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Economics is Useless

September 16, 2009 Leave a comment

Before I start here I should say that I really don’t know an awful lot about economics but I’m going to criticise it anyway. I’m quite prepared to be corrected on any points I make here but I think I do have reasonable cause to think a lot of what I’m saying is true.

The aspect of economics I’m most suspicious of is the market, specifically the idea that the market should be left alone to achieve the best outcome for society in general and that the market makes the best decisions based on its inherent processes.

A couple of recent news articles have lead me to doubt this idea. Actually, to be more honest, I’ve always been deeply suspicious of the concept of free markets being the best model for economic welfare. Anyway, the two articles were these: first, a survey in the US showing people didn’t want free market models to control greenhouse gas emissions and preferred government regulation; and second, a reminder of how the 2002 Nobel prize for economics was awarded to a psychologist for a theory (Prospect Theory) which effectively showed the standard economic free market model doesn’t work.

If the people of the US, which is usually thought of as the home of the free market, don’t trust it then who does? It seems that in the US big business has hijacked the “democratic” policy and it is now far from being “the land of the free”. In fact its more like the “land of the slaves of big corporations”. I know I’m reading a lot into a survey on a single issue which Americans don’t even think of as being the most important current problem although they do accept it as being real, but I think there’s ample evidence from other areas that this is happening.

And how many subjects hand out Nobel prizes to researchers from other subjects which cast a lot of doubt on the central tenets of that area? For example, has there ever been a biologist given a Nobel prize for showing a major physics theory is probably wrong? There’s none that I can think of. To me this shows that economics isn’t really a strong science (maybe not a science at all) and our whole understanding of the area should be re-examined. I do realise that some economists do doubt the standard free market model but the majority seem to support it, seemingly without any real evidence to show that it works.

I have done some brief research on the theory the Nobel prize was awarded for and it seems to basically show that people do not make sensible choices in a free market situation. The collapse of the global financial system seems to be in agreement with this idea. Its only through constant intervention (effectively corporate welfare handouts) that the whole system is propped up – until the next time it fails.

But even if the model worked without periodic collapses it still wouldn’t really be a suitable model for our whole society. Despite what many people will say it is based on short-term, self-centered greed. Its really quite a tribute to the propagandists who support the system that so many people support this as being OK and even admire the people who effectively parasitise off the rest of us.

So we really need to throw out the whole competitive, private enterprise model and look for something better. The first step would be to make the ridiculous system of trading currencies and imaginary financial packages illegal. We then need to find a model for financing things that really matter, such as long term scientific research into areas with no immediate pay-off – perhaps with no financial payback at all.

Here’s some example projects I would throw whatever money is necessary into: fusion energy, colonising other planets, stopping global warming. It doesn’t matter what these cost really, just find the money. If hydrogen fusion cost a trillion dollars that would be nothing compared with the advantages. Why has the US spent that much on saving some useless financial institutions instead? Simply because our whole economic system is wrong. Let’s start ignoring the economists and business leaders and let’s make some real progress instead. Following the current path will only lead to disaster.

The World is so Wrong

December 25, 2008 Leave a comment

Today, while watching a New Zealand music channel, I saw a couple of interesting music videos. The first was a sort of reggae versions of the old Christmas song “Little Drummer Boy” (that’s the one with all the pa-romp-pa-pom-poms in it). This was quite weird and I wondered how many joints were involved in creating the performance. I really enjoyed it though.

The second was rather more poignant. It was John Lennon’s Happy Christmas. The song was played while pictures were displayed of some of the less pleasant world events this year: scenes of war, children maimed by air attacks, land mines, and other less pleasant realities of the world for many people. Here’s the lyrics for the song (with repetitions removed)…

So this is Christmas
And what have you done
Another year over
A new one’s just begun
And so this is Christmas
I hope you have fun
The near and the dear one
The old and the young

A very Merry Christmas
And a Happy New Year
Let’s hope it’s a good one
Without any fear
 
And so this is Christmas
For weak and for strong
For rich and the poor ones
The world is so wrong
And so Happy Christmas
For black and for white
For yellow and red ones
Let’s stop all the fight

And so this is Christmas
And what have we done
Another year over
And a new one just begun
And so Happy Christmas
We hope you have fun
The near and the dear one
The old and the young

It was a reminder that, while in the western world we enjoy Christmas and might suffer a few problems repaying our credit cards, there are areas of the world where the inhabitants suffer genuine pain, some of which is caused or exacerbated by the extravagances of the western world.

So Christmas is a time when many people think about how the world could be made a better place, but I think everyone should watch this video and reflect on the fact that things aren’t really getting a lot better despite all of the positive thoughts.

I think the line “the world is so wrong” is a bit of an exaggeration because there is a lot of good in the world too, but it certainly could be a lot better. Maybe it should be something like: “the world is so not as good as it should be!”

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