The Dismal Science: A.K.A Economics .001, Part I

© 2015 By Bob Litton. All rights reserved.

Dear readers, I originally had intended to make this essay a single exposition. However, as I got into it the ideas, emotions and resultant words multiplied like the sorcerer’s apprentice’s mops, so I decided I had better break it into at least two, and possibly more, essays. I wanted to get the rocks out of my gut. As I write this preamble, I am nearly through with Part I. The composing procedure I have adopted is thus far slightly rambling; as you know, I have a tendency to write “off the top of my head”. But rest assured the substance is not fluff: I have been observing and pondering the economic scene in my homeland for many years now. O God, please help her!

I wrote in one of my newspaper columns decades ago that I have an aversion to economics, which has been dubbed “the dismal science”. But, like nearly everyone else on this globe, I cannot escape its various impacts on my life. I was thinking of excluding among the victims the Inuit in the Arctic and the forest dwellers in the Amazon jungle, but we have read recently of how climate change is melting away the tundra ice and thereby eliminating the surface on which some Inuit have their homes, and how some greedy gold, oil and farmland seekers are invading the Amazonians’ habitat; so, even those reclusive tribes are not excludable from the modern economic seine.

Over the past few years I have tried to organize in my mind the little I know (or think I know) about our capitalist economic system. I tried back in my early manhood to read a textbook designed for Economics 101 courses. I don’t think I got past the first chapter; any academic field that employs graphs and mathematical symbols is over my head. I just checked and saw that Wikisource has produced an apparently accessible English translation of Karl Marx’s Das Kapital, which I will probably at least scan while working on this blog post, but I don’t want such reading to interfere much with my lifetime’s impressions.

That connotation-rich appositive above, “the dismal science”, evokes in my mind two images: (1) the candle-lit laboratory of the mad scientist or wizard, and (2) an above-ground intellectual field so dense and counter-intuitive as to be depressively hindering to the mathematically challenged person (me). I really believe that both meanings are appropriate, even though most people would say that the second is the one intended.

The usual wizard of folklore favors “black magic” that is intended to harm others, and he often is secretive, hiding either in some secret cave or in a vacant castle, in its dungeon or in its tower. According to a PBS program I saw decades ago, Leonardo da Vinci, probably the historical human being who epitomizes such a scientist, reportedly built, in secret, a very large telescope in a tower. Of course, he did not build it to harm anyone; he built it to satisfy his insatiable curiosity about one of his many interests: the stars and planets. The Church, however, did not see it that way; they preferred to view the whole enterprise (when they found out about it) as diabolical. Curiosity has for centuries been a bugbear. (The fact that Leonardo was left-handed did not help either.) A much more homely wizard, the king of Id’s magician, quite often makes mistakes that temporarily harm or at least embarrass him. And the ancient Chinese sorcerers experimented with many plants in their search for the elixir that would spark an eternal — or at least an extended — lifespan; their experiments yielded some poisons, for which some paid with their lives, but they also contributed a good deal to modern pharmacology. So, I see all that as indicating there is no way to avoid the bad in any science, no matter how good the intention and the final result might be. (Examine all the side effects on your medicine labels.)

And now some few words on the second image. There are many out-spoken economists these days, some of whom regularly contribute op-ed articles or columns to our magazines and newspapers. Years ago, I used to enjoy watching John Kenneth Galbraith argue with William F. Buckley Jr. on the latter’s PBS show, “Firing Line”, although I did not completely follow what either said. The two economists I follow now, whenever I happen to notice their columns, are James Surowiecki in The New Yorker and Paul Krugman in The New York Times. Both are, I believe, liberals: Krugman acknowledged as much. Although I do not grasp the thought processes that lead them to their conclusions, I agree with both men most of the time (I cannot recall any instance when I balked at one of their conclusions, although there might have been such an occasion.) They are pretty good at speaking to my level of comprehension. Some of that stuff is bound to have sunken in.

Still, there are some economic facts which I have never understood and have been disinclined, until now, to research. The oldest such matter concerns the old, hot debate regarding the “gold or silver standard” of the 1890s. From my easy chair vantage point, I could not fathom what difference it made which standard was adopted; and, since it had been settled long before I was born, I did not really give a damn. Yet, a related question continued to nag at me: Why do we marry our currency to some pretty but basically lifeless metal anyway? A barter system — what Marx called the “exchange value” of products and services — although complicated to institute, would be much more natural and true to life.

Now I would like to present my overall view of how economics rules our lives.

The world is divided into two classes of people: capitalists and workers. The former invest their money in some enterprise, either a start-up company or an existing company. Usually, the money is bet on an existing company that has already proven it can float; however, venture capital placed in an experimental or innovative effort is not unheard of; and, since the investors are “getting in on the ground floor”, when the cost of “shares” is lowest, has the best chance of “earning” a large “return” on their investments.

Just as with the wizard’s experiments, any number of hazards can cause problems for the capitalists: the company might be part of a Ponzi scheme, a CEO’s errors in judgment can diminish or even destroy the company, the company could be swallowed in a “hostile takeover”, faulty or inferior products might cause the company to lose out on desired governmental contracts or have to recall products, an extended employee strike could squeeze productivity and thus profits, and so on. Some capitalists these days, e.g. Donald Trump, Warren Buffett and Mark Zuckerberg, have gained small fortunes in a single day’s stock market activity and can afford to lose the same amount without missing a step. But for many other investors — the much smaller ones — a comparable loss can eliminate their life savings. Those are the people who define themselves as “the creators of jobs”.

So, who assumes the jobs? Who actually gets the work done? That’s the workers. What I hate most about this separation into “capitalists” and “workers” is that it has been extended from the situation at the factory to that in social spaces: homes, restaurants, theaters and even churches. Of course, social class distinctions in the latter places have been moderated somewhat during the past century, but they still exist in hardly less apparent ways, what with the current movement toward “gentrification” of neighborhoods, the robotization of an increasing number of occupations, and the constant media attention on celebrities — the vast majority of whom are wealthy entertainers, athletes, foreign royalty, and entrepreneurial billionaires. Now we are debating the fairness of income inequity and slicing up social classes into one-percenters, (vanishing) middle class, and working class. Yet the working class and those even lower on the social ladder are reluctant to revolt against this pernicious system because they view the elites as models of what they might become, if only they can get that football or basketball “scholarship” or get an agent to notice them on “open mic nite” at the local bistro or if one of the lottery tickets they are buying today with half their paltry paycheck will just vault them over the rung where hangs that middle-class person. They don’t want to destroy those privileged positions, because they want to attain them.


NEXT (I hope): A more detailed look at the two major classes.


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