IV. CURRENT PROBLEMS IN ECONOMICS

Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

1. The Treatment of Government

   
   Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

2. Technology and Innovation

   
   Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

3. Long Term Investment Horizons

   
   Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only

   A Home Based Business Is What Most People Who Work For An Employer Wish For
   A home based business is what most people who work for an employer wish for. It is a dream to be able to work for yourself and put all your energy into making your own profits and working the hours that you want to work and doing things the way you want them done.The only way to get started is to plan what you want to do step by step and then do it. Market research is of the utmost importance as once you know how your product will be received in the market you will be able to plan your production of whatever it is you plan to market. It is of the utmost importance to have an outlet for your products or if you are intending to render a service see that you will have access to the right market. Once everything is in place and you have done all your research you will be ready to start your new venture.If you are undecided about what it is that you want to do then think about network marketing. This can be very enjoyable and can pay very well. There are various companies that sell different products and that have various incentive schemes for improving your sales.The best thing is to get involved with a company that allows you to use their quality products as a vehicle for building your own business. They will supply the products you sell and deliver them to your clients’ doorsteps. You will get a percentage of the total sales you have made in a month.The other side of the business and the most important part is recruiting new people into your business to do what you are doing. They will also be selling quality products and recruiting new people into their business. You will then be benefiting by all these groups that are under you.Many people make huge amounts of money this way. It is hard work, but rewarding because you are working for your self. One always has more inspiration and energy when you know that you are doing something for you and your family.
   It is impossible to describe any human action if one does not refer to the meaning the actor sees in the stimulus as well as in the end his response is aiming at.

   Ludwig von Mises

   I. INTRODUCTION

   Storytelling has been with us since the days of campfire and besieging wild animals. It served a number of important functions: amelioration of fears, communication of vital information (regarding survival tactics and the characteristics of animals, for instance), the satisfaction of a sense of order (predictability and justice), the development of the ability to hypothesize, predict and introduce theories and so on.

   We are all endowed with a sense of wonder. The world around us in inexplicable, baffling in its diversity and myriad forms. We experience an urge to organize it, to "explain the wonder away", to order it so that we know what to expect next (predict). These are the essentials of survival. But while we have been successful at imposing our mind on the outside world – we have been much less successful when we tried to explain and comprehend our internal universe and our behaviour.

   Economics is not an exact science, nor can it ever be. This is because its "raw material" (humans and their behaviour as individuals and en masse) is not exact. It will never yield natural laws or universal constants (like physics). Rather, it is a branch of the psychology of masses. It deals with the decisions humans make. Richard Thaler, the prominent economist, argues that a model of human cognition should lie at the heart of every economic theory. In other words he regards economics to be an extension of psychology.

   II. PHILOSOPHICAL CONSIDERATIONS - THE ISSUE OF MIND (PSYCHOLOGY)

   The relationships between the structure and functioning of our (ephemeral) mind, the structure and modes of operation of our (physical) bodies and the structure and conduct of social collectives have been the matter of heated debate for millennia.

   There are those who, for all practical purposes, identify the mind with its product (mass behaviour). Some of them postulate the existence of a lattice of preconceived, born, categorical knowledge about the universe – the vessels into which we pour our experience and which mould it. Others have regarded the mind as a black box. While it is possible in principle to know its input and output, it is impossible, again in principle, to understand its internal functioning and management of information.

   The other camp is more "scientific" and "positivist". It speculated that the mind (whether a physical entity, an epiphenomenon, a non-physical principle of organization, or the result of introspection) – has a structure and a limited set of functions. They argue that a "user's manual" can be composed, replete with engineering and maintenance instructions. The most prominent of these "psychodynamists" was, of course, Freud. Though his disciples (Jung, Adler, Horney, the object-relations lot) diverged wildly from his initial theories – they all shared his belief in the need to "scientify" and objectify psychology. Freud – a medical doctor by profession (Neurologist) and Bleuler before him – came with a theory regarding the structure of the mind and its mechanics: (suppressed) energies and (reactive) forces. Flow charts were provided together with a method of analysis, a mathematical physics of the mind.

   Yet, dismal reality is that psychological theories of the mind are metaphors of the mind. They are fables and myths, narratives, stories, hypotheses, conjunctures. They play (exceedingly) important roles in the psychotherapeutic setting – but not in the laboratory. Their form is artistic, not rigorous, not testable, less structured than theories in the natural sciences. The language used is polyvalent, rich, effusive, and fuzzy – in short, metaphorical. They are suffused with value judgements, preferences, fears, post facto and ad hoc constructions. None of this has methodological, systematic, analytic and predictive merits.

