PKT seminar: Debunking E., What is Too Inportant?

["John Gelles" <jjgelles@xxxxxxxx>]

            "WAR -- TOO IMPORTANT TO LEAVE TO THE
              GENERALS.
            "POLITICS -- TOO IMPORTANT TO LEAVE TO
              POLITICIANS.
            "ECONOMICS -- TOO IMPORTANT TO LEAVE
              TO ECONOMISTS.

            "YET -- THE BUSINESS OF AMERICA IS
              'BUSINESS'.


            In today's cliche, "The economics of America is
            economics" -- I don't think so!

            There is an underlying contradiction in Keen's complaint
            against writers of economics. He finds we "don't need
            an accurate theory of economics to build an economy".
            This echoes Coolidge' idea that business is in the saddle;
            and my view that theory sweeps up the droppings behind
            the parade to leave a cleaner track than business lays
            down.

            Keen's recognition of the irrevelance of an accurate
            economic theory, above, is one pillar of wisdom. But,
            simulatneously, and in contradiction of it, is his opener,
            "[Neoclassical economics] has achieved dominance over
            society [business?] because of its ultimate weapon: Theory".

            If the economy is the territory where business operates,
            and accurate theory unnecessary, then sooner or later
            economics should be divided, like Microsoft, -- with half of
            it disolved completely into logisitcs, and half into accounting.

            If not, if there is "political economy" (with no capital
letters),
            (and I think there is), then economics should survive as the
            discipline where values and strategic designs bend business
            to the will of an educated electorate.  Economics becomes
            a part of jurisprudence, a foundation for an economic bill
            rights.

            Among Keen's alternatives I found no mention of Lerner
            and the thought that money and credit can stretch ahead
            of production to bring it on -- and that taxes were an
            adjustment that can be made, like price, to keep money
            precious enough to work   It is only when money fails, and
            credit relies on barter instead of money, that the money
            tool to bring on production must be refashioned with a
            new name and a tighter regime.  This theory, if used by
            lawmakers holding purse strings, might be as good for
            business as initial public offerings have been in this decade.

            I find Keen weak on alternatives. If economics can not
            be left to the current crop of professionals, then who will
            take it up?  Let us say, the information scientists.  They
            are developing the tools that can possibly compute price
            in logistical measure superior to auctioned money. That
            is what we do in war -- compute inputs and outputs in
            their physical measure. Every businessman does this in
            his own niche. Perhaps information science will map out
            major resources and plans to use them in production.

            Keens, like all the economists I have met on PKT, want
            the public to read and remember the literature that
            awakened them to insights on the human condition in
            matters economic.  They make a list of books and authors,
            not an action agenda with contingency variations. Such
            an action agenda is left to politicians. Yet Keens begins
            with the admonition: do not leave politics to that bunch
            of theives.

            Imagine, if you will, our writers Isaacs, Liu and Davidson,
            locked up to write the action agenda (with contingency
            variations). Nothing but bread and water until they finish.
            Would they supply the alternative missing from DE?

            Maybe yes.  But would the US Congress or the Russian
            power structure pay it any attention?  In the beginning,
            economics is the study of power, especially gangster power.
            In the end it is the study of law, especially of lawmaking
itself,
            treasury, central bank and tax law.  Is it ever the study of
            interest and price?   These numbers are for bankers,
            speculators and marketing types, for sure.   When they
            rise to the level of economics they are currently too
            formidable to be corralled.  Until information science can
            bear down on the calculations, let us use economics to
            serve the poor as religion is supposed to do.

                John Gelles