The Economy, or the economies?

Economics Economics Questions
1

99.99% of national political discourse refers to some singular thing called ‘The Economy.’ I make it a point to try and hear instead ‘the economies.’ But from where ‘The Economy?’ If we talk about ‘the weather’ in the nation, we for sure don’t talk about 'the nation’s weather", as in 'the temperature" or 'the windspeed" or “is it sunny or is it raining in the nation now?” That is immediately understood as an absurdity, an abstraction too far. Then why, ‘The Economy’ when referencing the nation?

Is that:

a] Accurate

b] A political tactic

c] something that leads us towards understanding

d] something that leads us away from understanding

e] a result of atavistic wiring, a deep human need to convert confusing pluralities into reassuring singularities?

Is it something we do in order to try and wrap our brains around complex pluralities, and make them tractable?

We turn ‘the economies’ into ‘the economy.’

We turn our societies into 'S’ociety, and yet, a grasp of the latin root ‘socious’ would not easily permit that slight of hand, unless ‘everyone’ is jarringly our known ally, friend, associate.

Are we unwittingly acceding to some political view when we accept the term ‘The Economy’ as having any actual meaning in national political debate?

regards,

Frediano

2

Hayek explained the economic calculation problem of a socialist economy by stating that it was incorrect to describe the market economy as an economy. That in fact what was taking place was the alignment of millions of individual economies (or in Greek sense, households) towards a common purpose through the market process, as compared to a single state economy in socialism.

3

Exactly.

Then, why is 99.99% of modern national political debate about some singlular entity called ‘The Economy?’

Or, what can we conclude, when, during the January 2008 GOP primary debate in California, at Reagan’s Temple, three of the GOP front runners sat up and actually answered Anderson Cooper’s loaded question, “Tell us why you are best suited to run The Economy?”

Hayek, it would seem, is so politically fringe in our tribe that the concept of “The Economy” is an immutable axiom of the national psyche.

regards,

Frediano

4

Perhaps because it’s seen as an aspect of the state, i.e. that which furnishes it with the goods and services it requires to operate, so eventually like “society”, the various markets too are co-opted under the state and become coextensive with it, and it becomes the “Economy”, which is after all a society of sorts itself.

5

wait, does this thread mean i can no longer talk about the economy?

6

Feel free to talk about ‘The Economy.’ It must be fun, because so many do.

No, it only mostly means you’ll be talking widely accepted religious gibberish when doing so, as in, rotely re-spouting the instruction of the Founding Social Scientologists who died long ago. Tell me you didn’t just wake up one day, accept your instruction regarding ‘The Economy’, and never question it? If so, it might prove that on average, we’re average, though I’m pretty sure that actually doesn’t need proof.

Just as, and as part of the same religious campaign, economies have become ‘The Economy,’ our societies have become 'S’ociety. Praise be to Durkheim for providing one of the most honest definitions of 'S’ociety to be found anywhere, devoid of the usual circular 'social - society - social - society ’ nonsense.

“Society is not at all the illogical or a-logical, incoherent and fantastic being which it has too often been considered. Quite on the contrary, the collective consciousness is the highest form of psychic life, since it is the consciousness of consciousness. Being placed outside of and above individual and local contingencies, it sees things only in their permanent and essential aspects, which it crystallizes into communicable ideas. At the same time that it sees from above, it sees farther; at every moment of time it embraces all known reality; that is why it alone can furnish the minds with the moulds which are applicable to the totality of things and which make it possible to think of them.”

Halleluleah! Now, watch all the acolytes jarringly go laugh at the Jesus weasels, and claim them to be irrational followers of silly religious dogma.

Feel free to join Durkheim, roll your eyes back into your head, speak in tongues and talk about 'S’ociety, too, but as far as I’m concerned, an example of a society is a group of folks who meet once a month to discuss bird migration. From the latin, socious. “known partner, comrade, associate, ally” It’s ok if you truly believe that ‘everyone’ is your known partner, comrade, associate, ally." That’s what true religious believers do, they truly believe. Praise the Lord. But, it’s not ok to pretend that religion is science, as in, polluting academic discourse with religious beliefs.