   Still, the theories in psychology are powerful instruments, admirable constructs of the mind. As such, they probably satisfy some needs. Their very existence proves it.

   The attainment of peace of mind, for instance, is a need, which was neglected by Maslow in his famous model. People often sacrifice material wealth and welfare, forgo temptations, ignore opportunities and put their lives in danger – just to reach this bliss of tranquility. There is, in other words, a preference of inner equilibrium over homeostasis. It is the fulfilment of this overriding need that psychological treatment modalities cater to. In this, they are no different to other collective narratives (myths, for instance).

   But, psychology is desperately trying to link up to reality and to scientific discipline by employing observation and measurement and by organizing the results and presenting them using the language of mathematics (rather, statistics). This does not atone for its primordial "sin": that its subject matter (humans) is ever-changing and its internal states are inaccessible and incommunicable. Still, it lends an air of credibility and rigorousness to it.

   III. THE SCIENTIFIC METHOD

   To qualify as science, an economic theory must satisfy the following conditions:

   1. All-inclusive (anamnetic) – It must encompass, integrate and incorporate all the facts known.

   2. Coherent – It must be chronological, structured and causal.

   3. Consistent – Self-consistent (its sub-"narratives" cannot contradict one another or go against the grain of the main "narrative") and consistent with the observed phenomena (both those related to the subject and those pertaining to the rest of the universe).

   4. Logically compatible – It must not violate the laws of logic both internally (the narrative must abide by some internally imposed logic) and externally (the Aristotelian logic which is applicable to the observable macro world).

   5. Insightful – It must inspire a sense of awe and astonishment, which is the result of seeing something familiar in a new light or the result of seeing a pattern emerging out of a big body of data ("data mining"). The insights must be the inevitable conclusion of the logic, the language and of the development of the narrative.

   6. Aesthetic – The narrative must be both plausible and "right", beautiful (aesthetic), not cumbersome, not awkward, not discontinuous, smooth and so on.

   7. Parsimonious – The narrative must employ the minimum number of assumptions and entities in order to satisfy all the above conditions.

   8. Explanatory – The narrative must explain the behaviour of economic actors, their decisions, why events develop the way they do.

   9. Predictive (prognostic) – The narrative must possess the ability to predict future events, the future behaviour of economic actors and of other meaningful figures and the inner emotional and cognitive dynamics of said actors.

   10. Prescriptive – With the power to induce change (whether it is for the better, is a matter of contemporary value judgements and fashions).

   11. Imposing – The narrative must be regarded by society as the preferable and guiding organizing principle.

   12. Elastic – The narrative must possess the intrinsic abilities to self organize, reorganize, give room to emerging order, accommodate new data comfortably, avoid rigidity in its modes of reaction to attacks from within and from without.

   In some of these respects, current economic narratives are usually theories in disguise. But scientific theories must satisfy not only most of the above conditions. They must also pass the crucial hurdles of testability, verifiability, refutability, falsifiability, and repeatability – all failed by economic theories. Many economists argue that no experiments can be designed to test the statements of economic narratives, to establish their truth-value and, thus, to convert them to theorems.

   There are four reasons to account for this shortcoming - the inability to test hypotheses in economics:

   1. Ethical – Experiments would have to involve humans. To achieve the necessary result, the subjects will have to be ignorant of the reasons for the experiments and their aims. Sometimes even the very performance of an experiment will have to remain a secret (double blind experiments). Some experiments may involve unpleasant experiences. This is ethically unacceptable.

   2. Design Problems - The design of experiments in economics is awkward and difficult. Mistakes are often inevitable, however careful and meticulous the designer of the experiment is.

   3. The Psychological Uncertainty Principle – The current position of a human subject can be (theoretically) fully known. But the passage of time and the experiment itself influence the subject and void this knowledge ("time inconsistencies"). The very processes of measurement and observation influence the subject and change him.

   4. Uniqueness – Experiments in economics, therefore, tend to be unique and cannot be replicated elsewhere and at other times even if they deal with the SAME subjects. The subjects (the tested humans) are never the same due to the aforementioned psychological uncertainty principle. Repeating the experiments with other subjects adversely affects the scientific value of the results.

   5. The undergeneration of testable hypotheses – Economics does not generate a sufficient number of hypotheses, which can be subjected to scientific testing. This has to do with the fabulous (=storytelling) nature of the discipline. In a way, Economics has affinity with some private languages. It is a form of art and, as such, is self-sufficient. If structural, internal constraints and requirements are met – a statement is deemed true even if it does not satisfy external (scientific) requirements. Thus, the standard theory of utility is considered valid in economics despite empirical evidence to the contrary - simply because it is aesthetic and mathematically convenient.

