Notes for Rethink of Economics

===== Still being compiled: being moved from individual chapters

Notes first referenced on Home Page

Note on use of word "economics". We use the word "economics" very broadly, because we believe a rethink or reframing should not be confined. Broad in two directions. 1. As we use it, the word "economics" covers not just the strict field of economics but also its subfields or related fields, such as banking, finance and business. However, the field of management, when focusing more on techniques, is not so closely related - but it is not entirely excluded. 2. As such, it includes or refers to around a dozen things in these fields:

The science or area of study that is economics (and its subfields or related fields);
The theories that this area of study generates and uses;
Scientific paradigms, which govern what kinds of issues are researched, accepted and taught; beliefs about the structure of economics, such as neo-classical, Marxist, Doughnut Economics.
The teaching of economics;
The realm of practice;
The professional discipline of economics, and the rules that govern it;
The field of economics, which combines the above;
The system that is 'the economy';
The human economics activities that constitute the economy.
The repercussions of that activity on the wider world.
How theories and paradigms influence practice and how practice influences those.
Attitudes and mindsets (often called "culture", "worldview", etc.) towards economics and within the field of economics, which govern all the above at a deep level.

So the question "What is wrong with economics?" is addressed to each and every one of those. 1. What is wrong with banking, finance, business and economics as strictly delineated? 2. What is wrong with each of those dozen things? For example:

Is the science of economics biased or too narrowly focused to deliver theories on which it is reasonable to rely?
Are the theories misleading?
Are the scientific paradigms too narrow?
Is the teaching of economics biased, especially politically?
Is the practice of economics healthy, in delivering 'the good life', which we call Multi-aspectual Overall Good?
Is the professional discipline of economics riddled with corruption
Is the entire field of economics distorted?
Does 'the economy' generate Good or Harm? Is it bloated with Useless stuff?
Are the human economic activities good or harmful?
Does economics activity generate obesity, addiction, climate change, biodiversity loss, etc.?
Do theories and paradigms steer economics practice towards Good or towards Harm or bloatedness?
Is the culture of economics (theory-making, practice, etc.) healthy or unhealthy? Is economics driven by selfishness and idolatry, or by generosity and well-founded trust? What is the impact of those who worship 'Mammon'? Are they admired and applauded or curbed? And why?

In fact, we could add "And why?" to each one of those questions. Usually, when we use the word "economics" on its own, it should be reasonably clear from the context which is meant.

Finally, we use "economics" as an adjective or qualifier in many places, because we need to differentiate it from the meaning of "economic" that signifies frugal or efficient. For example, an "economic theory" refers to a theory in any field that is efficient and elegant, governed by Occam's Razor, while "economics theory" refers to a theory about economics as such. Likewise "economic practice" and "economics practice". HOWEVER, in the draft, we often mistakenly use "economic" as in common practice, when we mean we should use "economics"; these mistakes will be corrected gradually.

Notes first references in Chapter 1, the Introduction

Note on Real and Ideal. With Adam Smith, Ronald Coase and others, we seek to understand 'real-world' economics, and hence question extant theories. Where we might depart from, or go beyond, Smith and Coase is in how we understand the 'real world' in all its diversity, coherence, joy, sorrow, good, evil, despair and hope. For example, whereas Coase was content to study real markets, we also look at what markets do in and to the rest of life and reality. We want, if possible, to find a way of understanding economics that is guided by what some call ideals, which, when people try to implement it, does not need to be compromised (even though details must be worked out) because it already caters for all kinds of real-world eventualities without reduction in principle. Our approach to the real world is enabled by a philosophy with a clear understanding of its diverse aspects and how they 'hang together'.

Notes first referenced in Chapter 3, Perspectives We Employ in our Rethink

Note on 'Real-world Economics'. The Real-world Economics Review brings out monthly papers, many of them asking the questions we are asking. But are they truly "real-world"? However, most of their papers tend to come from an anti-neo-classical, anti-capitalist perspective, so that most of their criticisms and solutions are meaningful to this community rather than others. Insofar as capitalist and/or neoclassical economics harms the world, they have a point: real-world economics cannot be based on these. Sadly, many of the contributions are really just yet more theory that is unlikely to work in the real world. However, the value of their papers is to highlight problems, but especially also to draw attention to aspects of the real world that have been overlooked.

