All Economic Life stems from a Political and Social Life

To begin, I thought I should confess by stating my field of expertise is not Economics but Political Science, specifically International Relations. My interest in Economics revolves around a recurring problem that I constantly encounter within my own discipline whenever it discusses anything related to Economics. Given my expertise, it is odd for a political scientist such as myself to be fixated on Economics. The Fourth Estate could have delved more into the national governance and legal jurisprudence of a nation-state and how they interact with International Law. The SMP Compendium could have explored more about Council Democracy and the various proposals related to the Work-Standard, seeing how most of the entries therein pertain to economics and finance. It did not have to be formatted in that way, had it not been for an increasingly apparent problem which I am noticing in most economic discourse.

Any serious attempt at researching anything related to Economics will encounter conflicting interpretations. Some tend to be motivated by business interests, others motivated by centuries-old stipulations over opposing Theories of Value. The more pretentious ones were shaped by their personal experiences alone. And then there are those who give myopic predictions and scaremongering intended to further certain political agendas. Most conceptions of economic discourse are fixated on the free market and labor unions, on Kapital and Labor, but never the State and the Totality of the nation-state as a whole.  

If I had to describe Economics, it is this: All economic life stems from a political and social life. The Economy is not meant to be a mechanical automaton driven by constant pursuits of pain and pleasure. It cannot be understood as something which the Totality and State have no absolute control nor should the Economy be perceived as being driven by some form of Predestination-like “Invisible Hand.” Economic life does not occur on a linear, progressive line or even a circular pattern like a business cycle. It resembles more like a spiral defined by the very people who reside in the nation. Familiarity with the different ways of life shared by various peoples is important in Economics as in Political Science, requiring some basic knowledge of Psychology. Unfortunately, as my own research into the Economics discipline has demonstrated over the years, this is not the case among most economists from various schools of thought.    

There is a tendency among economists to treat Economics as a “Science,” which is a problem which also affects Political Science but economists tend to take this notion to logical extremes. Although Political Science is able to be more open to debate and scrutiny since much of it does delve into opposing philosophies and ideologies, the same is not always the case with Economics. It is too easy for economists to become trapped inside an echo chamber of abstract knowledge, where dissenting views on economic life are discouraged and never discussed at all.  

Similar to this problem is the inclination to study economic life in objectively scientific terms, to treat it as binding on all of humanity regardless of political, social, historical and cultural contexts. The problem for economists, especially those convinced that their discipline is somehow an actual Science, is that a lot of their economic models cannot be proven with the Scientific Method and even lack an historical basis. It is difficult to fathom how much of their research can be practical, let alone applicable to everyday life in any particular context. This has frustrated serious research from outside the Economics discipline, preventing any meaningful understanding of how any economy is supposed to function in practice. This applies more so for laypersons not versed in Economics or any other related discipline like Political Science because of problems inherent within mainstream “Neoclassical Economics.”

An example of this is the overreliance on “economic models.” Anyone who has read SMP Compendium entries about the “Vocational Civil Service Economy model” of the Work-Standard will notice that my descriptions are not entirely mathematically-based. What I did was provide the specifications of what the VCS Economy will entail and discuss how it is supposed to function if a nation applies it. A lot of the ideas related to the Work-Standard originated in the Western world and were eventually refined up to a certain extent in Prussia and the former Eastern Bloc and Soviet Union. It accounts for why I am able to articulate the VCS Economy with some competent level of historical evidence and empirical data while at the same time be able to understand Liberal Capitalist economies which rely on Neoclassical Economic theories. That enables me to describe the Work-Standard’s applications within a Liberal Capitalist regime as well as existing and historical Socialist regimes. 

Unfortunately, Neoclassical Economics does not operate on a similar paradigm. Its economic models rely excessively on complex mathematical equations, treating all economic life as mere functions of inputs and outputs. A normative bias prevails where economic theories can only be applicable to an economy already operating on a Liberal Capitalist Market or Mixed Economy, with Planned and Command Economies being treated as afterthoughts. Various unrealistic expectations of psychological behavior are often touted within Neoclassical Economics. 

In SMP Compendium entries related to economic planning, I stated that the VCS Economy and the Work-Standard prefer their own version. Rather than opt for centralized and decentralized planners or even not bother with economic planning at all, I chose a well-defined organizational structure intended to promote Socialization between superiors and subordinates within a chain of command on a jurisdiction basis. I recognized the possibility that not one person has complete access to precise information, which is always going to be a given in any organizational context. It is part of my arguments for why Technology alone cannot overcome that hurdle. And by rejecting the Incentives of Supply and Demand for the “Intents of Command and Obedience,” I was able to describe the Work-Standard and the VCS Economy without the need for a “market equilibrium.”

There is a certain trick about the “market equilibrium” insofar as it depends on some really bad assumptions about human psychology and ontology. Achieving it does not entail producing enough Supply to meet a Demand any more than it involves curtailing Demand to sustain a Supply. Instead, it assumes that everyone will always make rational decisions centered on the most pleasure for the least pain (“the greatest happiness for the greatest number”) with absolute access to flawless information about their choices and can perfectly process that same information to make instantaneous calculations of pleasure and pain. Everything has to be done as a perfectly rational decision without any external influences from anyone or anything. And if any rational decision is going to be made, it has to be done solely out of “personal preferences” and “self-interest” that are never going to change for any justifiable or unjustifiable motive whatsoever.

This sort of thinking is unrealistic, casting existential doubts over the authenticity of anyone’s decision-making. Moreover, these assumptions cannot be applied in any historical or contemporary context. The fact that such assumptions are being made in favor of markets must never be applied exclusively to economic planning alone. After all, nobody in the world knows absolutely everything about what goes on in the world at any point in time. People can communicate with others and pool together everything they know, but not have absolute access to perfectly flawless information because it can happen within any economy. The fact that Market and Mixed Economies are somehow ‘immune’ because of the free market is disingenuous at best and hypocritical at the very worst.

Categories: Philosophy, Politics

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