Home > Uncategorized > Economists have no ears

Economists have no ears

from Steve Keen

Thomas Kuhn once famously described textbooks as the vehicle by which students learn how to do “normal science” in an academic discipline. Economic textbooks clearly fulfil this function, but the pity is that what passes for “normal” in economics barely deserves the appellation “science”. Most introductory economics textbooks present a sanitised, uncritical rendition of conventional economic theory, and the courses in which these textbooks are used do little to counter this mendacious presentation.

Since this textbook rendition of economics is also profoundly boring, the majority of those exposed to introductory course in economics do no more than this, and instead go on to careers in accountancy, finance or management – in which, nonetheless, many to continue to harbour the simplistic notions they were taught many years earlier.

The minority which continues on to further academic training is taught the complicated techniques of economic analysis, with little to no discussion of whether these techniques are actually intellectually valid. The enormous critical literature is simply left out of advanced courses, while glaring logical shortcomings are glossed over with specious assumptions. However, most students accept these assumptions because their training leaves them both insufficiently literate and insufficiently numerate.

Most modern-day economics students are insufficiently literate because economic education eschews the study of the history of economic thought. Even a passing acquaintance with this literature exposes the reader to critical perspectives on conventional economic theory – but students today receive no such exposure.

Students might learn, for example, that “externalities” reduce the efficiency of the market mechanism. However, they will not learn that the “proof” that markets are efficient is itself flawed. Since this textbook rendition of economics is also profoundly boring, the majority of those exposed to introductory course in economics do no more than this, and instead go on to careers in accountancy, finance or management – in which, nonetheless, many continue to harbour the simplistic

They are insufficiently numerate because the material which establishes the intellectual weaknesses of economics is complex. Understanding this literature in its raw form requires an appreciation of some quite difficult areas of mathematics-concepts which require up to two years of undergraduate mathematical training to understand.

  1. October 28, 2020 at 9:06 pm

    By destroying the assumed validity of academic literature on economics, one can construct a newer way to support MMT. Since MMT starts with the Constitution and the power to create currency but the mainstream with assumptions about consumers behaviour, supporters make a rod for their own backs.

  2. October 28, 2020 at 10:16 pm

    You have just reminded me of a talk I did about 20 years ago entitled “How I learned why bad beliefs don’t die at the hockey arena.” A social psychologist, Gregory W. Lester wrote an article about how even inconsequential beliefs are part of the brain’s survival schema which is what I based my talk on.

    I have and had written extensively in letters to the editor about the bad economic practices of the day and two businessmen whose sons played on the same hockey team with my son began a discussion with me about one of my letters. It was the first intermission in the game. At about the mid-point of the discussion I asked them “When you go to the bank, to borrow money for your business or home mortgages where does the bank get the money?

    One chap answered “The Bank of Canada” and the other answered “From other depositors.” I responded with, “Actually neither. The banks create the money out of thin air.” The latter grabbed my shirt and made a fist threatening to strike me saying “That is the most fucking stupid thing I have ever heard.” I asked if I could buy him a coffee or had he had too much already. I am used to violence at hockey games but not usually at intermission!

    At the next intermission I approached him — I often go where angels fear to tread — and asked if we could talk. He was more calm and agreed. So I clarified my impression that he had a degree in business administration and had studied macroeconomics. I asked him what year and when I got home I looked up the intro text for that era — I should really get a life — and photocopied the section on fractional reserve banking which is a form of money creation ex nihilo as part of the money multiplier idea. I took that to him and we had a discussion about it and he said that his parents had taught him the intermediary role of banks and he had not let that go. He did not have the term intermediary.

    Of course, he was completely unaware that there are three basic ideas about money-lending despite his education. His first belief could not change even when he was provided with new information. He may still believe in the intermediary form but at least now may realize that there are other theories. If I see him again, I will cite the empirical data for what I said. I was not familiar with it then.

  3. Econoclast
    October 28, 2020 at 10:49 pm

    A variation on the title here might be that “Economists have lost their senses”.

