Economics, Faith, and Force

Okay I ended up yesterday talking about how it looks to me like there’s a whole lot of faith, and no little bit of force, tied up in the ideas behind economics.

Economics is the activity, or labor, an individual performs to produce goods and services to meet its hierarchy of needs such as food, shelter, clothing, security, etc.

As humans are social animals an individual participates in economic activity not only in service of itself but also in service of the groups they are a member of.

Economic activity owed by a member on behalf of a group is determined by authority.

The more legitimate the authority is viewed by the members of the group under it, the less coercion that’s necessary to extract the economic activity due the group from its members.

Weber gave three forms of legitimate authority and after listing them I jumped really quickly to the statement “Legitimate authority seems to boil down to issues of faith... or force.”

I’m going to be a little bit clearer about how I got there just in case it isn’t as obvious as I thought it was at first blush.

So the list I gave with really simple descriptions was;

Rational-legal – a formal system of written laws

Traditional – established habit and custom passing from generation to generation

Charismatic – authority derived from the leader/s themselves accepted as legitimate by the ruled group.

How I got to the faith conclusion here runs something like this when taking each of these in turn.

Legitimate Rational-legal authority is based on a formal system of rules and laws that are written down objectively.

It’s pretty obvious that these formal systems were invented by people, unless you’re trying to make the “finger of god wrote these ten commandments” argument about the origin of the laws and then we’re at a point of faith.

Elseif, as Feynman said, “"Science, is the belief in the ignorance of experts" meaning that there’s an issue of faith involved in following a formal system that was cut from whole cloth so to speak.

http://www.earlham.edu/~peters/nomic.htm

Legitimate Traditional authority is easy.

You can trace that back to “the divine rights of kings” or even further to actual god-king embodiments.

That’s back to faith.

Legitimate Charismatic authority is perhaps the most obvious of all.

If there’s no traditional basis to listen to someone and their not using the rules of the formal system to make changes to the system then the only way their authority is going to be accepted as legitimate is if the group just LIKES the guy and follows his rules on faith.

Legitimate seems to be a synonym for axiomatic-faith.

Force comes into it from Weber’s definition of “the State” that says the state is that entity which claims a legitimate monopoly on violence over a territory, which it may therefore elect to delegate as it sees fit.

As a “State” loses control over coercive violent force it ceases to be functional.

You then get into “pecking orders” where authority is exercised on the “I’m bigger than you” principal.

So in this simplistic view it pretty much follows that as citizens lose faith in their State the State loses legitimacy and declines in function.

I think the root of this is in just how fairly the citizen feels the economic exchange between themselves and the State meets their particular hierarchy of needs.

Jefferson turned a neat little phrase or two concerning the idea.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.”

I just figured I’d better be clearer about how I got to that “Legitimate authority seems to boil down to issues of faith... or force” statement because the two pop up a lot in more detailed issues like the question of “what is money?” for example.

Politics, Economics, and Citizenship

I read this quote once;

"War is the continuation of policy by other means,"

- Clausewitz

At the time I was more interested in some of old Carl's more practical ideas about the use of military force but this stuck with me.

As I began to start trying to come to grips with basic economics I found a not uncommon posit based off Clausewitz that says politics is the continuation of economics by other means.

Economics is basically the study of “goods”; their production, distribution, and consumption.

A Good is an object or a service that satisfies a need or desire of an individual.

A need is… uhhhh…

Well Maslow says needs’ can be viewed as a hierarchy of 5 tiers.

The most important needs are physiological; breathing, food, water, sleep…

Next are needs of security, then socialization, then esteem, and finally what he referred to as self-actualization.

http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

So from simple definitions it would seem that humans engage in activities that produce goods and/or services to satisfy a series of increasingly important needs required for a healthy existence.

This activity is called economic and to control this activity in large groups we use political means such as regulations and laws enacted and enforced by some form of authority.

When one group disagrees with or won’t follow another group’s regulations or laws controlling their economic activity then war is used to assert authority.

This seems to allow the control of larger and larger groups over time, at least for the victor of the wars.

Now getting into the etymology of a few of these terms real quick-like…

The term “politics” comes from the Greek politika which was derived from Aristotle’s “Affairs of the City” and means ‘relating to, of, or for citizens’.

