Introducing the Economics Workshop

Gave a brief presentation of "Do You Want a Sane Economy" (Divyadaan: Journal of Philosophy and Education 21/2 [2010]) to the Divyadaan students last evening, as an introduction to the forthcoming Workshop "Towards a New Economic Order" by Philip McShane (9-11 September 2010).

As I write, Phil must have boarded his flight for Mumbai... He arrives early morning, 5 September. Should be here 6 September. A press conference is being planned for 1630 hrs, 7 September. Mr Deokar, Editor of Sakala, has taken a great interest in the matter, together with Mr Francis Waghmare.

The leading ideas:

1. Distinguish basic and surplus circuits: the basic circuit concerns consumer goods; the surplus circuit concerns producer or capital goods.

2. What is fundamental in the economy is production, not money. Money, while essential, has a redistributive function.

3. The aim of the economy is not therefore "making money." It is an improved standard of living for all.

4. Money is a promise, a note. The betrayal of this promise seems to be at the bottom of the current economic crisis.

5. The failure to understand the workings of the economy - and therefore the crisis - is the true fault. Economics has not yet become a genuine science. Most economists and textbooks concentrate on money. They should recognize that production is basic. They have to identify the real variable. Then economics would become a science.

The 8 articles in Divyadaan attempt to introduce the real variables of economics in a very simple way, often appealing to simple businesses that do not involve money, somewhat in the manner that Wittgenstein's language-games at the beginning of his Philosophical Investigations. Thus McShane introduces the notion of credit; Brown the related idea of keeping promises; Shute the economic variables; O'Leary brings in money, and talks about what happens when the basic and surplus circuits are not balanced; and Zanardi the goal of the economy as making sense rather than making money. McShane rounds up with the call for genuine understanding, true theory.