Asking Questions – The similarities between Economics and Fiction

Firstly, I’d like to take a moment to apologise for my lack of blog posts – the main reason is I’ve been inundated with ideas, and they’re big ones, and the thought of starting was terrifying. So, I’ll take a step back, and just write.

This post is inspired in part by 1Q84 by Murakami, but also helps to define why I chose Economics as my subject of study. I don’t think I ever wanted answers to questions back way when, it would frustrate me to no end if I asked an abstract question and was provided with a definite, black and white response. And I never had any desire for knowing specifics, such as years of events occurring (other than their relative position to other events). Abstract questions such as – if we have no evil, can there be any good? Often the response I’ve received is evil is bad, and needs to be controlled and outlawed. There is no discussion, or consideration of the term, or of its position in society and in human existence, just a flat answer. This is not enough for me, I want the question to inspire further questions, I want to see a flowering of thought in the other person, for them to have another look at their world.

In 1Q84, the world has changed. I shan’t say much more than that, other than what The Times wrote about it – “A work of maddening brilliance”. If you like to question, as I do, I would strongly recommend reading it.  Murakami makes some interesting notes about fiction writing in this book, particularly that authors ask questions, they link ideas, they don’t answer but they do inspire. This inspiration provides one with a new viewpoint, a new understanding of their world, and provides them with new potential tools to shape and respond to their reality. What has this to do with Economics? Why, I believe everything. Economics is, in itself, a work of fiction. Sure, it is sourced from statistics, from tested theories, and from in depth research as to the behaviours and reactions of economies and people. However, its source is an ever changing one, being people. They are never the same from day to day, person to person, or even between countries. Generalisations can be made, and the theories that are built are often strong, testable, and usable. Consider this though – throughout the ages, over many differing forms such as religion, philosophy, and scientific thought, we have considered numerous ways to describe and understand human nature, yet still day after day we are surprised by the actions and reactions of others. We cannot understand our behaviour, oftentimes we don’t even understand ourselves, yet we create a form called Economics based on human behaviour to understand the interactions between various systems of people.

Please don’t get me wrong, I don’t think this in anyway demeans or belittles the subject. Rather, I think it highlights what is is that we do with this form of thinking, this form of understanding. A by-product of sentience is a pursuit of understanding, and Economics provides a framework with which to understand the behaviour of systems of people. In its current applied form, a money currency is used as a form of exchange between economic agents and parties for goods and services, but at its very core, Economics is a science of understanding how people achieve their wants and desires with limited resources. Within an economy, for instance, Australia, we use the Australian dollar to buy and sell products and services which will – so we believe – provide us with our wants and needs. We build theories and test through statistics and econometrics what were to happen if different actions are taken, such as Government stimulus, a drop in interest rates, or a new taxation system. We ask a question, and the Economics framework provides us with a method by which to come to an answer (with provisos of course – always remembering ceteris paribus). We apply this framework to historical actions in order to identify ‘ingredients’ as such, which affected the mix and resulted in a different outcome to what we expected – take stagflation for instance. These are tried methods, backed up by swathes of data, that are used to answer questions. But how is this any different to a work of fiction?

A story has characters. An economics system has micro and macro systems. A story has an event occur. An economics system has an event occur. A story follow the unfolding of the event, its effects on characters, and gleans new understandings from the behaviours exhibited – which, I must point out, if these behaviours are too foreign to the reader, then there is no understanding. The characters must be believable, they must stem from their structure on the breadth of human behaviour and characters in place, or at least, an understandable extension of current behaviour. In economic systems, the micro and macro systems must also follow real world behaviour, our current understandings of these systems and their operations, or at the least, an understandable extension of what is currently in place. In economic theory, we follow a story just the same as a fiction. An event occurs, and through the theory we watch the unfolding of the event, the reactions of the systems in place, and we glean new understandings from these behaviours.

Stylistically, they are quite different. Structurally, I don’t think so much. I like to ask questions, so I pursued Economics, a discipline which specialises in setting a scene, and watches events unfold. The results we take with us to apply to the real world, as a tool to help us understand further, and to shape and create our reality. The framework of economics is ever changing, a different subject every decade or so, it flows with the times and the generations, and it changes as behaviour changes, providing new ideas and inspirations as to how we can satisfy our wants and desires, given our limited resources.

Keep wondering readers.

– Rhiannon.
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Behavioural Control

This isn’t the blog post I intended on writing – I’ve been quiet of late as I’ve been powering through a couple of fascinating new books, and I did sit down this morning with all intention of summarising and relating my ideas on at least one. However, turns out I ended up watching Psycho-Pass Season 2 (all of it) instead, which led me to this post.

