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What are we Calling Economics These days..

Discussion in 'Controversial Topics' started by Drabdr, Dec 15, 2011.

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  1. Drabdr

    Drabdr Moderator Thread Starter

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    Brad
    This is from a copy/paste that Nittiley (thank you!!) put in one of the other threads. I found this quite interesting. It tends to be a subset of the OWS. However, I think it goes to a bit more fundamental level of the perception of Economics; Economists; and their perceived roles in Society.

    http://chronicle.com/article/Econom...er/130094/?sid=at&utm_source=at&utm_medium=en


    The Ideology of Free Market Fundamentalism:

    The Ideology of The Kindler/ Gentler Economics (my label):

    of Massachusetts at Amherst in September.

    I am not an economist; nor do I claim to be. But I do know that tools, for a lack of a better word, have their purpose.

    Tell me honestly... how long do you think you will last at an organization by focusing on :

    *secure long-run human well-being
    Instead of.... oh....maximizing short-run output and profits

    I contend that people's perceptions of money, wealth, and what organizations should be doing; is clouding the actual purpose of organizations, and the Psychology of the acquisition of money/wealth is being totally ignored.

    The purpose of a corporation is to maximize shareholders wealth. Any other purpose, will jeopardize it's medium-long term viability.

    So, anyone agree with my general contention? Has basic Economics changed that much, or is it just perceptions that have changed?
     
  2. ekim68

    ekim68

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    So do you think the current economic model we have now is sustainable? It has been the "Free Market" for 200 years now and it's a boom and bust economy....I don't trust the word "Free" anymore....
     
  3. ckphilli

    ckphilli

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    Nobody does, and that's the problem. We can't have a pure free market because of the word 'sovereign'. It will never happen, at least not in my lifetime.
     
  4. ekim68

    ekim68

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    An interesting perspective on that word, Chris......"sovereign".....As if the world is as big as the universe....
     
  5. ckphilli

    ckphilli

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    We could have a free market in a Utopian society. But the effort involved to achieve this type of of goal is unfathomable. We are not a 'kumbaya' world, and that's a fact. It's more than competition also, it's 'who's got the guns and the gold'. All IMO of course.
     
  6. ekim68

    ekim68

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    And, it's not sustainable, IMO....Something's gonna give......I give it 40 years....
     
  7. ckphilli

    ckphilli

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    I think you summed it up right there. That's the goal, make money; period. When people start mixing emotion with economics, it's time to change the channel. Reason being, the economy will right itself. There are a lot of people that are a lot smarter than I that can prove this statement. When economists begin paying attention to emotion, they make mistakes.
     
  8. Ent

    Ent Trusted Advisor

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    I think we need to be careful to preserve the distinction between economics and companies. A company can legitimately have a large number of goals, including profit maximisation but by no means limited to that. As certain individual corporations become significantly powerful on the scale of sovereign countries, I think it is very important that some notion of a corporate conscience is promoted. However I don't think that economics is the right discipline to try to deal with that.

    As to the free market, I'd say it's unwise to suggest the free market is a goal unto itself. It has been shown to work well in many cases, but it does have its weaknesses. Society is actually served best, according to John Nash, "when every person seeks their own best interest and the best interest of the group." If the free market won't provide certain good things to an acceptable level, find a system that will.

    The boom and bust cycle is actually an integral part of the economy (though its roots lie in the psychology of confidence) which encourages people to try their new ideas or simply their business intuition against the markets, and then culls off the ones that aren't working a few years later. While it is often harmful to many people, one should be careful about demonizing it.
     
  9. ekim68

    ekim68

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    Really? Why? Seems to me that in the down situations, businesses get bailed out by the Government...:confused: (Which Businesses for the most part, want less Government....:confused: )
     
  10. Ent

    Ent Trusted Advisor

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    I guess that's because the government doesn't think that people should suffer for making stupid mistakes, disregarding the fact that the entrepreneur on whom the economy depends is intrinsically a risk taker.
    This may be part of the same pattern.
     
  11. ekim68

    ekim68

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    I just wish they'd quit calling it a "Free Market Ecoonomy"...."Market Economy" would do just fine as there's nothing "Free" about it...
     
  12. buffoon

    buffoon

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    If the market were free in the way that "freedom" is usually misinterpreted, you'd be running for the hills, Mike.:)
     
  13. Ent

    Ent Trusted Advisor

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    Which, free beer or free speech?
     
  14. buffoon

    buffoon

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    The second will probably follow the first. How unintelligible will be another question.:D
     
  15. buffoon

    buffoon

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    To answer the question of the OP, I proffer that corporations, companies, industrial sectors, what have you, are not humanitarian organizations. That doesn't make them anti-humanitarian either. The concept of "humanitarian", humane, human has no place in this (nor its opposites), so to demand it is a dire misunderstanding.

    Thus companies engaging in "securing long-run human well-being" won't last very long at all in any market (IMO). Unless they're run and financed by the government or thru private donations.

    Where human well being is derived from commercial activities, it is a pleasing side effect but not the raison d'├ętre.

    Of course this does not apply to the well being derived from getting good returns on one's shares. But that is the desired commercial and economic effect, where it's "human" it's not derived from design.
     
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