November 28, 2017

Ecology does not Explain Economics

Timothy Birdnow

So now trees show us that socialism is good. Crazy liberal scientists are actually making that claim.

According to an article in physorg:

"The laws of nature are what drive wealth inequality within a given society – unless society takes action to counteract their effect, such as by adopting laws on taxation. The larger the scale, the greater the inequality. Today's globalisation trend is thus a process that naturally reinforces inequality. At the same time, globalisation also makes it more difficult to provide societal counterbalance

[...]

"Economically speaking, most societies are dominated by a small elite. In the same way, communities in nature are typically dominated by a small portion of the total number of species. "It's estimated that 1 percent of the world's population own half of total wealth. In the Amazon, 1 percent of tree species account for half of all biomass. Our work shows that this curious fact may be more than just coincidence," according to Marten Scheffer. "In this special collaboration between economic historian Bas van Bavel and our Wageningen team, we have demonstrated that major similarities exist between the patterns of inequality in nature and society. Inequality naturally grows as scale increases."

In nature, inequality is counteracted by natural enemies – including disease – that have an above-average effect on the dominant species. Among microbiologists, this process is known as the 'kill the winner' principle. Within societies, disasters such as war can temporarily work as equalising forces. Structural counterbalance, however, must come from targeted institutions such as taxation. As the scale of the economy expands, it is becoming increasingly difficult to enact such compensation. "This situation is what we are seeing as a result of the current globalisation," according to Van Bavel. "Only once before in human history have we encountered a similar process: in the early modern era, when the counterbalance that had been establish at a local level in the Middle Ages was surpassed by the increasing political and economic scale. Eventually, in the nineteenth and twentieth centuries, we formed a new system of counterbalance at the national level. What we should do today is once again establish a counterbalance, this time at the global level. In fact, it's crucial that we do so, in light of how inequality is a major cause of social and political tensions as well as economic stagnation. Realising such a worldwide form of governance will nevertheless pose a tremendous challenge."

End excerpts.

Liberal academics never cease to amaze me.

First, while there may well be a similarity in the way these two things operate (as indeed there is a similarity between, say, the behavior of gas molecules and of large crowds) this is hardly a clear and decisive link. Human societies are run by people, who function at a far higher level in terms of behavior than do forests or whatnot. There is reason at work in the human community. There are moral imperatives. the same cannnot be said of trees or other biological systems as they operate primarily on an instinctual and amoral level. For example, there are many charities that are founded by the wealthy to help the poor and less fortunate, and this is done outof enlightened self-interest on the part of the rich. You won't find that in the world of trees, where the tallest and most prolific will crowd out the smaller and slower growing. A tree never helped another tree out of altruism or even out of enlightened self interest.

Second, where are the laws regulating how trees treat other trees? The conclusion of the academics here is that we need centralized government and strict regulatory/redistributive laws to correct the problem of economic inequality. But is inequality even a problem, provided those with less are living a decent life? Who cares if the rich have way more than the poor if the poor are comfortable , well fed, sheltered, and have some enjoyment of life? It matters nary a wit how much more one fellow has than another provided the individuals in question have the same opportunities and the same rights. See, it's about rights and not outcomes. But you would not know that from reading this article.

Another problem with the assumptions here is that they assume a static environment. In the Amazon that may be true; the amount of land is limited, as is the water supply and whatnot. It's not true in an economic or political sense, as the land has nothing to do with wealth. Wealth is something that is made, not naturally occuring. The early industrial era, which the authors of the study tout as a reversal of the trend toward centralization of wealth, came about when people realized that instead of shepherding wealth we could make more of it. Adam Smith's dead hand meant that society was responsive to the needs and wants of the consumer as opposed to the orders of the elites, who ruled the economy prior to the creation of capitalism through a series of laws and regulations imposed under a system of merchantilism. It was when we stopped thinking of wealth as a limited commodity that we saw society move toward a much fairer and more prosperous state.

You wouldn't know that from reading this article. The authors clearly believe the old, tired arguments of limited resources meaning limits to growth. Trees and other biological systems have limits to growth. Men and economies do not - unless they limit growth themselves. Socialism was intended for that very purpose.

This notion that new laws - especially international laws - will somehow restore some sort of equilibrium is nonsense; laws merely redistribute. Take from one man to give to another and the first man will stop doing what he did to produce the largesse.

In point of fact, governments and laws act much like the big trees, blocking the sunlight and sucking up too much of the water for the weaker, less robust trees. Is it a coincidence that the gap between the haves and have nots has grown in modern times, when we have more laws and regulations on the books and much larger government? Governments do not produce wealthy, but rather take it from those who do. And laws and regulations merely restrict growth - they do not promote it. The end result is an ingathering of wealth into the hands of those best positioned to steer the regulations and laws to their benefit. A rich corporation has the resources to buy legislators and thus get laws set that retard or kill their competitors. Crony capitalism is not capitalism at all, but rather Fascist economics, quasi-socialism. And the rich get richer under this while the average joe finds himself strapped for cash as he has to spend more for inferior products. Take airlines, say; before the deregulation of airlines only the wealthy could afford to fly. Now everyone can. Conversly, prior to the fracking revolution the price of fuel continued to rise, largely thanks to draconian environmental laws and regulations, which led to higher gas prices. Poor people had to buy cheap economy cars while the rich got to enjoy the nicer big gas guzzler.s Limiting supply always leads to a disparity of wealth.

So, in conclusion, while there may be similarity in the way the two systems function, the authors of this study fail to grasp that a purely mechanistic system like tree growth does not exemmplify the economy, or the way societies assist in distributing wealth.

Posted by: Timothy Birdnow at 11:37 AM | No Comments | Add Comment
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