Thursday, April 13, 2023

The Ontology of Economics: A Normative Approach to the Economizing problem and its Epistemological Dissection

 

Abstract

In this normative paper, it was looked at the Economizing problem, also known to be the standard academic definition of Economics, i.e. satisfy unlimited human needs under the constraint of the limited resources. The definition was formulated from the following definition: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses” (Robbins, 1932). The closest solution Economics provided came from Adam Smith when he added the Capital as a 3rd mean of production after thousands of years of only considering land & labor as the only means of production (Smith, 1776).

Key Words: Economizing problem, satisfy, needs, constraint, resources, behavior, ends, scarce, means, uses, solution, mean of production, land, labor.

Introduction

Adding the main idea of rationalists[1] to the basic idea of Adam Smith[2] puts forward the vulgarization: how can humans get what they want?; with “how can” referring to the means, budgets, costs, or The Resources, and “what they want” referring to the utilities, satisfactions, consumptions, production, or The Needs.

As it might be deduced, Economics didn’t solve this problem, but only managed it, admittedly seeing it as an impossibility or at the very least a case of unfalsifiabile statement, because it constitutes for the human brains a dilemma or a paradox, i.e. the seemingly contradictory results or patterns reached using trusted rigorous methods such as logic and experimentation processes.

So is it possible to consider the resources as something else rather than a constraint? Does really having a limit (or a constant) in a part of this problem and infinity on the other means the impossibility of creating an equilibria? Why not suggest the possibility of the limited resources being equal to the unlimited needs if we know that the natural laws of the universe suggest that nothing is created nor destroyed? If we can’t truly crack this formula of needs & resources, can we at least if instead of managing it like Economics tells us to do, we try to approach this utopic equilibria as a problem that can indeed be idealized & solved?

The problem that is tried to be solved not only is it materialistic, but also fundamentally Philosophic and Ontological due to being linked to the human psyche of decision making that has fundamental qualitative aspects next to the rationalization of the said decision. Because of that, it will be avoided to dissect the problem from the consumer revolution view it defines from Economics (creating needs to facilitate the resources), i.e. orient the individual choices towards low cost products so in the future these same products will be produced, limiting like that the resources used. Which means also that the simplification (that comes in many versions on lectures) of the problem provided by the Rationalists[3] will be discarded too. This approach can have intersections with the idea of the society of leisure (Dumazedier, 1962), which will only be one aspect of this normative paper.

1.                 The Economizing Problem

Humans physically live in a limited closed system/universe (and can only exploit a portion of it), and mentally in an unlimited open system/universe. Yet the human needs -whether mental or physical- are unlimited.

2.                 Managing The Problem

Due to this humanly none-physical aspect of neediness that seems to influence, “disequiliberate”, dysfunction, and break influence- the natural physical ecosystem ; humans have opted to forge a tool called Economics to create an artificial ecosystem where they can optimally manage this inconvenience via a controlled balance between the needs & the resources of physical & moral persons, this control consists of not satisfying all of their needs (because they are unlimited), and base the satisfaction on a certain economical judgment based on many factors like priority, urgency, rarity, utility, recreation, etc.

3.                 Analysis Of The Problem

Based on what’s mentioned before about human needs & resources being divided into physical, and mental needs, it can be said that:

-          For the satisfaction of the unlimited mental needs, the unlimited mental resources can be used to build tools & “satisfactors” to do so; the engineering problem that may potentially occur is making “satisfactors” that are and only are purely based on mental resources such as abstractions.

-          For the satisfaction of the unlimited physical needs, it should first be pointed out based on the last paragraph that it is paradoxical to have unlimited physical needs with a limitation in the physical resources, that actually suggests that the human neediness of “physicalities” is mental based as a special case of a grander mental neediness scheme, meaning that the satisfaction of human physical neediness not only is it manageable like economics suggest, but also solvable if we act on the human psyche instead of just its physical surroundings.

It can be extrapolated from this analysis that if the limitation of the physical resources is discarded as being physical resources based, all human unlimited needs can be solvable and not just manageable.

