Greatest threat is Kleptocracy
Economists working in the finance industry were incompetent, just that their level of certainty is far less than that expected in other disciplines. I think there is some confusion in this discussion between ‘Business and Finance’ expertise and ‘Financial Economics’ The former relates to business acumen ie the ability make good predictions of future profitability based on the market opportunity and the personal characteristics of the key players involved. The latter the Financial Accounting expertise in understanding the financial position of the entities concerned. The valued economists are more using business and finance expertise than microeconomics principles to add value to their employers.
I have a big problem in equating the views of Smith with Newton. By putting Smith on the same pedestal you are in effect saying that economics is not subjective and that human society does not have choices in the way it chooses to produce and distribute its goods and services. That Smith’s free market oriented philosophy is in effect a Law of Nature that cannot be challenged by human will. The metaphors between biology and economic ‘principles’ are often used to ‘explain’ this with no justification. You should read John Ralston Sauls “The Unconscious Civilization’ which shows how our society has become utterly brainwashed to this way of thinking. .
In my view the rise of inequality is due to increasing automation and no real mechanism of sharing the productivity gains with those displaced. It is wrong to assume that humans have unlimited material wants. If these wants are mostly satisfied by the existing owners of capital there are less and less opportunities for others to satisfy the remainder.
When Adam Smith wrote Wealth of Nations, most countries were using mercantile systems. What Smith wrote applies to capitalist systems, not in general.
What Newton wrote applies only to this universe. It does not apply to other universes because the laws of physics are created at the creation of a universe, they are not universal.
This also goes for the physical constants. We are lucky that we got the constants we did at the “Big Bang” because with different constants the usual result is a “Failed Universe”.‘Financial Economics’ is a term I have never heard. I have never met an economist who was a “Bean Counter”, which is what a “Financial Economist” would be. On the problem of brainwashing, I obviously agree, please reread the passage that I wrote about my East German relative who believed Karl Marx was a “Wonderful Economist”.Your statement “ The metaphors between biology and economic ‘principles’ are often used to ‘explain’ this with no justification.” gives me happiness.
It means you took my writing of “My comment can be summed up by saying, ” You are basing your opinions on what you see and read in the mass media.“ Do not believe it.” to heart.
Your statement that “It is wrong to assume that humans have unlimited material wants.” is correct. The obvious counter example is the monks and nuns in any religion.These simplifying assumptions, that are incorrect, are present in every discipline. (The example of F=MA in engineering.). The assumptions have to be made because the analysis becomes to complicated for human IQ.
The solution is Artificial Intelligence. Being able to remove the simplifying assumptions of “Unlimited Wants”, “Function of Money”, etc. will produce a tremendous advance in economic theory. You wrote, “In my view the rise of inequality is due to increasing automation and no real mechanism of sharing the productivity gains with those displaced.” .
That was also the conclusion of Karl Marx, and it is incorrect. Germany is an example of why Marx is wrong. The automation here, has and is, progressing at a rapid rate, but the unemployment rate is low, and we do not have people dying on the streets such as you see in India. The trade schools can not find enough people to train to meet the demand. This goes even for waiters and other people working in the tourist industry.
By current proper economic theory, the greatest threat is Kleptocracy. You will never see this published in the mass media, and if a reporter was bold enough to do so, he would be fired.The statement “If these wants are mostly satisfied by the existing owners of capital there are less and less opportunities for others to satisfy the remainder.” is also another error of Marx. Marx did not understand the effects of new technologies. As I said previously, Marx made a lot of errors.
I have a big problem in equating the views of Smith with Newton. By putting Smith on the same pedestal you are in effect saying that economics is not subjective and that human society does not have choices in the way it chooses to produce and distribute its goods and services. That Smith’s free market oriented philosophy is in effect a Law of Nature that cannot be challenged by human will. The metaphors between biology and economic ‘principles’ are often used to ‘explain’ this with no justification. You should read John Ralston Sauls “The Unconscious Civilization’ which shows how our society has become utterly brainwashed to this way of thinking. .
In my view the rise of inequality is due to increasing automation and no real mechanism of sharing the productivity gains with those displaced. It is wrong to assume that humans have unlimited material wants. If these wants are mostly satisfied by the existing owners of capital there are less and less opportunities for others to satisfy the remainder.
When Adam Smith wrote Wealth of Nations, most countries were using mercantile systems. What Smith wrote applies to capitalist systems, not in general.
What Newton wrote applies only to this universe. It does not apply to other universes because the laws of physics are created at the creation of a universe, they are not universal.
This also goes for the physical constants. We are lucky that we got the constants we did at the “Big Bang” because with different constants the usual result is a “Failed Universe”.‘Financial Economics’ is a term I have never heard. I have never met an economist who was a “Bean Counter”, which is what a “Financial Economist” would be. On the problem of brainwashing, I obviously agree, please reread the passage that I wrote about my East German relative who believed Karl Marx was a “Wonderful Economist”.Your statement “ The metaphors between biology and economic ‘principles’ are often used to ‘explain’ this with no justification.” gives me happiness.
It means you took my writing of “My comment can be summed up by saying, ” You are basing your opinions on what you see and read in the mass media.“ Do not believe it.” to heart.
Your statement that “It is wrong to assume that humans have unlimited material wants.” is correct. The obvious counter example is the monks and nuns in any religion.These simplifying assumptions, that are incorrect, are present in every discipline. (The example of F=MA in engineering.). The assumptions have to be made because the analysis becomes to complicated for human IQ.
The solution is Artificial Intelligence. Being able to remove the simplifying assumptions of “Unlimited Wants”, “Function of Money”, etc. will produce a tremendous advance in economic theory. You wrote, “In my view the rise of inequality is due to increasing automation and no real mechanism of sharing the productivity gains with those displaced.” .
That was also the conclusion of Karl Marx, and it is incorrect. Germany is an example of why Marx is wrong. The automation here, has and is, progressing at a rapid rate, but the unemployment rate is low, and we do not have people dying on the streets such as you see in India. The trade schools can not find enough people to train to meet the demand. This goes even for waiters and other people working in the tourist industry.
By current proper economic theory, the greatest threat is Kleptocracy. You will never see this published in the mass media, and if a reporter was bold enough to do so, he would be fired.The statement “If these wants are mostly satisfied by the existing owners of capital there are less and less opportunities for others to satisfy the remainder.” is also another error of Marx. Marx did not understand the effects of new technologies. As I said previously, Marx made a lot of errors.
