Thursday, December 06, 2012

Giving freedom and avoiding Cliffs is productivity modelling  

Sach and Ross Gittins are in the news this week (SydneyMH) talking about big picture economic policy . About time I say ;
Many economists haven't really factored scarcity and regeneration elements into their plain 2 dimensional ledger sheet modelling. That doesn't help our leaders who really need a good lead here !
The real world is more than supply and demand control but you wouldn't know that listening to the desperate and careless talk of leaders and the majority of the audience at the moment .The Free marketeers need a good kick where it hurts !( I am talking about their simple mind games mostly)?    Below is a piece I posted elsewhere . Feel free to join me on ecomia anytime .

Sound big picture economists and practical ecologists have always started with a conversation about elasticity .Bigger picture discussions must move from plain elasticity to resilience assessment.  
 Resilience assessment tells you how close to the cliff others  are and if you don't factor that in, people will fall off!! This cartoon I drew in 2007 .
Everyone tells about my old work even though "noone ", I know anyway , is still doing much at its edges . Resilience is a key consideration in eco -nomics and one of its measures is elasticity. Elasticity in connections .
The blunt nature of the current fiddling with the old S&D instrument is blatantly obvious in the present Australian govt's ham fisted attempts to increase energy prices to reduce demand (a very thick trick)and their careless feather bedding of the already rich water and other resource industries by talking up the need for water demand control .
Tax is a win win thing under their simple and simplistic choices.
Putting prices up,( and giving handouts)  is something polys and S&D freaks understand , which means they might think they know what they are doing--- if Sir Humphrey is not present -
Until you show them the effects of in-elasticity and steep loss of control at the intersection of the 2 curves and how that can create wars, and bring down governments they get" intoxicated by their own wisdom "; They, like the media and the  game audience will play with things they don't really understand -our shared resources ( oikonomia)  It all seemed like some power over people at last !!!!
It seems to me that good economic management is a bit like parenting in relation to S&D . You make distinctions about when and when not to interfere ( Good governance was Sachs point) Morally and materially you don't want to stop how your kids spend money( eco freedom ) but you may influence how much disposable they have ( role of govt )
Let’s not pretend we should ditch what worked OK in the past ( Oikonomia and professional study of these matters ) for a dangerous media led game which plays around at the edges of cliffs ( and doesn’t know it )   With cliffs – someone  needs to know just how close they are and it isn’t fair to expect the children to know !

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