A Grand Synthesis
Edited or Printed: July 26, 2016
I have been working for decades to describe the interdependencies of spirituality, evolution, culture and economics. Here is a model of how they fit together.
Winslow Burhoe firstname.lastname@example.org 617-538-2015
In the ninth grade at Boston Latin School, I hurried into my morning German class, with less than two minutes to spare before the bell. I immediately went into my newly discovered relaxation routine (which seemed to give me the equivalent of an hour of sleep for each minute I used the routine.)
I put my head on my folded arms and closed my eyes. While quieting my breathing and relaxing all my muscles (starting with my feet and going all the way up,) I focused on the sound of the clock and eliminated all thoughts from my mind. It was only the second time, that I felt I had succeeded in stopping all my thoughts. What happened next stopped me from ever trying again.
Immediately, as if in a dream, I found myself flying rapidly across a bleak, sunless landscape. In the distance, I was rapidly approaching a wavy cloudlike wall. As I got closer to the wall, I could see a hole into which I was being drawn. I panicked, fearing I would not be able to get back to my life and clawed my way back to my normal reality. (I don’t know why I was so afraid, my life wasn’t that great.)
As I woke from my disturbing experience, the bell had not yet rung to start my German class, and I decided never to perform that relaxing exercise again.
It was some four decades later before I realized that there are many more dimensions than we can see and started constructing a reasonable model of the universe that could allow me to contemplate such an experience without terror.
I now realize that this childhood experience was a self-discovered form of meditation and that the cloudless landscape was an approach to the spiritual realm.
In order to read this version of the book, you have to be open to spirituality. Until my mid thirty’s, I was not open to spirituality. My father was a hard science type of guy — a meteorologist and an amateur anthropologist — whose hobby was the scientific study of religion. To him, God was an abstract concept, something like “the amalgam of the principles of the universe.” Much later, when I went to him with my newly discovered theory of spiritual dimensions, he pretended not to understand. I imagine he could see that my model would be a threat to his hard-science model. However, when I was a young man, I had followed right along in his hard-science model.
Now, after many decades, I believe in a spiritual realm, full of spirits who are trying to help humans (including me.) This realm is the home of angels and guardian angels, hunches and good luck. In order to have a fruitful and enjoyable life, all I had to do was to open my mind to their attempts at communication and follow the advice I received.
My mother died young from a brain tumor. After her death, I used to hear her voice in my inner ear, which contradicted my skepticism of a spiritual existence. But it didn’t convince me. A few years later, I was starting a business, and, apparently the spirits were in favor of it. Each day, it seemed, for a year, some kind of miracle or fortuitous event occurred to forward the success of my business. I found parts, tools, helpers and funding. This sequence of improbable events convinced me of the existence of guardian angels.
The turning point for me was the revelation of the reality of a multitude of scientific dimensions which I could not see. This revelation implied the existence of an interpenetrating spiritual realm.
It’s not all fun and glory, however. The spirits have their own agenda and it may not correspond to yours. In order to have an easy, prosperous and happy life courtesy of your guardian angels, you have to go in the direction they nudge you, and you may not always understand why. Failing to follow this narrow path leads to the Buddhist idea of a life of suffering.
One of my first questions is, “Why do the spirits want to help me, or humanity?” I don’t have an authoritative answer, so I have to speculate. I am not even sure that my mind is capable of understanding the reasons.
These simple, almost Utopian, ideas can use a lot of explaining and in this book, I am going to do that. The explanations wind through controversial opinions in the fields of culture, evolution, physics and economics.
Of all living species, Mankind is unique in its reliance on culture. It is as if the purpose of human evolution was to develop a brain that was capable of language. Once that was achieved, biological evolution essentially stopped and our history became primarily a history of culture. The technical reason for this is simple although not widely acknowledged. Biological evolution proceeds using the mechanism of survival of the fittest. Survival occurs before procreation. In other species, that survival relies on biological fitness and, therefore, the genes. Because culture provides survival for human children until after they reproduce, that mechanism is null and void.
Culture has its own evolution, which occurs in many different cultural streams. The main streams are in languages, tools, science and economics.
I have begun to understand that this book is a cultural stream. For some eight decades, I have been encountering and accumulating bits of culture and integrating them into an ideologically and logically coherent models.
Economics, although largely hidden from most people, is perhaps the most important cultural stream of all because it is most important for survival. For most people throughout all of history the main activity has been producing food. It is only when work becomes productive through the tools and knowledge of culture that wealth is created. As a result, freedom and leisure time also become available.
Leisure time is important for the goals of the spirits because it leads to communication with the spirits and the possibility of evolutionary progress to even more facility in that regard.
A proper understanding of economics is thus essential to a spiritually rewarding society. Because economics is generally misunderstood, I devote a lot of attention to it in this book.
As a parallel education, my many business failures led me to see, first, my failings a s a manager and, second, on a quest to learn the science of management. I finally met a good manager who could discuss intelligently his philosophy and practice. At about the sazme time, I discovered the book, “The One Minute Manager.” Which reinforced his points.
As my spiritual guidance deepened, I could see an anlogy to my understanding of management and the practice of the Spirits.
Hence the title of this book.
My mind does not experience reality directly. It creates models of reality that are based on the information it receives about the outside universe. These models are not necessarily true and not even, necessarily, consistent either within themselves or with each other.
The stories in this book are my models of reality. Each model is like a stage set. Although I have tried to make them all consistent with all that I think I know, some are more fanciful than others. This book is mostly about five Models of Reality: one for the Spirit Realm, one for the twenty-seven dimensions of the universe, one for culture, one for Darwinian evolution and one for economic productivity.
Their upshot is that they explain my life (purpose, existence, origin and end) and why I don’t worry about death. Since I can’t experience reality directly, I have to make it up. Through my senses I do have some information about what reality is. So, I try to make what I make up be consistent with what comes through my feeble senses. One of the simplest examples of a model of reality is a straight line. The eye is not a camera.
When there is a straight line in front of my eyes, the retina experiences not quite random dots in the vicinity of that line. My mind makes up that it is a straight line. This effect is easily demonstrated by magnifying a printed line. Before it is magnified, the mind sees a perfectly straight line, but when it is magnified, it is easy to see the dots of which it is comprised. This characteristic of the mind to create reality is the source of optical illusions. There are many popular optical illusions where the mind switches between two different interpretations of visual material.
These visual tricks are well-known. What is not well-known is that the same kind of interpretation applies to all perception, including abstract knowledge. All scientific theories are synthetic creations based on the available evidence. Does the earth go around the sun or does the sun go around the earth? The answer depends on what you know, not on what you see. Is Socialism desirable or not? Can Government spending jump start the economy?
These are questions whose answers reside in Models of Reality. Different models produce different answers. Disagreements or controversies cannot be resolved outside of a particular Model of Reality
To describe this model of reality was the original intention of the book.
