!! That’s a very impressive way to explain why using econometric models of previous cultural activity is insufficient for generating reliable predictions of future cultural activities and trends. The past is the past, and people are people.

  3. Frank Salter
    May 8, 2019 at 8:25 am

    The final sentence: “Mathematics, sciences and engineering long ago developed tools to model out of equilibrium processes, and this dynamic approach to thinking about the economy should become second nature to economists”, is what needs to be done. My paper, Transient development – RWER-81, is just that, an analysis of manufacturing over time.

  4. May 8, 2019 at 6:26 pm

    Here:
    https://www.patreon.com/posts/brief-history-of-26612065
    Is an excellent review by Keen of Richard Vagues new book. It’s a good introduction to the excellent work of Steve Keen as well.

  5. Craig
    May 8, 2019 at 6:47 pm

    Economists are smart, even the neo-classical ones. Their problem is they aren’t wise. Wisdom requires scientific, mathematical and engineering skills AND pattern/paradigm/essence perception. Thats how even the best heterodox economists can correctly declare the critique that neo-classicalism ignores money, debts and banks and yet miss the obvious paradigmatic insight that arises out of that observation, namely that money as DEBT ONLY created by private banks IS the current monopolistically dominating paradigm. Even fiscal deficits are turned into debt. To perceive paradigms you have to integrate seeming opposites….otherwise you fall back into mere theorizing, palliative reforms and/or the assertion of “epicycles”.

    Wisdom being the process of the integration of the truths in opposites it requires both abstraction AND DIRECT looking at the authentic and actual economic/productive process and deciphering the significances to be found there in order to craft policy aligned with a new paradigm.

    Wisdom is recognizing that paradigms are quintessentially integrative concepts and paradigm changes are the same quality and level phenomenons. It’s a singular concept that defines and creates an entirely new pluralism/pattern. Furthermore one of the signatures of a new paradigm is it is always in conceptual and phenomenal opposition to the current paradigm, like nomadic hunting and gathering vs homesteading/agriculture, terra-centrism vs helio-centrism, Debt Only vs Monetary Gifting. There are numerous other signatures that can help bring one to the wisdom and intellectual realization of a new paradigm.

    • MichaelLucasMonterey
      May 12, 2019 at 3:22 am

      Thanks Craig. I thought you invented that sociolinguistic model of neo-economics.

  6. Ikonoclast
    May 9, 2019 at 8:34 am

    John Vertegaal,

    I agree with you albeit it’s a general, heuristic and inductive reasoning agreement from a priority monism and complex systems ontology standpoint.

    Craig,

    I am not sure that I know the difference between intelligence and wisdom. That statement could be seen as self-critical or Hummel-critical depending on viewpoint. Seeing the words “wisdom” and “grace” made into neologisms with “omics” makes me a little concerned that I will be met with a speculative ontology rather than anything more empirical but I haven’t looked at the free preview yet.

    • Craig
      May 9, 2019 at 9:38 am

      Ikonoclast,

      I can understand the skepticism having been a skeptic most of my adult life. Unfortunately religiosity and skepticism are just the speculative opposite sides of the same coin and must both be overcome. Intelligence is almost entirely breadth of knowledge while wisdom is breadth, depth and directness of same. A scant and/or shallow sense of epistemology has always been adult homo sapiens’ problem. It would be better for adults to “become as little children” who truly live in the present, and integrate their intelligence with that naturally gracious experience.

    • May 9, 2019 at 4:16 pm

      Economists and lay people build their understanding of an economy from the same questionable principle of reality, which is that economic values are determinate. Take that away and their whole house of cards comes crumbling down. Indeterminacy is built into my set of first principles of a paradigm that is true until contradicted, while in the mean time subject to empirical verification. The unstated determinacy axiom leads either to heterodox paradoxes (contradictions), or orthodox irrelevancy. I humbly suggest there is a better way to understanding it all. As referred to before, see my paper: “Questioning the ontology of conventional economics” on my website. Though outside of its scope, solutions to the economic problem would logically follow.

      I wasn’t able to parse your reply, sorry. Isn’t “priory monism” and “complex system ontology” a contradiction in terms?

    • MichaelLucasMonterey
      May 12, 2019 at 3:26 am

      Ikonoclast – Thanx for that cogent response. My sentiments exactly. I think a workable alternative requires a totally logical, nontheistic metatheory or meta-economics.

      • MichaelLucasMonterey
        May 12, 2019 at 3:29 am

        Ooops! I meant “…metatheory of meta-economics”…and the intent implied is that it must be a generally acceptable, digestible and unequivocally logical statement of theory & metatheory.

      • May 14, 2019 at 7:52 pm

        I take it you are agreeing with Ikonoclast on Craig, who if you read him carefully has chosen to be non-theistic. Is “Craig” then not the Steven Hummel whose then impending book he has been praising?

