Home > Uncategorized > Mainstream economics finally made it …

Mainstream economics finally made it …

from Lars Syll

out of frame

Wooh! So this is reality!

  1. January 4, 2021 at 2:57 am

    If Pigs Could Fly… and Other Deep Thoughts Paperback – February 1, 2006
    by Bruce Lansky — https://www.amazon.com/Pigs-Could-Other-Deep-Thoughts/dp/0689049765

  2. Yoshinori Shiozawa
    January 4, 2021 at 8:31 am

    Two interpretations are possible.

    If the boy is mainstream economics, the picture satirizes that it is trying to escape from the old framework but cannot to do it effectively.

    If the boy is heterodox economics, the picture draws that it is trying to break through the neoclassical framework (but hard to do that because of old thinking tradition).

    • Meta Capitalism
      January 4, 2021 at 8:42 am

      Mainstream economics takes the particular features of capitalism – a very recent form of economic organisation in human history – as if they were universal, timeless and rational. It treats market exchange as if it’s the essential feature of economic behaviour and relegates production or work – a necessity of all provisioning – to an afterthought. It also focuses primarily on the relationship between people and goods (what determines how many oranges we buy?) and pays little attention to the relationships between people that this presupposes.
      .
      It values mathematical models based on if-pigs-could-fly assumptions more than it values empirical research; so it pays little attention to real economies, having little to say about money and debt, for example! Predictably, the dismal science failed to predict the crisis. When the UK’s Queen Elizabeth asked why no one saw the crisis coming, the economists’ embarrassment was palpable. (Why We Can’t Afford the Rich” by Andrew Sayer, Richard Wilkinson. – https://a.co/cvTuak4 )

      .
      One of the huge blind spots within heterodox economics and RWER is its failure to recognize that it isn’t just Mainstream Economics (ME) that creates reductionist (aka stylized) caricatures of individuals and society that mislead and obfuscate the real issues facing the field. If ME have no ears so too do some forms of so-called heterodox economics have no eyes or ears.
      .
      The use anachronistic outdated appeals to authority based upon 1960s biological narratives that are deaf, dumb, and blind to revolutions within the field of biology that use outdated views on complexity, evolution, and “emergence” to falsely wrap simple accounting (cost + markup) in meaningless mathemathematical masturbation.

    • January 4, 2021 at 12:58 pm

      In order to criticize heterodox economics, it is necessary to know the whole picture of heterodox economics as it is necessary when one wants to criticize mainstream economics. There are many strands of heterodox economics such as Post Keynesian (Fundamentalist, Kaleckian, Minskian, Kaldorian, and Sraffian), Marxian, Austrian, Institutional and Evolutionary economics only pointing basic theories (and excluding more policy-oriented or sociological ones). It is difficult to get a good map of heterodox economics by reading RWER blog. This is indeed a lacuna in this blog site. Very few information is given by regular contributors. Relevant information is rarely given by comments. Therefore, let me give a brief information on evolutionary economics here.

      Among heterodox economics, evolutionary economics is rather new and rarely well understood by other heterodox economists. See the second citation from Hodgson in my post (B1) The usefulness of evolutionary thinking in economics, which explains the rough picture of evolutionary economics.

      More concrete description of actual state (or recent development) of evolutionary economics is given in my second post on (B2) The usefulness of evolutionary thinking in economics.

    • January 5, 2021 at 1:27 pm

      Are there no other person who want to introduce one of heterodox economics and its significance?

      • Meta Capitalism
        January 6, 2021 at 1:06 pm

        Are there no other person who want to introduce one of heterodox economics and its significance? ~ Shiozawa Blissfully Ignorant of the many books listed on the right hand side of this webpate that discuss complexity ;-)

        .
        Translation: Are there no other persons who want to discuss my book?

