History of Economic Thought Revisited: Beyond Left and Right
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As much as many of us hate economists, we all love to sound like one. Some simplify arguments that limit people's choices between the left and the right, between the government and the market or, worse, between two political parties. By reflecting on the origins and evolution of economic thought, we will endeavour to widen our gaze beyond such limited binary thinking and open new directions in economic discourse.
![Beyond the Right & the LeftBeyond the Right & the Left
History of Economic Thought RevisitedHistory of Economic Thought Revisited
Joffre Balce
[The great economists] may be called worldly
philosophers, for they sought the most worldly
of all of man’s activities – the drive for wealth
& power” ~ Robert Heilbroner](https://image.slidesharecdn.com/evolutionorrevolution-140506002838-phpapp01/85/History-of-Economic-Thought-Revisited-Beyond-Left-and-Right-1-320.jpg)
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History of Economic Thought Revisited: Beyond Left and Right
- 1. Beyond the Right & the LeftBeyond the Right & the Left History of Economic Thought RevisitedHistory of Economic Thought Revisited Joffre Balce [The great economists] may be called worldly philosophers, for they sought the most worldly of all of man’s activities – the drive for wealth & power” ~ Robert Heilbroner
- 2. Why Economics’ History? • We cannot help living in history. We can only fail to be aware of it. ~ Robert Heilbroner • Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist ... soon or late, it is ideas, not vested interests which are dangerous for good or evil ~ Todd Buchholz
- 5. Processing the Presentation • Difference between principles, dogma and assumptions – Violate principles & nature punishes you; – Violate dogma & its teachers will punish you – “Assumptions are the granddaddy of all $ ®€₩₵ ῼ $”₱ • Be aware of the rhetoric vs. practice of ideology • Survey of the evolutionary history of ideas with a plot
- 6. How to Get What One Wants/Needs? Right Is Might • Produce It Yourself • Buy It/Trade for It • Borrow • To realise what one is born with & secure it: rights & duties Might Is Right • Steal = Cheat, Seek-&- Grab Economic Rent • Kill = War, Invade, Colonize • Beg = Acceptance of Defeat & Poverty as Natural
- 7. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocracy Mercantilism Socialism Autarchy Anarchy Communal ownership by society Natural resources belong to no one; all have an equal right to it Autonomy through self sufficiency Self- governance through equal rights Trade, conquer, compete & accumulate Money Medium of exchange & measure/ store of value
- 8. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Socialism Adam Smith •What are social goods? •What is the role of government? •What are the factors of production & their respective returns? •How are they managed to meet everyone’s needs? •What is the basis for international trade? •What are the benefits of unhampered trade? Autarchy Anarchy Money
- 9. Trade/ Cooperation Feudalism/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Thomas Malthus David Ricardo Socialism Ricardo-Malthus Debate •Economic Rent: • Ricardo: value in excess of the less productive land • Malthus: surplus profit from an undue advantage • Economic rent as the basis of iron law of wages; the option to work for oneself & live • Advocate of free trade as consumers have a right to cheaper quality goods • Misery & vice – nature’s means to temper population growth: keep wages low by enclosing land • Trade barriers are necessary as higher prices are due to excess population
- 11. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Capitalism Neo-classical Malthus Ricardo Quantitative Utilitarians Socialism Autarchy Anarchy • Maximise profit • Minimise cost • Maximise utility Social Darwinism
- 12. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Capitalism Keynesian Neo-classical Monetarism Neo-liberalismNeo-Keynesian Malthus Ricardo Quantitative Utilitarians Socialism Liberalism IMF-WB BlocIMF-WB Bloc Tea PartyTea Party When government intervention is to our benefit not to our benefit or Autarchy Anarchy TheThe management ofmanagement of the economy bythe economy by policy &policy & regulation orregulation or the absencethe absence thereofthereof
- 13. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/M athematical Physiocrats Mercantilists Smith Karl Marx/ V.I. Lenin/ Maozedong Ricardo Centrally Planned Economies State/Partisan Capitalism Socialism “Public” Monetarism Cuba,Cuba, North KoreaNorth Korea ““BRICAS”BRICAS” Capitalism State as central monetary authority
- 14. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Capitalism Keynesian Neo-classical “Private” Monetarism Neo-liberalismNeo-Keynesian Malthus Ricardo Utilitarians Socialism Liberalism Marx/ Lenin/ Mao Centrally Planned Economies State/Partisan Capitalism Cuba,Cuba, North KoreaNorth Korea IMF-WB BlocIMF-WB Bloc““BRICAS”BRICAS” Tea PartyTea Party
