| |
| |
|
Politics Information |
|
|
|
Immortality and Mortality in the Economic Sciences
Roberto Calvo Macias, a young author and thinker from Spain, once wrote to me that it is impossible to design a coherent philosophy of Economy without accounting for the (sad?) fact that we are mortals. This insight is intriguing. It is not that we refrain from Death in dealing with matters economic. What are estate laws, annuities, life insurance policies - but ways to cope with the Great Harvester? But this, admittedly, only scratch the non-profound surface of the question. The industrial revolution taught us that humans were dispensable. The process of production was reduced to minute functional units that people could learn in minutes. Only the most basic skills were required to successfully endure this learning curve. Thus, for as long as humans bred, the supply was inexhaustible. Humans became entirely replaceable, interchangeable (and alienated, in the process). Motion pictures of the period ("Metropolis", "Modern Times") portray the industrial worker as a nut in a machine, driven to the verge of insanity by the repetitiveness of his work. Yet, this view of human resources is fast becoming extinct in the rich Western countries. Training periods have lengthened, expert knowledge has taken over, the main value added is information. Humans represent a sizeable investment in education. They are no longer an inexpensive resource .With this realization, there came about a revolution in economic relations. Absurdly, inhuman totalitarian regimes (especially Fascism and Communism) were the first to emphasize the importance of the human factor in the total set of means of production. The concept of scarcity was extended (by virtually all the economic systems today) to apply to human resources. All resources are scarce. Economy is the science of trading off: giving up one resource in order to get more of another. The concept of "opportunity cost" is the first that students of economy encounter. The classic approach included natural endowments in the group of scarce resources. The human element was barely perceived as yet another natural resource. Now it is. The size of the population, its life expectancy, its quality of life, health, education, income - are all important. Economy is the branch of psychology which deals with behaviour patterns and with mental processes which relate to material wealth, with the opportunities to obtain it (=access to it) and with the processes and mechanisms underlying its attainment. Because material wealth can be expressed quantitatively, this specific branch acquired a "mathematical" nature, a twist not present in other branches of the human sciences. As such, it is highly surprising that so little formal thought was given to the issue of mortality (which is what makes the human resource scarce). The legal profession is positively obsessed with Death. This is why economic activities are relegated to separate legal entities. The founders of a company are mortals - the company itself, immortal. This is why the concepts of last wish, legal testament, estate and inheritance are so strong: they survive the person, they have an existence all their own. Economic theories, on the other hand, generally assume that humans are immortal and that their economic activities and legal entities which embody them have an infinite horizon. To some extent, this is justified by people's behaviour and by observing the social institutions that they form. People engage in very long term activities even when they are very old. No 80-year old inventor will give up his royalties just because he long surpassed his life expectancy and is about to die imminently. This is true even if he has no off-springs. No businessman will stop accumulating wealth just because he has enough for two lifetimes. No consumer will cease consuming simply because he has all that he needs to properly function. The life expectancy horizon is ineffective because w all deny the prospect of death. This denial mechanism is exceedingly strong in all of us - we suppress the fact that we will die one day and that many of our activities, efforts, battles and pursuits look absolutely outlandish from this vantage point. So, economy mimics and reflects human defensive mechanisms: it is long term, infinite in scope. Surprisingly, as Mr. Calvo Macias commented, the more temporally finite the organization - the more dynamic it is. Religious establishments, which ostensibly trust in the after-life (a form of immortality) - are procedurally rigid, ossified, frozen. This is also characteristic of states. The longer their past and the longer their perceived future (the Reich of a Thousand Years) - the more morbidly paralysed these entities and their institutions. Dynamism is closely associated with finiteness and with the perception of mortality when it is coupled with rebellion. The rebel does not accept his own imminent demise. He fights back by being dynamic, that is, through the process of creation. The