4.                 Common  Attempts To Solve The Economizing Problem

Some of the early generic attempts to solve the problem of human neediness had two pathways solve:

-          The mandatory constrain of the physical needs, this includes:

The construction of physical incubators to limit the neediness, such as limiting human rights when born to limit potential emerging possibilities that will lead to diverse and multiple needs to be fulfilled, examples of this are cellular imprisonment, land grabbing, labor exploiting, and austere monetary payments.

The Construction of mental incubators to limit the human psyche, examples of that include humbleness, contentment, piousness, and devotion to an austere dogma (e.g. cultic believes) by one’s outsource of his ability of thinking to the dogma so its gatekeepers can manage the person’s needs & resources according to a specific belief executed as a sovereignty law.

Both options of this first common attempt have led historically to disasters due to their rigid restriction, not being able to provide a minimal satisfaction (of physical or mental needs), and the welfare disparity inside and outside the two options, making these options even more suspicious of having any good results in the first place. These two options are commonly forwarded by religion –mainly organized ones- and social economical systems –mainly extremist & tyrannical ones-.

There are dogmas calling for extreme versions of the mandatory constrain of the needs, these can be found in some branches of Philosophy such as Antinatalism, Nihilism, and Pessimism. These extreme versions generally call for the cancelation of the human psyche through the cancelation of the human species, as they view the very existence of humans as the direct cause of human suffering through the latter seeking a physical perfectionism, even though only its non physical qualitative form that can ever be perfect due to the physical world having change as its only constant (Heraclitus, ~500 B.C). Historically, these dogmas don’t last –at least not in their enforced form- due to the pushback from religion, some moral & ethics savants, and from some of the populace; moreover, unlike religious and political figures that seek dominance and richness through enforcing their idealistic world views, those forwarding these extreme views were philosophers & thinkers who believe in freedom and relativity of ideas, thus didn’t try to enforce them; and lastly, the third reason would be those ideas were more like thought experiments to understand the human case.

-          The unfalsifiable emphasis on getting physical needs via the emphasis on realizing the mental needs. One of the possibilities to do this is via the creation of a mental incubator- for its unlimitation- whose outcome is physical or near physical, this has been tried in the past using:

Religious afterlife promises: not believed in so much due to their clear unfalsifiable nature.

Magical actions: believed in to last much longer for heavily counting on complex real life phenomenon and semi-physical concepts that helps their credibility; examples of this would be: hypnosis, self-hypnosis, Placebo effect, Nocebo effect, ceremonial drogues, and persuasion with archetypical storytelling & acquaintance.

Nootropics, narcotics, hallucinogenics, and Psychedelics: had much more prominence because they weren’t unfalsifiable[4] like religion, nor had anecdotal & ambiguous results like magick. Unfortunately, their results –and afterward outcome- is quantitatively and qualitatively less controlled (by the human factor) when introduced to the human body & mind, which makes these substances useless unless they are used in narrow limited domains such as some recreation aspects and some mental illness curing.

5.                 Synergy of The Past in The Present For The Future

Both types of the common attempts mentioned in that latter chapter were historically used differently and many times simultaneously too, but nonetheless the same types were the ones used and not anything else.

In this part, a potential way of approaching solvency of this problem will be introduced with the present and near awaited technological progress, and on the basis of a premise extrapolated from the epistemological dissection of past definitions & attempts.

It was already established that saying there are limited resources for unlimited needs is to a certain extent a misnouner and that in fact even though there are limited physical resources, the unlimited needs are all based on none-physical requirements, thus the limited physical resources that exist can only be used to enhance the output of the human mental resources to get its needs.

What can be done is try to use the limited physical resources to come up with a physical near-permanent controlled thing[5] (noted α) for humans that can provide them unlimited needs, the only way a physical thing can do this seemingly impossible task is if these supplies of needs have a none-physical form, thus being conscious-based abstractions induced from the individuals minds[6].

Concisely, approaching the solvency of The Economizing Problem can be with the plugging of humans to a virtual reality. As such, the way the Economizing Problem can be solved is if the Hard problem of Consciousness is solved through the understanding of the qualia, as it will explain human’s egocentric predicament (Perry, 1910), at that point humans would be indefinitely conscious entities capable of materializing all their wants[7], or at the very least according to what’s more quantitative than qualitative: humans will be able to hibernate themselves and amerce willingly into a very realistic dream/simulation state where they will only consume an infinitesimal epsilon energy who’s value tends to zero[8]. From an engineering perspective, humans would become one collective entity that is able to harness 100% of the energy  surrounding them, and use  100% of it, thus making Carnot efficiency ratio equals 1 (Carnot, 1824), or realistically at least approaching it.

6.                 In Depth Description

Humans have accumulated through history quantities & qualities of knowledge that lack sufficient understanding and clear applications, and that’s due to humans “intellectual selection” for what fits more their prioritized natural selection interests, as they have a short expiration date that doesn’t allow processing a huge quantities & qualities of information.

That means a simulation can be created where all of this abundant abandonment knowledge is equivalently –and not perhaps equitably- dispersed among the plugged humans (the simulatees)[9] to create purpose to the simulates by giving each person an egalitarian amount of knowledge to kickstart its processing and became achievers if they give more on this already existing knowledge

While having such intellectually satisfying goal to live for, the simulaters (the unplugged residue) will also provide for the simulates their basic human needs:

-          Physical needs: They can be actuated via plugging humans with food & drink tubes, sex tubes, sleep, and food & drink residual ejection tubes. The sentimental aspect of these physical needs (enjoyment, pleasure, etc) should be simulated in different kinds, flavors, and environments/atmospheres that mimic reality (e.g. the meridian cycle). Of course simulating these on humans is free choice based, meaning simulatees will only get stimuli when they do the acts corresponding to it in the simulation. Opt out option  should be available too, but under restrained judicial and bureaucratic conditions.

-          Achieving mental needs: these needs are usually associated with emotions & feeling even though physical needs have them too[10]. These mental needs are mainly abstracted as: love & belonging, self-esteem, and finally on top self-actualization (Maslow, 1943). It is historically & instinctively known that these human abstractions are realized through many types of human mechanical or biological achievement, such as creation, discovery, and invention & innovation.

 

7.                 Precautions

If the simulaters weren’t given their basic human rights & freedoms alongside feeding the simulation with real world information & updates, the project will fail in the same way failures strikes good structures & systems in the real world. Because intolerance, dishonesty, and disinformation are the basis of any system failure due to their inducing of structural malfunctions such as lying, hypocrisy, hate, violence, and corruption. In fact, there would be no need for the human species to leap into the digital world in the first place if replicating real world structures there would mean also repeating its mistakes.

8.                 Potential Incohesions

8.1  Stability & technological progress

Even if unlimited resources are achieved, that wouldn’t directly translate to satisfying unlimited needs, because the later is more driven by the political progress (i.e. rule of law) that guarantees stability so that humans can innovate and realize technological progress and attaint prosperity so they can enjoy the versatile choices this progress provide them with. For example before the industrial revolution -or even the agricultural revolution-, human population was very small, which made their resources abundant (basically all the planet was for a handful of people), yet they didn’t realize any technical progress that augments their choices & needs[11] (Keynes, 1930), and that’s due to the lack of efficient resilient social & political structures[12] (political progress) to create stability that will be a safety net that makes people’s desire to take risks and innovate more bearable in case of failure. Even in the modern times it can be observed that there are nations who were stable and innovative, but once they get destabilized, the technological progress starts to decrease. That means that the two factors are intertwined, and if one or both of them disappear, having unlimited resources would mean nothing.

Note that even with this stipulation a little bit of conflict should always exist (Marshall, 1890) (Schumpeter, 1942) to make sure humans don’t slack into a sterile life so they can still use their critical thinking, analysis abilities, and drive of surviving to be creative; the best case scenario conflict is to have an intellectual conflict & asymmetries, thus rendering the conflict a free competitive market of ideas; if the simulation is a shared space among users, then there will be no option to opting out the intellectual conflict.

