One thing I’ve always wondered is how the notion of ‘confidence’ got to be such a fundamental part of economics – or rather how we came to live in a system where getting antsy could topple the financial infrastructure that has over taken our independent good judgment (the necessary structures of exchange) that facilitate the operation of much of the world.
Economics is an interesting, valuable and remarkable field of study – but is it ‘rational’ or ‘scientific’ if the global economy can be determined by such a fickle human disposition as ‘confidence?’
For economics there seems to be a purposeful process of mystification where our base need to exchange with others to live in ‘society’ becomes conflated with and confused for natural with the human-made tools we use to understand those exchanges and, indeed, inform how they work.
Zygmunt Bauman said of capitalism (in my interpretation), to live in a system of individual maximization requires a wilful ignoring that not everyone and everything can be maximized concurrently – the world/nature doesn’t work that way. Maximization works on the principle of dis-equillibribum. Life, however, requires balance.
If confidence is, as we are now regularly told, such a volatile arbiter of ‘economic stability’ (read balance), then why do we value its role so much in economics? If confidence is based on an individual maximizers belief that s/he can maintain their level of maximization (stay filthy rich), should that really be able to make everyone else suffer as a ripple effect? Here I am not talking about greed (but I don’t see why not), just worry and fear – gaming, that perhaps I will not win the pot at the end of the rainbow.
And perhaps I should also ask why is economics given such a valued place in the ‘world of evidence’ if it is based on such a mutable and unpredictable principle. Necessary and helpful economics as a view on exchange, yes, but the sole basis of crisis and peril such as we’re seeing and have done for several years now and will again in the future? I’m not so sure.
To be sure, this is not a rally against the discipline of economics, but against the overvaluation of ‘confidence’ and perhaps the undervaluation of balance – not skewed balance, but ‘real’ balance where few aren’t allowed to maximize at the expense of everyone else having to compromise. That is a form of balance but balance based on disproportion – I’m not even talking about equity, there’s no way we could all have an equal share of the pie, but I’d like more than a crumb.
Perhaps that’s what the growing movement of ‘occupy [insert name of city here]’ is all about – the erosion of confidence in, and the de-mystification of imbalance. Or as one of the contributors to the CFP on invisibility calls it: the ‘outing’ of a pernicious public secret.