Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Economic Philosophy And The New Cycle

Economics / Economic Theory May 21, 2013 - 04:58 PM GMT

By: Andrew_McKillop

Economics

DENY THE NEGATION
Unknown to many, the dominant political economic doctrine of today, certainly in the OECD countries is the "liberal market doctrine" was built on denial. Since the 2008 crisis, this doctrine has become a mix-and-mingle of 1980s Neoliberalism plus a rejuvenated or reycled 1940s Keynesianism. In other words there is non-intervention in markets, certainly when it concerns fighting near-total monopolies like Microsoft or Google or finding the populace a job, plus massive state borrowing and bail outs of Bad Banks, called too big to fail. The principle is:


Privatize profits, socialize losses and not just forget, but deny the future.

The reason why we have this can-only-fail policy cocktail concerns its logical bases. Neoliberalism is a rejectionist, revisionist or negationist doctrine. In the early 1980s, it rejected the then-dominant economic doctrine or "interventioninst market doctrine", AKA 1940s Keynesianism which operated through the period of about 1948-1975, dominating the policy roost. Consecrating this, US president Richard Nixon in 1971 famously proclaimed "We are all Keynesians now".

Ironically, deficit spending through most of that "Keynesian time" was low or at an all time lows, balanced budgets were frequent and Quantitative Easing was unheard of anywhere in the world!

One problem for us is that neoliberalism has never really been defined, but this doctrine is at least as much a social, political and cultural doctrine, as an economic one. Probably the nearest thing to an Official History of Neoliberalism was written and published by Francis Fukuyama in 1992, although he rarely used the N-word. What he said or implied is disputed, but Fukuyama's references to the "imperative of war and hegemony by Western cultures and societies" could mean that his explanation of why History ended, around 1989, was a result of Neoliberalism plus Western military power.

About that time, according to Fukuyama's famous 1992 book "The End of History and the Last Man", the economic collapse as well as military defeat (in Afghanistan) of the Soviet Union signalled that "history was finished". Proving the fatuity of this assertion (and Fukuyama has now denied or negated much of his "end of history theory"), history with a capital H or not existed well before the Soviet Union and certainly will exist long after.

Even a moment's look at the real world shows that any so-called "final military triumph" of the Western nations is, first and foremost, impossible in a nuclear-armed age with about 440 Fukushima-type and Chernobyl-type nuclear reactors strewn across the globe. The ultimate Dirty Bomb threat, easily targeted and exploited by an increasing number of "players" in the Age of Drone war.

THE END OF ECONOMIC GROWTH AND THE LAST DEFICIT

Denying the deficit is the real logical or philosophical basis of Keynesianism. Negating it one way or another (for example Krugman-style with QE) produces a sort-of nirvana for the philosopher kings and princes, and the jesters and valets who laud them for the WSJ and Bloomberg. We can call this "propaganda apparatus" the New Liberals. Deficit spending essentially seeks artificial growth.

Going a lot further back than Fukuyama, Diogenes of Sinop (died about 325 BC) maintained that all "artificial growth" of society was incompatible with happiness, and playing the ecology card long before the Global Warming hysterics, he said that moral integrity requires a return to Nature. Diogenes was intensely austere in the real sense (not as defined by the IMF), and was described by the Stoics as a "sophos" or wise man. Also important for the theory of globalization, Diogenes called himself: "A citizen of the world" or "cosmopolite'". He denied the existence of any particular state or nation - exactly what Fukuyama in 1992 called the key enabler and function of the "global or globalising" economy, and why economic growth would henceforth, from 1992, be "endless".

Showing yet another serious lack of logical integrity in Fukuyama's End of History theory, how can Western nations pursue "global military hegemony" in a world where globalization unifies all nations and destroys any differences between them?  Without nations, History is almost certainly still possible, but wars would be very difficult.

As a voluntary exile and outcast, without social identity and stateless, Diogenes is called the father of the school of the Cynics, derived from the fact he often lived in a dog kennel and ate like a dog. He said that apart from his own thoughts, talking with dogs was more instructive than talking to "the bourgeois", and that he and dogs had been given the same low status by "bourgeois society" (dog = kynos in Greek).

Like his fellow-Cynic Antisthenes, Diogenes above all taught that the negation of the negation reveals Truth and his method won adepts despite Plato describing Diogenes as "a Socrates gone mad." Certainly not hinted at by Francis Fukuyama, the "post-historic" economy he forecast as coming (in 1992) failed to negate the debt by denying the deficit first by a little, then by a lot too much.