Psycho-Pass Season 2 Synopsis: The story takes place in an authoritarian future dystopia, where omnipresent public sensors continuously scan the Psycho-Pass of every citizen in range. The sensors measure mental state, personality, and the probability that the citizen will commit crimes, alerting authorities when someone exceeds accepted norms. (Wikipedia, 2014).

The authority in place is the Sybil System, and at one point they raise what was known as the Season of Hell, when a new system, Panopticon, was partially implemented to manage the road systems. However, it resulted in hundreds of deaths because of the constant bugs and lack of control. Which led me to question, what is a Panopticon? Of course, ask and Wikipedia shall provide.

The Panopticon is a type of institutional building designed by the English philosopher and social theorist Jeremy Bentham in the late 18th century. The concept is to allow a single watchman to observe (-opticon) all (pan-) inmates without them being able to tell if they are being watched or not. Bentham himself described the Panopticon as “a new mode of obtaining power of mind over mind over mind, in a quantity hitherto without example”. (Wikipedia, 2014)

It seems though, that although the idea of the Panopticon uses fear to control, Bentham himself argued for a more inclusive society, which appears at odds with such manipulative control. It may be that the fear of being watched, of losing privacy and thus control, is what has caused the ferocious backlash against central control. One can make a fairly easy comparison to Government, where a small number of people control the masses – although, not to the extent of the Panopticon, perhaps there is a grain of truth in the fear of possibly being watched by a Government that shrouds a majority of its actions. In Superfreakonomics, they discuss the idea of consequences. If one is caught speeding, one is fined, as appropriate for the level of speeding. An economic agent will weigh up the choices (presumably) at the time of the act as to whether they wish to stay in the speed limit, or disregard it and risk the fine. One simple answer to stop everyone from speeding is a death penalty. This extreme solution may cause the agent to always stay within the speed limit, given that the risk if they don’t is too high. In order for this to work however, the probability of capture would need to be high to always, otherwise agents will likely refer to their heuristics to determine the likelihood of capture, rather than the fine itself. However given the small number of law enforcement resources in comparison to the populace, currently this is not being done. If we were under constant surveillance, and the fine if one broke the law was to die, then it is very likely that agents would not break the law, given two critical things: the probability of capture (and resultant fining) is high, and the fine is too much of a risk for the pleasure (time, money, happiness) gained in the act of breaking the law.

Fear seems to be the controlling tool here, and it’d be interesting to see how this use of fear carries through in the behaviour of government, and those in power. It is also echoed in the fears that citizens seem to hold regarding surveillance – are we scared because of our lack of control, or because of a lack of trust of those in power? If it is the former, will it be a real loss or just the illusion that we had control originally. If it is the latter, do we mistrust because of previous behaviour, especially regarding fear tactics, or is it back to control, and loss of?

I’ll keep researching this, there are some fascinating crossovers with the material I’ve been reading of late, I’d say some of the key points that require defining and researching are:

  • Fear tactics
  • Control, reasons for, against, and effects
  • Privacy

Keep wondering readers.

– Rhiannon

Levitt Steven D. and Stephen J. Dubner, 2009. Superfreakonomics. United States: HarperCollins Publishers

Tow Ubukata. 2014. Psycho-Pass 2, Anime Television Series, Tatsunoko Production.

Wikipedia Contributors. “Psycho-Pass”, Wikipedia. The Free Encyclopaedia, 2014. http://en.wikipedia.org/w/index.php?title=Psycho-Pass&oldid=639544994

Wikipedia Contributors. “Panopticon”, Wikipedia, The Free Encyclopaedia, 2014. http://en.wikipedia.org/w/index.php?title=Panopticon&oldid=637457749

Economics – a tool for how, not an answer for why.

In my earlier post about THX 1138 I mentioned that humans appear to searching for an answer beyond money, and that Economics has been mistranslated as proving that money is the goal, when it has always been just a tool to achieving our goals. I stumbled across an article this morning that gave me goosebumps, the simplicity in which it described my thoughts was pure beauty!

I wish I could say that when I began my studies that I knew what I was doing – no such grand plan here, I just selfishly followed my interests. It just so happened that my interests fell into Economics, Statistics and Philosophy. When you look at these three in conjunction, they’re actually very similar, and provide some key insights into each. In particular, if one looks at Philosophy and Economics, there are the obvious threads of logic and systems thinking, however after reading this article I saw something that had been niggling at the edge of my thoughts for a while.

