In a chapter of Nobel prize winning physicist Richard Feynman’s book Surely You’re Joking Mr. Feynman! he talks about junk science and relates it to a South Seas tribal phenomena known as the cargo cult.
In the South Seas where this cargo cult of people wait for money and wealth to just fly in, and the myth survives even if it does not thrive. During WW2 they saw airplanes land with lots of good materials, and they want the same thing to keep on happening now. If only.
In the South Seas they’ve arranged to imitate things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas.
In the South Seas he’s the controller and the people, well they wait for the airplanes to land. They’re doing everything absolutely right. The form is absolutely perfect. It all looks exactly the way it used to but planes do not fly in. No airplanes land, no wealth from elsewhere, no money from the heavens.
All this is cargo cult science and because the people follow all that was before and all the forms of scientific investigation to boot, yet they’re missing something essential, because, on the evidence, their planes just don’t land anymore.
Its like this, rather than understanding and initiating the fundamental cause of some effect the cargo cult imitates the form of the causal process in the hope that it will bring them the actual effect but the planes just do not land anymore.
In the South Seas the islanders created an imitation airport in the hopes that the plane would fly in with goods and money. In the same way, Launceston's council is fabricating faux runways.
Keynesian economists are a lot like cargo cult economists and there are even more extreme, and dumber, economic belief systems. We hear the Keynesian doctrine that in order to restore economic prosperity, we must encourage spending even when you are not buying much of anything. If only people and governments would spend we will be OK.
In the USA lowering interest rates to zero in order to encourage lending is an idea that goes under the banner of being a plan. Of course the money for these programs will be created out of thin air by the 'The Banks' when they borrow securities with fake money. Have your heard this stuff before?
In a barter economy, people just would not think to offer nothing for something that they actually want. They actually offer something that they own or have created. Nothing actually changes when we introduce a 'medium of exchange' – money – to simplify the exchange. To be able to spend money, you must actually produce something – a good, a service of value – and offer it as a value for a value exchange.
Put another way, spending or “demand” is an outcome of production. Your demand is your supply which is in essence 'Say’s Law' – the law of markets, In classical economics the aggregate production necessarily creates an equal quantity of aggregate demand. Jean-Baptiste Say told us that in 1803 and so so many in local government just do not have a grasp of this basic economic principal
Just look at the cargo cult economists in local government as they look for the silver bird to fly in and shower them with money and goodies from the heavens. They've built the runways, chanted the right words, shook the right hands and put on the right cloths etc. But will the planes land?
When governments print paper money and they offer it to other governments, local government included, and in turn the paper dollars are offered for goods and services, it appears that someone has actually produced wealth and that they are exchanging it for something of equal value. Its a fair question to ask in the current circumstance, does this look like anything to be seen in local government right now? And do the services have value ... actual value ... real value?
After all, in the past, when the paper was backed by real wealth (gold), it was understood that there was a lot of paper money around. Just as the cargo cults fabricated control towers and runways in the hope that it would bring in real goods, and for nothing, in the same way cargo cult economists believe that by creating paper money and that its real and its real wealth. It has to be real because its printed with fancy ink on fancy plastic and its got large numbers printed on it.
Just like it is where the planes don’t land for the South Sea islanders, local government in Tasmania local government look to fly in money to fund pretend projects that the people will buy if only we can build them bigger and bigger still – anyway that seems to be the plan.
I'm sorry, I must go now. I'm creating a new shopping centre with someone else's money to compete with the old one, and I have to check to see how much money is flowing in so far and after that I must see who I might sell it to.
All this is cargo cult science and because the people follow all that was before and all the forms of scientific investigation to boot, yet they’re missing something essential, because, on the evidence, their planes just don’t land anymore.
Its like this, rather than understanding and initiating the fundamental cause of some effect the cargo cult imitates the form of the causal process in the hope that it will bring them the actual effect but the planes just do not land anymore.
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Keynesian economists are a lot like cargo cult economists and there are even more extreme, and dumber, economic belief systems. We hear the Keynesian doctrine that in order to restore economic prosperity, we must encourage spending even when you are not buying much of anything. If only people and governments would spend we will be OK.
In the USA lowering interest rates to zero in order to encourage lending is an idea that goes under the banner of being a plan. Of course the money for these programs will be created out of thin air by the 'The Banks' when they borrow securities with fake money. Have your heard this stuff before?
In a barter economy, people just would not think to offer nothing for something that they actually want. They actually offer something that they own or have created. Nothing actually changes when we introduce a 'medium of exchange' – money – to simplify the exchange. To be able to spend money, you must actually produce something – a good, a service of value – and offer it as a value for a value exchange.
Put another way, spending or “demand” is an outcome of production. Your demand is your supply which is in essence 'Say’s Law' – the law of markets, In classical economics the aggregate production necessarily creates an equal quantity of aggregate demand. Jean-Baptiste Say told us that in 1803 and so so many in local government just do not have a grasp of this basic economic principal
Just look at the cargo cult economists in local government as they look for the silver bird to fly in and shower them with money and goodies from the heavens. They've built the runways, chanted the right words, shook the right hands and put on the right cloths etc. But will the planes land?
When governments print paper money and they offer it to other governments, local government included, and in turn the paper dollars are offered for goods and services, it appears that someone has actually produced wealth and that they are exchanging it for something of equal value. Its a fair question to ask in the current circumstance, does this look like anything to be seen in local government right now? And do the services have value ... actual value ... real value?
After all, in the past, when the paper was backed by real wealth (gold), it was understood that there was a lot of paper money around. Just as the cargo cults fabricated control towers and runways in the hope that it would bring in real goods, and for nothing, in the same way cargo cult economists believe that by creating paper money and that its real and its real wealth. It has to be real because its printed with fancy ink on fancy plastic and its got large numbers printed on it.Just like it is where the planes don’t land for the South Sea islanders, local government in Tasmania local government look to fly in money to fund pretend projects that the people will buy if only we can build them bigger and bigger still – anyway that seems to be the plan.
I'm sorry, I must go now. I'm creating a new shopping centre with someone else's money to compete with the old one, and I have to check to see how much money is flowing in so far and after that I must see who I might sell it to.
Tanda Vale, Cynical Economics
1 comment:
Excellent piece...indeed seeing people like Albert van Zzzzzz dressing up in chains and robes is a disquieting experience from many perspectives. Who is he trying to impress? Obviously it is the Gods. Am I the only one squirming with embarrassmment at the antics of our Councils?
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