September, 2001

ABSTRACT

The subject of economics invokes distinguishing characteristics that warrant extensive critique and major renovation. These are:

· Numerous schools of theory that lack scientific closure, largely due to the failure to connect theory with empirical evidence over significant time intervals, but also due to built-in myopia and somnolence within the self-sealing economics community

· Practitioners have attained very powerful positions in national and international affairs, based on aggressive postures, syncophantic behavior in the service of power, and shifting sands that arise from the numerous incompatible schools of thought

· Secrecy is rampant in the decision-making processes that affect large numbers of people who are not privileged to know how decisions are made, and what models or designs were used to influence such decisions

· There is no significant effort to replace the numerous schools of theory with upgraded schools that reflect fewer assumptions; are more comprehensive; and can be judged critically against firm evidence

· There is a movement to globalize economic systems, thereby making economic matters still more opaque, and generating counter-culture movements among several audiences, who seem to be joining together to mount a steady revolution against the silent oppression of the secret meeting and the decisions that cannot be supported by sound science and cultural sensitivity

Economics can be looked upon as a field of study that is looking for a system which will move away from the present hodgepodge of discredited theories from which economic decision-makers draw, apparently at random; or based upon their own intuitive syntheses that are not subjected to the kind of scrutiny that is warranted by historical failures of judgment.

The system that is needed can be synthesized, in part, from a rigorous basis in three laws. These laws, whose relevance and integrity are unassailable, are uniformly ignored by economists. But they are fundamental to all modeling and, especially, to modeling that involves the design of systems.

Whether the courage needed to force these laws into the elitist domain of economics can be mustered is doubtful, but the need for such action is clear and pressing. The likely consequence of failure to move rapidly in that direction is a deterioration in world-wide economic systems and possibly increased anarchy.

PRESUPPOSITIONS

Nothing less than the replacement of economic thought is proposed in this paper. For some, such a goal is preposterous and pretentious. For others, it is necessary and not being done. For still others, it is a threat to status gained over decades of aggregation of miscellaneous writings into something called " the discipline of economics" or "the science of economics". This aggregation is neither disciplined nor scientific, although it may contain many subsets which display some form of discipline and some interest in scientific method.

To discuss such a topic in a writing of limited size, it is essential to begin with a set of presuppositions, stated without proof, the validity of which, if undercut, can destroy the argument being made here. But without such presuppositions, the scope of the matter is too great for the writing. To facilitate criticism and discussion, these presuppositions are titled and numbered. The numerical sequence, in this instance, does not designate priority of importance.

Complexity. The subject of economics involves substantial complexity of such a nature that economic theory growing out of single minds, and unsupported by the combination of a satisfactory design process and empirical evidence to support the theory, can never be adequate for broad social purposes. Vacuum. Into the vacuum created by many unsatisfactory and incompatible models of economics, gurus will arise to draw on the resources of the well-to-do who can influence whatever theories might be added to the mix, in order to gain some value; be it economic value, social status, or simply the joy of rubbing elbows with elites Acceptance. Rather than operate in an economic void, powerful people will accept some economic theory as a basis for exerting the power obtained by political or corporate means out of necessity. Non-Acceptance. Rather than submit forever to the tyranny of bad theory put into practice by politicians or corporate executives, some elements of society will protest at first and finally incite revolutions at last, out of frustration with ineffective, insensitive decision making. They will not accept what other accept out of necessity. BIFOLDING AND THREEFOLDING

The Center for Alternative Development Initiative, located in the Philippine Islands, has gained international recognition for creating and living a concept which has been called "social threefolding". This concept is described by that Center as follows:

"….we now live in a tri-polar world inhabited by three global powers---civil society in culture, government in politics, and large corporations in the economy". We characterize this as a tri-polar world because these three global powers are often in conflict. However, social threefolding recognizes that all societies, of necessity, have a cultural, political, and economic realm. Further, it recognizes that at some point, these have to be harmonized."

At the present moment in history, evidence is mounting in reports of very powerful groups of people and organizations that they are performing what might be called, by contrast, "social bifolding". Giving these powerful people the benefit of respect, why might they be engaged in bifolding, instead of in trifolding?

It is plain from the way educational institutions operate that the possibility of educating in trifolding and even in bifolding has been beyond their competence to this point in time. It has long been emphasized by systems thinkers that the fractionalization which has produced these institutions does not lend itself to integrative thought. While lip service is often paid to the desirability of broad thought and social responsibility, who can imagine that such behavior would suddenly be synthesized as soon as a graduate grasps the previously-elusive diploma?

But what of the research institutes? Can it be that they engage in filling the process- and content vacuums created by educational institutions? Avoiding all of the murky areas, one can look at the processes that these organizations apply and see from the process limitations that they cannot fill those vacuums. Likewise, if they could, the universities would probably jump on those processes and install them in their educational programs. Or, looked at another way, the research institutes use essentially the same processes used by universities. These processes have certain common features, but the central one is that they cannot cope with large numbers of variables. Hence they hold some constant and let a few vary. This is no way to run an intellectual railroad.