  4. October 28, 2020 at 11:11 pm

    Hi Steve : Thanks for all your good paradigm-busting over the years ! I recommend the TV one-hour Special we uplinked to PBS stations in the USA about 7 years go, “THE MONEY FIX” . the first half on the politics of money -creation, the second half on all the thousands of local currencies and various scrip people create to clear their local markets and employ their own citizens. It’s on films.com for classroom use and free, on demand at http://www.ethicalmarkets.tv Let’s escape the conceptual prison of money ! Hazel Henderson

    • October 29, 2020 at 12:29 am

      Thanks Hazel, I’ll check it out and link to it on my Patreon blog https://www.patreon.com/ProfSteveKeen. Thanks too for all your work over the years. I still remember fondly that workshop you conducted in Florida (where I had my misadventure with my passport, if you remember).

  5. Geoff Davies
    October 29, 2020 at 1:33 am

    Yes, thanks Steve for all your good paradigm busting, and I’m going to disagree on one point.

    You don’t need complicated mathematics to appreciate the nonsense of neoclassical theory. Steve has done a great job exposing logical fallacies in the neoclassical story, and for some of that you do need some maths.

    However – modern economies are pervaded by instabilities (market crashes, economies of scale, exponential growth of some firms, concentration of wealth, … ) and that observation demolishes the neoclassical equilibrium theory’s relevance to real economies. Economies of scale are an easy route into one form of instability, as I’ve illustrated in Economy, Society, Nature (see right-hand column).

    What you do need to appreciate this argument is some grasp of how the purpose of a theory is to provide useful guidance on how the world behaves. In other words you need to appreciate how proper science is done. That appreciation is utterly lacking in the pseudo-scientific discipline of neoclassical economics.

    Regarding other comments here, there is more to reforming economics than MMT, although that’s one important part. MMT can help us to weather recessions, but would it not be better to avoid recessions?

    Private banks create far more money than central banks (see antireirier’s comment above), and that drives booms and busts, as Steve’s work demonstrates. Remove the private banks’ core incentive to load us up with debt. Debt is economic fire and it’s time we learnt to manage it carefully.

    Markets cannot be left untended, there is no assurance at all that they will produce a desirable result efficiently. Oh, shock horror! If we manage the incentives under which they operate, we might find the world improves rapidly and dramatically. For example, a proper price mechanism on carbon emissions. There are many perverse incentives operating and removing those would make a big difference already.

    Financial markets are driven 98% by speculation, sucking wealth away and destabilising the real economy. Take the profit out of the speculation.

    Get rid of GDP, it is a crude, indiscriminate tally, it is not accounting (or relegate it to obscure academic discussion). Manage the economy to increase wellbeing as we reduce resource use and wastage. Triple-bottom-line accounting will work for that purpose, it has actual balance sheets. We could accomplish a great deal just doing more of what some people are already doing.

    Promote ownership structures (there are many) that ensure a better flow of benefits to all who contribute to producing wealth, or wellbeing. If workers are owners, 150 years of ideological conflict is abolished. But users can be owners too.

    And so on … I commend my book (again) to the many here who still seem to be trapped in fruitless lamentations.

    • Yoshinori Shiozawa
      November 2, 2020 at 1:33 am

      Geoff Davies: [M]odern economies are pervaded by instabilities (market crashes, economies of scale, exponential growth of some firms, concentration of wealth, … ) and that observation demolishes the neoclassical equilibrium theory’s relevance to real economies.

      I agree with you. So, my question. I see many heterodox economists (not neoclassical economists) who know pervasive instabilities of the economy and argue within the framework of equilibrium. How do you persuade them to abandon equilibrium analysis? What method do you recommend to adopt in place of equilibrium?

  6. Craig
    October 29, 2020 at 3:31 am

    I have often said here that I think you are the best economist on the planet, and I agree with virtually every bit of de-bunking you, MMTers and Michael Hudson espouse.

    I also agree with you when you say that accounting/double entry bookkeeping is an excellent way to follow the flows of money in the economy. What I would propose to you is that utilizing the accounting convention of equal debits and credits must sum to zero with a 50% discount to the consumer specifically at the point of retail sale, every cent of which would be reciprocally rebated back to the merchant granting it by the monetary authority, could be not just a reform, but an actual temporal universe reality inverting paradigm change in the economy and the money system.

