Truth Collective

Part 2 of the interview from Democracy Now. If you haven’t seen it, be sure to check out the first part.

We must add another field to the list of those in need of rescuing—economics itself.

The financial crisis has killed the claim that economics deserves to be treated as a science. The measure of a science is its capacity to explain, predict, and prescribe. And most economists not only failed to anticipate the nature and evolution of the catastrophe, but their conflicting recommendations on how to stabilize the situation exposed the unreliability of their knowledge. As much as Wall Street and Main Street, the economics profession needs a bailout of its own.

Policy gyrations and faulty calls have revealed that economics itself is in crisis: The experts simply have no idea what to do. No less an expert than U.S. Federal Reserve Chairman Ben Bernanke repeatedly declared the worst was over, only to admit with chagrin much later that “I and others were mistaken early on in saying that the subprime crisis would be contained.” As recently as mid-November, Bernanke told the U.S. Congress that he thought the measures that had been taken “appeared to stabilize the situation,” a pronouncement that proved wrong almost as soon as it was made. The fault lies less with Bernanke for trying to calm the markets than with the accumulated body of economic knowledge that failed miserably to equip him and other policymakers with more reliable tools to anticipate and navigate the crisis.

So, along with banks and brokerages, mortgage holders and emerging markets, it’s time to add another rescue effort to the list—for economics itself. This intellectual bailout will force economists to revise the models and methods unquestioned during the boom years. It will force them to produce new tools suited to a new era and reinvigorate their thinking by borrowing more intensively from other disciplines, such as psychology and political science.

from Foreign Policy.

The Economist is hosting a debate on whether the world is getting smarter from our increased consumption of culture (via the internet, etc.). Guest for day one, Donald Wood, writes his opinion:

Modern Western civilisation came into being about three centuries ago as an intellectual vision, shaped by the Enlightenment philosophy that human beings could conduct their social, economic and political matters with reason and responsibility. It was conceived out of the idea that men and women were rational, were able to think for themselves, were committed to logic and scientific enquiry and would be able to govern themselves in a responsible manner. Today, however, we are not managing our affairs in an intellectual manner. We have evolved into a chaotic post-intellectual culture.

The modern view was based on scientific empiricism, humanism, reason, individualism, personal and social responsibility, liberal democratic principles, exploration, capitalism, growth and progress. We proceeded under the elegant assumption that the citizenry would evolve into an increasingly intellectual populace, and hence could be entrusted with more and more responsibility for its own destiny. During the 19th and 20th centuries, however, this modern paradigm of scientific and humanistic reason gradually lost some of its cohesiveness and its sense of inevitable destiny. Romanticism, existentialism, urbanisation, capitalistic exploitation, Marxism, scientific uncertainties, global warfare, enveloping technology and international politics all contributed to the erosion of Enlightenment idealism.

We sense today that something has gone amiss. Many of our intellectually-based institutions—schools, business enterprises, the judicial system, churches, the family, government, indeed the very idea of democracy itself—are no longer functioning the way they were originally envisioned. We send increasing numbers of our youngsters on to higher education, but we know that our schools are not turning out citizens that can cope with our increasingly incoherent society. We rush down the path to embrace new advances in digital and genetic technologies, but we are not clear in what direction this path is leading us. We invest all of our material expectations in the economic free marketplace,—and then watch it collapse around us.

The information explosion overwhelms us overwhelms us, adding to our disorder rather than to our knowledge. Our technological leaps determine new urgencies and uncertainties with every quantum jump. The long-cherished economic promise of ever-expanding growth and progress seems to have vanished. We have entered into a new and unstable postmodern era of post-intellectualism. We question scientific reason and rationalism and embrace spontaneity and passion; we have swapped our commitment to privacy for the promise of security; we have downplayed competition in order to foster sensitivity; we have embraced hi-tech expertise while surrendering control of our own destiny; we have sacrificed our individualism on the altar of retribalisation; we have given up a broad liberal arts intellectual perspective in order to focus on specialised vocational training; we have abandoned our quest for universal truth and adopted a loose form of moral relativity. As a result, our modern civilisation has evolved into a postmodern rejection of reason and structure. As we liberated ourselves from the tyranny of history and the rigidity of truth-seeking, we also liberated ourselves from responsibility. We have engineered a new era of ambiguity and futility. Whatever.

Donald Wood writes from the perspective of a traditional enlightenment rationalist. Likewise, the editor arguing against heavily emphasizes the decline in reading in the west. Personally, I’m siding with Tim de Lisle, editor defending the proposition who writes:

It’s not culture that is in retreat here: it’s stuffiness.

Behind all these indicators lies a powerful demographic factor. More of us are going to university than ever before.

We may fritter away much of our time while we are there, standing in the students’ union bar drinking subsidised beer, but at the very least those years plant a seed of curiosity and a sense of possibility. Twenty-five years on, several of my contemporaries have now gone back to university for more. Kingsley Amis famously said that when higher education expanded, more would mean worse. In fact, more has meant less of the sort of snobbery he was displaying by saying that. Studies have shown that today’s graduates are cultural omnivores, able to enjoy high and pop culture alike. Which is where dumbing down gets it wrong. Catchy as it is, the phrase has a certain dumbness built into it. The real story is more complex and more heartening.

“Intelligence” has always seemed like such a misleading word to me. Maybe the important trend to note here is not the level of intelligence but effectiveness. If kids these days can easily master the the startling array skills needed to utilize new media— whether they be writing and social skills for social networking sites, or the research and analytical skills needed to find relevant information on the net— a familiarity with classical philosophy may no longer be necessary (or relevant).

The rest of the debate, which continues for the week, can be found at The Economist.