Chapter 3 – Synthesis of economic and scientific activities 2/2
3.3 Cognitive errors in assessing the status quo
The production of added value in economic processes gives a sense of continuous progress, overshadowing the powerful human capabilities that can already be achieved through creative processes, which are not being given good enough conditions to realise their full potential. An economy based on maximising this potential and applying systemic solutions to it will create an entirely new quality.
One of the problems standing in the way of seeing these possibilities is limited human perception. Man's lifespan is so relatively short that he does not notice processes that are happening all the time. At least not to the extent they deserve, misjudging many mechanisms as unchangeable and universal, as if they were linear.
Usually, human attention is attracted to single elements that belong to a larger whole. If they are locally beneficial, they are unlikely to provide the impetus for a deeper analysis of their nature or synthesis. On the contrary, they will reinforce habits and reinforce the belief that there are no better alternatives to them.
One can compare this situation to the problem associated with observing the curvature of the Earth. No one pays any attention to such a fact, especially as it is imperceptible on the scale on which we operate. Nonetheless, we are aware of how important it is as a factor that makes our existence possible at all. Human perception resembles a situation with two straight lines and a minimum angle between them, which locally will be of no interest.
This state of affairs will produce a false sense of consistency between theoretical assumptions and practice. However, this is only until the consequences associated with the global scale begin to make themselves strongly felt. An analogous situation applies to human perception, habits and illusions associated with classical economic processes. In this case, the realisation of significant inconsistencies can be quite a long process.
Meanwhile, the processes regarding the capabilities of the world of science, are not only occurring at a rapid pace, but are progressing exponentially, increasing their still untapped value.
The vast majority of the negative processes that emerged in the economy were the inevitable order of things and, contrary to popular opinion, it turned out that the overriding objective of the economy was never really the achievement of general well-being for the population as a whole, but the financial profit of a specific entity, preferably with a quick rate of return. The goal of achieving general prosperity was and still is necessarily only an accompanying objective.
Although, in such cases, a large percentage of the population may still be convinced otherwise and, through the power of habit and suggestion, go through a kind of process of denial, eventually, sooner or later, a logical fact must reach people's consciousness: the path between the intention (the goal set) and the attainment of a goal of the best possible quality, is the more efficient and shorter the fewer intermediate elements there are on it.
This universal principle also applies to all economic processes, concerning, among other things, the entire process of material goods/products. In the classical economic model, this intermediate element is burdened with an overriding objective in the form of financial profit, which may or may not be strictly correlated with the optimal achievement of the objective. Moreover, it may even be in conflict with it.
Ideally, there should be no intermediate elements at all, as illustrated in the graphic below.
Graphic 5 – Process with and without intermediate element
Graphic 5 for preview and download as PNG, SVG and TXT file
The more and more tools – economic actors – man has at his disposal, the remedial mechanisms naturally attributed to the free market become more and more limited. This is why, centuries ago and even a few decades ago, it was possible to overlook various risks. Although the mechanism of the free market is immutable, it operates in a permanently changing human environment, which is gaining an ever-increasing advantage over this mechanism at an exponential rate.
The crux of the issue, then, lies not in the free market as such, but in the unwillingness to accept that this mechanism is increasingly unable to live up to its role in the surrounding reality. As with the abacus in the computer age, the problem lies not in the inaccuracy of this tool, but in its lack of functionality and efficiency.
Interventionism, on the other hand, has acquired a bad name, whereas in reality it is nothing more than an intentional human action which, depending on the context, can be either a positive or negative phenomenon or simply neutral. And as such, in isolation from other human actions, it does not constitute a concrete mechanism or system.
3.4 Conclusions and objectives to be pursued
As conscious beings with a sense of responsibility for ourselves and our species as a whole, we are largely, or even mostly, condemned to intentional actions, which require the development of a range of optimized and effectively functioning processes, proceedings and behaviours, including in the economic domain. Not only those directly derived from our intellect, but also from scientific and technological advances, such as artificial intelligence. There is also a need to implement solutions of an interdisciplinary nature, not only for the individual, but also for entire groups of economic actors, complementing each other and cooperating under the auspices of a single management.