Before adolescence, my father gave me the book, “1, 2, 3 Infinity.” It was too difficult for me at the time, but I kept at it, especially when I was home sick from school. One of the ideas I encountered in it was that time is a dimension. It took me more than a decade to comprehend this idea. The key to dimensions is perpendicularity (and the Pythagorean Theorem.) The difficulty was that time is perpendicular to the three dimensions that I could see. If I couldn’t see it where was it?
Years later, as a loudspeaker designer, I encountered two more perpendicular dimensions that I could not see, one for electric force and one for magnetic. The electric dimension is well known to students of the LaPlace plane as the square root of minus one. The magnetic dimension is less well known but is describe in a monograph by Hunt titled “Electroacoustics.” It was some time later when I realized that these mathematical descriptions of electoral and magne5ic forces could be interpreted as dimensions. When I realized the analogy to time as a dimension, I guessed that there could be many more dimensions. I felt reassured when I encountered string theory which talked about 12 or even 28 dimensions.
It was a fairly simple step from the idea of multiple dimensions that I could not see to the idea that some of those dimensions could encompass a spiritual realm.
To say that I was excited by these insights is an understatement. Of course, I wanted to write a book.
Later on, I had a spiritual experience in which it was revealed to me that there were 27 dimensions in three groups.
To recapitulate, all dimensions are perpendicular to each other. For any two dimensions, in a right triangle, the sum of the squares of the two legs equals the square of the hypotenuse. Similar equations are true for additional dimensions. For example, in a room, the diagonal between opposite corners when squared is equal to the sum of the squares of each side of the room.
The Bible says that Heaven is on Earth. I say that the dimensions of the spiritual realm intersect with the dimensions that we see.
Spirituality is the essence of life.
Each of us is imbued (in a temporary prison) with a spirit from other dimensions in the universe.
Of all of my models of reality this one requires the most imagination. It relies substantially on the previous model of reality namely that the universe consists of 27 dimensions.
From my personal experience it is very difficult to be sure that an event is in fact spiritual. Furthermore there are relatively few of these events in my life. In my youth, these experiences were shut off to my by the scientific pragmatism in the culture of my father. For him, it was an absolute that there were no spirits, no ghosts, whatsoever. This absolute taboo, which I inherited, was finally broken after the death of my mother. A few months later, I heard her voice in my inner ear. It was unmistakable.
Soon after that, in my early 30’s I was embarking on what turned out to be a major business venture/experiment. During the year of 1969, I experienced virtually every day a miracle that forwarded the success of my business. After a few months of this I began to feel that this series of fortunate events could not be attributed solely to good luck.
At about the same time, perhaps in the following year, I was introduced to the remarkable book, “I Ching.” The I Ching includes its own model of reality which integrates the spiritual realm with the material. It also provides a method of communicating between them.
Decades later, I started working out that there are a multitude of dimensions that are invisible to our senses and therefore, there is a possibility for the physical existence of a spiritual realm.
Another decade, I spent a year doing weekly sessions with guided meditation during which I became intimate with my guardian angels and the spiritual realm. During meditation, I discovered a location at the back of my head where I could interact with my guardian angels, of which there were five. They were situated on a dividing membrane with the spiritual realm. I found that it was possible to penetrate the membrane (which resembled a soap bubble) but I was reluctant to do so out of fear of not being able to get back. I noticed that there were conscious entities on the other side of the membrane, one of which (I call him “The Old Geezer”) insisted I move in with Dian, who has become my wife.
Since then I have been working on this book, which has been reformulated several times when I have been informed of new insights. Among them is the concept of evolutionary cultural streams and models of reality.
This is a summary of the model of reality that I have for culture.
When it comes to culture, I do not swim in it like a fish unaware of water, I dance with it as it transmits to me and I transmit to it.
In the context of nature versus nurture, my genetic makeup is like an egg which is then prepared by the chef of culture. Who I am is both – not partly one and partly the other. Nature and nurture are different dimensions not antagonists.
Culture is information that is transmitted from one mind to another. Culture is not behavior. It is information that exists in minds.
There are two kinds of culture.
One kind is the kind I receive every day through the radio, the TV, the newspaper, books that I read.
The second kind of culture is when I transmit culture to others from my own experience.
This could really be something I learned from my mother and father or in school or it could be a new creation of mine a theory or teaching or a piece of music.
This is when cultural evolution occurs, that is, when limited elements of culture are selected to be passed on. This selection takes place both in the transmitter and the receiver. Both have to select the information that survives evolutionarily.
Cultural evolution is in the same model as human evolution, but independent of it. Culture is essential to human survival but it does not lead to humans who are, per se, more capable of survival.
Culture evolves in two different ways. Since culture resides in human minds, if it helps humans survive then it gets retained.
Secondly, some culture is either so interesting or so entertaining that human minds want to preserve it.
However the capacity of the human mind to retain cultural information is limited. Therefore, selection takes place; hence: evolution.
Cultural streams occur when many related elements of culture are transmitted as a group. Examples of cultural streams, are languages, professions and political structures.
I grew up in a nearly 100% Roman Catholic neighborhood. Our family was conspicuous for never going to church. My father’s father was a devout Presbyterian and Sunday School teacher. My father was not at all conventionally religious or spiritual. Nevertheless, as I approached the age of 12, my father decided that his children were missing out on the culture of religion, so we started attending a Unitarian
Church. The culture of Christianity rained off me like water from a duck. Although I came to love the church and its people, the spiritual language in which its culture was transmitted struck me as superstitious nonsense.
After fifteen years of having been partly immersed in the culture of Christianity, about all I had to show for it was a wonderment that so many people believed in spirits.
On the other hand, my children had almost no experience of Christianity. I never thought it was a culture they needed.
Now, I teach them about 27 dimensions and how they include the spiritual realm, a model that is not all that much different from the Christian Heaven. Who knows whether these ideas will roll off them like rain from a duck?
I was very young when my father first explained to me that evolution applied to culture. This was important to him because he used evolution to explain religion as a secular phenomenon rather than a spiritual phenomenon.
I always think of evolution in the Darwinian sense, not in the metaphorical sense of gradual change. Evolution has three essential elements:
- The first element is the transmission of genetic information from one generation to the next so that it is closely duplicated;
- The second element is a mechanism to vary the transmitted information so that the duplication is not perfect;
- The third element is a condition of scarcity in the environment such that not all duplications are able to survive. This is more commonly known as the survival of the fittest.
Culture consists of information transmitted (incompletely) from one brain to another. The culture we swim in is the result of evolution.
As soon as humans developed culture, biological evolution ceased, because human parents and tribes tend to keep their young arrive through puberty. There is no non-survival of the genetically unfit.
Most of what I know about economics is from participation, observation and common sense. Also, I have read a lot of books and articles, most of which seems to be either nonsense or deliberately false.
In my model, prosperity is the result of productive work. Period.
Without productive work, there is no prosperity whatsoever. No amount of “demand” creation or “stimulus” can substitute for work.
I use the term “work” to distinguish it from the corrupt idea that all labor is equal in value. There is no difference in economics between grunt work and desk work. There is however great difference in the value of wealth produced. The work of a medical doctor is more valuable that that of a carpenter. In general, the value of work is proportional to the amount and quality of culture acquired by the worker, culture in the form of education, tools and environment.
