Monday, December 29, 2014

Modern Economics: A Quick Look

The reduction of economics to science has destroyed the ability of people to see value that is not monetized, to the gross impoverishment of society (even when material profits have never been higher). People who cheerfully tout the superiority of "modern" to "ancient" society are dealing mostly in caricatures, which they turn into facts by manipulating mathematics. Also, I observe that many of them assume a view of "modern" that is incredibly narrow (excluding the 19th century, for instance, and even much of the 20th): "modern" society thus becomes the latest vision of a "return to Eden" that has yet to occur. 

People who want to make money these days in the US become, by and large, administrators (with degrees in economics, business, political science, communications, and various related fields that are all aptly euphemized under the title "marketing"). Administrative work consists largely in creating opportunities to squeeze money from people and institutions for spurious value (no "value added" to justify the expense that administration requires).

Why does college tuition continue to rise into the stratosphere? Administration. The people taking the money are not your professors, your instructors (who will soon outnumber the professoriate), nor your janitors and groundskeepers. They are deans, sub-deans, vice assistants to the provost, etc. Why do banks and car manufacturers require public money? Administration. The people taking the money are not your line-men, your mechanics, your bank-tellers. They are mostly middle management (with CEOs and CFOs and their like representing the flower of the cancer, not its root). Why are healthcare costs so large? Doctors and other providers are not hell-bent on making large sums: many of them work appalling hours for less money than the people who trained them (and the trend is to pay less and less to the providers, who are increasingly forced to avoid private practice and become the mercenaries of large corporations). Again, the people raking in the dough are middle managers, who sit at desks and fill out forms and pass absurdly high bills back and forth (from the middle manager in the hospital to the middle manager in your insurance company to you, and your jaw hits the floor when you realize that your ER visit cost $7000, and you must pay it all out of pocket).

When you investigate closely what it is that this middle management does to justify its increasing (and in my view unsustainable) expense to society, you find that it is engaged in a kind of legal piracy. Where it used to be "economical" to deal directly with the people you wanted something from (e.g. with a professor, a doctor, or a local banker--even a local politician), you must now call upon some middle manager (or a call center run by middle managers), take a number, and wait for a bill that will always cost as much as possible (and will cost more over time: next year, it will more expensive). You become used to this phenomenon; indeed, some of you are so used to it that you don't bother to wonder why it is that aspirin, tuition, cars, houses, justice, and basic healthcare cost so much more all the time. You don't stop to look at the deals other people (including some "poor" and "Third World" people) get from their providers (largely by having no time or infrastructure to impose the costly regime of middle management upon a public understandably eager to avoid paying a pirate for the right to live their lives). You accept the regime of extortion as "the way things are" even when you go to "fix things" (usually by voting for a change in the identity of your extortioner, as though swapping one face for another were the crux of the problem: it isn't).

The solution is both simple (to understand) and difficult (to apply in a practical fashion). Simply put, you must avoid doing business with middle management. Don't waste time talking with them, paying them, reforming them, voting for them, etc. Instead, you must build alternatives to them. Recreate relationships with service providers who exist without middle management. This will not be easy (or even "cheap" in the short-term; in the long-term, however, it will be much cheaper than any scheme that involves paying the pirates their protection money). You must put away the notion of being a consumer. There are no passive customers in a real market: instead you have to offer something to get something. You have to be trustworthy yourself, and have the acumen to recognize for yourself when someone is trying to take you for a ride. No "consumer protection" agency is going to help you (unless you give them real money, and even then, I would not trust them--whether they were public or private). You have to realize that abstractions are meaningless without some kind of concrete environmental referent. I don't care what the GDP is doing: it is a meaningless thing, since its rise might just indicate the proliferation of piracy rather than the creation of something really good (real value). Growth is ambiguous that way. I care what is growing, how it grows, more than that some growth occur. Middle management is eager to sell you growth, without drawing your attention to the fact that it wants to grow at your (and the world's) expense, via a process of piracy whose moral ethic is, "Make more money, no matter what: more is always better, no matter what the fallout is." If you like that ethic, then buy into it with your eyes open, instead of falling for the commercials that repackage it as something less brutal or short-sighted (like Adam Smith's capitalism or Karl Marx's humanism).