- 15. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Henry George Indifferent to “State or Private” Monetarism Ricardo Social Market Democracies Co-op Societies Qualitative Utilitarians Socialism Land Reform Economies Asian TigersAsian Tigers + Botswana+ Botswana Nordic/Nordic/ GermanGerman StatesStates ICAICA Equal rights & their application to private property Autarchy Anarchy
- 16. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Capitalism GeorgeMarx/ Lenin/ Mao Keynesian Neo-classical Monetarism Neo-liberalismNeo-liberalismNeo-Keynesian Malthus Ricardo Centrally Planned Economies State/Partisan Capitalism Social Market Land Reform Economies Co-op Societies Utilitarians Socialism LiberalismAsian TigersAsian Tigers + Botswana+ Botswana Nordic/Nordic/ GermanGerman StatesStates ICAICA Tea PartyTea Party IMF-WB BlocIMF-WB Bloc““BRICAS”BRICAS” Cuba,Cuba, North KoreaNorth Korea Autarchy Anarchy
- 17. Synopsis, Well Almost ... • A race is not determined by the size, carrying capacity or horsepower of the vehicle but its design according to principles & the manner in which one drives. (otherwise, Duct Tape Panacea) • Menu of options is wider than many think ... Because ideologues don’t want you to think • One does not have to choose; they can mix & match or shift paradigms • There is one more frontier: Money
- 18. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Malthus Socialism Autarchy Anarchy Bullionists Karl Marx/ V.I. Lenin/ Maozedong Capitalism Monetarist Battle: State or the Private Management?
- 19. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Capitalism Keynesian Neo-classical Private Monetarism Neo-liberalismNeo-Keynesian Malthus Ricardo Quantitative Utilitarians Socialism Liberalism FinancialFinancial HermaprhodytesHermaprhodytes Tea PartyTea Party When government intervention is to our benefit not to our benefit or Autarchy Anarchy Bullionists
- 20. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/ Mathematical Physiocrats Mercantilists Smith Neo-classical Non-State Monetarism Ricardo Socialism Liberalism CommonsNatural Virtual Pre-ColonialPre-Colonial South America,South America, South PacificSouth Pacific PyraMMMidaPyraMMMida Cyber CurrenciesCyber Currencies QuantumQuantum Autarchy Anarchy Utilitarians property of the printer & bearer All money is people’s fiat Capitalism Bullionists
- 21. Trade/ Cooperation Politics/ Competition Ethical/ Philosophical Accounting/M athematical Physiocrats Mercantilists Smith Neo-classical Non-State Monetarism Ricardo Utilitarians Socialism Liberalism Commons property of the printer & bearer Georgists Co-op SocietiesSocial Market Democracies Land Reform Societies Autarchy Anarchy All money is people’s fiat Nash Equilibrium Natural Virtual • PerishablePerishable • UsableUsable • No “monetaryNo “monetary authority”authority” • UBI/Citizens’UBI/Citizens’ DividendDividend • ResponsibleResponsible SeignorageSeignorage • Efficiency &Efficiency & ProductivityProductivity with Freedomwith Freedom Capitalism Bullionists
- 22. My Personal Biases • Primacy of human rights & the equality/ equanimity in their application • Restoring the symmetrical relationship between employer & employee, without resorting to an external agent (i.e., government or union • Most efficient use of resources by maximising both utility & profit, rewarding parties for their positive externalities while minimising waste & restoring the commons & damage to them
- 23. My Personal Biases • Solve social problems: – Sharp business cycles triggered by speculation becoming the preferred economic activity & overtaking production – What has destroyed every previous civilisation has been the tendency to the unequal distribution of wealth & power. ~ Henry George • End the “Age of Entitlement” of the rent seeker/grabber & recover the economic rent for the general economy’s purpose – Raise Land Value Taxes BUT reduce, if not eliminate, taxes on income, consumption & transactions (except for the “Tobin Tax”, if it can be collected on the spot) – Democratisation of currency – Free AND Fair Trade
- 24. My Personal Biases • Examine & Prioritise Ethics: Question Laws – Corporations ARE NOT Human Beings! • Maintain Mathematical Rigour: Best Estimates • Use Economic “Laboratories” that test the universal applications of proposed principles • Gestalt Approach Over Gut Fears: Provide Concrete, Lasting & Foundational/ Systemic Solutions
- 25. Open Conclusion "I don't care who writes a nation's laws—or crafts its advanced treaties—if I can write its economics textbooks.“ ~ Paul Samuelson It is from the scope and wisdom of the economists of the past that we must reap the knowledge with which to face the future. ~ Robert Heilbroner “Let no man imagine that he has no influence. Whoever he may be, and wherever he may be placed, the man who thinks becomes a light and a power.” ~Henry George .