battle between creation and death is drawn along the lines of mortal fear. And, so, we can distinguish two types of economic players: those who accept death and those who reject it. The first type is characterized by fear and anxiety as the driving force - the second by deep seated denial and false confidence. Those aware of their mortality display a decrease in economic activity with the onset of old age. They tend to attach a greater weight to their income the more recent it is. They discount future income and attach negligible weights to it. They tend to think short term as they grow older, towards the end of their lives they refrain from any economic activity bar trading, speculation, arbitrage, brokering and investments in financial assets. They become less risk averse as time passes. Those who deny the crawling end still demonstrate an emotional attachment to wealth and to its accumulation at an old age. They do weigh income in accordance with its expected maturity (the more futuristic the income - the less weight it carries) - but they still attach some weight to it. Dividend Discounting Models in stock valuation assume an INFINITE stream of future dividends, discount it, add the results to get the CURRENT price of a stock. Stock in the New York Stock Exchange (NYSE) are trading now at a p/e (price to earnings) multiple of 18. Assuming a 35% average tax on dividends and on capital gains - this means a person has to wait 28 years to recoup his investment. Taking into consideration risk free income (the interest payments that the person could have received had he invested the money in Treasury Bonds) - the effective multiple is really 60 and above. Investors are willing to wait 60 years and more in order to receive their money back plus a reasonable return. This is the quintessential denial of the finiteness of life. These two types clash and conflict. As they do, they generate the very fabric of market economies as we know them today. Players are trading risks, speculating, investing in projects, buying stocks - all based on a hidden philosophies of life and death. It is this that we trade amongst us when we do: our own mortality. About The Author Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia. His web site: http://samvak.tripod.com
MORE RESOURCES:
Politics - Google News |
|
|
|
RELATED ARTICLES
Advances in Nuclear Energy; Safe, Clean and Reliable The newest pebble reactors are easy to build and manage and have extremely high out put considering their small size, perfect for islands set down wind from populations. Unfortunately the Three-mile Island and Chernople incident make populations feel uncomfortable with Nuclear. US Social Security - Is President Bush A Robin Hood After All? The Organization for Economic Cooperation and Development issued a report Monday that pointed out that even though the US proposals will yield a system that reaches the poor in a more redistributive way than many other countries, the average pay outs of the government pensions are rather low at around 51% of a retiree's previously earned salary as compared to over 70% in other OECD countries.Only New Zealand and Ireland outperform the US in reaching its poorest nationals because they have simple flat-rate state pensions. Workmens Compensation Lawyers, Lets Raise Minimum Wage; No Lets Not, Say We Did, We Have The debate to raise minimum wage in California is totally negated. The debate holds no weight because workmen's compensation rates are completely out of control there. The Ugly American Returns! Originally published in 1958, "The Ugly American" (Lederer & Burdick) documented American blunders abroad and our failure to identify that what we termed communism in undeveloped countries was merely the screams of hunger and hopelessness becoming manifest. 15 years later, we extricated ourselves from Vietnam and licked our wounds for 30 years, finally coming to some sort of accommodation with free fire zones, Agent Orange, and My Lai. Responding to Article: Logic Class 101 Applied to the Minuteman Project In response to Douglas Bower's article; Logic Class 101 Applied to the Minuteman Project and on going topic of the BS at our borders, I wish to comment. First I agree with the Professor regarding the rhetoric and questionable comments from the Minute Men, I agree with the problematic liability, I agree with our own national debate that few in our population see the issues on both sides. Water Conservation, Retention and Better Policies As the populations expand in Colorado outside of Denver, Las Vegas, North County San Diego, Atlanta, Phoenix, Tucson, San Bernardino, Riverside, Albuquerque, etc; The West will need to look to transferring the load of cities like Los Angeles, Phoenix, San Diego, and San Bernardino to getting water from the ocean through Desalination Plants. At one point during the last drought states had to make a choice between fighting fires or saving the water for drinking. TSA Missteps at Our Airports The TSA seems to have completely missed