The Economics of Portrayal (6)

May 13, 2015

This series – The Economics of Portrayal – was a serialized posting of The Dignity of Humanity. The entirety of this paper is available free for the reading on Scribd, or available free for downloading from my LinkedIn profile.


The Economics of Portrayal Series

The Economics of Portrayal series posits this hypothesis: A superficial understanding of philosophers and economic/political theorists allowed 19th-century capitalists and political leaders to embrace the notion of human degeneracy, thus legitimating the concept of competitive industries and labor markets (and the eventual formation of centralized economic structures), and command and control governance (attempting to proscribe as many negative human actions as possible). Such assumptions were made a priori, that is, theorizing before empirical evidence could inform such assumptions. Thus, these assumptions were mere ideologies, since evidence was not seen as a necessity; rather, legitimizing the centralization of institutions was the desired end, enhancing the powerbase of those in control.

This series also rests on the postulation that humans meet expectations, regardless of whether those expectations are high or low. As a result, in the wake of the 19th-century industrial revolutions in Britain and later in the United States, human behavior devolved into degeneracy as a result of such low expectations from political and economic leaders, until today when we find isolation, narcissism and sociopathic behaviors saturating all levels of society. While human dignity is a global issue, it is one of the major paradoxes of our times that the United States, founded on the long outcome of Enlightenment ideals, would become the very nation that embodies the antithesis of those ideals.

Until such low expectations of humanity are recognized as creating self-fulfilling prophecies, rather than as natural outcomes of humanity, Americans will never begin to successfully reclaim the founding ideals of the American Republic, namely, the belief that individuals can reach higher expectations, can become citizens again, can assume responsibility for their actions, and that economic and political institutions are there to serve the individual and not the converse. In the process, individuals recover their sense of dignity.

This series is not intended to be an exhaustive historical review of philosophical thought on human nature, but rather a sketch of the superficial understandings that allowed the centralization of our economic and political structures, a centralization that has brought us to a confluence of dysfunctional economies and governance the world over.

The series started here.   Part 2.   Part 3.  Part 4.   Part 5.    Part 6.


The Tyranny of Debt

May 7, 2015

“(T)he United States waged a long war upon the ground, that governments are instituted to secure, and not to bestow, the freedom of property.” – John Taylor, Construction Construed and Constitutions Vindicated, (1820), Sec. 1.

“To live securely happily and independently is the end and effect of liberty… All men are animated by the passion of acquiring and defending property, because property is the best support of that independency, so passionately desired by all men… as happiness is the effect of independency, and independency the effect of property; so certain property is the effect of liberty alone, and can only be secured by the laws of liberty; laws which are made by consent, and cannot be repealed without it.” – Thomas Gordon, Cato’s Letters, No 68, (1721).

Against Exploitation

“Private property is the bulwark protecting the individual against exploitation by others,” Herman E. Daly wrote in Beyond Growth. “A property owner has an independent livelihood and need not accept whatever conditions of employment are offered.”

Indeed, Daly taps into the very essence of private property with these sentiments. If there is one single element of Marxism that presses the hardest against the individual’s freedoms, it is the question of property. While it is true that in a perfect world – wherein everyone’s sincerity of altruism would be above question – a society based on communal property may indeed be a workable framework.

But this is not a perfect world, and as sure as the sun rises in the east, there will always be those individuals who would eye the control of communal property as a means to power. In fact, we find in history that state control of property defines every major establishment of communism in the world. And while contemporary Marxists will contend the communism of the USSR and China does not represent “real” Marxism, it is fair to level these criticisms against Marxism until such time its followers show us a society in possession of a complete sincerity of altruism.

It is for this reason, and others, that the tenant of private property continues to hold in free societies, at least for the foreseeable future. But there is another insidious threat to private property, one that Daly did not recognize in his statement above (but does so elsewhere in his works), and that threat is indebtedness.

