Hollywood Studios – Disney World

Back to photographs of our visit to Disney World - we saw how stunts are done, specifically in the Indiana Jones movies. Interesting and spectacular! Pure entertainment! Indiana’s anachronistic troubles enabled us to forget about our troubled economy, Iraq, Afghanistan, Israel and Palestine for three days.

Conclusions and Recomendations: The History of Economic Theory

Of course I’m not an economist, and I am making conclusions based on a cursory knowledge of the subject. I must also admit that I am prejudiced by my position, that science including the social sciences are constrained and fashioned by their cultural environment. That position is in part based on Ludwig Fleck’s notion of “thought collectives” and Michel Foucault’s “episteme.” In Power/Knowledge Foucault wrote “The episteme is the ‘apparatus’ which makes possible the separation, not of the true from the false, but of what may (be) from what may not be characterized as scientific” (p. 197). Fleck believed that groupthink is as much a part of the scientific community as the general culture, and that breaking with traditional scientific theory (thought collectives) is an extremely hard process that must occur with great effort over time. By extension, economic theories are contingent upon the “thought collective” of the time and place in which they are written. In simpler terms, economic theories are history based. For example, Adam Smith’s Wealth of Nations was a product of its time in which the new industry based economies of Europe were vying for colonial power, thus his concern with free versus constrained economies. Additionally, John Maynard Keynes was concerned with the Great Depression and so recommended that government spend money in order to adjust the downward curve of an economy in depression. And, finally, Milton Friedman recommended that government keep hands off and spend less during an era of profligate Republican and Democratic party spending during the fourth, fifth, sixth, and seventh decades of the Twentieth Century.


Thus, at the end of the first decade of the Twenty-first Century at the beginning of what could very well be the Second Great Depression, it would behoove us to do a thorough examination into the history of economic theory in order to apply the various quanta demonstrated by theorists over time to our situation. These must be accompanied by a thorough campaign aimed at informing and convincing the public and both parties of the necessity of such a program applied over the terms of several presidents. We can and must do the following to fix the economic crisis in which we find ourselves.

1. Spend money to improve and replace outmoded infrastructure with newer more advanced greener (reads less oil dependent) systems that will serve us well during the rest of the 21st Century. That kind of spending is the most practical and will stimulate the economy while providing jobs for those in need.
A. We do not need more roads!
B. We do need a revitalized rail system including high-speed lines coast –to-coast (Jacksonville, FL – through the Gulf Coast and desert cities to Los Angeles, CA?) and top to bottom, Boston, MA to Miami, FL and Chicago, IL to Houston, TX.
C. Invest short term in an automobile that can do better than 60 miles per gallon of oil, and long term an electric or water powered car.
D. Revitalized power grid, and system that relies increasingly on biomass, hydro and wind, solar, hydrogen fuel cells and atomic fission / fusion.
E. Research to achieve all of the above.
2. Be sure that a thorough and concrete long term plan for saving money is in place so that we can remove the massive debt our profligate spending in the past and present has and is creating.
3. Fix health care and education because our children and healthy working adults are the future of our economy.
4. Thorough regulation of banks and Wall Street (not socialism but regulated capitalism) is necessary to prevent greed from entering the market in force in future generations. The past fifteen years of our economic history have thoroughly demonstrated - much to Republicans chagrin - that totally unregulated capitalism (a la Milton Freidman) does not work.
5. The commodification of everything; sex,gender, race, sexuality,religion, actors, singers, sports, families, children, parents, vacations, electronics, ad infinitum ad “nausium” must cease. We must learn to be more discerning and frugal as individuals and as a nation. Such a dramatic change will take strong leadership from the top down as well as across the culture.
6. I thoroughly believe that the following statement should be rule number one in any economy. We must be vigilant because greed is a powerful human force and individuals, corporations, and institutions will find new ways to make themselves rich at the expense of the middle class and the poor in any culture or society.

Finally, I must ask the question - How can we possibly achieve all of the above? I could use some help here, and so could our government. Practical suggestions (reads, not political b---s---)?


Reading

Boland, Lawrence A., The Principles of Economics: Some Lies My Teachers Told Me. London and N. Y. (Routledge, 1995).

Fleck, Ludwig. The Genesis and Development of a Scientific Fact. Chicago and London: (The University of Chicago Press, 1981).

Foucault, Michele, Le jeu de Michel Foucault (1977). Trans. Alain Grosrichard as "The Confession of the Flesh," inPower/Knowledge: Selected Interviews and Other Writings 1972-1977, Colin Gordon, ed. (NY: Pantheon, 1980).

Les Mots et les choses. Une archéologie des sciences humaines (1966). Trans. Alan Sheridan as The Order of Things: An Archaeology of the Human Sciences (NY: Vintage, 1970).

