Revisiting the History & Evolution of Economic Thought. (Presentation)

Revisiting the History & Evolution of Economic Thought. 

Precis: "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist..." (Todd Buccholz, author of New Ideas from Dead Economists). As much as many of us hate economists, we all love to sound like one. Some simplify arguments that limit people's choices between the left and the right, between the government and the market or, worse, between two political parties. By reflecting on the origins and evolution of economic thought, we will endeavour to widen our gaze beyond such limited binary thinking and open new directions in economic discourse.

Resume of Presenter: Joffre Balce is the Assistant Secretary of the Association for Good Government, a 113 year old NGO focused on economic education based on the primary sources 19th century American intellectual, Henry George. He was a PhD candidate at the UNSW Law Faculty, holds a MSc in Industrial Economics from the University of Asia and the Pacific, a former chief economist of the Philippine Deposit Insurance Corp., that country's bank regulator and liquidator and research head of a Manila-based affiliate of Standard Chartered Securities, and worked on various development projects in Western Europe, the USA & Asia. 

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  • Alec

    'Understanding human nature involves dealing with the drivers of economy in order to obtain security and possibly happiness'. This meetup was a real challenge of ideas for everybody present.

    1 · May 19, 2014

  • Michael K.

    Hi Joffre,
    I enjoyed the presentation and robust debate. The books I mentioned in the debate were:

    1. Douglas, C. H. "Economic Democracy" (Available on the web from www.socialcredit.com.au).
    2. Jarvis, Jeff, “Public Parts”, Simon & Schuster, New York, 2011

    The first book is a difficult read, but it describes an economic alternative named Social Credit that seemed to have much in common with your ideas from Henry George et al.

    Maybe what the success and weaknesses of ‘Bitcoin’ and other experiments in virtual currencies have taught us is that they are indeed similar in workings to a Ponzi scheme. However, maybe far more disturbing is that they are teaching us that the "real" currency is no different. We are hooked on growth and waste, just as Douglas described at his time of writing during WW1.

    Cheers,
    Michael

    1 · May 7, 2014

    • Michael K.

      Ok, so now we finally come to the topic at hand. What does all this intimate? Firstly, we need to discuss the mechanism of natural (or artificial) selection a little more carefully. What makes it work? Well, if we want systems to adapt favourably to their environments, then:
      • the separation of powers between the direct and indirect must be protected
      • the parts (genes or concepts) must be allowed to compete and cooperate, or ‘struggle’, in their environment
      • there must be opportunity provided by the environment for occasional mutation or dissention from the norm or the current paradigm
      • the parts (genes or concepts) must reside in a population pool that gives opportunity for new gene- or idea- arrangements to spread through imperfect replication

      May 18, 2014

    • Michael K.

      If money and production are locked into such an arrangement, in which case money would represent the genes, logic or policy, and production the environment of such money-policies, then:
      • Money-policy makers should be separate to their beneficiaries, just as courtroom judges are independent of their judgments. The policies of money supply should not reside behind closed doors in the board rooms of banks
      • There should be more than one currency and money-policy provider, so that various systems may compete for their adoption by traders
      • The barriers to entry into currency provision and money policy choice must be low enough to allow for their occasional mutation or innovation
      • Money-policy should be debated in public arenas. Such policies should be open for inspection just as parliamentary bills are open to the public
      It is only as we enshrine these concepts with respect to monetary policy that we can hope to adapt favourably in a fast-changing business environment.
      Cheers,
      Michael

      May 18, 2014

  • Alec

    A comment from somebody who is not an expert on economics, but who wants to understand its intricate network of theories, applications and experiments. Looking at it from a birds view perspective it seems that theorists have got lost in what they tried to propose. Being economics not an exact science, any attempt to explain part of it will not include the whole system of how it works as a whole. It seems that after all those attempts to fix it, or justify a refine model, that would be fair to all parties, no much clarity has been reached yet; it may mean that globally or at least the addition of its parts has serious flaws. I don’t support the destruction of what has been achieved and I don’t support either to discharge whatever useful knowledge has been gathered; however, we need to ascertain who are economic drivers benefiting and whose arguments economics is defending. If a whole new system needs to be invented, let’s do it.

    1 · May 10, 2014

    • Joffre

      I hope that economics can regain its conscience. Adam Smith provides an appealing rhetoric for enterprise. However, the practice of economics applies the frameworks of mercantilism, bullionism, Malthus & Social Darwinism which says competition is the best & only way an economy works. Hopefully, the mathematics of John Nash will provide the framework for the conscience of the lineage of Smith-Ricardo-Qualitativ­e Utilitarians & promote cooperation & just sharing -- not the corporate privatising -- of the economic rent/synergy it generates.

      May 14, 2014

  • Alec

    After all, the failed communism was a new system invented by somebody that at the time knew more about economics that anybody else Karl Marx. Many countries gave it a fair go, but now it is understood that the system of units of labour cannot be apply universally. Maybe the new technologies, allow us to monitor transactions in a way that valuations, speculations and brokers deals are somehow organised in a better way, throwing light in what is happening in the world, having immediate knowledge of any scarcity or surplus and allowing us to moderate the effects. This considering that superpowers will not taking control of this information and using it to profit or selling it to the biggest bidders. Look what was in the news today about information being leaked from the Australian Bureau of Statistics https://au.finance.yahoo.com/news/insider-trading-sting-24yo-australian-210102747.html

    May 10, 2014

    • Joffre

      Thanks Alec!

      There is a paradigm where business is war. Many corporations adopt this & perceive the market as a battlefield & those in it as either enemies or allies -- which is not just other corporation but other stakeholders such as government & consumers as well. A successful warrior-general is one who (1) gets more benefits than his allies & therefore, the power to control them and (2) eliminates his enemies, if not manipulate them to achieve more strategic benefits. The final chapter of the Sun tzu deals with the use of spies & the information they gather in order to achieve victory at the lowest cost possible. This explains the story in the yahoo link.

