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Economics is a social science or discipline that analyses the production, consumption and distribution of goods and services, or from another perspective, ‘wealth.’ It often asks what is valuable at any one point in time by evaluating the worth of goods and services as they are exchanged. (Drawing on the notion of a point in time, and what we know about the modern capabilities of quantum computing, might suggest that any failure to properly understand where value lies and of what it consists, in immensely complex chains – for example in stock-market deals – could result in hugely disastrous market crashes.) Where this evaluation may be difficult to accomplish (for a number of reasons) this would seem to make economics a normative discipline. Schumacher suggested that its models and theories are based on value systems and embedded views of human nature and referred to meta-economics, as some of these values are not made explicit in the discussion of wealth and its distribution.

Schumacher actually compared two different economic systems in order to illustrate this point: one was the western ‘materialist’ system where the standard of living is measured by the amount of annual consumption – and which therefore seeks to achieve maximum consumption along with optimal patterns of production. The other was a Buddhist economics based on the notion of the ‘right livelihood’ and the ‘middle way’ – aiming for the maximum of human well-being with optimal patterns of consumption.

It is interesting that presently there seems to be more media attention given to research on economic notions of ‘well-being’ and even the search for drivers of happiness.

History:

Economics emerged in and around the 17th century, in line with a value system that differed markedly from those in existence in medieval times. Until then most of what was needed to survive was produced and exchanged locally, within ‘tribes’ or local populations. Robert Heilbroner makes a distinction between markets, where food, materials for building shelter, and clothing might be traded, and ‘the market system’. (The Worldly Philosophers, p.27.) ‘For the market system is not just a means of exchanging goods; it is a mechanism for sustaining and maintaining an entire society.’ Markets existed, and not just for barter, but generally, profit was frowned upon (seen as ungodly) and there were severe restrictions on those who attempted to sell to promote their own self-interest.

There are of course, examples of early traders who did undergo long voyages, (and thus were trading globally) but the suggestion is that these voyages were an end in themselves, and as much about discovery and adventure – ceremonial, bonding and social voyages – rather than for the ultimate motive of profit. A corollary to this might be that these ends are still in existence today (i.e. the bonding of the boardroom, the religious pursuit of profit, Thatcher’s yuppies who took to heart the free market forces and the limitation of the state’s role, and took the role of competitive individualism as their mantra for professional activities.)

In line with the emergence of economics, Beinhocker says, of the period between 1750 and the mid-eighteenth century,

‘According to data compiled by the Berkeley economist, J.Bradford DeLong, it took 12,000 years to inch from the $90 per person hunter-gatherer economy to the roughly $150 per-person economy of the Ancient Greeks in 1000 BC. It wasn’t until 1750 AD, when world gross domestic product (GDP) per person reached around $180 that the figure had finally managed to double from our hunter-gatherer days 15,000 years ago. Then in the mid-eighteenth century something extraordinary happened-world GDP per person increased around 37-fold in an incredibly short 250 years to its current levels of $6,600…’ (p.9).

The evolution of economics:

Earlier it was called political economy, but then it was suggested in the 19th century that ‘economics’ as the short form of economic ‘science’ seemed to suggest a wider scope for the subject.

There are basic contrasts between micro and macro economics – where the micro involves households, individuals and firms and macro looks at ‘entire’ economies and growth, unemployment, fiscal policy, inflation etc.. Normative economics looks at prescriptions – how economics should work, while positive economics looks at describing what occurs. As suggested above, the distinction between these two might not be as clear-cut as one might expect.

There is also economic theory and applied economics, rational and behavioural economics, mainstream and heterodox economics, econometrics (where economic theories are tested empirically, i.e. through observation, as opposed to via controlled experiments) and experimental economics.

