“necessities of thought”
Concepts that have proven useful in ordering things easily achieve such an authority over us that we forget their earthly origins and accept them as unalterable givens. Thus they come to be stamped as “necessities of thought,” “a priori givens,” etc. The path of scientific advance is often made impassable for a long time through such errors. For that reason, it is by no means an idle game if we become practiced in analyzing the long commonplace concepts and exhibiting those circumstances upon which their justification and usefulness depend, how they have grown up, individually, out of the givens of experience. By this means, their all-too-great authority will be broken. They will be removed if they cannot be properly legitimated, corrected if their correlation with given things be far too superfluous, replaced by others if a new system can be established that we prefer for whatever reason.
[Einstein 1916 in obituary notice for Ernst Mach]
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—— Ugarteche, Puyana and Madi ——
Gerson Lima / Maria Alejandra Madi
Edward Fullbrook and Jamie Morgan
————— Michael Hudson ————–
Maria Alejandra Madi / Jack Reardon
————- Edward Fullbrook ————-
—————— Steve Keen —————–
————— Richard Smith —————
————– Gustavo Marques————
– Victor Beker and Beniamino Moro –
————– Lars Pålsson Syll ————-
—————– Stuart Birks —————-
Edward Fullbrook and Jamie Morgan
———— Armando Ochangco ———-
Shimshon Bichler / Jonathan Nitzan
————— Mauro Gallegati ————–
————— Herman Daly —————-
————— Asad Zaman —————
—————– C. T. Kurien —————
————— Robert Locke —————-
Nicholas Rescher notes:
1. “Only flux is experientially real: physical reality as we experience it is always unstable.”
2. “Concepts are always fixed and stable.”
3. “Stable concepts cannot adequately characterize an unstable object.”
So, why do we blithely assume the following?
“Adequate conceptual characterization of physical reality, as we experience it, is possible.”
According to Rescher, Plato resolved this conundrum by assuming “Since real reality must be intelligible, this relegates the experienced physical realm to the status of a mere illusion.” On the other hand, Bergson according to Rescher, effectively says, “So much the worse for mere conceptual intelligibility. It reveals its own inadequacies by being unable to come to grips with experienced physical reality.”
“For Bergson, the world transcends the limits of reason, seeing that a reality that has process, flux and change as fundamental features cannot be adequately encompassed by any fixed set of descriptive categories.”
Quotes from “Process Metaphysics – An Introduction to Process Philosophy” by Nicholas Rescher.
My position is that Rescher’s Process Metaphysics are a useful approach and a good antidote to the temptations of scientism. However, process metaphysics of this kind seems to lack a useful definition for “process” per se, tending to permit it to remain somewhat transcendental and mystifying, though this no doubt remains true to the spirit of avoiding essentialism.
Complex systems philosophy, on the other hand, seems to me to take a next step which was lacking in process philosophy. There are clear definitions for systems, boundaries and processes (as changes in and between systems involving flows of matter, energy and information) in systems philosophy. From a pragmatic and scientific point of view, it is clear that we can understand some systems and processes adequately, in the hard sciences at least, for manipulation and prediction purposes.
We need to look at complex systems ontology (in my view) to get a handle on economic ontology. This is something conventional economics typically, constitutionally and absolutely REFUSES to do, in my reading and debating experience. Referring to conventional economics’ lack of a founding ontological analysis is like referring to the emperor’s non-existent new clothes. It is just not the done thing and conventional economists will completely ignore you.
It’s worth looking at “The Philosophy of Complex Systems” edited by Cliff Hooker. Read a selection of essays to suit your interests. I doubt many will have the time to read the whole tome. I certainly haven’t.
Concepts are useful, albeit the map is not the territory. Imaginations are useful also, albeit the stories which explain what we imagine may not correspond with what we think we are imagining.
Percepts, especially when posing as concepts, are easily misused. Thus, ‘utility’ as pleasure/satisfaction OR a an objective benefit is a percept with no essential content. That this percept plays a central role in micro-economics and, by implication, macro-economics is highly disturbing. That anyone thinks one can derive ‘demand curves’ from such a percept, mathemagically transformed, is one :: only one :: of the many, many problems with existing economic theory. There is, after all, no such thing as a ‘demand curve’. None have ever been found empirically for goods, albeit I am unacquainted with the financial sector where trade in financial instruments may accidentally correspond with the predictions of theory today.
But, as I said, this is only one problem with economic theory, micro and macro. But, it’s a biggee. No area of economics can –read WILL– remained unaffected one the theory of demand is, as it is currently, is removed from the paradigm. I am removing it.
