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2020 | Book

Introduction Read chapter Read first chapter

Metaeconomics

Tempering Excessive Greed

Author: Prof. Gary D. Lynne

Publisher: Springer International Publishing

Book Series : Palgrave Advances in Behavioral Economics

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book presents the Metaeconomics Framework and Dual Interest Theory, which weave the empathy-based moral and ethical dimension back into key economic questions. Metaeconomics addresses the problem of placing too much emphasis on the market or the government, and thus argues that seeing the link between ego and empathy, self- and other-interest, and market and government will lead to a more just, fair, and sustainable polity. The unique Dual Interest Theory proposes that ego-based self-interest and empathy-based other-interest are joint and internal to each person: it maintains the original proposition from Adam Smith that each person maximizes their own-interest, which Metaeconomics makes clear involves balancing the two joint interests, although self-interest is more primal. The book begins with an explanation of how Metaeconomics connects the other kinds of economics. The book then provides a series of applications of Metaeconomics in heated policy issues, such as elections, finance, family, food, health, natural resources, education, taxes, and extreme inequality, among others. Finally, the book concludes that the only way to save capitalism is to bring empathy into both private and public actions and bring about a more humane balance in market and government.

Table of Contents

Frontmatter
Chapter 1. Introduction
Abstract
The first economist, Adam Smith, was a moral philosopher. Unfortunately, modern economics moved away from the moral and ethical dimension of economics, especially in the more formal versions represented in mathematical microeconomics. It came to focus strictly on Self-interest, becoming an economics of Greed. Said move also removed consideration of the community from the economy, which means it also removed consideration of the shared Other-interest. It also removed consideration of the larger Spaceship Earth System. In contrast, Metaeconomics sees the economy as the smaller sub-system, both within the community and within the larger Spaceship Earth System. It results in bringing the shared Other-interest into a key role in tempering and perhaps bounding the tendency to excessive Greed when Self-interest is the only force.
Gary D. Lynne
Chapter 2. Landscape of the Metaeconomics Framework and Dual Interest Theory
Abstract
Adam Smith wrote two books. The first, The Theory of Moral Sentiments, focused on the moral dimension. Neoinstitutional Economics grew out of it. Based on that framing, Metaeconomics developed the proposition of a shared Other-interest. The second, On the Nature and the Causes of the Wealth of Nations, focused on the material wealth-making dimension. Neoclassical Economics grew out of it. Metaeconomics includes the proposition of Self-interest a primal driver, consistent with that tradition. The overall landscape of Other-interest and Self-interest economics is explored. It is proposed that an integration is needed, as in Self- and Other-interest. The integration is, then, across the material and moral and, on a larger scale, across Market and Government.
Gary D. Lynne
Chapter 3. Drifting Isles and Re-integration on the Metaeconomics Continent
Abstract
The Other-interest and Self-interest landscapes have led to the metaphorical Isles of the InstituEcon (those who practice Neoinstitutional Economics) and the NeoClassEcon (those who practice neoclassical economics, especially as represented in Microeconomics). The MetaEcon (those who practice Metaeconomics), who operate on their own Isle with the BehavEcon (those who practice behavioral economics), have proposed bringing the Isles back together, as in integrating Neoinstitutional and Neoclassical Economics. The hope of the MetaEcon is to someday produce a new continent with best ideas from all the Isles at work.
Gary D. Lynne
Chapter 4. Formal Metaeconomics: Recycling Choices
Abstract
Metaeconomics sees non-allocable inputs and goods as the norm. A figure shows a set of self-interest indifference curves overlapping with a set of other-interest indifference curves, with payoffs in the dual interest at every point. Goods are non-allocable across the dual interest: payoffs are joint, interdependent, and inseparable. The same is true in producer supply, with two sets of overlapping Self-interest and Other-interest isoquants. Inputs are nonallocable across the dual interest. The Other-interest (shared with others, but internal to the own-self) represents the connection of the self to the other in both the community and the Spaceship Earth System. Empirical test demonstrates how self-control to bring the shared other-interest in recycling and buying recycle content goods works to temper the Self-interest in not recycling.
Gary D. Lynne
Chapter 5. Metaeconomics as Behavioral Economics and the Focus on Happiness
Abstract