Economics models the ways in which our society works, there are basic models for basic ideas, and much more complicated flows and designs to capture the bigger ideas. We use statistics and theories to try and understand how our systems act and interact within our society, and the more we model, the more we try to generalise or compartmentalise humans – even to the point of adding in a factor for irrationality – all in order to make sense of what we see around us. There are many reasons why we model in this way, some as simple as making business decisions or placing policy, however I feel that we ache to understand our world, we try to make sense of what is happening so we can feel secure that the decisions we make are the best educated ones at the time. We want to feel right, and in control. Tim Harford put this nice and clearly in his Ted talk – Trial, error and the God complex.

However, we are not god. We are not all seeing, all knowing, and omnipotent. We make mistakes, because we are human, and to believe that there are models and systems of thinking that can account for everything is highly delusional, in just that we cannot even grasp the depth of the system in which we live, being our reality. I won’t generalise and claim that Economists do this, or even that people do this, at the least on a conscious level. However, what we are guilty of is believing that a model is the answer, when it is but a tool. Economics models our reality, but it can only show what we ask of it, and we don’t know all the questions, and the tool is only as strong as we make it. We can use economics to clarify, to simplify, to inspire, but it will not show us where to go or the reasons behind our questions.

Philosophy, the age old science, the beginning of all scientific theory, the beginning of logic, is where these questions can be answered. Or, if one has faith, then religion can possibly show these insights too. (Philosophy is my personal favourite, so I’ll continue with that branch in this post). Philosophy considers human emotion, response, consciousness and nature in order to understand why we are here, what this reality is, and what it could possibly mean to us – in this sense we can find our purpose, our reason for living, our reasons for humanity. Economics cannot provide us with purpose, only with the tools for the actions we determine.

I highly recommend you read this article, it’s a brief one and a shorter version won the New Philosopher writer’s award III.

http://theconversation.com/the-perils-of-the-last-human-flaws-in-modern-economics-29783

Keep wondering readers.
– Rhiannon.

Work hard, increase production, prevent accidents and be happy.

THX 1138
THX 1138, GEORGE LUCAS’ DIRECTORIAL DEBUT, PRESENTS A COLD, DYSTOPIAN FUTURE IN WHICH INDIVIDUAL THOUGHT AND LOVE ARE FORBIDDEN. BUT TWO CITIZENS DARE TO REBEL.
LUH 3417, a disenchanted surveillance worker, consciously stops taking her mandatory drugs — medication that suppresses emotions — and gives placebos to her roommate, THX 1138. Now free to feel, the two fall in love, but find themselves on the run for breaking laws of conformity.
Released March 11, 1971
The above was taken from the producers website, and although I selfishly watched this because of an addiction to dystopian science fiction, I found that it brought up a lot of economic questions. The populace in this movie are drugged to decrease emotion, ostensibly to increase efficiency and thus production (amusingly to produce cybernetic cops that enforce control of the society). Although the production wasn’t a particular focus of the film, it’s certainly a topic worth exploring. To begin economic studies we are presented with highly simplistic models to gain some understanding of what economics attempts to explain. Such as, demand drives supply, prices are a function of these two forces, and by extension, the entire economy operates through these interactions. Unfortunately, sometimes these simplistic models are taken as the over-arching principle of economics, and the principles of capitalism over-ride the original ideal – that economics is the study of how humans satisfy their wants with limited resources. Price is but a function of how humans negotiate this problem, it is not the end in itself. Somewhere in history, economics was mistranslated to be a study of how to maximise profits, when it has always meant much more.
THX-1138 portrays a society that has over time, drugged its people into the most efficient resource to maximise productivity. This seems ideal, if our societies end goal is to maximise productivity, as societies translation of economics is want to suggest. If so, why is this society considered dystopian? Why is there an overtone of fear, why do LUH and THX reject the medication and attempt to flee? If production, profit, is the end goal, why would anyone want to leave such a seemingly efficient society? This would suggest that the ideal of economics, of satisfying wants, does mean more than money, and resources. That emotions, personal ideals and dream can also be considered ‘resources’, worth desiring just as much as physical resources. That not all physical resources satisfy all desires, that not everyone has the same desires, and that there isn’t always a one size fits all solution.
It is a personal beef of mine when people misinterpret my love for economics as maximising profit, that being an economist means being a capitalist, and that functions such as education, welfare, and research must not matter to me because they’re not profitable. I need to say this, as it is one of the most important ideals that I hold close to my heart. I did not study economics for money, for profit, or for stock markets. I study economics because of the interactions between people, the ability to understand and watch how people reach their dreams, and to try and find ways to help society reach further, expand, grow and become more. I see this everyday in popular media, where those who chase profits find at the end of the movie that there is more to life – The Wolf of Wall Street, Wall Street, even American Psycho. (apologies if I ruined the story for anyone!). There are movements currently towards Minimalism, where one declutters, and by doing so disconnect oneself from the drive to buy happiness and to find it within. Countries across the globe are pushing for cleaner power generation technologies – though, this can partly be argued by the scarcity of the resources on which the original generators were based, as well as the push by the younger generations for environmental custodianship. Money is important insofar as it is a tool to reach our dreams, and society is pushing to realise their dreams rather than just profits. Economics, as a study, is leading the charge in understanding these movements, though I think that this is not well advertised.
Movies, novels, blogs, articles – media – are a mirror of our times, of what has been and what we expect to come. Our fears, dreams, desires, sins, and passions are laid bare for all to see. And it is here we can start to understand our desires thus what is driving our current day economics, and where we could potentially be further into the future. When I see something of interest, something that hints at a curiosity, of a desire, I’ll bring it up here for you to have a look at.
Keep wondering readers.
– Rhiannon.