A certain amount of prosperity is essential to biological survival. Without food and shelter, people die. Throughout most of history, the value of work, for most people, has hovered around the survival level. In rare cases, culture has flourished and the value of work has increased to the extent that excess prosperity has resulted in the accumulation of wealth.
A man works in order to provide food, shelter and leisure time. If he is productive and thrifty, he will accumulate wealth.
Once wealth has accumulated, it can be increased by mutual trade. Two agents do not mutually trade unless each expects a benefit. What is traded is the value of his work. The value of one’s work is thus increased by trade. In a sense, every trader is an entrepreneur. (Note that the impetus for trade is not created by demand but by the accumulation of wealth.)
Prosperity can be greatly increased by entrepreneurs. An entrepreneur is someone who conceives of and implements more productive methods in either work or trade.
A society where great wealth accumulates necessarily tolerates entrepreneurs and entrepreneurial activity and fosters freedom of choice in where and how work is done. It also protects the wealth of those who have rightfully acquired it.
Economics and culture are symbiotic: without economics, there is no culture and without culture there is no economics. Economics is about productivity and generating wealth.
There are, among others, two philosophical attitudes towards economics. One side thinks that prosperity is a good thing and to be encouraged. In opposition are those who think that prosperity is undesirable or that it should be shared equally. My economic model is about how prosperity is achieved and is silent on whether prosperity is desirable. On the other hand, my spiritual model (the theme of this book) holds that prosperity is desirable because it makes spiritual communication more available.
The twin engines of economic prosperity are work and trade. Without work there is nothing produced, nothing to trade. Trade is necessarily mutually beneficial. Otherwise, no one would trade.
The value of a person’s work is multiplied by various cultural factors, such as, education, tools or environment.
The key to increased prosperity is innovation. Innovation is what an entrepreneur does. It is his job to invent new tools or new ways of trading.
Enhancements in the value of trade come from entrepreneurs who see new opportunities in combining customers with services or products.
In our overall culture there is enormous misinformation about economics. I consider that almost everything I encounter in the media – books, newspaper, magazines, the internet, radio and television – is not true.
My explanation for this has two parts. On the one hand there are many honest, good-hearted well-wishers who would like to see all people benefit equally. These people are eager to believe fabulists who promise ways to make that possible.
On the other hand, people who are already wealthy beyond comprehension are jealous of their status and are happy to make it difficult for other people to become similarly wealthy. These people use the media, the universities and the government to provide misinformation that is attractive to the do-gooders and well-wishers.
What is true is that although equality is impossible, prosperity is easy. In general, people like to work and to create prosperity.
Entrepreneurs and innovators run up against the wall of government. Without governments provision of physical security, financial systems and legal justice, they cannot operate. Against the impediment of government’s taxation and regulation they are nearly immobilized.
The mechanisms that produce prosperity are fragile. They rely on culture:
- For creating the value of work;
- For providing an environment where people are safe to work and to trade;
- For providing a legal and judicial environment where agreements are enforced.
I guess, in order to provide context for the rest of the book, it is necessary to reveal my personal opinions about what it is good and bad in the world today.
This is more likely to turn into a political manifesto than a model of reality. A political organization, or a state, serves many purposes. In my opinion, the most important of these is to provide an environment for economic activity.
Freedom to work
Freedom to trade
Right to own property
I am not a fan of democracy. It seems that the majority will always vote to have rich people give them their money. Therefore, in order to have a stable government, political power must always be in the hands of the wealthy.
I have always thought that the U.S. Constitution shows the best way of doing that. Unfortunately, however, it has evolved away from its original intentions to the point where, now, the majority votes to have the wealthy give them their money.
Until today, I had been discouraged about the course of the American government. I now see the possibility that the apparent coup occurring here is by the wealthy to recover their control of the government.
The purpose of management is to influence another’s behavior. The best way to do that is to get their agreement and then to help them.
The way to get spiritual management is to find out what they want you to do and then to let them help you.
The universe is closed and consists of 27 dimensions, grouped into three realms. Our material world is in one realm; the spirits inhabit the second realm. Perhaps the third realm is for god. If so, that gives us an analog to the Christian trinity: three entities unified into one.
From reading and from my own experience, I am convinced that there are many spirits, some of whom act as guardian angels, others who volunteer to give our physical forms an essence of spiritual life and others whose role is unclear to me.
It seems to me that the purpose in our lives and generations is intimately associated with the spiritual 1
In the long run, I expect the material and spiritual to be integrated.
This can only happen after some further evolution of our minds and of our culture. Among other things our time must be freed from the struggle to survive. The misinformation about economics corrected and our aversion to wealth and leisure time removed.
In the meantime, we can enhance our own lives by seeking and being open to spiritual guidance
I like the model of reality provided by Dzogchen, a branch of Buddhism. However, like most spiritual models, the purpose of Dzogchen is to achieve enlightenment and to provide guidance in the difficult passage to reincarnation. I think that is a half-way point.
For me, the goal of spiritual interaction is collaboration. It seems to me that the physical laws of motion and energy do not apply to the spiritual realm. Yet, the actions that we humans are able to achieve are sometimes valuable to the agendas of the spirits. My intention in spiritual interaction is to carry out the spiritual agenda. My spiritual guidance is to write this book.
In sessions of guided meditation with Mike Elkin I discovered a circle of five Guardian Angels at the boundary with the spiritual realm. A few times, I experimented with passing through that boundary and discovered more spirits on the other side. It seemed to be a vast empty space with a bright light at the center. Around the spherical periphery were many windows similar to the one I had transited. At each window on the spiritual side was a replica of what I called “The Old Geezer,” each one looking through the window at the person on the other side.
Another time, when I was trying to pursue the reason why my eyes continually close involuntarily, I followed a red laser-like fishing line into the far reaches of the spiritual side and discovered a wraithlike entity whom I came to know as Hilda. She resembled an illustration in one of my Dzogchen books.
Most of my interactions have been with the head person of guardian angel council, whom I call Serena. It was Serna long ago who got me to give up coffee altogether and to quit alcohol for a year. It was the Old Geezer who instructed me to move in with my now wife, Dian.
Since the Spiritual Realm cannot be perceived with our normal five senses, it is important to shut them off, along with any psychological anxiety or intention. Deep breathing, relaxing muscles and closing my eyes help achieve this state. Physical comfort and leisure time are also helpful.
Once I get into the meditative state, I direct my consciousness to the back of my mind where I find my Council of Guardian Angels (along with a bunch of avatars for various mental functions.)
This is also where I find the boundary with the spiritual realm.
Human hearing doesn’t work so any conversation has to be telepathic. When a spirit has something important to tell me, all I need to do is to keep my mind open. I don’t even need the meditative state.
Another technique is to pose leading questions and then to keep my mind open to an inaudible answer.
Reincarnation has never made sense to me as a logical proposition, and I have never understood why it is such a big deal in eastern religions. This morning (Sept 2015) my wife, Dian, asked me why.