   So, what are economic narratives good for?

   Narratives in economics offer an organizing principle, a sense of order and ensuing justice, of an inexorable drive toward well defined (though, perhaps, hidden) goals, the ubiquity of meaning, being part of a whole. They strive to answer the "why’s" and "how’s". They are dialogic and prescriptive (=provide behavioural prescriptions). The client (let's say, a politician) asks: "Why am I (and here follows an economic problem or behaviour". Then, the narrative is spun: "The situation is like this not because the world is whimsically cruel but because...and if you were to do this or that the situation is bound to improve". The client is calmed by the very fact that there is an explanation to that which until now bothered him, that there is hope and - providing he follows the prescriptions - he cannot be held responsible for a possible failure, that there is who or what to blame (focussing diffused anger is a very policy instrument) and, that, therefore, his belief in order, justice and their administration by some supreme, transcendental principle is restored. This sense of "law and order" is further enhanced when the narrative yields predictions which come true (either because they are self-fulfilling or because some real "law"- really, a pattern - has been discovered).

   IV. CURRENT PROBLEMS IN ECONOMICS

   Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

   1. The Treatment of Government

      
      Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

   2. Technology and Innovation

      
      Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

   3. Long Term Investment Horizons

      
      Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only i

      Debt Management - Essential to Maximize Growth
      Debt – it's a fact of life for most. Debt however, is not always bad. In fact, debt can be used to your advantage. Most businesses do this every day. They avail themselves of a principle that's been used to generate substantial wealth for years; the principle of leverage. Leverage means simply using an asset to generate a larger advantage than the asset itself provides. Business use this for many assets, not just debt. In fact, the the more proficient a business is at leveraging all it's assets, typically the more successful a business is overall.If one goal of a business is consistent, managed growth, debt is one of the most valuable tools at your disposal. As your business grows, you'll need ever increasing amounts of various assets and payables, such as inventory, personnel, tooling, transportation, shipping and utilities, to name a few. As the need for such things increases on a monthly basis, few businesses are able to self finance the additional fiscal obligations, hence the need for debt if they are to grow.The key is effective debt management. Advantageous credit terms should be negotiated with every vendor and creditor possible. Some vendors will offer cash discounts. In some cases these may be upwards of 10%. Such discounts will usually be stated in the the percentage discount you can expect to receive, followed by the number of days you have to pay on credit terms if you choose not to take advantage of the discount. Look carefully at the different discounts offered by your various vendors. Sometimes it's more advantageous to take the discount, other times you should avail yourself of the credit terms offered.As your business grows, you'll need more of almost everything than you required the period before. In many cases, you'll outgrow your credit limits with vendors. You may find yourself on credit hold for no other reason than you've exceeded your monthly credit limit. In such cases, if you have a solid record of on-time payments, you should renegotiate your credit limit. Most vendors will be willing to comply in an
      e result of introspection) – has a structure and a limited set of functions. They argue that a "user's manual" can be composed, replete with engineering and maintenance instructions. The most prominent of these "psychodynamists" was, of course, Freud. Though his disciples (Jung, Adler, Horney, the object-relations lot) diverged wildly from his initial theories – they all shared his belief in the need to "scientify" and objectify psychology. Freud – a medical doctor by profession (Neurologist) and Bleuler before him – came with a theory regarding the structure of the mind and its mechanics: (suppressed) energies and (reactive) forces. Flow charts were provided together with a method of analysis, a mathematical physics of the mind.

      Yet, dismal reality is that psychological theories of the mind are metaphors of the mind. They are fables and myths, narratives, stories, hypotheses, conjunctures. They play (exceedingly) important roles in the psychotherapeutic setting – but not in the laboratory. Their form is artistic, not rigorous, not testable, less structured than theories in the natural sciences. The language used is polyvalent, rich, effusive, and fuzzy – in short, metaphorical. They are suffused with value judgements, preferences, fears, post facto and ad hoc constructions. None of this has methodological, systematic, analytic and predictive merits.

      Still, the theories in psychology are powerful instruments, admirable constructs of the mind. As such, they probably satisfy some needs. Their very existence proves it.

