Thursday, April 26, 2012

Understanding Ignorance in Economics

Ignorance is important. Regarding the common idea of "market," if we were to ask how or when or where this "thing," the "market," exists, the answer would be that the market, however it exists and whatever the word in fact signifies, depends for its very being or presence on the fact of having persons out there who are willing to be stupid----depends upon ignorance. It depends upon ignorance. Ignorance is absolutely essential.
    Although I could proceed to fill in all the details for how ignorance functions in economics, let's first understand that there is another point of view. This point of view claims that the market requires information. Established economic theory makes claims that market phenomena operate according to the principle of information. Now information and ignorance sound dissimilar, don't they? -so, I think that there is a real difference. The established theory is wrong; the real principle is ignorance. Instead of the claim that the market depends on information, I am making the claim that is depends on the lack of it.
     We set up a conceptual apparatus that explains capitalism with ideas like the idea of "a market system." We may allow ourselves to use the language. That is allowable. To get an alternative wording just change the (grammatical) article. If we change the indefinite article to the definite,the language says: the market system. There is a difference. Nevertheless, either way we put it using language--- "a" or "the" --- capitalism is a concrete phenomenon, not a merely conceptual one. The problem lies in finding out what really exists. Under some other circumstances, like feudalism, the thing that such concepts as "market" refer to may be replaced by something else, so it is important to know what we are talking about. For example, it is not possible to translate what one would mean by a "market" that existed for primitive man, or for protazoa, or planets, or molecules, for that matter, into ideas about capitalism. So, just note here that the phenomena associated with "the/a market" describes a particular way of life: the "market" or "capitalistic" way. So, we see all these easy statements about economics that rely on the device of the word "market."
     Whatever we mean by "market," we do not mean merely the supermarket. Yet, interestingly, the market also is an article! I don't mean grammatically here. That's over. Now I've switched my meaning, regarding "article." (Just like a person on the autism spectrum would!) The market and a market article (for sale in the market) can be conceptualized in much the same way. It is as if the whole market, and I mean the whole capitalist system is one item on the market. Imagine that you go to the supermarket and you get an item called "capitalism," wrapped in shrink wrapping like broccoli.
     The academic bullshit that is out there confusing the public claims that trade occurs based on (that trade is explained by) persons' reference to information they possess. They point out that humans act based on rational reasons. Well, sure. I guess they should. This is all supposed to be profound. If humans act rationally, then this explains market behavior. It explains "the" market -- or "a" market. I guess they are saying that you choose products based on some kind of thinking. They supposedly assess their information. Before acting, the conventional economist says, they think. They refer to information they have, in their heads (now they have cell phones they look at). If you do not have information, how can you say you are a free person? So, we can sense how important these arguments were to the economists who created all this profound stuff. It relates to our understanding the world we live in, so, it is important. OK, it is important. You win.
     Anyways, we want to know if all that is the real explanation. I think not. Today, with Google and all that, there is reason to suggest that they do not even know which items they are trading. Not to mention whether, for example, it was manufactured in a sweat shop. But you could just use the example of advertizing. Advertizing is such a big industry, right? I guess so. If I am the customer, when exactly do I pay for the advertizements I always get? What do you say? Let's move on (although I know what you did: you may have said the advertizing price is included in the price you pay). Not only do they not know which actual items they are trading, they do not even know the prices. Where did all this rational understanding of the product and its price go? I find it perfectly plausible to suggest that the whole standard textbook world is garbage. I don't really feel comfortable saying that. Yes I do! I feel good about saying that! Not so easy but it is really a kind of a flawed, garbagey version of reality. Even if students are in abeyance. Really. That stuff does not pass muster with me. I don't believe it anymore. I do not think it even comprises any useful understanding. And that, too, is ignorance. But another kind. This is the ignorance of the economist, not of the markets.
     This is ignorance too, but this time the total ignorance of the economists and their student-spawn, which has to be distinguished from the merely relative ignorance of the economy, which is, as we mentioned, is at least a real thing. As that awful man "Marx" would say, "sensuous reality." And he was pretty sure of himself. Why? Why did he think that? We could call the actual, existing ("sensuous," if we use the language of the Moor) economy an "existing" ignorance, or a functional ignorance, not an academic department. Market ignorance functions. It is an ignorance that is crucial to "the" / "a" Um---the economy. There is a distinction being made here between ideology and material or functioning reality. The economy is peculiar; that is for sure. Because, it represents all the contradictions of the human race, all of its ignorance.
     Inquiry into economics is a valid preoccupation. We can and may look for insight into market questions, matters of "economics." Why do persons behave as they do in the economy? Is it really based on rationality? The entire "economic" field needs to re-opened, re-figured. Then, I think, we could reveal that economics is based on ignorance. And by revealing that, I also know that you would be removing a little of the ignorance. That must be done carefully, though, because you will get a result. Finally, with care, we remove that great economic ignorance. I wonder: what did they mean by "The Dismal Science"?

    "Dismal science." What the hell does that mean? I don' know --- The human race is full of flaws and imperfections though. Alfred Marshall saw a different world. I don't see how he was dismal; his version of things was kind of rosy and utopian, an idealist who wanted to understand the world, which of course has to mean the society. His way of understanding it was that of assuming that capitalism was rational.
    Marshal wrote a big treatise in the 1880s that I looked. I could feel the honorable, decent person. So, he was looking for kinds of answers in the area of human society, how humans work, interact, etc. In reading the opening of that book I can get a vision of a person (Marshall) seeing the ideal, rational world, as he thought it had been created or was being created, at that time. (So he wanted to create the book version?) He speaks of "man," of man's concerns, and how man operates. It's a nice description. I don't want to run it into the ground, just to do damage to it in your honor.
    His writing comes at a sort of peak of the capitalist experience. His world is definitely on capitalism's upward path, a peak in the sense that the system hit in his moment in time. (English time.) Still, it was just a book. Who really cares? There were a half-dozen other, different schools of thought current, so Marshall was one of many. Judging from one of his titles (of a book) he wants to find the "Principles" of economics. He is really looking for the principles of how life works, or how human beings operate, but in the capitalistic condition (he seems to think that condition universal). Like most persons within the institutions called academia he is somewhat narrow and biased, or, I should say, specialized.
     We often strive for a perfect rationality, or for some kind of science. This has been quite an obsession of the West, since the French Enlightenment, has it not? Marshall was trying to do that, too.

    It is based on economists like Marshall that we claim, today, that things like information constitute an explanation of behavior in the world of markets and capitalism. What if, instead, behavior in capitalism is based on flaw, or ignorance? In fact, what if the whole world is based upon defect, and, in the original period when capitalism was developing, there was enough of it to base a capitalism on? That would be a whole different way of looking at it. Marxism is a little like this because there it is all based on conflict, or struggle. For Marx, there is always a struggle. This makes sense. Everything is based on flaw, or conflict. Unfortunately, that whole system (of Karl Marx) depends on class division, so in that case the conflict is embodied in the social classes as an extension of the same class phenomena that existed historically up to that time. I don't have time for that discussion now, but I am what I am suggesting is that capitalism is based upon ignorance. Also it is based on the manipulation of ignorance. There is more explanation to be provided here, but what I will say is that those "gaps" of ignorance, of (lack of) knowledge, are probably in some way where the profit lies. At base here is the idea that the basic conflicted nature of European society, with it all its violence and ignorance, is the very basis, the very ground, upon which capitalism takes root and thrives.
    So, I don't think I convinced you, but I think that the ignorance theory works just as well as the information theory. 



  2. what are the necessary conditions of capitlaism? there need be a large number of people that are naive, who believe it is not what Warren called "a rigged system." Of course, she is probably perfectly correct technically. My point is that, if persons had believed that, there would be no capitalism. There needs to be the large base of "many stupids" for the system to work. We see the naive T.V. shows, for example, in the 1950s, like "Perry Mason." Still today, persons still refuse to think that law enforcement officers do any wrong things. Then what else would they be stupid about? There is therefore a contrast, and two kinds of people: the more cynical or knowing businessman, and the naive persons who have to believe there is goodness in the world. These are groups that have to exist. The same persons could even be both. Why not? Schizoprenia, they used to call that. Actually it is "multiple personalities." I believe so. (Or Jack believes so, anyways!)