Note on the Labour Movement. The Labour movement was 200 years ago, and still is largely, inspired into being by the plight of labour oppressed by wealthy uncaring owners of businesses. Recently in the UK, it is the Labour movement that has resisted transition away from fossil fuels, on the grounds of losing the jobs of workers.

Note on Dooyeweerd. ===== explain why he is best philosopher of meaning and also of everyday life so far, and some of his background.

Note on Comparing Suites of Aspects. See Tabular Comparison of Suites of Aspects.

Note on Meaning and Being. Dooyeweerd differs from most philosophers, in turning our attention from entities or processes to Meaning, which, he argued, is their very foundation. Things do not just exist or function, but exist-as and function-as, where the "-as" refers to an aspect, which is a "modality of meaning", and hence also a "mode of being" and "mode of functioning" (terminology Dooyeweerd used). (This echoes Wittgenstein's claim that we do not just see, we see-as.)

For example, a pen exists-as and functions-as a writing instrument by virtue of its meaningfulness in the lingual aspect, -as a colouring instrument by virtue of the psychical aspect, and (sometimes) -as a status symbol by virtue of the social aspect.
Similarly, money exists-as and functions-as a token (lingual), of value (economic), of exchange (social), -as a measure (quantitative) and a flow (kinematic), -as owned (juridical), -as a motivator, even an idol, (pistic), and so on. (Might this explain Adam Smith's various functions of money?)

Dooyeweerd's view, grounding being and functioning in meaningfulness rather than in themselves or each other, has important implications in both theory and practice, in theory because it shifts the focus from entities to aspects, and in practice because it (a) avoids marginalising values (overcoming the seeming Is-Ought dichotomy) (Chapters 5,7), (b) reduces the pressure to define types of thing too precisely, (c) encourages us to consider the functioning of economics more precisely (Chapters 6,7), and it (d) frees us from misleadingly attributing too much agency to things like money or banks (Chapter 8), and (e) brings the value and functioning of non-human, such as plants and animals and planet, into economics. Dooyeweerd's view breaks the 2,500 year old tradition, continued since the Greeks, of treating existence as fundamental. For more, see Basden 2019.

Some find the metaphor of ocean of meaningfulness helpful. Just as it is the ocean in which fish swim and exist and that enables them to swim and exist, so aspects constitute an 'ocean of meaningfulness' in which we, and all things, function and exist, and which enables all functioning and existence.

Note on Animal Behaviour. Though Dooyeweerd argues that animals function as subject only up to the psychical aspect, some argue that some animals function as subject in later aspects too but only in limited ways.

Note on: Are Religions Narrow?. Some may be surprised at our claim that religion motivates an holistic viewpoint, believing that religion makes people narrow-minded. Narrow-mindedness among religious people has two elements, (a) they have let tribalism contaminate their religion, (b) they believe that what they believe applies (holistically) to all and when society rejects it, society is going wrong and it is their duty to uphold it.

Note on Common Good. ===== to be written or found in older versions of rethink.

Note on "Reality". Many academics dislike talk of "reality", politically disliking what they call "essentialism" and "realism", and clinging to notions like the social construction of reality. Dooyeweerd allows us to understand the reality of social construction: it does exist, in that social reality is actually generated by humans functioning in the social aspect. To Dooyeweerd "reality" has two sides, fact-side, encompasssing all that exists and occurs temporally, and law-side, the basic aspectual laws by which it all exists and occurs. Even social construction of reality is itself a reality, insofar as there is some aspectual laws that enable it to occur. It is in this sense that we use the term "reality". It is deeper than any knowledge of reality that we might believe we have, and which might be mistaken. In this way, Dooyeweerd was close to Critical Realism, but he distanced himself from it for making reality into a theory.

Notes first referenced in Chapter 4, Meaning, Mandate, Mindset

Note on Frugality. The RLDG were divided on whether efficiency should replace frugality as the norm of the economic aspect. Dooyeweerd [NC,II, 67===] clearly assigns efficiency to the formative aspect. In this Rethink, we adopt Dooyeweerd's view but remain open to the possibility that the norm might be efficiency. Frugality seems to have the economic aspect saying to all its sibling aspects, "I am being careful to minimise my demands on you, so that you are not hindered from flourishing." The norm of an aspect applies in others, and frugality in analytical functioning, for example, avoids the confusion by restricting reasoning to what is relevant (Occam's Razor).

