Jump to content


 


Register a free account to unlock additional features at BleepingComputer.com
Welcome to BleepingComputer, a free community where people like yourself come together to discuss and learn how to use their computers. Using the site is easy and fun. As a guest, you can browse and view the various discussions in the forums, but can not create a new topic or reply to an existing one unless you are logged in. Other benefits of registering an account are subscribing to topics and forums, creating a blog, and having no ads shown anywhere on the site.


Click here to Register a free account now! or read our Welcome Guide to learn how to use this site.

Photo

Economic Philosophy


  • Please log in to reply
5 replies to this topic

#1 locally pwned

locally pwned

  • Members
  • 489 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Portland, Oregon
  • Local time:11:43 PM

Posted 19 September 2006 - 10:37 AM

A few thoughts...


Which, if any, school of economic thought "has it right" in terms of best fulfilling society's needs and wants? The classicals (the supply-siders)...or the Keynesians (on the demand-side)?


Is capitalism as we know it the right system for modern society? Why or why not? If not, what has to change?


How heavy is the influence of economics on the political process...does the market system diminish democracy? On the other side of the coin, how much does...and how much should...government influence the economy?
"The whole of science is nothing more than a refinement of everyday thinking." - Albert Einstein

"The world is my country, all mankind are my brethren, and to do good is my religion." - Thomas Paine

"If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands." - Douglas Adams

BC AdBot (Login to Remove)

 


#2 MaraM

MaraM

  • Members
  • 1,717 posts
  • OFFLINE
  •  
  • Gender:Female
  • Location:British Columbia, Canada
  • Local time:12:43 AM

Posted 21 September 2006 - 02:33 PM

When it comes to "How heavy is the influence of economics on the political process?", I suspect the old adage, "Money talks!" has never been truer than when governments.
Never let your computer realize you are in a hurry or just typing the last few words of a vital document.

While outer events might make one happy or sad, happiness itself is entirely internal, and at all times completely within one's power.

#3 locally pwned

locally pwned
  • Topic Starter

  • Members
  • 489 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Portland, Oregon
  • Local time:11:43 PM

Posted 21 September 2006 - 03:31 PM

Ah yes, the government can't be trusted...it's too easily corrupted. But what corrupts the government? Corporate interests! Ironic, no? The government is manipulated by business....and business manipulates by definition since the driving force of the market system is self-interest.

The trouble is that the goals (aka needs) of society do not always line up with the goals of the market system (aka corporate self-interest). Therefore, the idea that you can any and all social ills through the application of the market system is bound to fail.

Now, take for example a factory along a river that happens to be a water source for a town. The factory produces goods that benefit society. However, in creating these products the factory also produces toxic chemicals that have to be dealt with. According to classical economics, the factory's self-interest drives it to create better products for cheaper prices so that it might become more profitable...thus its self-interest is a boon both to society and itself. But...since its self-interest can be boiled down to profit alone...a familiar equation comes into play. Maximize profit by minimizing cost. So, does the plant increase its costs to safely dispose of the waste...or does it maximize its profit by dumping the stuff into the river? Obviously, the factory chooses to dump its waste.

Here, the needs of society...in this case, not being poisoned...conflict with the needs of the company.

So the people rally; sick families sue the company. The response of the company is, of course, to defend its interests; to protect its profit margin. Why pay for a full clean up and change of operations when they can, for a much lower cost, reduce the emissions a bit and then put on an add campaign to convince the public of how much they care?

Meanwhile, lobbyists from the company contribute large sums of money to which ever party appears to be the most pro-business and anti-regulation while politicians of that party turn a blind eye to the damage that is being caused.

Some other politician steps up and tries to "fight the good fight" to "protect the people." He/she might be honest in this fight; sometimes he/she is just using the battle as a way to gain popularity. Most likely, it's a mix of the two.

This scenario is so familiar that it would be redundant to describe it any further. My point is that across the board, society's needs are pushed aside for the self-interest of business. Government often becomes a pawn in the battle. Sometimes government actually helps balance things out through regulation; but as the political pendulum swings one way and protections are put in place, eventually it must swing back and those protections are once again weakened or removed.

This is not a "corporations are evil" speech. But we need to understand what corporations are: profit machines. Nothing less, nothing more. They exist to create profit for their shareholders. At this, they are very efficient. Along the way there are goods and services that are created that benefit society. But there are untold costs as well. The goal, in my opinion, should be to find the right balance of regulation...and hopefully one day a business culture with a more moderate and empathetic stance toward the health and growth of society.

Edited by locally pwned, 21 September 2006 - 03:35 PM.

"The whole of science is nothing more than a refinement of everyday thinking." - Albert Einstein

"The world is my country, all mankind are my brethren, and to do good is my religion." - Thomas Paine

"If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands." - Douglas Adams

#4 jgweed

jgweed

  • Staff Emeritus
  • 28,473 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Chicago, Il.
  • Local time:02:43 AM

Posted 21 September 2006 - 04:59 PM

"...business manipulates by definition since the driving force of the market system is self-interest."

"According to classical economics, the factory's self-interest drives it to create better products for cheaper prices so that it might become more profitable...thus its self-interest is a boon both to society and itself. But...since its self-interest can be boiled down to profit alone..."
"
This argument rests on a rather narrow definition of "self-interest" which even Adam Smith, I think, would disadvow as somewhat reductionist ("profit alone"). In the example of the factory, for example, it could easily be argued that the company's "real" best interest---at least in the long run---would be to clean up the polution to prevent society's "invisible hand" from taking retribution (e.g. boycot of goods or services, civil or criminal litigation) against the factory. In other words, to isolate the economic activity from the rest of the lived world, seems to me at least, to over-simplify the example.
Or to look at it another way, this depiction of greedy capitalism was perhaps appropriate in an earlier age, vide Carlyle's Past and Present or Dickens' Hard Times. But one really wonders if this picture reflects the subtleties and complexities of modern society, if it---in other words--- reflects the historical changes in the world in which people have a greater understanding and awareness of the interplay between business and society. The writings of those Victorian crusaders, for example, created an insistence on the part of their readers for all sorts of changes that were eventually enacted by Parliament. It is certainly possible to argue that the picture of classical economics is misleading in a very mixed economy now, and perhaps that the painting was never realistic before the paint was dry.