      • Yoshinori Shiozawa
        January 6, 2021 at 1:53 pm

        There are many strands of heterodox economics such as Post Keynesian (Fundamentalist, Kaleckian, Minskian, Kaldorian, and Sraffian), Marxian, Austrian, Institutional and Evolutionary economics only pointing basic theories (and excluding more policy-oriented or sociological ones). (Yoshinori Shiozawa on January 4, 2021 at 12:58 pm)

        I have specified that I am talking about basic theories excluding policy-oriented or sociological ones. In the right column we find many interesting books but they are mainly policy-oriented ones or methodological arguments. It shows where the center of interest lies for major contributors and readers, but does not map the picture of heterodox economics.

      • Meta Capitalism
        January 6, 2021 at 3:33 pm

        In the right column we find many interesting books but they are mainly policy-oriented ones or methodological arguments. ~ Shiozawa Avoiding Reality

        .
        Shiozawa’s claim is disingenuously false. The work cited addresses complexity in a manner that doesn’t trivialize, explain away, or sweep under the rug with just-so stories rooted in ideological spoofs of biology nontrivial intractability and real-world complexity. His response is proof that he prefers simple minded rhetoric and is a
        Simple minded (thinking) person (単純思考者) ima be to substantive deal with real-world complexity.
        .
        Keen aptly describes such simple thinking economists as Shiozawa proves himself to be:
        .

        Saltwater economists were willing to abandon equilibrium (or at least perfectly competitive equilibrium) but still believed they had to reason in a reductionist way. (Keen, Professor Steve. Debunking Economics (Digital Edition – Revised, Expanded and Integrated): The Naked Emperor Dethroned? (Kindle Locations 6440-6441). Zed Books. Kindle Edition.)

        .
        Shiozawa is saltwater thinker.

      • Yoshinori Shiozawa
        January 7, 2021 at 12:55 pm

        Poor Meta! He has proved by himself that he has no ability other than to label anybody he disagree with.

  3. Craig
    January 4, 2021 at 5:10 pm

    The study and understanding of the frame is nothing compared to the study and NEW understanding reflected in the eye of the boy. The frame is complexity, evolution and emergence. The look in the boy’s eyes is cognition itself and of a new concept that creates a new frame.

    There may be a thousand considerations regarding price, but cost + mark up is their temporal universe expression. Philosophy and policy are both important, and new paradigms concepts express transformative integrations of them. And when one cognites on the paradigm of paradigms….”all that I have written is but straw compared to what has now been revealed to me.” Thomas Aquinas.

    • January 5, 2021 at 2:59 am

      The frame is complexity, evolution and emergence. The look in the boy’s eyes is cognition itself and of a new concept that creates a new frame. (Craig on January 4, 2021 at 5:10 pm)

      An interesting interpretation! Do you have, Craig, any concrete idea in creating a new frame that goes beyond(!?) “complexity, evolution and emergence”? Most economists have difficulty in making a frame that can treat “complexity, evolution and emergence”.

      • Craig
        January 5, 2021 at 4:19 pm

        Yoshi,

        Monetary Gifting/Direct and Reciprocal Monetary Distributism intellectually INCLUDES and ENCOMPASSES complexity, evolution and emergence because it aligns with the thinking of the leading reformist movements like MMT, Minsky’s financial instability hypothesis, Public Banking and the various movements that advocate for UBI/Universal Dividend.

        It systemically RESOLVES its major problems (individual and systemic monetary austerity and price and asset inflation) and hence TRANSFORMS it into a system of abundance and fluidity.

        Economists and economic pundits need to cognite on the natural philosophical concept behind the above new paradigm, i.e. grace as in gifting, grace as in dynamic flow/process/evolution/emergence, grace as in unity/union of the particles of truth in opposites and grace as in ethical height and refinement. Then they will realize:

        “Only the free-wheeling artist-explorer, non-academic, scientist-philosopher, mechanic, economist-poet who has never waited for patron-starting and accrediting of his co-ordinate capabilities holds the prime initiative today.”
        R. Buckminster Fuller

        And they may also realize that the natural philosophical concept of grace is actually the new cosmological paradigm.

