Me: The temporal universe flows freely and the economy is inextricably embedded within the temporal universe. If it does not flow freely, then it has elements that prevent it from being so. We have a monetary economy and money is the most salient and significant factor in it. The temporal universe being in such free flowing state/process it abhors a statistical equilibrium. All heterodox economists recognize that there is a scarcity of individual aggregate demand and they recommend and offer policies they think will remedy that scarcity. The problem is these policies are either one off (“a modern debt jubilee”) and/or think only filling the statistical gap between total costs and so prices and total individual aggregate demand is adequate policy. These balancing policy ideas, even if it is with additional monetary input, still have the stench of DSGE hanging around it.
The free flowingness solution of course is CONTINUOUSLY filling the monetary gap to ABUNDANT overflowing with a high percentage discount/rebate policy tied to the terminal expression point of inflation and the terminal ending point of the entire economy, i.e. retail sale.
FS: May I add, science is a joint accumulative effort where the body of knowledge and understanding is continually reassessed against the empirical evidence. This is the essence of the scientific method.
Economics is almost the obverse. The only testing against the empirical evidence is to judge how well the curve fitting has been carried out. Hypotheses are never rejected when they fail to match the empirical evidence. This rejection of the scientific method appears to be taught as the appropriate mode of economic thinking. Why!!??
KZ: Frank, I agree that economists seem to have little interest in anything other than their own conjecturing when it comes to their “science.” This is not unique in science, however. Even physicists do it regularly.
Part of the problem is that the “reassessment” process you mention is difficult to make work in practice. In fact, the reassessment isn’t so much that as a construction of a new scientific understanding. In the words of physicist Andrew Pickering’s book, “Constructing Quarks,” “I try to avoid the circular idiom of naive realism whereby the product of a historical process, in this case the perceived reality of quarks, is held to determine the process itself. The view taken here is that the reality of quarks was the upshot of particle physicists’ practice, and not the reverse: hence the title of the book, Constructing Quarks.” … “the emphasis is on practice.”
FS: Ken, I would suggest a different stress to that which I think you are doing. There will be individual scientists who will act in error for a variety of reasons including deliberate misrepresentation, but it is the body of the scientific community who will establish that which can not be invalidated. I was hoping that would be how economists would examine my paper, “Transient Development”. The analysis is fully consistent with the empirical evidence, but detractors claim it can not be true but a variety of spurious reasons.
KZ: Frank, you are correct. Scientists establish what all can and should accept as fact via consensus. But it’s consensus about practice, not each fact or experiment. You should also note that when Pickering and others who study science use the term construction, they are attempting to bring our attention to how both science and science facts are created – they are constructed. In the case of Quarks, for example, high-energy physicists constructed them over a 50-year period. Pickering’s book is an attempt to describe the history of the construction process. It’s a fascinating story. And, being a story about humans, it includes errors, some massive, falsehoods, and delusions.
Me: What is being discussed here is the need for a new economic philosophy AND even more importantly….a new scientific philosophy. I have posted the following ascending scale of scientific actions here several times: research/data gathering, theorizing, philosophy. paradigm perception/change/the deeper, fuller more complete understanding AKA wisdom.
I have heard Steve Keen, who I consider probably the most astute economist on the planet, say we need a new economic philosophy….and then go right back to posting mathematics until in his own words MEGO (my eyes glaze over) occurs. And there of course isn’t anything wrong with research/data gathering and theorizing….it’s just that it’s important to know when to go to a more integrative level of understanding.
We need to go from the invalidated DSGE to “a philosophy of the higher disequilibrium” and then paradigm change. And we need to go from the intellectually delicious and necessary mode of inquiry of Science ONLY to the science inclusive and more mentally integrative level of wisdom.
KZ: Craig, interesting. But let me ask you about your ascending scale of scientific actions. Have you observed “scientists” taking these actions? And if so, how and why did they create them and how do they use them. In other words, is this their ascending scale of actions or yours? That answer can be determined only by observing, for example biologists or sociologists. And, secondly if this is the observable process, what are the results? What do scientists construct by using it?
