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ECONOMICS – THE BIG PICTURE (PART I)

July 2, 2015

ECONOMICS  – THE BIG PICTURE (PART I)

Albert Einstein, brilliant physicist, once complained that he wasn’t able to communicate with other physicists at meetings and conventions anymore because everyone there had become so specialized, tended to have their own jargon and hung out with their own kind. It was an accurate observation, and not just in the discipline of physics. Specialization is the rule of the day.

Thus cardiac surgeons and general practitioners have little in common to discuss; bankruptcy lawyers and personal injury lawyers live in different worlds though their paths may cross on occasion when, for instance, a bankruptcy petitioner is in a car wreck or a patient has the flu and an arrhythmic heart at the same time. Generally, however, such is not the case. Patients and clients have specific needs and the professions have responded with specialties to meet those needs. Supply meets (specific) demand.

I think (with some exceptions) that we are seeing the same thing happen in the field of economics from my reading of books written by those who hold forth in the “dismal science” (as some wags have called it). Economists work for governments (foreign and domestic), banks, think tanks, NGOs, international organizations such as the UN, IMF, and World Bank, academia, unions, commercial and industrial corporations, et al. Given the specific interests held by each such entity, it is not surprising (as Einstein lamented in another discipline) that such economists have “become specialized, tend to have their own jargon and hang out with their own kind” at symposia and conventions. Whether this is good or bad may depend upon the interests of those making such evaluations.

On a personal note, I am not an economist though I took an undergraduate degree in the discipline before going to law school. I briefly considered going for a PhD in the discipline and a career in academia but did not. I became a lawyer but never lost interest in economic history or economics in general.

It is clear to me that an economist working for a union and an economist appointed as an adviser to the Secretary-General of the UN have little in common to discuss at a convention or other meeting of economists, but I am not sure that this is a desirable situation. The question of labor rights, wages and working conditions on an international level is, I think, an appropriate topic for discussion among economists irrespective of their specialties given the irreversible globalized economy in which we must live and compete. We are irretrievably interconnected in this day and age and are shortly to be world citizens (if not already) whether we like the idea or not. Instant communication, trade and the free movement of capital (among other things) has accelerated such successful interconnection.

We are approaching a “One-World” tethering of economic interests and performance whatever the political and social makeup of international participants may be whether they have socialist, capitalist, or even barter economies (witness our robust trade with communist states). Politicians in countries around the world will wave their respective flags for as long as they can in their attempts to preserve their power bases and political fiefdoms, but the die is cast.

Giving up political power is painful to those who enjoy its fruits (see the EU with its common currency, Greek austerity abuse and limited surrender of sovereignty by signatory states), but the trend is clear (see sovereignty-busting terms of the proposed TPP).  A future “One World” status across the economic board is, I think, inevitable, and if so, citizens of the world (even though brought into it kicking and screaming) must learn to cooperate with one another in every area of human endeavor if we are to survive our technological skills in killing one another and environmental destruction of the planet.

We are called upon to survive as a group, not as discrete parts. Edward O. Wilson, Harvard professor, has summed up the problem from a different perspective. He writes that . . . . “We all operate by a worldview distorted by the residues of hereditary human nature. We exist in a bizarre combination of Stone Age emotions, medieval beliefs, and god-like technology.” My response? Whether monk or atheist with developed or underdeveloped brains unfit to suit the times, here we are. Now what?

The foregoing is prologue leading up to a discussion of a rather new specialization in economics whose members are known as “development economists.” Theirs is the task (among others) of persuading decision-makers in individual states that our problems are global, that we must understand how all of them connect by cause and effect, that the world’s problems are thus our problems, that we should look upon ourselves as a species and not, for instance, as Americans or Ukrainians and that we should devise more realistic and pragmatic approaches to the world’s problems as a whole. In addition to environmental problems which affect all humanity everywhere, we have other global problems in need of solution which will affect humanity everywhere, problems such as pockets of severe poverty, the threat of pandemics, a dangerous disparity of resource appropriation within and between nations and a perhaps equal disparity in the distribution of  income and wealth economies provide for their contributing members (see our  current failure and that of others to adopt policies that fairly distribute the wealth and income of our and their economies to other than the greedy few).

Jeffery D. Sachs is an outstanding development economist. His now 7-year old book, Common Wealth Economics for a Crowded Planet, is the trigger giving rise to my writing this blog. Al Gore writes of his effort that “Despite the rear guard opposition of some vested interests, policies to help the world’s poor and the global environment are in fact the very best economic bargains on the planet.” I think Gore is correct and that it will be a lot cheaper to correct these deficiencies now rather than later when they have blossomed into full-throttled emergencies with all of the civil commotion and upheaval that comes with it as we belatedly attempt to handle problems that could and should have been handled earlier.

Sachs writes that coming changes will go beyond a mere rebalancing of economics and politics among different parts of the world; that global cooperation will have to come to the fore and that the very idea of competing nation-states that scramble for markets, power, and resources will have become passe;  that the idea that the United States can bully or attack its way to security will have been proven to be misguided and self-defeating because the world will have become too crowed and dangerous for more “great games” in the Middle East or anywhere else.

I think such views deserve to be heard in any convention or meeting of economists, however specialized those attending may be. Those attending need to hear some macro-economic thinking in addition to the exchange of views they may have with their fellow specialists within their narrow specialties and interests. In short, they need to be exposed to “The Big Picture” (and so do we).

I will set forth more evidence-based views held by Sachs in Part II. Stay tuned.   GERALD    E

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