      • Meta Capitalism
        January 6, 2021 at 1:14 pm

        Have you read this Yoshinori?
        .

        (1) Explaining what complexity involves.  Among the subjects of investigation that complexity involves are:

        • intricate interdependency
        • complex adaptive systems
        • random and unexpected change
        • feedback patterns
        • part-whole system relationships
        • simulation
        • nonlinear and chaotic dynamics
        • phase transitions
        • sensitive dependence on initial conditions
        • self-organization
        • computational complexity
        • big data
        • cross-level and within-level interactions
        • network effects

        And no doubt there are other subjects this list omits!

        (Davis, John. Economic Philosophy: Complexities in Economics (Kindle Locations 169-186). WEA. Kindle Edition.)

        (2) Explaining How Complexity Enters into Economics. Here we can distinguish:

        • How the nature and content of economics itself is complex

        Economics is complex in regard to: heterogeneous agents, upward and downward causation, the nature of complex adaptive systems and agent-based models, bounded rationality, dispersed interaction, bubble phenomena, herding behavior, trading networks, non-market interaction in relation to market interaction, post-Walrasian economics, multiple equilibria and out-of-equilibrium dynamics, radical uncertainty, reflexivity and feedback patterns, novelty and emergence, increasing returns, identity formation, open vs. closed systems, hysteresis, econophysics, artificial markets, etc.

        • How economics’ complex nature and content relates to its methodology of investigation

        Problems of complexity arise in connection with: different relationships between economists, social scientists, and the public in regard to the content and roles of economics, relations between different traditions and school of thought in economics, different methods used to introduce complexity into economics, different epistemological and ontological conceptions of complexity in economics, interdisciplinarity and economics’ relations to other disciplines, the relationship between positive and normative reasoning in economics, computational limits, the relationships between induction, deduction, and abduction, problems of self-reference, historical vs. logical analysis, simulation and artificial systems, constructive mathematics, etc. (Davis, John. Economic Philosophy: Complexities in Economics (Kindle Locations 186-204). WEA. Kindle Edition.)

        An Economic Philosophy investigation of Complexities in Economics, then, operates on two interconnected levels: how (i) a complex economics draws on (1) complexity theory, and then on the relationships between (i) the complex content of economics and (ii) the complexity of approaches to that content. (Davis, John. Economic Philosophy: Complexities in Economics (Kindle Locations 204-207). WEA. Kindle Edition.) (Davis, John B. & Hands Wade, eds. Economic Philosophy [Complexities in Economics]. UK: Bristol; 2020;(World Economics Association Book Series.)

      • Yoshinori Shiozawa
  4. Michael B. Matheron
    January 4, 2021 at 6:36 pm

    ….He’s climbing through the frame & looks to his left to see Art Laffer wearing the Presidential Medal of Freedom & reacts as rationally as possible by experiencing eye-popping brain freeze.

  5. Ken Zimmerman
    January 19, 2021 at 1:52 pm

    The next move in economics as science is in my view complexity science. This is a brief history of that science (a western science)

    Since the 1950s, when people like Ludwig von Bertalanffy and Kenneth Boulding developed the field of ‘General Systems Theory,’ Norbert Wiener, Gregory Bateson and others developed the field of ‘Cybernetics,’, and Jay Forrester developed ‘systems dynamics’ there have been many attempts to break free from the reductionist frame in which physical and to an even greater extent social science had been trapped for over two centuries. The goal: develop a more holistic and systemic understanding of the complexity of the world in which humans are involved.

    Practically oriented, early systems thinkers wanted to improve their ability to predict and control the systems in question. The introduction of insights from chaos theory and non-linearity, first in mathematics and later into the concepts employed into systems sciences marked the development of complexity theory.

    Interconnectedness, unpredictability, and uncontrolability are key features of all complex systems. In dealing with complexity rather than mechanisms, the aim of science shifts from improving our ability to predict and control to aiming to better understand the dynamics and relationships of the systems in which we participate so that our participation can be both more appropriate and more beneficial for all.

