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I think one important respect in which the economy is socially embedded is demand and consumption, that is, determining what people will consume, in what amounts. This is because to a large extent what people believe they need is culturally determined, and it also has to do with local social interactions (like status).

I this this is the main obstacle to developing closed models of the economy where everything is determined "endogenously" (meaning: endogenously to the economy, considering the non-economic part of social life as "external").

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Fri Jul 6th, 2007 at 06:15:32 PM EST
Yes, that is a theme that has been explored in Block's Postindustrial Possibilities, which builds on Fred Hirsch's earlier (1970s) Social Limits to Growth .
by TGeraghty on Fri Jul 6th, 2007 at 06:43:37 PM EST
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I suppose if there are "social limits to growth", sooner or later growth will have to be pursued by dismantling society. ;-)

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Fri Jul 6th, 2007 at 06:45:35 PM EST
[ Parent ]
That's right. If it's a choice between growth and society, then society must go. Then the cockroaches can enjoy the growth!
by TGeraghty on Fri Jul 6th, 2007 at 06:53:47 PM EST
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I think I once read that economists had much difficulties in putting advertising in their models, as following advertising makes little "rational" sense.

One of the problems when debunking utilitarianism in economical discourse is that it is easy to make sophistry with the concept ; essentially any behaviour can be made to look like rational maximisation of an utility function. (for various meanings of rational, maximisation, utility and function).

The fact that most exchanges are regarded as demand and consumption is one of the damage done to society by the Great Transformation, too. I don't "consume medical service", I have a social relationship with a doctor that tries to keep me healthy. Yet the extreme monetisation of these kind of exchanges, as they must fit in the greater economic schemes, makes the social part had to maintain.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Jul 6th, 2007 at 06:48:24 PM EST
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Yes, advertising is a big part of it. In terms of the putative "closed" economic model, one could "predict" that demand needs to be boosted via advertising, but the back-reaction of the advertising spending will be difficult to model.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Fri Jul 6th, 2007 at 07:20:50 PM EST
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Here's Block, for example, on "positional goods" (the idea comes from Hirsch):

. . . the problem of the growing importance of positional goods [the possession of goods and services that others cannot attain, e.g. academic credentials such as admission to the "right" school]. . . cannot be solved simply through reallocating resources or even through faster growth. . . . The only solution to the problem of positional goods is to attempt to minimize the competition. The concentration of the quest for positional goods at the higher end of the income continuum makes the problem eminently manageable. A more equitable distribution of income would dampen the struggle over positional goods by reducing the discretionary income of the rich and the upper middle class. . . . The expanded provision of public goods could also help to reduce the competition for positional goods.

by TGeraghty on Sat Jul 7th, 2007 at 07:59:19 PM EST
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It's another way of saying "exclusive" or "privileged".

There was an excellent Diary on Privilege here

http://www.eurotrib.com/story/2007/3/5/290/06967

and I concur with Geonomist's view that those who have Privileges ("positional goods" doesn't quite say it for me!)should give back something to the rest of Society in respect of them.

Exclusive rights over land and knowledge being the obvious candidates....

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Jul 7th, 2007 at 08:29:17 PM EST
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