Note on Saving and Frugality. Tendy et al. [2015] reports many statements people made about saving, many of which are about saving for a house or for children. Such saving is not only to build up funds for the future, but also an exercise in frugality here and now. It prevents us spending so much on non-essentials that would waste money. Whereas most respondents in their survey left it at that, a couple recognised the frugality benefit of saving: "=====" and "=====". (Had this survey not been taken during the 2015 culture of spend-spend on me-me-me, might more have recognised or at least admitted this benefit?) This is yet another piece of evidence that the meaning kernel of the economic aspect is frugality rather than consumption or production. Chapter 4 discusses frugality, Chapter 7, non-essentials.

Note on Polanyi's Discussion of Embeddedness. Karl Polanyi [1944/2001] was concerned that economics had become "dis-embedded" from other spheres of society, especially in its form as a self-regulating market (SRM), in which all things - goods, labour, land, money - become treated as nothing but commodities, and all spheres of society are "subordinated to its requirements" [p.74]. This is the first of what he saw as a "double movement", with the second movement being defensive counter-reaction by society, which feels threatened. The dis-embeddedness of the SRM is not just a fact but is harmful, and Polanyi's hope is that, after some cycles of this, an equilibrium would set in. Though Gemici [2006] finds philosophical antinomies in Polanyi's view, DeMoor [2013] argues that these can be overcome with Dooyeweerd's ideas of aspectual irreducibility and inherent coherence coupled with Dooyeweerd's theory of social institutions. DeMoor finds other problems in Polanyi, especially that it it vague. Elsewhere we take DeMoor's use of Dooyeweerd further in enriching Polanyi.

Note on Hayek's Defence of Economic Isolation and Arrogance. Contrary to Polanyi, Hayek [1988] argued, that self-regulating markets are normatively necessary and what Polanyi called embeddedness is anti-normative, because he reduced all to evolution and biotic life as the sole origin of meaning. The unfettered market is the most efficient way to feed mouths of a growing population. Our Rethink, of course, rejects that, because there is more meaningfulness in Creation than mere biotic survival, but it is interesting that Faria [n.d.] finds a logical inconsistency in Hayek's use of the purposeless mechanism of evolutionary survival to find purpose, and also that in reality Hayek's proposal is self-defeating.

Notes first referenced in Chapter 5, Values

Notes first referenced in Chapter 6, Functioning and Repercussions

Note on Quaker Capitalism. Cadury, Lever Brothers, Josiah Boot, Thomas Cook in the UK (some called "Quaker capitalists"), established their firms in order to provide some societal good to overcome evils like drunkenness and disease among the poor. It is those firms that lasted a century or more, thought after that time they deteriorated and so collapsed. For more, see e.g. Thomas Cook and Quaker Capitalism.

Note on Aspectual Understanding of Ostrom. Elinor Ostrom's 8 principles for success in governing complex economic systems may be seen as meaningful and Good by reference to aspects. The following is from Stephen McGibbon, 26th Feb 2024:

"1. Commons need to have clearly defined boundaries. In particular, who is entitled to access to what? Unless there's a specified community of benefit, it becomes a free for all, and that's not how commons work. Spatial aspect
2. Rules should fit local circumstances. There is no one-size-fits-all approach to common resource management. Rules should be dictated by local people and local ecological needs. I think this is Social
3. Participatory decision-making is vital. There are all kinds of ways to make it happen, but people will be more likely to follow the rules if they had a hand in writing them. Involve as many people as possible in decision-making. Formative
4. Commons must be monitored. Once rules have been set, communities need a way of checking that people are keeping them. Commons don't run on good will, but on accountability. Juridical
5. Sanctions for those who abuse the commons should be graduated. Ostrom observed that the commons that worked best didn't just ban people who broke the rules. That tended to create resentment. Instead, they had systems of warnings and fines, as well as informal reputational consequences in the community. Juridical
6. Conflict resolution should be easily accessible. When issues come up, resolving them should be informal, cheap and straightforward. That means that anyone can take their problems for mediation, and nobody is shut out. Problems are solved rather than ignoring them because nobody wants to pay legal fees. Aesthetic
7. Commons need the right to organise. Your commons rules won't count for anything if a higher local authority doesn't recognise them as legitimate. Juridical [AB: also pistic?]
8. Commons work best when nested within larger networks. Some things can be managed locally, but some might need wider regional cooperation - for example an irrigation network might depend on a river that others also draw on upstream. Social [AB: Also aesthetic: harmony?]