Classical political economy

Adam Smith’s The Wealth of Nations described land, labour and capital as the three drivers of production and wealth. He also recognised that the division of labour could create great efficiencies, while perhaps causing problems for the common man whose world view was created by the day to day features of his job.  Smith was the originator of resource allocation theory, suggesting that in a competitive but self-regulating space, resource owners will deploy these most profitably – resulting in an equal rate of return and satisfaction of economic needs of the people. The market was seen as a ‘mechanism’ (note Newtonian tone) acting as an ‘invisible hand’ paradoxically leading people selfishly pursuing their own interests to create social benefit. Self-regulation meant that the market was its own guardian, and didn’t need the interference of government. Prices are kept from ranging away from the cost of production via public demand. The market also encouraged risk, creativity and invention. Smith also referred to two laws: the law of accumulation and the law of population. Via the accumulation of capital society could benefit as money was invested in more machinery and means of production. However, while more machinery would mean more workers, which would in turn mean higher wages that would then dissolve profits – the law of population meant that ‘the demand for men, like that for any other commodity, necessarily regulates the production of men.’

Other early  political economists were Malthus, John Stuart Mill and David Ricardo. Ricardo (writing just after the introduction of the Corn Laws, which practically broke Britain, in order to protect the landowners’ interests) looked at the distribution of income and conflict among landowners, workers, and capitalists. Ricardo saw that resources such as land are limited, and would result in problems emerging from the growth of population and capital, keeping wages and profits down while increasing rents. He grasped that the interests of landowners and capitalists were at odds and that the landowners were at war with the community. This position made Ricardo very popular with industrialists…

At a time when people were starting to question whether nationhood could be linked to population numbers, Malthus saw that human populations tended to increase, outstripping food production. One increase was geometric while the other was arithmetic. He also questioned the idea that a market economy could naturally create employment, suggesting (like Keynes in the 1930s) that savings (Smith’s accumulation) would create unemployment as countermanding spending. Malthus’ views were very unpopular. Malthus’ view was that, ‘Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to provide subsistence…that premature death must in some shape or form visit the human race.’

It is of note that (as Beinhocker points out, p.17), while some modern economists generally agree that economics should be studied as a complex system, and others agree that it has much in common with the idea of evolution, it was, of course, Malthus who inspired Darwin’s thinking, and that in fact much of our thinking about evolution derives from early economic ideas on wealth and population.

It is often important to account for the analogies and metaphors inherent in and between disciplines as these can account for some circularities and blind passages that seem to recur. Just as cognitive psychology might have suffered in part from its reductionistic reliance on the ‘brain as computer’ analogy (when the sorts of computers referred to in the analogy were created in order to attempt to replicate just one small part of how our minds work), so it is possible that thinking on economics might have been held back by earlier hesitation about exploring ideas about complex adaptive systems. There have been many works written on this subject: Veblen, Alfred Marshall, Schumpeter and Hayek, Nelson and Winter, for example, but it is generally agreed that mainstream economics has mostly been concerned with the model of economics as a form of self-governing mechanical system.

Although it seems that Smith, Malthus and Ricardo were opposed to one another, in fact it seems that partially where they differed was at the level of focus that they applied their thinking to. However, they saw social systems driven by the search for profit, market roles, a place for government and the force of competition. They also applied their thinking to technology. Smith described in great detail the ways in which pins were made, and how the division of labour and application of technology had their part in this process, but his thinking seemed to focus on a closed technological system. Malthus and Ricardo however were present when technology started to explode upon the scene, as more innovation came in, (the steam engine, the spinning jenny, iron working) it became apparent that with such innovation might come an upset to the ordered mechanisms of self-governing economies.

John Stuart Mill (worth writing about in far more detail) differed from these three thinkers in that he came of a more utopian approach. The social changes that were fostering early economic thinking had produced factories where social conditions were utterly appalling. Worse, because of an insistence on mechanism and natural law, it seemed to some that these appalling conditions were just a natural consequence of the market, and that while there was horror running through the fabric of these workplaces, it was akin to that of ‘nature red in tooth and claw:’ impersonal laws at work with no need for intervention.

Mill, following Robert Owen, Saint-Simon and Fourier, was convinced that a better way could prevail. Rather than encouraging the lower classes to revolt as did the Communists, utopian idealists wished to persuade those who held the power to change their ways, to reform. While the means of production might be functioning according to the laws described by Smith, Malthus and Ricardo, what happened to what was produced was actually down to a number of factors that could be controlled – and was not subject to natural law.