Second to last sentence should have read: Once the theory of demand, as it currently is, is removed from the paradigm.
Correct. And the way to permanently remove the theory of demand, as it currently is (indirect and monopolistically controlled), is to break up the paradigm of Debt ONLY via a universal dividend and a 50% Discount/Rebate policy of Direct and Reciprocal Monetary Gifting at the point of retail sale.
Too simple for the intellectual vanities of the erudite, Too empirically and temporally beneficial for all economic agents, and effectively problem resolving not to be a paradigm change.
Craig, I am uncertain about your meaning here.
The paradigm of DEBT is not unique to monetary societies, but to all economies which have a referential unit of account for exchange purposes and ‘loans’, i.e. one or more equivalent Standards of Value whether these circulate or not. Monetized differ from these in that ‘monies’ come to function as ‘permission slips’ one must have to participate effectively as active agents (sellers or buyers) in ‘markets’.
Yes, indebtedness is a problem.
But the manner in which ‘permission slips’ are distributed affect economic activity overall even if the paradigm of debt is addressed. This is, to my mind, the central problem which axiomatic-deductive models –a.k.a. deductive-nomological models criticized so effectively by Yoshinori Shiozawa– fail to take into account. And, the failure to take into account the distribution of ‘permission slips’, implicit in the idea of the ‘representative consumer’ used in the DSGE model lies in the faux demand ‘curves’ based upon maximizing subjective consumer preferences.
There are objective standards for the measure of human welfare. Coase’s notion that those harmed by some can be ‘compensated’ for non-financial harms like cancer, birth defects and others fails to account for the reality that those harmed outcomes neither can nor will accept any money as ‘compensation’ for such non-financial burdens the behavior of others may cause. Human ‘welfare’ may not be reduced to compensatory payments for such losses based upon the complex mechanics of the price system.
I think I am beginning to get Craig’s meaning – much the same as my credit-card system, but missing what I see as the central point. So everyone is credited with a universal dividend, the buyer gets the goods half price and the seller is credited with the other half so he can buy replacement goods at wholesale price; but what keeps generating the universal dividend? We need to work, to help Nature regenerate its value; and if we are using money, I think we need Edward Fullbrook’s fractional way of valuing Nature’s total Market-value to establish and ‘ration’ the annual dividend.
The UK experience during and after the Second World War was that though everyone had to survive on “short rations”, on the whole most of us came out of it fitter than we went in. In a recent BBC TV documentary Michael Palin went to see how penniless desert nomads survived and was amazed to find them happier than we are, being grateful for smaller mercies.
Great quote!
On another blog, a commentator referred to my claim to be using Occam’s razor to suggest a reason or cause for the arrival of zero real interest rates at the cnetral bank. The cause, I suggested, of interest rates now being low was because they have been intentionally financially engineered to be that low by the oligarchs and financiers, through their influence on central banks and politicians.
The commentator jocularly suggested I was using Marx’s hammer rather than Occam’s razor and that everything looks like a nail to Marx’s hammer. I replied that perhaps we should be talking about Maxwell’s silver hammer! I mention this because of the issue of “pataphysics” but I will get back to that.
My central starting point in the more serious part of the reply was that there are no fundamental laws to interest rates or anything in financial economics. A fundamental Law is any hard science law, like the laws of thermodynamics for example, which humans did not create and which humans cannot alter but rather can only work within. To command nature you must obey nature, as the philosopher Francis Bacon put it.
Interest rates on the other hand, like money and like legal private property are human creations; social fictive inventions. They have not Fundamental Laws but are based on implemented rules (legal laws and regulations) employed as axioms. From axioms you may derive theorems, proofs that inevitably follow, if you are clever enough to derive them. In a political economy, those with the political power can change these axioms at will, subject only to other competitors in the sociopolitical and socioeconomic power game and ultimately in the physical power game (meaning gangsters, police and military).
Looking for fundamental or natural laws in finance (like the “law” of supply and demand), is a fool’s errand, in my humble opinion. Rather, we should simply look for those with the power to set the rules (axioms), by fiat or by privileged negotiations. The masses do not participate in these negotiations except by indirect and usually ineffective actions like voting or by direct and sometimes very effective actions like strikes and revolutions.
Margaret Thatcher infamously said there is no such thing as society. Au contraire, Maggie! In fact there is no such thing as economics. There is only political economy. All the rules of economics, as founding axioms, are made by humans and can be changed by humans, but specifically by those humans wielding effective power of some sort in society. Conventional bowdlerized economics is “pataphysics”. I offer this below as a whimsical, but at base still serious critique of conventional economics.
