Behavioural Economics

Browndog, Going-Postal.Net

Could it be that modern free-market economists just can’t face the implications of what it would mean if some of the most basic assumptions underlying modern economics are infact empirically false? It would cost them their jobs after all, wouldn’t it?

The pdf [] chronicles Helmut Nyborg’s treatment in Denmark. The fuller picture is quite startling and hopefully it will make it clearer to some that we’re now in the midst of a most odd change which is radically at odds with received wisdom. Yet most will have little understanding of its origin.
One should question the agenda of bandwaggoners people like these ‘Mindspacers’ , as they seem to have ‘appropriated’ the original work in diversity in order to further deregulate (as set out in the Guardian piece). The originals are still treated much like Nyborg and colleagues, and there are many of them. Most, like the rest of us have, as (the respected classical economist) Michael Hudson describes, been conveniently numbed. Still, at least it’s made a Cabinet Discussion Document.

“Over the last decade, ‘behavioural economics’, which seeks to combine the lessons from psychology with those from economics, has moved from a fringe activity to one that is increasingly familiar and accepted. Drawing on the most recent evidence, the full report sets out the most robust effects that influence individual behaviour; demonstrates how these have been, or could be, applied to major policy issues; and considers the practical implications and political concerns about applying these methods. By applying these advances to the real challenges that government and communities face today, it tries to answer the ‘so what?’ question for policy-makers. More generally, there is increasing understanding across the behavioural sciences about the factors that shape and affect our behaviour, in contrast – or complement – to legal and regulatory instruments conventionally used to compel us to behave in particular ways.” 

From MINDSPACE – A Cabinet Office Discussion Document

The Euro and Its Zone – An Hypothesis:

By creating the Marshall Plan’s European Project after WWII (and ultimately the Euro), the USA had just ONE nation and currency to deal with in its efforts to keep the free market (this prevents unified opposition and governance as a competitor, we are a market-garden economy now much like that which was planned for Germany in 1945) running on this side of the Atlantic. Germany was all but a USA Treasury Department (Morgenthau) creation in the mid 1940s, but then, they had to do the Marshall Plan about face because the USSR was using the austerity caused by the Morgenthau Plan to draw the West Germans into the USSR’s socialist sphere of influence. Has the USA just continued this over the decades to cripple socialism in Europe and the Warsaw Pact, culminating in the 1990s Russian state asset sell off facilitated by the Chicago Boyz? (look up the likes of Jeffrey Sachs – a regular NN favourite). Why did Osborne meet the Oligarch on that yacht? (add Peter Mandelson to that question as well).

Perhaps they needed the UK out of the Eurozone so the USA had a damper (like a reactor rod) over here. Look at where the money crisis was run from. It was NYC/Wall Street and The City of London/Canary Wharf. They used Iceland and Ireland. Iceland deregulated its banks making it a deposit haven – i.e. a great source of borrowing for property developers. Fiat money and Basle allowed high leverage, making promises based on future growth and low risk via securitisation possible. But the risk was ultimately funded by the peoples of Europe, naively out to make money on property asset booms in ageing/falling populations. Those doing this must have known full well that the people of Europe would also end up having to liquidate state (public) assets in order to bail out the banks when it all crashed (as bubbles always do in Austrian School Business Cycle theory). What we’re going to see now are mega privatisations (aka asset stripping) of the public sector (not just jobs but assets like land) like that already forced upon Ireland and Greece by the IMF, which will surely serve to eradicate the last remnants of socialism in Europe?

On the face of it, it’s predation. Parasitism of one meritocratic elite (see Michael Young’s warning) at the expense of the rest. Alas, most people seem to have been effectively numbed to this, as Michael Hudson described.

Presumably the problem for the USA (and us?) now is China and our dwindling and seemingly ever more numb populations? See the seemingly self-destructive Democrat and Republican Parties in the US, and here as well, just look and see for yourself.

Is this just politics for the numb?