Step Forward: Love

“If you will allow yourself to buy into this new way of thinking of economics, we get to create our theories anew; we get to turn the dismal science into a delightful science.”

3.54 I have spoken about Love before in previous posts on Game Theory – as a pillar of transcendence in its own right and as a catch all for everything that is humane about playing games. In my last post I described a theoretical pursuit that economists might have long since discarded as impossible – a search for what I called an Infinite Complete Good – an ICG – a good that not only harms absolutely nobody in its consumption, but also is infinitely available and does not become diluted in its use the more one consumes it. Perhaps some of you saw it coming, but the answer to this theoretical search is in the title: Love.

This is the central tenant from which I feel economics and indeed the rest of our lives should be conducted. As it is just a word it is vague, but I will be sure to expand upon it liberally to really get a sense of what I mean. As I have mentioned before, remember, all good emotions, feelings and actions can be described as a subset of Love.

3.55 This is by no means whatsoever a normal approach to economics. But I would urge you to think of where mainstream economics has gotten us so far. Oft described as the ‘dismal science’, economics essentially tells us that there is no perfect theory: no matter how hard we try we cannot guarantee that in the distribution of income everybody will be happy; no matter how hard we try, we cannot guarantee in politics a voting mechanism where everybody will be happy. The best we can do is maximize what we have out of a naturally limited situation.

I, personally, believe in a better way. I have found that if you study economics seriously, you cannot avoid studying at some point the philosophy underpinning it. My belief is that there is a better way to think of the underlying philosophy. As long as we agree that we are trying to achieve that everybody be as happy or fulfilled as possible, with the constraint that we stay alive as a human race, the route of Love is the best and only way to approach things.

3.56 This is because Love is the Infinite Complete Good. No matter how deep we draw from the well of Love, there is always more. A phrase from a book I much enjoyed as a teenager has always stuck with: Neale Donald Walsch in his book Conversations With God describes Love as a Synergistic Energy Exchange.

Have you ever been in a conversation with someone where you were so connected to what they were saying, you felt like you were literally bouncing energy off of each other, but each time it came back stronger and stronger?

Have you ever felt in such a lonely place, but then listened to a piece of music new or old that suddenly propels you through the rest of the day?

Have you ever been so stressed, angry or otherwise in a bad place, and took a walk or rest in some area of outstanding beauty, to find that a wave of calm passes over you, and you can face whatever the problem was?

Have you ever been so so tired, but suddenly the love of your partner, significant other, lover, whatever, has aroused you so greatly that you appeared to get the energy to make love from apparently nowhere? 

All of these are different, but similar, forms of Love.

3.57 It is this infinite well of Love, either through an ever increasing exchange of energy from one person to another; or through your own doing – your own ability to see the beauty in a piece of music, a place, a situation, a picture, a memory – that we should start viewing as the ultimate commodity. For nothing material will ever satisfy us as much as these described things above do.

3.58 Economists have talked of utility, but they regularly assume that utility only encompasses what one can purchase, what satisfaction one can gain from consumption. When that might have been extended out in recent years to happiness, wellbeing, the attempts have still fallen woefully short of not only what really makes us happy, but the perception of the best ways with which we can achieve that.

3.59 This is an exciting time! If you will allow yourself to buy into this new way of thinking of economics, we get to create our theories anew; we get to turn the dismal science into a delightful science.

What do you think?

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The Good, The Bad & The Neutral

The Good, The Bad & The Neutral

“An ICG … is the Holy Grail of economics. Really, it is.”

3.44 I want to give now a more logical introduction to what I call Spiritual economics.

I left off the lengthy 5-post discussion of game theory mentioning that there is somewhere the Holy Grail of economics – something that until now has been passed off as non-existent: an Infinite Complete Good (ICG). This phrase won’t make any sense yet even to economists, so let’s talk through it.

3.45 In the game theory I discussed, the assumption which causes the selfishness is that there is a lack of resource to go around – there is not enough – and so as humans we must fight for what there is. This is a central tenant of economic thought: inherent scarcity.

If goods were not scarce, it would force us to rethink all of our base theories with a tenant of complete Abundance: an ‘infinite pool of resources’ as I stated two posts ago.