    Such a policy would 1) immediately double everyone’s purchasing power (everyone gets to purchase $100 worth of groceries etc. for only $50) and 2) also double the actually available free and clear money for every retail enterprise’s goods and services making it 3) not only the definition of good economic times for them, but also a policy that could integrate the traditionally opposed political interests of labor and management because it is so completely and obviously in both of their self interests. 4) It would not only end inflation, but would (almost miraculously from an orthodox economic theory standpoint) beneficially integrate price and asset deflation into profit making economic systems. Finally, 5) if we did another 50% discount/debt jubilee policy at the point of loan signing for every big ticket and/or green consumer product we could make every EV, solar panel, battery back up system so affordable that it could clear the skies with post haste. (a $50k Tesla becomes $25k at point of sale and $12.5k at note signing and a $300k home with solar panels and battery back up systems becomes $150k and then $75k). Finally, finally, 6) making the economy hum and trend toward ecological sanity while ending the fear of inflation could enable a giant increase in fiscal spending for the mega projects necessary to hopefully survive climate change.

    Of course we’d need to have a few rather simple and understandable rules and regulations accompanying this policy (even entire pattern/paradigm changes can be somewhat destabilized by the anti-social intents of a few), but I assert to you that these simple, but not simplistic, policies are capable of completing the correct intents of yourself, MMTers and Michael Hudson.

    • October 29, 2020 at 11:06 am

      Craig, the whole of what we spend comes out of our account and is credited to the seller’s, so why rebate it? And have you thought about where the seller is going to get his income from, if what he receives from us has to be spent on restocking? If he lives off his profit, then if you discount his income he will likely pre-empt that by doubling his profit margin. On the other hand, give everyone (including him) the credit they need and their living expenses won’t need to figure in the price of commodities. That can be decided on criteria like recyclability.

      The nice thing about Steve Keen is his humour, as in “Economists have no ears”. Same here with Antireifier. I’d like to thank him for his story, which by way of his three theories has got through to my wife about “banks create the money out of thin air” where my own earnestness has not. Has Hazel seen that our own credit cards in effect enable us to to do that ourselves, generating currencies as “local” as one can get? The earnest Geoff thinks “there is more to reforming economics than that”, and I agree with him on the specific issues he raises, but isn’t the misrepresentation of money at the root of all of them? Remember Stamp:

      “”Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”

      There is more to reforming economics than MMT: the need is to reduce banking to local accountancy and remember what Wikipedia calls ‘Stamp’s Law’:

      “”The government are very keen on amassing statistics. They collect them, add them, raise them to the nth power, take the cube root and prepare wonderful diagrams. But you must never forget that every one of these figures comes in the first instance from the chowky dar (village watchman in India), who just puts down what he damn pleases.”

      • Craig
        October 29, 2020 at 5:29 pm

        First off, I’m still waiting for a reply from professor Keen regarding the efficacy of the policies I enumerated.

        Secondly, “the whole of what we spend comes out of our account and is credited to the seller’s, so why rebate it?”

        Not with the direct and reciprocal-discount/rebate policy at retail sale. The consumer pays only 50% and the monetary authority rebates the other 50% back to the merchant so he/she can be whole on their overheads and margins of profit. You’re apparently not seeing the actual operation of the policy.

        “And have you thought about where the seller is going to get his income from, if what he receives from us has to be spent on restocking?”

        Again, he receives 100% of his full price. It’s just that the consumer only pays 50% of it.

        “If he lives off his profit, then if you discount his income he will likely pre-empt that by doubling his profit margin.”

        Again, again, he’ll get his full retail price because the monetary authority will rebate fully 50% of it back to him that he discounted to the consumer. And he and every business model before retail won’t be arbitrarily raising their prices because one of the rules for opting into the 50% discount/rebate policy will be that they cannot do so unless their OVERALL expenses have increased, and considering that the 50% discount/rebate policy combined with the $1000/mo. universal dividend policy (which with the 50% discount enables everyone 18 and older to purchase $2000/mo. worth of goods and services) they and every one of their employees wouldn’t have to pay the transfer taxes for welfare, unemployment insurance and even for social security. Thus they could pocket that as savings/profit margin. Thus they can choose the incredible economic benefits of the 50% discount/rebate policy and the universal dividend and innovate and compete on price instead of committing the economic vice of price inflation…or they can decide not to opt into the new policies….and thus have to get 100% of their price from consumers when their competition only has to get 50%.