        As a sometime statistician I entirely agree with Bhaskara II below [is that an echo of Roy Bhaskar I hear?], but Ken’s useful reference to Actor-Netwoork Theory is marred by American pragmatism being “defiantly anti-Kantian”, i.e. rejecting metatheory because it undermines their own position. In much the same way as the then Judaic establishment rejected the evidence for the goodness and resurrection of Christ, and hence the validity of his message of God being a loving Father wanting his kids to love each other too.

        The convenient metaphysical choice in the Renaissance period was to deny the existence of God, thus the possibility of Creation, and of human life having a purpose – with the purpose of economics being derivative of that. If one wishes to glorify oneself at the expense of others, it is rather inconvenient to admit that we are all brothers, and that so-called “black sheep” are all too often white.

        On economic meta-theory, see my comment in the Doris Day appreciation of her, portraying the ideal despite her marital misadventures. More than a gifted – a wonderful – old girl.

      • Ken Zimmerman
        May 15, 2019 at 1:48 am

        Dave, ANT is “defiantly” anti-Kantian because since the dominance of Kant’s idealism social scientists have had to `construct their own object.’ Human actors were reduced to mere informants simply answering the questions of the sociologist qua judge, thus supposedly producing a discipline as scientific as chemistry or physics. To go from metaphysics (metatheory) to ontology is to raise again the question of what the real world is really like. As long as we remain in metaphysics (metatheory), there is always the danger that positioning of the actors’ worlds will remain too easy because they could be taken as just so many representations of what the world, in the singular, is like. In which case we would not have moved an inch and would be back at square one of social explanation-namely back to Kant’s idealism.

      • Craig
        May 14, 2019 at 9:10 pm

        Wisdomics-Gracenomics concisely fulfills the requirement of being a pan-entheistic meta-theory for a meta-economics.

        Dave, do you have a point about my moniker here being Craig?

      • Craig
        May 14, 2019 at 10:56 pm

        In other words god/consciousness is and is within the entirety of nature/the cosmos.

        As William Blake so aptly put:

        If the doors of perception were cleansed every thing would appear to man as it is: Infinite. For man has closed himself up, till he sees all things thro’ narrow chinks of his cavern.

        ***********************************************************

        To see a world in a grain of sand
        And a heaven in a wild flower,
        Hold infinity in the palm of your hand,
        And eternity in an hour.

      • May 15, 2019 at 11:15 am

        Where to start? Craig, I asked a question, but I suppose it was a bit warped by my dislike of anonymity (which in a wicked world does have its place). Loved your Blake quote.

        Ken, I suggest you are attributing to Kant what he was opposing, i.e. Hume’s “A Treatise of Human Nature” Vol 2. People with that metaphysic will inevitably interpret Kant in Hume’s idealist way, not seeing the realist Kant saying what Blake so beautifully says above. The Kant I know is saying you can’t see science without looking through the chink of causation, nor live decently without commitment to ethical precepts. Not knowing any better than Hume how the mind works, he naturally didn’t pretend to by basing his argument upon it. I try to imagine what he would have said with a post-Shannon understanding of how the mind works, receiving data from outside by tuning into it and reacting by trying to find it as one would in a book or computer database – usually by looking it up in the index but occasionally (as when people have photographic memories) being able to see the page directly.

  7. Bhaskara II
    May 12, 2019 at 11:43 pm

    Professor Keen’s suggestion of considering dispensing completely with the neoclassical approach is prudent. Rejecting the whole, of a manufactured or received lo because too many of the items are faulty is an excellent practice in quality control.

    I have already done it. I also use the rejected ideas to filter out economists.

    “This should not dissuade us from dispensing completely with the neoclassical approach. – or rather if – the market economy emerges from this crisis.”For some substantial period, and especially while the actual economy remains in turmoil, we have to accept a period of turmoil in the teaching of and research into economics. Hanging on to parts of a failed paradigm simply because it has components that other schools lack would be a tragic mistake, because it is from precisely such relics that a neoclassical vision could once again become dominant when – or rather if – the market economy emerges from this crisis.”

    • Bhaskara II
      May 12, 2019 at 11:47 pm

      Meant to say “lot” instead of “lo”:

      The sentence should have been.

      Rejecting the whole, of a manufactured or received lot because too many of the items are faulty is an excellent practice in quality control.