      The attainment of peace of mind, for instance, is a need, which was neglected by Maslow in his famous model. People often sacrifice material wealth and welfare, forgo temptations, ignore opportunities and put their lives in danger – just to reach this bliss of tranquility. There is, in other words, a preference of inner equilibrium over homeostasis. It is the fulfilment of this overriding need that psychological treatment modalities cater to. In this, they are no different to other collective narratives (myths, for instance).

      But, psychology is desperately trying to link up to reality and to scientific discipline by employing observation and measurement and by organizing the results and presenting them using the language of mathematics (rather, statistics). This does not atone for its primordial "sin": that its subject matter (humans) is ever-changing and its internal states are inaccessible and incommunicable. Still, it lends an air of credibility and rigorousness to it.

      III. THE SCIENTIFIC METHOD

      To qualify as science, an economic theory must satisfy the following conditions:

      1. All-inclusive (anamnetic) – It must encompass, integrate and incorporate all the facts known.

      2. Coherent – It must be chronological, structured and causal.

      3. Consistent – Self-consistent (its sub-"narratives" cannot contradict one another or go against the grain of the main "narrative") and consistent with the observed phenomena (both those related to the subject and those pertaining to the rest of the universe).

      4. Logically compatible – It must not violate the laws of logic both internally (the narrative must abide by some internally imposed logic) and externally (the Aristotelian logic which is applicable to the observable macro world).

      5. Insightful – It must inspire a sense of awe and astonishment, which is the result of seeing something familiar in a new light or the result of seeing a pattern emerging out of a big body of data ("data mining"). The insights must be the inevitable conclusion of the logic, the language and of the development of the narrative.

      6. Aesthetic – The narrative must be both plausible and "right", beautiful (aesthetic), not cumbersome, not awkward, not discontinuous, smooth and so on.

      7. Parsimonious – The narrative must employ the minimum number of assumptions and entities in order to satisfy all the above conditions.

      8. Explanatory – The narrative must explain the behaviour of economic actors, their decisions, why events develop the way they do.

      9. Predictive (prognostic) – The narrative must possess the ability to predict future events, the future behaviour of economic actors and of other meaningful figures and the inner emotional and cognitive dynamics of said actors.

      10. Prescriptive – With the power to induce change (whether it is for the better, is a matter of contemporary value judgements and fashions).

      11. Imposing – The narrative must be regarded by society as the preferable and guiding organizing principle.

      12. Elastic – The narrative must possess the intrinsic abilities to self organize, reorganize, give room to emerging order, accommodate new data comfortably, avoid rigidity in its modes of reaction to attacks from within and from without.

      In some of these respects, current economic narratives are usually theories in disguise. But scientific theories must satisfy not only most of the above conditions. They must also pass the crucial hurdles of testability, verifiability, refutability, falsifiability, and repeatability – all failed by economic theories. Many economists argue that no experiments can be designed to test the statements of economic narratives, to establish their truth-value and, thus, to convert them to theorems.

      There are four reasons to account for this shortcoming - the inability to test hypotheses in economics:

      1. Ethical – Experiments would have to involve humans. To achieve the necessary result, the subjects will have to be ignorant of the reasons for the experiments and their aims. Sometimes even the very performance of an experiment will have to remain a secret (double blind experiments). Some experiments may involve unpleasant experiences. This is ethically unacceptable.

      2. Design Problems - The design of experiments in economics is awkward and difficult. Mistakes are often inevitable, however careful and meticulous the designer of the experiment is.

      3. The Psychological Uncertainty Principle – The current position of a human subject can be (theoretically) fully known. But the passage of time and the experiment itself influence the subject and void this knowledge ("time inconsistencies"). The very processes of measurement and observation influence the subject and change him.

      4. Uniqueness – Experiments in economics, therefore, tend to be unique and cannot be replicated elsewhere and at other times even if they deal with the SAME subjects. The subjects (the tested humans) are never the same due to the aforementioned psychological uncertainty principle. Repeating the experiments with other subjects adversely affects the scientific value of the results.

      5. The undergeneration of testable hypotheses – Economics does not generate a sufficient number of hypotheses, which can be subjected to scientific testing. This has to do with the fabulous (=storytelling) nature of the discipline. In a way, Economics has affinity with some private languages. It is a form of art and, as such, is self-sufficient. If structural, internal constraints and requirements are met – a statement is deemed true even if it does not satisfy external (scientific) requirements. Thus, the standard theory of utility is considered valid in economics despite empirical evidence to the contrary - simply because it is aesthetic and mathematically convenient.

      So, what are economic narratives good for?