8.2  Ideological pushbacks

It should be noted that ideological pushbacks might happen against the existence of a simulation. In many instances, individuals can in elections vote based on their ideological alienation (political, religious, etc) even if the candidate might disadvantage them economically. And if that proves something, it would be that what rationalists suggested about individuals being economically rational is merely a perfectionist view that bounds individuals’ interests to only its quantitative side in (using positive Economics approach) without the qualitative or normative Economics approach. The failing of many metrics presently used to measure the development of a country are an example of such case, in fact one of these biggest metrics would be the economical growth, because in a sense economical growth isn’t a necessity that should be chased by all means regardless of their drawbacks, but rather more of an emergent property caused by a convergence of individuals’ synchronized specialty work -in a geopolitical territory- towards a common goal.

But as a more concrete example, the satisfaction of Maslow’s Pyramid of Needs (Maslow, 1943) don’t necessarily have to follow its conventional hierarchical pattern, in fact there may be a more EFFICIENT way of satisfying them as represented below :

Figure. Top-to-Down Maslow Pyramid Satisfaction

The crystallization of a population’s ancestral identity[13] through systems & institutions[14] will give them a sense of unity[15], thus realizing their need of Love & belonging, and safety due to the progress emerging from a unified identity. Love & belonging and safety are the two criteria to give rise for good economy and also to normalize in the population a sense of community that will make them physiologically help the needed in their identity group. Once a person is safe, loved, and fed, his esteem to self-actualize is then realized. When a territory’s identity group is self-actualized, then it would be safe to say that they are prosperous.

Reversed Maslow pyramids were the standard way of satisfying the needs in pre-modern age when tribes were the standard. If such sense of identity is reintroduced to the present world, it would make achieving all one’s needs fast and cheap like it used to be in the past[16] if not faster and cheaper with the technological progress. Not only that, but it will narrow down the “infinite needs” to the “infinite important/primordial needs” an identity group seeks: in the same way infinity has infinite infinities in mathematics (Cantor, 1874), the needs also have infinite infinities from which one will choose those important for him. Meaning simulaters should fight consumerism, or at the very least steer it to their meaningful needs that assure lucrative & sustainable outcomes.

8.3  The Economics Of The Simulation

If the simulation will have its own economics & finances with the ability to exchange its money & commodities with the real world, its developers should then really pay attention to the means & structures of acquiring these two to avoid people using modding, hacking, and loopholes for profit & personal gain that exceeds the simulation average for each simulater.

8.4  The Judicialities Of The Simulation

For such contexts, the judicial system should make strict laws for the simulation, the simulated, the simulatees, and the simulaters that regulates their activities and integrate them to the real world too.

Conclusion

A post-scarcity world doesn’t mean making everyone rich[17](Volckart, 1997), but what that mean is creating a cheap marginal cost (Rifkin, 2014) service that tends to zero where humans can have rights, freedoms, resources to satisfy their needs and achieve things that can have an impact on the real world. It will be discussed on in-depth followed papers suggestions for near and medium term experiments designs & to apply to such path outside the stereotypical portrayal of such ambitions as being a videogame or a digitized modernized theological premise, but rather as a decentralized autonomous freelancing form of societal economy that utilizes consensual brain mining: it can be someone’s job as well as it can be his heaven, or both. If there is enough will and innovation, economists will increasingly control this problem in the same way physicists does with entropy. What’s needed is for economists to try creating a new working Economics framework, the innovation on the theory of Economics hasn’t radically changed since Adam Smith introduced Capital to the means of production (Smith, 1776) two centuries ago, and the pathway –or a mix of a couple, some, or all of them isn’t unconceivable- to create the new Economical revolution isn’t quite clear yet: it may be with consciousness as some philosophers and spiritualism researchers think, it may be with biology if human life is extended so they can satisfy more needs, it may be with physics if a new better source or storage of energy is created/discovered, it may be with Technology if it created optimal tools that make energy consumption optimal, etc; either ways, a lot of promising fields to ease human life while keeping its essence are still investigated thoroughly. The American playwright Jerome Lawrence once said: “A neurotic is a man who builds a castle in the air. A psychotic is the man who lives in it. A psychiatrist is the man who collects the rent”.

References

Lawrence, Jerome. American Playwright and author, 1915 to 2004.

Robbins, Lionel (1932). “An Essay on the Nature and Significance of Economic Science “, pp 16

Smith, Adam, “An Inquiry into the Nature And Causes of the Wealth of Nations”, Book 2 – Of the Nature, Accumulation, and Employment of Stock; 1776

Heraclitus, compile of writings fragments, Ephesus (Kusadasi, Turkey), 500 B.C.