Metaeconomics is a relative of Buddhist economics, through seeing the essential interdependence among people, and with the Spaceship Earth System. Metaeconomics is also related to Behavioral Economics, both drawing upon and contributing to the empirical testing and findings in same. Empirical propositions coming out of Behavioral Economics are explored in the context of Metaeconomic framing and Dual Interest Theory. Due to it being quite empirical, it also helps put new understanding into puzzles, like just what is happiness, anyway. Metaeconomics posits that happiness is about finding balance in Ego and Empathy, each respectively underlying Self- & Other-interest. Happiness on a larger scale comes from such balance within each person, leading to an overall higher attainment of same at the level of Market and Government, on the path to a happier capitalism.
Gary D. Lynne
Chapter 6. Elections Policy: Voting Is Not Only About Self-Interest
Abstract
Voting behavior has always been a puzzle. Metaeconomics solves the puzzle, making it clear that voting always involves a bit of sacrifice in Self-interest in order to achieve gains from the shared other-interest in political outcomes. Intriguingly, it also involves a bit of sacrifice in Other-interest in order to not sacrifice too much in the realm of self-interest. So, voting, just like all other Metaeconomics choices, involves maximizing Own-interest while sacrificing a bit in both domains of the dual interest. It is also clarified that Government, composed of elected politicians, appointed officials, bureaucrats, and staff need to be careful to serve the other-interest shared with every person, avoiding the primal tendency to self-interest only choices, which can especially lead to crony capitalism.
Gary D. Lynne
Chapter 7. Financial Policy: Tempering Greed
Abstract
The 2008 financial crisis revealed the effects of excessive Greed. The mantra leading to the crash had been that Greed is good, and excessive Greed is extremely good. Microeconomics, especially the Libertarian branch of it, as represented in Chicago School of Economics, proposes that the market will temper the Greed. Metaeconomics clarifies that the only thing that will temper Greed is the shared other-interest, combined with adequate Self-control within each person in the market. The other-interest can be used as the basis for nudging the Self-interest on to better paths; when that fails, then the Other-interest needs to be brought to bear in government controls, like the old Glass-Steagall Act, which was in effect revived to temper and bound the banks and Wall Street.
Gary D. Lynne
Chapter 8. Food Policy: Stability, Sustainability, and Safety
Abstract
It is in the shared Other-interest to have a stable food supply. One way to ensure same is to help in paying the crop insurance payments associated with extreme weather events. It is also essential to ensure a sustainable Spaceship Earth System, historically accomplished through paying farmers to help offset the costs of sustaining soil and water resources. It became essential to ascertain what drove adoption of such practices. The research found the key was to not only offer financial incentives but to also induce Empathy conservation, a shared Other-interest. It was about nudging farmers into considering downstream effects of on-farm practices. Safe food is also an essential shared other-interest, leading to sharing in the costs of setting and ensuring food standards.
Gary D. Lynne
Chapter 9. Health Policy: Universal Pre-existing Conditions
Abstract
The coronavirus pandemic highlighted the essential shared other-interest in public health. Also, the pre-existing conditions debate, too, points to the reality of a universal shared other-interest in dealing with same. Everyone has said conditions: everyone dies. Metaeconomics adds new insights on how to think about balancing the primal self-interest in only one’s own health with the essential need to balance it with the shared other-interest in universally better health for everyone. The Dual Interest Theory clarifies that it is about maximizing the Own-interest in delaying the time until death, possible only by sacrificing a bit in both domains of dual interest. Pragmatically speaking, it leads to suggesting an integrated effort represented in private and public health efforts, including Market and Government provision of both insurance and health care.
Gary D. Lynne
Chapter 10. Family Policy: Failed Liberalism and Lost Sensibilities
Abstract
Turmoil over fundamental human rights in sexual preferences suggested lost liberalism and sensibilities. Family disintegration is rampant due to a failed, bad capitalism leading to poor paying jobs and most couples having to work too many hours. Extreme Greed is expressed through businesses who are involved in “Phishing for Phools” causing way too many persons and families to over buy non-essential goods: Few Americans can find even $400 for emergencies. Metaeconomics points to failed liberalism and lost sensibilities on both the right and left political aisles. Families can be put back together only with more tolerance for, and respect for, the right to be a person. The issue is the content of the shared Other-interest, widely shared. It is about moral and ethical of said Other-interest.
