Friday, December 4, 2009

Light Bulbs and Markets

According to the Chicago School of economics, we have nothing to worry about. The market is a self-regulating organism that automatic cleans up the shit left by the financial retards who run it. So, let the boys have their fun; the invisible hand will pat them on their asses and send them on their way.

According to Raj Patel there is a joke making the rounds among economists:

Q: How many Chicago School economists does it take to change a light bulb?
A: None. If the light bulb were burnt out, the market would change it.

As Patel points out, “The great unwinding of the financial sector showed that the smartest mathematical minds on the planet, backed by some of the deepest pockets, had not built a sleek engine of permanent prosperity but a clown car of trades, swaps and double dares that, inevitably, fell to bits.

Actually, we can blame William Petty (1623-1687) for this. Petty is considered the father of “Political Arithmetik.” His philosophy is summed up in his decision to “discard comparative and superlative Words and to use only such reasoning as can be expressed in Terms of Number, Weight and Measure.”[1]

Thus was born the quantification of everything and the gradual rise of the wacky world of the value-free social sciences. (So seminal was Petty’s work that it influenced both Adam Smith and Karl Marx.)

The problem with both Petty and the Chicago School is the mistaken belief that they can impose a rational, linear matrix on the nonlinear chaos that is life. From this premises arises the fallacy that the market is driven by rational beings making rational decisions and that the price of a commodity or stock represents the sum total of all of the input from a given stock or commodity.

As Patel points out, “This is different from saying that the price actually does reflect its future performance—rather, the price reflects the current state of beliefs about the odds of that performance being good or bad.” In other words, the price reflects what the mob thinks.

Because economic theory is so shackled to numbers and formulae, it is unable to factor in greed, stupidity, ego and mob psychology, all of which have a greater influence on the market than rational decision making.

The result has been an economy that has reeled from bubble to bubble to such an extent that it views bubbles as the norm. As soon as one pops, the masters of the universe frantically work to inflate another.

It’s really not fair to blame Petty for the Chicago School. The man believed that a rational government was wise to minimize defense spending in favor of building an effective social welfare net.

But then, history shows us that the mission of disciples is to corrupt their masters' teachings. Look at what St. Paul did to Christ and what Stalin did to Marx.

Meanwhile, Obama still believes that the clowns who built the car can put it back together.

Good luck, babe.


[1] Quoted in Peter Linebaugh’s, The London Hanged

4 comments:

Ivan hentschel said...

You left out what Bible-beaters did to the Bible and what modern day Islamists have done to the Koran and Mohammed.

And the car would not need to be re-built if we hadn't let the clowns drive it.

But what do you expect from a POTUS who says we will "ramp up" a war to ramp it down? Say what?

Case Wagenvoord said...

Actually, the list is endless.

Anonymous said...

Dear Author belacquajones.blogspot.com !
I assure you.

Anonymous said...

I'm the sort of guy who passions to taste original things. Presently I am manufacturing my own pv panels. I am managing it all alone without the assistance of my staff. I am using the net as the only path to acheive this. I stumbled upon a very brilliant website that explains how to build pv panels and wind generators. The place explains all the steps needed for diy solar panel construction.

I'm not really sure about how precise the information given there is. If some experts over here who have experience with these works can have a look and give your feedback in the site it would be great and I'd extremely appreciate it, cause I truly enjoy [URL=http://solar-panel-construction.com]solar panel construction[/URL].

Thanks for reading this. U people rock.