Saturday, August 15, 2009

My Economics and Theirs

Starting with the previous post, about my original international trade idea, this blog will now shift to talking more about my own economic theorerical system, rather than the general chatter, comments, etc. you saw before.

Here is something I ran into by searching self-interest, economics. It is linked to "economist" magazine -- not a publication I will usually be very interested in.

Absolute advantage
"This is the simplest yardstick of economic performance. If one person, firm or country can produce more of something with the same amount of effort and resources, they have an absolute advantage over other producers. Being the best at something does not mean that doing that thing is the best way to use your scarce economic resources."

This serves as a way to contrast "their" economics and mine. I am seldom interested in the standard approach that has been developed in regard to economics. I do agree with the general import of the term (i.e.: economics), so I do not have any problem with the name of the subject category itself. There are some other striking agreements with the standard discussion, but I do not think, for example, that economics is about scarce resources. Linking economics with scarcity seems to be, on the other hand, the standard school's (or mainstream academic's) opening move or opening gambit of some sort. In the quote above, once they have explained what "absolute advantage" is, then they ask about what this producer will do: what the producer's next move (its behavior) will be. This is all preliminary to just piddling about forever which is of course precisely what they want to do.

For myself, I would interrupt right at this first point about "absolute advantage," which point seems clear enough, and point out that whether or not one has some kind of advantage in the absolute, the questions of economics concern how one relates socially to other beings (particularly humans) and therefore, the question is that of how that product that you could produce will be distributed.

This, of course, throws out the whole emphasis on "self-interest" as well as any number of other things.

For example, lets say I have absolutely bigger muscles than others in my society, the question is more that of what I will do with that. It does not necessarily mean I should beat everybody up. That really has so little to do with it. Now we shall assume that the society is capable of some basic economic distribution. Assuming that such is the case there are two choices that are of more merit to consider than going up to the first person I see and punching him (which has also been done, and also reminds me of the way I have been treated by certain law enforcement officers in Prescott, AZ, New Jersey, and Chicago, IL): I can use those muscles to compete, or to cooperate. Many behaviors are likely to be a very complex mix of those two.

So then: going into the matter by first positing absolute advantage (or scarce resources) and then making a big deal of whether one will use it or not use it -- waxing philosophical about absolute advantage vs. competitive (ooops! --- isn't that "comparative"?) advantage as if they are two equal considerations -- misses the opportunity to instead focus on how the social distribution of the resources one possesses will transpire. This is the problem of economics --- which was eventually solved by capitalism.

So, there was your short little economics lesson from my point of view. I am highly pleased, after about eight years of doing this, to be able to extemporaneously write in the subject area of economics and see several points of my own economics theory pop right in there as if it happens all by itself! (Took eight years, really.)

I have -- no doubt -- an "absolute advantage" when it comes to jackSilverman-type economics theory...

No comments: