Our basic understanding about how the economy works - is wrong.

It’s not supply and demand – it’s demand and supply.

One of the blogs I really like to read is Evonomics. They have a really great essay on an arabic economist from the 14th century and highlight the similarities and difference between him and Adam Smith - who is usually the person western textbooks cite as the - father of modern economics.

Here is the article - https://evonomics.com/amazing-north-african-scholar-beat-adam-smith-half-millennium/ 


First - one of our unending problems is that - western science and western education is really ignorant of all things not western. Which is why - most economists don't even know this guy existed or that - the way he framed things makes more sense.

To quote the article: "The invention of supply and demand analysis wasn’t invented in the 19th century: the Islamic scholar also described the relationship of demand and supply, and also took the role of inventories and merchandise trade into account."

There are some important things to learn from his work.

1) Demand matters. Creating demand is what creates the market. When supply side people say - we need to create a supply - they are missing something important - that is the customer. Without the customer - there is no business.

2) The government matters. Particularly - taxation matters. Taxation helps create civilization. Government helps people see themselves as a united group - which allows commerce to happen since we tend to want to trade with people - we view as friendly. This is expensive and requires money.  Money to build the infrastructure that allows all that trade to occur.  The government is one of the biggest creators of demand!  And this is true in most countries. The government hires more people than - pretty much anything else and spends more money than anything else. We don't need government to get out of the way - as much as we need government to use it's purchasing power for good - and not evil.

3) Greed/Hoarding wealth is bad. Basically - greed is what brings the downfall of the civilization.   Khaldun’s words are telling: “dynasty and government serve as the world’s greatest market place, providing the substance of civilization. Now, if the ruler holds on to property and revenue, or they are lost or not properly used by him, then the property in the possession of the ruler’s entourage will be small. Thus (when they stop spending), business slumps and commercial profits decline because of the shortage of capital”. “ […] Furthermore, money circulates between subjects and ruler, moving back and forth. Now, if the ruler keeps it to himself, it is lost to the subjects” (Khaldun p. 365).

Lowering taxes on rich people, allows the money to be hoarded and when this happens it is lost to the people. And when it is lost to the people, consumption slows and stops - and the economy crashes.

Using science to fight corruption by increasing cooperation

Corruption is low scale cooperation. How to create large scale cooperation? It has to do with increasing competition.

I am a big fan of the evonomics blog. It brings evolutionary scientists to talk about how we are evolved to behave and how we can use this knowledge to create more just and fair societies.  One of the areas they focus on is  - applying this to economics- hence - evonomics.

Here they have Dr. Michael Muthukrishna who says - "This approach gives us a powerful theoretical and empirical toolkit for developing a framework for understanding corruption, why some states succeed and others fail, why some oscillate, and the triggers that may lead to failed states succeeding and successful states failing." Read more: http://bit.ly/2f6HiYD (via The London School of Economics and Political Science - LSE)

Bullying Management is Bad Management. And there is science to back that up.

It turns out that - collective teams - without bullying - perform best.

How do I know? Well..... I was reading the Evonomics blog. Which is you don't read it - you REALLY should. Anyway - there was an article about how Stacked Ranking is bad. Really really really bad. In fact, this article describes it as a "destructive employee practice." http://evonomics.com/why-stacked-ranking-is-the-destructive-employer-practice/

They aren't the only ones writing about this - Google "what is stacked ranking employees" and pretty much every article is about why this practice is toxic.

The article from Evonomics is great though - as it cites an old study - involving stacked ranking of hens. A farmer was trying to create super hens. So he took his best layers (his alpha hens) and put them in a shed together, bred them and tried to get even better hens. What he got, was psychotic hens that were so busy trying to kill each other that they didn't have much time to lay eggs. 

It turns out the alpha hens - were also bullying hens. Now, I realize that most of you have not kept chickens before - but some chickens are bullies. They use violence and aggression to get food and whatever they want.

