Wednesday, January 6, 2010

free market view from Santa Fe, New Mexico

Everyone uses the term "free market." What we call "free market" is a matter of balance. Should the matter of the market be framed as it is classically, or rather neo-Classically? --- with one product, firm or person being balanced against another? This idea of equal individuals corresponds to what is called the neo-Classical, and in this view we think of many individuals, with the word "individuals" referring to different sorts of individuals, whether the individuals in question are individual persons, units of a product, etc. Or we think of many firms, but in any case, there again is the idea of individuals, or a number of equal, competing units, and they are supposed to find some equilibrium balance.

However I am not sure this represents the best way to look at the the world of economics and at its necessary component of balance. There are different styles of dealing with the topics signified by this word, "economics," and that is why, in using the word "economics," we may or may not mean to indicate social or cultural phenomena. In Loretta Napoleoni's way of casting the economics world, there is a term, "rogue economics" (I wonder what the Italian would be), which is on the side of "economics," whereas she calls the other side, which is to say the social or cultural part of life "politics," citing Hannah Arendt in defense of her position. But in the world of economics (here we mean both the study thereof and the human behavior thereof), language morphs. It changes with individuals, who, accordingly, have differing ways of stating things.

Things do have to come into balance with one another. This is the trick of economics --- it is to achieve balance. But I do not think that balance always has to work in the way the "classic" economists of the 20th century have chosen to believe. As we said, there are many ways to frame it. And...times change, after all.

Look at my post "therapist reform." That is about balance, but it is about balance between pecuniary or monetary interest on the one side and social interest on the other. Yet even pecuniary or monetary interest has deep social roots in the history of capitlaism. But, as we move into the present, how about balance between the new economy and the old economy, or balance between government intervention and free markets? All these are balances. They should not be "off book," ---- or, off the balance sheets!

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