      This is why I am not averse to the term "revolution" because to deal with the exploitative nature of institutions at war, one has to strategise like a warrior as well. Reform strikes me as a form of appeasement of an oppressor. Sure, there may be a win-win deal; however, tyrants must win much more than than the oppressed.

      May 14, 2014

  • Michael K.

    Hi All,
    The good news is, that as we learn the weaknesses we are exposed to in our modern economy and realise the virtual nature of our current economic system, we can be more free in our thinking to consider a radical reformation such as offered by Henry George, Social Credit or something else that initially seems equally bewildering.

    The second book provides a realistic framework for the seed of change that many in the discussion seemed to hope for, so it is worth a read. To anyone interested, I'd like to keep the conversation going and maybe build a new 'public', as described by Jarvis...

    Cheers,
    Michael

    1 · May 7, 2014

    • Michael K.

      I guess I'm more for finding our own solutions that bypass the old paradigm or make it irrelevant...

      1 · May 8, 2014

    • Joffre

      The government should be more concerned about protecting rights -- which all people are bestowed by their existence -- & not provide protection based on their property, many if which derive value from economic rent which belongs to the community that generated it.

      May 9, 2014

  • Joffre

    Before anything, I would like to thank Alec and everyone for such a vibrant exchange. Glad to hear so many diverse responses.

    Just as a response to the Incan & Mayan issue. My source on the Inca is http://io9.com/the-greatest-mystery-of-the-inca-empire-was-its-strange-1198541254. I checked this sight on the Mayans & found was http://latinamericanhistory.about.com/od/Maya/p/Ancient-Maya-Economy-And-Trade.htm. I am curious about any site or literature that could prove my source "absolutely wrong."

    As for the issue of slavery, I find Wikipedia describes a general decrease in slavery, thanks perhaps to reform & by those who rejected reality & sallied forth against the wind. :)http://en.wikipedia.org/wiki/Slavery

    For anyone interested in having a copy of my presentation. Happy viewing! http://www.slideshare.net/Bumiputra_X/history-of-economic-thought-revisited-beyond-left-and-right

    May 7, 2014

    • Joffre

      The awareness that all fiat money is most likely a recent development. Even agreeing that gold/ silver as a standard is because people "make it so." Money has always been fiat.

      May 9, 2014

    • Joffre

      Point being is because the value of a currency -- be it beans, shells, coin, paper or electronic pulses -- is determined by what people bestow it, it should be in the hands of the people.

      May 9, 2014

  • Ulrike M.

    I most enjoyed the very lively discussions following the presentation. Great Night - thanks Alex for organizing.

    May 8, 2014

  • robert s.

    This was very thought provoking. If you believe what i write i wouldn't bother writing. If you understand what i'm saying there would be no point in saying it. If it does not challenge your beliefs there is nothing to consider. Well done Joffre.

    1 · May 7, 2014

    • Joffre

      I'm not really averse to the term growth. It's natural to grow. I would be more afraid about the obsession with achieving growth by all means. It's probably why co-ops have Principle #7: Concern for the Community. Growth, progress, prosperity can't be at the expense of the community at large. That's why I believe that macroeconomic accounting fails to give the big picture when it neglects to measure economic rent. That out planet is finite is a fact. However, synergy from cooperation has multiplier effects that generate a synergy that go beyond currently perceived and measured limits. Unfortunately, many neo Malthusians drum up too much fear of overpopulation that they forget what economics is also for -- generating synergy through multipliers.

      May 7, 2014

    • Michael K.

      I agree: Growth through the multiplier effects of innovation and synergy is a good thing...

      May 8, 2014

  • Joffre

    In response to the revolution. Having been a veteran of two, it's not really that bad when it is non-violent AND driven by thought & reason, not emotion & passion. This diminishes the possibility of violence & failure. The Occupy went dormant because ideologues who demanded compliance "in the name of unity against a common enemy" discouraged people to think, discuss & explore alternatives to the system.

    I was in a third, but that time as a defender of the government. It was a violent & scary encounter. Sadly, after the mea culpa of the powerful then, the causes of the mobs' anger were addressed with "reforms." This brings me to the issue why thought & reason are important -- even more important AFTER a revolution. Elites can take over & leverage their power & influence over information and news to make people forget the reason why there was a revolution. I believe that is what the world is seeing after the Arab Spring -- it was hijacked by elites & powers behind the scenes.

    May 7, 2014

  • Joffre

    Thought some more about two questions asked in the form. What forms of democracy would I prefer that spurs prosperity without poverty? Form my experience, a cooperative democracy works but its practice has to be consistent with the principles co-ops espouse. To know a bit more ... http://ica.coop/

    The other question is on a financial structure/system that is better than the current quasi private government central banking system that dominates the landscape that delivers progress with democracy without poverty. My bias is for credit unions and co-op banking. The strongest & most resilient against the GFC I've noted are the Caja Laboral Popular of Spain, the Raiffeisen banks in Europe & the credit unions of Canada. the caveat here is fidelity to principles that co-ops espouse.

    Having worked with co-ops have given me reason to hope. Studying economics from the Georgist perspective encourages me to promote a macroeconomic framework that will protect them from policy oppression.

    1 · May 7, 2014

  • Alec

    That is fine Victor. I did not know that you organise that group thanks for letting us know. I'll have to attend one day soon.

    April 19, 2014

  • Victor

    Looks great! May i let members of my meetup groups know about it? Victor, organizer Sydney Arthouse group. [masked]

    1 · April 14, 2014

  • Ben

    Hi

    April 9, 2014

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