How Economics Fails

Economics is nothing more nor less than the study of the primary way in which people connect with society and get on with their lives.

In everyday life, you may interact with a few people – family, colleagues, and friends. But through the process of eating and paying the mortgage you interact, at some distance, with hundreds more. Because this interaction is entirely through something called “money,” a way of keeping score, it’s very tempting to look at it entirely through numbers. The dizzying details of tens of millions of exchanges every day makes a top-view in bulk the most desired method of analyzing how things are going.

Yet this process has proven wrong over and over again. The failure of economics, particularly macro-economics, is the primary reason why the only true study of an economy has to be a People’s Economics.

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A System of Connections

Summer re-run season has me terribly bizzy.  This is a repeat from eight years ago which informs the basis of People’s Economics.  

The art and skill needed to put knowledge to practical use is more than just what technology is really about – it’s generally seen an increasing share of our economy.    The term “Knowledge Economy” comes from Peter Drucker in his 1966 book, “The Age of Discontinuity”.  It includes this:

In a knowledge economy where skill is based on knowledge, and where technology and economy are likely to change fast . . . the only meaningful job security is the capacity to learn fast.

True enough, since a lot of knowledge applied as an art went to revolutionizing economics itself since that time.  But as many of us have learned, the ability to think fast means nothing without the right connections.

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People’s Economics – the Camp/Fire

The hardest thing to change is often perspective. To see the world from a different angle requires either movement to a new position or an out-of-body experience.

Given how frozen our identities have become in political tribes, it is almost certainly easier to pull someone’s consciousness out their daily routine than to call them over to a new position. Where new perspective is essential to understand radical change in this world, the first step has to be a separation from conventional language and thought. Everything has to be unlearned.

So it is with People’s Economics. Longtime readers will be familiar with the concept that has been developed in real time here on this blog. Now that the camp has been set up in the middle of the dark woods, it’s time to light a fire. People’s Economics is now the Camp/Fire for Barataria, aside from period asides which will in other ways help the promote the general concept of developing new perspective.

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Forest/Trees? Camp/Fire

It’s an old cliché. “Missing the forest for the trees” has little meaning by itself, but calls up a deeper cultural conversation. This kind of “conventional wisdom” is worth exploring in a world full of a lot of detail but little useful, objective truth.

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Forward, America!

Emmanuel Macron’s La Republique en Marche party is racking up huge gains in the parliamentary elections, verifying the clear message previously sent by French voters – we want something different. Because of their clear choice we also may have an answer to the question posed by restless voters throughout the developed world for the last two years. What is it that they want? Something different, more than anything.

American politics, between elections, is frozen in the choices made last November. All we have to debate is an endless array of minutia, all of which are subject to interpretation for one simple reason – no one can possibly make sense of a lot of details.

We need a distraction, something which takes our focus away from the dazzling details. We need a shinier object that breaks us out of the endless recounting of trees, not forest. And there is nothing Shinier than high technology.

If a political philosophy based on technology seems cynical, consider Macron’s statement, “We need new methods, not ideas.” Let’s take that one step further and make it a platform. Introducing the real Progressives, perhaps called Forward America, likely nicknamed the Technocrats.

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Progress?

When former FBI Director James Comey testified in the Senate, it was as if the grown-ups had finally arrived. It wasn’t just the air of authority that this straight talking man projects, either. It was the respectful lack of grandstanding demonstrated by actual US Senators which truly enshrined the moment. Whatever comes of this it’s not going to be childish and stupid.

As I write this, there is another sign that the world may be returning to normal. The results of the UK election are still coming in and they are telling. It’s not that the Conservatives have lost their majority which counts here. It’s the fact that polling in these elections is actually predictive once again. It was absolutely reliable before the last election and the Brexit vote, perfectly predicting the results. Polling is back this time and it appears that the world is actually returning to something like normal.

Not that there isn’t chaos in the hung parliament. But it’s bounded, orderly chaos. Small victory.

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Reason

“Conventional Wisdom” isn’t.

Everyday life is the process of understanding and using key facts about the world around us. The sky is blue, red means stop, the 94 bus leaves at 7:53, and coffee will wake you up. Most of the important things in life are obvious enough, based on immediate observation or past experiences strung together.

However, the presence of technology and a growing interconnectedness impinges critical “facts” onto our lives which reach far beyond our senses and sensibilities. Cell phones work because they just work, this thing called “money” in our bank account is extremely important, people who live in distant lands are motivated by something akin to demonic possession, et cetera.

This is where it all breaks down. Or, more importantly, where things breaking down accelerates as reason itself fails.

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