    • Craig
      November 1, 2020 at 8:10 pm

      It appears there will be no response to my asking Dr. Keen to comment on the efficacy of my 50% discount/rebate policies at retail sale and at the point of note signing so I’m going to outline how they and other policies I advocate philosophically and temporally align with everything he, Michael Hudson and Warren Mosler say they advocate…and actually complete their reforms by accomplishing the paradigm change they also advocate.

      Dr. Keen advocates for “a modern debt jubilee” and QE For the People both of which are forms of monetary gifting. I advocate these very same policies in my book.

      Keen has recently re-discovered the importance of the tool and underlying economic infrastructure of accounting within which the entirety of the economy is embedded.

      He has recognized that Banks utilize accounting to create money.

      What he hasn’t fully comprehended is that they also use it to:

      1) create the virtual monopoly monetary and financial paradigm of Debt Only,

      2) that retail sale is a strategically powerful point in the economy for a price and direct monetary policy to be implemented because it is the cost summing, ending, terminal factor expression and exiting point from the economy of every consumer product and service

      3) because at that point such policy utilizes the accounting convention (equal debits and credits must sum to zero) and so is the key policy for resolving systemic monetary austerity, individual income scarcity and inflation thus creating a completely new pattern change with Monetary Gifting in both the money system and the economy.

      Michael Hudson is correct when he says that for-profit finance is a parasite on the productive economy. Warren Mosler and Steve Keen have also realized that fiscal deficits are a monetary virtue not an economic felony. What they nor any other economist apparently has comprehended is the idiocy of giving a single (illegitimate) economic business model monopoly power to create money in the equally monopoly paradigmatic form of Debt Only when a non-profit publicly administered banking and financial system could dispense money as both debt and as gifts with incredible cost savings for all economic agents, could be used to rapidly modernize infrastructure and along with the 50% discount/rebate policies free up and enable the funding of the mega fiscal projects that will be necessary to survive climate change.

      Lastly, let me introduce the new concept of the mega paradigm change. A mega paradigm is one that immediately, directly, continuously and beneficially effects every individual and also has “knock on” beneficial effects in bodies of knowledge and areas of human existence other than the primary area of the new paradigm.

      The Copernican Cosmological paradigm change was legitimate in that it forever changed cosmology and enabled the related field of astro-physics, but it didn’t immediately, directly or continuously effect every individual or change other bodies of knowledge other than tangentially and relatively ineffectively the pattern of religion.

      The mega paradigm change of Direct and Reciprocal Monetary Gifting and the consequent creating of the profit making economic system of Direct Fiat Monetary Distributism immediately, directly and continuously beneficially effect every individual, every legitimate commercial economic agent and would also beneficially effect

      1) individual and social psychology: by giving everyone the deep breath of relative monetary abundance after 5000 years of the smotheringly austere dominance of Finance’s monopoly paradigm of Debt Only,

      2) politics: by integrating the self interests of traditionally opposed constituencies of labor and management against the real problem which is finance’s monopolistic paradigm of Debt Only and by defeating inflation, making the fiscal mega projects necessary to survive climate change imminently doable,

      3) ecology: by immediately enabling a tremendous green consumer product bottom up thrust toward a sane ecological industrial policy via both the 50% retail discount/rebate policy and the 50% big ticket and green product discount/debt jubilee at the point of note signing

      4) geo-politics: by enabling all nations of whatever political ideology to economically survive the ending of the limited resource of petroleum and its negative ecological effects.

  7. Robert Locke
    October 29, 2020 at 10:49 am

    ‘[E]conomics is being taught as if it were a science when in fact it is more like engineering: needing knowledge of a range of possible solutions made intelligible and reliable by relevant theory. And the ‘idiots savants’ may be “skilled in techniques”, but are they the appropriate techniques?’ dave taylor

    ‘What you do need to appreciate this argument is some grasp of how the purpose of a theory is to provide useful guidance on how the world behaves. In other words you need to appreciate how proper science is done. That appreciation is utterly lacking in the pseudo-scientific discipline of neoclassical economics.’ geoff davies

    If a person wants to learn about the economy, economic theory, although it presumed and presumes to be a useful guide to how the world behaves, has not been. Otherwise, I as an historian. would have accepted the New Economic History, which attempted to base economic history on neoclassical economics theory and econometrics, in the 1960s.

