Economics: The study of production and the distribution of wealth.
13. This very simplistic definition of economics usually suffices for an individual or group that tries to understand the basic functions of its economic system. Economics and its study is aimed at understanding the economic reality that confronts subsistence and how to somehow control its impact in ones favor, or the greater benefit of the commonwealth. A curious look at present academic discussions in economics reveals that models and predictions based upon some mathematical formula will often suffice for an accurate description of economic reality. In reality, it is curious that the degree of certainty with which any of these mathematical modals adheres to reality can only be based on past results or historical fact. New “shocks” or variables among the participants in economic activity can reduce complex modals to entries in an academic mausoleum in the basement of some building. When these modals are analyzed within the scope of some “shock,” a certain disquietude will be expressed. The modals do not correctly estimate the importance of some economic policy factor, thus uncertainty. Uncertainty in economics is evidenced by economic panic.
13. It has been said that the end of economic activity is consumption. In other words, economic endeavors are driven for subsistence, as well as, a standard of living that is most often referred to as “successful.” Thus, economics as a discipline of study seeks to understand how the various participants in a economic system acquire wealth or success using the existing institutions. For a capitalist community, understanding the principle of supply and demand is a most basic analysis. Modals and theories are produced that seek to express the complex interaction of producers and consumers. Most economists and producers view the idea of a “laissez faire” society in which the markets function without interference from government or other entities as the ideal society for the provisioning of the needs of subsistence. Certainty to the outcomes of this society are usually only questioned when threats of war or some other common physical disaster affects the participants.
14. Unfortunately, the certainty of these outcomes are primarily based on the certainty of past outcomes. In this sense, confidence toward the future is rooted in the stylized facts from economic history that seem to justify a certain course of action. The problems of poverty, under and un-employment, environmental destruction and economic inequality, among many others, are justified by the realized gains or traditions of the economic system. While philanthropic activities acknowledge the problems inherent within a given economic system, the main thrust of economic study, the MBA’s one might say, is to secure a greater portion or increase the national dividend or income. The problems of economic activity become the byproducts, also known as the “externalities,” of the system. In part, this is just a modeling efficiency that relegates these externalities to a position subordinate to the task at hand. The certainty of past results neglects a forward look that fails to account for the evolving nature of social systems and the fact that past economic activities have not produced “success” for a large part of the populace and environment.
15. It is curious that this backward look with all its dogmatic presumptuous ideas has not been challenged more thoroughly by economic study. It is widely evident that the results of past economic policy and thought have led to great economic problems for the future. Rather than building confidence, economic policies seem to only amplify the uncertainty toward the future. Indeed, environmental “externalities” may prove to change the entire nature of life as man knows it presently. Not only in the sense of the bio-sphere being degraded, but also on the productive capacities of any economic system. This is particularly true with regards to the basic need for adequate nutrition or food.
16. With regards to education and learning, the individual’s experience the “externalities” of economic activity. These are not factors that can be subsumed or explained away from the economic dilemma facing the individual. While the modals may present stylized learning from which a person can understand the basic ideas of supply and demand, rarely do they address the problems of economics in a coherent or forward looking position. In fact, formal education tends to perpetuate the ideas of past economic policy and provide justification for their continuance. Thus economics becomes not an innovative study in how to address serious economic problems, but a rehashment of theories of management and modals of economic behavior that perpetuate the existing maladies.
17. Innovation is limited in its use to technological advancement. Innovation is viewed as “investment” that increases the capacity to produce in order that more consumption may occur. Innovation in the way that economics perceives its subject is reserved for the “cranks” or concerned elements of society groping with the present “externalities” of the system. Past experiments, one might say, with tampering with the “lassez faire” nature of economic activity have proved the validity of the present state of affairs. Thus formal education must seek to impart those elements of understanding that will perpetuate the validity of present economic activity, despite the contradictions and problems. With the collapse of central control of economic activity, such as in former communist states, an even greater degree of justification is given for capitalism as being the only possible economic modal.
18. From this formalization of economic facts, students in formal education are taught the rewards of “playing the game,” so to speak. Success is measured and viewed from a position of economic gain and/or growth. That gaps in wealth have steadily increased in the last fifteen years, does not enter into the rote rehashing of economic theory. Formal education becomes the means to the end with success measured in terms of the possession of money or its equivalent. Innovation in economic policy is reduced to the wishful thinking of “bleeding heart liberals,” whatever that defines. Innovation becomes a new way of producing better things cheaper. The rewards of education are the “stuff” that an individual can command control over, whether money or otherwise.
19. At this point, the articulation of economic policy presents its contradictions in full. Once one understands the basic assumptions of economic activity, one equally senses its disconnectivity to the learning of life’s experiences. The elusive “success” that is promised by economic policy only tends to diminish the certainty under which many economic modals operate. Those who seem to be profiting the most, or the most successful, seem to be those who adhere to the basic economic tenets and articulate them most forcefully. That the “externalities” that are produced by those who are successful is somehow justified, confronts the individual with a degree of pessimism and uncertainty that is not eased with philanthropic activities. The reality of maintaining any kind of subsistence level overwhelms constructive criticism and innovative thought. Economics continues to articulate those facts from the past that somehow justify the state of affairs.
20. Again a word must be spoken on the power of economic politics. These modals and theories do not exist within a vacuum. They are associated with the economic policies and aims of those in power. That formal economic education should articulate these policies is a given. The ability to be innovative in economic policy is diminished by the degree of uncertainty that would arise from such innovative thought. What might be described as path dependency becomes a natural law to which no individual group or entity should strive to negate. Manipulation of economic policy becomes geared to the perpetuation of existing conditions, despite its deficiencies and inequalities. This is not to say that the individual does not see the contradiction of this state of affairs. The problem once again becomes how can innovation be achieved in this state of affairs. Not just innovation of the means of production, but also innovation in economic policy that benefits the whole.
21. Thus once again we are faced with the fact that the methodology of economics is at odds with the goals of that methodology.
Scott Simpson whitalone at aol.com