Mindorenyo

Saturday, April 22, 2017

Paradigm Shifts

Since my post referencing Jung was thoroughly trashed and then ignored, here is one that Jerry (and Stuart?) won't be able to resist.  (Jim's in Bali so he's off the hook this time.)  I ran across this in a discussion of the sorry state of conventional economic wisdom.

Three before their time: neuroscientists whose ideas were ignored by their contemporaries

I discuss three examples of neuroscientists whose ideas were ignored by their contemporaries but were accepted as major insights decades or even centuries later. 
  1. The first is Emanuel Swedenborg (1688–1772) whose ideas on the functions of the cerebral cortex were amazingly prescient. 
  2. The second is Claude Bernard (1813–1878) whose maxim that the constancy of the internal environment is the condition for the free life was not understood for about 50 years when it came to dominate the development of modern physiology. 
  3. The third is Joseph Altman (1925–) who overturned the traditional dogma that no new neurons are made in the adult mammalian brain and was vindicated several decades later.
Here's a good article if anyone wants to see how a similar situation is playing out in economics:  
MMT is what is, not what might be (warning, it's rather long).  Here's a relatively brief excerpt describing the general phenomenon of scientific revolutions:

Academic disciplines (such as, neurobiologists, archaeology, economists etc.) work within organised ‘paradigms’, which philosopher Thomas Kuhn identified in his 1962 book – The Structure of Scientific Revolutions – as “universally recognized scientific achievements that, for a time, provide model problems and solutions for a community of practitioners”...
Rather, Kuhn said that dominant viewpoints persist until they are confronted with insurmountable anomalies, whereupon a revolution (paradigm shift) occurs. The new paradigm exposes the old theories as inapplicable, introduces new concepts, asks new questions and provides students with a new way of thinking with a new language and explanatory metaphors...
The work of Joseph Altman, Jacques Cinq-Mars, Barry Marshall and countless others across all discplines represented the potential for a paradigm shift and was resisted by the mob until change became ineluctable.
Not all novel ideas face this sort of brick wall. But when the professional bodies become trapped by Groupthink and, typically, there is status and money at stake (particularly, commercial edge) then resistance can be fierce and prolonged...
The following discusses the above with respect to economics, so you can ignore it if you've had enough (c:


The point to understand is that MMT is a system of thought that allows us to understand how a fiat currency monetary system operates and the central role that government can play in a modern monetary economy...
What is mostly ignored in mainstream economic commentary is that in August 1971, the monetary system agreed at the famous Bretton Woods conference in July 1944, which required the central banks of participating nations to maintain their currencies at agreed fixed rates against the US dollar, collapsed.
The system proved unworkable and when President Nixon abandoned the convertibility of the US dollar into gold, most nations moved to a fiat currency system...
Different nations (or blocs of nations) structure and use the capacity possessed by a fiat currency in different ways. The Eurozone Member States voluntarily ceded the capacity to Frankfurt and then imposed harsh rules on themselves with respect to net spending.
Other nations have evolved differently.
But the point is that every day, across every nation, monetary systems are in place that operate along the lines described and explained by MMT...
MMT, as a new powerful lens, makes things that are obscured by neo-liberal narratives more transparent.
It means that the series of interlinked myths that are advanced by conservative forces to distract us from understanding causality and consequence in policy-making and non-government sector decision-making are exposed.
There is much similarity with traditional religion, as I see it.

Friday, April 14, 2017

Regional Inequality and the Election of Trump

The election of Trump is part of an international reaction to neo-liberal economics.  Looking at the phenomenon more closely, we can see that increasing regional disparities caused by the decline of U.S. government anti-trust enforcement are a major component of the overall reaction.

Eliminating anti-trust has been good for profits of major American corporations.  The co-option  (co-opting) of the middle class through the ownership society and increasing participation in the profits of large corporations has no doubt been a major factor.  No doubt there have also been some beneficial effects for consumers.

The effects of neo-liberalism on regional economic equality are less well appreciated.  Thus, many of the owners of regional corporations are unhappy and have called for ever less federal government intrusion into the economy.  Ironically, however, these regional corporations are under attack from larger national and multi-national corporations, and lack the protection formerly provided by anti-trust laws.

Thus, Trump rode regional dissatisfaction to the presidency, boosted by anti-government business leaders in flyover country.  Their businesses, however, are not under attack from the government, but from global behemoths such as Amazon.com, Bank of America, or United Airlines.  Their irrational belief that too much government is responsible for the increasing regional disparities is manifest in the profoundly confused Republican economic platform.  Voters in flyover country know something is amiss with their local economies, but their leaders (Republican and Democrat) aren't giving them a reasonable explanation.  They've turned in the exact opposite direction of where they need to go.

These thoughts of mine are still half-baked.  For a more coherent discussion, please see Regional inequality is out of control. Here’s how to reverse it, by Phillip Longman (from 2015 -- i.e. written before Trump rose to prominence).  Here's the concluding paragraph of Longman's article:
Inequality, an issue politicians talked about hesitantly, if at all, a decade ago, is now a central focus of candidates in both parties. The terms of the debate, however, are about individuals and classes: the elite versus the middle, the 1 percent versus the 99 percent. That’s fair enough. But the language we currently use to describe inequality doesn’t capture the way it is manifest geographically. Growing inequality between and among regions and metro areas is obvious to all of us. But it is almost completely absent from the current political conversation. This absence would have been unfathomable to earlier generations of Americans; for most of this country’s history, equalizing opportunity among different parts of the country was at the center of politics. The resulting policies led to the greatest mass prosperity in human history. Yet somehow, about thirty years ago, we forgot our history.