As a young man, I thought the study of Economics was just a little tawdry, like writing poetry for money rather than love, and very unlike Philosophy which was pure and clear and concerned itself solely with Truth. That notion stayed with me mainly because I was busy with some other stuff for several decades, but now I’m looking at the subject with fresh eyes out of a pit of deep ignorance. Give me credit, though, I’m trying to slog my way out of the pit.
First step on that slog, I’m reading Keynes and Hayek — to be honest, I’m getting ready to read Keynes and Hayek — and I’ve started out with the idea that they’re both wrong in basic assumptions. Both are sold on the capitalist system, I am too, but they both envisage this system to be a model of separate individuals who don’t know each other and will never see each other again agreeing (or not) to the terms of a single transaction. I’ve kept up a little in philosophical thought over the decades, and it just ain’t so. We start out embedded in a culture and a society, which culture and society influences our thinking (and therefore our “rationality) and we inherit a social morality which enables us to and which is necessary for any sort of “doing business”.
Anyway, this article in the New York Times Sunday magazine prompted my outburst: “Wanted: Worldly Philosophers“. The authors argue that Keynes large vision was undermined by the “stagflation” of the 1970s and Hayek’s (and Friedman’s) vision has just been undone in the current crisis, in which massive government intervention was required to prevent another Great Depression. Now, though, because of the Economics has been taught, there’s no new Keynes or Hayek to step up and offer a new system, or even a new understanding, and we have to fight each other with old weapons.
“Perhaps the protesters occupying Wall Street are not so misguided after
all. The questions they raise — how do we deal with the local costs of
global downturns? Is it fair that those who suffer the most from such
downturns have their safety net cut, while those who generate the
volatility are bailed out by the government? — are the same ones that a
big-picture economic vision should address. If economists want to help
create a better world, they first have to ask, and try to answer, the
hard questions that can shape a new vision of capitalism’s potential.”
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