All quotes below are from Wikipedia:
“Pataphysics … ; French: pataphysique) is a difficult-to-define “philosophy” of science invented by French writer Alfred Jarry (1873–1907)[1] intended to be a parody of science.”
My comment: This is appropriate for economics as conventional economics itself parodies science, specifically 17th C to 19th C mechanistic, classical physics and its mathematical methods, particularly for static equilibria.
“One definition is that “pataphysics is a branch of philosophy or science that examines imaginary phenomena that exist in a world beyond metaphysics; it is the science of imaginary solutions.””
Conventional economics, at least of the bowdlerized Mankiw sort, is a science of imaginary solutions. There is something different in Arrow-Debreu, and their modelling, who at least, by my understanding of an extant interpretation, essentially propound that their modelling is axiomatic not empirical; prescriptive and not descriptive. Then they rigorously derive theorems from their assumed axioms. This permits, for example, the logical deduction, by deriving theroems, that an unregulated free market without a minimum wealth condition set for all participants does not permit free choices (of consumption) by all participants. This is a useful insight.
The whole matter turns on the fact that there is a real economy and there is a financial/legal/regulations economy. The first is a real system (as hard science would use that term). The second is a formal system. At heart is the following question. What do formal rules, financial, legal and regulatory, do to real systems (and what can’t they do to real systems) when the formal rules are followed and enforced by and on humans to some significant degree. The formal rules, followed or enforced, program human behaviors to a considerable degree just as computer code programs a computer; albeit humans are creative and eve resistant interpreters of codes.
Political economy creates economics. That is the sense in which I say there is no such thing as economics. I mean it is not free-standing with its own inherent laws. Rather it is conditioned by political economy, the current realization of our social fictive constructions especially when we remain largely unconscious (as false consciousness ignorance) of their constructed fictive or artificial (made by artifice by humans) nature. Change the rules (legal laws and regulations) and you will change economics. We are now realizing that we must change the rules of bourgeois economics because free market economics is inhumane as shown by “Piketty’s Law” [1] which is actually a theorem derived from the current axiomatic rules of capitalist economics. Piketty backed the elucidation of his “law” by extensive empirical historical which shows how that theorem plays out in practice. We are now also realizing that we must change the rules of bourgeois economics because free market endless growth economics is ecologically unsustainable.
I invoke the term “pataphysics” because it nicely captures what is developed when the need for empiricism and a proper science-consistent ontology for economic processes and objects is ignored by the so-called discipline of conventional economics. Instead of a scientifically defensible and consistent ontology (especially of real system / formal system interactions) we get economic pataphysics: a branch of bowdlerized moral philosophy which examines imaginary phenomena that exist only in a world beyond even metaphysics. We get the “science” of imaginary solutions.
Note 1: By Piketty’s “Law” I mean “If r greater the g then Inequality increases”. This is not a law but a theorem which demonstrable when we follow the stnadard rules (axioms) of capitalist financial economics.
Well said!
‘Marx’s Hammer’, so to speak, is neither more nor less than a focus upon the welfare inequities caused by the maldistribution of incomes in monetary societies.
Economics is Political Economy. Although we can study the operation of the price system and the distribution of income upon economic activity, the reality is that economics is a scientia which must be based upon how we provide for ourselves. That is not only inseparable from our politics, the study of how markets operate is not equivalent to ‘how we provide for ourselves.” Nor should it be since markets ‘provide’ only what subsets of the population have the ability to pay for. No market has ever existed that ‘provides’ for everyone. Merchants cannot provide for everyone. To expect that they can or do is simply absurd.
“Philosophy without science is empty. Science without philosophy is muddled.”
— Paraphrasing A. Einstein,
Correct. But even philosophy is inadequate for actual and thorough change. The levels of forms of analysis from the bottom up are: Data Gathering, Theorizing, Philosophy and Paradigm Analysis and Perception. I would posit that we need a third axiom: Science without paradigmatic analysis is static and prone to religion.
We’re still seeing the changes to scientific philosophy wrought by Einstein, Planck, etc. And what might the conceptually opposing, reality inverting paradigmatic thirdness in science be? Why the fundamental change from a dogmatic Reductionistic ONLY scientific mindset to a more inclusive one that incorporates the ultimate unitary concept of Grace as in simultaneous separateness and oneness.
The NATURAL, PHILOSOPHICAL AND PARADIGMATIC concept of Grace is not a colloquially religious pronouncement, but rather a spiritual one.