The Philosophy of Economics

Paradigms usually change before people realize they have.  Those who can see a trend are usually thought of as gurus for this reason.  They are the people warning of a bad winter.  They are the ones who know what will happen next, and how to prepare.

When it comes to economics, nothing has changed for decades.  Economics has become a science taught at Universities that use textbooks of the policy makers.  People pay a lot of money to learn what is thought of as an infallable study.  Finance has used this study to base business on.  The concepts have been discussed at length here, such as fiat currency, the rational consumer, and others.  SOme of these theories are accurate enough to use in simplistic terms, such as supply demand, but any thoery is just that:  a thought, an idea.  There really is nothing concrete about economics.

I like to think of economics as a study of philosophy.  Something that has a lot of merit, worth, and use, but is not and can never be nailed down.  It can be proven given certain paradigms, but when the paradigm changes, the study should change with it.  With philosophy, we have grown from not needing to use god as giving the laws to understanding the philosophy of science.  It isn't that god may or may not exist, but with science we can deduce certain rationale.  We can do this by the philosophy of logic as well.

Yet with all of the great ideas of recent study in philosophy, the likelyhood that these ideas will too change is great.  As a culture we are always learning, and thus we must not constrain ourselves inside old paradigms.

Neo-Keynesian economics constrains us.  And it the dialectic should not put up the Austrian School as an absolute, or else we are caught in the Hegelian dialectic (another philosophy proven to have holes).  But what we need to do is understand that times have changed, and we need to use new theories, or old ones we are not currently using, to make sure a paradigm shift does not catch us off guard.

My worry is that this is happening now.  The economy, and finance with it, has changed drastically in the last 40 years.  Wee have moved off a gold standard to creating an insurmountable debt that will never be paid in full, and the answer is too continue down this path like it is the only way.  We must stand back so as to see the forest through the trees because the forest may be much larger and complex than we thought.

Or maybe the forest is a simple forest.  One where we could create orchards and use the rivers and lakes to create a utopia.  WHo knws?  But we should not focus on absolutes, for the forest, as nature, will continue to change, and we should change with it and not against it.