The world’s most important material bishops had their yearly congregation in late January in Davos. Their Pope, Klaus Schwab, told them that “knowledge doubles every three to five years”. Excellent! But what knowledge?
Half a century ago, in 1954, Benke Nilsson touched the world record in high jump. He had developed a new technology in coming over the pole. He flew a bit over two meters. If the knowledge of high jump technology doubled every fifth year, why didn’t our high jumpers fly four meters high in 1960, eight in 1965 etc. …and finally now up over at least two kilometres?
My first serious question is: How is it with man’s rationality? Is it changing like computer technology or like high jumpers?
In Le Monde of Jan. 25th you could read about a loss of over 40 billion euro in the French Société Générale. In Neue Zürcher Zeitung of Jan. 31st you found that the Union de Banques Suisses had lost 21 billion Swiss francs. In the Herald Tribune the same day Merill Lynch, Citygroup, Morgan Stanley and Bank of America together had lost 57 billion dollars. Etc., etc., etc….
Some twenty years ago I wrote an article about economic professors as haruspices, Etruscan fortune-tellers who predicted man’s future from studies of animal intestines. I suggested that the knowledge of the first group was equally impressive as that of the second. The economists believed in rationality. I didn’t! Not in any haruspex! Not even if they now hand out Nobel Prize substitutes. Which should be stopped! Economics is, to a very large extent, humbug.
In no way was I alone. In Europe’s leading Economic Journal, the Centenary Issue of January 1991, one serious observer wrote that “The risk….seriously exists that the discipline progressively loses touch with real problems”. Another warned that “one section of scholars….regard as their inferiors those who contend the need to observe the real world. This phenomenon is a palpable symptom of scientific degeneration.”
It has now become much better. A survey has found that the most excellent finding by the economic science during 2007 was that foreign aid gifts of “textbooks did not improve test scores or graduation rates in rural Western Kenya….(while) treating children for intestinal worms did lift school performance.” Truly a world shaking finding!
The above mentioned banks employ some of the world’s most clever economists. They give advice to the bank leaders. If a costumer wants an advice, he pays dearly for it. But when the world’s greatest banks get such horrible results as those mentioned are we not forced to see that economists don’t know much? I once had one of the best and most honest in the field as my teacher, Erik Lundberg. He was fond of telling the story that when two professors of economics meet each other in the street, they could not help smiling, both knowing that what they were teaching was much bluff and empty air.
Already in 1680 Pierre Bayle in some “Thoughts on the Comet” suggested that all mass opinion was created by very few leaders of the “vulgar masses”. Half a century earlier the even more cynical Machiavelli said that nothing else existed. To which Gustave le Bon four hundred years later gave a theory, his “Psychology of the Masses”, a famous textbook for demagogical dictators.
Knowledge about how to invest in the stock exchanges doesn’t seem to double every fifth year. It seems rather that the gregarious herds, like lemmings, run with the crowd up and down the speculative ladders, this being true even for the leaders of our biggest banks!
I have a second even more serious question, connected to the first. How does the growth in knowledge affect our moral behaviour in the economic life? Does it in some way also double in five years? And in that case, in which direction? Up or down? Surely a good subject for a coming Davos session!
Man’s genes are the same now as a hundred years ago. But when we then could steal a bracelet of gold and not very much more, we can now steal billions. Thanks to the increase in knowledge the potential profits from stealing in the financial sector is now infinitely bigger than a hundred years ago May it then not be that the ethical behaviour inside our economic system has not improved but deteriorated?
It reminds me of an old story. Alexander the Great had caught a pirate ship. The pirate defended himself: “What is the difference between you and me? I steal in a mini-scale in the high seas, you steal by warfare on land in a maxi-scale?”
Now, thanks to our fabulous progress in knowledge, some people seem to be stealing on an exponential mega-scale-level!
Happy springtime anyway!
Gunnar Adler-Karlsson
www.philosophicalpark.org
adler.karlsson@capri.it
If you are interested in my general theory explaining the Kosovo problem, look at my theory
of disintegration!
http://www.philosophicalpark.org/index.php?option=com_content&task=view&id=105&Itemid=20
[i]Re-quoted in Royal Economic Society, Newsletter, June 2007, p. 15.
[iii] David Leonhardt, “Armed with new tools, economists start to get their groove back.” International Herald Tribune, Febr. 20th 2008, p.14.
[iii]In the U.S.A. translated as “The Crowd. A study of the popular mind.” N S Berg, Dunwoody, Giorgia.