domingo, septiembre 21, 2014

Replacing the Science of EcoNoMics with the System Profession of EcoIsOurs

Second update. To Paul Krugman: let's 'destroy the EcoNoMy' to help emerge the EcoIsOurs by embracing Great Capitalism. That's simply a way to let Schumpeter's creative destruction operate to make us all better off. While Paul Krugman's article Planet on the Ballot is in agreement with our argument that Bill Gates' 'Energy Miracle,' is not needed, we differ where he mechanically suggests that "As both a technical matter and an economic one, drastic reductions in emissions would, in fact, be quite easy to achieve. All it would take to push us across the line would be moderately pro-environment policies." The difference is that the ballot, as a consensus mechanism, isn't going to provide the required organic action oriented institutional innovation, under a scientific attitude, that's mentioned next.

In fact, we can select where Krugman says "True, Republicans still robotically repeat that any attempt to limit emissions would 'destroy the economy,' to reframe it as enabling the emergence of EcoIsOurs, which is beyond the scope of the ballot. With regard to the need to learn about the institutional innovation required, please consider the post To Fareed Zakaria, thanks! But, Yeats is still right on, which is to be considered as an integral part of this text.

We are only repeating here the introduction of the post that says "Fareed Zakaria has given us a very important contribution today under Fareed's Take, in his program GPS. His contribution can be read in his Washington post's article In the West, the political center holds — but barely." Here we add that we need to think of not just one center, but two. The current center today has become pro anti-systemic and it might remain pro anti-systemic even under Inclusive Capitalism, as discussed in "Eighth update. Global synthesis: great capitalism first, elections second," of.the post World Economic Forum Davos 2016: Will #OWS and #15M love The Industrialist’s Dilemma? 

As can be seen on the main entry of that last mentioned post, the second center is pro systemic, which went missing at COP21 in order to support Great Capitalism institutional innovation to zero carbon. I add now that the proposed agreement Laurent Fabius, French Foreign Minister, who chaired the summit and directed the negotiations said on the day before last  must be "balanced and annoy everyone. " In a tweet that day, we suggested that it shoud annoy the pro anti-system. This suggests that electoral candidates needed to fill the center need to embrace Great Capitalism.

The real problem on Krugman's suggestion can be inferred from what he says:
As a card-carrying economist, I am obliged to say that it would be best if these policies took the form of a comprehensive system like cap and trade or carbon taxes, which would provide incentives to reduce emissions all across the economy. But something like the Obama administration’s Clean Power Plan, which would use flexible regulations imposed by the Environmental Protection Agency on major emitters, should be enough to get us a long way toward the goal.
This is how EcoIsOurs trumps EconNoMics. This time it is based on the must read article The Economy Isn’t A Machine. It’s Organic and Constantly Evolving.written by W. Brian Arthur, the recipient of the inaugural Lagrange Prize in Complexity Science and the Schumpeter Prize in Economics. The following paragraph of that article reveals the urgent need to change the mindset to get out of the current great depresion
The standard, equilibrium approach has been highly successful. It sees the economy as perfect, rational, and machine-like, and many economists – I’m certainly one – admire its power and elegance. But these qualities come at a price. By its very definition, equilibrium filters out exploration, creation, transitory phenomena: anything in the economy that takes adjustment – adaptation, innovation, structural change, history itself. These must be bypassed or dropped from the theory.
The new idea is that the system profession EcoIsOurs is organic and constantly evolving. This is another attempt to suggest shifting away from the independent underlying assumption of EcoNoMy (that emerge firts from Spanish Eco No Mía ) to the interdependent EcoIsOurs (to Eco Es Nuestra) as a great reminder of the need to create as sson as possible the systemic civilization.