L'Archéologie du savoir (1969). Trans. Alan Sheridan, The Archaeology of Knowledge (NY: Pantheon, 1972).

ECONOMIC THEORY: An Extremely Brief History

classical economics, also known as “Modern Economics" (inclusive of classical economics) begins in 1776 with the Publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith because Smith used modern rational argument (reads opposition) to compare and contrast actual examples of free versus constrained markets. However, Aristotle first struggled with the idea of wealth acquisition and ethics (private versus public ownership of wealth) in the 4th Century BC. Between Smith and Aristotle Thomas Aquinas argued in the 13th Century AD that goods ought to be sold at equitable value. Today economists operate under many of the assumptions of classical economics begun by Adam Smith and further developed by John Stuart Mill and others at a time in which the industrial revolution was creating the modern economy based in capitalism as opposed to feudal societies that existed in the middle ages and into the Renaissance. For example, Smith and it appears also that Francois Quesnay were the first to understand that modern economies were based on production of goods by the people as opposed to the value of the King’s treasury. *1

There appear to be two competing ideas concerning the determination of the value of goods in early classical economic theory: 1) the cost of production theory, and 2) the cost of labor theory. Later this dichotomy is broadened to include three more factors: 1) the level of output, 2)technology and 3) wages. Strangely enough Carl Marx can be considered a classical economist despite his opposition to the classical free trade economy because he based his argument for a communist (Proletariat society in which wealth is distributed according to need) in all the assumed fundamentals of classical economics.

Thomas Robert Malthus, in the 18th century, was the guy who proposed that an economy is better served by spending as opposed to saving. Later, Neoclassical economics, identified with Alfred Marshall dispensed with Carl Marx’s labor based economy in favor of a precisely formulated supply and demand economy. Keynesian Economics derives from John Maynard Keynes’ The General Theory of Employment, Interest and Money (1936). It is the most revolutionary piece of economic theory fabricated during the 20th Century. Keynes work ushered in the era of Macroeconomics, and in direct response to the Great Depression Keynes proposed that the labor market may not be corrected through flexibility of price and market regulation. Thus the origin of the idea many consider to be truth in contemporary economics, that regulation of the marketplace is not effective. Ironically, it was also Keynes who deployed the idea that government must spend money in order to correct the downward spiral of public confidence and demand for goods in a depression.

In reaction to Keynesian and Macroeconomics, Milton Friedman (1912 - 2006) showed that stabilization policy in a modern economy is extremely complex. He further explicated in detail the necessity that government minimize involvement in the economy in favor of self-regulation of the private sector. Thus, he emphasized the Keynesian idea that market regulation is ineffective even while reacting against the increased government spending that both Republicans and Democrats advocated during the fourth through sixth decades of the 20th Century. Friedman’s “monetarism” contained the idea of stagflation thus predicting the era of poor economic growth coupled with high inflation during the 1970’s.

I leave summary and further conclusions of this all too brief examination of “The History of Economic Theory 101” to my next entry.

*1 I wonder, in countries were there still are monarchs why the value of the king’s treasury isn’t considered as part of that formula, however slight, or is it?

Works Consulted

This is a partial list that is most relevant to this particular entry. I will publish a separate and complete journal entry for works consulted toward the end of this exploration of economic theory.

Smith, Adam, An Inquiry into the Wealth of Nations. (London) W. Strahan and T. Cadell, 1776.
Marx, Carl, Das Kapital, Vol. I, II and III. (New York) L. W. Schmidt, 1867 – 1871.

Marx, Carl, Das Kapital, Vol. I. On line edition, http://www.marxists.org/archive/marx/works/1867-c1/index.htm. Viewed and downloaded 9:58 AM EDT., Monday, March 9, 2009.

Das Kapital, Wikepedia, http://en.wikipedia.org/wiki/Das_Kapital. Last modified 8:30 GMT, March 9, 2009. Viewed and downloaded as PDF file, 10:00 AM EDT., March 9, 2009.

History of Economic Thought, Wikepedia, http://en.wikipedia.org/wiki/History_of_economic_thought. Last modified 02:29, March 5 2009. Viewed and downloaded as PDF file, 10:04 A.M. EDT.

Friedman, Milton, Capitalism and Freedom. (Chicago) Chicago University Press, 1962.

Keynes, John Maynard, The General Theory of Employment, Interest and Money. (Cambridge) Macmillan Cambridge University Press, 1936.

New Animal Kingdom Tiger Photograph

Let’s break from political and economic concerns and go back to pure entertainment.

The ruins are so authentic that I had to reach out and touch them. I felt as though I was on the Enterprise Holodeck.