Notes first referenced in Chapter 7, Good, Harmful, Useless

Note on Capitals and Lowercase. Capitalized Good, Harmful and Useless refer to 'the' fundamental versions of these, often to aspectual Good and Evil. Lower-case good, harmful and useless refer to specific instances of these, or to collections of them. Capitalized tends to refer us to what Dooyeweerd calls the law-side, and lower-case to the fact-side of reality.

Note on Basis of Harm. This is a philosophical issue. Most philosophies seem inadequate for this. Oversimplifying somewhat, traditional subjectivist philosophies define harms (and good) by what we happen not to like, objectivist philosophies induce harm from repercussions of past functioning, while Scholastic philosophies refer to authoritative lists of virtues, often rooted in Aristotle. The flaws of these three approaches have been long discussed. Dooyeweerd points us in a different direction, towards meaningfulness: each aspect defines a distinct kind of Good and, from the biotic aspect onwards, a corresponding kind of Harm. See Table ===.

Note: Raworth's Diversity. A possible exception to this is Raworth's Doughnut Economics. She sets out seven principles of "how to think like a 21st century economist" so as to avoid the harms she lists in her "ecological ceiling" while avoiding various harms of dropping below the "social foundation". This is to be welcomed, but the picture is rather fragmented insofar as she does not justify why each component of the ceiling or floor is included.

Note on Toxic Culture. Toxic culture is a loose term, but often refers to pistic dysfunctions like idolatries and hidden agendas among management, coupled with ethical dysfuctions like management seeking employees as merely serving their own interests and even protecting themselves against employees.

Note: Harmonization. (We avoid saying "balanced" because that presupposes only two aspects in a zero-sum game, whereas "harmonized" involves multiple aspects and is not zero-sum.) This harmonization cannot be

Note on Constellations. Even these diagrams are neither complete nor fully accurate, but are an initial attempt after 20 years' experience to express the constellation of aspects. The full set may be found in Chapter 9 of Basden [2020] or in the Dooyeweerd Pages.

Note: Idolatry. See the section on idolatry in Chapter 4.

Note. Ecological Footprint. Calculating Ecological Footprint takes into account materials, pollution, energy, transport, resource depletion, biodiversity, climate change emissions, and other things. Ecolgoical Footprint calculators may be found at: =====, =====. One remarkable thing about Ecological Footprint for economics is that is correlates negatively with almost all human wellbeing indices, which all correlate positively with each other. See EU Report on Beyond Growth, Figure 23, p.94.

===== following from r7 24 July 2023; to be merged with real note. Note. Ecological Footprint. The ecological footprint of most affluent cultures is around three whole Earths, and that of humanity as a whole is =====; see Table 7t-ecolfootprint.

===== Table 7t-ecolfootprint.

Every economic activity occurs within, and contributes to, a lifestyle. The Ecological Footprint of an lifestyle may be expressed in two ways, either as the total number of Planet Earths that would be needed to sustain the lifestyle if all humanity took part in it, or its inverse, as Earth Overshoot Day, which is how far through the year all the resources available on Earth, which are required by that lifestyle extended to all humanity, are used up. The total Earth Overshoot day for all humanity's average lifestyle is ===== and its Ecological Footprint is ===== Earths.

What this means is that the Earth cannot cope with an abundance of Useless economic activity that drains its resources for no good purpose. The ferrying of biscuits between two cities drains fossil fuel resources. (It also wastes human time; that is an opportunity cost.)

===== the following should go elsewhere. If we wish to continue our Useless activity, are we not saying that we are more important than other people on Earth, demanding that they cut their Ecological Footprint in order to allow our Useless activity?

Reducing an Ecological Footprint from 3.0 Earths to less than 1.0 Earth requires a massive reduction in affluent footprints - no mere 20% drop, but a 67% reduction.