    I’ve been waiting vainly for the past sixty years for economic theoreticians to sort this one out.

    So what have I done. Studied history, to find out why we are not having success in developing a science of economics.

    My conclusions. Economics cannot be made into a natural science by comparing it with natural science. It is more like history, specific to time and place. You can learn a lot from historians in this respect about economics.

    • Geoff Davies
      October 29, 2020 at 11:00 am

      Agreed Robert, economies are historically contingent, like other aspects of society. When I say ‘science’ I don’t mean to exclude that. Geology (and my branch, geophysics) is also historically contingent. One can still approach the study systematically, test hypotheses and create new hypotheses. I would suspect historians do something like that.

      • October 29, 2020 at 11:51 am

        “One can still approach the study systematically, test hypotheses and create new hypotheses. I would suspect historians do something like that”. Geoff.

        Do you think engineers don’t? The rate of change comes into this, of course. In 1900 we had telephone but couldn’t fly; by 2000 we are conducting business by internet and have flown to the moon. Perhaps economists need to develop a historical perspective rather than try to absorb what is happening now? The proliferation of disciplines in science suggests that its new hypotheses are like, having chosen to build a bridge in a way possible in 1900, wondering whether one one should repair it in 2000 by welding rather than rivetting.

        The old options remain, even if they are often forgotten. Think of “intermediate technology” in E F Schumacher’s “Small is Beautiful”. Have economics forgotten that, or been persuaded not to read it? How can one choose between options one is not aware of?

      • Craig
        October 29, 2020 at 4:47 pm

        “How can one choose between economic options one is not aware of?”

        Actually look at them when it is suggested they do so. Like for instance looking at the stunning efficacy of a direct and reciprocal price and monetary policy at both the point of retail sale and at loan signing….instead of compulsively looking at the economy ONLY via indirect theoretical and/or mathematical abstractions. That’s how.

      • Yoshinori Shiozawa
        November 2, 2020 at 1:55 am

        Geophysics must be a good example from which economists can learn much. The biggest difference between geophysics and economics is that the former has a solid base of modern physics whereas the latter has no such things. It has to build its own basis. The main trouble with economics is that its core theory (often called neoclassical economics) is wrong. It is as flawed as geocentric system theory in the last phase of medieval astronomy. I am not looking down the astronomy before heliocentric system. It was far more precise than today’s econometric predictions. In my opinion, the main task of actual economics is to produce Copernicus, Galileo, and Kepler before expecting to produce Newton.

    • Yoshinori Shiozawa
      October 29, 2020 at 2:26 pm

      Robert, Geoff, and others,

      it is possible to build an economic theory that is history-friendly or compatible with history. Actually, I have published a new paper (on line first): A new framework for analyzing technological change in Journal of Evolutionary Economics.

      As you know very well, technological change is one of major forces that changes the economy. This fact is widely known and it is argued that technological change induces economic growth. However, it was not known in what mechanism technological change induces economic growth (except for half-tautological arguments like classical and endogenous growth theories).

      As you know well, it is quite hard to tell how and when new production and product techniques appear. On this part, we have to put them in the hands of historians. But, we can know how economic growth emerges through a series of production techniques improvement. This theory, or course, cannot be predictive. It cannot tell how many percentage the economy grows next year, but we can clarify the mechanism through which the economy grows.

      The paper contains a subsection with a title history-friendly framework (Subsection 4.5). Unfortunately, the paper is not published on open access basis. Those who have difficulties to obtain a copy, please ask me by e-mail. My e-mail address is y@shiozawa.net As I know the e-mail address, I will send you the PDF.

  8. Craig
    November 20, 2020 at 7:46 pm

    I repeat my challenge to Dr. Keen to comment on :

    the EFFICACY of my 50% discount/rebate policies at retail sale and at the point of note signing and whether or not the policies I advocate philosophically and temporally align with and accomplish virtually everything he, Michael Hudson and Warren Mosler say they advocate.

