Why economists are wrong
- 31 July 2011
- Why economists are wrong
- The experts in political economy say: spend more money, and employment will go up.
- This is wrong. The decisions made during spending are important to whether it will raise employment and help the poor, and for a simple reason: charities are not in the business of giving people jobs. Over the last two years, over five dozen American billionaires have pledged to give the majority of their wealth to a worthy cause, but many of the poor in the US are more concerned with the basic necessities of living—food, shelter—that philanthropy does not tend to provide.
- The unreliability of the political process, currently locked in a battle over reducing spending, means that it falls on every individual to do what they can to support the nation's economy. Most people are already aware of this—but "what I can do" is, in fact, the opposite of what many people think. The belief that someone in the system, somewhere out there, is directing the flow of resources to where they are most needed misguides people into doing things that would seem to directly contradict common sense.
- But these actions are completely rational, because support for accepted measures of success is the basis of any stable society. Any change in the ideas of what it means to 'succeed' should not be taken lightly, and must be made with careful deliberation on the concepts that hold society together. The United States of America were formed around the idea that what is best for the individual is best for society, given the interactions of competing goals that result in a civilized framework. The consequence is the assumption that the way to help society, and reduce the economic problems that exist in the current time, is to progress towards nominal success within the current framework.
- This informing by society of individual success, and consequent progression by the individual in the direction indicated by society, cannot be seen to lead to a desirable result when the goals which were originally critical to the determination of the framework have been removed from the decision-making process. The framework attempts to conform to reality, but does not predict the changes that will occur or the effect these changes will have on people's goals, and cannot be relied on to dictate accurate standards of success independent of the calculations of the multitudes that comprise the nation at any given point in history. The continued affirmation of goals is necessary to the maintenance of an environment that supports those goals, and the absence of this input is one of the reasons for the rise in financial complexity that lead to the financial crisis.
- What the nation would benefit most from, therefore, is a framework that does not dictate a standard of success, but instead allows that standard to exist independent of the framework that all of society conforms to.
- What does this mean for the present? The idea of working as hard as you can, and spending as much money as your income will allow, is not a measure of achievement that leads to lower unemployment or a balanced society with equal opportunity for everyone. While the American constitution fiercely defends the right for people to do this if they so wish, a framework that encourages everyone to think this is the right thing to do is not one that will address the problems of unemployment and inequality that currently exist.
- The best things people can do to help the lower-income segments of society are to be more careful about purchasing products that lack sufficient competition to bring them down to a reasonable price, to avoid working excessively if the only benefit is to be able to purchase such products, and to support changes to the framework of society that encourage other people to act with similar economic prudence by removing the emphasis on financial success as a measure of personal worth.
- Americans need to focus on conserving work so there is a share of it for everyone who is willing to work smarter and not harder, in order to achieve the confidence in one's actions that is essential for spiritual and psychological health. This requires both freedom of choice and a way to measure progress in the direction one chooses, whether it is efficiency of work, annual income, time available for other goals, or the amount contributed to one's company or the nation in the form of taxes or excess value.
- Economists are not going to fix the economy, since they see their job only as knowing how to make the numbers go up and where those numbers go is not their responsibility—and after all, maybe it isn't!—and while the President means the best for the nation, he is dependent on his economic advisors and partisan conflicts have drawn attention away from the real problems that many people are reminded of every day. The future, as always, lies in the hands of the people.
- Detailed explanation of causes
- One-step plan to eliminating unemployment
- notes from yesterday
- theme: what you can do to help the poor
- why economists are wrong, low consumer demand
- not their responsibility... well maybe it isn't
- make the numbers go up. don't think about which numbers are going up, can be those of fin. inst. Spending choices seen as outside realm of expertise.
- having a choice removes excuses. can longer hide behind the system.
- the President depends on economic advisors. but they only advise how to make the numbers go up, since goals of people are not clear.
- rational - how to help - work harder to help unemployed, purchase expensive products to help the poor, important: aggregate effects of millions
- work smarter, not harder
- missing from equations: what people think they can do to help the economy
- US culture: bettering self means benefit to society, so wrong standards lead to misunderstanding of solution to society's economic problems
- work conservation
- pushing limits - amount of work done, vs efficiency and productivity while working
- two things you can do... work less but available, and pay more attention to purchases
- nation is being more careful about spending, we should do the same
- confidence in one's actions is essential for spiritual and psychological health, requires both freedom of choice and a way to measure progress.
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