My off-the-cuff answer was that the eastern religions never considered that the universe consists of 27 dimensions. Part of that concept is that time is a dimension and therefore does not pass. Our minds have invented the illusion of the passage of time because, otherwise, experience would be beyond our comprehension. Our brains do not have enough memory to comprehend more than one moment at once.
When one experiences Satori, or oneness with God, the mind has a similar problem. There is just too much to experience and the reality of 27 dimensions, and the fact that time is a dimension is just overlooked. In such a universe, the ideas of reincarnation are irrelevant.
This is especially so in light of my opinion that the Spiritual realm has its own dimension of time, which would be, of course, perpendicular to ours.
Therefore, a spirit considering a human in whom to incarnate would have the whole of human history to consider. Such a spirit could choose first someone from our future, and, after that, someone from our past. Such a sequence would be impossible in the popular view of reincarnation which assumes the conventional view of time.
Darwinian evolution is not a theory. It is merely observations about how the world works. The observations are not controversial. Darwin merely looked at what was going on from one generation to another and wrote it down. Later on, other people discovered genes and figured out how they explained Darwin’s observations.
Controversy arises when various kinds of missionaries try to use the ideas of evolution to advocate their particular causes, whether religious, philosophical or political. Darwin, himself, was guilty of this. He tried to use his observations of evolution to explain the origin of life, which many others, including me, considered to be a stretch.
Until recently, it was not so obvious that evolution is not so much about genes and biology as it is about the information in the genes. In that context, it becomes apparent that evolutionary processes apply to culture as well as to biology.
Conflicting Economic Models
Elements of Supply Side Economics
- Inflation and Deflation
- Supply and Demand
Cultural Structure of Economics
Economic Cultural Streams
The Economic Boom and Bust Cycle
Economic Fallacies and False Myths
Conflicting Economic Models
I am not an economist, but the study of economics has been a matter of interest to me for a long time. I have purchased many books and read parts of some of them; I have read newspaper articles and editorials, downloaded and read articles. So now I know a lot of the vocabulary and am familiar with the political issues.
I have come to recognize that, among real economists, there are several economic models. Interestingly, these models are not consistent with each other. In some cases, common sense is missing, and even reality is ignored.
My interest in economics was sparked when my small loudspeaker business (Burhoe Acoustics) failed during the Carter administration as a result of what I thought was a completely unnecessary recession. From the editorial pages of the Wall Street Journal, I started reading about the controversial supply side economic model espoused by Jude Wanniski and Robert Bartley and adopted by presidential candidate Ronald Reagan. This model was supported by professional economists Robert Mundell and Arthur Laffer, the latter famous for his invention of the Laffer Curve, (which showed the unsurprising result that maximum tax income occurred at a point between zero and maximum tax rates, with the conclusion that, if the present tax rate is higher than the maximum point, lowering the tax rate would increase the tax income to the government.)
It became immediately obvious that models contradictory to that of supply side economics existed. This was evident from the vilification by most of the mass media and by Reagan’s political opponent G.H.W. Bush, who castigated it as voodoo economics.
It used to amuse me that the editorial pages of the Wall Street Journal used an Economic Model that was inconsistent with that of the front page.
One of the Economics books that I had purchased was Paul Samuelson’s Economics, which has persisted through many editions and is, I think, one of the best-sellers of all time. I was unable to read and absorb it because it didn’t make sense and was internally self-contradictory. I think that the ideas of this book have pervaded our culture and underlie several of the current economic models including the dominant one, which is sometimes called the Standard Model.
I haven’t discovered what the Standard Model is, but it seems to be the basis for economics reporting in financial magazines, The New York Times, The Wall Street Journal and the rest of the Main Stream Media.
My Financial Model, which I elaborate below, is based on the supply side model. It is oriented toward producing maximum prosperity and could be called Pure Capitalism. Although well-developed by a small number of professional economists, it gets short shrift, if not outright derision, in the Main Stream Media.
Other Financial Models may have other purposes: Marxists seem to want to destroy capitalism; Socialists seem to want to achieve equal wealth for each person; Progressives seem to want to maximize government control. Many economic commentators in the media seem to be concerned about social justice, however, with no coherent way to achieve it.
No economic model other than supply side is sustainable. All other models rely on (and dissipate) the wealth that has been accumulated by the productivity of Capitalism.
It is of interest that there are so many contradictory models existing simultaneously in our culture. Obviously, they cannot all be accurate, or even useful. Then why do they persist? Are there powerful cultural agents who benefit from the promulgation of false economic models? In whose interest is it to deter more rapid economic growth? I speculate that it might be the already very rich.
Supply Side Economics is so simple that a child can understand it, but, perhaps, not an adult. Economics is so important that it cannot be trusted to the general public. That is why government sponsored economics seems so difficult and complicated. The reason why I am trying to peel away some of the misconceptions and hoaxes is to provide a path to spirituality for the general public.
Economics begins with work, lives in culture and leads to trade and wealth.
Spirits do not need to eat, but humans do. Economics is about personal survival. Somebody has to work in order to be able to purchase the elements of life: food, shelter, education and personal security. Prosperity leads to greater leisure time and, possibly, greater spirituality.
When someone works, they produce something of value that can be used either for prolonging life or for exchanging for something someone else produced.
When someone acquires culture, they are enabled to work more productively and to accumulate wealth.
Entrepreneurs invent new and better ways of producing wealth.
Investors acquire the ideas and techniques of the entrepreneurs.
The bulk of economic behavior is collaborative. The nature of economic behavior is NOT competitive. Economic behavior consists of people working together and trading with each other.
Government, when friendly to the production and acquisition of wealth, guarantees the right to own property, the freedom to work and free trade, a sound money supply and personal security. Such a Government allows you to retain the wealth you generate.
Government, when hostile to the production and acquisition of wealth, makes it difficult to work, trade and innovate. Such a Government confiscates wealth.
Fundamentally, someone works. For example, a farmer, carpenter, a banker, lawyer or entrepreneur creates value from his work. Work is not divided into whether you use your muscles or your brains. Everyone works, or needs to be supported by someone who does work.
The value of your work is related to your productivity; the greater your productivity the greater its value. Productivity is almost entirely a function of culture. Culture includes education, training and environment. Even gifted performers such as sports figures and movie stars depend more on culture than on innate ability.
For a human being to survive without culture would be impossible. Even Robinson Crusoe arrived on his desert island with a lifetime of accumulated culture.
Productivity is necessary for survival. Once survival is assured, there is the possibility of retaining wealth. Not all activity is productive work, for example, attending a play. Productive work is what leads to survival. Work in excess of what is needed for survival can produce wealth in the form, of goods, which can be stored or traded. Wealth is interchangeable with leisure time.
Psychologically, wealth is difficult for the humans to tolerate, since humanity has evolved in an environment of poverty and hardship. So far in human history there has not developed such a culture which is tolerant of wealth.
