Wednesday, March 25, 2009

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---)?


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).

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