The Complex Nature of Economics: Understanding Issues from Multiple Perspectives Instead of Searching for Absolute Truths

1. Let’s start from the multiple perspectives of economists

  This is a joking way of saying: Ten economists will have eleven different views on the same economic issue. This is another profound statement. Why?
  It first reflects a basic fact. From the independence of economics as a discipline in the late eighteenth century to today, there is almost no economic issue on which economists have a high degree of consensus. For example, there are four or five main views on what currency is, such as “commodity currency theory”, “functional currency theory”, “credit currency theory” and “symbolic currency theory”, etc., not to mention the number of non-main views. Another example is the issue of economic crises. The repeated occurrence and response to economic crises around the world have not led to a generally close understanding among economists. Views on the causes and countermeasures of crises are diverse and inconsistent.
  If we ask further, what is the reason for this basic fact?
  Generally speaking, economics is the theory of the economic world and economic issues. The economic world is a vast and unbounded space, with complex structures and unpredictable timing, which determines the high-dimensional relevance and mystery of economic issues in this world. However, since the birth of economics, the cognitive tools used are nothing more than the description, analysis or synthesis of natural language, as well as the reasoning of formal logic language and the calculation of mathematical logic symbols; they are nothing more than the transformation of real experience problems into For abstract formal problems, we use concepts, logical rules and generally accepted assumptions to perform numerical measurement and mathematical calculations to obtain formal conclusions, and then answer empirical puzzles; it is nothing more than reducing high-dimensional related economic problems into simple cause-and-effect relationships. , ignore or abandon mysterious content that does not fit into the logical framework. To sum up, there is a clear contrast between the characteristics of the economic world and economic issues and the existing cognitive model of economics, which is manifested in three main aspects.
  One is to use the finite to recognize the infinite. Whether it is the use of natural language or the deduction of formal logical symbols, economics has always constructed a professional theoretical world and special economic problems, trying to understand the real economic world and economic problems through them. However, the real economic world and economic problems must be larger than such “professional world” and “specialized problems”, and it is impossible to map them homogeneously and in equal proportions. Accordingly, what economics provides people is not a complete view of the real economic world and economic issues, but only a certain professional or specialized limited understanding. However, various economic theories almost do not humbly believe that they have given all the explanations of the economic world and economic problems, at least the core understanding or key discoveries. Limited knowledge is infinitely exaggerated. The narrow “world” and “problems” interpreted by economics have been misunderstood as the entire existence of the real economic world and the overall appearance of economic problems.
  The second is to use static knowledge to understand dynamics. When real empirical problems enter the field of economic research and are transformed into “formal problems,” economics forms static theoretical worlds through self-defined concepts, selected data, and presumptions and calculations under logical rules. Correspondingly, “formal issues” are sorted out, classified, analyzed or synthesized in these static theoretical worlds, and relatively certain or even extremely certain “formal conclusions” are obtained. Obviously, the conclusions obtained in the static world must still be static, and do not correspond to the dynamic and continuous evolution of the real economic world, where empirical problems are constantly changing and taking on various forms. It is regrettable that most economic theories regard static moments as the sum of static and dynamic, and use them to interpret dynamic issues in the economic world, melting all “movement” into “stillness”. It is like a magical hand that freezes the spring water of a river. The moment when the river is frozen is used to show the vivid flow of the river.
  The third is to use history to understand the future. Economics is a theory that emphasizes practice, and predicting the future is its natural mission. In the future economic world, based on certain axioms, we can distinguish a certain direction, speculate on certain values, and even determine certain results from the inertia of the past history. This is what economics often calls “path dependence.” But the most certain thing about the future is greater uncertainty. In other words, the understanding of economics from history to the future is only valid within a certain range; beyond this range, it is either guessing or imagining. A large number or even all economic theories, especially economic research under the guidance of logical empirical methods in recent decades, are supported by big data and computer operations, and the conclusions obtained from historical regression can be directly used to predict the future economic world. The future becomes a simple copy of history. This view of cognition, which is difficult for common sense to recognize, is actually the mainstream in modern economics, which cannot but arouse people’s thoughts.
  for example. Modern Monetary Theory (MMT) has become somewhat popular in recent years. The reason for the popularity is the huge growth in the money supply of various countries after the global financial crisis in 2008. This theory seems to give a reasonable explanation and can be used in the current and future monetary policy formulation and operational practices of various countries. In fact, it is an excellent example of the contrast between the “professional world” of economics and the real world. “Formal problems” replace the existence of experience, and the theory of finiteness attempts to cover infinite time and space. Naturally, it is powerless to explain the real economic world, and has no solution to the economic problems in the real world.
  This theory believes that currency can be defined as a “unit of account”, and the modern currency in today’s world is the “national unit of account” issued by various sovereign countries. From the perspective of theoretical classification, it belongs to “symbolic currency theory” and is just one of many monetary theories. However, this professional theory believes that it has completed human society’s entire understanding of modern currency; and can deduce the “IOU” nature of all currencies in human society from the “national unit of account”, and then understand the physical objects that have appeared in history. All currencies in the real world such as currency and gold currency; even the earliest currency forms in human society can be definitely in the form of “units of account”, rather than the physical currencies recognized by other monetary histories or monetary theories, such as shells and stones. wait. In this way, Modern Monetary Theory (MMT), with its “unit theory of account”, declares the end of all other monetary theories in the history of human society.
  It is clear that the real currency world will not just become a world of “accounting symbols” because of the emergence of modern monetary theory (MMT). The existence of gold currency reserves is a proof; at the same time, the nature, function and form of real currency have changed. The persistence of currency cannot be fully grasped by the existing explanations of this monetary theory; also, identifying currencies from history to today as “units of account” is just a view from a certain perspective, and it is far from correct. , let alone completely correct and absolutely credible. It may be said that Modern Monetary Theory (MMT) understands a certain aspect of the real monetary world, but only one aspect.
  Looking at it, what all disciplines in modern society (including natural sciences) have in common is the construction of “professional worlds” to understand the real world. On this basis, humanity can then carry out its mission of building or transforming the world. This shows that the cognitive model of human “professional world” is an objective existence. At the same time, it shows that the real world will always be greater than the various “professional worlds” and will always be greater than the simple sum of the various “professional worlds”. Human cognition has limitations, or flaws, and the key point should be here.
  Looking back at the pluralistic views of economics, they are nothing more than the construction of various “professional worlds” and “specialized problems” in this field, derived from a limited, partial, static and historical understanding of the real world and problems. This is a natural existence, and there is no need to make a fuss about it. It also shows the high necessity of communication, complementation and integration of different perspectives in economics. But economists have adopted more of an oppositional attitude, not recognizing the limitations or flaws of their own “professional world” and “specialized problems”, let alone certain values ​​of other people’s “professional world” and “specialized problems” – absolutely The superposition of self-affirmation and absolute negation of others has created an extraordinary spectacle of diverse viewpoints in the field of economics.

2. What is economics doing: discovering truth or reaching consensus?

  The research results of economics have various names, such as economic viewpoints, theories and doctrines, etc. They are also called economic laws, theorems and principles. From the perspective of the economists who are the subject of the research, if “discovery” and “invention” are used as the yardstick and reason for defining the nature of results, it is certain that economic research is only “discovery” and not “invention”. After all, the entire economic world and all economic problems are created by people’s economic behaviors. To study them only requires seeing, adding up, and guessing, but does not require creation. Correspondingly, the research results are to find things like people’s economic behavioral motivations, market mysteries, transaction rules and equilibrium clearing states. As the general public is familiar with, and many economists are convinced of it, the “law of market supply and demand” is a typical example: when the supply of goods exceeds demand, prices fall; when the demand for goods exceeds supply, prices rise. In the real economic world, various market supply and demand dynamics are often staged. Economists have discovered and summarized this law, which is a major economic achievement. If you look carefully at those widely popular economic ideas or conclusions, they are just the revelation of some of the secrets of the economic world. Subsequently, the trump card to answer or solve relevant economic problems is either at your fingertips or not far away.