the ball at our airports. This is not to say that the Federal Government is completely and utterly incompetent, for that is a whole other debate possibly spanning a thousand agencies? It is also not an immediate call for privatization, as we have already seen the abuses in private police forces and prisons. Truckers Take Some Hits and Keep On Trucking After 9-11 insurance rates on Independent Truck Drivers and smaller trucking companies showed an average increase of over 30%. Larger trucking companies are generally self insured, however incessant lawsuits have also hurt them and caused higher self insurance funds causing decreased earnings and thus higher over all shipping rates to the consumer. Dole, Kemp, Trusting People Many in the peanut gallery of society are so quick to attack the republican party, out of duty to their side of the sound and fury of human endeavor, however if you are really going to attack people without debating their concepts then in fact you are no better than those you condemn. I recommend to all that you look at both sides and see how similar we really all are. How Dogpoo is Changing The World Perhaps a silent revolution is taking place, this time more than ever literally on your doorstep. Irritatingly literally even. The Economics of Cloning Armies or Super Families Let's put the religious part of the debate for a moment, there will be time for that later. Currently there is much ethics debate from many different religious beliefs about cloning in both the scientific communities and the church. Globalization Often we see protests at the sites of global leader gatherings. Some complain Globalization is bad, that a one world currency is evil and that there is a huge conspiracy a foot to control all of mankind. America Needs an Education Reinvention Bill NOW! In order to build a stronger, more self-sufficient America, America must first be willing to change. To build a progressive and competitive society, America's most important challenge is to change its antiquated educational system. PA Congressional Pay Hike Raises Eyebrows While many Pennsylvanians are struggling to figure out how they can pay their real estate taxes before the end-of-the-year deadline, the PA congress not only votes an extra $11,403 onto their base pay, but those on committee chairs receive an additional $4,050. Speaking in terms of percentage, the pay hikes ranged from 16% - 34%, while most of their constituents are lucky to see a 3% raise. Abu Ghraib: Our Surprise is the only Surprise As pictures and videos surface showing young American soldiers humiliating and dehumanizing Iraqi prisoners, we, as a society, recoil in disgust and disbelief. Friends and family of those charged with such crimes, shake their heads in bewilderment and assure the world that the perpetrators are normal, caring, loving individuals without any prior sadistic or bullying traits. Philosophical Thoughts from a Road Warrior; Part II Continued thoughts while driving down the road in a huge semi; mobile command center, the miles click by, but the mind flies thru time at the speed of thought.Yet as we previously approached Socialism at a rapid rate and faster than anytime in our history during the previous 8 years administration we did not allow for it. The Options For Regime Change In Iran If recent speeches by US officials on Iran's plans to become a nuclear power can be seen as part of a build-up to a possible US-evoked regime change in Iran, the intelligence behind it is at once scant and abundant. Whatever the real official US policy toward Iran is aiming for exactly is hard to get clear, but it is noteworthy that off late, US officials have stepped up their campaign of Iran criticism. The Mother of All Political Battles Has Begun! News is spreading of the retirement of Supreme Court Justice Sandra Day O'Connor, setting up a political battle the likes never before seen. This is the first of what could be several openings in the not too distant future. The Dawn On The Nile Valley Has Secrets To Tell! (2) Submiting the Criminals to The ICC!Everybody concerns about justice in the World should be delighted because the call to submit the criminals in Sudan to the International Criminal Court(ICC) becomes a reality last Thrusday in the UN's corridors!The UN Security Council voted 11-0 to refer a sealed list of 51 people accused of crimes against humanity in the Sudanese Darfurian region to the ICC.The USA, China, Brazil and Algeria abstained after the last minute wrangling led by the US to exempt its citizens from submission to the ICC, some media sources said. Is This All There Is? In today's Rants from Lance session I address the question many American's are asking them selves? Is this all there is? I myself have a number of questions along this theme? I believed it, when I was told of the American Dream and when I found out it was a lie; I wanted to scream. I worked hard, did every thing right tried the best I could and was able to sleep at night.
|
| home | site map |
| © 2006 |
