Monday, July 06, 2015

How "Economics" Is Flawed

Economics is, really, dollar-denominated sociology.  As such, there's a flaw in the "economics" system.

...So, let's put all this together.  The economic system we've set up isn't a thing in its own right.  It doesn't have a nature, and therefore it doesn't have laws of its own.  Economics is just a human activity.

Thus, the relevant laws to economics seem to be our laws, that is, they are consequences of our nature.  Human nature includes the danger of starvation and the suffering of pain.  It also includes this dangerous incapacity to always cleanly distinguish between what our mind tells us about the world and the world itself.  Where we've set up a system that is fragile instead of antifragile, systemic collapse is our fault and should be our responsibility.  In this case, the Germans' outsized influence on the system suggests outsized German responsibility.  They have created much of this problem by acting as if it were possible to impose laws on economics that don't take account of human nature. All economic laws are located in us.

On the other hand, human nature also includes a robust self-love that corrupts us when we try to treat each other fairly.  Greeks have behaved in accord with human nature, but not wisely or well.  Making exceptions for those who have behaved unwisely is a serious business.  It has to be done in a way that doesn't make exception-seeking an attractive proposition for other nations (such as Portugal or Spain).

If that can't be worked out, then we should bow to human nature and let the Greeks take care of themselves -- out of the Euro, and out from under the control of its rules.  The rules are unwise, and the philosophy behind them likewise.  Because it mistakes the locus of the laws, it thinks you can have economic laws that are detached from human nature.  That can only lead to systemic collapses such as this one.  We should expect to see more, whether the Germans or the Greeks "win," unless the whole set of rules is re-examined to take account of human nature in its fullness.


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