Normative and Positive Economics: A Isocratic Sketch

Introduction and Definitions

Whilst it is certainly more appropriate for a sketch for appropriate normative and positive economics to take up several hundred pages more than the several hundred words offered here, such as sketch is nevertheless provided. It is considered possible, albeit just, to provide in summary form the knowledge and experience of modern economics to state quite succinctly what works, what doesn't, and what is fair and what isn't.

This sketch begins with a definition of socialism which refers to those systems of economic organisation which is characterised by public forms of ownership; conversely capitalism is defined by economic organisation those which have private forms of ownership [1]. As is well known, there are many variants of public and private ownership and indeed many variants within the continuum of the two extremes. One such dimension refers to the means of distribution and exchange in contrast with the ownership of productive forces [2]; here the significantly differences are between market mechanisms and centralised planning. Another such dimension refers to a political subsystem that operates in parallel to the economic; by which varieties dictatorships may be contrasted with varieties of democracy.

Another set of definitions necessary for this discussion is reference to political economy and the factors of production, a field largely ignored since the development neoclassical economics in the latter part of the 19th century. From the work of Whilst providing important contributions to price, value, scarcity and studies in marginal utility [3], the conflation of land and capital into a single entity has all the signs of a tragic mistake. Whilst the conflation has been supported by both advocates of capitalism and socialism, economists are largely aware of the distortions that arise from the forced union.

A Darwinian education

Reuters reports on Mr Obama's speech:


The economy cannot sustain "21st century markets with 20th century regulations," Obama told reporters after the meeting with lawmakers.

"If we once again guide the market's invisible hand with a higher principle, our markets will recover, our economy will once again thrive and America will once again lead the world in this new century as it did in the last," he said.


Adam Smith believed that the market's invisible hand ought to be guided by individuals acting out of enlightened self-interest. Everyone is better off if everyone acts in self-interest (the parable of the butcher, the baker, etc); as an ethics professor, Smith implied that everyone acted in self-interest to benefit the community. He did not mean that when everyone acted in self-interest without regard for the community, society would still somehow benefit.

Mr Obama's "higher principle" is Smith and his liberal contemporaries' "enlightened self-interest."

Darwin, in his essay The Moral Sense of Man and the Lower Animals, distinguished between two types of instinct: "higher" and "lower". Over the course of his essay, Darwin empirically demonstrates the existence of two distinct types of morality that are instinctive in both animals and mankind: the kind of instinct that leads animals to care for their fellow species, and the kind of instinct that leads animals to care for themselves possibly at the expense of their fellow species.

Darwin wrote that, "man can generally and readily distinguish between the higher and lower moral rules. The higher are founded on the social instincts, and relate to the welfare of others. They are supported by the approbation of our fellow men and by reason. The lower rules...relate chiefly to self."

Darwinian Institutionalism

Happy belated birthday to Charles Darwin, and happy belated bicentennial! Two hundred years ago, Charles Darwin wrote a less famous treatise on morality titled The Moral Sense of Man.

Most striking to me, from a political standpoint, are these lines: "As man advances in civilization, and small tribes are united into larger communities, the simplest reason would tell each individual that he ought to extend his social instincts and sympathies to all the members of the same nation, though personally unknown to him. This point being once reached, there is only an artificial barrier to prevent his sympathies extending to the men of all nations and man gradually advanced in intellectual would the standard of his morality rise higher and higher."

What Darwin argues in this treatise is that there are two types of moral instincts in men. The lower instinct is that which relates to self-preservation; this is the self-interest that Smith capitalized on (pun intended). The higher instinct is that which relates to man's care for his fellow man, his community, and to humanity. Darwin argues that a finer mind would lead to a more compassionate heart.

This is all very interesting from the standpoint of an educator: if you're training the "leaders of tomorrow," how do you help your students "advance in intellectual power" in a way that will rise their "standard of his morality higher and higher?" A later post will explore that.

From the international relations stand-point, Darwin's prediction that the march of civilization will be marked by increasing cooperation has been accurate thus far. While he was writing, the West practiced a very pure form of realpolitik - statecraft based solely on self-interest. We now associate our own self-preservation with the good of the human race or at least a large slice of it. The EU is a prime example of it.

Bushfire Defense

Image credit: Aussie_Pecker/flickr

This is a place to interactively examine the lessons from the 2009 Victorian Bushfires and similar events, with a view to finding solutions to the problems of living in an environment that can produce such fires.

Individual isolated houses and tree lined streets need to be re-engineered to allow amenity and survivability.

Lying in Politics Revisited: The Iraq War in the Age of the Internet

Presented to the Australasian Society for Continental Philosophy Conference, Auckland, December 2008.


Hannah Arendt's "Lying in Politics" is a pithy essay which not only documents the extent of public deception and personal self-deception by the U.S. administration during their military intervention in Indochina, but also acts as a commentary on her argument for liberty and freedom ensured through constitutional protections and the human motivation to protect those principles.

Forty years later somewhat similar circumstances have arisen. Based on false assertions of the presence of weapons of mass destruction and collaboration with Al-Qaeda (along with other justifications), the world's greatest superpower finds itself embroiled in a war that appears to have no conclusion, suffers a lack of support on the domestic front, and is under profound international criticism.

In addition to revisiting the replication of deception by political administrations to their population contrary to known reality, there are also the issue of significant changes to the acquisition of popular knowledge of popular knowledge that deviates from the official line. The internationalisation of media and the establishment of mass communication systems have profoundly altered the human condition of consciousness generation, but also has different effects in matters of civil disobedience.



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