When voluntary, trade is the mutually beneficial exchange of the product of two workers. It is necessarily mutually beneficial. Otherwise it would not be voluntary. Trade can consist of the direct swap of physical goods. It can include intangible goods such as art or education. It can be in exchange for money. It can be in exchange for credit (an IOU) in other words, the promise of future work.
Because it is mutually beneficial, trade increases wealth. Trade is useful because it saves work for each party to the trade. Trade can be viewed as the sale of the value of one’s work. The cost would be the time spent in working, and the profit would be leisure time acquired.
Entrepreneurs are the source of economic growth. Fundamentally, entrepreneurs increase the productivity of others. They create innovation in economic culture.
Entrepreneurs initiate trade by inventing new products and creating markets. They improve productivity by inventing new ways of working and ever more effective tools.
I have been an entrepreneur, more than once.
While still in Grammar School, I discovered a recipe for fudge in my mother’s Fanny Farmer cookbook. In a matter of days, I was buying chocolate, sugar, milk and butter in bulk at the local First National grocery store. Neighborhood boys were flocking to my kitchen to purchase my fudge. Hand drawn chalk advertisements appeared on the pavement near our house. A neighboring boy entered into competition, and I learned the plusses and minuses of negative advertising. My father bought a ledger where I could keep records. He also insisted on reimbursement of household expenses.
There are two parts of the Government which oppose clarity of thought about economics as well as the advancement of prosperity for the middle class. One part is that which is controlled by conscious efforts of the very rich, who are inconvenienced by the arrival of newly rich entrepreneurs. The other part is the unconscious bureaucracy, which is threatened by general prosperity.
I think the best model of government is as the technique by which rich people try to protect and increase their wealth.
One form of protection is to prevent other people from getting rich enough to compete. Hence regulation and taxation.
Another form is camouflage: they pretend to be Democrats or Republicans.
For the very rich, the most important institution through which they both exert control over government and extract wealth from it is the Central Bank.
Other important institutions include the Media, Universities and Museums.
Another model of government is that it is a bureaucracy (which may even resemble a form of life) whose greatest existential threat is prosperity in its populace. When people are prosperous, they have no need of government. The bureaucracy ensures its survival by restricting prosperity through taxation, regulation and welfare benefits.
Government when Friendly
Mostly government doesn’t help. If a government were friendly toward the generation of wealth and prosperity, it would provide in general an environment that enables entrepreneurs to set up businesses, trade freely and retain profits; some of its features would include the following:
- Provide money of constant value;
- A minimum of taxation and regulation, perhaps, zero;
- Secure borders;
- Protection from pirates and other thieves;
- Various freedoms – trade, work, association, education,
The extent to which these provisions are absent is an indication of a government’s hostility to the generation of wealth and prosperity.
Government when Hostile
The most effective way to discourage entrepreneurial activity is though taxation. Regulating business activity is also powerful.
Money is a mutually agreed upon symbol of one’s respective work. The desired characteristics of money include that it not perish or change in value and that it be easily divided and carried. Gold has some of these characteristics. Carefully printed paper has other desirable characteristics. The ideal is paper money which cannot be counterfeited but is easily exchanged for gold.
Imagine a closed economy with a fixed money supply. When productive work is performed (increasing prosperity,) the value of the money will increase, which is a good thing for people who own money and other assets. In our current vocabulary, this is called “deflation” and is considered a bad thing by those who associate “deflation” with the Great Depression, as if it had been a cause. It is also a bad thing for people who owe money, since they may have to repay more value than was initially borrowed.
When a bank or government creates money from nothing, that is, without a corresponding debt. Inflation is caused and the value of previously existing money is lessened, which is good for people who owe money.
This may account for why the government says that inflation is good thing, owing a lot of money and getting to cause the inflation by spending free money.
When entities trade it is said that it is at a price where supply equals demand. Economics texts have a nice simple curve which recognizes that as supply increases or decreases, price goes down or up. Some economics texts tread this relationship as an algebraic equation, as if demand could be measured as going down or up and affecting price accordingly. Such thinking supposedly justifies government spending to jump-start the economy, as if spending money increases demand and hence supply.
This is one of many nonsensical ideas in modern economics.
The reality is that people work for a living and create excess wealth (prosperity) when they are productive. Government spending is not a source of wealth, even when it is counted as a part of GDP.
Like a coral reef, the various cultural economic streams form an interdependent multi-dimensional structure. When individual participants are free to work and trade, that structure grows and becomes stronger. When entrepreneurship is strangled by government taxes and regulation, the structure weakens and may experience catastrophic failure.
There are many cultural streams associated with the subject of economics.
One of the cardinal points in my thesis is that prosperity is desirable.
Unfortunately, however our biological evolution has taken place in the condition of scarcity. As a consequence, a culture is filled with advice on how to live as a poor person. In fact, wealth and the acquisition of wealth is discouraged by the culture.
The only culture I know which has maintained prosperity across several generations is that of 19th-century England. This also happens to be the only culture I know of which has maintained a cultural stream that favors the maintenance and creation of wealth This cultural stream was typified e by the tradition of the so-called “public” schools, which were in fact not public but which were used to educate the class which became the government class.
Switzerland and Hong Kong may also be examples of such a culture but I don’t know enough about them to say so.
The challenge is to develop cultural streams which both encourage the creation of wealth and show how to live with wealth.
The growth of economic prosperity requires a particular cultural structure. The paucity of instances of economic prosperity in the history of the world testifies as to the rarity of such a cultural structure. Most economists either fail to recognize or willfully deny what the cultural conditions necessary for economic growth are. Those who do recognize and are honest about it are generally in the “supply side” or Austrian school, which roughly runs from Say’s Law and Adam Smith through Von Mises and Hayek to Laffer and Skousen. The theories of social justice and wealth redistribution typified by Marx and Keynes do not lead to prosperity but rather to its destruction.
The question I address in this article is “Why do periods of prosperity end, and usually with a dramatic if not catastrophic bust?” To answer that question, I introduce the role of evolution not only in the biological sense but also with respect to culture in general and specifically with respect to certain streams within culture such as economics and the idea of social justice.
In particular, I suggest that the very growth of economic prosperity causes changes in various cultural streams, so that the culture which led to the economic growth in the first place is drastically altered and becomes a debilitating agent rather than a supporting one.
It is my opinion that these changes are unintentional and even largely unrecognized so that people are always surprised when the bust occurs. I think that most people would prefer that prosperity continue. The answer is to add an element to the prosperity producing culture which recognizes what conditions are required and what conditions are forbidden for continued prosperity.
This is not an easy task because most people in positions to change the culture prefer that economics remain a mystery.
Prosperity results from a combination of evolutionary and cultural progressions. The development of prosperity changes the course of those evolutionary and cultural developments, usually resulting in conditions that produce economic decline. Because the cultural infrastructure that allows the development of prosperity is both critical and fragile, the decline is usually much more rapid than its development, giving the appearance of first a boom and then a bust.
