• Shawn
    13.2k
    Economics can only be called a science with the fundamental underlying feature of game theory, explaining it.

    I studied economics for two years at college and dropped out for various reasons. I'll just jump right into it. Game theory is a field concerned with how decisions should be made given constraints. The dominant theory governing the workings of the individual is called, rational-self-interest. In rational self-interest one predicates the need for goods or products on the needs of the individual, which have consistently been proven to be insatiable. Its kind of a joke amongst economists that had people been satisfied with anything they buy, consumption would come to an abrupt slow-down. To actually do this though is quite evil in terms of morality; I mean, to turn wants into dissatisfied states. Jesus thought there were higher values that the profit motive; but, not much has changed human nature in such regards. People continue and will continue to want things and continue the manufacturing of goods.

    Now, not to make this thread too shallow I want to point out that because cooperation has been so vital to the survival of the human species. Cooperative strategies in game theory usually arise around or because-of the workings of contracts of the law. However, because the law has been for a while concerned with the rational self-interest of not individuals; but, cooperative strategies and rational actors abiding in every legal agreement with rational self-interest, then what can one say about this? Has the complete subversion of the needs of consumers been accomplished? I'm no Marxist; but, one has to really think about how your needs are being subverted by the calculus of rational self-interest by those who profit the most from making or changing laws the most. Actual individuals don't have the time or resources to make or change laws, special interest groups do, as well as the rich, funding them.

    Proceeding, why is cooperation important? From the birth of humanity to this point in day, we have cooperated in groups of individuals to overcome and support ourselves with consensus about how to behave. Even though it may take us many more years to understand game theory in terms of how throughout our evolution we have behaved in relationships which have promoted our survival, then what greater need could there possibly be than the understanding of how cooperation is instilled in relations? Because cooperation is actually based on social contract theory, then one can infer that the law is the highest arbiter of cooperation or its violation in a contract. As an American, from what history can tell us, deterrence and rational self-interest has been hailed as the norm of social contract theory. In Europe, the situation looks a lot different. Europe's existence is actually predicated on the nature of cooperation between countries forming the European Union. Had I studied economics again, or if I return to college to do so, it would definitely not be the dismal aspect of economics in the US; but, of the fundamental economics of the European Union, and with that a detailed analysis if their aspect of cooperative game theory is leading to better results. Just because Gross Domestic Product can look higher in the US, the EU is doing more (and compounding more) with their lower Gross Domestic Product. It is fundamental in any cooperative strategy that the pooling of resources leads to more efficient use of those very resources, with advances in technology being equal. People don't see this aspect of GDP.

    I want to say more; but, I will recap on why economics is in a dismal state. The current Overton window in the US and Europe has been hijacked by conservativism proselytizing their enamor with capitalism. I mean, Europe has to actually beat a dead horse when confronted with an American about how they aren't socialists; but, social democrats. Its really sad with what happened with Brexit. The more parties in a relationship, the easier the goal is to gain from less rather than spending more for the same amount. Anyway, I believe that cooperation leads to better results, and with the bloated concern with rational self-interest and egotism and deterrence, we are living in a fearful and less efficient state than possible. How to overcome it is something I hope the reader might mention or analyze with regards to the OP.

    Comments and thoughts welcome.
  • jgill
    3.8k
    "the Dismal Science"
  • Count Timothy von Icarus
    2.7k
    I wish I had students this interested when I was still teaching economics.

    I hate to recommend Hegel, because even the relevant work here, The Philosophy of Right (his most accessible), is not at all an easy read. So, I'll just throw out a book I like on the application of Hegel to the 20th century, Axel Honneth's Freedom's Right. I recommend it because it addresses just these issues. Hegel was a big early fan/adopter of Adam Smith, but you could also argue that he was a proto-Keynesian who saw how the state might need intervene to counter recessionary forces and long-term unemployment caused by sectoral shift.

    PR is mostly about ethics and morality, but it covers the economy in the section on civil society. For Hegel, social institutions (marriage, guilds/unions, markets, the justice system, churches, etc.) objectify morality for their society and ultimately serve to maximize freedom (in the long run, through a process akin to natural-selection). They also shape our identities and, through this, help us both to be free, and, crucially, to not want to use our freedom to take away others' freedom.

