I was struck by a sentence in a paper by Warren Coats,
Natural market behavior in the face of an excess supply of money held by the public is to spend more...
It asserts that there is a 'natural' behaviour and that economists can understand it. I think a very careful examination of nature is required especially in the light of the profession's poor track record on predictions.
Is a natural market populated by that selfish brute, homo economicus? A fictional market created by economists in their own image? Why would a 'natural market' ever have an excess of money? Would the media in this market be used issue false signals about prices, trends and indicators? Would Max Keiser be allowed in this market selling his silver and bitcoin? Would there be a risk of terrorist attack in a 'natural market?' In a natural market, would the money be issued by a banking cartel which regularly met in secret in Basel? Is a natural market a desirable thing? Is money natural? Would it be a fearful place or a community space?
Economists are here to ensure that the economy works in the service of the elected government, and that a days work yields a day's pay. They offer a control panel to politicians saying if you want this, then fiddle interest rates, tax laws and social spending in this way. It usually works over a one or two year period. But surely engineers who cannot perceive a train wreck should not be engineering trains.
It would be better if policy were set by tossing a coin, than that mechanistic language be used to present the economy as assuringly predictable or even controllable.
As I've stressed before, I haven't studied economics. To me the economy is not a system, its a maze populated by rabbits, and preyed on by golden eagles. The rabbits and the eagles have been constantly playing the game of evolution for millions of years. And the game changes faster and becomes less predictable as policy makers and large actors wield ever larger tools.
In this view, of course the economy is unpredictable - the interventions and the predictions affect the future. When Warren Buffet advises us to sell gold, or when the Fed secretly buys its own bonds that affects the price, in ways economists couldn't have predicted, and which is therefore I suppose 'unnatural'.
It would appear that the whole economy is unnatural then, since it is constantly contaminated by 'events'. So why do we still have economists, and many of the same economists who cheered as we accelerated towards the crash of 2008. I thought the whole profession discredited. Naturally they would retire from public life and flagellate themselves in everlasting contrition.
So why are they still on our telescreens cheering the stock market, still advising governments? Is it responsible to draw developing countries into the maelstrom of capitalism? Why aren't they telling us that nothing has changed since 2008 and that only policymakers have only one option - to kick the can down the road and hope it explodes in the faces of the next goverment. Why aren't economists talking about the impact of banking fraud on the economy? Why do they still trumpet the GDP as a measure of success? Why, as the stock market overheats, don't they mention the inflationary effects of QE?
Many people now understand 'money' is the only thing preventing us from rapidly reducing carbon emissions, ending poverty, living properously and going to Mars. Our capacity is enormous, but we can't even issue enough 'money' to pay the interest on borrowed money which never existed!
I suggest that the profession is presiding over, and intellectually backstopping this massive transfer of wealth from the middle class to the elite. It has become part of the banking propaganda machinery. Instead of providing insights on reality, economists are lulling the servants asleep while the masters are stripping the house, calling in air strikes, and claiming on the insurance.
So I invite the economics profession to consider these few things:
- Can we stop trying to 'fix' the economy like it had a broken a fan belt, and consider the possibility that our assumptions strayed from the mark some time ago
- Can we widen our models to include more 'unnatural' market behaviour, like class war, altruism, insider dealing, solidarity, the CIA drug industry, Quality mother-baby time, money as debt, non-monetary evaluation, and the policy to reduce debt by inflation.
- To what extent is the profession financed by banks which break the law with total impugnity every day and in many ways?
- Can we review who has control of those levers, and who pays them, and why?
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