  8. Bhaskara II
    May 12, 2019 at 11:49 pm

    Prof. Keen said,

    “Key here should be a rejection of neoclassical microeconomics in its entirety. “

  9. Ken Zimmerman
    May 14, 2019 at 3:50 am

    First, not a bad job, Steve. But second, third, and so on. Second, if we’re interested in restructuring the US economy, not economics there are several good alternatives from which we could choose right now. No need to invent anything new. The Green New Deal is one place to start. If you want to get down to the nitty details, check out any of the Nordic nations or Germany. Of course, this will never happen since America is ‘Exceptional,” and these other things and nations are just ordinarily human. Third, if it is our intent to restructure economics the academic pastime, we also have many examples from which we could borrow. I omit the physical science models since the transference of such into economics is beyond the skills and understanding of most of today’s economists. But models in both Sociology and Anthropology are more detailed and empirically based than anything in economics. Two models used by sociologists might be especially useful for economists. Grounded theory and exchange theory. The first derives models directly from field observations. The second examines and describes those aspects of interactions between people that seem to be based on what someone may “gain and lose” by being with others. From Anthropology economists might find cross-cultural analysis useful. The basic premise of Cross-Cultural Analysis is that statistical cross-cultural comparisons can be used to discover traits shared between cultures and generate ideas about cultural universals and how to approach these in terms of research. Ecological anthropology might also be useful for economists. It focuses upon the complex relations between people and their environment (both human and nonhuman). Also, institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions (e.g. individuals, firms, states, social norms). The traditional version is likely best for economists, since it rejects reductionism. Thorstein Veblen, Wesley Mitchell, John R. Commons, and John Dewey are part of this institutionalist lineage. Behavioral economics is based in institutionalism, but a bit mixed up. Finally, the most widely used model incorporating both social scientific research and government policy development is Actor-Network-Theory (ANT). Developed by Anthropologists and historians it rejects “essentialism,” beginning with humans as animals who evolve like all animals with the capability to imagine and perform what they imagine. From this, humans participate in interactions with one another and nonhumans. In this way humans create their societies and culture, defining their nature and future. Based in American pragmatism and defiantly anti-Kantian, ANT combines determinacy and uncertainty since both exist for and are used by humans. ANT emphasizes that the only genuine authorities for human culture and society are the actors who create them. Some of these are scientists. Most are not.

  10. May 15, 2019 at 12:16 pm

    Ken, further to my comment above on Kant, I enjoyed your summary of “different ways of looking” useful to economics as it is, but institutionalism is surely focussed on a limited number of types of thing, and not on how to similarly reduce the interactions between them to a manageable number of different types. It is not that I disagree with ANT’s starting point, “humans as animals who evolve like all animals with the capability to imagine and perform what they imagine”. I disagree with it only as a starting point, for it leaves unanswered the prior questions of how pre-animal nature “imagined and performed” creation by patterning of attractive forces. My argument starts with a “metaphysical” choice of energetic motion rather than pre-existing matter as the starting point, but given Cartesian coordinates the outcomes of a cyclic process building layer upon layer are empirically verifiable at each level of the “onion”. That’s Craig’s “pan-entheistic meta-theory”, which diversity of viewpoint Catholics are at last thankfully beginning to understand is implied in the word “Catholic”. I’m prepared to accept the Christian version because of its empirical “critical experiment” demonstration in the historic Christ, and because it relates ethics to a built-in purpose rather than Craig’s aspirations. But still, from the point of view of economics that is an aside so long as one’s ethics is based on the brotherhood of man rather than humans breeding animals for their own purposes. My question is, does ANT recognise the determinacy (i.e. continued existence and directing potency) of network channels, within which uncertainty exists but can be located, detected and corrected; or are they too just a figment of idealist imagination?

    • May 15, 2019 at 12:29 pm

      PS. The curiosity of the “onion” model is that the latest (smallest) level is on the inside: nearest and most like the centre from which it grows. Thus the relation of man to god.

      • Ken Zimmerman
        May 16, 2019 at 1:57 am

        Dave, your understanding of Kant and mine are certainly different. In his “transcendental idealism,” Kant argues that space, time, and causation are mere sensibilities. “Things-in-themselves” exist, but their nature is unknowable for humans. The mind, says Kant structures experience, with all human experience sharing certain structural features. Kant compared his propositions to the Copernican revolution; worldly objects can be intuited a priori, making intuition independent from objective reality. For Kant reason is the source of morality, and aesthetics arises from a human faculty of disinterested judgment. Kant’s influences on philosophy is strong even today, especially in the fields of epistemology, ethics, political theory, and post-modern aesthetics. Kant wanted to put an end to futile and speculative theories of human experience, while resisting the skepticism of thinkers such as David Hume. Kant believed he was showing the way past the impasse in philosophy between rationalists and empiricists. There is no agreement on whether he succeeded in this effort. To say Kant was an empiricist is therefore incorrect. He considered both, but I don’t believe he settled on one or the other. And I certainly don’t believe he settled the disputes between them. To say Kant asserted it impossible for humans to live decently without ethical precepts is to beg the question as to the source(s) of these precepts. Is it God, the human brain (which Kant claimed could not be known), or ??? I contend that humans create ethical precepts along with all the other aspects of human ways of life. They imagine them into existence. And they are real. As real as the stones and bars of a penal institution, the prison, though most are not so easily touched or described. I claim no final knowledge of the sources of human imagination. Some anthropologists claim its source is changes in brain chemistry and/or structure, while others claim it is environmental. Theologians chip in that it’s a gift from God. But the proof of its existence is in what it creates – the complex world of human cultures and history. Something no other species on Earth has done. Kant, like most philosophers seems more interested in explaining human experience without ever examining actual humans than getting the story right. But undoubtedly, he was an intelligent fellow. One of the reasons I read Michel Serres is that his philosophical work begins and ends with reading the media and observing people in daily situations. That’s more of an undertaking than any human can handle.