NEGATING EVERYTHING

J-P Sartre claimed he represented continuity of dialectical thought from pre-Socratic times, able to be evoked by one of Zeno's paradoxes (about 450 BC), which we can note is also utilised by Copt, Shia Sufi and Zen Buddhist masters. This paradox says neither continuity nor change are real, both are an illusion, and must be negated to arrive at the truth.

Negating the deficit or deficits needs the same gung-ho approach. As Paul Krugman masterfully explains almost every time he gets paid to write an article, searching for precise answers to certain types of apparently very simple questions, like financing debt, will always fail. Simply denying the debt and printing money is the "nice" solution, but not an answer. In the same way we can ask what is the exact mathematical value of Pi, which is approximately but not exactly 22 divided by 7. The real answer is there is no answer.

How we finance spiraling debt in all the so-called developed, or former-rich countries, today, is the same question, with exactly the same answer!  Call it the Central Banking paradox.

Diogenes and Antisthenes, or even Socrates when they were defining the most appropriate and best social organization, which obviously includes economic organization, said this will only be possible by firstly treating "conventional morality" as hypocrisy, greed and corruption. By denying this morality, and rejecting our present ideological and infantile dependence on "The Market", which does not exist, we can break the chains which are dragging us towards Sartre's neant or Nothingness.

More subtly, and a method (perhaps surprisingly) used by Francis Fukuyama, we need to deny each item of hearsay, for example market news. We also need to discard received wisdom, such as all articles by Krugman, to arrive at the truth. Unacknowledged paradoxes are so rife and so basic to the defence of our present, or recent "squeaky clean economy", which has never existed, that the real paradox needs to underlined - this squeaky clean economy has never been defined. These rampant paradoxes have to be identified and exposed for what they are. The philosophical and moral difficulty of defending rank social injustice and the massive waste of physical resources to produce unwanted and unsaleable goods, useless services, mindless pulp magazines, blogs and I-books jammed with disinformation - and pretending this is the "summit of civilization" - would surely have drawn more contempt from Diogenes or Antisthenes, and from Socrates than their curl of the lip when talking about the defects of their own contemporary societies!

NEGATING DEFECTIVE NORMALITY

A dysfunctional economy is merely an additional manifestation of toxic normality. Methods for combating this "defective mormality" extend at least as far back as the above-cited Greek philosophers who said that freedom from desire of "peer group approval" is the only route to integrity, autonomy, and what modern psychologists starting with Jung, called individuation or "the whole person". Put the other way, we can be sure that when we get opprobrium and denigration for any positive proposal we make, this is a sure sign our proposals have merit, rather than the hypocritical flattery we might well receive for a very dumb idea. To be sure, today's crisis denial industry is a massive industry employing thousands of mindless persons. It is morally and materially enabled by the "zombie news media" with its economic and business variants, such as any report from Goldman Sachs or Bloomberg.

Assuming for convenience that the most recent and most extreme process of nihilist economic denial started in 2008, we can be sure that four full years of denial have caused serious "neurone damage" or "denial fatigue" to the perpetrators and profiteers from maintaining a critically damaged economy, and society, in their critically damaged state. This neurone damage is manifested in many ways, for example the complete schizophrenic nature of so-called relaunch-and-recovery policies that "seek austerity with growth". By spending less, the economy "can only grow"!

Junk logic, which is vital to economic denial has anatural counterpart in junkscience. Global warming hysterics confronted with the uncomfortably very cold long-running Spring of 2013 in the northern hemisphere, snap back with the claim that it is unusually cold "because of global warming"!

The masterfully stupid Economic Fool's Logic asks us to believe that tilting the economy into stagnation and further into recession "will maintain employment" ! This will of course and "inevitably" reduce deficits to zero! These policies are in fact both negationist and nihilist, and seek nothing at all - only to buy time with borrowed cash and misplaced hope.

Sooner or later, even the so-called Lamba Masses, the Joe and Jill Sixpack zombies of consumer society - who at election times pretend for a day that they are "highly interested" by these farces - will crack under the weight of their ignorance, greed, hypocrisy and stupidity. When they lose their own job rather than gloat about the neighbors losing their job - the real definition of a Recession - we can expect to see what zombies are programmed to do, and good for, from as far back as Socrates' time. When the dam breaks, social unrest and probably civil war will show that the process of denial and negation has terminated, creating a new Cycle of Civilization. Fukuyama could well agree because, as we know, he has denied and negated his own theory.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in