Wednesday, May 30, 2012

The Social Science Of Economics - Predation, Victimization and Violence Endorsed By The State - Part One, An Introduction.

Some recent events have unfolded that I want to talk about.  Because of these recent events, I’m going to take a detour and delay some economic and market posts and focus on the incredible violence that oftentimes reflects our social and economic values.    I haven’t decided if I will put up four or five or ten or twenty posts in this series.  But they will roll out over the coming  summer months.  I will continue to intersperse  more “mainstream” economic and market posts during this process.  You’ll recognize these future post because they will be titled as parts in a series.

One has to expand their point of view well beyond the mainstream to gain proper perspective of what ills face our economy and society.   Especially, when one listens to the simple-minded solutions presented by politicians.  Both political parties created this crisis.   Neither wants to embrace change because with the economic and social ills they have created comes unprecedented political control, power and wealth.   There is a finite amount of control and power in our society.  So, it is quite obvious that this control, power and wealth that politicians have granted themselves has come at the expense of our citizens.  As they take more, we have less.  And, that dynamic is a direct or indirect result of predation, victimization and violence endorsed by the state. 

We hear many who wish to see change make simpleton remarks like fractional reserve banking, as one example of many, is a major factor behind this crisis.   Fractional reserve banking is simply a tool.  There are proper applications of any tool and then there is the abuse of any tool.   The abuse of this tool, in particular, leads to an exponential function where a debt crisis is unavoidable.  But, fractional reserve banking, simply as a tool, most certainly does not need to be used in such a manner.  Fractional reserve banking can be a very powerful tool for democracy in the right hands; a public banking and monetary system.  

The ills in our society and economy are much more esoteric than these arguments that abolishing the Federal Reserve, ending fractional reserve banking and other equally simpleton arguments would spawn some miraculous sustainable recovery.   The abuse of any  institutions, tools or citizens is only possible by the dismantling of the rule of law.  Only politicians have that power.  Only we grant them that power.   The reality is that unless we deal with underlying sociological factors it doesn’t matter what institution or tool we think is going to solve our ills.  It simply won’t work.   Of course, there is a counter argument put forth by many that if we simply dismantle government, it will accomplish the same end result.  Well, that is essentially what we have been witnessing over the last thirty years; the dismantling of government.  The short answer is that this will not work.  It will also destroy our democratic institutions, it will permanently drown out those without a voice and it will turn our economy and our society into one of even greater lawlessness.  As a nation of laws, the radical right-wing answers are anything but.

Economics at its core is really nothing more than a social science.  Or, at least it was before it was destroyed.  Intellectual giants played a role in its founding and early sociology and psychology-based understandings of its principles.  Economics started as an outcropping of sociology and was actually taught in sociology curriculum before it became a full-fledged college program.  When it broke from being a social science to a stand alone science based on fuzzy math and unproven math-based theories, aka junk science, economics started its decent into massive failure.   That is where it is today.  In the modern world economics is generally practiced by intellectual midgets who don’t know what they don’t know.   Economics is a profession essentially created and embraced by the dumbed-down corporate state.   Economists find themselves in a paper bag of what is generally-accepted, failed economic dogma and can’t punch themselves out of that paper bag.  

As we have discussed before, part of the failure of economics starts at the very beginning of the learning process.  The wrong professors and the wrong students are attracted to economics.   The wrong people are attracted to economics because of the wrongness of its curriculum and its teachings.   That is, people who are less concerned and substantially less aware of sociology (including social anthropology) , associated psychology and the human condition and more concerned with the knobs and dials of data analysis and mathematical theories based on  unsubstantiated and oftentimes completely wrong quantitative factors.  

Knobs and dials are truly meaningless to gaining proper perspective without the application of quality.  Sociology, psychology and an appreciation for the human condition are the basis for that application of quality.  It is human factors that determine the sustainability of any economic factor.   It is also our social values that define our economic values.  To gain proper perspective on how to fix our economic ills, one must appreciate our social ills.   It is the social values embraced by our society’s leadership that determine the sustainability or lack thereof of both our society and our economy.   Our economic ills are, at their core, a reflection of ills that infect the leadership of our nation. 

I think we could very well be in the final years of economics as a profession and a college curriculum.  At least as it is taught today.  If nothing else, we have noted for half a dozen year that the economics profession is in a bubble - the mainstream economics community is literally clueless.  It was just 18 months or so ago that I highlighted a survey showing over 90% of economists believed there was no chance of a double dip recession.   Similar numbers were seen before the 2008 collapse.   Britain just announced it is already back in recession and the 2009 “recovery” is the worst in its recorded history.   The reality is we never  got a recovery off of the 2008 collapse, let alone be so lucky to have a double dip “recession”.    Without massive money printing for financial speculation, endless wars to keep the for-profit military industrial complex humming and a government spending 70% of national income,  (your income) true unemployment could easily be 50%.   Ditto for every major country around the world.  The extreme percentages of economists to always be wrong, all of the time, points to nothing short of systemic incompetence.  This highlights fundamental unsustainable flaws in the economics educational system and profession. 

