Home
>
Political
>
Immortality and Mortality in the Economic Sciences

Immortality and Mortality in the Economic Sciences

Roberto Calvo Macias, a young author and thinker from Spain, once wrote to me that it is impossible to design a coherent philosophy of Economy without accounting for the (sad?) fact that we are mortals. This insight is intriguing. It is not that we refrain from Death in dealing with matters economic. What are estate laws, annuities, life insurance policies - but ways to cope with the Great Harvester? But this, admittedly, only scratch the non-profound surface of the question.

The industrial revolution taught us that humans were dispensable. The process of production was reduced to minute functional units that people could learn in minutes. Only the most basic skills were required to successfully endure this learning curve. Thus, for as long as humans bred, the supply was inexhaustible. Humans became entirely replaceable, interchangeable (and alienated, in the process). Motion pictures of the period ("Metropolis", "Modern Times") portray the industrial worker as a nut in a machine, driven to the verge of insanity by the repetitiveness of his work.

Yet, this view of human resources is fast becoming extinct in the rich Western countries. Training periods have lengthened, expert knowledge has taken over, the main value added is information. Humans represent a sizeable investment in education. They are no longer an inexpensive resource .With this realization, there came about a revolution in economic relations. Absurdly, inhuman totalitarian regimes (especially Fascism and Communism) were the first to emphasize the importance of the human factor in the total set of means of production. The concept of scarcity was extended (by virtually all the economic systems today) to apply to human resources.

All resources are scarce. Economy is the science of trading off: giving up one resource in order to get more of another. The concept of "opportunity cost" is the first that students of economy encounter. The classic approach included natural endowments in the group of scarce resources. The human element was barely perceived as yet another natural resource. Now it is. The size of the population, its life expectancy, its quality of life, health, education, income ? are all important.

Economy is the branch of psychology which deals with behaviour patterns and with mental processes which relate to material wealth, with the opportunities to obtain it (=access to it) and with the processes and mechanisms underlying its attainment. Because material wealth can be expressed quantitatively, this specific branch acquired a "mathematical" nature, a twist not present in other branches of the human sciences. As such, it is highly surprising that so little formal thought was given to the issue of mortality (which is what makes the human resource scarce).

The legal profession is positively obsessed with Death. This is why economic activities are relegated to separate legal entities. The founders of a company are mortals ? the company itself, immortal. This is why the concepts of last wish, legal testament, estate and inheritance are so strong: they survive the person, they have an existence all their own. Economic theories, on the other hand, generally assume that humans are immortal and that their economic activities and legal entities which embody them have an infinite horizon. To some extent, this is justified by people's behaviour and by observing the social institutions that they form. People engage in very long term activities even when they are very old. No 80-year old inventor will give up his royalties just because he long surpassed his life expectancy and is about to die imminently. This is true even if he has no off-springs. No businessman will stop accumulating wealth just because he has enough for two lifetimes. No consumer will cease consuming simply because he has all that he needs to properly function. The life expectancy horizon is ineffective because w all deny the prospect of death. This denial mechanism is exceedingly strong in all of us ? we suppress the fact that we will die one day and that many of our activities, efforts, battles and pursuits look absolutely outlandish from this vantage point. So, economy mimics and reflects human defensive mechanisms: it is long term, infinite in scope.

Surprisingly, as Mr. Calvo Macias commented, the more temporally finite the organization ? the more dynamic it is. Religious establishments, which ostensibly trust in the after-life (a form of immortality) ? are procedurally rigid, ossified, frozen. This is also characteristic of states. The longer their past and the longer their perceived future (the Reich of a Thousand Years) ? the more morbidly paralysed these entities and their institutions. Dynamism is closely associated with finiteness and with the perception of mortality when it is coupled with rebellion. The rebel does not accept his own imminent demise. He fights back by being dynamic, that is, through the process of creation. The battle between creation and death is drawn along the lines of mortal fear.

And, so, we can distinguish two types of economic players: those who accept death and those who reject it. The first type is characterized by fear and anxiety as the driving force ? the second by deep seated denial and false confidence.

Those aware of their mortality display a decrease in economic activity with the onset of old age. They tend to attach a greater weight to their income the more recent it is. They discount future income and attach negligible weights to it. They tend to think short term as they grow older, towards the end of their lives they refrain from any economic activity bar trading, speculation, arbitrage, brokering and investments in financial assets. They become less risk averse as time passes.

Those who deny the crawling end still demonstrate an emotional attachment to wealth and to its accumulation at an old age. They do weigh income in accordance with its expected maturity (the more futuristic the income ? the less weight it carries) ? but they still attach some weight to it. Dividend Discounting Models in stock valuation assume an INFINITE stream of future dividends, discount it, add the results to get the CURRENT price of a stock. Stock in the New York Stock Exchange (NYSE) are trading now at a p/e (price to earnings) multiple of 18. Assuming a 35% average tax on dividends and on capital gains ? this means a person has to wait 28 years to recoup his investment. Taking into consideration risk free income (the interest payments that the person could have received had he invested the money in Treasury Bonds) ? the effective multiple is really 60 and above. Investors are willing to wait 60 years and more in order to receive their money back plus a reasonable return. This is the quintessential denial of the finiteness of life.

These two types clash and conflict. As they do, they generate the very fabric of market economies as we know them today. Players are trading risks, speculating, investing in projects, buying stocks ? all based on a hidden philosophies of life and death. It is this that we trade amongst us when we do: our own mortality.

About The Author

Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com

same day cleaning service Des Plaines ..

In The News:

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Instagram's new 'Your Algorithm' tool lets you control your Reels feed in real time. The app now gives you power to customize what videos you see.

Major Marquis fintech breach exposes 400,000-plus Americans' data through unpatched SonicWall vulnerability, with Texas hardest hit at 354,000 affected.

Free up iPhone storage fast by clearing large photos and videos from Messages app. Simple steps for iOS users to delete attachments without losing chats.

Scammers are flooding inboxes with fake tracking alerts that mimic real carriers, exploiting the holiday rush to steal logins and personal data.

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

LastPass faces $1.6 million fine from U.K. regulators after 2022 data breach exposed 1.6 million users. Password manager failed proper security controls.

Petco disclosed a data breach exposing customer Social Security numbers, financial account details, and driver's license information due to a software error.

Baseball teams can now analyze complete swing mechanics in normal training environments using Theia's markerless AI system that processes standard high-speed footage.

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

Immortality and Mortality in the Economic Sciences

Political