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Musing economics

July 7, 2009

Economics, a human, social or historical science with the imponderable factor of human freedom making it more descriptive and conjectural than predictive; essentially subordinated to ethics, since economic activity is not an end in itself, but a means for man to devote himself to other tasks eg, spiritual which do have the nature of an end.

In the 18th century British philosopher Jeremy Bentham founded the ethical, legal, and political doctrine of utilitarianism, which states that correct actions are those that result in the greatest happiness for the greatest number of people. For Bentham, happiness is precisely quantifiable and reducible to units of pleasure, less units of pain. Bentham was strongly opposed to then-dominant theories of natural rights, in which human beings are believed to possess certain inherent and unalterable social requirements. An ethical principle totally opposed to the common good ie, the good of all not of the greatest number and which is rooted in God.

Adam Smith

The secularisation of happiness is a characteristic note of the philosophy underlying Smith’s economic study: human happiness as defined in terms of self-interest and the pursuit of pleasure and avoidance of pain. Industry and business should have no fetters, since they are the source of wealth, and wealth is the source of pleasure and the killer of pain. This is congruent with Relativism, a dogmatic philosophy of happiness. “Permitting people to do whatever they desire, as long as it doesn’t harm others brings with it a deep anthropological disorder, with steep personal and social costs”.

The relativist mentality is united to an excessive accentuation of the technical dimension of the human intellect, ie, the activity of the intellect that permits us to control and exploit nature for our own benefit. Consequently, the sapiential function of the intellect which seeks to understand the meaning of the world and human life, truths about the world that can give a sound answer to the question of the meaning of our existence is suppressed[1].

Thus the thirst to accumulate, to triumph, to relax and amuse oneself, to live easily and pleasantly, easily prevails – observable in social and legal expressions of lifestyles, over the desire to know, to reflect, to give meaning to what one does, to help others by means of one’s work, to transcend the narrow limits of our immediate interest.

Thomas Malthus

Malthus’ law overlooked the technology’s ability to increase production at higher ratio than that of population growth. It also didn’t take into consideration God’s providence and the productive capacity of human intelligence; the 21st Century knowledge worker.

John Stuart Mills

A dogmatic rationalist, Mill’s political science deduced from the premise, “the first principle of human nature”: every man acts from self-interest. Man is activity or process; not, however, process of evolution of the Idea, as in Hegel, but material process (matter evolving, transforming itself dialectically). Man in other words, is essentially homo faber, material labour. Any activity turning him away from this will therefore be alienation (Religious Alienation, Philosophical Alienation, Political Alienation, Social Alienation and Economic Alienation) ie, lack of fulfilment of Humanity, a source of divisions and conflicts.

The five alienations mentioned above occur inversely. The beginning of estrangement lie is private property, thenceforward, the rest is nothing but “instruments of oppression” which men keep inventing in order to better dominate their slaves eg creating legal bonds, inventing abstract notions, producing the idea of God and Heaven to console the oppressed and stop them from rebelling…

Karl Marx

Historical materialism: All history is determined by the economic structure of the society ie by the system of production, distribution and exchange and ownership. This is what determines the history and culture of every society.

Matter rather than the Idea is the only reality. This matter isn’t static but continuous. The conflict of opposites (dialectics) in progressive evolution is indeed the inner force of progress (Darwin & Malthus). In other words, progress is a result of conflicts between opposites (exploiters/bourgeois Vs the exploited/proletariat – natural selection and the struggle for life by species. Dialectics is also a scientific method to interpret reality.

Dialectics is like the science of sciences, the logic of all knowledge, the negation of whatever is permanent essence in things, what reduces all to process and becoming, perpetual struggle or polarity of contradictions. It is a philosophy of becoming, of continuous transformation, which discards eternal truths, the ideas of truth-error, good-evil and so forth. In the last analysis, it is a new relativism, wherein the only “absolute” is man, ie, whatever historico-social man does or wants.

Alan Greenspan’s “The Age of Turbulence”

Of all his teachers, Arthur Burns and Ayn Rand – she “…expanded my intellectual horizons, challenging me to look beyond economics to understand the behaviour of individuals and societies – had the greatest impact on Alan Greenspan. Ayn Rand’s philosophy of objectivism encourages individuals to pursue their rational self-interests. Thus she upheld individualism over communism and egoism over altruism. For Greenspan Adam Smith “…remains among my deepest intellectual influences.” John Locke and Joseph Schumpeter also influenced him.

E-business – communication unbounded by geography, space or time – perpetual innovation and global competition. These key factors underpin the dynamism that the world of work is continuously faced with. Hence, the emergence of the 21st century worker: the knowledge worker – a networked person who has to take decisions all the time guided by the knowledge base he/she has access to.

Invariably, work in the 21st century involves thinking for a living. As bottom-line growth is substituted for top-line growth the options open to companies to attain the latter is either through mergers and acquisition or organic growth. The limit to growth via M&A reveals an unavoidable reality: internal growth is driven by creativity (innovation: new ideas to develop new products and markets), an ability that depends more on knowledge workers not financial or physical resources.

Thus, economic systems  are evolving from the industrial-type signified by the era of organisational man, hierarchies, vertical “silos”, top-down command structures and one-way flow of information to one built on services and technological innovations ie, service  and activities with a predominant informational content.


Is it possible that the ambivalence about globalisation is due to how the message is preached? John Gray, a political theorist, offers a view contrary to conventional wisdom “…what is striking is how closely the market liberal philosophy that underpins globalisation resembles Marxism. Both are essentially secular religions, in which the eschatological hopes and fantasies of Christianity are given an Enlightenment twist. In both, history is understood as the progress of the species, powered by growing knowledge and wealth and culminating in a universal civilization.”

“Human beings are viewed primarily in economic terms as producers or consumers, with – at the bottom – the same values and needs. Religion of the old-fashioned sort is seen as peripheral, destined soon to disappear, or to shrink into the private sphere, where it can no longer convulse politics or inflame war.”

Globalisation viewed in this light limits the promises it holds, premised on the thinking that all history is determined by the economic structure of the society ie, by the system of production, distribution and exchange and ownership.

Invariably, this is what determines the history and culture of every society. Man is more than just the principal operating unit of economic activity, rather the human person is the efficient cause who performs varied activities that correspond to his/her vocation using resources, instruments and technologies to transform, bestow meaning and value upon the natural world through skilled performance.

[1] “There are obvious dangers to this [ie, a knowledge society]. Such a society can easily degenerate into one in which the emphasis is on formal degrees rather than on performance capacity.” It can, on the other hand, also fall prey to overvaluing immediately usable, ‘practical’ knowledge, and underrate the importance of fundamentals, and of wisdom altogether.” Peter F. Drucker, Managing in a Time of Great Change

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