Sunday, July 24, 2016

Economics Is Broken. How Evolution, Ecology, and Collective Behavior Can Help Us Avoid Catastrophe After the crash, can biologists fix economics?

Mainstream economics uses advanced mathematics to calculate wide averages. The utility of an apple can be measured they say. When I was young I would go scrumptying (nicking apples and pears from orchards) and not only would I eat a belly load of apples before I got home, my family would be eating tons of apples all through the summer too. And at the end of summer the woods would be full of blackberries and me and my friends would go out and pick loads of them. So we had apple and blackberry pies, baked apples, plain old apple pies, apple and blackberry crumble, stewed apple with custard, you name it, all with cloves and cinnamon, etc, and none of us ever got fed up with it.

So mainstream economics takes all these averages and then over whole populations they believe that these averages even out, but I still can't see how utility can ever be accurately measured in the way that weight, or speed and light can be. So the advanced maths used in economics can still only ever give us more averages, but the mainstream economists then takes only the values that leads to an economic system  that suites the One percent. Eric Zuesse describes very well in in his book, Feudalism, Fascism, Libertarianism and Economics ( how the One Percent - the aristocracy as Eric Zuesse describes them - paid for this, so now we have an economic system based on right-wing propaganda.

Neoclassical economics, and libertarians for that matter, view people as being entirely selfish, and that we only do good deeds because it pleases us. But they get it entirely the wrong way around. A Selfless act can give a lot pleasure, and so it is being selfless first that brings the pleasure after. Only by being entirely selfless can we get the pleasure. Over the centuries many people have given their lives to save others, and we have all heard of people who have shielded bombs to save others, where often many of these people were strangers too. Teachers have lost their lives shielding children from mad gunmen. Where's the selfishness in that?

Is Broken. How Evolution, Ecology, and Collective Behavior Can Help Us Avoid Catastrophe   After the crash, can biologists fix economics?, By Kate Douglas


The global financial crisis of 2008 took the world by surprise. Few mainstream economists saw it coming. Most were blind even to the possibility of such a catastrophic collapse. Since then, they have failed to agree on the interventions required to fix it. But it’s not just the crash: there is a growing feeling that orthodox economics can’t provide the answers to our most pressing problems, such as why inequality is spiralling. No wonder there’s talk of revolution.

Earlier this year, several dozen quiet radicals met in a boxy red building on the outskirts of Frankfurt, Germany, to plot just that. The stated aim of this Ernst Strüngmann Forum at the Frankfurt Institute for Advanced Studies was to create “a new synthesis for economics”. But the most zealous of the participants – an unlikely alliance of economists, anthropologists, ecologists and evolutionary biologists – really do want to overthrow the old regime. They hope their ideas will mark the beginning of a new movement to rework economics using tools from more successful scientific disciplines.

Drill down, and it’s not difficult to see where mainstream “neoclassical” economics has gone wrong. Since the 19th century, economies have essentially been described with mathematical formulae. This elevated economics above most social sciences and allowed forecasting. But it comes at the price of ignoring the complexities of human beings and their interactions – the things that actually make economic systems tick.

The problems start with Homo economicus, a species of fantasy beings who stand at the centre of orthodox economics. All members of H. economicus think rationally and act in their own self-interest at all times, never learning from or considering others.


Matt Franko said...

Its just survival of the fittest... I dont see the disconnect...

The 1% might just be branching off into a new superior species...

Kaivey said...

Then they will have to fight each other to the death.

Tom Hickey said...

There have always been a 1% but the personalities shift over time. There is no indication that 1% dynasties are leading to another, superior subspecies.