I can’t sing the praises of Charles Hugh Smith and his “Of Two Minds” blog enough.
Case in point is this piece entitled Bleeding the Patient: Modern Economics and the Symbolic Economy, in which Smith ties together why nothing in our modern world seems to be working anymore, specifically, because our “unifying model,” the ersatz “science” of economics, is as wedded to the reality of the actual behavior of economic “bodies” as, say, medical “science” was wedded to the reality of the human body, circa, say, the year 1500 or 1600.
Or, as I heard recently in another context, if you don’t know where you even intend to go, no captain on Earth can successfully get the ship there. Modern economics, and, alas, as it infects other human endeavors like politics, law, as well as “understanding” of human behaviors in a variety of contexts… since the hypothetical “rational actor” that is the basis of the supply/demand graphs and econometric voodoo that is supposed to (but never does) predict actual behavior or outcomes bears no relationship to actual humans, who, indeed, are frequently motivated by things other than money and money-grubbing behaviors. Testify, Brother Smith:
We are mired in a similar era of pseudo-science being accepted as actual science, i.e. as reflecting the underlying causal mechanisms of life and the universe, and that pseudo-science is called economics.
As I have noted here many times, we are experiencing not just a standard-issue financial crisis but the failure of the entire pseudo-science edifice of modern conventional economics.
The basis of pseudo-science is to mask unfounded, misguided and potentially disastrously dangerous ideas drawn from superstition and folk beliefs with the external trappings of real science. Thus economics presents itself as a “science” by invoking the symbolic magic of equations and quantification of data gathered from the real world.
In esence, the “understanding” of junk-science is symbolic: the body is plagued with “humors” which can be drawn out via bleeding the patient, etc. The actual workings of the body, far beyond the conceptual reach of the folk/junk symbolic “science,” are conceptualized symbolically via analogies: disease is “hot” or “cold,” the body functions like a clock, etc.
In the exact same fashion, conventional economics “understands” the workings of the economy symbolically, and its “cures” play out in its artificial construct, the symbolic economy.
The symbolic economy is based on the cargo cult of “animal spirits”, the magical “humors” which ignite the economic activity quantified by the pseudo-science. The witch-doctors at the Federal Reserve (the eminent, highly educated “expert” bleeders) have been busy painting radio dials on rocks for the past four years, hoping that their increasingly desperate pleas will magically reach the gods of “animal spirits.”
The true nature of conventional economic’s symbolic economy is best illuminated by the cargo cult’s increasing dependence on managing perceptions as the “tool” to influence financial behavior. In other words, the “physicians” rely on fundamentally symbolic actions to influence the symbolic economy.
Well then. We must understand that policy-makers from Printing Press Ben Bernanke to Timmeh Geithner to Blankfein, Dimon, Pandit and Moynihan themselves… and their subordinates [such as… Obama]… they believe… not only in the cult of themselves… but in the cult of the correctness of their methods. Anyway– you get the picture. The real reality based approach– food, water, shelter, personal relationships, how to get around, spiritual fulfillment… those are reality. Everything else– money, politics and so forth… fictions… which, if we play it right… we can insulate from our realities, so that just maybe we can get through while others elect to drown in a sea of… unreality. Alrightie.