I have repeatedly told you how the free market economic model has assumed a monopoly and a dominance that allows its supporters to claim that there is no alternative to it. That this economic model is taken for granted and is regarded as the only viable option available, was highlighted by an article in the New York Times on 11th July 2007, when the writer, Patricia Cohen, began by commenting that
“For many economists, questioning free-market orthodoxy is akin to expressing a belief in intelligent design at a Darwin convention: Those who doubt the naturally beneficial workings of the market are considered either deluded or crazy”.
Well, what I have consistently said since I first started this blog is that I am adopting a little delusion and craziness and challenging the fundamental assumptions of free market orthodoxy. Indeed I have just been trying to explain how these matters are assumptions about general tendencies as opposed to scientific constructs, that what we are being presented with are not scientific conclusions, but a whole raft of assumptions about the human being, and also importantly, the admission that if we are motivated by other instincts that may overcome our acquisitive instincts then most economic theories about markets and production begin to break down. When pressed, most economists will admit I am correct and that they are indeed dealing with assumptions resulting from the adoption of a scientific methodology as opposed to scientific truths, but, and I do not apologise for repeating, this is then translated into a scenario that is utilised by unscrupulous politicians and their policy makers to justify telling us that there is no alternative to their approach and that the chaos they have inflicted on our economy and society was not their fault, nor the nature of their free market approach, and that there is no alternative to the damage we are suffering from their attempts at recovery which are simply a repetition of the factors that caused the crisis in the first place. This is mendacity of quite staggering proportions, a denial of reality and unacceptable. In addition, even if their methodology is quite accurate and explanatory I ask you to consider the following. Even if the invention of the util and the development of mathematical models based on measuring utils are a fairly accurate reflection of behaviour, mathematics itself is, as David Hume shows us, a human activity. What do I mean by that? I have never been able to grasp mathematics, I am a mathematical imbecile. One of the reasons for this sorry state of affairs is that in order to learn anything I have to understand it, I cannot adequately learn anything unless I can transcend faith and have a satisfactory explanation. The great stumbling block that I met in my school life was the concept that a minus times a minus equals a plus. Now, I occasionally have bouts of rationality, and when faced with this equation my rational self always came to the fore to ask why this is so; I wanted to know why minus times minus equals a plus rather than just take it on faith in order that I could understand it. To cut a long story short, no-one has ever been able to tell me why minus times minus equals a plus, none of my teachers or any of the experts I have encountered throughout my life. I was intimately associated with an academic environment for 40 years, and throughout that time I have asked many mathematicians, economists and statistical experts why minus time minus equals a plus, and no-one has ever been able to tell me; it just does, they invariably say. I worried about this for many years and wondered if I was spectacularly stupid until I came across the American poet Ogden Nash who wrote that
Minus times minus results in a plus
The reason for this, we needn't discuss.