In the controversy of nature versus nurture, I come down very strongly on the side of dominance of culture over genetics when it comes to matters of economic choice in human behavior. It is a particular culture that allows the development of prosperity and it is another particular culture that ends it. Up to now, there is no culture which allows the continuation of a constant level of prosperity without either growth or decline in that level. It is prosperity itself which breeds the culture that destroys it. In general, people are not aware of these cultures (Thomas Sowell in his “A Conflict of Visions” identified two of them.) They are especially not aware of the culture that allows prosperity in the first place.
There have been many cycles of boom and bust. I have an explanation for the bust. It is cultural evolutionary rot. Prosperity blocks the natural cleansing of evolution, and reproductive channels become clogged with inferior information transmission. As the culture becomes contaminated with erroneous economic ideas, instability sets in and prosperity is destroyed.
Cultural streams transmit the information that allows each of us to construct models of reality. In economic history there have been essentially three conditions, each of which has its own economic cultural stream.
For most of the world, most of the time, there has been extreme poverty. Food and shelter are hard to come by. Life is short and characterized by hard work. The economic cultural stream is dominated by information about working skills, techniques of collaboration and mechanisms of trade. There is almost no information about prosperity or how to create it. There is no concern about social justice and no leisure time. Honesty and unselfishness are highly valued. Religion is important.
The conditions that allow the development of prosperity occur very rarely, but it does happen. The fundamental conditions that allow the growth of prosperity are the freedoms to retain wealth , to work at will, to trade and to be secure. The cultural streams associated with poverty are favorable to the generation of prosperity. However, the development of prosperity is not favorable to the cultural stream of poverty.
All economic prosperity is the result of productive work, only work, not government spending or distribution or confiscation.
A boom occurs only when government provides conditions that permit economic growth. In this environment entrepreneurs flourish, creating ever greater prosperity, using credit, trade and business contracts.
A bust occurs when the government changes the rules such that the conditions which permit economic growth are reduced or eliminated so that entrepreneurs can no longer continue their productive practices. Since government bureaucrats do not understand how the entrepreneurs operate, they do not realize the fragility of the culture which is its foundation and therefore feel free to tinker with the rules for either their own advantage or for some imagined social advantage.
TWO CULTURAL STREAMS
A cultural stream typically contains a vocabulary, rules for behavior, an historical narrative, a system of values and a model of reality. It may or may not be associated with a particular religion. It may include a bunch of specialized information categorized as a science or trade, for example, economics.
In this article, I am concerned with two cultural streams. One is common to almost all people throughout history as well as to most of the people in the world today, but is somewhat unfamiliar to the readers of this article. That cultural stream is associated with an environment of abject poverty.
In this culture, hard work and early death are the dominant factors. Within tribes, there is some division of labor and simple trade, often without the benefit of money. Such cultures are usually self-perpetuating because of a social structure in which the ruling elite does not permit the conditions of generating prosperity to arise. This is usually unintentional since they do not know what such conditions are, and they are more concerned with maintaining their own precarious domination.
The cultural conditions which allow the generation of prosperity can be summarized as freedom: to work to own, to travel, to trade and to be safe in his environment. When entrepreneurs are given the freedom to generate wealth, they do so at a frightening rate without at all understanding the environment of economic freedom that has been granted to them. In fact, they take it for granted and do nothing to protect it.
There is a cultural stream in which these conditions are codified but it is much misunderstood and vilified: the United States Constitution. When these conditions were touted in 1980 by economically literate candidate Ronald Reagan they were denigrated by economically illiterate candidate George H. W. Bush as “voodoo economics.”
Meanwhile, the beneficiaries whose boats rise in the general prosperity have no idea that it is an unusual culture and also tend to take it for granted. The politicians who follow the Constitution are cast aside and accused of being old-fashioned and out-of-date.
The old idea that work is essential to survival is forgotten and the new idea that work is not necessarily labor intensive is not learned.
In prosperity, a new cultural stream develops where the nouveau riche are recognized as a social problem and the government is urged to tax and regulate and the invidious goals of social justice become the new ethical norm.
Needless to say the new cultural stream does not allow the continued generation of wealth and the increased loss of economic freedom eventually causes some degree of economic decline, often catastrophic.
There are two cultural stages of prosperity. One is of static prosperity, without growth or contraction. We are presently in this condition, which is without precedent in world history as far as I know. The other is of growth, which requires entrepreneurs. Perhaps the decline of the Roman Empire is a third case.
This essay is not to be interpreted as an espousal for either boom or bust. There is a plethora of advocates for either side. Interestingly, it is a corollary of this essay that those who advocate a bust are living in an environment of prosperity, and those who advocate a boom are living in an environment of scarcity.
For the purposes of this section, there are two models of reality, one for the boom cycle and one for the bust cycle. Each model of reality has its own cultural streams. The boom period causes the alteration of the cultural streams that engender it and they usually turn into the cultural streams and its model of reality which in turn lead to the bust._ Throughout human history, there have been relatively few periods of prosperity. Biology and culture have simultaneously evolved to optimize human behavior in the environment of poverty and scarcity. When the conditions arise that permit economic growth, that growth tends to happen so rapidly that the traditional culture and biology can not adjust to the new conditions and hence become inappropriate for the evolutionary survival of the conditions that gave rise to prosperity. Instead, the culture adapts in an inappropriate way and causes the bust which returns everything to conditions of scarcity which are to which the human evolutionary development was originally adapted.
The conditions for producing prosperity do not happen easily or even by accident. When those conditions arise, entrepreneurs thrive. Entrepreneurs are the main engine for economic growth. They improve labor productivity at the same time that they create new business enterprises and products.
As long as the favorable conditions persist, economic growth can increase exponentially. In less than a decade, the environment of scarcity and poverty can be forgotten. The new cultural problem is gluttony — overeating, overdrinking and overindulgence in narcotics.
So rapid is the change from scarcity to abundance that the culture cannot adapt. The biological human is completely unsuited to prosperity. Those who create the conditions for prosperity become appalled and try to make adjustments to cure the new problems created by prosperity — and kill the golden goose.
Then comes the bust.
I am not an economist. I do not read economic journals. However, much of what I read from professional economists seems to me to be false, even ludicrous. I am a professional loudspeaker designer. When I entered the field in 1961, I felt the same way about writings from the speaker designers at that time; the literature was largely false, sometimes, even, ludicrous.
My first favorable reaction to economic literature came from the editorial pages of the Wall Street Journal, especially when Robert Bartlett was the editor. For a short time Jude Wanniski was one of his editorialists and one of the chief exponents of “supply side economics.” I learned a lot from his book, “The Way the World Works.” More recently, I have greatly admired a book by Mark Skousen, “The Making of Modern Economics.”
The creation of wealth requires work. Growth in the creation of wealth requires entrepreneurs.
I have very little sympathy for modern macroeconomics, especially, Keynesian. Economics starts with action — the creation of value through the action of work and trade. Macroeconomics starts with aggregates of the results of work and never addresses the origins of the aggregates. It seems to me that macroeconomics misconstrue cause and effect and treat algebraic equations as if they are reversible. For example what is called “demand” does not cause supply or consumption, as is posited by Neo-Keynesians.
