Friday, July 24, 2015

Kate Douglas — After the crash, can biologists fix economics?

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.…
“Morality evolved out of cooperation within and competition between groups, so when acting as a single group to tackle global problems we will have to assume the role of natural selection ourselves,” [David Sloan]Wilson says. This might involve pursuing a wide variety of strategies, identifying those that work best, and then creating incentives to cooperate on implementation. “In some ways it’s the opposite of the invisible hand.”
Heresy! It's the basis of heterodox economics.

ht Mark Thoma at Economist's View


RedRosa said...

This is why economics used to be included in sociology departments... and something that most heterodox economists never forgot. Marxist systems theorists, institutional economics, etc..

Matt Franko said...

Its the basis of Darwinism itself...

Roger Erickson said...

Ya think? In Germany, of all places. Goes to show you that every aggregate already possesses far more capabilities than it is using ... it just needs a cause big enough to start utilizing those talents.

Can we organize on a bigger, better level? It all depends on whether the mouthbreathers of the world allow progress to happen.

My own biology background says that an aggregate growing numbers this fast can't yet re-organize as fast as it's growing.

Our lack of communication tools and practiced methods (and challenges) leaves "AGGREGATES IN THE MIDST OF GROWTH SPURTS" too susceptible to local institutional momentum to regain, let alone improve social agility.

We're aware emerging interdependencies .. but just don't have the tools to easily coordinate tuned, aggregate responses.

In that regard, our populations are very much like a teenager going through a growth spurt. The only known solution to that is enough dedicated practice at SOMETHING to regain agility AS OUR PERSONAL, PHYSICAL GROWTH RATE SUBSIDES.

Imagine your own clumsiness problem if you yourself never stopped growing.

There is some agility limit to the size of human aggregates. We just don't know what it is. At some point, a given "model" doesn't scale well past optimal sizes given available methods. Hence the known range of quarks in nuclei, hadrons/electrons in atoms, atoms in molecules, molecules in cells, cells in organs, organs in physiologies, and # of individual physiology member of human aggregates.

Same reason military organizations have squads, platoons, companies, battalions, brigades, divisions, corps, armies etc, etc.

Barring unexpected organizational tools and methods allowing us to practice, maybe we've already exceeded the range of optimal human population aggregates.

We reached an unprecedented level of mobilization and national organization back in WWII - using only paper & pencil. Pity we haven't found any other reason to organize that well, other than killing each other.

Hence, the first rule of biology is ... find a challenge worthy of the organizational capabilities of the existing entity. We're not doing that.

Roger Erickson said...

Pity all the people with more useful things to say weren't invited to this conf, though, admittedly, many wouldn't want to go anyway. They'd be more useful actually getting things done, with those willing to evolve.

Imagine if George Marshall & Marriner Eccles had gone off to academic conferences in 1939, instead or reinventing the US Army & US Federal Reserve.

Credentialism shoots itself in the foot yet again.

So far, it's always come down to luck or statistics, of having someone like FDR, Lincoln or George Washington in the right place at the right time. If WE want to survive, we can't rely upon luck. We have to find the little ways to reduce the momentum of institutional frictions, and keep them from working at cross purposes.

Matt Franko said...

We cant leave our operations up to the academe...

Roger Erickson said...

I wonder if Schauble was invited.

If so, would he turn them down?

If he went, what would he say? Gibberish about following all rule & "paying ALL debts," no matter how meaningless" ?