  Since we are discovering something in the economic world, then the highest realm of economic research is “discovering the truth.” This is already a relatively common social concept. Ordinary people have always viewed and expected economic research in this way; although economists rarely make clear statements, judging from a large number of classic treatises and an astonishing amount of current literature, this highest research goal is highly acquiesced.
  So, can the various views, theories and doctrines of economics from ancient times to the present, as well as the results of laws, theorems and principles, prove that the goal of economic research is indeed to “discover the truth”? If so, what results can be counted as discovered “truths” or “quasi-truths”? If not, what are those rich and diverse economic results?
  No matter how you define truth, its absoluteness, eternity, universality and integrity are indispensable. It belongs to the existence of determinism and is completely objective and independent of human will. Even understandings with relaxed conditions, such as “relative truth”, “approximate truth”, “high probability results”, etc., all emphasize its objective height and is not a purely subjective construction of humans, let alone speculation and imagination under certain assumptions. Using this to judge those economic results such as “ten economists will have eleven opinions”, it is obvious that they are very far away from the truth, so far away that the shadow of the truth may not reach it. Their diverse differences, oppositions and conflicts categorically deny the absolute, eternal, universal and holistic nature of truth.
  It is true that economics is not all about rich and opposing viewpoints, and some research results have been widely recognized. Do these results have the characteristics of truth and can support a certain degree of reliability in “discovering truth” in economic research? The answer is no.
  Look back at the laws of market supply and demand. This law seems to be a “discovery” of the mysteries of market supply and demand in the economic world, but it is actually a highly abstract way of thinking about market operations by economists. The “market” here is complete, supply and demand are independent of each other, competition is complete, information is symmetric and transparent, changes in supply and demand directly affect each other, and the corresponding price change rules emerge. In the economic world, there is no such law, only occasional market supply and demand facts. In other words, the real normal market is incomplete. Information asymmetry, diversified supply and demand relationships, non-competitive markets and even the existence of oligopoly make the discovery of this law very weak, so that economists are divided on ” Different factions of “classical markets (complete markets)” and “non-classical markets (incomplete markets)”. There is also the opposition between the classical theory of “supply automatically creates demand” which supports innovators, and the opposition between modern market theorists who believe that “supply and demand imbalance” requires intervention in demand. The fierce debate between the two has not ceased to this day. This law is not close to nor can it be seen that it is tending to the truth.
  Let’s talk about externality theory. The so-called externality refers to the impact of the economic activities of one economic entity on another economic entity. There are two main possibilities for this impact: one is to bear additional costs, such as company A’s production polluting company B, and the latter pays for nothing; the other is to obtain additional benefits, such as company A’s road construction benefiting company B, and the latter benefits for free . Such externality stories exist in the economic world, and this theory has the potential to discover and reveal objective facts. More importantly, it provides a “reasonable understanding” of economics – externalities need to be “internalized”: the cost of pollution should be borne by Company A, and the benefits of road use should be paid by Company B. However, upon closer examination, this theory is also an abstract construction of economists. On the one hand, externality is a concept based on the definition of economic subjects, and this definition is more social and man-made, not highly objective, and not absolute; on the other hand, any economic activity will produce Due to various difficulties in discovering, measuring and processing many tangible and intangible externalities, economics is more heavily based on assumptions and speculations. This theory is not so much “discovering” a truth as it is “forming” a certain understanding.