Can you imagine if less than 10% of bridges were designed not to fail?   Or less than 10% of cars purchased actually worked?  That is the economics profession today.  This truly incompetent profession provides the primary policy input, generally useless might I add, into our political system, corporate system and our society.  I’m not exaggerating when I say the profession could be dying.  One of the first posts I wrote years ago is that any bureaucracy will first do what’s necessary to sustain itself.  ie, Self-interest.  It’s the same morally-bankrupt self-interest behind capitalism, the banking system and our political party system.  Economics as it is taught today only exists because the self-interested monopoly Federal Reserve funds the majority of economic research, economics positions and economics departments in universities.   Without the backing of the self-interested, incompetent Federal Reserve, it is debatable whether economics would actually have the critical mass to even justify a college degreed program.  Economics as it is taught and practiced today is not a merit-driven profession.  There is little, if any, measurable truth or value derived by society or our economy.  ie, Without this rigging of markets and the economics profession by the Federal Reserve, the profession would either adjust or die.  Most likely die for its systemic shortcomings and failure to serve democracy.

As we have discussed before, the world is truly qualitative.  It is the qualitative interpretation of  factors and data that separates truth from fiction. 

I’m going to leave the modern day world of quantitative finance and economics that has become the measuring stick of junk economics and go back to a time when the world was defined by quality.  In many instances that was further back than half a century and oftentimes even a century ago.    To essentially “unlearn” some of the uselessness of what has been learned.  To a reality that cannot be derived through a mathematical equation.  The qualitative world.  And with it we are going to look at many of the sociological and psychological dynamics that are killing our economy and destroying our society. 

While none of this is anything new on here, I want to clearly tie an upcoming series of posts on victimization, predation and social violence to a reality that isn’t discussed in politics, economics or finance.  That is, answers to our economic ills aren’t found in mathematical equations measuring nonfarm payroll or productivity or industrial production or the growth of M1 money.   The daily focus on these variables has proven and will continue to prove useless.   We hear politicians, Wall Street, economists and the Federal Reserve cite these factors over and over for the last thirty years while the poverty level in this country skyrocketed.   As discussed before, during these three decades government transfer payments have risen over 700%.  ie,  Our economy has been dying for over thirty years.   I submit to you it is dying because of predation, victimization and violence endorsed by the state. 

Economists, politicians, banksters and corporate bureaucrats seem to consistently miss such a simple point but people are not numbers.  Sociological and psychological factors cannot be defined by numbers.  And, the debasement of economics into a dehumanized numbers game of equations has ultimately led to the economics profession’s own crisis.   Essentially, that is what we are witnessing around the world.   The economics profession is failing.  And, because everything they believed is failing, the economic systems built around this junk science too are failing. 

Contrarily, it is quality that determines our social success.   By conclusion, it is quality that determines our economic success.   Without the interjection of the quality of timeless human values – compassion, kindness, acceptance, community, dignity, equality, respect and the like, what remains in a society and an economy?   Little, if anything of quality.  Little, if anything, worth saving.  And so it is.  

While violence, predation and victimization aren’t new topics on here, my goal in coming posts is to open the aperture of our line of sight just a little bit wider.  To raise a level of awareness to our conscious mind.  When we raise behavior, often unconscious, into our conscious mind, we become more aware of the world around us.  And, we become more aware of what must be transformed to create a better economy and society for all people.  Then, when we see similar dynamics in the future, we have a greater conscious appreciation for harmful social and economic dynamics and their consequences.    

In closing, these dynamics bring to mind one of my favorite modern day works of literary art that has been mentioned on here before. 

The difference between a good mechanic and a bad one, like the difference between a good mathematician and a bad one, (or economist – my interjections in red)  is precisely this ability to select the good facts from the bad ones on the basis of quality.  This is an ability about which formal traditional scientific method has nothing to say. (Aka modern-day junk economics) It’s long past time to take a closer look at this qualitative preselection of facts which has seemed so scrupulously ignored by those who make so much of these facts after they are "observed." (the mindless .. lacking quality .. measurement of knobs and dials of quantitative economic and financial factors.)  I think that it will be found that a formal acknowledgment of the role of Quality in the scientific process doesn’t destroy the empirical vision at all. It expands it, strengthens it and brings it far closer to actual scientific practice.

Our coming posts will be focused on a timeless world left behind by the creators of the Godless corporate state and the economists who seek to perpetuate its lack of quality; a dynamic their  profession has helped perpetuate for its own failed self-interest.

posted by TimingLogic at 11:16 AM