White House subversive diversions, Economic Stimulus v. Tax Cuts and Spending Freeze, The Second Great Depression, and WHO’S TO BLAME?

Bull (BLEEP!) about the who’s to blame part, and a spending freeze is simply Herbert Hoover style stupidity. The current economic crisis was created over a fifteen-year period after devious Wall Street and Banker folk created instruments (credit default swaps) and a system that allowed banks and other financial institutions to hide REALLY BAD LOANS. THE ANTI-REGULATION REPUBLICAN PARTY / BUSH LED FRENZY of the past eight years allowed that system to continue in perpetuity as loan practices got more and more shoddy over time. As to inferred current White House created diversions - I’m so over the Republican Party diversionary tactic of re-writing our history!

Instead, this crazy old artist has decided to do a bit of research into economic theory because I’m confused by the Republican v. Democratic Party division over President Obama’s stimulus package (Actually the Economic Recovery Act which was constructed basically by Democrats in the Congress and Senate since Republicans refused to have anything to do with it except to put their own PORK into it. To perhaps oversimplify the argument, Republicans wanted nothing to do with the package because they claimed (and still do claim) that it will cause disastrous stagflation, and that our government has no business meddling in the economy. They will probably make a similar claim concerning President Obama’s healthcare initiative. Democrats on the other hand claim that our economy has collapsed, and that without government intervention things will only get worse, perhaps much worse - and they claim that healthcare reform is necessary to an economic recovery.

First, an a priori observation, and it is not based in economic theory, only my concern that the argument stated above is a binary opposition. *1 As is so often the case with such oppositions, two factions argue over the opposition until one side becomes subordinated to the other in the social environment as false or incorrect whether or not that social / cultural outcome is provable. In any event, I’m discovering just how complex and subtle is the gray area between the extremes of the opposition. Also, and before any argument on my part, the next entry in the series will be a brief summary of Economic theory, of which I see very little discussion in all the Republican v. Democrat argument about the failed economy of our nation and the world. Of course, I cannot help but come to a conclusion based on that history, and the argument that is only beginning to take shape coupled with the a priori observation above. I also see that I must do some extensive reading, and a partial list of books and Websites will be one of my future entries on this subject.

As always I will create images as part of each of these entries about the economy because I am an artist, and this journal purports to be an artist’s journal. The entries will be interspersed among my more Art oriented entries over the next several months.

As a side to my excursion into the “History of Economics, 101,” I’m amazed that, like Nero - while we explore and argue (reads fiddle around) the nation and coincidently the world continues to crash and burn.

March 11, 2009 – A Note on Obama Signing Today’s Spending Bill

Several Observations:

1. He has no choice – If he does not sign, congress must write a new bill by midnight and the federal government will shut down. No new president wants that to happen.
2. Republicans approved of this bill, written last summer and fall when Bush was president, and now vociferously oppose it because of earmarks, many of which they wrote into the bill.
3. Republicans oppose the earmarks that keep the poor in housing, and feed poor single mothers and children as pure pork. I say, in almost all Marie Antoinette’s words, “Let them eat pork.” Or perhaps I should say instead, “let them eat their own hot air, and let the poor children eat real food while sitting at a table in their own home instead of garbage on the street.”

Note - Thursday, March 12, 2009 – Comcast, Fox, stands with…

Republican “do nothingism” of course. Yes, I know. I subscribe to Comcast.

IT’S THE ONLY CABLE AVAILABLE! H-m-m-m-m-m-m, isn’t that the definition of a monopoly, and why was it necessary to break-up Ma Bell (Bell Telephone regional companies) in 1984 if Comcast and its monopoly is allowed to stand in the two thousands.

So, I’m stuck using a company that is anathema to my social and increasingly my economic political views!



Note

*1 Binary Opposition - Complete opposites - two things that are related yet completely different - in 360 degrees of circumference in a circle, two things that are 180 degrees apart. In structuralist theory two things that are mutually exclusive. In post-structuralist theory one of the pair of opposites is seen as dominant, and the other as weaker or subordinate.

Disney’s Animal Kingdom

I realize this isn’t the world’s greatest (Art) photograph, however I was intrigued by Disney’s Animal Kingdom, especially the section that is set in the ruins of an Indian Palace complete with Tigers. I felt it absolutely necessary to include this photograph here, and I will put more up later, as I am gradually going through the hundreds of photographs taken during a visit to Disney last week. The most amazing thing was the authenticity of the palace ruins, and I give the Disney engineers and artists kudos. I walked through the ruins looking at tigers and other wild animals prowling through the crumbling walls and magnificent decayed palace murals, seemingly free of entrapment, and I felt as though I had been instantly transported to India.