Most people, including the entrepreneurs and their enablers are unaware of the conditions required to enable prosperity. Thus, when the rules that allowed the prosperity are changed, causing the bust, the entrepreneurs are blamed, or gluttony, but not the rule makers.
Here are the conditions in which entrepreneurs thrive:
Freedom to own property
Freedom to retain value of work
Freedom to choose work
Freedom to trade the value of one’s work or property
Freedom to travel
Freedom from government regulation
Freedom from government taxation
Freedom from external threats
Freedom to choose a stable currency
The first seven are freedom from government. The last two are services provided by government.
Throughout most of human history government has denied most or all of these freedoms.
The first major exception was the Roman Republic. The second has been the United States Republic, as prescribed by its constitution. At the time the constitution as written, it was not understood that these conditions would lead to prosperity. Two centuries later, it is still not widely understood.
A recent example in another country is Hong Kong from 1960-1980. A British magistrate, Copperthwaite, surreptitiously created these conditions and declined to record statistics while the colony grew from nothing with no resources other than a shipping port and the protection of the British navy to one of the wealthiest countries in the world. Under the threat of the Chinese takeover, hundreds of Hong Kong millionaires expatriated to countries like Canada.
With many of these freedoms in place, Israel’s economy is now booming.
The U.S. victors of WWII imposed many of these freedoms on their former adversaries, Germany and Japan, where even more dramatic growth went on for several decades.
In many countries who once were a playground for entrepreneurs, these freedoms are vanishing. The growth of prosperity in these countries is also vanishing. These countries include most of Western Europe and the United States.
In our country, the only remaining bastion of freedom is the Internet. This is one of the few arenas in which an entrepreneur can open a new enterprise. Perhaps this is why the freedom of the Internet is under attack.
There has been a lot written about Rome, that I haven’t read. From what I can recall, Rome had a long period of growing prosperity (in the order of a centuries) until the culture came apart under the later emperors.
Taiwan, South Korea and Singapore are all examples of a period of economic freedom and great prosperity, for a time. About twenty years ago, China created a free trade zone along the southeast coast which is still flourishing.
According to my analysis, it is not technology per se that leads to prosperity but the increase of the value of work which is enhanced by culture and trade. Technology is a by-product.
Switzerland, like Hong Kong, is an example of a society with no natural resources and yet has created a very prosperous economy. Switzerland is all the more remarkable for its long period of stability and no seaport to allow trade.
New Zealand voters have alternated governments which have alternated periods of economic freedom and periods of growth.
Chile under Pinochet enjoyed great growth, but Pinochet did not last very long, undone by liberals and Communist sympathizers in other Western countries.
Hong Kong, Chile and Singapore are examples of countries where economic freedoms exist without democracy.
Narrative of the boom/bust cycle
In the beginning, people are poor. The necessities of life are scarce. Children go to bed hungry. The old and the infirm are allowed to die. All the able-bodied work hard to provide housing and sustenance. Productivity of work is low. Society is organized in tribes. Tools are primitive and scarce.
The culture of scarcity is dominated by the importance of hard work and thrift.
The beginning of prosperity occurs when people have the freedom to organize work and to trade, first among themselves and eventually with people from other tribes. Workers require training and more sophisticated tools. There is some form of money. Productivity improves.
Culture expands to include education and mercantile practices.
With even more economic freedom, entrepreneurs emerge. Bankers and lawyers allow credit and contracts. Wealth is accumulated. There are now tools to make tools. Education becomes institutionalized. Worker productivity is substantially increased. Art begins to appear. Society is organized in states.
Cultural emphasis shifts from the importance of hard work and frugality to dealing with wealth and leisure time.
With complete economic freedom, entrepreneurs plague the economy with innovation. Work productivity is so enhanced, that manual labor virtually disappears.
Culture turns to social justice and improving the quality of life. At the same time, it becomes wishful thinking and the real world disappears. Without scarcity, culture can become independent of reality.
When the culture becomes unmoored from what created the prosperity, the society becomes unstable. Ignorant of the freedoms which create wealth, the well-to-do beneficiaries have a tendency to eliminate those necessary conditions, and when prosperity disappears they have no idea that they were the cause.
The cultural network that enables and supports a wealthy society is both complicated and fragile. The persistent failures of centrally planned economies bears evidence for that complexity. When it begins to unravel, no one knows how to fix it, and the bust comes very quickly.
Cultural Streams in the boom/bust cycle
Prosperity is enabled by culture. It takes a particular kind of culture, in which various freedoms allow entrepreneurs to flourish. Because the economic activity of entrepreneurs is difficult to understand (even by entrepreneurs) and not readily apparent to most economists, a widespread culture to support economic growth does not exist.
One of the few cases where prosperity was deliberately introduced to a geographical region is the example of the southeast coast of China over the last three decades. The government of China was about to take over ownership of Hong Kong and noticed its prosperity. Intrigued by its extraordinary and unheralded prosperity, China decided to experiment on the adjacent coast. Several of the provinces were given special freedoms. Like Hong Kong they were allowed to trade freely with other countries with minimum regulation and taxation. They were allowed to hire people from inland China, for whom it was a godsend. However, they were restrained from trade with inland China. They welcomed entrepreneurs and investment from other countries, notably, Taiwan.
I consulted with a Taiwan loudspeaker company during the time it moved from Tawian to Xiamen (1985-1995). When I traveled through the countryside, the construction of buildings and highways was almost explosive. Going only a few miles outside of Xiamen brought us to a scene of abject poverty.
It is wrong to attribute the Chinese economic miracle to anything but more or less untrammeled capitalism. It is occuring almost entirely in the coastal free trade zone. The point is that there was no underlying culture that led China to perform this experiment. Rather, it was in imitation of what they observed working in Hong Kong.
The actions of entrepreneurs do not easily fit into the government statistics on which modern economics relies. The magnitude of their collective accomplishments go unappreciated.
My view of culture is that it is information transmitted in time through human language (primarily) independently of genetic information. Like genetic information, there is evolution. As genes are organized into humans, tribes and even cultures, so bits of cultural information are organized into streams and languages. For the purpose of this essay, I am focussing on the cultural streams that have to do with theories of economics.
The cultural stream that promotes economic growth is known by the name “Supply Side Economics.” This stream starts with Adam Smith and passes though the so-called “Austrian School” of which Von Mises and Hayek are the most prominent names. This cultural stream was popularized during the 1980 Reagan presidential campaign and was supported on the editorial pages of the Wall Street Journal. Jude Wanniski was instrumental in organizing the support of economists Mundell and Laffer. The principles of “Supply Side Economics” were generally derided by most members of the media, most members of the Democratic party and many members of the Republican party including the Reagan’s vice-presidential running mate, George H.W. Bush.
Although Reagan’s implementation of these principles resulted in one of the greatest periods of economic growth in the history of the world, the same people continued with their derision and even denial of the resulting growth. That cultural stream now appears to have completely disappeared from the mainstream media, even including the editorial pages of the Wall Street Journal.
