Ed, As always, I enjoy your well-crafted postings. However, I must beg to differ quite fundamentally from your latest.
You charge people like me with amplifying notions of free-trade,etc, into an ideology. This seems so from your point of view only because (until recently anyway) such "ideologists" have been relatively thin on the ground and have had to raise their voices just that little bit louder than the norm. When Milton Friedman reminded everybody in 1956 that money, like all other goods, is subject to the laws of supply and demand, he was almost a lone voice and took a lot of flak. It was only when the practice of Keynes' ideas by western governments produced something like a 30- to 40-fold devaluation of currencies in the '50/80s period, that it was realised that Friedman was basically correct. That generation of treasury economists has now retired or passed away, thank goodness. The basic problem is that the industrial revolution produced such fantastic prosperity that developed countries' governments could easily afford huge armies and navies at the turn of the 20th century which inevitably (with hindsight) led to two world wars of hitherto unimaginable widespread suffering (and dozens of smaller wars since which continue). A byproduct of this is that such governments also felt it necessary to intrude into all sorts of other activities (education, health, pensions, welfare, transport, agriculture, etc) in order to keep their populations "strong". People are now living in a sort of command economy as they never did in previous centuries -- in effect, being governed as though on a war-footing. This may seem an extreme way of putting it, but it is surely so when looked at historically. A corollary of all this is that because government taxing and spending are now so intertwined with the normal trading economy, then the economists of the past century, no matter how brilliant some of them may have been, have not been able to see the wood for the trees. Unlike other sciences, where laws are successively refined and made simpler, economics has not been able to do this in recent decades. Not yet anyway. Over the longer term, as armaments become overwhelmingly dangerous and some sort of world order (though not of the George Bush variety one hopes!) will have to be established, then I am sure that economics will be seen to rest on some simpler laws than now appears to be the case and Adam Smith and David Ricardo will not be as vilified as now and will regain the sort of stature that rightfully belongs to them -- the stature that Darwin has in biology and Newton has in physics. You ended with: <<<< Do keep walking your dog. Great thoughts seem to come from that. If they are not all yours, you may have the cleverest dog that ever lived. >>>> My dog is now waiting impatiently at my side. She agrees wholebarkingly with what I've written so far. However, if better ideas occur to us after discussion during our walk then I'll write further. She's usually able to sniff things out that I overlook. Keith At 11:00 30/07/02 -0400, you wrote: <<<< Keith, as is so often the case, you raise a number of mind-bending issues in a single posting, including one that I'm sure we've debated before, whether economics is a science. I would accept that it is, once certain prior notions and assumptions have been accepted - people behave in their self interest, it is better to produce more than less with given resources (therefore assembly-line like specialization), the more you have or use of something, the less productive or satisfying it is, etc. Once these props are in place, you can build all kinds of things on top of them, including dogmas about capitalism and freedom (Freedman), but there is always the temptation to kick them out from under and demonstrate that the system you have built is in fact a house of cards. Moreover, once you get into dogmas, the science begins to stop and religion takes over. You abandon the language of "what if." and get into that of "should" and "ought". But that's only one kind of economics. Another kind tries to figure out what is happening out there, in the real dirty old world we live in, shop in, and gain or lose jobs in. What relates to what? Why do we have business cycles and what can we do about them? What might government do to make life less painful during downturns? What might it do to slow down booms, thus preventing a wastage of resources? What is the relationship between the "paper wealth" of the stock market and the "real economy"? This is where Keynes and a whole host of people since Keynes come in. Here, you are never quite free of notions and basic assumptions, but you are less inclined to build superstructures on top of them, and you discard them if they don't really make sense in terms of what you find out. There is yet another kind of economics which has to do with fairness and equity. This hinges on the appropriate balance, in society or even globally, between rich and poor. To what extent, and by what means, should you move income and wealth from the rich to the poor, or from both to society as a whole? This kind of economics is, of course, not free from concepts of social justice and collective versus individual responsibilities. Government needs to be involved in all of the forgoing. Given that competition is good and monopoly is bad in terms of the allocation of society's resources, it needs to ensure, via anti-combines legislation, that a reasonable level of competition prevails. Given that the business cycle can be destructive of jobs and incomes (including government revenues), it needs to do what it can to counter the cycle via stabilization policy. Given that too wide a gap between the rich and poor can also cause problems and raise costs that permeate all of society, it needs a slate of policies focused on redistribution. And, because any society depends on a combination of public and private goods, it must be prepared to provide a certain level of physical and social infrastructure. What the left wing /right wing debate has been mostly about is not the fundamental ideas of economics, but about how much of each of the foregoing government must do. You may be right in suggesting that there are more left leaning than right leaning people on this list. I, for example, believe that functions of benefit to society as a whole, such as education and health, should be operated by government. I also believe that government should do everything it can to counter the vagaries of the business cycle. And I believe in the redistribution of income and wealth, perhaps through something like a GAI. However, these are not beliefs based on economics, they are essentially political and part of my own personal dogma. They may reflect the fact that I was born into the poverty of an immigrant family during the Great Depression and worked as a unionized logger when I was a young man. I really don't know where they came from, but I cannot attribute them to Adam Smith, Milton Freedman, or even John Maynard Keynes. Do keep walking your dog. Great thoughts seem to come from that. If they are not all yours, you may have the cleverest dog that ever lived. Ed >>>> ---------------------------------------------------------------------------- -------------- Keith Hudson,6 Upper Camden Place, Bath BA1 5HX, England Tel:01225 312622/444881; Fax:01225 447727; E-mail: [EMAIL PROTECTED] ________________________________________________________________________