    Dr. Keen advocates for “a modern debt jubilee” and QE For the People both of which are forms of monetary gifting. I advocate these very same policies in my book.

    Keen has recently re-discovered the importance of the tool and underlying economic infrastructure of accounting within which the entirety of the economy is embedded.

    He has recognized that Banks utilize accounting to create money.

    What he hasn’t fully comprehended is that they also use it to:

    1) create the virtual monopoly monetary and financial paradigm of Debt Only,

    2) that retail sale is a strategically powerful point in the economy for a price and direct monetary policy to be implemented because it is the cost summing, ending, terminal factor expression and exiting point from the economy of every consumer product and service

    3) because at that point such policy utilizes the accounting convention (equal debits and credits must sum to zero) and so is the key policy for resolving systemic monetary austerity, individual income scarcity and inflation thus creating a completely new pattern change with Monetary Gifting in both the money system and the economy.

    Michael Hudson is correct when he says that for-profit finance is a parasite on the productive economy. Warren Mosler and Steve Keen have also realized that fiscal deficits are a monetary virtue not an economic felony. What they nor any other economist apparently has comprehended is the idiocy of giving a single (illegitimate) economic business model monopoly power to create money in the equally monopoly paradigmatic form of Debt Only when a non-profit publicly administered banking and financial system could dispense money as both debt and as gifts with incredible cost savings for all economic agents, could be used to rapidly modernize infrastructure and along with the 50% discount/rebate policies free up and enable the funding of the mega fiscal projects that will be necessary to survive climate change.

    Lastly, let me introduce the new concept of the mega paradigm change. A mega paradigm is one that immediately, directly, continuously and beneficially effects every individual and also has “knock on” beneficial effects in bodies of knowledge and areas of human existence other than the primary area of the new paradigm.

    The Copernican Cosmological paradigm change was legitimate in that it forever changed cosmology and enabled the related field of astro-physics, but it didn’t immediately, directly or continuously effect every individual or change other bodies of knowledge other than tangentially and relatively ineffectively the pattern of religion.

    The mega paradigm change of Direct and Reciprocal Monetary Gifting and the consequent creating of the profit making economic system of Direct Fiat Monetary Distributism immediately, directly and continuously beneficially effect every individual, every legitimate commercial economic agent and would also beneficially effect

    1) individual and social psychology: by giving everyone the deep breath of relative monetary abundance after 5000 years of the smotheringly austere dominance of Finance’s monopoly paradigm of Debt Only,

    2) politics: by integrating the self interests of traditionally opposed constituencies of labor and management against the real problem which is finance’s monopolistic paradigm of Debt Only and by defeating inflation, making the fiscal mega projects necessary to survive climate change imminently doable,

    3) ecology: by immediately enabling a tremendous green consumer product bottom up thrust toward a sane ecological industrial policy via both the 50% retail discount/rebate policy and the 50% big ticket and green product discount/debt jubilee at the point of note signing

    4) geo-politics: by enabling all nations of whatever political ideology to economically survive the ending of the limited resource of petroleum and its negative ecological effects.

  9. Ken Zimmerman
    November 29, 2020 at 6:00 pm

    In her book, The Time of Money, Australian Sociologist Lisa Adkins argues that finance-led post-Fordist capitalism controls our world. Its universal features and problems are: mass indebtedness, financial turbulence, economic crises, austerity, underemployment, unemployment, wagelessness, wage repression, in-work poverty, crises of livelihood, precariousness, and emptied-out futures. These features and problems are not incidental to contemporary capitalism (and hence cannot be remedied by any simple program of reforms) but are intrinsic to its very dynamics and operations. She suggests that a logic of speculation unites these features and problems. A logic that is both at the heart of contemporary capitalist accumulation strategies and guides and directs the dynamics of social formation, even though its forms—from the schedules and calendars of household bill and debt payments through to demands that the unemployed always stand ready for work or not work—may appear to be disconnected, disparate, and dispersed. As a model or system of accumulation, the logic of speculation is dominated by the generation and production of surplus via financial channels, and especially by movements and flows in and of money. In her book she details how speculation cannot and should not be limited to financial practices and financial exchanges alone, since a logic of speculation is also at issue regarding everyday, mundane forms of money.

