11.05.08
Economic models vs why the eonic model succeeds
The previous post discussed market economics, Free markets and economics, and then suggested looking at the eonic model.
Economic models tend to think they are analyzing the whole of culture by analyzing a subset, the economy, which is forced on the whole. Wrong approach. Forget economics for a moment, as a subsystem, and look at the totality of culture, over long ranges of world history. Such a system is far too complex for a mathematical model of the standard type. All at once a beautiful simplicity opens up, a complex dynamical pattern, one that we can study empirically, but with some elements of dynamics, taken empirically. The dynamics is strictly an aspect of the past, and the eonic model is designed to switch off in our immediate past (and the data shows this) and turn into the account of the free agents instead of the system.
Economic models suffer one and the same problem indicated by Karl Popper/Isaiah Berlin, applied to Marx (!), the historical inevitability argument. You can’t apply deterministic models to systems of free agents. But of course noone can stop you and the result often fails on prediction.
The eonic model succeeds because it takes this into account, and discusses both the system being analyzed and the agents inside it, which includes the observer doing the theory.
The result of this kind of thinking is in principle and practice used in economics, e.g. the study of cyclical behavior: you simply study economic patterns empirically and include the observer, i.e. as you observe the system cycling from your present you take action to modify the system by ‘piecemeal social engineering’. Simple, nothing complicated. That’s what economists do in practice. What they are doing currently as the ‘system’ once again does something unexpected, i.e. the current financial crisis.
The eonic model is based on the distinction then of a ‘system’ and the ‘free agent’ inside it. The dynamics of the system suddenly opens up, into a beautiful simplicity, and we see a kind of evolution in action.
The result of all this is a reminder that humans are in charge of economic systems. They aren’t mathematical abstractions that we are required to obey. The rules were rigged anyway, to serve the interests of those who make the models.
We were talked into deregulation to free markets because of these abstractions and the claim they were ‘holy laws of economic behavior’, which they weren’t, and the models were mostly junk.
That’s what happens in a meritocracy of this type. Math types get snared by math problems and pursue their logic in a narrow focus. The basics of the foundations of a science of economics were never laid, so this imaginary game proceeds on its own logic until shaken by reality checks.