To be more clear, and specific, I meant only that RE has not offered any argument against the validity or truth of the concept of either the multiplier effect or the local multiplier effect. He has merely stated that it doesn't really happen, or exist. If I remember correctly, JDW agreed with RE on this, but no one has yet to put up an argument for or against assertions on this point.
Um, the First and Second Laws of Thermodynamics? The Law of Conservation of Matter?
You can't create things or energy out of nothing....
There can't be any multiplier effect for material wealth. Non-material wealth is an entirely different story.
"Money" doesn't come close to what RE is describing, "riches" is too vague.... "Goods" is probably the closest term in common use, but it doesn't quite capture it, because what RE is talking about include electrons streaming through a wire or methane molecules streaming through a natural gas pipeline, which aren't exactly what are brought to mind by the term "goods". I feel like there is a term out there that does adequately encompass it, I am actively trying to figure it out.
Me too!
I strongly suspect that the underlying pattern to our various confusions and disagreements here relates to the problem I'm interested in solving, which is the problem of how we may now
sincerely employ the word "wealth". As I said, I believe the traditional concept of wealth is now both obsolete and moribund.
Moribund is probably the better word, given the strict definition of obsolete in most dictionaries. Moribund:
"being in the state of dying : approaching death" -- Merriam Webster Dictionary.
Obsolete:
1. out of use or practice; not current
2. out of date; unfashionable or outmoded
"no longer used or needed, usually because something newer and better has replaced it"
American Heritage Dictionary.
If I'm correct, Adam Smith's term "wealth" is currently of little utility in our world, for various reasons. It is not yet obsolete, in any strict sense, only in that an obviously superior definition has yet to be offered, vetted and widely embraced. If a paradigm shift in economics has begun, which would radically reframe and redefine
wealth, that shift is only at its incipient stage, at best. But that does not, by any means, mean that it isn't underway.
Thomas Kuhn popularized the concept of a "paradigm shift," by which he meant a fundamental change in the basic concepts and experimental practices of a scientific discipline. His classic example was the Copernican Revolution, which was the paradigm shift from the Ptolemaic model of the heavens, which described the cosmos as having Earth stationary at the center of the universe, to the heliocentric model.
As we all know here, the notion of a "social science" has long been considered dubious by practitioners of the physical sciences, but it is just this which the field of economics is supposed to be. I any case, if economics is overdue for a paradigm shift, as I suspect, it will bear only vague resemblances to paradigm shifts in cosmology or any other physical science. It would more likely bear resemblances to a paradigm shift in social or cultural anthropology, or philosophy. The latter, philosophy, may be agreed to have undergone something at least parallel or analogous to a paradigm shift as Kuhn used the term. But it would probably be a more loosely, analogous usage of the phrase. This would probably be a little less so with regard to various sweeping changes which have occurred in social and cultural anthropology. An example in that field would be the shift from Anthropology's origins, in which it was a widely held assumption of modern Euro-centric anthropologists that the best vantage point whereby to comprehend non-modern, non-Eurocentric cultures was through the lens of the cultural assumptions of the anthropologist's own cultural setting, time and place. The result of such anthropology was a lot of biases which the anthropologist or ethnographer was simply unaware of, blind to. He or she could therefore not subject his or her own observations to scrutiny. You may call these "blind biases".
We are all in a similar situation when we talk about "wealth" from within the blind biases of our culture and it's sense of economy and economics. But..., but ... many of the blind biases surrounding our popular notion of "wealth" have been drawn out into the light where they may be examined.
One of these -- and there are very many! -- is spoken of by JDW above: Methane gas and electricity. In Adam Smith's usage of the word wealth, methane and coal and oil would all be considered an obvious form of wealth. We, today, cannot be so sanguine. For to utilize such "wealth" here is to reduce wealth over there. Same could be said for industrial fertilizer, jet planes, automobiles, military equipment and education for industrialism. On and on and on...
ad, almost
infinitem. The associated "externalities" now have a cost far and above any benefit which we could sincerely name "wealth".
However!! There are genuine forms of material wealth!!
This point is crucial. The science of ecology, which is in fact a physical and not a social science -- for the most part -- explains the fundamental principles of such wealth.
Social sciences further flesh them out, and so on and so forth, and this is my
general point. But the entire scope of the significance of all I'm saying here is not yet gathered together into one place, such as Nicolaus Copernicus’s
De revolutionibus orbium coelestium.The implications of all of this are showing up whenever intelligent people discuss wealth. The term is in critical disarray, and signals a fall into the moribund. But just because an idea or theory is no longer proving useful or explanatory is not also to presume that a general theory of wealth is anywhere near maturity. There will likely be a time of confusion and ignorance, even of foolishness, as we learn gradually how to talk again about such matters.
In the mean time, we will not find much common agreement, other than to discover together that something is terribly wrong, disjointed, confusing and broken about how we HAVE been talking about such matters.
Our difficulties in such discussions spring largely from the fracturing of the historical "natural philosophy" and philosophy more generally, into various university departments and their associated disciplines, each with a somewhat arcane language and discourse of their own. What I seek to do is to reverse some of this, not to eliminate these categories but to see how what we may call the physics and chemistry of wealth may relate to the philosophy (e.g., ethics) and social science (e.g., psychology), etc.
I realized a while ago that what is required for this paradigm shift to continue to evolve is what may be called a General Theory of Well-being, which may be said to be a subset of ethics and aesthetics. But it would need to address things just as observably real as the motion of the planets or the first and second laws of thermodynamics! Gawd help us that anyone should bring up C. P. Snow's "Two Cultures," but I suspect it may be obliquely relevant, nonetheless.
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Topic: The First Law of Wealth (Read 9777 times)
July 12, 2014, 04:27:08 PM