Extract from EVOLUTIONARY ECONOMICS – E-book by Hirak Bhattacharya

Extract from





E-book by Hirak Bhattacharya




published by IDEAINDIA.COM at
m.ideaindia.com/by_now.php?id=1911-EVOLUTIONARY%20%20ECONOMICS






HIRAK BHATTACHARYA, born in 1953, Hirak holds graduate and post-graduate degrees in Engineering from Indian Institute of Technology, Kharagpur. He served in public and private sector enterprises for about 25 years and is currently working as a freelance management consultant from Kolkata, India. Hirak has had a long cherished dream to write a book on Economics. His enthusiasm and hard work have resulted in the present work which, in his own words, ‘is intended not to educate but animate’!





Preface from






I once came across a dull painting of a pipe (years before I was introduced to the equally morbid painting of a ‘rational consumer’ in the books of economics) with an intriguing caption, ‘This is not a pipe!’ In the same sense, this is not a book and I see no book as being capable of capturing the reality. There are very many ways a book might be, and a book such as this which has a lofty intent to paint the reality of economics is no exception. It remains an awkward question as to how this plenitude of economic reality can be secured in ink marks.



There are indeed exciting economic realities which can be grounded on individual or even collective psychological, historical, cultural, cultivated or conditioned dispositions, often to the extent when pain pleases and the forbidden attracts. A kaleidoscope of economic reality, such as, ‘wealth pleases and poverty displeases or terrifies’; or ‘wealth displaces what poverty pleases’; or ‘poverty disposes what wealth proposes’; may or may not be very comforting. These are matters of posturing and the way it proceeds is often intellectually dishonest; it simply assumes that certain things or facts are more, or less worthy. Even the warped perceptions or the chronicles of haughty plutocracies or of embarrassed and staid bourgeoisies or of belligerent proletariats sprouting from the percolation model of wealth are grounded on a moral or sympathetic naiveté (the discourses notwithstanding). Indeed, one may also ask whether much of the epistemological soul searching in economics has resulted in anything but a retreat to vulgar empiricism. We do seem to recognize the danger in such grounding but do not possess the will to confront it. If history were not to repeat first as a tragedy and then as a farce; and if it were not to make a point so crass that it is embarrassed by (or enamoured of) the fact that it always acts with malice aforethought (or any overweening altruistic pretensions), we daresay that we need to subject economic realities to the grind and rigours of a different apparatus criticus.



And on a different plane, economics can also excite us and economic activities can offer the excitements without the convenience of wealth or the inconvenience of penury. Such a scheme is plausible only in the realm of aesthetics which harmonizes all and negates nothing. And aesthetics is very much present in the furniture of economic reality; we need not suffer from a sense of deprivation on that account. We may, though, doubt about the purity of such forms or even, contents. As a matter of fact, economic reality has evolved much in aesthetical terms than in any other, economic or social. These other terms are about socio-economic gymnastics, highly relevant to political doctrines and epistemological discourses but hardly amenable to evolution.



This book intends to carry forward this quarry on to the evolutionary aspects of economizing or more plainly, evolutionary economics. And, in the fitness of its proposition, therefore, bears the title ‘Evolutionary Economics’. It is an outcome of my confidence in evolution that underscores the primacy of aesthetics in any disposition that embraces intelligent life: biological or linguistic or social or economic. And by intelligent life, we would do well to consider a life which need not manifest in everything that follows laws of reductionistic science. It is all about a disinterested speculative manifesto of free choice that any evolutionary life manifests. Any interested choice is an inevitable outcome of familiarity (even when it is by reason!) and such choices are inimical (or do not conduce) to any evolutionary enterprise. But, I have no great confidence that anything that I say is right in any other sense than the aesthetical; nor is that important as long as the book is true to its proposition.