The good news is that once the regular hen house no longer had these bullying alpha hens, the remaining hens became very very happy and became excellent egg layers.

What the farmer found out is that bullying is stressful and stressful hens - don't lay eggs.  He also found that the hens he thought were his alphas - weren't really his alphas. They just appeared to be better because - often they took credit for another hens work. And yes - hens will do that.

The big lesson about why stacked ranking doesn't work?  Teams made of competitive alphas - are teams made up of aggressive individuals who don't really care about the others as long as they are on top.

The really good news for those of us interested in creating happier more cohesive work groups is that teams constructed to function as a collective are the ones that enhance the qualities of the individuals within it and allow those individuals to prosper. The individual isn't lost in a collective team. They thrive as individuals.

 Another lesson is that getting rid of your super chickens - who are also your super bullies - helps improve performance.

If you want to learn about how to stop bullying in the workplace - take one of my many classes and invite me to your company to do a presentation. https://humanistlearning.com/category/bullyingharassment/

Humanism and Libertarianism: Are they compatible?

Not really.

At the risk of pissing off some of my libertarian leaning friends and fans, I personally don’t think libertarianism is compatible with Humanism.  In concept, they should ally with one another. Individual liberty. Yeah, we Humanists love that.  We just don’t love it when it stands alone.  

Humanists embrace the concept of embedded autonomy, where the individual is embedded in a community. If the community thrives, they thrive. As a result, as individuals, we encourage people to be responsible to the communities in which they live.  Our goal is to create a better place for ourselves and for everyone else. 

This is what enlightened self-interest is all about. Self-interest without concern for others is just selfishness.

There is a really great article debunking libertarianism over at the Evonomics blog: https://evonomics.com/what-happens-when-you-believe-in-ayn-rand-and-modern-economic-theory/

The list several problems with libertarianism. First, their idea of what humans are is flawed. Humans are not rational actors that will chose to maximize their gain while doing minimal harm to others. Ideally yes, we would, but in reality, we don’t. When we go selfish, we go short term. Short term problem solving discounts future harm and increases the value of current gain. Which is a fancy way of saying the value system is lopsided and there is no incentive to self-correct and take into account the the negative impact our actions may have on others.

For a Humanist like me, I think it’s out of balance and I would rather balance my autonomy with my responsibilities to others. I think this yield better results for me as an individual in both the short and long term.

Another way it seems to go off course is it discounts and diminishes our natural desire to act cooperatively. Humans are tribal animals. We like to work together. Individual is fine, but only to a point. Again, it’s not a realistic or healthy view of who we are as a species and as individuals.  I understand not wanting to be coerced into cooperation, but voluntarily cooperating with others in our community is what creates communities.  Cooperation is a good thing. Self-interest alone doesn’t encourage us to cooperate and the case studies of businesses and countries that have adopted Libertarian principles of government are proof of how badly things go when community investment and cooperation is eliminated and discouraged. Read the article for the details. It’s not good.

Which brings me to the last thing. It doesn’t work. This is one of those things that seems good on paper, but in reality-  leads to horrendous results, both for individuals and for the communities in which they live. At the end of the day, Humanists go with what is proven to work. And Libertarianism has proven, it doesn’t work.

As a Humanist, I celebrate individualism, but I am also firmly committed to being of service to my community. I get frustrated whenever I talk to libertarians who argue against voluntarily joining to pay for things like hospitals or schools or things like that. I understand philosophically why they are making that argument, but the level of selfishness that it exhibits is horrifying to me as a Humanist. I want to help. I want to pay taxes and purchase things collectively that help our community. I want to purchase health care for myself and my neighbors. I want to purchase schools for our kids and libraries. I like paying for cops and fire departments. These benefit not just me, but everyone.

The concept that everyone should be out for themselves and their own – lacks compassion. It’s selfishness rationalized.  And it really doesn’t seem very humanistic to me.  What are your thoughts?

To learn more - consider taking this free online course - Why Humanistic Managementhttp://humanistlearning.info/why-humanistic-management/