    Complexity theory is becoming a science that recognizes and celebrates the creativity of nature as recognized and presented through the creativity of humans. Now that is extraordinary, because it opens the door to a new way of seeing the world, recognizing as part of scientific work (it was recognized earlier by some religious and philosophical traditions) that considering as imperative what humans experience as dynamically complex systems, often sensitive to initial conditions whose properties are emergent; sometimes almost liquid. We must learn to walk carefully in relation to this new reality on which the quality of our lives depends, from microbial ecosystems to the biosphere to political revolutions, because we influence them although we cannot control them. This knowledge is new to our western scientific mentality.

    Quote from Brian Goodwin (et al., 2001, p.27) as modified by Ken Zimmerman (June 14, 2002)

    I much admire the work of Goodwin. A biologist, mathematician, and philosopher who introduced the concept of complexity into biology. Goodwin died in 2009 before I could have the pleasure of meeting him. I hope he would have approved my modifications to his quote. The original is ““Complexity theory is becoming a science that recognizes and celebrates the creativity of nature. Now that’s pretty extraordinary, because it opens the door to a new way of seeing the world, recognizing that these complex dynamic systems are sensitive to initial conditions and have emergent properties. We have to learn to walk carefully in relation to these complex systems on which the quality of our lives depends, from microbial ecosystems to the biosphere, because we influence them although we cannot control them. This knowledge is new to our western scientific mentality….”

    Goodwin does some work on the second but more important factor in the movements of complexity science. And I assume he would have done more if he had lived longer. That factor is complexity culture. Complexity science, including complexity economics can go only so far outside of complexity culture. Goodwin considers complexity theory as generative regarding culture. In “Toward a Science of Qualities in Organizations,’ Goodwin argues,

    And a major contribution of the deconstructionist movement has been to demonstrate the unconscious way in which we employ metaphors such as growth and progress to underpin our worldview (Gergen 1994; Harvey 1990). And the second question is whether we can use metaphor in a creative and transformative way, to open up new realities and new resources: Concepts of human conduct operate much like tools for carrying our relationships. In this sense, the possibility of social change may be derived from new forms of intelligibility … I [have] proposed the term generative theory to refer to theoretical views that are lodged against or contradict the commonly accepted assumptions of the culture and open new vistas of intelligibility. (Gergen 1994: 60; emphasis in original)

    So we argue that, while of course complexity theory is a metaphorical construct, it is a construct which is in Gergen’s sense generative when applied to social life and to organizations, and we will continue to show that it draws our attention to particular qualities of postmodern inquiry which provide support for emerging approaches to organizational inquiry. (for further discussion check out, Toward a Science of Qualities in Organizations, Lessons from Complexity Theory and Postmodern Biology, Peter Reason and Brian Goodwin. Concepts and Transformation 4:3, 1999. 281-317)

    But generative can do the other direction as well. If scientific theory can sometimes transcend culture, it is also the case that even when it does it must begin from culture to do so. A culture that creates, propagates, approves, and passes along scientific values and norms must exist for any sort of science to exist. The form the science takes depends on the norms and values of the culture.

    Maurizio Iaccarino, Secretary General of the UNESCO/ICSU World Conference on Science and at the Institute of Genetics and Biophysics, CNR, in Naples, Italy describes the science- culture interaction.

    Moreover, although the language of science is often specialized, and thus inaccessible to non-specialists, science and culture are not different entities: science is part of culture, and how science is done largely depends on the culture in which it is practised.

    Science has had an increasingly strong influence on European culture. In the nineteenth century the buzzword for science was ‘order’. Scientists had discovered that the movement of the stars is predictable, and that all terrestrial and celestial phenomena follow the same scientific laws like clockwork. They believed, according to the Galileian vision, that the book of nature is written in the language of mathematics, with characters represented by geometric objects.
    The mission of science was to discover the laws of nature, and thereby explain all natural phenomena. This faith in science gave rise to the philosophical movement called positivism, which led to a widespread trust in science and technology and influenced social theory. Even after positivism faded out, the Darwinian theory of evolution still influenced social phenomena, most notoriously eugenics and racism. The faith in the possibilities offered by scientific progress still shapes the beliefs and actions of people today; in fact, expressions such as “this has been scientifically demonstrated,” are often used to cut short a discussion.