First update, I posted the following comment under the article a Forbes article mentioned below, that says:

"No plea about inadequacy of our understanding of the decision-making processes can excuse us from estimating decision making criteria. To omit a decision point is to deny its presence – a mistake of far greater magnitude than any errors in our best estimate of the process." -- Jay W. Forester (2000) "Perspectives on the modelling process"  
Dear Steve Denning,  
Good afternoon! 
Please accept the following suggestion. Instead of Robert Piketty deserving a Nobel Prize in EcoNoMics, I understand that it is Jay W. Forrester, the father of System Dynamics, who deserve a Nobel Price, in the discipline of EcoIsOurs, in accordance with the blog post being distributed by the following tweet: 
@gmh_upsa - Replacing EcoNoMics with EcoIsOurs  @fredemamzade @adriantsn @JoseManuelLunaV  #EuropeIN 
Best regards, 
José Antonio Vanderhorst-Silverio

“Good Artists Copy; Great Artists Steal” – Picasso
This is written as a complementary follow up to Why the Eurozone leaders must change their common sense first. I argue that the difference in meaning between EcoNoMics and EcoIsOurs is so great, that an effort to transition EcoNoMics itself to the new meaning given by EcoIsOurs will be very confusing indeed. In a way it explains the new common sense that the new European Commission needs to have its members and the Eurozone to enter a Golden Age as soon as possible, by letting wisdom govern, instead of money.

In order to describe both EcoNoMics and its replacement EcoIsOurs, I will mostly copy, with minor editing, the abstract, part of the introduction and part of the historical evolution of the text of the Plenary Address of the International System Dynamics Conference “Economic Theory for the New Millennium, given by Dr. Jay W. Forrester, the father of System Dynamics, on July 21, 2003, in the city of New York.

By stealing those words, but not revealing the remainder of the Plenary Address, I believe that instead of extracting huge value, as many business identified as vampires, for example, by Forbes, are doing today, I believe that I am actually adding great value to it, by marketing its great content, to help the world enter the Golden Age that Carlota Pérez predicted before that Address. However, any distortion or mistake introduced in this approximation, done here with an action oriented scientific attitude, is wide open to be perfected by making comments to this introductory note, which pretends to integrate the Good, the True and the Beautiful into an emerging integrated whole of the EcoIsOur world.

As a reason for its replacement, EcoNoMics has tried to be a science and in its effort has failed to answer major questions about real life behavior. It has failed to adequately explain what happens in the real world. The usual EcoNoMics literature presents it as a science, with EcoNoMist trying to emulate the hard sciences such as physics. Those attempts to force it into the mold of a science have not been satisfying. As a result of trying to pose as a science, its field has become substantially detached from real world behavior, and has tended toward a close theoretical discipline disconnected from the world it tries to explain.

EcoNoMics has drifted toward a conceptual structure that is narrow, is based on unrealistic assumptions, emphasizes equilibrium conditions, and is committed to mostly linear mathematical methods and statistical analysis of historical time-series data mostly confined to simple concepts. In essence they restrict themselves to learning from the past, which is a big mistake when new technological revolutions at the highest level arrive and even a worst mistake when a new civilization emerges. The failure of EcoNoMics to provide, for example, a persuasive explanation for the Great Depression of the 1930s, has left the world without protection to help us out the current Great Depression at the beginning of the 21st Century.

EcoIsOurs is to be a system profession, such as management, engineering and medicine, each of which is based on underlying sciences.  An EcoIsOurs systems profession would be based on underlying sciences such as psychology, decision-making, and nonlineal feedback dynamics. As a systems profession, it would then reach beyond its basic sciences to understand and redesign EcoIsOurs systems, which will concentrate in learning about the emergent future.

By closely observing the structures and policies in business and government, simulation models can be constructed to answer questions about business cycles, causes of major depressions, inflation, monetary policy, and the validity of descriptive economic theories. A system dynamics model, as a general theory of economic behavior, now endogenously generates business cycles, Kuznets cycles, the economic long wave, and growth. A model is a theory of the behavior that it generates. The economic model provides the theory, for the great depressions and how they can recur, for example, 50 to 70 years apart. Those models help reveal inconsistencies, weaknesses, errors, and mismatches between the theories and reality.