      • May 16, 2019 at 10:07 am

        Ken, we certainly disagree over Kant, but this is because you refuse to accept the difference between “revolutionary” and “normal” science: between not being able to see because you are not looking in the right direction, and Humean not knowing how that can be true at the micro level (so presuming one must be imagining what one sees). There is an answer to that, which is that what one imagines is what is there: that the brain adjusts its senses until the image maximises alignment with the incoming data, being normally able to detect whether what is imagined corresponds to what is seen. That’s the way to get past the Humean impasse; Kant got the revolutionary part of the way to it by seeing his criteria directly and defending them by a rational process of elimination. If you don’t look for causes and goodness you won’t find them.

      • Ken Zimmerman
        May 16, 2019 at 2:10 pm

        Dave, science and scientific knowledge are not cognitive processes but an embodied cultural practice enabled by instruments, machinery and specific historical conditions. Would the mind of a scientist or an engineer from, say, California seem anymore “modern” or “rational” than that of one from China if it were studied independent of the education, the laboratory and the tools that shaped it and made its work possible? It’s culture (including history) that create science and scientific knowledge. This includes the common trademark of the presentation of science as purely cognitive and intellectual, objectivity. Like science and scientific knowledge, themselves, objectivity is also manufactured; make up. “Scientific method” is not a path to “objective facts” that transcend their human origins. Scientists argue and debate about data, test results, testing machines and methods, observational tools, etc. until a sufficiently strong and resilient network of actors (that includes scientists but also all the other humans and nonhumans involved in the work) creates and defends the facts. During this entire process scientists continually say they are speaking for the facts. Once their propositions are turned into indisputable statements and peer-reviewed papers — what Latour calls ready-made science — they claim that such facts had always spoken for themselves. That is, only after the scientific community accepts something as true are the all-too-human processes behind it effectively erased or, as Latour puts it, black-boxed. If it’s science and scientific work one wants to understand, focus on these processes, particularly the creation and maintenance of the cultural networks of actors (humans and nonhumans) that create and defend scientific truths.

        This process is the common way for humans. All human knowledge, understanding, and practice are created in this same way. That includes the facts and concerns of art, literature, government, philosophy, etc. All are created (imagined) through networks, with some networks establishing the “real” in art, literature, government, philosophy, science, etc. while other networks fade away. It’s not the data itself that’s important, but rather what happens to the data in the networks. Facts are “networked;” stand or fall not on the strength of their inherent veracity or connection to “reality” but on the strength of the institutions and practices that produce them and make them intelligible and useful. In other words, the network that creates and supports them. If this network breaks down, the facts will go with it. This is certainly not Kant.

      • May 16, 2019 at 5:24 pm

        So young Newton’s seeing the apple pulling the earth was neither a cognitive nor a scientific event? For it was certainly not “an embodied cultural practice enabled by instruments, machinery and specific historical conditions.” What it was is revolutionary science: a paradigm change from seeing the earth pulling the apple to seeing the earth and the apple pulling each other.

      • Ken Zimmerman
        May 17, 2019 at 8:52 am

        Dave, Sapiens creates cultures and societies formed based on these cultures. Science is cultural and societal. It cannot be otherwise. Within this environment, Sapiens continues to be a creative and imaginative species. Which leads to changes in culture and thus human history. Newton was a member of Sapiens, thus lived and worked within a culture, specifically 17th century Britain, which included 17th century British education and science. That education and science included the notion of a force among objects, including earth, transferred from the Moslem regions to Europe during the 400 years before Newton’s birth. Newton’s life and his science and mathematics is thus an “embodied cultural practice enabled by instruments, machinery and specific historical conditions.” That’s often not seen by humans because culture and history is just there; it comes to be as just the way things are. “The last thing a fish would ever notice would be water.” Culture and history are Sapiens’ water.