If there was, for example, infinite availability of petrol with no constraints on its recovery, there would be no such thing as a price on petrol. This of course assumes the commodity petrol is readily available and no labour need go into to converting it from oil, and a number of other things. Notwithstanding, if it did happen, there would be no price; because one could not gain from pricing it and trying to sell it on. Why would you buy my petrol if you have an infinite well to drink from? Any attempts to buy or sell would go down as rather loopy. Price exists in the market for one reason and one reason alone: scarcity.

3.46 An example of a commodity that is currently abundant is oxygen. Although it is not technically infinite it certainly feels so at the moment – there is no apparent restriction on how much we may inhale into our lungs, and as such it has no price. It might seem silly to point this out, but it is only its lack of price that stops us thinking of it as a commodity – similar items like housing and water, which are also, albeit not as immediately, essential to life, have a price because of their scarcity. Some would argue pricing something that is so essential is ridiculous, but that tends to flagpost communism in many people’s eyes and this is not quite where I want to take the argument!

3.47 Now, the thing about petrol, if it were infinitely available, is that some elements of its use make it a Bad (the antonym of a Good in economic speak): in the long term it is said to damage the environment. In the short term it does not smell particularly nice and can poison lungs. Part of it is a Bad because some people somewhere down the line will gain displeasure, or lose utility, from its use.

3.48 Now oxygen is not a Bad, but I wouldn’t argue that it is a Good either. Because it is so essential to life I would call it a Neutral. Water when consumed for drinking only (as opposed to washing your car, for example) is also a Neutral. There are other arguable essentials that could fall into this category such as heat and very basic foods, but with these it is too easy to get into debates about whether an aspect of these things is actually a ‘good’ due to some utility gained somewhere (e.g. you don’t necessarily need heat past a certain point to survive, and if you enjoy even eating plain rice there is an aspect of luxury to the item.) Water for drinking, and oxygen, are the two unequivocal Neutrals for me. Because of problems with policing the former, really the latter still only stands.

3.49 The fact that oxygen is infinite (barring environmental destruction) is unfortunately a moot point because it is a Neutral. Economics deals with maximizing utility with the resources we have. Anything that is a Neutral, despite how infinitely abundant it is, does not serve to directly maximize utility. It does, of course, considerably help in increasing your life span, but it doesn’t directly affect your quality of life itself in that time.

3.50 Likewise, if petrol were infinite we would still have a problem, because as a part-Bad we have the potential to overconsume it and cause irritation to others.

3.51 What is a Complete Good? The first criterion of a Complete Good (a non-traditional term in economics, by the way) is that it has not an ounce of Bad in it. To keep in line with traditional economics, this doesn’t include the idea that if I eat a burger you now can’t have the burger and because there are less burgers around the price of burgers should go up. Plenty of goods are actually like this. The second criterion, though, is that it does not succumb to diminishing returns to scale. That is, my increased consumption does not dilute its utility increase for me. Now that is much rarer.

3.51 Without discussing all the Goods that manage to not be complete, imagine now that a Complete Good could be Infinite too? This means that its use was unlimited it would not affect the price mechanism, and thus it wouldn’t even indirectly disgruntle people like a Complete Good. We could keep on using it and using it to continue increasing utility.

An ICG would thus truly be the Holy Grail of economics, because its use fulfills the first Pareto criterion in my very first post on very first post: when it is used everybody is at least as well off and at least one person is better off. That is the Holy Grail of economics. Really, it is.

3.52 An ICG. ‘Well,’ you will say, ‘simply doesn’t exist.’

But I really, really disagree. Step in Spiritual Economics.

Do you agree with my definition of Goods, Bads & Neutrals? Neutral is not an economic term in classical economic models as far as I know, but does it make sense to define the category regardless of how narrow it turns out to be? Can you think of any more ‘neturals’ in our lives?

 

What about Complete Goods? Can you think of a better term or a more snug description?

 

Do you agree that an ICG really is the Holy Grail of economics? If not, why not? (Note that this discussion is going to become much more concrete very shortly).

 

Write in the comments below or send me a direct message through any of the social media outlets !

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