      Narratives in economics offer an organizing principle, a sense of order and ensuing justice, of an inexorable drive toward well defined (though, perhaps, hidden) goals, the ubiquity of meaning, being part of a whole. They strive to answer the "why’s" and "how’s". They are dialogic and prescriptive (=provide behavioural prescriptions). The client (let's say, a politician) asks: "Why am I (and here follows an economic problem or behaviour". Then, the narrative is spun: "The situation is like this not because the world is whimsically cruel but because...and if you were to do this or that the situation is bound to improve". The client is calmed by the very fact that there is an explanation to that which until now bothered him, that there is hope and - providing he follows the prescriptions - he cannot be held responsible for a possible failure, that there is who or what to blame (focussing diffused anger is a very policy instrument) and, that, therefore, his belief in order, justice and their administration by some supreme, transcendental principle is restored. This sense of "law and order" is further enhanced when the narrative yields predictions which come true (either because they are self-fulfilling or because some real "law"- really, a pattern - has been discovered).

      IV. CURRENT PROBLEMS IN ECONOMICS

      Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

      1. The Treatment of Government

         
         Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

      2. Technology and Innovation

         
         Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

      3. Long Term Investment Horizons

         
         Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only

         Which Home Businesses Work Best for Families?
         It feels like there's a million family businesses out there and it can be a real challenge finding a business that is a good fit for your family. The hardest part is figuring out what kind of business works best for your family. The water of opportunity can seem so murky with choices that you're not sure if you really want to jump in. Here's a few tips we've found that help most families get clear about their needs, and what their ideal home business should look like.1) Know WHAT YOU WANT your Home Family Business to do for you! - This is really THE most important thing. What are you looking for? Is it time freedom? More Money? How much Money do you want? Sit down with a notepad right now, and just ask yourself "What do I want my business to do for me?". Arming yourself with this just this info could save you THOUSANDS of Dollars and TONS of Time. Some people want the freedom of owning a business, but instead, what they end up with is a business that owns them.2) Flexible Hours - Parents need flexible hours. Most parents could not deal with a schedule that was going to keep them away from their family at critical moments. So you want to find something that you can do around those things that are important to you.3) No Inventory - Most families don't have room to store all their kids coats, let alone have enough room to have boxes of products stacked all over their home. On top of that businesses that require you to keep products on hand also tend to require a much higher initial investment, this is typically cost prohibitive for families.4) No Employees - Buying a business where you have to manage employees, often feels like running an adult day care center. Also, the cost and frustration in hiring, training, and firing employees could considerable take away from a family business you wish to run from home.5) Ability to Earn a Great Income - This is huge! It may surprise you how many peopl
         s:

         1. All-inclusive (anamnetic) – It must encompass, integrate and incorporate all the facts known.

         2. Coherent – It must be chronological, structured and causal.

         3. Consistent – Self-consistent (its sub-"narratives" cannot contradict one another or go against the grain of the main "narrative") and consistent with the observed phenomena (both those related to the subject and those pertaining to the rest of the universe).

         4. Logically compatible – It must not violate the laws of logic both internally (the narrative must abide by some internally imposed logic) and externally (the Aristotelian logic which is applicable to the observable macro world).

         5. Insightful – It must inspire a sense of awe and astonishment, which is the result of seeing something familiar in a new light or the result of seeing a pattern emerging out of a big body of data ("data mining"). The insights must be the inevitable conclusion of the logic, the language and of the development of the narrative.

         6. Aesthetic – The narrative must be both plausible and "right", beautiful (aesthetic), not cumbersome, not awkward, not discontinuous, smooth and so on.

         7. Parsimonious – The narrative must employ the minimum number of assumptions and entities in order to satisfy all the above conditions.

         8. Explanatory – The narrative must explain the behaviour of economic actors, their decisions, why events develop the way they do.

         9. Predictive (prognostic) – The narrative must possess the ability to predict future events, the future behaviour of economic actors and of other meaningful figures and the inner emotional and cognitive dynamics of said actors.

         10. Prescriptive – With the power to induce change (whether it is for the better, is a matter of contemporary value judgements and fashions).

         11. Imposing – The narrative must be regarded by society as the preferable and guiding organizing principle.

         12. Elastic – The narrative must possess the intrinsic abilities to self organize, reorganize, give room to emerging order, accommodate new data comfortably, avoid rigidity in its modes of reaction to attacks from within and from without.

         In some of these respects, current economic narratives are usually theories in disguise. But scientific theories must satisfy not only most of the above conditions. They must also pass the crucial hurdles of testability, verifiability, refutability, falsifiability, and repeatability – all failed by economic theories. Many economists argue that no experiments can be designed to test the statements of economic narratives, to establish their truth-value and, thus, to convert them to theorems.