Due to the nature of such a model, it is impossible to speak of any specific key on which it would be based. It will certainly not be a specific mechanism/algorithm, but, as in the case of statute law, an elaborated whole set of legal, social, sociological or motivational aspects, exploiting the creative nature of man, constantly subject to adjustments, taking into account the changing nature of the human environment over time.
Negative motivation schemes are quite ineffective. The shameful and inhumane examples from ancient and modern history using slave systems are proof of this. Schemes based on purely reproductive activity are also less effective than creative activity, because in the case of the dear one we have a strong correlation with an anthropological factor, specific to humans, related to the cognitive functions to which we owe our evolutionary success in general.
In this field, human beings are particularly and naturally active, even in the absence of additional motivational factors. Reinforcement with additional motivation by creating appropriate conditions for the use of these activities, especially among intellectually outstanding but also average individuals, will contribute all the more to greater achievements in the scientific field, and thus to the emergence of new technologies and a more efficient economy.
Many ideas that mankind had previously rejected as unrealistic or for mental reasons, cultural prejudices or habits, were put into practice after a while anyway. Often out of compulsion rather than goodwill. This is how we approached, among other things, the concept of universal education, including women's education or, finally, a system of governance based on democracy. As a consequence, these proved not only viable, but indispensable.
It is no different today, when we are increasingly condemned to make concrete decisions, not leaving things to their own devices, if only in the context of acquiring new energy sources. The natural resources we possess are not part of a theoretical model with infinite parameters, but their quantity is defined by specific numbers.
Their depletion will sooner or later force us to take specific, targeted action, before economic operators decide to use other resources, cheaper to obtain, but not necessarily beneficial or profitable in the long term from the point of view of the consumer, or with a negative impact on the environment and humans themselves.
The economy and its closely related quality and lifestyle also have a huge impact not only on the individual, but on society as a whole. The consequences of this in turn have a great impact on a myriad of social phenomena. One of these is the consequences for the demographic structure. Market mechanisms often have disastrous and irreversible effects on many of these aspects, but solving the problems they generate is most often left to the intervention of the authorities.
It is common to trivialise and shallow these issues, shifting various problems to the next generation. Social problems induce difficulties with the economic situation, thus closing the cycle of consequences caused by the spontaneous nature of classical market processes.
The more we deal with economic mechanisms of an inertial nature, such as the classical economic model, the more it is impossible to predict and estimate all their real costs.
A strange paradox therefore occurs. In a world dominated by reckoning with economic costs at every turn, no account is taken of the calculation of gains and losses brought about by the very use of such an economic criterion. This is often argued on the basis of the lack of such possibilities, which only confirms the lack of justification for the belief that there is no alternative to this state of affairs, even though, in fact, we all increasingly recognise the growing limitations and declining efficiency of the classical model.
Such a belief, as in most cases, stems from a psychological factor and the strength of attachment to the status quo. This is one of the classic examples of form over substance and habit over rationality.
Problems of this type are increasing exponentially in a globalised world. Already today, free market processes alone cannot handle our reality, and the area of their possibilities is shrinking drastically. To all this must be added the protectionist economic policies of various countries and the disturbing phenomena associated with the announced attempts by authoritarian states to implement grand projects not only in the economic domain, but also in the scientific domain, which do not in any way take into account social or financial costs.
As a result, human decision-making with an element of science will have to successively displace free market processes as spontaneous and become the mainstream model. In such a reality, there will also be a place for the free market as a complementary element, functioning in synergy with the future mainstream model. It is no less important to be aware that the role of science will become dominant in the most crucial and strategic sectors of the economy, including major areas of social life.
We need to realise that many of the problems we create ourselves, by virtue of our intellectual level and conscious action, are so highly complex that, in order to solve them, a simple algorithm, e.g. a free market one, is not enough, but it is precisely our intentional action, representing the same level of complexity, which will be able to meet such challenges, that is required.
The sooner we initiate these necessary processes, the sooner we will reap their positive fruits in the form of a more efficient material and immaterial development of our civilisation for the overall benefit of all mankind.
Sylwester Fiet
March 2023
< Previous Page 1 2 3 4