201. How to proceed with this blog?
I will continue to elaborate on themes discussed
earlier in this blog. I will discuss economics and markets in some detail. In
particular, I will explore the connections between economics and the various
philosophical themes discussed in this blog: knowledge and discovery, ethics
and morality, identity, self and other, collaboration and competition, trust,
altruism and egotism, meaning and language, culture and society, and, above
all, change.
My treatment of economics will be far from textbook
economics. Traditional, mainstream economics is built on assumptions of rational
choice, the autonomous individual, and optimal or equilibrium outcomes. I go
against all of those, as I have done before, in this blog.
Rational choice is severely limited by unconscious
motives of behaviour, with little free will, and by ‘radical uncertainty’ where
one cannot calculate risks because the set of things that may happen is open,
and preferences shift in the process of making and enacting choices. What can happen
and what one wants follow choice as much as they precede it. This connects with
the themes of knowledge and change.
The individual is constituted by genes in interaction
with experience, especially interaction with other people. He/she develops
his/her intellectual and emotional identity along a unique path of life. This
yields variety of cognition, in what I have called çognitive distance’.
Processes of cognition, evaluation and action never
achieve intended goals, and shift as a function of obstacles or novel
opportunities encountered on the way. That is the pragmatist perspective that I
have adopted in this blog. Equilibrium outcomes may be analytically useful as
benchmarks but are never actually achieved. Life is, as I called it, imperfection on the move.
The challenge is to sort out how this all works out in
a renewed view of economics and markets. Here I use a book that I published in
2014: How markets work and fail, and what
to make of them (Edward Elgar).[i]
I am against fundamentalist market ideology, but I am
not against markets. We could not do without them. But they work imperfectly.
They often fail, and not only in the ways that economists realize. There are
areas where markets should not be permitted to go. In other areas they may make
sense but yield more perverse than useful effects. Above all, in markets there
is, or should be, not only competition but also collaboration. There is need
for both trust and control, without trust becoming blind. This ties in with the
themes, in this blog, of self and other, collaboration, and trust.
I will argue that for a new economics the utilitarian
ethics adopted, mostly tacitly, in present economics, should be replaced by a
virtue ethics, inspired by that of Aristotle, but with some important twists,
as discussed in this blog. There are multiple virtues and values, which cannot
always be brought under a single measure. This is another obstacle to the
calculation of optimal choice.
[i] The book is ridiculously expensive,
but a cheaper paperback edition will appear in August.
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