      • Craig
        May 16, 2019 at 5:51 pm

        When in doubt integrate the truths in opposites, it’s the process of wisdom itself, and grace is wisdom’s pinnacle concept which is the continuously integrative state of a duality which conceptually and experientially yields a thirdness greater oneness.

      • May 17, 2019 at 1:05 pm

        Ken, I hope Craig can have the last word on this. What you say may be true from the historical perspective, but it is not true of historical events. Newton personally transformed the perspective of science by both his gravitational “gestalt” and the mathematical calculus he invented to work put its implications. Let me grant you as much as I can. The previous culture based on observation assumed the earth as the centre of everything and gravity an effect of the earth operating somewhat differently on the elements of earth, water, air and fire so that each finds its own level. The invention of the telescope led to realisation not only of our solar orbit but of the immense distances in space, where the earth’s influence was negligible. There was thus a problem with the existing cultural assumption that the heavens (and most obviously the sun) moved round the earth, attracted to it by its gravity. If you do your sums on that basis, how do you account for the differential motions of the stars beginning to show up through the new telescopes? (In your terms, the instrument enabled realisation of the problem, not the solution). Newton changed the basic axiom of the calculations from a master-slave to an inter-active relationship, and went on to show that with that assumption the sums worked out for as far as one could now see. Newton’s solution to the problem in earlier science was adopted and changed the subsequent culture: i.e. the culture didn’t change itself. But that is the last thing an anthropologist immersed in the evolution of culture would ever notice?

        As for what relevance that has for “changing economics”, let me remind you that I was enthusing over your reference to ANT (Actor-Network-Theory), because that is what my own analysis of the basis of economics amounts to – in contrast to the gravitational theory of economics in which the different kinds of actors automatically find their own level. Wouldn’t it be more helpful to explore and develop that basis for theory rather than wasting time repeatedly disagreeing with each other?

      • Ken Zimmerman
        May 18, 2019 at 12:30 pm

        Dave, Newton was a person only because 17th century British culture afforded him that status. There were others in that culture not afforded that status, e.g., African American slaves, women. Whatever he did personally was only possible due to this status. But there were many in the culture who clearly did not believe Newton had done anything of merit. That debate went on long after Newton’s death. Plus, as I’ve already mentioned, Newton did not alone invent gravity. It was a notion in British culture long before Newton’s birth. Like most such inventions, in science and elsewhere it was a collaboration. Newton just did not have personal contact with most of his collaborators. What you mention from Aristotelian science is essentially correct. Ibn al-Haytham in Moslem regions and Roger Bacon in Middle Age Europe challenged Aristotle’s science before Newton’s birth. So, by Newton’s time science of the elements (earth, water, air and fire) was under stern challenge. Newton was one of many involved in the creation of the telescope. It wasn’t till the middle of the 18th century that a telescope that could accomplish even some of the actions you list was created. The telescope is like other instruments. It’s used by persons, who discuss what they see or don’t see, debate the “facts,” and publish findings which are either accepted or not by the scientific community. If accepted, all the debates are put away since we now know the “truth.” A truth that all those involved in the debates contend was always there for anyone to see.

        The solar system challenged by Copernicus and others was from the Greeks. Considering the instruments available to the Greeks and their prejudices about how humans fit into nature, the system they proposed made sense. Copernicus positioned the Sun near the center of the Universe, motionless, with Earth and the other planets orbiting around it in circular paths modified by epicycles and at uniform speeds. That view has gone through dozens of iterations from 1550 to the present. Some of these came from Newton, but none altered the replacement of Earth at the center by the Sun. Which was viewed as a crime by the Catholic Church, but not one serious enough to severely punish Copernicus or most who followed him. Newton’s view of the orbits of the planets and of the universe generally reflected his belief, taken over from British religious notions that God was active in the universe, ensuring that the planets moved so they did not collide, and the Earth was comfortable and peaceful. Gravity was, in a real sense for Newton an intervention of God. The interactive you mention is God’s part in maintaining His creations. Few scientists today would accept such religious-science mixing. It was quite common in Newton’s time, however. Culture changes. Sometimes even the intervention of a single person can change it. But more often it changes through a cumulative process, taking decades or even centuries. Newton is part of a centuries long change. Slower than changes from relativity, but quicker than the changes from Darwin’s evolutionary views. You’re wrong about culture changing itself. Culture creates unsolved problems or uncertainties that force consideration of new versions of how to live and work. Culture fails or creates dilemmas it is unable to resolve and must change.

        As to economics, the economy, and Actor-Network-Theory, I offer the following. “This performation of the calculative agencies-ie, of the economy by economics-is largely carried out through the intervention of professional economists. The study of the strategies developed by this profession is thus indispensable for an understanding of the variety of mediations through which this gigantic enterprise of formatting takes place. Unfortunately very few studies exist on the subject.”

