On Economics

It’s ages since I wrote anything here….

Someone has just contacted me about something I once wrote on Blogger a couple of years  ago, which send me back to look for it. The reader had liked the piece so I thought maybe I’d copy it here.
It’s dated slightly, but in a good way, in that several of the points I predicted seem to be slowly taking place. Spooky…..

Anyway… see what you think…

Monday, September 21, 2009

On economics

Economics has been called the ‘dismal science’, and is something I know nothing about. What is eminently obvious to me though, is that nobody else knows anything about it/them either, or the Crash of 1928 and the Mess of 2008-and-counting would never have happened. Would they? These wonderful bankers (the collective noun for bankers, as in, say, a ‘pride’ of lions or a ‘gaggle’ of horse-flies, is ‘wunch’, I’m reliably informed) kept telling us that they needed to pay each other vast amounts because you need to pay top dollar ‘…to get the best brains’. These ‘best brains’ have just applied their top dollar expertise to bringing the world’s economies to their knees. How did they pull off this remarkable feat? … more in a minute.

Meanwhile, what’s all this about economics being ‘a science’? A science is something that deals in empirically discovered Facts, allied to a rational Hypothesis (ie, ‘hunch’), which combine to produce, with luck, a Theory. This Theory will apply in all cases in all places, and is thus held to be ‘true’ until it is superseded by a broader more all-embracing Theory. That’s the scientific method; and it works (or should do).

Economics works entirely differently. It does not work according to empirical objective Facts and sound Theory; it hobbles along from day to day, lurching to left and right at each successive minute. Science does not do that. Why do/es economics lurch and stumble from pillar to post? Because it’s all based upon human decisions in the first place and natural disaster in the second. Expensive mathematicians and deluded financial brokers keep trying to devise algorithms to predict market movements, (Why? To add stability, for the benefit of all? Hmm… how about ‘to make a quick killing’?) but they will never ever find one, I can predict with fine certainty. They would be literally much better off studying the weather. A typhoon in Japan flattens a factory, and thus by the ‘law’ of supply and demand, the price of scraggle-tweeters quadruples overnight.
Hang on, though… ‘law’? That sounds a bit like science, don’t you think? A proper Law, like the Law of Gravity or the Law of Conservation of Energy. But the ‘law’ of supply and demand is nothing like that. It’s not even a ‘law of moral convenience’ as passed by a parliament in a civilised society for the best protection of its citizens from the mad and the bad.
No, the ‘law‘ of supply and demand is nothing but an observation of the near-universal practice of greed and venality in the world of commerce. If something becomes scarce, traders, merchants, cornershop wallahs and Top Dollar Bankers all react in the same way: they up the price as high as they can get away with. It’s not a law; it’s a dispiriting reflection on the human capacity for selfishness.

And there you have it: the economics of the entire world is run not on the basis of any Law, or indeed upon rationality of any sort: it is run on the backs of just two emotions: greed and fear. They call a market ‘Bullish’ when greed is in the chair and everyone thinks they can steal a march over the other guy and drain some extra cash out of the public commonwealth for their own Top Dollar bonuses; and they call it ‘Bearish’ when fear replaces greed, and everyone judges that the risks of allowing greed full rein are too high. Best sit tight for a while, until untrammelled greed becomes possible again. This is the condition we are in at the moment. The Great Brains of banking are biding their time. They were startled that the USA didn’t bail out Lehman’s (they were banking(!) on the Big L being so important to The Economy that it could never be left to go bust) and now they are hiding under their collective stone, waiting for us all to forget. Then they can return to plunder us once again.

Or can they? Have we finally learned some sort of lesson? That Rampant Capitalism is no good for anyone? Have we finally learned that a civilised society is not one in which every man is for himself, and himself alone?…. the message that Milton Friedman and Reagan and Thatcher rammed down our throats, and which our public services have been shattered by ever since? (Remember Thatcher’s famous ‘There is no such thing as society’?)

Have we learned that enormous private wealth for the few at the expense of public squalor for the many is not a good exchange? That a vast wage gap between the highest paid (‘earned’ from such useless things as property speculation and currency manipulation) and the lowest paid (doing such essential jobs as sewage work and producing food) is bound to breed ill-feeling all round and to greatly diminish such things as civic pride and social cohesion, not to mention national morale?

I doubt that we have learned. We might tinker a little at the edges, and might try (unsuccessfully I would confidently predict) to appeal to the better natures of the Greed Merchants in finance and banking, but overall nothing will change. Greed and Fear will remain the Laws by which the world runs its economies. Until, one day….

… one day the Common Man will say ‘enough is enough’…. And politicians will be forced to rein in the Men of Greed. Then maybe economics will slowly change from being run at the whim of personal greed-driven twitches and lurches, and begin to be run as a service to everyone on the planet: fairness will replace greed; everyone’s basic needs will be addressed and met; long-term social investment will replace short-term profit rip-offs; huge wealth will be looked down upon instead of looked up to; we will honour each other instead of despising or envying each other. We will be judged by our values and not our value.
And on that day, the Fat Pigs of the City will finally learn to fly.

Until then, we will just have to remain angry at what they’ve done, and feel more angry because there seems to be no will to change it at the top of governement, and even more angry because we at the bottom feel powerless to change this. And that’s the way it will stay until enough of the public get fed up with being swindled and decide to act.

Meanwhile, the Co-op Bank was not involved in any sleazy activity, and is never likely to be, as it is run not by Top Dollar Greed Merchants for their own interest, but by and for its own members: it’s a co-operative. You might like to consider this when wondering where your money will be safe in the future.

Rant over. Back to work… Finally finished Chapter 16. About to broach The Occult: toads, newts, skinny blokes with bass guitars hanging below their knees, zombies and all….. but underneath all the nonsense there are some gems of wisdom. More later.

(Nov 2011: That last paragraph refers to the process of writing ‘DarwinPlus!’. It’s now all done and dusted, I’m mighty glad to say. More details elsewhere on this website.)

Comments are closed.