Gary D. Lynne
Chapter 11. Education Policy: Need for Science and Ethics
Abstract
Metaeconomics clarifies that the essential problem is the lack of education about the essential parts of a truly humane and liberal democracy. Said democracy needs education about the ethical and moral dimension, and not just the material dimension. Education gives the basis for forming a shared Other-interest that works for everyone. Metaeconomics points to how a truly humane and liberal capitalism needs a truly integrated private and public education system. Said system builds on the strengths of each to ensure each person understands, has the capabilities, and can then help build, a more humane system. Widely supported public-education is in the foundation. Private-education can be brought-in to fill in important gaps.
Gary D. Lynne
Chapter 12. Natural Resource Policy: Avoiding the Tragedy of the Commons
Abstract
The issue is how to avoid the tragedy of the commons arising out of excessive greed. The mainstream neoclassical and libertarian economics solution is to turn the common and public property in such things as water into private property. Intriguingly, privatizing does not solve it: private property in Spaceship Earth systems can easily lead to the tragedy of the anti-commons. Just because it is owned in a private property does not guarantee that excessive greed will not destroy it. Metaeconomics clarifies that solving both the commons and anti-commons problems requires finding good balance in private and public property, balance in Market and Government: temper and bound the Greed in both realms. Carbon taxes, carbon markets, and the sulfur emissions markets are explored as a case in point.
Gary D. Lynne
Chapter 13. Tax Policy: Pay the Price
Abstract
Metaeconomics clarifies that a tax is actually the price paid to better ensure reasonable levels of attainment of the shared Other-interest, in such things as public research and education; public health (pandemic, anyone?); food and drug standards and safety; and, yes, the traditionally accepted price paid for roads, police, fire, and military. So, taxes that reflect said value V, coming out the other decision forms (especially the Administrative, Legislative, and Judicial Branches of Government) often priceless in nature, are essential. Taxes are not a distortion in the market forum, which produces the price p. Rather, taxes hold the potential to help the market work more effectively at representing the value V of things held in the shared Other-interest. Taxes are essential to efficiency and happiness.
Gary D. Lynne
Chapter 14. Income and Wealth Policy: Toward Optimal Inequality
Abstract
Metaeconomics clarifies that extreme income and wealth inequality can drive deterioration in public health and exacerbate social problems. Metaeconomics clarifies that the inequality is also driving populism, and the move to extreme views in Political Tribes. Most importantly, Metaeconomics clarifies the task as one of finding the optimal amount of inequality. Cases such as in baseball team performance and business performance are highlighted, showing that both extreme equality and extreme inequality decrease overall performance. The focus needs to be on balance in compensation packages, thinking in terms of superstar and typical player, CEO management and labor as integrated in compensation. The same is true in thinking about social security and the minimum wage.
Gary D. Lynne
Chapter 15. Saving Capitalism: Bring Empathy into Mind and Action
Abstract
Metaeconomics points to an Empathy-based, humane liberalism in the foundation of capitalism, the kind originally envisioned by Adam Smith. In light of Metaeconomics framing, the natural tendencies to Fascism must be addressed. That is, when the various bad liberalism frames come to overly influence the system, bad capitalism emerges. As soon as it arrives, Fascism again becomes popular, as well as the other “isms” at the ends of the spectrum. Metaeconomics is a direct counter to “bad-isms” of all kinds, due to being based in empirical reality and pointing to the essential need for an ethical foundation, both especially missing in Fascism. Metaeconomics holds the potential to help in saving capitalism by shifting the conversation to making it good, which keeps Fascist tendencies at bay.
Gary D. Lynne
Chapter 16. Conclusion
Abstract
Metaeconomics is a player in the economic tool-box. It works to integrate across the more traditional fields as represented in Neoclassical Microeconomics and Neoinstitutional Economics. Metaeconomics draws heavily on the same empirical and scientific sources as represented in Behavioral Economics. As a result, the Dual Interest Theory could also serve as an analytical engine for Behavioral Economics. It is especially tuned to establishing both science and ethics in the foundation of Economics. The story of Scrooge and the Christmas Ghosts needs more attention: empathy matters.
Gary D. Lynne
Backmatter
Metadata
Title
Metaeconomics
Author
Prof. Gary D. Lynne
Copyright Year
2020
Electronic ISBN
978-3-030-50601-8
Print ISBN
978-3-030-50600-1
DOI
https://doi.org/10.1007/978-3-030-50601-8