Wednesday, August 9, 2017

The Evolution and Perversion of Economics

The study of economics did not originally have to do with markets - the word originates as Greek "oikonomos" (household knowledge) which referred to the sound management of an estate and the allocation of human effort that was required for the members of the household to produce the necessities they required, preferably before devoting time to conveniences and luxuries.   Economics had nothing to do with the world outside of the household, except in rare instances in which a household produced more than was necessary and could barter with other households for their own excess.

The principles of a well-managed house was scaled up to the management of towns, cities, nations, and nowadays even the world.   It has been stretched well beyond what it was intended to manage, and stretched to a scale at which management may not be at all practicable.  Thus considered, if economics seems unfathomable, it is only because it has overstepped the bounds of its original intent.

The needs of a household and the means to achieve them are quite straightforward, such that even uneducated peasants can manage to figure out how to get by on what they have and to improve their lot over time.  But when men who consider themselves to be smart and sophisticated engage in the foolish behavior of presuming to speak on a grand scale about the needs and means of every household in a nation or in the entire world, complications invariably arise.

Economics is a simple concept that is only made complex by struggling vainly to amalgamate that which should likely not be amalgamated, and complexities and paradoxes arise when such broad and sweeping statements are attempted.  It has, in other words, overstepped its bounds and become entirely insular and divorced from reality.   The academic economist is a man who has bitten off far more than he can chew and is too arrogant to spit it back out and deal with it in smaller bites.

This is not to say that there is no use for the principles of running a household, or even a production facility – merely that when the efficiency of production and trade has swelled to overshadow the meaning of those activities, economics has been misapplied and is quite likely more damaging than beneficial.

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