"My point is that across the board, society's needs are pushed aside for the self-interest of business."

The other side of the coin is certainly that business's needs are pushed aside for the self-interest of society and its "needs." Certainly Ayn Rand could make this argument, and has done so very forcibly on many occasions.
Someone, for example, has decided that society "needs" twenty-five or more different blends of gasoline (to meet various localities' legislated requirements for clean air); this has hampered production and distribution of gasoline, discouraged the building of new refineries, and added to its price at the pump.

How society's "needs" are determined is another discussion....

My only point here is only that sometimes we get a mental picture of a situation and that the picture (paradigm/model/idea) can lead us into difficulties if we only look at the picture and not at the deeper realities that occasioned it in our mind.

Regards,
John
Whereof one cannot speak, thereof one should be silent.

#5 locally pwned

locally pwned
  • Topic Starter

  • Members
  • 489 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Portland, Oregon
  • Local time:11:43 PM

Posted 21 September 2006 - 10:37 PM

This argument rests on a rather narrow definition of "self-interest" which even Adam Smith, I think, would disadvow as somewhat reductionist ("profit alone").


Yes! I didn't get into Adam Smith much in that post; but it is true that even he believed certain needs of society are best left to the government...such as waste disposal, utilities, ect. I have read about Smith, but I am no expert; however the impression I got was that he believed self-interest would in the end 'limit itself,' based on some of the points you've made. However, I think that in practice, especially in the complexities of modern capitalism, he was wrong.


Or to look at it another way, this depiction of greedy capitalism was perhaps appropriate in an earlier age, vide Carlyle's Past and Present or Dickens' Hard Times.


It is interesting to me that the unionization and regulation that came about because of the gross abuse of human rights that came from this era is now being removed because things don't 'seem so bad' and such regulation is no longer needed. We'd never go back to an era when the entire family has to work to support itself, the poor are getting more numerous and poorer while the rich are getting fewer and richer, medicine is hard to come by...oh, wait, that does sound oddly familiar... :thumbsup:

There's a pattern here, by the way: society is plagued by problem. People come up with a solution...correcting the social ill. The problem all but vanishes. People forget why they are taking steps to solve a problem they no longer perceive. The steps are discontinued. The problem comes back.

It is certainly possible to argue that the picture of classical economics is misleading in a very mixed economy now, and perhaps that the painting was never realistic before the paint was dry.


True, that's perhaps why most classical economists are in fact more moderate "hybrids..." supply-siders for example.

Someone, for example, has decided that society "needs" twenty-five or more different blends of gasoline (to meet various localities' legislated requirements for clean air);


This is a problem, yes. This specific problem might be better addressed with a more comprehensive stance on emission reductions.

jgweed, on the other side of the coin, what's your take on Keynesian economics?
"The whole of science is nothing more than a refinement of everyday thinking." - Albert Einstein

"The world is my country, all mankind are my brethren, and to do good is my religion." - Thomas Paine

"If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands." - Douglas Adams

#6 jgweed

jgweed

  • Staff Emeritus
  • 28,473 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Chicago, Il.
  • Local time:02:43 AM

Posted 22 September 2006 - 11:17 AM

I was making meta-economic comments more from a philosophical perspective than actually discussing economic theories. While I have read Adam Smith---but more as philosophy as economics, I only understand Keynesian economics second-hand, as it were, and so I cannot make any intelligent comments about it. As with all theory, its application in the real world generally gets muddied and often the results are at cross-purposes with the original.

I was really questioning, in a rather halting fashion, the assumption that companies are "profit machines" with the sole purpose of maximising profit, and the picture-analogy of anthropomorphised companies, as if they had a mind or soul.
I was also questioning the criterion of "self-interest" as an explanatory framework, which makes as much sense in economic activities as it does in the strictly human. In both cases, the manipulation of the definition of "self-interest" makes it so broad as to be almost without meaning.

Certainly, corporate "self-interest" cannot be boiled down to profit alone, nor does this view take into consideration, for example, the considerable benefactions bestowed upon the arts by large corporations (most major symphony orchestras would cease to exist without large corporate grants). Again, if corporations were concerned SOLELY with the bottom line, then how does that explain the strong support for United Way campaigns, and the extra cost involved for the company to make possible monthly donations from paychecks?

Here, one could make the argument that a better model for explaning corporate actions should be based on a biological analogy: the "real" goal of corporations, as with any "life-form" is self preservation. Or perhaps, following Nietzsche, a special kind of Will To Power.

I think the real questions are all prior to the discussion of economics, and hinge more on moral issues (goals) than they do on economics (means).

Regards,
John

I wanted to add the economic systems have at least three aspects. First, which we may broadly call "scientific" is the observation and analysis of data, then there is the general theory that explains the (more and more complex and quantifiable) data, and finally there is the normative element, since economics is a practical (as opposed to a pure) "science." The difficult part of understanding economics, aside of the technical vocabulary, seems to be caused by the often very subtle mixing of the normative with the scientific.

Cheers,
John

Edited by jgweed, 27 September 2006 - 12:03 PM.

Whereof one cannot speak, thereof one should be silent.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users