 Whatta Hero! |
 |
 |
 |
 |
 |
 |
 |
|
REACHING FOR HEAVEN ON EARTH, The members of the American economics profession, as Arnold contended, performed a vital practical role in maintaining this unique system of corporate socialism American style. It was their role to prevent the American public from achieving a correct understanding of the actual workings of the American economic system. Economists instead were assigned the task to dispense priestly blessings that would allow business to operate independent of damaging political manipulation. They accomplished this task by means of their message of "laissez faire religion, based on a conception of a society composed of competing individuals." However false as a description of the actual U.S. economy, this vision in the mind of the American public was in practice "transferred automatically to industrial organizations with nation-wide power and dictatorial forms of government." Even though the arguments of economists were misleading and largely fictional, the practical -- and beneficial -- result of their deception was to throw a "mantle of protection ... over corporate government" from various forms of outside interference. Admittedly, as the economic "symbolism got farther and farther from reality, it required more and more ceremony to keep it up." But as long as this arrangement worked and there could be maintained "the little pictures in the back of the head of the ordinary man," the effect was salutary -- "the great [corporate] organization was secure in its freedom and independence." It was this very freedom and independence of business professionals to pursue the correct scientific answer -- the efficient answer -- on which the economic progress of the United States depended. More in: http://dieoff.com/page235.htm |
|
The Need to Reintegrate the Natural Sciences
into Economics. "How long will researchers working in adjoining fields... abstain from expressing serious concern about the splendid isolation in which academic economics now finds itself?" the Nobel Laureate in Economics, Wassily Leontief, asked in 1982. This question is extremely important because economics is the foundation on which most decisions effecting agriculture, fisheries, the environment, and indeed most aspects of our daily lives, are based. Natural scientists, including biological scientists, may have particular views on this or that economic policy, but few question the legitimacy of economics as a tool. We believe that, paraphrasing the great Prussian military historian Karl von Clausewitz, economics is too important to leave to the economists, and that natural scientists should not leave the procedures by which we undertake economics up to economists alone. Instead, natural scientists must contribute to a new discourse about the means, methods and ends of economics. This paper is a response to Leontief's question. It is critical that economics be based on sound principles, and that the policies that are generated from it have a solid foundation. Neoclassical economics, that form of economics derived in the mid 19th century that prevails today, focuses on problems related to value decisions, the behavior of economic actors, and the working of markets. These problems belong to the sphere of the social sciences (many of which, incidentally, have their own problems with neoclassical economic theory, see for example Marris 1992). But the wealth that is distributed in the markets must be produced in the "hard sphere" of the material world where all operations must obey the laws and principles of physics, chemistry and biology. Our concern is that most production models of economics are not based upon these biophysical laws and principles, and indeed tend to ignore them (Georgescu-Roegen 1971, Daly 1973, 1977, Kimmel et al. 1985, Leontief 1982, Cleveland et al. 1984, Hall et al. 1986, Hall 1992, 2000). The rest is at http://dieoff.com/page228.pdf |
|
ECONOMIC EFFICIENCY "There is an assumption in economics that the market system
handles resource allocation in an efficient manner unless proven otherwise."
"All this was inspired by the principle -- which is quite
true in itself -- that in the big lie there is always a certain force of
credibility." ECONOMIC EFFICIENCY When an engineer uses "efficiency", it means getting the most output for the least input -- a good thing because it tends to conserve finite natural resources. [1] But when an economist uses "efficiency", it means "efficient distribution" -- a bad thing because it tends to deplete natural resources (all economic activity wastes finite energy stocks). Economic efficiency means the "correct people" (those who can afford it) get the "correct goods and services" (whatever they want; technically known as "Pareto Optimality", which incidentally, doesn't exist). Economic efficiency rewards people who are the most successful at converting natural resources into industrial garbage ... so they can invest in even more conversion of natural resources into industrial garbage. If one can think like an engineer (social scientists will have difficulty doing this), one can deduce from first principles, history, and observation that a society based on "economic efficiency" will crash and dieoff. Here's how: 1). Visit the astronomy department at your local university and verify that Earth is indeed spherical. All spheres are finite, thus Earth is finite. Therefore, you can deduce that Earth's energy resources are finite too -finite "energy stocks" (e.g., oil) and finite "energy flows" (e.g., wind). 2). Visit the physics department and verify that: Energy is the capacity to do work (no energy = no work). Thus, the global economy is 100 percent dependent on energy -- it always has been, and it always will be. There are NO exceptions to the laws of thermodynamics. The First Law of thermodynamics tells us that neither capital nor labor nor technology can "create" energy. Instead, available energy must be spent to transform existing energy stocks, or to divert an existing energy flow into more available energy. The Second Law of thermodynamics tells us that energy is wasted at every step in the economic process. The engines that actually do the work in our economy (so-called "heat engines", such as diesel engines) waste more than 50 percent of the energy contained in their fuel. Energy resources must produce more energy than they consume, otherwise they are called "sinks" (this is known as the "net energy" principle). About 735 joules of energy are required to lift 15 kg of oil 5 meters out of the ground just to overcome gravity -- and the higher the lift, the greater the energy requirements. The most concentrated and most accessible oil is produced first; thereafter, more and more energy is required to find and produce oil. At some point, more energy is spent finding and producing oil than the energy recovered -- and the "resource" has become a "sink". 