The Virginia white tailed deer can serve as a paradigm for natural species and exhibit their essential characteristics. Once upon a long, long time ago, the human race was also a natural species very much like the Virginia white tailed deer. The race is natural no longer. It is a species made artificial by means of a human artifice. If economists understood the significance of the analogy between natural species and the human race, they would long ago have abandoned the absurd Seniorian view “That every person is desirous to obtain, with as little sacrifice as possible, as much as possible of the articles of wealth.” Until economists realize that the artifice called the economy essentially exists to make life for human beings easier and better, the human condition will never improve. We will continue to exploit and even kill each other for any modicum of wealth. That is an evil bargain.
What can be learned about economics from studying the Virginia white tailed deer? Well, perhaps nothing. After all, odocoileus virginianus does not live in an economic environment. It is a natural species; it is a part of nature and relies entirely upon nature. No deer is either employed nor unemployed. No deer is part of a labor force. No deer is a merchant or investor. Odocoileus virginianus has no middle class. It has no upper or lower class either. A deer is purely and simply a natural animal. It is born as a child of its parents. It learns to forage for plants, including shoots, leaves, cacti, grasses, acorns, fruits, and corn. When it matures, it seeks suitable mates to contribute to the propagation of its species. It has no economy! But the Virginia white tailed deer can serve as a paradigm for natural species and exhibit their essential characteristics.
Once upon a long, long time ago, the human race was also a natural species very much like the Virginia white tailed deer. The human race is natural no longer. It is a species made artificial by means of a human artifice.
I suspect it happened over a long period of time for different reasons in different ways in different places but mankind withdrew from nature. When people realized they could grow plants and husband animals, they also realized they no longer had to forage or hunt. Primitive villages contained gardens and common areas for grazing animals. Tilling fields and herding animals replaced foraging and hunting. But as villages became cities, gardens and village commons began to disappear. Without them and without the ability to forage and hunt, human sustenance became uncertain and large numbers of people became dependent on others. City dwellers had to depend on others to provide “work” for their daily bread. So an artifact called an economy which consists of a person’s relationships to others for the purpose of survival came into existence. Workers depend on employers and vice versa. Vendors depend on consumers. Lenders depend on borrowers. Everyone depends in some way on the services of others. As John Donne writes, “No man is an island.”
Economics is about these relationships between people. Economists try to determine or predict how people will react under various economic conditions. The law of supply and demand tries to describe what vendors will do when the supply falls or the demand rises. Some vendors act in accordance with the law; some to not. Various confidence measures (consumer, vendor, investor) are used to predict what the subjects are going to do. If consumer confidence falls, will consumers buy less? Maybe, maybe not. Doesn’t that depend on what they need and can afford? Who does the theory of rational expectations apply to? Why humans, of course. But can an irrational person, of whom there are many, have rational expectations? Economics as we know it cannot answer such questions. So you see, economics is about what economists believe people’s attitudes are. Nothing more or nothing less.
To [Stephen] Roach, Americans are still working to rebuild savings and will be slow to increase spending as long as wage growth is sluggish and household debt exceeds long-run averages. “We have a long, long way to go,” says Roach . . . a senior fellow at Yale University’s Jackson Institute of Global Affairs. . . . [Harvard’s Martin] Feldstein predicts “we finally are going to see a good year in 2014,” thanks to stock-market and home-price gains that have boosted household wealth and given consumers the confidence to spend.
Here you have economics in a nutshell. Two prominent economists telling us how (they believe) people will react to current economic circumstances, and they have opposite views which makes them nothing more that armchair psychologists. But it’s worse: the people they expect to act in one way or the other are not even real.
