Apocalypse economics and economic apocalypse — Richard Westra

What cutting edge economic anthropology and economic history shows is that prior to the dawn of the capitalist era it would have been nonsensical to refer to such a thing as an “economy” and no one ever did. The reason for this, quite simply, is that while economic reproduction is an existential facet of all existing human societies it had always been intermeshed with other social practices–culture, religion, ideology, politics, and so on–and indistinguishable from them. Only under capitalism does economic life emerge transparently, as a separate sphere, permitting systematic study of “the economy” in economic theory.

Mainstream economics in the neoclassical tradition which gained hegemonic status across much of the world by the early 20th century never problematizes the above important ontological fact. Rather, it blithely advances precepts that draw on select economic practices of capitalism as universal principles of human economic life per se.

Unfortunately for humanity, the naturalizing of capitalism by dominant mainstream neoclassical economics establishes a bulwark against the posing of vital economic questions which challenge capitalist rationality....

Societies involving human relationships are complex adaptive systems, comprised of subsystems and "elements," that is, individual members. In human society as a whole, the elements or members are not the unit of society but rather the family is the social unit. Traditionally, this was the relationship of subsystems interrelated by kinship — individuals, families, clans, tribes, and nations.

Each society is characterized by its culture, which includes its traditions, customs, institutions, capabilities and potential, and shared aspirations. This includes overlapping factors that are often characterized as social, political and economic. It is not possible to disentangle the factors comprising the society other than conceptually.

Such conceptualization necessitates drawing lines that involve making assumptions that hang on on factual evidence as well as on abstractions that are based on fuzzy sets. Moreover, identification of key factors and their measurement, as well as prioritizing relevance, is extremely difficult in the scientific sense. Thus, arriving at causal explanation that is scientific sense is riff with issues. These issues are generally debated ideologically rather than scientifically, making the outcome speculative and rhetorical, infected with cognitive-affective bias.

Human knowledge is relative since there are no absolute criteria. For example, in science, all measurement categories are anchor to a real basis as a standard. Scientists are continually trying to refine the exactitude of such standards, as well also ensuring that the standards are adhered to in practice.

A further complicating factor is that human knowledge is based on conceptual structures that are not fully systematized. That is, they are not algorithms. Rather, the basis of human known is narrative, a world view that is embedded in the cultural narrative. For example, the history of thought can be divided into three periods so far, with a fourth period emerging.

The first period was mythological explanation, which still persists, e.g., in religions. "Mythos" means English "story" in Greek. The Greeks distinguished mythos and ethos. Mythos is the cultural story while ethos signifies the cultural values and character. Generally, the cultural ethos is the context for the cultural story that determines and transmits fundamental values and orientation. Logos or reason is distinguished from pathos or feeling. There is also topos, or cultural theme — what a culture is primarily concerned with. Topos relates to telos or purpose. For example, the topos of America is liberty as an end-in-itself or highest good. Finally, there is kairos or opportune time. Cultures are subject to the process of historical dialectic, waxing and waning with a Zeigeist. The mythic age began to wane during the Axial Age (c. 600-300 BCE) and began to be replaced by the conceptual age as mythos as mythological explanation gave way to logos as rational explanation. This was particularly visible in the West with the rise of Greek philosophy as the foundation for what would develop into the Western intellectual tradition.

The intellectual, philosophical or conceptual age is the second stage. It would be characterized by logos or rationality. Pathos or feeling was acknowledged as important but relegated to rhetoric by Aristotle.The cultural narrative began to change as mythological explanation gave way to causal explanation based on logos or reasoning. Plato and Aristotle in particular laid the its foundation based on the teaching and example of Socrates, who wrote nothing.

The Greeks also distinguished episteme or conceptual knowledge from praxis or practice, e.g., the practical application of conceptual knowledge. This, coupled with Aristotle's emphasis on observation, resulted in a cultural transition when Aristotle's thought became dominant over Plato's in the Middle Ages, largely to the influence of Aquinas.

 The second stage developed into the third state when philosophical method began to be replaced by scientific method. Then observation, which Aristotle had emphasized counter to Plato, became key as instrumentation and measurement were improved through technological innovation. Gradually, the scientific age became dominant in the cultural narrative owing to the success in its application to technology and the transformation of society that it wrought, not as if by "magic" but based on understanding "the laws of nature." With Newton the initial stage of the this transformation was completed.

It was assumed that the success of the scientific method was due largely to the assumption of naturalism, which involved rejecting mythological explanation like religious dogma and theology, and also philosophical explanation based on abstract reasoning. This led to the conceptual distinctions among fields of knowledge and the "vivisection" of the organic life of society into conceptual mechanisms.

Modern economics is a result of this. It is the attempt to explain the "economic life" of society in terms of mechanistic and naturalistic principles that are based on equating naturalism as a methodological assumption with materialism as an ontological assumption. The units of society are viewed as individuals functioning like atoms in physics, so that economics is assumed to be based on laws of nature which do not differ materially from the laws of nature discovered in physics. Thus the assumption that the methodological debate is decided, with methodological individualism and microfoundations established as key assumptions along with equilibrium and rational maximization of economic benefit for the agent.

This results in mechanistic explanation over organic, and the normalization of "naturalized economics" as a definitive explanation without relation to society as a system, that is, a whole with a structural aspect and also a functional one. The result is caricature rather than science. Since economic is a policy science used in policy formulation, this has consequences for the whole of society.

The fourth period may now be waxing. This can be characterized as the age of the algorithm. It will depend on develops in computer science and technology, in particular AI. This would mark passage from the Industrial Age to the Digital Age, but probably still within the third period dominated by science.

Whether this will be apocalyptical remains to be seen. It well could be with several swords of Damocles hanging over the body of humanity. But it could also mark a transition to a new humanity.

MR Online
Apocalypse economics and economic apocalypse

Editors

Originally published: Exploring Economic History with Palgrave Macmillan by Richard Westra (July 2019)