 

Bibliography
Bradshaw, Mike. 2013. Global Energy Dilemmas. Cambridge, UK. Polity Press.
Folger, Edward; Ford Coppola, Francis, and Sturhahn, Lawrence. THX 1138, directed by George Lucas (United States, Warner Bros, 1971). http://en.wikipedia.org/wiki/THX_1138 / http://lucasfilm.com/thx-1138
Hanley, Chris; Pressman, Edward R. and Solomon Christian. American Psycho, directed by Mary Harron (United States, Lions Gate Films, 2000). http://en.wikipedia.org/wiki/American_Psycho_(film)
Pressman, Edward R. Wall Street, directed by Oliver Stone (United States, 20th Century Fox, 1987). http://en.wikipedia.org/wiki/Wall_Street_(1987_film)
Scorsese et al. The Wolf of Wall Street, directed by Martin Scorsese (United States, Paramount Pictures, 2013). http://en.wikipedia.org/wiki/The_Wolf_of_Wall_Street_(2013_film)
The Minimalists. Joshua Fields Millburn and Ryan Nicodemus. Accessed 30 November 2014. http://www.theminimalists.com/

The Introduction

This reminds me of drama class in high school, where the teacher tries to draw you out of your shell by having you express your own unique nature in front of the class. The more expressive, unique, and eccentric you are, the more you are applauded. One must stay within bounds however – one cannot just step outside the social norms that is high school life, and expect to live.

I wonder how I should introduce myself, and the doubts and questions start to roll in. Am I being too presumptuous, weird, or odd. Am I exaggurating myself to seem cool, to fit in, or to purposefully not fit in, will it even matter if I am truthful about myself or if I create a whole new identity would I achieve all my dreams? This is as intense as high school drama, creating a character in Skyrim, or a new family in the Sims.

I’ll start at the top then. My goal in this blog is to explore behavioural economics, with flavours of science fiction and philosophy. I grew up watching Neon Genesis Evangelion, playing violin, and attempting to make sense of western philosophers such as Descartes. I revelled in fantasy novels, and got in trouble often with students and teachers alike for questioning perspective and reality. I started Economics in year 11, but fell in love with the so called ‘dismal science’ in year 12 – which may be in part due to a teacher who encouraged questioning assumptions, logic, and thrived in chaotic classroom debates.

I decided to be reasonable, and worked full-time before going to University. During this time, I discovered that money held a very strong sway over my decisions, and although economics was my passion, money drove my choices. Eventually, after 6 years part-time study, I majored in economics, minoring in philosophy and statistics. I had thought that choosing philosophy units, although fascinating to me, would be useless in application, but this whimsical choice turned out to be one of my best ones. Statistics was a curiosity, and I picked it for its applicability to economics, however I found that in studying these three I found a thread of logic, of different yet similar lenses of reality, and I became hooked.

During the undergrad degree I also started learning Japanese, a side-effect of an obsession with Japan and its culture. Likely started through anime, I am still obsessed and watch anime weekly. One Piece forever! ❤ Since the undergrad I have moved onto a graduate certificate in project management, and discovered yetanother potential interest – systems theory.

The more I study, read, explore, and discover, the more I find new ways to see myself, the world, and our people. The interconnectedness of so many varying realities fascinates me, and how our future is driven by their interactions and existence. Who are we, why are we, and where are we going? I will use behavioural economics as the lens for these questions, and I’ll shade my findings with my other fascinations. This is what I’d like to share with you.

See you next time!