The agregate of all such societies has no singular meaningful meaning, and ditto ‘The Economy’, except in certain Cargo Cult science societies trying to sell the religion ‘the state is God.’

Here’s a great drinking game, but wait until you’re 21: pick up any ‘Sociology’ textbook – you know, the soft science – and every time you see a line of science that begins "so-and-so believes … " then shout out “Haleluleah Brother!” and drink just a shot of beer. If you are not totally faced by the end of the first chapter, then … keep reading for as long as you can.

regards,

Frediano

7

Comparisons between ‘the national weather’ and ‘the national economy’ are not quite revealing enough, because ‘the national economy’ is much more complex. Which emphasizes my point.

What is ‘the temperature’ in the US right now? Too hot, or too cold? Let’s let the folks in Alaska and Florida duke that one out.

And yet, we have predictive weather models. We can calibrate them. (For economists, ‘calibrate’ means, compare your predictive model with groundtruth to ascertain the validity of your predictive model.) We can apply data to our weather models, predict outcomes by applying the models, and then compare the model predictions with reality. And, state of the art is maybe 10 days, tops, with stated and verifiable and growin uncertainties the farther out we try and predict these relatively simple complex systems objectively governed by physics.

So sure, what is ‘the’ fed interest rate that will best tweak in ‘the’ economy? What is ‘the’ size of ‘the’ stimulus package that will best manage ‘the’ economy? Let’s brush aside 50 sets of more stringent state banking and lending laws in court case after court case and even USSC case, and replace them with our OneSizeFitsAll, AllOurEgsInOneBasket federal FNMA experiment, see what happens. At least when human constructivist hubris from the last century built it’s occasional unsinkable Titanic, the only folks who paid were the unfortunate victims of the hubris, not every citizen in the nation.

When it comes to state of the art in economics, state of the art can’t even reach consensus and reliably tell anybody on earth what just happened, much less, what is going to happen, or God forbid why, when it comes to ‘The Economy.’ And yet, you can tool into Cargo Cult Science societies like the Princeton Department of Political Economics, and find (never calibrated, ever) mathematical looking models, dutifully using some of the very same lexicons and symbology to be found in the adjacent Math or Physics Departments. You can read paper after paper, and check the math, and never once see any of this Cargo Cult science applied to actual reality, as a calibration. Why bother, when the mission is purely political? Lab coats? Check. Computers? Check. Excel Spreadsheets? Check. Got the correct look and feel of actual ‘science’, but let’s stop short of actual ‘science’, because after all, we’ve given ourselves a bye with that ‘soft science’ disclaimer, as in, not really science at all.

We’ve got terrabytes of historical weather data. Feel free to calibrate your latest crazy weather model, there is a new experiment run every day.

Ditto the latest economic model, but … don’t hold your breath. Instead, go see economic science in action, and read about the LTCM post mortem. When the model gets too tough to map onto reality, state of the art in economic predictive science just … neglects the terms. What you end up with is something that, if it were a weather model, would be able to predict that the weather in San Diego tomorrow is likely going to be sunny and warm, and works perfectly for as long as the weather tomorrow in San Diego is sunny and warm.

But, when it comes to modern political economic debate, we’re not even talking about Cargo Cult scientific economic models, complete with nonlinear partial derivatives and so on. We’re talking full blown voodoo priests simply dancing at the base of today’s volcano, ‘doing something’, promising a good harvest if we give tribal power to them. If next years harvest is good, we credit the voodoo priests. If not, they blame the purity of last years sacrifice.

And, the tribe still buys it. Totally uncalibrated, except in the lucky rabbits foot school of modern calibration.

So, back to talking about “The Economy.” It’s riveting stuff. Riveting, uncalibrated stuff that can’t even tell us what just happend, much less, what is going to happen.

I just wonder where it is mostly used. Is it used by folks who stare at the scoreboard and bet on the game, or is it used by folks with actual skin in the game? Carcass carvers, or beast builders? Or purely by the political parasites, living on the beast?

It reminds me a little of those crib sheets you can buy outside of racetracks, picking the winners in each race. Except, of course, that even those are at least daily calibrated with ground truth.

regards,

Fred