Am trying to focus back in on my original assertion about what I was going to study. This was whether there are differences between subjects and their degree of separation from the www, and their primary ontologies. Although I was going to use economics and psychology or perhaps sociology and their attendant ontologies to create a spotlight with which to examine this question, this would still involve looking at the ontologies of a range of other subjects.

I was going to use economics as a focus, as I think it perhaps represents something that might be wrong with how we talk about knowledge in general and reasons for studying, working together, collaborating – ultimately: trust.

A lot of work that we do is tied into research programs that are underwritten by governments as being part of some economic promise. For example, the last Labour government’s education policy was predicated partly on the premise (stemming from research in the 1950s that re-emerged in the 1970s (need to find and cite)) that countries with a more highly educated population tend to do better economically. Thus following Tomlinson’s recommendations, the Diploma system was introduced, only partially, which in fact had the consequence of introducing a system that did the opposite of what he had intended.

This however, being loosely accepted: that the more highly educated a population is, the more wealthy their country, it would seem to follow that it makes sense to make use of emerging technologies to help to educate this population. There is a body of research on this – how technology can be ubiquitous; it can get to the places that teachers can’t, and can help to make learning something that is always ‘on’.

There are actually so many problems with these assertions that it would take a whole other blog post, or perhaps even, essay, or perhaps even, thesis to go into them – but I’m happy to accept that 1) learning is basically a Good Thing and that 2) technology can help to mediate it. I might perhaps then reluctantly accept that it’s possible that if you have a lot of learning, you might end up creating more wealth for your country, however some of the data for this is possibly correlative rather than strongly causal.

But to get back to my original question, it is whether there might be said to be an economics of ontologies? Could we find out whether there are some subjects that lend themselves, via their objects of knowledge to be shared and studied on the web? And that therefore are more accessible and therefore might end up generating more money?

It seems at first glance, that physics might be one of these subjects. Physics research can be large scale and tend to be carried out by large communities who share resources.  Is there something about the nature of physics that makes people more likely to collaborate? Are they perhaps true seekers after knowledge who are less motivated by economics / reward than say, chemists? (Apologies to all you pioneering, truth-seeking chemists out there.) Would this then mean that by the very nature of a subject, if it attracts more people who care more about discovery, or truth, then they may well as a result, collaborate more, and could easily use technology in order to do this, but they care less about creating wealth, so that all web-based subjects that can easily or practically use the web to be studied are never going to be worth funding by governments who only care about short-term goals?

This seems on the face of it, rather facile, but it does intersect with another debate about why there still seem to be less girls studying physics, and in general, science subjects. (This debate appears worldwide, but I shall for now confine myself to the UK.) There was recently some speculation about whether the Big Bang Theory was attracting more people to the subject, but this generated some scathing responses from researchers who had determined that take up of physics was in fact governed by early influences.

Just reading Repko’s book on Interdisciplinary Research. Very interesting to consider that,’ Interdisciplinary research is a decision-making process that is heuristic, iterative, and reflexive. Each of these terms – decision-making, process, heuristic, iterative, and reflexive-requires explanation.’

I’m finding this very intriguing, especially in relation to one of our courseworks that involves outlining the process involved in searching for and (hopefully) finding material on a randomly selected question that has something to do with the web at its heart. It is interesting that although we think of searching as ‘seeking’ there is sometimes an element of filtering or of looking for material that might reinforce one’s original ideas.

Have also been reading on economics in Afghanistan, Intelligent Agents (not secret ones), hypermedia, (just discovered The Humument – an old favourite of mine is about to be released as an app) bots (including narrative bots and social bots – here’s one I made earlier) and privacy. At present these don’t strictly appear to be to do with my original question, but some of the topics keep re-presenting themselves to me and so I’m keeping an eye on them, to see if they might develop into a personal theme. Have also been reading on spimes, hyperreality and skeuomorphs, and came across this blog from Matt Jones on The Internet of Things.

Have a good introduction to Sociology (Giddens) but need to also check to see what isn’t in it, as it’s quite an old copy.