  There is also the doctrine of marginal effects. This doctrine is called a revolutionary theoretical innovation. It revolutionized classical economics and discovered that the determining mechanism of market economic value is the consumption and utility of the demand side, rather than the production and cost of the supply side as believed in classical theory. Revolution is the negation of the past. Negation means either ending history and the truth appears; or continuing history and having the possibility of being denied again. It should be said that the marginal effect theory is supported by the empirical facts of the real economic world. It won quite a few fans as soon as it was launched and is frequently used in real economic practice. However, it has not reached the altar of truth. On the one hand, it inherits the premise of “perfectly competitive market” from classical economics, which is a hypothesis rather than a discovery; on the other hand, it ignores the positive role of the supply side on the demand side, and demand becomes the only “cause” independently. , simplistic the determination mechanism of market economic value, and the thoroughness of the “revolution” directly denies the objective complexity of the economic world. Therefore, it is often challenged, attacked, and even re-denied in one way or another.
  Economic research is the undertaking of individual economists or teams. Economic results are usually completed by a scholar or a group of scholars, and their results have great individual or small group characteristics. When many individuals or small groups have similar views, theories, and doctrines, a certain theoretical research community will naturally form. They transcend the limitations of long history and geographical areas, and cluster into a certain school of economics. Classical economics, Austrian school, modern mainstream economics, etc. are all products of this type of research community. These communities are tangible or intangible and independent. They are very different in terms of core ideas, main methods and tools, and key conclusions. Of course, there are exchanges, collisions, and even contradictions and oppositions between them. Therefore, the research results of economics are not, and it is difficult to identify them as unique truths. They are more about consensuses formed within each research community.
  From the formation of various research communities to the emergence of results, it is not difficult to see that there is a clear logical relationship between “ten economists will have eleven views” and consensus. It can even be said that the latter evolved from the former. The key here is that economists will always build or enter a certain research community consciously or unconsciously. If the “ten” represent the total number of economists in the world, then as the research progresses and the results are applied to the economic world, they will naturally reach some consensus and reduce the “eleven views” number, spawning or incorporating into a certain research community. Throughout history, such communities have been large and small, but they have never been aggregated into a whole; there have been various consensuses, but they have never been aggregated into one idea.

3. The meaning of economics: beyond the economic consensus

  From discovering truth to reaching consensus, economics seems to have downgraded. In fact, this is just a restoration of the true face of economics – reaching a consensus is far more consistent with the history and reality of economics than discovering the truth. Since it is a restoration, of course there is no connection between praise or criticism. Consensus is no less than truth. “Truth” here is actually another name for “consensus”. It is true that restoration is not a simple change of words, it brings significant positive effects. First, it will rewrite or redefine the meaning of economics. Because discovering the truth itself is what economics is about, while reaching consensus is not certain.
  The so-called meaning of economics, roughly speaking, can be determined as the social value and use value of economics. It mainly consists of two aspects: the reliability and usefulness of economic results. The former emphasizes the quality of economics knowledge, while the latter focuses on the effectiveness of economics application. In layman’s terms, it means whether economic results are reliable or not and whether they work or not. Truth is reduced to consensus, the veil of absolute and eternal “reliability” is lifted, and the illusion of universal and overall “effectiveness” is also eliminated. The consensus that replaces it is less accurate and reliable knowledge, and it is also a less dynamic and effective tool. In other words, consensus must be relative, changing, special and partial knowledge, and there is no inherent requirement to be “one size fits all”; at the same time, its application in the economic world has a strong historical and Regional and matter-specific, there is no universality across time, space and specific human economic activities. With the arrival of consensus, the meaning of economics will no longer appear perfectly in the castles in the sky in the distant sky, but will instead emerge roughly from the thick sensible world under our feet.
  In view of the unity of research community and consensus, the question now is, within the community, what does consensus in economics mean? What is the relationship between different communities and consensuses? Why can’t different communities and consensuses converge into a single community and consensus? What exists outside all community and consensus, and what does it mean?