The Big Lie

Today, “free” societies everywhere are populated with a large number of home and property owners, but only a small percentage outright own this property lien free. Almost all of it has been purchased with the help of a mortgage. And within this reality rests The Big Lie, that is, we live on the illusion that we are “homeowners.” Yet, unless we hold title to our property lien free, it is very difficult to align this illusion with reality. And so, to tap Daly’s passage again, encumbered homeowners are forced to “accept whatever conditions of employment are offered.” Read the rest of this entry »

Profit Maximization is Self Annihilation

April 21, 2015

“Some states (i.e., nations – ed.) have lost their liberty by particular accidents: But this calamity is generally owing to the decay of virtue. A people is travelling fast to destruction, when individuals consider their interests as distinct from those of the public.” – John Dickinson, Letters of a Pennsylvania Farmer, 1768

Profit maximization is self annihilation or, PM = SA in economese, should one feel the need to mathematize the phenomenon, but profit maximization first emerged not of mathematical modeling, or validated by empirical evidence, but by commentary that tickled the vice of greed.

In 1970, Milton Friedman wrote an article for The New York Times, “The Social Responsibility of Business is to Increase Profits.”

And with that commentary, Friedman kicked off one of the most singularly damaging ideologies that would go on to send the global economy over a cliff.

In this writing, Friedman argued for the singular focus of business to be profits. This myopic view of business endeavors completely ignored the negative externalities that could unfold from such a concentration and, being an economist, Friedman should have understood the concept of negative externalities.

No doubt he did, but only in areas of economic theory that supported his ideology. That’s the beauty of neoclassical economic theory, the orthodox teachings of most economic departments today: With its mathematical elegance and a priori thinking, one can make neoclassical economic theories say anything one wants. For the uninitiated, such theories appear “scientific” thanks to the abstruse mathematics. And while the mathematics provides a patina of science, in fact neoclassical economic theories are diametrically opposed to sound scientific endeavor, as a conclusion is assumed before a hypothesis is empirically tested.

And that is exactly what Friedman does in this perennial favorite of C-suite management: he assumes the conclusion, otherwise known as “begging the question.”

Ignored in his argument is that a singular, obsessive focus on profits completely discounts the reality that profits are a means to an end, not an end unto itself.

The ultimate goal of business – yes, and even economics – is social welfare. Business and economic institutions reside in a society to serve the needs of that society’s individuals, its citizens.

For those in the audience who are thinking, “Uh oh, here comes the Corporate Social Responsibility speech,” or for the lesser minds who enjoy clinging to hyperbole, a case for “socialism,” guess again. Read the rest of this entry »

The Economics of Portrayal – Secular Depictions of Human Degeneracy (5)

April 16, 2015

Depravity: Within the forces of the Protestant Reformation this bleak take on humanity took on new life, as covered in the last post in this series.

It was also a belief supported by Hobbes, the English 17th-century political philosopher. Anyone who has read even the briefest biography on Hobbes knows that he was an atheist, so how did the idea of human depravity leap from the Reformation to form the basis of Hobbes’ social contract theory?

Hobbes followed the steps of Machiavelli in the latter’s belief the Greek and Roman classics on republicanism were too lofty and idealistic. For anyone who has ever read Machiavelli’s The Prince, it’s easy to understand how this writer lowered the standards for political life (ignoring, for the moment, Machiavelli’s much more enlightened and republic-supporting work, Discourses on Livy). Hobbes, in turn, proffered that it was humanity’s passions, not reason (once again left out of the equation), that drove human behavior.

Hobbes believed in the equality of humankind, but not in the warm sense with which we embrace equality today: Humans are equally capable of killing each other, creating the most powerful of all human passions, fear. This equality in mutual annihilation leads to competition, the pursuit of the same things deemed valuable within a society, and creates the fear of being left out of society. Distrust blooms in such a universe, and thus pre-government humanity is little more than a realm of animalistic passions, where all is interested in nothing more than self preservation. Humanity is not social by nature, in Hobbes’ mind’s eye; nature is to be feared.

In short, Hobbes could have written the screenplay for Mad Max Beyond Thunderdome. Read the rest of this entry »

Chimp Takes Action Against Invasion; Shows More Initiative Than Most

April 14, 2015

Who would have thought a quirky news story about a chimpanzee could end up embarrassing us humans?

A female chimpanzee at the Royal Burgers’ Zoo in the Netherlands was fed up with a drone hovering over the chimpanzee pen. She grabbed a tree branch and nailed it with a powerful backhand, and the drone plummeted to the ground, destroyed.

Apparently, other chimps in the same area also armed themselves with branches, wanting a crack at the drone.

The chimps showed more initiative against the invasion of privacy than most Americans.

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