Am now looking at a book on economics called, ‘Markets not Stakes: The Triumph of Capitalism and the Stakeholder Fallacy.’ This is written by Professor Patrick Minford and was published in 1998. He outlines why he thinks that the stakeholder culture was mistaken and how capitalism was thriving. The stakeholder concept was supposed to find the middle way between ‘failed socialism and free-market capitalism.’ The blurb discusses the way in which regulatory proposals were to create more rights for workers, allow the government to override the pull of market forces on investment in an attempt to curb the 80s short term corporate culture.

I am particularly interested in this because it would seem very easy now to say how obviously mistaken this view was. However, it goes on to say that ‘Stakeholding is no different in essence from interventionist and redistributive taxation, its only difference is its lesser transparency, which therefore deceives people into believing it to be innocuous.’ Although he then apparently goes onto argue that it destroys incentives (the meat and blood of economics, according to ‘The Armchair Economist’ ) I’m initially quite interested in the transparency issue.

When I worked for a FTSE100 company that was quite concerned about corporate governance and hence ‘transparency,’ a word which we hear all too often nowadays, the other word that was always brandished was ‘stakeholders.’ Generally the more your job was to do with explaining figures and processes to people, the more you had to take ‘stakeholders’ into account. This actually meant not just anyone who had a right of some sort (surely just one’s bosses in a monolithically hierarchical company structure?) to poke their nose into what was going on, but those who felt that they ought to have a right. Or those, like me, who were just very, very curious about how it all worked. The more stakeholders there were (in a PLC serving most of the country’s households, that was at least 18 million) actually the less possible it became to be transparent. I’m increasingly convinced that the possibility of transparency decreases exponentially in any very small company (say, 7 or fewer employees) or any company that has over say, 300 employees, just because of organisational factors. I’m also wondering whether this is not accidental, but actually deeply tied into company size (depending on its structure, or how the power gets passed around). So am quite interested to read this book and see what comes out.

Am reading it alongside ‘The Armchair Economist’ which is interesting, but is leaving me feeling vaguely unsatisfied at present.

Mors ubi dira fuit vita salusque patent.

So, to expand the first blog post a little: what I think is nagging at me is this sense of a range of ‘objects,’ of pieces of ‘knowledge-meat’, or ‘currency’, that are consumed or traded within their own disciplines. Sometimes these objects of knowledge have the same names in other subjects, but they mean different things. And across disciplines the means of making them edible, civilized, tradable can be hugely different. Traditionally these bits of ontologies, of data (they are sometimes data) are going to somehow be examined, discussed, prodded, perhaps measured: quantified or qualified in some sense. In the past this might have been described on paper. These days, some of us (perhaps not that many, globally) have the web as a means of mediating discovery and knowledge acquisition. There are many things that can be done with knowledge on the web: it can be hidden, it can be spread, it can be created, it can be pushed around. If tiny bits of data somehow fit with the tiny little pieces of the structure of the web, then one might suppose that a sort of true picture emerges. However, again, something that has nagged at me is how so much of our thinking is analogical, or metaphorical. So that true pictures are actually very hard to locate using reductionist mapping – see Wicked Problems, for example.

What I think might be part of one of the questions I want to pursue, is to do with how the web might change the analogies that are implicit or embedded within disciplines. Sometimes the process of collaboration can bring out these assumptions. Sometimes, collaboration is hugely impeded by them.

For example, one of our widely used assumptions or analogies that fascinates me, is that which describes electricity. Electricity has long been portrayed as a commodity. Walter Patterson (a physicist by trade) has written at length on this subject, in a book called, ‘Keeping the Lights On.’ The traditional picture of electricity is of something that ‘flows’ like water, and can be cut off, traded, conserved, or wasted. Entire forests have been destroyed in the pursuit of the subject of electricity and our consumption of it. Generations of schoolchildren have suffered sleepless nights, worrying (somewhat misguidedly) about global warming’s fatal pendulum hanging over the Polar Bear every time they put their heating on (along with the location of the calorie  – another rather elusive and misleading concept.)

