Re: more economist scandals

[Ted Winslow <egwinslow@xxxxxxxxxx>]

Michael Perelman wrote:

> I didn't get any responses from my note about Nobel prize-winning
> economist, Harry
> Markowitz, as the cofounder of one of the two infamous military
> contractors
> associated with the prisoner abuse scandal.

Keynes connects the mistaken use of "logic" to predict the "uncertain"
future with a psychopathological need to "hide from ourselves how
little we foresee"

"This [hiding from ourselves how little we foresee] is how we act in
practice. Though it was, I think, an ingredient in the complacency of
the  nineteenth century that, in their philosophical reflections on
human  behaviour, they accepted an extraordinary contraption of the
Benthamite  School, by which all possible consequences of alternative
courses of action  were supposed to have attached to them, first a
number expressing their  comparative advantage, and secondly another
number expressing the  probability of their following from the course
of action in question; so  that multiplying together the numbers
attached to all the possible  consequences of a given action and adding
the results, we could discover  what to do. In this way a mythical
system of probable knowledge was  employed to reduce the future to the
same calculable status as the present.  No one has ever acted on this
theory. But even today I believe that our  thought is sometimes
influence by some such pseudo-rationalistic notions." (XIV, p. 124)

"the theory we devise in the study of how we behave in the market place
 should not itself submit to market-place idols. I accuse the classical
economic theory of being itself one of these pretty, polite techniques
which  tries to deal with the present by abstracting from the fact that
we know  very little about the future." (XIV, p. 115)

and to canalise sadism (such mistaken use of logic is "remorseless").

Both aspects defend against fear of death: the first by denying the
fact that "in the long run we are all dead," the second by transforming
self-destructiveness into sadism and then locking this up in the "iron
cage" of an obsessional symptom.

The "greed" which this "pretty, polite technique" serves as an
instrument also canalises sadism.

 "dangerous human proclivities can be canalised into comparatively
harmless channels by the existence of opportunities for money-making
and private wealth, which, if they cannot be satisfied in this way, may
find their outlet in cruelty, the reckless pursuit of personal power
and authority, and other forms of self-aggrandisement.  It is better
that a man should tyrannise over his bank balance than over his
fellow-citizens; and whilst the former is sometimes denounced as being
but a means to the latter, sometimes at least it is an alternative."
(General Theory, p. 374)

Ted