         There are four reasons to account for this shortcoming - the inability to test hypotheses in economics:

         1. Ethical – Experiments would have to involve humans. To achieve the necessary result, the subjects will have to be ignorant of the reasons for the experiments and their aims. Sometimes even the very performance of an experiment will have to remain a secret (double blind experiments). Some experiments may involve unpleasant experiences. This is ethically unacceptable.

         2. Design Problems - The design of experiments in economics is awkward and difficult. Mistakes are often inevitable, however careful and meticulous the designer of the experiment is.

         3. The Psychological Uncertainty Principle – The current position of a human subject can be (theoretically) fully known. But the passage of time and the experiment itself influence the subject and void this knowledge ("time inconsistencies"). The very processes of measurement and observation influence the subject and change him.

         4. Uniqueness – Experiments in economics, therefore, tend to be unique and cannot be replicated elsewhere and at other times even if they deal with the SAME subjects. The subjects (the tested humans) are never the same due to the aforementioned psychological uncertainty principle. Repeating the experiments with other subjects adversely affects the scientific value of the results.

         5. The undergeneration of testable hypotheses – Economics does not generate a sufficient number of hypotheses, which can be subjected to scientific testing. This has to do with the fabulous (=storytelling) nature of the discipline. In a way, Economics has affinity with some private languages. It is a form of art and, as such, is self-sufficient. If structural, internal constraints and requirements are met – a statement is deemed true even if it does not satisfy external (scientific) requirements. Thus, the standard theory of utility is considered valid in economics despite empirical evidence to the contrary - simply because it is aesthetic and mathematically convenient.

         So, what are economic narratives good for?

         Narratives in economics offer an organizing principle, a sense of order and ensuing justice, of an inexorable drive toward well defined (though, perhaps, hidden) goals, the ubiquity of meaning, being part of a whole. They strive to answer the "why’s" and "how’s". They are dialogic and prescriptive (=provide behavioural prescriptions). The client (let's say, a politician) asks: "Why am I (and here follows an economic problem or behaviour". Then, the narrative is spun: "The situation is like this not because the world is whimsically cruel but because...and if you were to do this or that the situation is bound to improve". The client is calmed by the very fact that there is an explanation to that which until now bothered him, that there is hope and - providing he follows the prescriptions - he cannot be held responsible for a possible failure, that there is who or what to blame (focussing diffused anger is a very policy instrument) and, that, therefore, his belief in order, justice and their administration by some supreme, transcendental principle is restored. This sense of "law and order" is further enhanced when the narrative yields predictions which come true (either because they are self-fulfilling or because some real "law"- really, a pattern - has been discovered).

         IV. CURRENT PROBLEMS IN ECONOMICS

         Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

         1. The Treatment of Government

            
            Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

         2. Technology and Innovation

            
            Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

         3. Long Term Investment Horizons

            
            Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only

            Facts About Warehousing Your Trade Show Exhibit
            The Warehousing function plays a critical role in insuring the successful shipment of trade show exhibit properties in and out of the trade show exhibit house. The department’s primary role is to inventory the customer’s properties, pull and load out designated trade show trade show exhibits for shipment to show site, receive the customer’s properties into the facility, inspect crates for damage, and return properties to the warehouse for storage.Warehouse personnel keep accurate records of crate contents and work closely with project Management, Production, and Shipping to create and update crate inventory records as well as confirm crate count on shipment requests, insuring all components are pulled for shipment. The Warehouse also makes sure that all components leave and return in good condition. As the last line of defense, the warehouse personnel become the final check and balance in the successful movement and maintenance of customer properties to and from show site.Other Warehouse functions include supporting Production in the safe movement of crates in the facility during in-house trade show exhibit installations, refurbishment of customer properties, and the labeling and proper storage of new properties.Department ProcessesSpecifically, the Warehouse fulfills the following responsibilities:· Maintain crate inventory data, including crate contents, size, and weight.· Track movement of properties in and out of the facility, guaranteeing that property is returned complete and undamaged.· Efficiently and securely store customer properties to minimize unnecessary handling and ensure safety of crate contents.· Continual communication with Project Management, Production and Shipping departments to insure accurate and timely movement of properties inside and outside the trade show exhibit facility.What the Trade show exhibit House Needs from the clientIn order to maintain the property, all trade show exhibit houses require a basic level of detail from your company including:
            establish their truth-value and, thus, to convert them to theorems.

