A most excellent post today at Naked Capitalism
Especially this good thinking by Tom Crowl:
Money is a very difficult concept for most people to understand… and I believe that adds to the confusion.
To the extent that the condition of human society is controllable by humans (in other words barring meteor strikes, earthquakes, tsunamis, etc…
That condition is ENTIRELY dependent on decisions… ENTIRELY!
Individual and group decision operating within the constrainsts of natural law. (literally ALL decisions but like flapping butterfly wings most have negligible effects)
MONEY is a TECHNOLOGY!
That’s the first thing people don’t quite get… and it doesn’t stand in for ’stuff’ though it may seem so…
What it actually does at its root… is impel decision.
Money is a decision technology… and that’s true whether fiat or commodity based… Its roots are SOCIAL. (A hammer you can use by yourself… with money you need at least one other and a whole body of shared belief behind it.
And that’s also why trying to separate economics from politics is not only wrong but very dangerous… it leads to very, very bad social science open to tremendous bias.
Recognizing its root in decision has implications… certainly including. but well beyond the issue of campaign finance… Its also inherently and eternally incapable of functioning perfectly which doesn’t mean we don’t need it… but it needs a wiser approach for repairing the damage when it breaks.
Decision Technologies: Currencies and the Social Contract
BTW, on a slightly different topic… when economic purists talk about ‘markets’ as some perfect mechanism for deciding values…
I’d like to suggest this:
Those that assume that markets establish ‘rational prices’ have to concede that the rationality is bounded by human perceptions of time and its relationship to those values.
Anyone but a complete idiot will realize that EVENTUALLY… oil will be orders of magnitude more expensive. Now that could be in 2 years or 200… but it’ll come.
SO a hypothetical investor with a 1000 year lifespan would likely be buying oil (and helium along with a few other things) and know that he was making a pretty safe bet that somewhere along that line he’d be way, way in the black on his investment…
My only point is to recognize that markets are inadequate mechanisms which cannot be reliably depended on to do the kind of pricing necessary to promote the best human condition longterm.
And until the common political wisdom confronts and will deal with that… we’re essentially screwed.
(This has nothing to do with Left/Right ideological fantasies… it arises out of a seemingly discredited way of looking at things…. PRAGMATISM.)
There are all too many economic arguments made that are ridiculous and should have long ago been over and have no place in honest political discourse (ridiculous things like the Laffer curve, or that the FED is a neutral body w/o a pro bank/financial services bias).
I’ve only been looking at this economics world in any serious way for a couple of years and I know I don’t know a lot… but really… this field is clearly messed-up…
And we’re stuck with an establishment not much interested in looking for real answers.
