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Friday, August 7, 2015

The Economic Mind

Ray Kurzweil in his newsletter promoted George Gilder's new book The 21st Century Case for Gold. Just scanning it and reading reviews, I find it a rehash of his Reagonomics inspired by the U of Chicago Milton Friedman school of free market capitalism but with information theory thrown in. He does criticize Friedman for considering the velocity of money as a constant as part of his critique of the monetarism or control of money by a Central Bank.

He spurns Keysianism (the control of spending) in which government spends on public works in the time of recession and then practices austerity in a time of boom. And he attacks mercantilism (the control of trade) in which governments set up barriers to trade for protecting national products or for social reasons. The point is 1) restrict the transiency of money by attaching it to gold (as long as it stays scarce) or to an algorithm in the case of bit coins and 2) keep government out (except for restricting the transiency of money and to protect free trade and markets).

He would not even consider socialism in which markets are regulated for social goals or in which government takes ownership of some industries to increase competition in the market. Nor does he distinguish between types of capitalism (e.g. German, American, Brazilian, etc). Any governmental effort to support or control markets simply works against the good of the greater number of people. Using tax policies, subsidies, and control of interest rates to support innovation, to foster new participants who have been left out, or to end poverty, he would contend does just the opposite. It actually suppresses innovation and drives wealth to the higher echelons.

I have not been trained in the dismal science. I have never taken even one course in economics and have done only sporadic reading in the subject. I have no expertise or authority to criticize the various schools of economics.

But being trained in philosophy and social science and being very well read in neuroscience, I am most aware how value perspectives influence what and how we see and understand "the facts."My value perspective comes primarily from who I choose to hang around with, who I care most about, whose respect I want the most, who I most empathize with, and whose eyes I want to see through.

I watched the Republican candidates for president last night. All said they would spend more on the military. All said they would repeal Obamacare without saying with what or if they would replace it or whether they would favor any universal healthcare program. All said they would decrease the size of government except for the military and building the wall to keep illegal refugees out. Many said they would reneg on the deal with Iran with the alternative of going to war. Many said they came from poor beginnings and had become successful; and all said that they cared about the poor who could not care for themselves. All were proponents of a militarily protected free market that did not include our enemies (e.g. Iran). None spoke about the earth, species extinction, climate change, and pollution except to say that they would curb or end the Environmental Protection Agency. Most claimed to be Christian following the will and commandments of God as revealed in the Scriptures.

Contrast that with Pope Francis. His value perspective is shaped by his own upbringing in Argentina, his practice of steering between laissez faire capitalism and state run socialism, by his theological and scientific studies, by his imagination of the.life of St Francis and Jesus of Nazareth, and most of all by his concern for the people he chooses to hang out with and who he cares most about--those whom Jesus called the "little ones," the culturally despised, the poor, the left behinds and Francis called "brother wolf" and "mother earth." It is through that lens that he judges the imperialism of the West and the successor empire of the United States. It is through the eyes of the poor, not the whiney middle class, that he judges the effects of an industrial economy that makes a commodity of air, water, and land and that makes the earth, the living beings of the earth, and human persons into objects that can be appropriated, used, and exploited.

Only from this vantage point can we see that Gilder's free market is a dangerous illusion. The free market is controlled by those who have the wealth, power, and military means to make it work to their advantage. The dogma of free market capitalism is propaganda by the nation state players angling to dominate the market to increase their personal wealth. It is supported by a myth and metaphors of American exceptionalism and its calling by God to rule the waves.

There are many business people and economists around the world who are experimenting with growing wealth through economic activity that is fairer, more inclusive, and cares most about bringing in the "left behinds." They call it "post" or "new" capitalism or "democratic socialism" or "cooperative economy." They do not yet constitute a powerful movement that threatens to overcome the so-called free market capitalist economy. But they have my support. They are the true innovators. And I hope the future. I will lobby for them at all levels of government and do my best to support the local organizing that will sustain and grow them.

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