    Two changes are happening after Iaccarino wrote this in 2003. First, there has arisen in the US and in some other nations a populist challenge to science that labels science and scientists elitists and guilty of betraying human welfare. The cultural roots of this ideology are deep, particularly in the US. But boils down to this – distrust for anything that cannot be explained in simple language in a bar. In the US this grows out of two developments. First, a severe decline in science education. Second, growth of religious movements that reject any reconciliation of religion and science. Sort of like a return to the era of the ‘Scopes’ trial combined with a strong social movement to make Americans ignorant. Second, the accomplishments of scientists have become even more remarkable and thus for many threatening. For example, AI, virtual experimentation, and genetically tailored drugs.

    This is from Encyclopedia Britannica 2018 on evolutionary economics.

    …a field of economics that focuses on changes over time in the processes of material provisioning (production, distribution, and consumption) and in the social institutions that surround those processes. It is closely related to, and often draws upon research in, other social sciences, such as economic sociology, economic anthropology, and international political economy. It also has important implications for many other areas of economics, including growth theory, economic development, economic history, gender economics, industrial organization, and the study of business cycles and financial crises.

    Evolutionary economists often utilize concepts from evolutionary biology to explain how economic evolution occurs. Indeed, many evolutionary economists view economic evolution as a nondirected, step-by-step process that is not teleological (it lacks a specific goal or predetermined endpoint), a perspective similar to the Darwinian view of species evolution. In addition, many evolutionary economists also agree that at least some human cognitive and social predispositions are the result of genetic evolution. Examples of such predispositions include the abilities to learn a language, to learn social norms, to cooperate in groups, and to develop complex tools with which to transform nature into usable goods and services. Evolutionary economists also commonly employ analogues of concepts that Darwin relied upon but did not invent, such as inheritance, variation, and natural selection.

    Whereas many mainstream economists tend to ask “how” questions, evolutionary economists tend to ask “why” questions. For example, one mainstream approach to a situation of scarcity of resources in an economy would be to determine the most efficient way of using those resources, often relying on rigorous mathematical models. Evolutionary economists, on the other hand, would consider possible solutions only in light of the historical or evolutionary path that led the economy to a situation of scarcity.

    Although the study of evolutionary economics does not preclude the use of mathematical models or quantification, most of its practitioners employ qualitative and interpretive methods. Evolutionary economists are interested in examples of sociocultural evolution on a grand scale, such as the rise of agrarian empires or of modern capitalism, but they also study specific, micro-level forms of evolution, such as changes in the organizational routines of individual firms. [kz: family vs. corporate farming] Consequently, the kinds of issues that evolutionary economists are interested in overlap with the foci of other social sciences, such as sociology and business psychology.

    Two other important concepts borrowed from the natural sciences, emergence and complexity, also play a key role in evolutionary economics. Emergence is the phenomenon whereby an observed system results from the complex interaction of the components of its subsystems. That process of interaction gives rise to patterns that cannot be predicted from or reduced to the behaviours of the individual components. However, understanding the system still requires understanding its components and their interactions. Accordingly, in the case of sociocultural evolution, it is still important to understand what individuals do and how individual choices and habits interact with social institutions in a dynamic way.

    Even though evolutionary economics plays a larger role in economics than in the past, few of its recommendations make it to policy makers or legislators. This is an academic block, not a practical block. It is clear, however that evolutionary economics, if applied can change not only the study of economic ways of life but also change economic life for ordinary people for the better. Main reasons, I suspect it will never be allowed to play a significant role in the social sciences or policy formation in the US. Unfortunately, in terms of wealth and power arrangements the US remains in substance if not always in form a pre-civil war society and culture.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.