Real economics is philosophical - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 4 December 2013
Real economics is philosophical A  A  A

Baltimore, Maryland

Dow down 94 yesterday. Gold was flat.

Yesterday, we drove out to the country. We had rented a mini-excavator over the weekend and needed to return it. It had gotten stuck in the ditch we were, a giant bulldozer had to be called onto the job to get it out.

What were we doing with an excavator, you might ask?

Well...therein hangs a tale. We will tell it because it is (remotely) connected to our mission here at the DRE.

But maybe we should answer that question first. What is our mission?

That's easy. We try to connect the dots. We try to make sense out of the world of money. We try to understand what is going on.

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Alert readers will recognize that this has more in common with philosophy than with modern economics. But there's a tale there too. The only kind of economics that is worth a damn is philosophical, not mathematical or scientific. