philosophistry economistry

I see that there are a number of ways to perceive most things. I have always liked the idea behind philosophy- the idea of attempting to make sense of the world. This is the basis of what we call science, now. Making sense of intangibles is something that starts internally and then branches off to any number of paths.

When I look out there at how people choose their world, it seems to be ordered by which path they chose to take. Each one gives a vista that is unique to its own meanderings. Once on a path there are many branches, and it is always possible to turn around and walk back, to take an earlier branch that can lead to a different perspective.

What I see in people is that there is a feeling that there is a race going on; whoever gets to the end of the path first wins, or you’re running out of time and there just isn’t time to ponder what-if’s as you go. Keep to the trail and don’t get sidetracked by those little paths that don’t go somewhere obvious.

Economics is something enormously important to the society I live in. In a way it is written into the landscape here. The founding of the country was, in a way, an economic choice; the argument that resounded with many was that of freedom of trade, freedom to build businesses. It was also a revolt against taxation, against a government that seemed too far away and that used the taxes to benefit those far away, with too little benefit here. And it was also a bunch of smugglers who were about to see their income reduced by a new scheme of that government that would benefit the general population, but at the expense of ruining their illicit trade- these are the people who funded the revolution.

It was also a rejection of monarchy. Freedom from the social mores, the layers of rank and privilege. This, too, was seen as a chaotic venture- if you don’t know your place, won’t you waste a huge amount of time trying to figure out where you stand in comparison to your fellow man? This was an argument against the idea of equality. While it seems that we made that choice, there appears to be a wish to see some as innately better than others, and the country has spent the past two hundred odd years codifying how to make sure that the better classes have legislative and legal rights to promote their interests above others. We have never gotten rid of that adoration of the royalty, and transfer it to whomever we can see as royal, special, better.

This seeps into our economic system in a number of ways. We have a study of economics that is famously difficult, famously deep and mysterious. We have “Game Theory” to justify actions and rules, sets of arbitrary scenarios to which rules of logic are tested and results tabulated to come up with what must be the most rational response, and at the same time, we are surprised when people on average don’t act rationally.

There is a tension between simplicity and complexity. For science to work, it is easiest to start of reductively; find the basic foundation that the rest is built on, and work from there. In some places this works wonderfully- in mathematics we have arithmetic, which can be applied to represent just about anything, so long as the right form of question is found. It can represent the entire world, at least so far as we can tell.

In some way, arithmetic is a tool that justifies mathematics as something that is infallible. And it is, to some extent. It works, and it works the same every time. I say it is a lot like opening your eyes; if you have sight, every time you open your eyes, you see. It works every time. But, mathematics is a lot more like comprehension than it is arithmetic- while you see something, and you can look at a rock and it will look the same every time, the closer you look, the more you realize that what you see is an ever changing understanding.

The basic concept of philosophy that became the scientific method is that you work on previous knowledge and test it. You look at the rock and say “it’s a rock”. Then you try to figure out what “rock” means, and start looking at what its properties are- hardness, density, structure. The closer and more intimate you get to “rock”, the more “rock” becomes a complex arrangement of different parts- first different types of rock, then the molecules, then atoms, and smaller and smaller. Coming to understand those leads to figuring out how the rock was formed- was it pressure? Was it lava? Was it lava and pressure? Chemical reactions between different things at different temperatures? It turns out that “rock” is structure, history, chemistry, any number of things, and it never really returns to simply “rock” after that.

This is a path. Once you have wandered down it, the vistas that you see have changed you and changed how you see the world. The way that you have been informed becomes structural to how you view the world around you.

In economics there is a similar path, but it is mixed up with the social mores. On the one hand are the rational rules, applied to moderate transactions. On the other is the legal and philosophical underpinnings of how the economics are recorded, metered, the prism through which the data is viewed.

From my perspective, much of our economics is based primarily on the relationship between only two parties- the seller and the buyer. This applies to work (wages, compensation), to banking, to fines. Caveat Emptor appears to rule the day, not just in warnings, but in the philosophy behind how our judicial system deals with money and banking; if you can be convinced to sign something, the economic advantage or disadvantage is held within that agreement, and it’s your fault or your gain.

As one person put it during a conversation, “usefulness has a very simple definition, one that provides a pillar of free-market societies: desirable for exchange.” I love this definition, as it is apparently simple, looks logical, and is about as close to a perfect fiction as is possible. The statement holds within it a range of privilege that is, from my perspective, stunning. This is permission for anything possible- and at it’s most simple definition, one that exists outside of societies, in a neutral space with no outside forces, it is true. Desirable for exchange means that one party has some use for the thing to be exchanged.

This is similar to the way that economic rules are phrased. “Right to Work” rules are a similar simple set of rules based on the idea that anyone is free to work for whoever they want, and any employer is free to hire or fire as they please. The concept is perfectly true for a society where everyone is perfectly equal and no one needs to work. I don’t know where that is, really. If you were born into a wealthy family, then those are rules that are perfectly justifiable for you; because you don’t need income, the employer has no power to influence you into a less than desirable position. On the other hand, most of the people in the world don’t have that benefit, and the less family wealth a person has, the less choice they really have in matters of work. At a certain real point, an individual’s choice is often either to live through crime or accept whatever terms are available to get a job because the barriers to starting a legal business are too high.

In the “useful is anything desirable for exchange” paradigm, this is a rational extension. The person needs a job to survive, and therefore any job offered is useful. Between the two parties it may even look beneficial all around- the employer gets a worker at a rate that allows for profit, and the person being hired gets income in exchange for work. Fine, it’s perfect- that’s Capitalism at it’s basic.

But, to paraphrase another person in that same conversation once said, Capitalism is a nearly perfect engine, if it is allowed to operate without influence. That point being that Capitalism works in a perfect world, but in a world where people stop looking at efficiency in what they are doing, and attempt to exploit other factors, the Capitalist engine winds up requiring controls to prevent too much exploitation on the basis of power, rather than efficiency.

Here in the US we have a stratified social order. It hasn’t been stratified primarily by inheritance for much of the history of the country, but it has always struggled with the urge toward royalty; the idea that families have better genes, and proof is in their economic standing. Families rise, and families fall, and every few generations there are dynasties that control the country to some extent. Our judicial system and our banking system are in a constant state of tension between the words of the Constitution and it’s warring principles that everyone is created equal, but money makes some more equal than others. Our economics looks at short term issues while ignoring long-term.

Access to capital is a great example- the more money you have, the less you pay for access to other people’s money. The less money you have, the more you pay for it. This makes some sense in that economic theory states that there is more risk in loaning to a person with less money as they don’t have the means to finish paying. This theory is proven by the data in that poorer people end up making payments late more often. In short term thinking, then, this is true- poor people are more risky for bankruptcy. But, because of the higher interest rate, the banks have recovered far more of their loans at any given time from a high interest (generally low-income) borrower than they have from the low interest (generally higher-income) borrowers. So the real losses are less, but the way they can are reported make them “higher” losses. This is a perceptual bias, and creates a self-reinforcing problem in that the person with lower income will suffer more and have a harder time paying the higher interest rate- we don’t really have any proof that this is structural to income, or if it is a problem created by the method of calculating “risk”.

It’s a problem of what path you are on. If you have mostly experienced beneficial returns from the economic system, then it looks like it is a pretty fair system that works well. If you’ve have mostly dealt with the opposite, then this looks like a broken system that punishes people for their lack of net worth. All too often, for those at the bottom of the economic scale the institutions that do make money or goods available on a loan basis do so at rates that no wealthy person can conceive of- rates that dwarf the person’s income, with penalties that are severe, and mostly legal now. These predatory companies are all owned and supported by people who live outside of the poor community, and they earn a very good rate of return, and get to pay fairly low taxes because they often get to claim full losses on loans that have been paid back many times over.

I think it’s a combination of the problems of people who are on paths and don’t want to look beyond what they see as benefits. In Seattle most prostitution is purchased online at about 4PM from an office computer, according to some recent studies. This is probably common. Those are all “useful” exchanges if one is deep down one path where the problems with that are on the other side of a hill that they rarely visit. Then it’s just something that two consenting adults do, and the buyer gets to remain blissfully unaware of what sort of exploitation the other is under- is it just easy money? Seems unlikely considering the stigmatism against sex work in this country. Is it voluntary? Perhaps, but only if voluntary allows for it to be the only thing that person can see to do. Is it abusive? Only if you look at the statistics and history of sex work; it isn’t that common for someone to go onto the streets alone to earn money through sex, most are brought to the trade by someone who has some level of power or coercion over that person.

Low income, low skilled work isn’t really all that different from sex work in that the person rarely sees another choice. The outside forces are certainly less- it’s unlikely that there is a Pimp there coaxing you to do something, and the work you do likely won’t be as socially unacceptable or with as much risk of violence. But it’s too simple to say that there’s another job that you could work. If all the jobs are similar, then there isn’t any real choice. If there are no lending institutions to help start a business and you don’t have family money, then it’s unlikely that is a viable option. If that is where you live, you are probably having to work to support yourself and/or your family, making school something other than an option.

This is simply not visible as anything but a concept to many people in this country.

The opposite is also true- when you grow up in poverty it is very hard to see the benefit to work that isn’t labor. You simply don’t have a conceptual ability to understand that someone can get paid for thinking, as opposed to laboring. They know that the people earning the highest incomes in this country don’t pick up shovels or hammers, they use a mop only if they have a whimsical notion that cleaning is a way to meditate. Useful is something that manages to pay the rent or unclog a toilet, not an idea or a concept.

I guess I am far more on that utilitarian side. What is useful has to have greater breadth than the exchange between buyer and seller. To my perception, that is a view of a person in a perfect little glade, or an idyllic island where the plant that generates their electricity and the farm that grows their food and the people that build their houses and vehicles and computers are all far on the other side of mountains. I am living closer to that glen than to the dark side of the mountain, but I didn’t grow up here. I grew up working, moving, struggling. I don’t have that belief that an idea should pay more than the shovel, and that puts me at a disadvantage in this type of economy, this sort of society, with the mores of this country.

For me to learn to live in that privileged glen, I have to give up the paths that I have walked down, leave the people that I have learned to care about, give up the morality of poverty, and I don’t really know how to do that. I don’t know how to un-see what I have seen, what I have learned, and to accept this life of caveat emptor. It seems there has to be another way. I can see the problems with embracing any one of these views- that it puts you on a path you don’t want to leave. But this path looks like it ends only in misery.

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