            There are four reasons to account for this shortcoming - the inability to test hypotheses in economics:

            1. Ethical – Experiments would have to involve humans. To achieve the necessary result, the subjects will have to be ignorant of the reasons for the experiments and their aims. Sometimes even the very performance of an experiment will have to remain a secret (double blind experiments). Some experiments may involve unpleasant experiences. This is ethically unacceptable.

            2. Design Problems - The design of experiments in economics is awkward and difficult. Mistakes are often inevitable, however careful and meticulous the designer of the experiment is.

            3. The Psychological Uncertainty Principle – The current position of a human subject can be (theoretically) fully known. But the passage of time and the experiment itself influence the subject and void this knowledge ("time inconsistencies"). The very processes of measurement and observation influence the subject and change him.

            4. Uniqueness – Experiments in economics, therefore, tend to be unique and cannot be replicated elsewhere and at other times even if they deal with the SAME subjects. The subjects (the tested humans) are never the same due to the aforementioned psychological uncertainty principle. Repeating the experiments with other subjects adversely affects the scientific value of the results.

            5. The undergeneration of testable hypotheses – Economics does not generate a sufficient number of hypotheses, which can be subjected to scientific testing. This has to do with the fabulous (=storytelling) nature of the discipline. In a way, Economics has affinity with some private languages. It is a form of art and, as such, is self-sufficient. If structural, internal constraints and requirements are met – a statement is deemed true even if it does not satisfy external (scientific) requirements. Thus, the standard theory of utility is considered valid in economics despite empirical evidence to the contrary - simply because it is aesthetic and mathematically convenient.

            So, what are economic narratives good for?

            Narratives in economics offer an organizing principle, a sense of order and ensuing justice, of an inexorable drive toward well defined (though, perhaps, hidden) goals, the ubiquity of meaning, being part of a whole. They strive to answer the "why’s" and "how’s". They are dialogic and prescriptive (=provide behavioural prescriptions). The client (let's say, a politician) asks: "Why am I (and here follows an economic problem or behaviour". Then, the narrative is spun: "The situation is like this not because the world is whimsically cruel but because...and if you were to do this or that the situation is bound to improve". The client is calmed by the very fact that there is an explanation to that which until now bothered him, that there is hope and - providing he follows the prescriptions - he cannot be held responsible for a possible failure, that there is who or what to blame (focussing diffused anger is a very policy instrument) and, that, therefore, his belief in order, justice and their administration by some supreme, transcendental principle is restored. This sense of "law and order" is further enhanced when the narrative yields predictions which come true (either because they are self-fulfilling or because some real "law"- really, a pattern - has been discovered).

            IV. CURRENT PROBLEMS IN ECONOMICS

            Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

            1. The Treatment of Government

               
               Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

            2. Technology and Innovation

               
               Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

            3. Long Term Investment Horizons

               
               Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only

               Commission Hijacker Hidden Inside Your Web Page Design!
               As a person almost obsessed with Web site marketing, I am often at odds with my Web site designer friends as to what is important. They know that I love them and I mean no offense so all is good.For all Web masters especially those who count on commissions selling other people’s products, some Web design flaws could really hurt. The following are some common and some not so common flaws that can rob you of commissions by masking your affiliate links from visitors without your knowledge, sending the visitors to wrong landing pages, lowering your Web sites search engine ranking and wasting your valuable time on maintenance and tracking.Fixing these flaws creates a clear path to more productive Web design and higher commissions.1- Error 404 Disease.Test your Web site for this widespread and deadly disease that keeps sending your potential customers to the never land of server error 404. Go to your Web site home page, which in our case is http://www.askdomain.com. Then add a slash and something after the main url. For example, “emailmarketing.html”. The complete url of this example is http://www.askdomain.com/emailmarketing.htmlWhat will you see? Our home page, right?Now, go to your own Web site and repeat the process. Enter a url from a page on your Web site that you know does not exist. Do you see a message related to error 404? If so, your Web site is losing hard earned traffic and potential customers. Contact your Internet hosting provider to help you cure this and place a customized error message on your site. A custom error 404 message displays your sales message or redirects these lost visitors to your home page.2- Long Affiliate Links & Ad BlockersLong affiliate links always create problems especially when they break up in email campaigns. But now there is a more serious threat: Ad blocking. These ad blocking scripts view your affiliate links and banners as advertising, assume the client doesn’t want to see them and block them entirely from view. The dark humor in this is you
               blem or behaviour". Then, the narrative is spun: "The situation is like this not because the world is whimsically cruel but because...and if you were to do this or that the situation is bound to improve". The client is calmed by the very fact that there is an explanation to that which until now bothered him, that there is hope and - providing he follows the prescriptions - he cannot be held responsible for a possible failure, that there is who or what to blame (focussing diffused anger is a very policy instrument) and, that, therefore, his belief in order, justice and their administration by some supreme, transcendental principle is restored. This sense of "law and order" is further enhanced when the narrative yields predictions which come true (either because they are self-fulfilling or because some real "law"- really, a pattern - has been discovered).