    For example, people are more willing to embrace social welfare programs and wealth redistribution if they feel like they share a common identity with the primary beneficiaries of such policies. This is why high levels of migration have proven challenging in the West and have undermined support for the welfare state. People often see migrants from the developing world as "others;" they do not feel like they share an identity. Research bears out Hegel's intuition here. (This is not a judgement on the appropriateness of such identification, just what appears to be true.)

    Hegel would say that the state, working with and through other institutions, ideally works to resolve this sort of issue by building a common identity so that people want to cooperate and maximize each other's well-being, freedom, and flourishing. Basically, changes in identity serve to change people's social welfare function such that members of a society prefer what is better for others (and we could even argue that, at the limit, this might match what people would advocate for if behind Rawls' veil of ignorance).

    But Hegel also has a notion of freedom that hews much closer to the ancient and medieval view of freedom, so how this looks is a little different then one might expect (IMHO this is actually a good thing).
  • Shawn
    13.2k


    Yes, well the very premise, which when I read about dialectics caused me to instantly want to read-about Hegel made me think about the issue of 'truth-formation' in terms of science.

    My natural inference from discovering significant truth in Hegel was regarding the nature of causality. I posted hereabouts some thoughts about the nature of causality and its significance to the field of law, science, and philosophy. I am not that interested in the socio-economic aspect of Hegel. I view it as an appeal to civil democracy, where or which has been attempted in the US, (as usual), first in the 1950's.

    Thanks for commenting. I am also interested in your take on the notion of conservativism, as seen in the US. I am quite tired of seeing US conservatives dominating headlines in terms of their proselytizing of being first to this or that in terms of economics. If you really think about it, once you divorce the notion of being more rational for believing in theories or doctrines, which naturally arise out of human rationality, then you kind-of deflate the whole hot air balloon.

    Anyway, thanks and hoping for your response.
  • Gnomon
    3.7k
    Economics can only be called a science with the fundamental underlying feature of game theory, explaining it. . . . . why economics is in a dismal stateShawn
    My economics text in college was The New World of Economics by Mckenzie & Tullock. They didn't define Economics explicitly in terms of Game Theory, but it was based on the "new work" in the 1960-70s, including Public Choice Theory.

    My marginal note in the book was : "When the numbers (values) are removed from the mathematically derived diagrams, what is left is a pure logic diagram {e.g. Normal or Bell curve} showing abstract relationships. From this we can derive general principles which can be applied to specific cases and the numbers plugged back in."

    Ironically --- considering the state of 2024 American politics --- the authors concluded, in the chapter on presidential elections, that "In a two-party system, the intelligent politician attempts to find the middle of the distribution". But, in the years since the book was written, politics and economics seems to have strayed from that rationale of moderation, toward more extreme positions.

    Today, Liberals & Conservatives don't pander to middling moderates, but to true believers in those polar opposite worldviews. This has pushed both politics, and economics in general, toward "take no prisoners" & "winner take all" policies. One side will invest in "dirty" but doable Fracking, to the exclusion of "clean" power, while the other will push technologies that are not ready for prime time. Fortunately, the US has enough inertia & momentum to do both, despite the divided politics.

    Economics was originally called the "dismal science" because of the no-win conclusions of Malthusian bottom-line production predictions. But today, the gloomy outlook may be more due to the top-down political pressures, which may overwork the goose-that-lays-the-golden-eggs, or strangle her with regulations. :sad:


    The Dismal Science :
    In a series of papers, Martin Weitzman has proposed a Dismal Theorem. The general idea is that, under limited conditions concerning the structure of uncertainty and preferences, society has an indefinitely large expected loss from high-consequence, low-probability events.
    https://cowles.yale.edu/node/144793

    DISMAL BELL CURVE
    depositphotos_60749819-stock-illustration-sad-mouth-expression.jpg
  • Vera Mont
    4.2k
    The dominant theory governing the workings of the individual is called, rational-self-interest.Shawn
    Can rational self-interest account for religious zealotry, patriotism or racism?
    If you separate the economic arrangements of a society from its world-view, social structure and moral foundations, you end up with the fragment of a picture and no understanding.
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