On 30 Oct 2009, at 08:25, Czeslaw Mesjasz wrote:
> Dear All,
> First, a usual disclaimer - I (we) could write much more but time,
> 1. The discussion on New Economics is in 95% "nihil novi sub sole".
> is, and was, a divide between neoclassical, mainstrem economics and
> various "non-orthodox streams". Oliver Williamson, a representative of
> most mathematicized non-neolcassical trend, i.e. American
> Neoinstitutionalism was recently given the "Nobel Prize" in economics.
> It's an important signal.
> 2. The line of divide is clear - "objectivity" vs. "subjectivity" in
> economics and finance.
> I have no time to provide links but search engines should help. So
> I recommend Robert Mirowski's works. He provides a good introduction
> a deepened understading of economics as science.
> Then Donald McCloskey (presently Deirdre McCloskey) - economics as the
> science of discourse and not the science of objective mathematization.
> 3. Calls for a New Paradigm in Economics are well-known. There is
> truly a
> need to change the fundamentals - search for "objectivity" based upon
> classical mechanics (stability, equilibrium, etc.) proved to be vain
> - to
> some extent.
> Directions of replacement are well known - implementation of new
> models and metaphors.
> In this case cybernetics and complex systems are particularly useful -
> search for J. Barkley Rosser's works. Perhaps revitalization of
> dynamics at a new much more advanced level.
> 4. Current events in finance only fuelled the long-lasting discourse.
> A few weeks ago Paul Krugmann wrote in NYT about dominance of
> elegance over reality - it's a well-known issue but convincing when
> applied to the
> situation on financial markets.
> 5. Here I cannot refrain from quoting the Black Swan of Nassim
> Taleb. But
> on the financial markets we have also the Dragons (search for that
> along with
> the name Didier Sornette - an "econophysicist").
> In the USA there is Doyne Farmer, one of the pioneers of that
> approach -
> the Santa Fe works. His critique of traditional econometrics and
> modelling in finace is quite persuasive - search for an article in
> one of recent issues of "Science".
> 6. So what is new as a result of the crisis? BTW, I think that use
> of the term "crisis" is an abuse. See a picture of Fred Bell from San
> Francisco in 1931 - that WAS the Crisis!
> Perhaps only a few issues which are alreaady developed.
> A. Rethinking mathematization of economics/management. Perhaps even
> attention should be given to CAS (adding cognition and understanding
> limits of decisiopn making), networks, system dynamics, etc. A more
> critical approach to existing models - perhaps a kind of non-Gaussian
> econometrics with more attention paid to "fat tails".
> For example, in my opinion, the efficient market hypothesis is based
> a simplified understanding of information. We know that we do not
> precisely what is information - there are several functional
> to defining it.
> B. More attention to subjective discourse - again, "nihil novi..".
> structuralism and constructivism have been around in economics and
> management for some time. New ideas are emerging - markets for risks,
> "subjective" (not necessarily creative) accounting - I call it post-
> modernist accounting.
> "I do not know if my numbers are correct and/or "objective" but due
> to my
> social/political position I am able to make my numbers more convincing
> for the public/policy makers/shareholders/bondholders/media, etc.
> I very much like the discourse on financial stability. A deeper look
> this "objective scientific term" gives amazing results.
> C. Perhaps more attention should be paid in academic discourse
> to another idea, too often treated as a buzzword - "sustainability" at
> various levels.
> D. Search for a "New Paradigm". I think that in a short term it's a
> effort. Of course, there will be attempts of the masters of
> discourse of
> global economics and finance to infuse new overwhelming metaphors. We
> aleready have something new coined for the public - "jobless
> Perhaps soon we will have "balanceless banks" or "value of non-
> Continuation of brainstorming could perhaps be a good source of
> new predictions.
> E. I do not expect that soon some day somebody wil proudly declare -
> is a NEW ECONOMIC PARADIGM!
> Perhaps in the process of rethinking modern economics a consensus will
> emerge about some changes in theory and policy oriented thinking.
> But I
> would not expect any breakthrough.
> F. There may be only one exception - a truly deep crisis, of course,
> different from the Great Depression. But hopefully there would not be
> such a stimulus for research. A truly deep economic crisis would
> imminently lead to local or global war(s).
> As an exercise I suggest to read the texts where AIG painted
> of its collapse. Perhaps exaggerated but gave some taste of what could
> 6. So before applying for any financing for the search of a New
> it's better to see what has been already done.
> 7. As for me, at present I have not capacity to search for
> something in
> New Economics.
> The above is just a "collateral effect" of my daily work on several
> texts in systems, security, management and corporate governance.
> I know that some of us will be at the Heinz von Foerster Congress in
> Vienna in November. So hopefully there will be time for discussion
> all that.
> Best regards, Czeslaw Mesjasz
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For more information go to: www.metaphorum.org
For the Metaphorum Collaborative Working Environment (MCWE) go to: www.platformforchange.org
METAPHORUM eList Archive available at - https://listserv.heanet.ie/ucd-staffordbeer.html
Archive of CYBCOM eList available at - http://hermes.circ.gwu.edu/archives/cybcom.html