  Within a single community, viewed in a closed manner, all members have the same cognition, and there are no differences, contradictions, or oppositions. The consensus can easily be transformed into internal beliefs or beliefs. It shows that it is extremely difficult to try to increase the intellectual quality of a consensus through internal forces; on the contrary, there is no big obstacle to reducing the existing intellectual quality of a belief-based consensus. Moreover, the higher the level of consensus, the higher the level of belief. A consensus with a high degree of belief will inevitably have many “metaphysical” characteristics, which are far away from the real economic world and economic issues, and its social value and use value cannot reach a certain height. The conclusion here is that economics has very limited meaning when looking at consensus within a single community. In other words, a closed community has only a small meaning, a meaning that is solidified and difficult to improve itself.
  Somewhat helplessly, the entire world of economics is precisely composed of many communities and consensuses with different beliefs. Fortunately, due to the differences in different consensuses, especially the practical needs of the real economic world, different communities will spontaneously collide and communicate, or they will rub, oppose and conflict with each other, or they will approach, absorb and complement each other, and there will even be a The situation occurs when a community merges part or all of the consensus of another community, forcing the closed community to transform into an open form. In the history of economics, the consensus of classical economics was absorbed by later neoclassical economics and later neoclassical comprehensive economics, which is a classic proof. If the consensus of a single community is prone to internal belief and weakens its economic significance, then the game between different communities and consensuses will effectively prevent the trend of belief and enhance the consensus during the division and combination. improve the quality of knowledge and expand the social value and use value of economics. The conclusion here is that the game relationship between different communities will gain new consensus and create an open new community, bringing expanded economic significance.
  The change of a community from a closed to an open one is a kind of logic in form and a kind of progress in history. Open communities have strong vitality. In the competition between different communities, they adopt an eclectic approach, retain the good and eliminate the bad, win survival, win development, and move towards the future. In the competition, a closed community clings to its old status quo and amuses itself. Its consensus is strongly religious, and either the community tends to die out or shrinks into a bystander of history. Looking at the current situation of economics, the mainstream theory is relatively developed, while some branches are declining. Basically, open and closed communities are either intertwined or evolved independently.
  The strong vitality of an open community does not mean that it has the power to unite all different consensuses in economics. Any community and consensus, whether open or closed, strong or weak, are just a combination of inaccurate knowledge and self-owned beliefs. They will always spontaneously exclude each other, so that various communities and consensuses arise. It is an eternal scene in the world of economics. In short, various communities and consensuses containing different beliefs can never be integrated into a whole. There is no “strongest takes all” law in the economic world. From this, the meaning of economics will appear in rich and diverse ways due to the existence of different communities and consensuses. These meanings can be divided into “reliable” and “effective”, as well as mainstream and non-mainstream. But they cannot be unique, nor integrated, nor absolute.
  The economic world is a world in itself that is independent of economics. When economic research clarifies and reaches a consensus, the free world is divided into two: the known world covered by the economic consensus and the unknown world that has not been touched. In the known world, because there are multiple communities and consensuses and mutual games, economics shows large or small social value and use value, which is the meaning of economics; in the unknown world, because it has not been touched, it is mysterious. and boundless, implying a new exploration of possibilities in economics.
  There is no doubt that there is a significant and complex relationship between the existing economic consensus and new exploration. The most prominent thing is that new exploration will impact various existing consensuses, intensify various consensus games, promote the reorganization of the community, form a new pattern of community and consensus, and expand the scope of the economic world covered by consensus. If we say that economic research is more about enjoying itself within the existing consensus, each sticking to their beliefs and competing with each other, then the significance of economics will not be that great; if it is said that economic research is more about Entering the unknown world, even if it is a small breakthrough, based on its powerful power to reshape consensus, it will definitely bring more improvements to the existing consensus and greatly enhance the significance of economics. In a word, the greatest and lasting significance of economics lies not within the existing consensus, but in the unknown world outside them.