Another cultural stream which has proven to be much more popular with the government, academia and with the media started with Karl Marx and is identified with the term Socialism or the concept of social justice. Concentrating on the role of government to limit the accumulation of wealth and distribute it to the poor while ignoring the importance of entrepreneurs in generating wealth, this cultural stream is of no use in generating prosperity and to the extent that government adopts its ideas, prosperity is destroyed.
The normal human economic condition is scarcity. The conditions for generating wealth do not exist, and, more importantly, the cultural stream that represents those conditions is unknown or forgotten. If by some accident those conditions are created, then the generation of wealth takes off. Still there is no cultural stream that explains the generation of wealth or the conditions required. As wealth is achieved, the cultural stream of social justice arises and eventually destroys the conditions that had existed that allowed wealth to be created and consequently, the bust.
At the beginning of the cycle, in conditions of scarcity, hunger and difficulty of survival, there is no question about the desirability of more prosperity. If it ever begins to happen most people are happy about it. It is only when people are no longer hungry and have plenty of leisure time, that they begin to complain about other people’s wealth and attempt to destroy it.
To break the cycle, it is first necessary to clarify that wealth is a benefit and desirable. Unequal wealth is inevitable. Even in a poor society some people are more aggressive and retentive.
Once a culture that approves of wealth is established, it is necessary to bring about the conditions that generate wealth, the supply side cultural stream needs to be established and maintained through the period of growing prosperity.
Once stable economic growth is achieved, a new cultural challenge needs to be met to deal with the problem of human biology which has evolved in constant hunger and scarcity. The human appetites are unsuited for conditions of plenty.
Incidentally, it is my opinion that the bust is not built into the boom. The bust is the result of government actions that either make it too difficult for entrpreneurs to operate or destroy the conditions which had allowed success. The idea of a bubble that bursts, I think, is incorrect. Jude Wanniski documented (“The Way the World Works”) the cause of the 1929 stock market crash as being directly correlated to the passage of the Smoot-Hawley tariff bill working its way through congress. In Wanniski’s view the stock market was not experiencing a bubble. Rather government threatened to change the rules by enacting a tariff. This in turn reduced the value of most of the trading that was going on and so reduced the value of the companies listed on the stock market.
In my view a similar thing happened in the crash of 2000. There was not a tech bubble. For whatever reason, the Clinton administration had adopted a laissez-faire attitude toward regulating the various technological companies. However, for whatever reason, the Bush administration put in new regulators who were more aggressive in limiting those companies.
Briefly, and off of the top of my head, some of the common economic cultural elements that seem to me to be outright wrong.:
- The Phillips Curve; there is no connection between inflation and unemployment.
- Jump-start or Stimulus; Government spending never helps productivity.
- The Minimum Wage is an abomination which benefits no one except labor unions.
- Trade is a Zero Sum game: If it were, nobody would trade. Nowadays, we don’t trade; we buy or sell in exchange for money. Anyone who buys or sells does so in order to gain an advantage.
- Trade Deficit; just thinking about it, there can be no such thing; is anyone in China going to give anyone in the United States anything in exchange for nothing?
- Deflation is evil; on the contrary prices automatically go down in the presence of prosperity. (That is, the value of money increases.) Inflation is caused by government spending money it does not have, that is, printed from nothing.
- A small amount of inflation is a good thing; a good thing for the government; it allows the government to spend free money and to pay back debt with less expensive currency than when it borrowed.
- Income inequality is a bad thing; only if you are against prosperity; entrepreneurs create wealth and share in it; everyone benefits.
- Government statistics are reliable and true; they are based on the same computers which create weather forecasts.
In order that my description of evolution be valid, it is not necessary that it account for everything about the development of humans or other life forms, a mistake that many advocates make. For one thing, it is not necessary that evolution account for the origin of life.
Whenever people voluntarily work together or engage in trade, self-organization occurs.
People in self-organized groups are not usually aware of it.
A next stage in cultural evolution is with regard to self-organization of groups of people.
People are naturally resistant to being in a self-organizing group because it is difficult for them to perceive any self-interest in it.
Spirits are self-organized. PERHAPS THAT SELF-ORGANIZATION IS WHAT PEOPLE CALL GOD. (I didn’t mean to capitalize that.)
Proteins are self-organized expressions DNA.
Insect colonies are self-organized expressions of DNA.
Darwinian evolution is a process that consists of: the
- transmission of information
- (which may be modified during transmission)
- from one generation to the next
- in a hostile environment and the
- survival of some, but not all, of that information.
Darwin observed that process in biological species, where we now know that the information is encoded in DNA molecules.
There is nothing teleological in that observation, and Darwin’s unfortunate use of the term “natural selection” may indicate his preference that there be a master breeder in the heavens. Unfortunately, Darwin himself attempted to answer teleological questions with his evolutionary theory.
There continues to be confusion about whether Darwinian evolution contains any answers to the question of why it produces the results. That confusion disappears as soon as one accepts the above definition. There is no designer, no purpose no one to select a desired result.
Culture consists of information that has evolved in the Darwinian sense. This is a very important point not yet understood by contemporary scientists and philosophers. We humans don’t notice cultural evolution because by definition what we experience is its result; we have no knowledge of culture that has not survived the hostile environment of our cumulative minds. For the most part, we also don’t notice that our environment is almost entirely cultural and that who we are is much more strongly determined by culture than by genes.
Culture is retained (selected) information.
Cultural evolution is about how that information is selected.
Information flows through generations in cultural streams.
The information in cultural streams can be organized into models of reality.
Models of reality are synthetic, not necessarily true; they are merely a logical way of organizing information.
Information is not necessarily true, not even retained information (culture).
Buddhism and Christianity are models of reality; each has its own cultural stream. Likewise, Atheism.
This book is a model of reality; it includes much of my personal cultural stream.
We organize our memory into a model of reality, or rather, several models of reality, similar to a genealogical family tree or a computer program menu structure. Whenever we receive a new bit of information, we try to find a similar group in our model structure. When we find a fit, we slide it in. If we don’t find a fit, we are likely to ignore it. Only when it is very important do we create a new slot where other bits will later fit in.
These slots are like file folders, each full of related bits of information. Each folder contains the information that makes up a cultural stream. Just as some folders can be categorized into a more general heading, so too do small cultural streams join into a larger river of information.
Cultural evolution works in the context of cultural streams. The information that survives from one (cultural) generation to the next is that information which a human chooses to retain in one of his models of reality. It is important to remember, and counter-intuitive, that the survival of information in a cultural stream has nothing to do with the biological survival of the host. Thus a cultural artifact, e.g. altruism, is retained in a cultural stream because it is attractive to the human mind not because it is in any way useful to the survival of any gene. In fact, such cultural artifacts are often detrimental to human survival.
Such models include sound and vision as well as cultural and logical constructs.
Such models include much more detail than is available from what the senses perceive. For example, witnesses to the same event create different models of reality, each of which is equally real to the respective observer.
Socialists prohibit entrepreneurs and thus any increase in prosperity.