               IV. CURRENT PROBLEMS IN ECONOMICS

               Neo-classical economics has failed on several fronts simultaneously. This multiple failure led to despair and the re-examination of basic percepts and tenets:

               1. The Treatment of Government

                  
                  Government was accorded a special status and special treatment in economic theory (unlike other actors and agents). It was alternatively cast as a saint (seeking to selflessly maximize social welfare) - or as the villain (seeking to perpetuate and increase its power ruthlessly, as in public choice theories). Both views are caricatures of reality. Governments do seek to perpetuate and increase power but they use it mostly to redistribute income and not for self-enrichment.

               2. Technology and Innovation

                  
                  Economics failed to account for the role of innovation in growth and development. It also ignored the specific nature of knowledge industries (where returns increase rather than diminish and network effects prevail). Thus, current economic thinking is woefully inadequate to deal with information monopolies (such as Microsoft), path dependence and pervasive externalities.

               3. Long Term Investment Horizons

                  
                  Classic cost/benefit analyses fail to tackle very long term investment horizons (periods). Their underlying assumption (the opportunity cost of delayed consumption) fails beyond the investor's useful economic life expectancy. Put more plainly: investors care less about their grandchildren's future than about their own. This is because predictions concerned with the far future are highly uncertain and people refuse to base current decisions on fuzzy "what ifs". This is a problem because many current investments (example: the fight against global warming) are likely to yield results only in the decades ahead. There is no effective method of cost/benefit analysis applicable to such time horizons.

               4. Homo Economicus

                  
                  The economic actor is assumed to be constantly engaged in the rational pursuit of self interest. This is not a realistic model - merely a (useful) approximation. People don't repeat their mistakes systematically (=rationality in economics) and they seek to optimize their preferences (altruism can be such a preference, as well).

                  Still, many people are non-rational or only nearly rational in certain situations. And the definition of "self-interest" as the pursuit of the fulfilment of preferences is a tautology.

                  V. CONSUMER CHOICES

                  How are consumer choices influenced by advertising and by pricing? No one seems to have a clear answer. Advertising is both the dissemination of information and a signal sent to consumers that a certain product is useful and qualitative (otherwise, why would a manufacturer invest in advertising it)? But experiments show that consumer choices are influenced by more than these elements (for instance, by actual visual exposure to advertising).

                  VI. EXPERIMENTAL ECONOMICS

                  People do not behave in accordance with the predictions of basic economic theories (such as the standard theory of utility and the theory of general equilibrium). They change their preferences mysteriously and irrationally ("preference reversals"). Moreover, their preferences (as evidenced by their choices and decisions in experimental settings) are incompatible with each other. Either economics is not testable (no experiment to rigorously and validly test it can be designed) - or something is very flawed with the intellectual pillars and models of economics.

                  VII. TIME INCONSISTENCIES

                  People tend to lose control of their actions or procrastinate because they place greater importance (greater "weight") on the present and the near future than on the far future. This makes them both irrational and unpredictable.

                  VIII. POSITIVISM versus PRAGMATISM

                  Should economics be about the construction and testing of of models, which are consistent with basic assumptions? Or should it revolve around the mining of data for emerging patterns (=rules, "laws")? On the one hand, patterns based on a limited set of data are, by definition, inconclusive and temporary and, therefore, cannot serve as a basis for any "science". On the other hand, models based on assumptions are also temporary because they can (and are bound to) be replaced by new models with new (better?) assumptions.

                  One way around this apparent quagmire is to put human cognition (=psychology) at the heart of economics. Assuming that the human is immutable and knowable - it should be amenable to scientific treatment. "Prospect theory", "bounded rationality theories" and the study of "hindsight bias" and other cognitive deficiencies are the fruits of this approach.

                  IX. ECONOMETRICS

                  Humans and their world are a multi-dimensional, hyper-complex universe. Mathematics (statistics, computational mathematics, information theory, etc.) is ill equipped to deal with such problems. Econometric models are either weak and lack predictive powers or fall into the traps of logical fallacies (such as the "omitted variable bias" or "reverse causality").