from Lawrence, Pub Philosophy Group, Sunday meeting: The present economic crisis + news

Dear friends,

This week we are discussing: The present economic crisis.
But before discussing the crisis Peter has asked me to remind you that:
he is sharing a flat in Mostoles close to public transport; very good
conditions. Central heating and central hot water. There two rooms to
rent out: a single and a double: tel 609257259 (LJCB Note: one of the
rooms might be taken, not sure which one)
I'm afraid I did not have time to finish my essay. However, I had four
points which I wanted to discuss.
1) Given that this crisis is global, does this mean that the world
economy has entered into some sort of black body state? That is, has the
world economy entered into a state of a closed system, with all the
repercussions of the second law of thermodynamics?
Look at it this way, some forty or fifty years ago the world economy
consisted of a the few countries that made up the west. China and the
Soviet Union did not feature much in the world economy of the time.
Moreover, the natural resources which the then economic system required
were either owned, manipulated or expropriated by the few countries that
made up the then world economy. In other words when in the past there
was an economic crisis it only affected a few countries and these
countries could easily obtain the resources at a "favourable" price not
to mention they could always find/create new markets to sell their goods.
Today, every country is part of the economic system, and all countries
are trying to own, manipulate or appropriate the resources of others.
This means that we cannot expand our economic activities beyond the blue
sky and we're not going to start selling sports cars to the whales and
dolphins any time soon. Basically, the question we can ask ourselves is
this, has the world economy entered into a regressive loop of boom and
bust? With those who experience a bust today would find it more
difficult to create a boom tomorrow.
Of course, there will always be those individual economies that will
experience a prosperous period in the shot term, not to say that
different economies will be at different levels of the loop. However,
the loop will lead towrds more violent crises involving more people. QED

2) When we ask ourselves, what caused the present economic crisis? Our
present day understanding of cause is not robust enough for today's way
of thinking. We are familiar with the sentence: smoking causes lung
cancer; but we are not familiar with the sentence: indifference causes
lung cancer. Not only are we not familiar with such statements, but even
our language cannot cope with any possible explanation, and moreover, we
just do not have the methodology to test such a statement. Our
understanding of cause requires a chain of events of the same class.
Cancer is a physical event in the physical organ, the lungs, and smoking
is a physical event that has a chemical reaction with the lungs.
Indifference is not something we can measure in a test tube.
Before, however, complex numbers were fully understood in mathematics
(see Wikipedia: complex numbers) the concept of square root of minus
one, did not much make sense, simply because the meaning of a number was
a real unit; one was the one as in one apple on the table. Thus for us,
when we ask the question what caused the present economic crisis, the
answer "indifference by investors as to whether their capital retains
its value over the medium or long term period" just does not make sense.
So we have to come up with such useless answers as, cheap interest
rates, profiteering, or easy credit or whatever.
So do we have to amend our thinking about cause to accept that in our
rational understanding of the world we have created for ourselves we
have to include negative events as legitimate causes of physical events?
In other words, do we have to consider: "the indifference of capital
owners towards the value of their capital over time" as an equal cause
as say "1.5% base lending rate issued by the central bank will cause
irresponsible lending?

3) What are the ethics of the present crisis? Given that we operate in a
global economy, do we owe a duty of welfare to those who have been
affected by the crisis? Ironically, I want to argue that the moral issue
is not this question nor the answer to this question, but the moral
dilemma that the rational and moral answer introduces. The rational and
moral answer to this question is of course, yes, we do aowe a duty to
these victims.
The moral dilemma, however, is this, should we act to prevent an
economic crisis so people won't become victims of a crisis. Thus we can
help those who are victims of a crisis by giving them ten or a hundred
Euros or we can demand and insist that investors do not do anything to
reduce the value of their capital. Even I have to think hard to come to
terms with the meaning of the second question. Giveing a tenner is much
easier than demading that companies made a fair and reasonable profit.
4) Unfortunately, for my fourth point I have no idea what the answer is
going to be, but I'll ask the question anyway: which is easier find a
solution to prevent future economic crises or change our thinking about
out how the economy should work?
But after all is said and done I have noticed one thing since I have
been observing the events of the world economy: those who are convinced
that the economy will do well, if not already doing well, have always
been in a well paid job. And I have never heard an honest unemployed
person, say that the economy is doing very well when they cannot find
decent work to support their family.
Take care and see you Sunday,
Lawrence

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from Lawrence, Pub Philosophy Group, Sunday meeting: The present
economic crisis + news