I am eternally grateful to Mr Nash for confirming to me that this is the general state of that particular equation within the science we know as mathematics and that people in America suffer from the same affliction that I do. Now, as David Hume also shows us, truth is relative, and we hold things to be true because we have expectations based on our human experience. However, as Hume also teaches us, because the sun comes up every morning does not mean that it will always come up, or because we cannot walk on water does not mean we will never be able to. We live our lives based on our experience of reality, which we hold to be true until something alters that experience; I thus avoid trying to walk on water in case I drown. But, although I am perfectly happy to accept that minus times minus equals a plus has provided a sound basis for scientific and therefore human progress, Hume’s scepticism has led me to question whether minus times minus always makes a plus? Are there indeed instances in the natural or physical world when minus times minus does not make a plus? Now, I do not doubt the reliability of mathematics, because, as all my tutors used to assure me, it works. Nor do I doubt its ability to allow the human being to explain and harness nature and do wonderful things; that is self-evident. What I doubt is that it is an absolute, and is true in the sense of being without flaw, because, as mathematics is a human activity, as far as I am concerned it must have flaws. Mathematics is a dynamic discipline because it develops and improves through trial, error, and experimentation, in other words, at any given time in human history, mathematical knowledge is incomplete and capable of improvement. This leads me to believe that whenever mathematicians develop a particular area of their discipline, what they believed prior to any particular development or improvement, whilst not necessarily wrong, was incomplete and therefore flawed. I therefore wonder if, for example, many of the unexplained phenomena we encounter in our lives are the result of instances when minus times minus did not make a plus, such as failures to predict natural disasters, or failures in scientific and mechanical functions that have led to human disasters, or failures to predict a serious economic crisis that was obvious to anyone who was exercising a scintilla of rational thinking, and, if someday mathematics will discover that minus times minus does not always make a plus. For example, one of the things that convinces me about the phenomenon of global warming is how, armed with very sophisticated mathematical models, weather experts keep getting their forecasts disastrously wrong. Indeed it must have been excruciatingly embarrassing for our foremost economics experts, armed with a whole barrowload of mathematical models and charts, to admit to the Queen that they hadn’t a clue the financial crash was coming, that they could not explain how it happened, and hadn’t a clue how to resolve it. So, if the concept that minus times minus equals plus is in fact a truism, but not an absolute truth, and does not always work with relation to science, engineering and weather forecasting, how many more mathematical assumptions might be flawed, and therefore how much more must the possibilities be for mistakes when applied to a science of human behaviour such as economics, and particularly in circumstances where it has been applied by people who have based their hypotheses on the assumption that human nature is rational and that they can measure the unmeasurable.
I therefore present the reader with three suggestions, one, that mathematical models are not necessarily always reliable in the study of human behaviour, two, that economic mathematical models are even less reliable, and three, that their conclusions should never be regarded as ‘the truth’ or providing ‘proof’. All science is a matter of probability and never involves certainty. Thus, if we proceed from the assumption that our dominant mathematical economic models are always providing an accurate picture of economic behaviour and are then applying such conclusions to another incorrect assumption about a supposed rational consumer, then we are being dominated by an economic orthodoxy that has been established by erecting one false hypothesis on top of another. To compound this felony, our dominant economic model then bases its analytical conclusions on the notion that each individual is not only a rational consumer, but an aggressive and atomised individual, when in reality that individual is indeed a social being by its nature and therefore motivated by different impulses and desires. If we then add to this brew the dominant basis of public policy formation in the UK that there is in reality no such thing as society and that our economic activity is guided by some kind of spurious economic device that we call an invisible hand, is it any wonder our economic world finally crashes about our ears and we descend into financial and economic chaos? What we are confronted with is a philosophical and policy driven political and economic model of the modern world that is erected on error after error about the nature and behaviour of the human being and the world that being inhabits. If I am even partially correct, then the modern discipline of economics (particularly neoclassical and neoliberal economics) is in a sorry state and must never be considered a reliable guide to human behaviour of any kind but particularly economic behaviour, and most certainly must never be embedded as the one and only basis of public policy-making for which there is no alternative, which brings us back to the difference between economics and political economy (I trust you are still with me here as I am not sure that I am still with me).
Thus I conclude that if we stop to consider the nonsense of the claim that there is no such thing as society, the fictional modern presentation of the individual, the sinister gobbledegook that passes as Objective philosophy, the economic concept of utility and the claim that it gives us a scientific basis for economic theorising, I trust you will agree with me that modern economics are both wrong and a fraud. Add in to this the philosophical notion that the human being is rational and you get a view of the so-called science of economics that must lead to despair. I have dealt with the concept of rationality several times previously in this blog and so will refrain from repeating myself, simply noting that the free market concept of rationality is another fairy tale. I again apologise for the length of this post but trust you have not been too bored with it, and that, even if you disagree with me it will give you pause for thought. You have been warned.
Your Servant
Doktor Kommirat
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