Me: Actually I left out a prior action in that ascending scale, hypothesis, which is the beginning of the scientific method/process. It’s obvious that research/data gathering is science’s next step which is combinatory/integrative, then theorizing which is organizing data and observations in coherent ways like capitalism or socialism in pursuit of a further mental and logical integration of ideas, i.e. a philosophy like free markets, monetarily re-distributive and structurally manipulated markets or Direct Distributism.
The hard sciences often get to the philosophical level. Economics rarely has and as we see is now in the state of iconoclasm/de-construction. Paradigm changes of course are extremely rare and are the next to highest level of integration of only the truths in opposites. In fact a paradigm itself is an integrative construct of the opposites of a single concept that fits almost seamlessly within the generalized structures of the old paradigm and yet creates an entirely new pattern whose character is transformed. So this IS observably the scientific process.
Science is (generally) a trinity-truth fragmenting-process (hypothesis, the dualistic process of assessing truthfulness or falsity of data and theories). Wisdom is a trinity-unity-oneness-wholeness-process (the integration of a bothness/duality to the point of a thirdness greater oneness) which utilizes and includes the scientific method but again is ultimately an integrative process.
So the observable process of science is a fragmentary determination of truths that mostly stops at the theorizing level due to the increasingly integrative necessity to move up the scale to philosophy combined with its (science’s) habituation to doubt. Wisdom being an entirely integrative process can continue to ascend the scale unless it degenerates into orthodoxy/dogma at which time it falls back into dualism. If it becomes aware of and relates to the pinnacle concept of wisdom, grace, it can ascend to the level of paradigm and even to the beatific level of ethic/zeitgeist.
Scientists, philosophers and paradigm perceivers/seekers of wisdom all construct realities. It’s just that the latter two generally construct and create higher integrations thereof.
KZ: Craig, nothing about science is obvious till people do it. I don’t know what you mean that hard science often gets to the philosophical level. I know many “hard” scientists. Most despise philosophy and philosophers even more so. You should consider the history of the term “hard science.” It was invented by physicists as an insult to the so called “soft” sciences, including biology, geology, and all the “social or behavioral” sciences.
Me: What you describe is rigidly orthodox, exclusionary and IMO stupid science.
“I know many “hard” scientists. Most despise philosophy and philosophers even more so.”
To their detriment and to the further acculturation of orthodoxy and it’s inevitable personal result if unchecked by wisdom…arrogance. The reason they despise philosophy is because they’re probably only focusing on the ORTHODOX variety which becomes the withdrawing trap of sophistry….not wisdom which is the integration of opposites like the integration of the mental and temporal which is consciousness itself.
“For these scientists, science is an elite calling that only the “smartest people in the room” can perform. Many physicists are self-absorbed and arrogant, with the level of each declining as we move from physical scientists to social scientists, with geologists often the least self-absorbed and arrogant.”
Precisely as I have just described ORTHODOX science.
As I pointed out in my prior post science and wisdom are complementary modes of inquiry, and yet science is but a subset within wisdom
Anyone who has been educated is habituated to orthodoxy, while true education, which is wisdom, is the first step toward innovation, new insight and ultimately paradigm change.
JS: We might benefit from asking ‘cui bono?’ – who benefits from the way economics is taught – since it seems not to serve those looking for a social physics.
JV: I’m afraid not, JC. The dichotomy you’re seeking doesn’t exists. There are no textbooks to be found that take the economy as a dynamic system to be their point of departure. All economics teachers are alike where it concerns their paycheck. Seeking a “social physics” umbrella doesn’t help either in a system where all its activities are noted in a unit of account. The physical outcomes of those activities remaining unaffected even during the worst imaginable crash; which only is a crash of accounts. Hence it is solely the underlying accounting of the system hat should be the focus of teaching economics. And such a modus operandi is dynamic at its very core.
Me: John Vertegaal, Precisely. And that’s why Steve Keen’s charts illustrating the accounting equation that assets and liabilities sum to zero is minimally enlightening while a study of its subset of cost accounting datums and the use of calculus on them enlightens the fact that the economic system is in an inherent state of profound scarcity disequilibrium regarding total individual incomes and total costs and so prices.
PB: Speaking as an engineer by training, what economics needs is a Handbook of Applied Economics equivalent to Perry’s Handbook of Chemical Engineering.
Great handbooks draw editors for each chapter from real life practitioners, often retired, who have actually built things; bridges, chemical processes, nuclear power plants, etc.