I have invoked the term evolution here in a more generic sense in signal contrast to its limited analogical conveyance to economics or the biology of species, molecules and elsewhere. More particularly, evolution, here in this book, has been sought to be conveyed not as an analogy (analogically deterministic), as is done elsewhere, but as ontology. I am emboldened by the distinctive and the all pervasive theme of aesthetics (from amongst the five known fields of study, viz., logic, aesthetics, ethics, politics and metaphysics) to expand the evolutionary effect of ‘natural selection’ to ‘aesthetic selection’ (or more expansively may be, selection through and by means of aesthetic appreciation / contemplation/ speculation). And of all conceivable selections, only aesthetics brings forth complete ontological identity of the means and the end. The phrase ‘natural selection’ (and, even the word, ‘evolution’) is much tainted. It is one of the most extensive systems of counterfeiting that the world has ever seen; a facsimile of a certificate that nature has given to the righteous, rational and economic man entitling him to any competitive and innovative misdemeanour! That apart, economics makes a real hash of the word selection, unobtrusively though, through its myriad assumptions; everything is naturally selected – humans (as rational and natural consumers) and human wants and desires, goods and properties of goods to satisfy human wants, utilities, prices et al. It was but natural that economics would naturally select natural scarcity as its only natural adversary! Gold is therefore an extreme natural want of humans and has properties to extremely satisfy extreme human wants (though with increasingly decreasing marginal utility) and desires for it, its extreme utility (cardinal or ordinal or is it both?) is ranked well nigh above any other good and its intuitively natural price (an independent variable) is conceivably higher than any other good, it being most scarce….. And in the free market (natural market) only; gold is able to hold, by adornment or investment or astrological demand (natural demand), on to its dear equilibrium (again natural) price! If human wants for gold are infinite (even if the number of humans is infinitesimally small or finite), we need no rocket science to deduce the conclusion that every material being intended to satisfy such infinite material wants is already scarce, before even economics gets a chance to play upon its theories and when it plays, we need move only along the direction of time before everything falls apart. The God in the equilibrium of economic science is hardly different from the one we frequently (sometimes unwittingly) visit as ‘fate’ in Astrology. Even Schumpeter’s ‘Entwicklung’, initially translated as ‘development’ and later as ‘evolution’, was not rid of this God of macroeconomic equilibrium! It makes economics not only a Dismal Science but also a distastefully unintelligent one – a Distasteful Science or Arts (not un-tasteful though)!



We meet nature on the surface, more particularly while selecting and competing (even, election upholds no better model for us in comparison) and alas, only a surface meets another! Natural selection, as it is made out to be, is a reflection of truth, not a truth in itself – it just points to a means, an inducible and deducible one with much assumptions (often assumptions far outnumbering propositions), not the end. And it is said to have made by chance our speciation (by which accident we have become humans) most efficient (and, lo and behold, effective too!). Why should nature be selectively so prudent to adopt a competitive means to make humans, of all the species, the highest bidder, unless it is inefficient and ineffective in itself? And whether or not natural selection is efficient or inefficient, there is no gainsaying that nature has passed on its efficiency or inefficiency to the highest bidder, and forever expecting to put it into the office. One would suppose that a few of us, natural sellers, are rarely disappointed though the nature, as a whole, irredeemably is. The title ‘natural’ seems unwise and, for the most part, is falsely (and recklessly) applied. How can nature be any wiser, if it does not know any better how to select (species) than humans? Or, are we democratically elected natural species in the free market of nature? Interestingly, unlike its very natural meaning in use now, the wise Greek had conveyed the ‘Wittgensteinian’ meaning of nature in use as ‘beauty’/’whole’!



Besides, Evolution as ‘natural selection’ makes an objective assertion that refers to a property out there in the object ‘nature’. It also purports to make an objective assertion expressing some objective property of the psychological and physiological lives of the subject, ‘human species.’ The reality of Evolution is therefore divided/shared between nature as an object and human subjects as objects. Often when we conclude a remark at a higher level we link it to something at a lower level using the word ‘because’! We might say that ‘Evolution is a great objective work of nature because of the sheer objectivity in the method of natural selection’. It is one thing to say that evolution may have methods, unlike those of exact sciences, for settling disagreements on the method (or the method’s supremacy) by which we have evolved and have become what we are, and so have some claim to objectivity. What, though, is that method? Adaptation to the aesthetics of any environment (physical or non-physical) aesthetically, is far more natural than mere survival…. At least, it discounts nature’s deliberate intent or interest in awarding a fitness certificate to any particular species! Our perception about nature is always conditioned and that conditioning affects what we make out of nature. It has been far too long that we have held natural selection as a phenomenon which captures the nuances of evolution better than others. We have far too passively perceived a nature to be copied down in order to produce representational resemblances everywhere. And the current paradigm of economics known as evolutionary economics tries to capture that analogical resemblance as well. And thus, Evolution is seldom a neutral or an innocent (let alone aesthetic) observation; it posits a supposed supremacy on a method, howsoever efficient or deficient; aesthetic selection would seem not to import the same opprobrium. We should make reality and not take it anymore. Evolution is all about ever increasing marginal utility in the lives of our species; mere entrepreneurship and innovation will hardly help generate superior variants through the selection vehicle of market! The oft-quoted premise that, if changes occur continually in the economy and that such changes are affected and effected by the markets (creative destruction), i.e., the selection vehicles, and hence it is evolutionary (even in its limited sense), amounts to merely saying that equilibrium is perpetually destroyed (it can be destroyed otherwise also) but does not guarantee at all that superior variants are created (nor does it guarantee any better state of equilibrium).