  11. Craig
    May 17, 2019 at 11:54 pm

    The paradigm change of Wisdomics-Gracenomics and its policies and structural changes IS THE QUINTESSENTIAL CULTURAL/PATTERN CHANGE. It’s good, it’s WAAAAY GOOD for everyone and every agent EXCEPT private finance. It doesn’t reform and tweak problems it resolves them in the way paradigms do, by complete inversion/transformation of current
    realities.

    If the erudite economists, pundits and small to medium sized
    business community would simply look at the temporal, empirical and problem resolving effects of its policies (particularly the way it can get us “off the dime” toward the implementation of positive ecological effects with the double 50% discount/rebate policy for non-fossil fuel consumer purchases and the ending of the idiocy of financing for ecological sanity being “too expensive”) ….then WHAT IS THERE TO ARGUE ABOUT? ESPECIALLY WHEN THE ALL THE REFORMERS CAN COME UP WITH IS FAR LESSER BUT ALIGNED REFORMS????

    Think about it.

  12. May 19, 2019 at 4:15 pm

    Obviously, Ken and Craig are not interested in changing economics, only in listening to the sound of their own voices. A pity, as for a moment Craig was on the verge of saying something sensible about the dialectical formula for getting something out of a discussion, and Ken came up with a relevant-sounding formula, “Actor-Network Theory”, which turns out to be for him just high-sounding words: a diversion from serious discussion of the proposition that what looks like a continuous process on the time-scales of anthropology is anything but when considered on the timescales of historic events. What the heck is a ‘performation’, anyway? That too sounds like a figment of Ken’s fertile imagination.

    Craig, realising change involves a great deal more than just understanding and agreeing on the wording describing a new paradigm. Have a listen to Varoufakis on European reform:

    • Craig
      May 19, 2019 at 7:39 pm

      Dave,

      Varoufakis is just like virtually every other economist, extremely erudite on his subject matter and the process of REFORM….and a paradigm perception dunce.

      Of course there is a process AFTER a new paradigm is recognized, but it’s really only with those who haven’t cognited on it yet and once it becomes a reality someplace its recognized by the human population there and elsewhere that its such a phenomenally progressive step that everyone copies it. That’s historically verifiable. When a single hunter-gatherer stopped being nomadic, settled in one place and created enough food to feed three tribes, well, that was the end of hunting and gathering as a lifestyle.

      Learn the signatures of historical paradigm changes…and you’ll have paradigm perception/wisdom:

      1) Discovery or re-discovery of a new insight/new innovation that resolves long term current paradigm problems (the 50% discount rebate policy at the point of retail sale/the missed “hiding in plain sight” recognition that retail sale is the terminal ending, cost and price summing and final problem expression point of the entire economic, actually productive process and hence a simple mathematical operation can reverse systemic realities)

      2) Conceptual Opposition (Debt/burden/obligation to re-pay vs Monetary Gifting)

      3) Inversion/Transformation (Individual income scarcity and systemic monetary austerity to abundance of same)

      4) Resolution of long standing current paradigm problems. (Individual income scarcity and chronic inflation)

      5) Permanent change/progression in the area of human endeavor that the paradigm change takes place in. (pick your own paradigm example)

      6) End of the primacy/monopoly of the major structural entity of the old/current paradigm and replacement of it by a new primary structure conceptually aligned with the new paradigm. (private finance to finance as public utility)

      7) Paradox (Increased freedom and ability to consume [if intelligently and wisely regulated and incentivized] rather than becoming profligate ecocidal idiocy, instead enables forthright and immediate movement toward ecologically sane consumption and ability to finance whatever projects are needed to reduce CO2 etc.)

      • Ken Zimmerman
        May 20, 2019 at 10:32 am

        Craig, just one question for you. Why would any modern financial millionaire or billionaire accept, let alone champion your proposal over the current economic arrangements that have and will continue to make them rich?

      • Craig
        May 20, 2019 at 6:51 pm

        They wouldn’t of course. But they are few, we are many and when the constituency of we awakens to the fact that the policies, regulations and structural changes of Wisdomics-Gracenomics immediately more than doubles their purchasing power, doubles the actually available money for their goods and services, doubles the doubled purchasing power for new homes, electric vehicles and any product that reduces our carbon footprint, doubles the doubled purchasing power of savings, lowers every individual’s and commercial agent’s taxes and amongst loads of other “spill over” benefits in other areas of life that finance has wheedled its way into also enables us to escape oppressive homo economicus’s subset of purposes labeled Employment Only and choose from the set of All Positive and Constructive Purposes…..the alleged power of finance will fold like a rag doll. And if they don’t, then “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

      • Ken Zimmerman
        May 21, 2019 at 1:10 pm

        Craig, allow me to point out that these millionaires and billionaires don’t need any of this “help.” And I suspect that many would not want such “freebies” going to the less affluent in society. Greed and jealously, two powerful emotions.