The last time humanity's average Ecological Footprint was less than 1.0 Earths was 1969===== check that. Decades earlier, people might be excused because they did not know, but since 1969 our knowledge has continually increased, and now we have no excuse. This is one major reason why the issue of Useless economic activity, and especially of non-essentials is now extremely important. It should not be ignored by the field of economics any longer! (Christians might recall ==='s "In the past, God overlooked ... but now ...".)

Note: Global South Economies. The production of food and other essentials of life in Global South nations is frequently wrecked by climate disasters like drought and floods, and those nations must then devote considerable economic activity and money to damage recovery and importing essentials, rather than to other economic activities that are more productive of added Good. Given the responsibility orientation of this Rethink, we must link knowledge of that state of affairs with the question of who is and was responsible for the climate change that is having such impacts, especially taking into account the long lead-time of climate change - the nations and people of the Global North. Should not those responsible be the ones to sacrifice to help the others. (We might remember Jesus' words: "To those whom much is given, from those will much be required.") That G7 nations are beginning to help e.g. Vietnam become less dependent on coal is a good example of that. More is needed.

Note: Aspect Details. For more details of each aspect, see "http://dooy.info/aspects.smy.html".

Note: Football. This actually occurred in the north of England 2022-23.

Note. Statistical combination. If p and q are proportions of non-essentials and bullshit, and they are statistically independent factors, then the combination is: p + q - (p*q).

Note: Excessive enjoyment. Is it not often found that when we demand and get excessive enjoyment we find it palls, it becomes boring and we no longer really enjoy it? The Law of Diminishing Returns? Are those in affluent societies really more happy and fulfilled than those in economically restricted societies?

Note on Right to Happiness. Is happiness an essential? "After all, a man has a right to happiness," remarked the man who had divorced his wife to take up with a younger, more exciting girl, on hearing of his ex-wife's suicide. With this story, C.S. Lewis [===] argues "We have no right to happiness" [[Lewis ===].

Note on statistics on non-essentials. The claim that dysfunctional attitudes lie at the root of all kinds of surfeit of non-essentials comes from observation, because the careful emprirical research needed has yet to be carried. Suggests a research project.

Note on Legal. Of course, not every decision should be decided by expensive lawyers; rather, it might be better if economists, politicians, pundits, and indeed all people, were educated more in what makes a good legal decision.

Note: TCD, Town Centre Development. Shown is a screenshot of a knowledgebase constructed by Gareth Jones in 2008, of expertise on how to assess each aspect of town centre development. This is an inference net, in which the lines show inferences from one concept to another, usually probabilistic concepts linked by Bayesian inference. Here it is used simply to show a complex example of qualitative analysis.

Note on Pandemic Figures. On 8 April 2020, the UK Road Haulage Association reported that 46% of the UK truck fleet was parked up because nobody was purchasing "non-essentials" (the word they used). A year later it was found that the clothing sector had reduced by 50% and fuel by 25% (in round figures). These figures could give some indication of the proportion of the economy that is non-essential: nearly half the goods transported or bought were "non-essential".

Notes first referenced in Chapter x. Traditional Problems in Economics

Note on Calculating GDP. In the UK at least, it takes a year of effort to collect and analyse the data to calculate GDP. Often, an initial guesstimate is made for GDP over the past year, which then has to be corrected a year later. See ===link. We have suggested calculating GDP by assessing the amount of Harm and Good done by economic activity, in ways similar to current processes. However, if calculating Total Good is not so easy, then another way is to start with current GDP (as GDP = Total Good + Total Harm + Total Useless) and subtract from it twice the calculated total Harm and the calculated total Useless.

Created 14 July 2023. Last updated: 9 November 2023 ch 4,5 headings; word "economics". 28 November 2023 p notes. 20 December 2023 RWE. 28 December 2023 Polanyi. 3 January 2024 Hayek. 19 January 2024 labour. 30 January 2024 n-svfg. 2 February 2024 n-rnrw. 17 February 2024 Animal Behaviour. 27 February 2024 ostrom; links. 20 March 2024 n-econ rw, n-rlty. 28 March 2024 emph. 29 March 2024 n-ridl from Ch1. 1 April 2024 n-mgbg rw.