Economics could not have chosen an entirely dyastopian or kakotopian view of nature or humans for it to remain rationally or objectively or empirically or sympathetically scrumptious; per force it has taken an ‘empirico-speculative’ view, a familiar view. One would, by now, guess that more fiction is read into the concept of equilibrium, for example, than facts (more fiction is also otherwise read than facts). And when it can offer nothing better, it had better believe that something really obtains towards which equilibrium is targeted. Economics forever tries to save the rationality of equilibrium conditions by finding real objects for it (perfectly competitive market, for example); economic responses to equilibrium are always sought to be upheld as rational.



Admittedly, there will always be a gap between demand and supply (of human needs and wants); the question is who or what is going to bridge this gap? Let us not loose the perspective; it is the man who must leap; or more precisely, his taste must leap. We can see a parallel here in Merleau-Ponty’s phenomenology – ‘Between noun and verb lies the gap that each person who speaks and writes must leap.’ Rules of economics or language are secondary. If you allow prices to bridge this gap; your Rules rather explain demand as what it is not than what it is. Between human needs and fulfillment of such needs the man stands, not the Rules of economics. Rules of language have little bearing on poetry; it is not grammar which helped Shakespeare create ‘a strange misshapen thing’.



Erringly therefore, economics tries to establish a concept of men (the rational consumer) by defining its characteristics relevant to economics (its assumptions and propositions). By defining the characteristics of men which perhaps distinguishes them from other species (though there may be grave doubts about the fact that whether these characteristics are even common to all within the same species), economics specifies what every man that ever existed is like. In other words, it is clearly the case that however idiosyncratic a man might be, he still retains these characteristics of men. This concept of men is clearly relevant to this particular study of men, without being able to describe them completely. Only if one thinks that all men are identical (alike) can one argue that this concept of rational consumer in general applies to all men.



Could it be that economic responses to equilibrium are irrational? The way it vies to defend equilibrium, one suspects its honesty in its belief in equilibrium as something rational. This account though does not explain how economics can act knowingly in an irrational way! But it may also seem that, confronted with the fact of the infidelity of prices and free-markets and bounded rationalities, economics can shut its eyes and this might also be a rational way for economics to behave and explain equilibrium! Turning stone deaf to the infidelity of your spouse is also an equilibrium state. But, what economics cannot do is simultaneously act out the belief that price or market or equilibrium or humans is at once faithful and faithless.



In the reality of economic facts today, economics forever seeks to settle disagreements. Consider this: A westerner on return from a visit to any Indian city says to his friend ‘How poor’. The friend replies, ‘Surely not anymore’. Frankly, they don’t trot out inductions or deductions. He simply says to his friend, ‘If you don’t believe me go and see’. There is a vast area of our economic lives, where possible disagreements are sought to be settled by simply ‘looking’ (statistics and facts follow later). Somewhat disparagingly, this suggestion is said to be true of aesthetics as well.



Importantly, much of economics is to do with perception. We have to see the fashionable raiment emergent in a man (or even in his statue). That is why induction and deduction may sometimes seem so inapposite in economics. At best, such inductions and deductions can be used to get us to believe that economics has a certain property but do nothing to help us perceive ‘the man with the fashionable raiment’ any better. Besides, bringing economic facts to settle a disagreement about it is simply what we do. If I say that India is a poor country, I can bring before anyone the records and point out the exact facts and figures that support my contention.



Imagine the case of India where suddenly the economy plummets. There is a dispute as to whether the hitherto non-moving average per capita income has struck below the hypothetical red-mark. I, with a position above the red-mark, would be exceedingly ill advised to say that matters about India (or Indian economics) are subjective in order to allay (or underplay) all misgivings about this dispute. That may well, in some philosophical discourses, be true. In the economics of life, however, it is nonetheless the case that per capita income or living standard of India may well be below or above the red mark, and Indian people can be right or wrong, sometimes with tragic consequences, in saying which of these they are. This in itself is sufficient to establish the rightness or wrongness about ‘economic’ condition of India that enables us to treat economics as an objective matter even if, when philosophizing, we may come to seriously doubt this.