      • Craig
        May 21, 2019 at 5:47 pm

        Ken,
        You’re making the wrong and/or missing the point. Who cares whether those who utilize Debt to dominate won’t like it? When you recognize the new paradigm…which is always a cultural advance of an order of magnitude, you have clarity on the ethics and the course forward.

        Enough of the mental masturbation of regurgitating economic critiques that we all already agree upon. It’s fiddle faddle.

        Keen almost got it right when he said neo-classical economic ignores money, debt and banks. It’s the SCARCITY of money, The PARADIGM of Debt ONLY and PRIVATE FOR PROFIT BANKING. So okay, run with the new insight regarding the pivotal power point of retail sale and the innovative policies, regulations and structural changes that bring individual monetary abundance, systemic free flowingness, the common sense of ending a “business” model of private for profit finance from monopolizing the single most powerful factor in the economy and that in so doing enables us to act ACTUALLY BEGIN TO ACT on SURVIVAL consumption and necessary projects for the planet and its many species.

      • Ken Zimmerman
        May 22, 2019 at 2:24 am

        Craig, I don’t give a damn for economics or economists. But in the “real world” when challenging an existing way of life, such as neoliberal economies, winners and losers in keeping vs. abandoning that way of life must be considered. Those who benefit from neoliberal economies will oppose your “new” paradigm if the change hurts them or their friends. No matter how much the change might help those hurt by neoliberalism. It’s better to figure out how you propose to handle this fight before launching the “new” way of life. I speak from many years of experience. By the way, in my experience most of the proposed changes lose this fight.

      • Craig
        May 22, 2019 at 5:00 am

        Who loses with the policies of Wisdomics-Gracenomics? Virtually no one, that’s who. Even the vast majority of the managerial class in private finance will be able to find a job in the new publicly administered non-profit national banking system and with the dividend and 50% discount/rebate policies they probably won’t lose much or any purchasing power to boot. The benefits of the policies in my book are “all good”, “way good” and a huge increase in the 99%’s purchasing power, lifestyle, chronic mental state and also builds an institutional infrastructure that will enable them to choose to work on their personal problems and self actualize the higher thoughts, emotions and attitudes of wisdom.

        If the entirety of that can’t be “sold” and or acculturated then maybe we shouldn’t be called homo sapiens i.e. “wise and discerning man”.

      • Ken Zimmerman
        May 22, 2019 at 9:37 am

        Craig, perhaps you are correct. But I suggest you brief some folks likely to question your plan and get their input on objections it might raise. Forewarned is forearmed. Just a suggestion. I always take this precaution myself.

      • Craig
        May 22, 2019 at 3:32 pm

        Well, I thought that was what I was doing in posting here. Unfortunately there has been almost zilch actual questioning about/analysis of the policies, philosophy and paradigmatic studies I’ve enumerated here hundreds of times. All I get is cynicism, doubt, probable non-comprehension, occasional attempts at invalidation or no response at all (all of which are typical responses to new paradigms considering that new paradigms are always in conceptual opposition to orthodoxies surrounding and the precise concept of the current/old paradigm).

        I’m ready to take specific questions regarding the actual policies, regulations and philosophy of Wisdomics-Gracenomics and about assertions regarding them. Let’s have an actual discussion. It might be an opportunity for me to learn.

    • Ken Zimmerman
      May 20, 2019 at 3:25 am

      Dave, you say Actor-Network-Theory sounds interesting to you. Great. But you obviously haven’t read any of the work of those who invented ANT. Otherwise, you would know the answer to your question about performation. If you don’t want to read, I can explain it to you.

      • May 22, 2019 at 11:36 am

        Ken, so I’ve read the wiki on ANT and it is fill of neologisms. What rings bells is the statement ” [ANT] is not, in other words, a theory ‘of’ anything, but rather a method, or a ‘how-to look’ as Latour[1] puts it”. That ties in exactly with SSADM, which is however a MATHEMATICAL method applicable to anything [evolutionary if not dynamic], and not just a melee of words getting lost trying to describe everything. It seems the key point ANT has missed when worrying about “tree structures arising from deviations in transmission” is many-to-one multiplexing, as when one is not talking about individual things but about lots of things happening in parallel, like thousands of people all going from their own homes to a football match, or producing goods from diverse resources. In SSADM such relations would refer to a list of individually specified journeys or tasks, which therefore may not yet have happened. As a design method, therefore, it is not just about “how to look”, it is about “how to make”: about creating the possibilities of things happening. In my theories of economics and its monetarised control, the network contains the minimum number of “actors” necessary to make possible a network (i.e. 4), but the channels between them are multiplexed. In electronics there are just four types of component, one of them being the interfaces to non-electrical forces (e.g. heat, pressure etc). Arthur M Young’s “The Geometry of Meaning” shows more clearly than anyone else I’ve come across how control is related to Newton’s equations of motion. Applied to SSADM itself, the four “actors” are entities, processes, histories and audit trails.