People who want to lie while appearing not to are good at this tactic. Instead of specifying specific subjects in their sentences, unspecific generic nouns are used instead. Roach says, “Americans are still working to rebuild savings.” Which Americans? Certainly not Bill Gates! Feldstein says, “stock-market and home-price gains . . . have boosted household wealth and given consumers the confidence to spend.” Which consumers? Certainly not the families receiving food stamps! And consider this oddity: The logically possibility exists for both to be right. What if Roach had said that frugal people are still working to rebuild savings and Feldstein had said profligate people have the confidence to spend? Would that mean anything more than the truism frugal people save and profligate people spend? What would that teach us about “the economy”? Would it be getting better or worse? For the same reasons, it is logically possible for GDP to increase while net wages fall. Could anyone say definitely that the economy is improving? As a matter of fact, there is no definitive combination of indicators that would enable anyone to say that the economy is improving. Just because some indicator, say GDP, increases consistently over some period of time does not mean it will continue to increase. So too with all the many indicators. As Keynes himself put it, “the material to which it [economics] is applied is, in too many respects, not homogeneous through time.”
People are not all the same. There are frugal and profligate people, wise and stupid people, careful and careless people, greedy and generous people, honest and dishonest people. The list goes on and on. And people often change! It would make a great deal of difference if we knew that stupid people were investing in the stock market and wise people were selling out, but no economist can ever tell us that. People to economists are neither stupid nor wise. Economic man is unreal; s/he does not exist.
Talk about “the economy” is meaningless. All that can be done is talk about the state of some of its parts at some specific time. That’s what some of the indicators do, but the indicators are easily fudged. (Lies, damned lies, and statistics!) Take, for instance, the unemployment reports and their embedded concept of the workforce which is defined as those people currently working or not working but actively seeking employment. This definition must have sounded good to some economist (difficult to understand why), but consider this analogue. A school district’s superintendent decides to define “student body” as consisting of those attendees who study and do homework. Wouldn’t he be subject to ridicule? Yet economists define things in similar ways even though they should know that fudged numbers never yield valid results. Economics as the subject is currently understood can never teach us anything useful and has deluded us into believing that it is the study of how to accumulate money, converting all of the worst attributes of human nature into virtues.
When the economy is understood as a replacement for nature’s provision of its bounty, several things become evident.
►The artifice constrains no one.
►For the artifice to work, people must be relied upon to do what needs to be done to provide all with their needs.
►Unfortunately, many people are completely unreliable.
►The political part of the political economy must find ways of providing what the unreliable people will not.
►Otherwise for a majority of human beings, life is a direct function of the reliability of others.
If economists understood the significance of the analogy between natural species and the human race, they would long ago have abandoned the absurd Seniorian view “That every person is desirous to obtain, with as little sacrifice as possible, as much as possible of the articles of wealth.” Millions (perhaps more) of living counterexamples exist. When a boy in West Virginia says he wants to be a coal miner “just like his dad,* he is not seeking wealth. Neither are the students in nursing schools, departments of education, or social work. Neither too are those who want to be firemen, policemen, or even soldiers. The view that wealth is what motivates people is ludicrously stupid. Many, including economists, do not realize how much they rely entirely on such non-wealth seeking people.
I know it sounds silly, but if a Virginia white tailed deer could be asked what it would accept as a successful life, I suspect it would say something like having sufficient food, shelter when needed, mates, children, and longevity. Vestiges of those natural instincts still dominate human lives. They constitute the fundamental wants of human beings. When a young person tries to become a fireman and succeeds, not calling him/her successful is an ignorant misuse of language. S/He is just as successful as the person who seeks to and becomes a hedge fund manager. And a hedge fund manager who amasses millions but dies prematurely from stress related diseases or cannot have successful relationships with mates or her/his own children is a failure at living. Wealth is never the relevant ingredient. Most human beings are merely trying to live; they are not seeking wealth. Until economists realize that the artifice called the economy essentially exists to make life for human beings easier and better, the human condition will never improve. We will continue to exploit and even kill each other for any modicum of wealth. That dear reader is an evil bargain. Economists are responsible for promoting it.
John Kozy is a retired professor of philosophy and logic who writes on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on http://www.jkozy.com/ and he can be emailed from that site’s homepage.