Patterson says, “How many times have you heard or read some energy specialist refer to ‘energy production’ or ‘energy consumption’? These people are supposed to be experts. Surely they ought to know one unbreakable law, the First Law of Thermodynamics, the law of conservation of energy. No one produces energy. No one consumes energy. The amount of energy in the whole universe remains the same.”

He then goes on to describes a host of assumptions that arise incorrectly out of our making electricity a commodity to be traded, the most simple being that arising from the regulators who are allegedly looking for the best deal for the household market – a low unit price does not equal a low bill – the holy grail for the ‘consumers.’ To me, having worked with the UK’s largest energy company and, in particular, with their hard and soft data, it’s clear on a fairly elementary level that describing our relationship with electricity like this is going to cause anxiety for the ‘consumer’. It describes a selfish market. It’s all about measuring how much we use, and not the quality of our relationship with it. Too much = red, not very much = green. It’s almost a little bit childish. Imagine designing an app to somehow map our relationship with energy. It would have reds and greens, wouldn’t it?  It would be about ‘a lot’ (scolding) or ‘a little’ (caressing tone of voice- well done.) It would be great to break from this model and look at different ways of being technical about how we are with energy.

Even as I’m doing my preliminary, slightly distracted, coffee-table pre-reading, this strikes a chord with me. A book I picked up a couple  of weeks ago, written by Stephen Landsburg is called, ‘The Armchair Economist.’ (In the manner of many inhabitants of armchairs he keeps disappearing just when I want him. I’m also wondering if The Spy in the Coffee Machine can see him from the kitchen, and if so, whether they should talk. Never mind.)

The first chapter of this book starts boldly with, “Most of economics can be measured in four words: ‘People respond to incentives.’ The rest is commentary.” He then goes on to describe, or perhaps, hypothesise, how making cars more safe kills more people, as people drive more safely in more dangerous cars. Landsburg continues by saying that economics begins with the assumption that all human behaviour is rational. I’m presuming that part of the rest of the book is to decry this notion triumphantly. It is very fashionable nowadays (and seems to cause great joy for the evolutionary psychologists) to show how entirely irrational we are; however I can’t help feeling that there is sometimes a confusion in the literature between say a system of perception, or of governance that overcorrects, and the net result that that has for the movement and/or survival of its owner. (I know, feeling something isn’t really academic: it’s another question to explore.)

So, now I have economics and markets intruding a little into my original speculation about how the concepts or metaphors embedded in disciplines might be creating pictures that aren’t entirely correct. It’s certainly the case that while markets have their own language, they also trade in the languages used by the disciplines that come together to create the products or objects on sale. And now, for some of us, the sorts of things that can be traded, over the net for example, are elusive objects, which it might be worth while trying to pin down a little further. I’m worrying that some of this sounds as though I’m just talking semantics. I do intend to explore this further and show how it’s not just trivial misunderstandings, but deep ones that maybe re-cast our notion of the world to some extent.

As far as a methodology goes, my approach to research is often about contingency. Particularly interdisciplinary research. I don’t believe that using a wholly empirical, top-down filtering method is always going to work, as this assumes that there is an explicit pool of knowledge out there to be refined. My very subject matter says that this might not be the case. So, although I intend to use the traditional method, and my next step is to get my text books on economics and psychology/ sociology, and to read and annotate findings from them, I will  also read a lot of not-quite academic, coffee-table stuff that gives me a feel for whether I would be happy to say, sit and have lunch with the people who are writing. And, more immediately, I’m suffering from a nagging sense of not having figured out what the correct referencing procedure for blogging is. I’m used to using hyperlinks and checking they’re still live every now and then. Suspect I might need proper references.

I also haven’t yet drawn out my reasons for an interest in psychology, but, quickly, this is because I think that in the pursuit of truth (which should arise somewhere when looking at how subjects are affected by the web), it is is probably going to be interesting to look at what drives people to co-operate and trust each other when working together within specific subject areas that use specific ontologies that might or might not be affected by the emergence of the WWW.

I am now releasing these thoughts into the wild, where they can roam about in a  sort of purgatory of waiting for approval.