    As a mode or system of social organization, the logic of speculation involves the emergence of forms of life that are characterized not by equilibrium states and stasis but by disequilibrium, disproportion, and asymmetry. Households whose debts outstrip the probabilities of repayment, wages that do not cover the costs of life, and work that does not pay are all at issue here, as are forms of practice attuned not to the reproduction of labor but to the optimization of payment. The logic of speculation does not simply replace a previous social order in a totalizing fashion but is also emergent and subsisting alongside other modes. One feature of the logic of speculation is the active translation of existing map-making of the social into the landscapes of speculation.

    Thus, the logic of speculation must be seen as both a mode of accumulation centered on finance and money and a specific mode of social organization. The logic of speculation must also be viewed as a rationality that defines the aim or object of all action. According to Adkins, it is temporality that unites the two modes of speculation. That is, overall, it is temporality that constitutes the logic of speculation as a rationality. Really, the logic of speculation should be understood to concern a specific form of time. This is a time in which pasts, presents, and futures do not flow chronologically or in sequence but are open to a constant state of revision. This is also a time in which events cannot necessarily be foreseen but unfold in unpredictable ways. Adkins suggests that it is along the flows of this indeterminate and nonchronological time that strategies to generate surplus via money and finance subsist, and it is the nonsynchronous moments and rhythms of this time that mark the distinctiveness of a mode of social organization ordered by a logic of speculation. Adkins book, then, is not only about money, finance, and emergent forms of social organization—it is also about time. Time that divides everything in human societies into indeterminant and variable slices.

    The rationality of speculation profoundly effects all human actors, including actors of economics. As with all human agents, for agents in the economic field the future is always already there in the immediate present, allowing agents routinely to anticipate the yet-to-come. Yet, since economic actions are but one segment of networks of social relations, Bourdieu warns that this practical anticipation of the future in the economic field—the grasping of time yet-to-come as a quasi-present—should not be understood to involve a rational calculus of risk as neoclassical economics suggests. Indeed, Bourdieu maintains that while economic orthodoxy will always reduce the practical mastery of situations of uncertainty to a rational calculus of risk, construing the anticipation of the behavior of others as a calculation of the intent of opponents, understanding economic action and especially the practical anticipation of the future as engendered by the habitus—collective, historical, and unconscious structures—throws the calculating agent of economic orthodoxy into radical doubt. (Boltanski and Chiapello 2005; Fraser 2013) Bourdieu’s understanding of time and temporalization raises challenges to accounts of increasingly anticipatory ways of life. For Bourdieu, understanding economic action in terms of a way of life of agents, action, time, and the social world restores economics (especially neoclassical economics) to “its true vocation as a historical science” (2005 [2000], 216). That is, as a discipline whose epistemological and ontological assumptions are highly contingent. Something mainstream economists should take to heart.

    Heterodox economists, such as those who blog here criticize greatly the focus in mainstream economics on utility-maximizing, human capital–seeking, accumulative, calculative ‘behavior.’ Viewing it as a betrayal of both economics and humankind. But now there is a challenger to both them and the mainstream they criticize, albeit from a rather different direction, by an atmosphere that demands not a capital-accumulating but a speculative subject. This is a subject attuned not to the accumulation of capital or to struggles for rights to claim ownership of capital (including the ownership of labor power) but to speculation, especially speculation in regard to flows of money across whole lifetimes. It is also a subject whose everyday practices are speculative in form. The logics of financial expansion which speculation ways of life engender put the heterodox schools (community-based) and neoclassical economics (especially the standoff between them) firmly in their historical place. Indeed, these logics suggest that regarding the empirical world, the relevance of both is reaching certain limit points.

    Finally, Adler’s book raises one major question for me. With social scientists such as Adler and many others doing such detailed and probative work on economic actions and actors, why is economics even still necessary? Seems the sociologists, psychologists, anthropologists, etc. involved in this work are far surpassing the contributions of economists. It also seems we ought to consider whether it might be beneficial to reconsider humanity’s strategies for handling concerns related to the restructuring of economic ways of life.

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