An economics handbook would draw chapter editors from chartered banking, investment banking, central banking, credit card issuers, payment processors, as well as insurers, pension fund managers, hedge fund managers, portfolio mutual funds, money markets. There would be sections on government policy, fiscal deficits, monetary authorities, and crisis management, but also banking best practices, empirical data, and rules of thumb for prudent lending ratios, risk management, and reducing fraud.
Such a handbook edited by retired professionals free from the perverse incentives of our status quo economic forums should be embraced as an authoritative counterbalance to academic journals and policy wonks. Just the brazenness of a handbook tittle that combines banking, finance, and asset management along with government fiscal and monetary policy along with risk management writ large would be a revelation.
JC: @ peterblogda – but that is the whole point, economics is neither chemistry nor physics. It is about the human soul and its strengths and weaknesses. To try to make a science of this is to make an ass of science, to misunderstand its strengths and weaknesses. If we had an economics of and for the lived world, it is clear that the science aspects of economic activity could support and maybe clarify it. Just as chemistry may support and clarify a brilliant chef’s work – which is to produce joy rather than mere nutrition.
Me: @JC Spender,
Actually you’re quite right except that’s wisdom. Wisdomics-Gracenomics is wisdom applied to the economy via the relevant aspects of its (wisdom’s) pinnacle concept of grace as in love in action/policy in the temporal universe. Wisdom is not just niceness or some airy-fairy nonsense. Its the thorough integration of the practical and the ethical/ideal.
Peterblogdonovich’s Handbook suggestion is a good one and if its final chapter were an exegesis of the aspects of the natural philosophical and pinnacle concept of wisdom, i.e. grace, it would be found that all of the observations and policy recommendations of the leading heterodox economists (like financial parasitism, UBI-Universal Dividend-QE for the Individual) align perfectly with that concept. The one synergistic policy they all have missed is the high percentage discount/rebate policy which is the very expression of the new monetary, economic and financial paradigm of Abundant Direct and Reciprocal Monetary Gifting.
HS: With best wishes for a peaceful and nuclear-free 2019 to all, I would say that we would be better off sticking with any Orthodox positions that are of some relevance to anything at all, let alone a science that is so subjective that it will take a lifetime of prayer to lead it to salvation.
Me: Yes Helen, that is precisely what the endless debates about the particles of truth and untruth in orthodox and heterodox economic theories leads to. However, new paradigms historically leave all but the most antithetical to the new paradigm structures and theoretics virtually unchanged while, almost magically, transforming for the better the body of knowledge/area of human endeavor that the new paradigm applies to. It’s a testament to the power of a single concept, which is the essence of a new paradigm, to change an entire pattern while simultaneously leaving most of its temporal structures untouched.
FS: The desire to simplify leads to unwarranted conclusions. Economics is not an exclusive-or as to whether it is a science or is not. Economics has two aspects, selection of alternatives and the results of the selections. The selection of alternatives is at times unpredictable and at other times it is predictable. The results of known selections are predictable. Analysis needs to deal with appropriately.
Me: It can, or in the case of a paradigm change it’s a simple, singular concept that applied resolves numerous chronic problems within the old paradigm. In which case it is an integration of the simple and the complex. Conceptual opposition is the major signature of the need for paradigm change, and the integration of opposites to the point of thirdness greater oneness is the mark of paradigm change accomplished.
KZ: Peterblogdanovich’s suggestions are useful, in my view. Most every discipline with which I do work publishes handbooks. Anthropology, sociology, psychology, geography in the social sciences. All the physical sciences. Even history has handbooks; dozens of them. Handbooks are normally best thought of as books of case studies, encounter descriptions, project descriptions, work assignments, or training exercises. Such handbooks extend to most of the major sub-disciplines, as well. For example, economic Anthropology, social psychology, social stratification, molecular engineering, modular nuclear reactors, subatomic physics, organic chemistry, tectonics, etc. They’re great reference documents and excellent teaching tools, in most instances. There are several handbooks of macroeconomics available. Investigating whether any would help with the problems Romer identifies in macroeconomics would be worthwhile, in my view.
Me: Integrating the opposites of technics and philosophy is the solution. After all, metaphorically speaking, you’ll never get to the goal of heaven until you awaken to the efficacy of grace.