      • Ken Zimmerman
        May 22, 2019 at 2:09 pm

        Dave, wiki is just not enough to understand ANT. A few points. First, ANT is consistent with complex (chaotic) human culture/society. According to the concept of chaos, three simple constraints make everything, including human culture remarkably rich and complex. The three constraints I’ll call sensitivity, determinism, and recurrence. These constraints allow mathematical chaos: behavior that looks random but is not random. For beginners in ANT John Law is, in my view, the clearest interpreter of ANT. Law uses two stories to describe ANT. “First story. Actor network theory is a ruthless application of semiotics. It tells us that entities take their form and acquire their attributes as a result of their relations with other entities. In this scheme of things entities have no inherent qualities: essentialist divisions are thrown on the bonfire of the dualisms. Truth and falsehood. Large and small. Agency and structure. Human and nonhuman. Before and after. Knowledge and power. Context and content. Materiality and sociality. Activity and passivity. In one way or another all of these divides have been rubbished in work undertaken in the name of actor-network theory.” So, there is only one path in ANT to grasp what’s going on in any social arrangement (social includes not just humans but also nonhumans—all can be assembled in differing arrangements depending on relations between agencies (actors that act on things around them, with and without what current philosophy calls intent). We must examine, reveal, take apart, etc. the construction work involved in creating anything, from social norms to love to wars to government, etc. As Latour puts it, after the work is completed, that it happened or how it happened is “black-boxed” out of sight and mind. Such investigations are dangerous and often scandalous. “Sacred divisions and distinctions have been tossed into the flames. Fixed points have been pulled down and abandoned. Humanist and political attachments have been torn up. Though, of course; it is also a little more complicated, and the scandal may sometimes be more metaphysical than practical. For this precise reason: it is not, in this semiotic world-view, that there are no divisions. It is rather that such divisions or distinctions are understood as effects or outcomes. They are not given in the order of things.” In ANT the first story is often called “Relational Materiality.”

        “The second story has to do with performativity. For the semiotic approach tells us that entities achieve their form as a consequence of the relations in which they are located. But this means that it also tells us that they are performed in, by, and through those relations. A consequence is that everything is uncertain and reversible, at least in principle. It is never given in the order of things. And here, though actor-network studies have sometimes slipped towards a centred and no-doubt gendered managerialism, there has been much effort to understand how it is that durability is achieved. How it is that things get performed (and perform themselves) into relations that are relatively stable and stay in place. How it is that they make distributions between high and low, big and small, or human and non-human. Performativity, then, this is the second name, the second story about actor-network theory. Performativity which (sometimes) makes durability and fixity.”

        ‘Actor-network’. This is a name, a term which embodies a tension. ANT is sometimes called “material semiotics.” It is intentionally oxymoronic, a tension which lies between the centered ‘actor’ on the one hand and the decentred ‘network’ on the other… There is much to be said about this, about this notion of the ‘actor… network’. Yes, actors are network effects. They take the attributes of the entities which they include. They are, of course, precarious. But how is the network assembled? Here there are answers, but many of them lead us into well-rehearsed machiavellian or mnagerialist difficulties. Or they are posed in a language of strategy. No doubt the founding texts of ANT are more complex and oxymoronic than this quick naming suggests. However, if we draw on a set of discourses that have to do with strategy, then the gravitational pull of those discourses is primarily about the struggle to centre-and the struggle to centre and order from a centre. And as we know, this brings problems that may be told in several ways. This is one of the major critiques leveled against ANT. But those using ANT are aware of this difficulty. In the words of Leigh Star,

        • One: yes we are all heterogeneous engineers, but heterogeneity is quite different for those that are privileged and those that are not. The point is a little like Rosi Braidotti’s in relation to Deleuze: to celebrate a body without organs is all very well, but less than attractive if life’ has always been about organs without a body.
        • Two: we may talk of ‘heterogeneous strategies’ or ‘heterogeneous engineering’. But what about non-strategic orderings? What about relations that take the shape or form that they do for other reasons?
        • Three: materials may be heterogeneous, but what of heterogeneity in the sense intended by a writer like Jean-Francois Lyotard? Heterogeneity, in one way or another, as Otherness, that which is unassimilable? As difference? Whatever has happened to this?

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