3). Visit the ecology (or population biology) department and verify that "overshoot", "crash", and "dieoff" are common in nature. Dieoff occurs when animals run out of energy stocks (food). H. sapiens are running out of energy stocks (fossil fuel first, and then food). Now that you have deduced the dieoff scenario from the science, turn on your TV set and observe that "dieoff" is already underway in Russia and Africa. The only remaining question is when will "dieoff" come to a location near you? Many industry experts expect it in less than ten years. Some say it is here already. See http://dieoff.com/synopsis.htm THE POLITICS OF ECONOMIC EFFICIENCY "Economic efficiency" also means "economic anarchy" (no government regulations). Another way of looking at it is that economists advocate "Social Darwinism" -- survival of the economically fittest -- the rest can suffer and die. In the words of Economic Nobel Laureate Milton Friedman: "Pinochet has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." [2] Although the first advocate of Friedman's Social Darwinism was the Dominican Friar St. Thomas Aquinas (1224-1274),[3] the British economist Thomas Malthus (1766-1834) was the first to really understand and record the real-world implications of Thomistic Philosophy: "A man who is born into a world already possessed, if he cannot get subsistence from his parents on whom he has a just demand, and if the society do not want his labor, has no claim of right to the smallest portion of food, and, in fact, has no business to be where he is. At nature's mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he does not work upon the compassion of some of her guests. If these guests get up and make room for him, other intruders immediately appear demanding the same favor. The report of a provision for all that come, fills the hall with numerous claimants. The order and harmony of the feast is disturbed, the plenty that before reigned is changed into scarcity; and the happiness of the guests is destroyed by the spectacle of misery and dependence in every part of the hall, and by the clamorous importunity of those, who are justly enraged at not finding the provision which they had been taught to expect. The guests learn too late their error, in counter-acting those strict orders to all intruders, issued by the great mistress of the feast, who, wishing that all guests should have plenty, and knowing she could not provide for unlimited numbers, humanely refused to admit fresh comers when her table was already full." [4] Here is a recent example of Malthus' Thomistic Philosophy (Social Darwinism) by the notorious former World Bank Chief economist and US Treasury Secretary Lawrence H. Summers: "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable... because foregone earnings from increased morbidity" are low. He adds that "the underpopulated countries in Africa are vastly underpolluted; their air quality is probably vastly inefficiently low compared to Los Angeles.... " [5] By using everyday words in idiosyncratic ways, economists hijack normative "feel good" terms for their heinous "feel bad" political agenda: Social Darwinism. Economists are able to use both definitions simultaneously in order to "feel good" about their politics while deceiving others -- which is a splendid example of lying to oneself in order to tell more convincing lies to others. Economists provide the best examples of how the animal evolved as the apex "social predator" rather than the apex "engineer" (economists don't know anything about the real world -- and they don't care). "POLITICAL EFFICIENCY" The reality of the economist's political agenda is a curious mixture of politics and efficiency: "political efficiency". Economists are trained to believe that "money" has nothing to do with politics and is simply a medium of exchange. But even the casual observer can see that money is social power because it "empowers" people to buy and do the things they want -- including buying and doing other people: politics. If employers have the freedom to pay workers less "political power", then they will retain more political power for themselves. Money is, in a word, "coercion", and "economic efficiency" is correctly seen as a political concept designed to conserve social power for those who have it -- to make the politically powerful, even more powerful, and the politically weak, even weaker. Economists have adopted normative terms and idiosyncratic definitions to make them better liars. Indeed, to the economist, lying is effortless and automatic. It's a way of life. "Economists have become a plague as dangerous as rabbits,
prickly pear or cane toads. Economists have become the cultural cane toads of
Canberra, oozing over the landscape and endangering myriad indigenous species.
Not only the economy but also mental health would be greatly improved if we
could lift the fog of obfuscation on things economic. The first step is to take
economists from their pedestal and to see them as the curiosities they are. The
first step to reducing their power is to reduce their legitimacy. How is this
to be achieved? First, economists' outpourings should, as a matter of
principle, be met with laughter, derision, benign paternalism. They should
cease to be employed as media commentators. In the long term they should cease
to be hired. Let them be pensioned off and die out. Extinction is a worthy end
for a profession whose brief is rotten to the core." Jay -- www.dieoff.com References: [1] Energy efficiency is the percentage of total energy input that does useful work in an energy conversion system. [2] Cite in Newsweek, Jan, 1982. SUMMARY: So what was the
record for the entire Pinochet regime? Between 1972 and 1987, the GNP per
capita fell 6.4 percent. In constant 1993 dollars, Chile's per capita GDP was
over $3,600 in 1973. Even as late as 1993, however, this had recovered to only
$3,170. Only five Latin American countries did worse in per capita GDP during
the Pinochet era (1974-1989). And defenders of the Chicago plan call this an
"economic miracle." [3] "Particularly important was Aquinas' brief outline of
the mutual benefit each person derives from exchange. As he put it in the
Summa: 'buying and selling seems to have been instituted for the mutual
advantage of both parties, since one needs something that belongs to the other,
and conversely.'" [ p. 10, ECONOMIC THOUGHT BEFORE ADAM SMITH, by Murray N.
Rothbard; Edward Elgar, 1995; [4] AN ESSAY ON THE PRINCIPLE OF POPULATION, 2nd edition, Thomas Malthus [5] The Memo DATE: December 12, 1991 |
|
Jay Hanson
|
