"People are vulnerable ... because they don’t have an accurate view of the economy to begin with.” Robert Reich This resonates with me. I feel that our shared common sense cannot make much sense out of the story we are being sold today, about the economy. Why is it so hard to make sense of this story? It's not you. It's the story. It is obsolete. Incomplete. And fundamentally flawed. It is a story we inherited from the closing decades of the 20th Century, that starts out as a 19th Century social narrative of PROGRESS into an infinitely receding frontier for endless market expansion through technological innovation and economies of scale that gets reduced over the course of the 20th Century to GROWTH as the simple numerical increase in the volume of qualitatively undifferentiated transactions measured in prices paid in money from one period of measurement to the next, severing all common sense connections between quantities of money and quality of life, and replacing common sense with the nonsense that more is alway better. We are being sold a story of the economy as the production and distribution of goods and services through markets for allocating scarcity through price, roiled by the forces of Creative Destruction. We are being told that we each and all must work hard to produce and consume more, so that the markets can give us more. In exchange, we are promised: 1. that more will always be better; and 2. that we will each, as freely self-determining market participants, will be free to determine, each for ourselves, our own personal and individual share of the more that the markets give us. We sold that the markets always get it right, except when they don't, and that GOVERNMENT is bad because it oppresses through regulation our freedom of self-determination in the markets, except when the markets fail. Then Government is needed to shore up the Markets, and get them going again. Civil Society is marginalized. Finance is trivialized. All social decision making is reduced to this mythical battle between Markets and Government, private vs public, policy vs price, shared vs individual, coercion vs. FREEDOM! It is a very violent, contentious, conflict-ridden way of describing our uniquely human way of being in an artificial world that we make together, for ourselves to live in, through our technologies, out of the world of Nature into which we all are born, as a mutual aid society for sharing an abundance of technology solutions to the everyday problems of all of us, as everyday people, living our best lives under the circumstances every day, through networks of connections for enterprise and exchange using money as a legal instrument for effecting transaction between people separated by distances of time, place and social connection that is also the social energy through which society directs our individual insight and initiative towards some activities and away from others.
Tim MacDonald’s Post
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As we wind down the week and head into whatever endeavors lay ahead, I wanted to share a little casual reading (attached to a little more in-depth reading should you choose). This week, it was noted that the bond market is heading towards a record year already. It is troubling news (issuers are locking in rates for fear of long term inflation and future high interest rates). Many of the causal issues are explained in this brief summary of a lecture given over 60 years ago by respected economist Ludwig von Mises called "The Six Lessons". The complete text is available in the attached summary via PDF. Cheers and enjoy! WRD https://lnkd.in/edDiM5qk
What are Mises’s Six Lessons?
mises.org
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Learning Ambassador II and Safety Committee member at Amazon TUS2 Fulfillment Center / Seeking Remote Position at Amazon in Marketing, Publicity, Community Mgt, Learning/Training, Content Creation, Public Policy
#StevosBusinessBook of the week: In This Economy?: How #Money & #Markets Really Work by @KylaScan Reveals the hidden forces driving key economic outcomes. @CrownBooksNYC https://lnkd.in/gbj3J5ds #ad #StevosNovelIdeas #economics Want your new #book reviewed, promoted, or considered for this designation? DM me for info.
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An expert in sociotechnical systems change, strategist, executive coach, and facilitator.
Read my latest (link in bio) on the sociotechnical system we all misunderstand: the economy. Here's how it concludes: "This isn’t a utopia that starts with a blank sheet of paper, but by exposing these faulty premises, we can start to build anew. Perhaps the biggest premise to abandon is the idea that the economy will thrive by the ‘invisible hand’ of the market, and instead recognize that it is made. Hell, Adam Smith who wrote of ‘the invisible hand’ only used it three times across all his written work. Two hundred years later, Milton Friedman and the Chicago School of Economics picked up the term and ran with it, weaponizing the term and “cementing this belief that the market is this omnipotent and infinitely wise thing,” according to Liu. It’s not. We make it every day and we can start to make it anew by refusing to let these faulty premises become truisms or natural laws, and see ourselves as shapers of the system, pointing it toward a public purpose and new possibilities."
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Aspiring Business Analyst | Blogger at Data and Dime | Intern @ Marwadi Shares and Finance Ltd. | Core Member, Placement Committee @ SCMS Bengaluru | BBA in Business Analytics | SPM 2024 @ IIM Udaipur |
Day 6: The Broken Window Fallacy 🪟💥 Can breaking windows really stimulate the economy? According to the Broken Window Fallacy, not quite! This theory debunks the idea that economic destruction creates growth by highlighting the "seen" and the "unseen" costs. If a window is broken and then fixed, it may seem like money is circulating and jobs are created. But what we don’t see are the missed opportunities—what else could have been done with that money if the window was never broken? 🔨💸 Destruction doesn’t create value; it just diverts resources from more productive uses. 🚫📉 Ever seen this kind of flawed thinking in economics or business decisions? #FinanceTheories #BrokenWindowFallacy #OpportunityCost #BizarreFinance #EconomicGrowth #ResourceAllocation #21Days21FinanceTheories #BehavioralEconomics #EconomicTheory #BusinessDecisions
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Raises an interesting point. In the Intangible Economy, what is a productive activity, what is a net zero-sum activity and what is busy work. And what is the purpose of economic activity? The Swifties may have otherwise spent their money on activities that gave them far less pleasure.
Taylor Swift and the fallacy plaguing modern economics
ft.com
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Here’s a CNN report on my Economic Letter with Sylvain Leduc and Huiyu Li.
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7moIt is also wrong. Which is why it makes no sense to our common sense. We know from lived experience that more is not always better. It depends. More of what? Better for whom? The connection between quantities of money and quality of life matters. It needs to be managed. Also, people don't make choices in the markets. Money does. Or, rather, people make choices in the markets by spending money. If you don't have money to spend, you don't have a voice in the markets. If you have lots of money under your control, you have an outsized voice in the markets. In politics it may be one person, one vote, but in the markets, it's one dollar, one vote. And some people control many more dollars that other people. Lastly, money matters. And finance matters. It is through our financial institutions of agency, authority and accountability for aggregating our savings and deploying those aggregations to supply money to enterprise for its use, for a purpose, for a time, at a cost and on terms that society shapes the enterprises that shape the technologies that shape the choices that shape the economy that shapes society, and our shared future. We need to hold those institutions accountable. We are not.