Gregory, Clark (2010) “The Consumer Revolution: Turning Point in Human History, or Statistical Artifact?”. Department of Economics, University of California, Davis (gclark@ucdavis.edu) July 4

Perry , Ralph B., (1910). “the ego-centric predicament”. Journal of Philosophy, Psychology, and Scientific Methods 7. pp 5-14

Cantor, Georg (1874). "Ueber eine Eigenschaft des Inbegriffes aller reellen algebraischen Zahlen". Journal für die Reine und Angewandte Mathematik. 1874 (77): 258–262.

Carnot, Sadi (1824). « Réflexions sur la puissance motrice du feu et sur les machines propres à développer cette puissance ». Paris: Bachelier

Keynes, J. Maynard, (1930). “Economic Possibilities for our Grandchildren”; in “Essays in Persuasion”, New York: W.W.Norton & Co., 1963, pp. 358-373

Marshall, Alfred (1948) [1890],  “Principles of Economics: An Introductory Volume”, p. 3

O'Boyle, Edward J., (1993). "On Need, Wants, Resources and Limits". International Journal of Social Economics, Vol. 20 No 12, pp 13-26 © MCB University Press 0306-829

Schumpeter, Joseph A. (1994) [1942]. “Capitalism, Socialism & Democracy”. London And New York : Routledge. pp. 82–83

Dumazedier, Joffre (1962). « Vers une civilisation du loisir ? », Seuil, Paris

Maslow, A.H. (1943). "A theory of human motivation". Psychological Review. 50 (4): 370–96

Rifkin, Jeremy (2014), "The Zero Marginal Cost Society", St. Martin's Publishing Group

Volckart, Oliver (1997). “Early Beginnings of the Quantity Theory of Money and Their Context in Polish and Prussian Monetary Policies, c. 1520-1550”, The Economic History Review New Series, Vol. 50, No. 3, pp. 430-449



[1] Satisfy the maximum of needs with the minimum of resources.

[2] About the resources to satisfy needs not being a much versatile spectrum and not restricted to only land & labor.

[3] maximizing the utility and minimize the spending, maximizing the satisfaction under budget constraint, maximizing the consumption under budget constraint, and maximizing the production under cost constraint.

[4] Due to the person being the firsthand expriencer without any middleman like a savant, cleric, magician/witch doctor, or a ruler/politician.

[5] E.g. a structure, like that of agriculture that still thrive to this day after millennias of usage with falls & rises of civilizations in between.

[6] Like the archaic versions described in the past chapter.

[7] Regardless of whether it’s done with the assistance of technological progress.

[8] Unless it’s zero if and only if consciousness is found to be the maker of reality.

[9] The unplugged residue (the simulaters, the care takers, and the watchers) can take care of the plugged ones physicalities & machinery, e.g. update the simulation with new discoveries & achievements done in the real world or in the simulation itself.

[10] That’s because in more deeper meaningful way the physical needs are actually just a special case of a more broader spectrum of mental needs with these mental needs having even a deeper level of this association due to high levels of abstraction power in them.

[11] The need doesn’t manifest in humans internally, but rather one shall have information on existing things so he can have a choice, thus to be able to express a need.

[12] Based on culture, traditions & customs, believes, religion, normative economics, etc.

[13] Based on the historical ethnic origins with all its cultural weight, such as language, traditions & customs, religion, etc.

[14] Embodying in the modern era the already existing cultural & ethnic systems and protect them with rigorous legislations & institutions.

[15] If not sometimes directly self-actualization if the identity was accepted after a populace physical/mental war, i.e. it was an earned identity that people made their purpose in life to get, and not to have one forced on them.

[16] But it has to be determined if this identity would primarily rely on what pre-modern identities relied on such as racialism, ethnicity, and religion; or will it synthesize a new way of creating new identities (such as the uncontrolled creation of digital and physical sub-cultures, neo-age religions, and cults).

[17] Because that will implicate making everyone poor due to the devaluation of what’s valuable as a currency –mainly money-.

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