“Economics” comes from the Greek words for house (oikos) and law (nomos) giving the term a meaning of ‘laws of the house’.

The term “citizen” has a more complex etymology deriving from Latin into Old French and taking on subtle distinctions of usage over passing generations but the general idea is ‘an individual who operates economically as a functioning member of a city’.

So the word origins suggest we have individuals with needs living in households that require “laws” to operate in such a manner that the individual’s needs are more or less being met.

In turn the individual’s home is a part of a city (i.e. a group) with an authoritarian relationship that allows the citizen access to goods and services (like security) that meet needs they might not otherwise be able to satisfy in return for a portion of the economic activity of the household, dictated by law, being used in the interests of the city as a whole rather than consumed by the individual citizen performing the economic activity.

Somewhere between the economic activity an individual performs for themselves and the economic activity they perform for the group/s they are a member of creeps the idea of authoritative control.

As a matter of fact the whole modern subject of Economics is derived from the earlier and broader subject of “Political Economy” itself derived from “Moral Philosophy” (i.e. Ethics).

Once you’re talking Ethics you’re smack in the realm of trying to define “legitimate authority” as opposed to less equitable “dominance hierarchy’s”.

Max Weber describes the idea of “legitimate authority” as authority considered justified and “legitimate” by both the ruler and those ruled.

When authority is considered legitimate the commands of rule are much more likely to be obeyed by the ruled group without much reliance on dominance or other forms of coercion.

He gave three forms of legitimate authority;

Rational-legal – a formal system of written laws

Traditional – established habit and custom passing from generation to generation

Charismatic – authority derived from the leader/s themselves accepted as legitimate by the ruled group.

At this point we’re into la-la-land as all these “legitimate” concepts trace back to stuff that has you arguing the existence of god or other such futile discussions.

Legitimate authority seems to boil down to issues of faith.

... or force.

That's an awfully shaky foundation... but I'm having a hard time avoiding that conclusion.

Intro and purpose

Maou Tsaou: A scholar who, having failed, gives himself over to wine.

Ne·o·phyte/’nee-uh-fahyt /Noun

A person who is new to a subject, skill, or belief.

So Maou Tsaou is a “drunken neophyte.

That’s fair enough as far as it goes I suppose but it certainly begs the question, “a neophyte of what?”

My answer to the question, “what have you got?”

In other words on its most favorable blush Maou could be said to be “a Jack of many trades but a master of none.”

Another way to say it without churching it all up is that Maou knows practically nothing about a whole bunch of things.

So what I hope for this lil’ project is a post or two a week on whatever is tickling my intellectual fancy (such as it is) at the time.

Generally that has to do with a lot of history, some technology, a little mathematics scattered in here and there, a bit of biology, and a growing appreciation for arts, both crafting and fine.

Of course, these days it’s hard to ignore politics… much as I’d rather.

Ergo, if anyone at all ever bothers reading this stuff look for the first few topics I focus on to try and come to grips with just what is going on in that realm currently.

I have some gut instincts about what’s happening politically these days but I’m curious as to how accurate those instincts actually are.

Opinion does not equal expertise no matter how strong the emotional investment in the opinion.

I prefer expertise to instinct.

The question of which expert to follow, for example Friedman or Keynes, is another problem altogether but I figure the least I can do is try and show who I choose to follow and why when I reach those junctures.

Before I can reach those junctures though I’ve got to have some kind of idea of what something like economics actually is to begin with.

That’s what this blog is for.

I think of it as a kind of record of my ignorance.

I don’t expect everyone to agree with me and don’t expect to find all the “right” answers.

I do hope to refine my thoughts and ideas on various subjects through this process and also hope to find a few answers that are “right” for myself at least.

“Sunshine go away today

I don't feel much like dancing

Some man's gone he's tried to run my life

Don't know what he's asking

Working starts to make me wonder where

The fruits of what I do are going

He says in love and war all is fair

But he's got cards he ain't showing

How much does it cost, I'll buy it

The time is all we've lost, I'll try it

But he can't even run his own life

I'll be damned if he'll run mine, Sunshine”

-Jonathan Edwards, “Sunshine (Go Away Today)”