What essentially gave rise to our practice of saying that men are truly rich or poor? Nothing scientific or economic! Net-worths may now attach to different men, but we had our words of wealth or poverty (i.e., the states of perceived living standards/conditions or loosely speaking, ‘status’) long before we knew net-worth. What underlies this practice is our emergence as status-sighted beings. A survival value, thus, became attached to a shared capacity to sort economic things in certain ways by the use of our status-perceptions, and this capacity continues to be useful to us in a wide range of ways. Talk about ‘status’, then, reflects our capacities and practices. Status discrimination need not, though, be something that majority possesses, it could still be a minority skill and those not possessing it learning by experience to rely on those who do. Those who do not have the capacity can infer that others do, but that ability need not yet give them the power to discriminate (between the difference), an ability of which they may keenly feel the lack. Moreover, even where all have the capacity, some may have it in a more ‘developed’ form, may discriminate more shades and subtleties of status, an ability that they notice grows with practice. There is, too, the possibility of a historical or cultural or geographical defect, so that people can, perhaps curably, be affected in their capacities to discriminate statuses by the condition of physical existence! Other factors too, they may learn in due course, can affect discrimination and cause disagreement. What lies at the root of all this is those agreements in our judgments employed in our exercise of our ‘evolved’ economic capacities and the practices, like eating hamburgers when hungry, that emerge from those evolving agreements. We have developed as creatures that have the capacity to view things together in certain ways. This status discrimination suggests a way of thinking about economic objectivity that is far from any scientific models (let alone any philosophy).



It should not be misconstrued that the book seeks to make all economic ‘facts’ illegitimate when the facts may indeed be legitimate. It only raises an objection to the general tendency to think about economic facts as objective which rests upon interests that are not impartial or neutral but inextricably shared (and much stratified or localized).



This book, therefore, is not the effect of the same good old cause (‘the same effect always follows the same cause’), the cause in itself is different: to restore the integrity of our economic thoughts with our lives; to make economics adaptable to life. The cause can never remain the same; we can no longer hold economics as something pledged to a scheme of life which is obtained from cultural, statistical or heuristic manoeuvres or shared opinions. Economics cannot remain forever a game of shadow-boxing with instincts or subservient to the collective call of instincts. The picture of life it holds seems ridiculously incongruous with the free choices of life, the tastes of life; there is no predictable order in nature, matter or life and all predictability is due to only seemingly statistical or historical regularity (man and his history are but statistical machines!) of their otherwise indeterminate manifestations. Men and history are obtainable only as gross statistical estimates at a macroscopic level and why should one care to rest a philosophy of economic action upon such a precarious basis? In the large mass of economic actions, we have lost sight of the incalculable worth, variety and choices of life. If the concept of economic cause renders these free choices as delusions, we certainly need to transcend the current metaphors of economics. Is economics of capitalism in life now, to intone Bergson’s phrase on mechanism, a passing jest?



It is also high time that we invoke Capra’s systemic or holistic or ecological thinking into economics and economies; that there are no parts at all and what we call a part is merely a pattern in an inseparable web of relationships. Every partial paradigm, howsoever dominant or demotic, contains the seed of its own demise. Capra has a measure of the problems that arise from the parts, the plaintiffs’ briefs - "Ultimately these problems must be seen as just different facets of one single crisis, which is largely a crisis of perception. It derives from the fact that most of us, and especially our large social institutions, subscribe to the concepts of an outdated worldview, a perception of reality inadequate for dealing with our overpopulated, globally interconnected world.” The patterns, the structures and the processes of economics, here in this book, are sought to be connected in the widest possible web of an aesthetic relationship (as opposed to Capra’s ecological relationships).



Economics is always a vigorously boiling pot; but since the book has no mandate apart from its being; it does not risk addition of any fuel to the fire already under it. And in its being, the readers have before them a book which is, or is not a unity! I have had no possible audience in my mind; I thought all readers are far more unprejudiced and competent observers than me. The book has no particular logical arrangement of its text as chapters for the ease of reading and assimilation; it holds building volition much dearer. I am, however, terrified somewhat having exposed my limitations on paper. I rest my honour on the empathy of my readers. I lay before them a permanent motif of economics which is intended not to educate but animate.



I have indeed tried to house my thought by listening to a different drummer, the great Henry David Thoreau, the philosopher woodman from the woodlands of Massachusetts! It was a relief to visit with him, his ‘economy’, who found it easier to say no than yes, despised the cowards who conformed and had a fantastic disregard for facts. It is a book for those, in Thoreau’s words, ‘who have been unable to pay for all the dinners which they have actually eaten ….and have come to read it to spend borrowed time…, robbing their creditors of an hour!’ Needless to mention, I have submitted myself almost completely to this great guide. My readers will have more occasions to meet this great soul along and I can assure that the rewards will be great.



I propose not to expressly mention here and offer my gratitude to those other great philosophers and thinkers to whom I owe all of it, the letters and the spirit; they are too great to be used as mere ornaments – their influence hovers over everything that I have written. Besides, if this book lays a claim that it is a work of unity I can no more speak about ornaments.

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