I wonder if in theological terms it's possibly more the difference between Practical Capitalism and Symbolic Capitalism - Symbolic Capitalism being the purer and more holy of the two, because it's untainted by the dirt and sweat of physical reality.
Symbolic Capitalism is Platonic Capitalism - rule by numbers and rarefied abstract concepts. The numbers are defined by the rules of the game. They define the aims of the game. They're purely theoretical.
I found a fascinating and disturbing quote by a UK rail boss this week, in which he said that it was 'nonsense' to criticise the UK's insane franchising and privatisation system because the UK has 'the best growth of any railway in Europe.'
That quote is so wrong in so many ways that I really have no idea where to start with it. But it's indicative of the 'growth above all else' mind set that underpins symbolic capitalism.
As long as there's growth, nothing else matters. Not only is nothing more important than growth, but nothing else can even be considered as a factor - except possibly grudgingly if the 'costs' make enough noise that you have to throw them a bone to get them to shut up for a while.
So in the case of rail, high growth for the last couple of years trumps that the fact that the shiny new market-driven symbolic system relies on public subsidies that are five times greater in real terms than when the railways were nationalised, and provides a service that offers poorer service availability and longer travel times.
The whole thing really is quite mad.
And it's a stupid canard anyway, because passenger figures plummeted after a few high profile accidents. So a big part of the 'growth' is really just the process of returning to pre-disaster levels.
Self-serving and partial, but the insight is not completely silly. In the long run, we're all dead. John Maynard Keynes
I know the phrase is a commonplace in the Finance 'biz' but it's sloppy terminology leading, as laboratory experiments have shown, to neo-liberalism in rats. (lol)
What's the impact on GDP of guaranteeing every citizen who wants it a high quality post-18 education?
What's the influence on GDP of a Van Gogh painting which was practically worthless while he was alive but now changes hands for tens or hundreds of millions?
What's the impact on GDP of the homeless?
Without a concept of cultural value, to balance out book value, conventional accounting is socially meaningless.
It's exactly the same relationship as that between Matter and anti-Matter: we have Value and anti-Value. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Socially irrelevant, I'll give you that, to an extent. "It's the statue, man, The Statue."
"Price" and "Value" Oscar Wilde had the measure of when he defined the Cynic. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
'Price' means nothing, except that someone is prepared to pay X for an item or service at a particular point in time.
GDP comes from aggregating all of these transactions with some rather nominal national weightings and producing a measure of something which supposedly correlates to wealth.
But if a social relationship or physical process can't be reduced to a transaction with a price, it doesn't appear on the books, and in economic terms it's invisible.
The big problem - the one that I haven't seen any economist try to tackle, from Keynes downwards - is how to explicitly include these relationships so that they do appear as factors.
Most people when asked will tell you that it's these social and cultural relationship that define real value - in the sense of what makes life worth living.
So where are these values in economic theory? There's occasionally a bit of handwaving about quality of life, but there's no explicit concern with these relationships. In fact they're often considered a dangerous distraction.
This is why businesses allowed to lay people off to pump up the bottom line. The social costs are very real. But they're only calculated indirectly. And even then, it's not the businesses that pay for them.
The point is that these costs are real. You can't dismiss them as subjective because the concept of price is equally subjective - it's one microscopically narrow view of one very tiny subset of human interactions. And if anything these other transactions are more real to people's experience than anything in classical economic theory.
So not including them in a theory of wealth is dysfunctional. Saying they're hard to measure is irrelevant if there's no serious attempt being made to measure them and include them in policy decisions at all.
And in the meantime we're seeing endless, and quite possibly terminal, examples of that dysfunctionality happening today.
The corollary is that if you measure the right things, many problems become simpler because you have a direct handle on them. What we have now is rather too much energy expended on one-dimensional measures like inflation and unemployment and GDP and interest rates, papering over a lingering sense of unease that something isn't right in our culture, but it's impossible to clarify or quantify what it is.
A saner system would reverse that.
More than that - my guess is that a healthy culture is far less likely to have problems like inflation and unemployment anyway.
If relationships are functional and inclusive rather than predatory, a lot of the supposed problems in economic theory will very likely vanish, because the system as a whole will be operating at a much more intelligent and spontaneously organised level.
It's not that the work has to be truly productive. It's more that it has to be busy. And the more busy the better.
The reason for this declining return to scale that gross material wealth°, past a certain point, isn't the chief limit on the innovations and refinements that constitute increasing (technological) quality. Cultural support for these, and available educated brains, are stronger factors. Research budgets are largely spent to pay for those brains, and their number doesn't increase in proportion to gross material wealth per capita. Cost of equipment is more relevant, but much of the important work isn't greatly equipment-intensive -- it involves designing and modifying things that are being made anyway.
The weakness of causality in one direction is masked by the strong correlation that results from causality in the other direction. That is, creativity and innovation may seem to follow from high levels of gross material wealth, when they instead enable it (for better or worse).
------------ ° By "gross material wealth", I mean a measure of wealth that gives little weight to quality of life in a broad sense. Words and ideas I offer here may be used freely and without attribution.
On the other hand, the French gained control of goods that defined the "good life" sometime during Louis XIV and have managed to maintain their hold on most of this market since. So designing an economy to produce excellence is obviously a superior strategy.
But since we are touting national economic characteristics--allow me to add a few.
The Japanese believe that there is no detail too small and that nothing is ever finished and that improvement is always possible. This makes for incredible products--especially complex ones like cars and video cameras.
The Germans and Nordics seem to concentrate their economic energy on being excellent at the invisible details. If you have never heard of the product, have no idea what it does, and it is somehow critically important for an industrial society--these guys probably build it better than anyone.
And of course, how can we ignore USA industrialization. In 1971, I heard a guy shout to a group of volunteers who were trying to organize a production of HMS Pinafore, "People! TRY to do this right! But if you cannot do it well, do it BIG!" I have never heard the USA philosophy of everything said better. "Remember the I35W bridge--who needs terrorists when there are Republicans"
As long as the money supply is growing British Rail, or whatever, has to grow at the effective rate of the increase just to stay the same - in PPP.
This concept requires far more thought and energy to digest that I can give in a quick comment.
But I really like it! "Remember the I35W bridge--who needs terrorists when there are Republicans"
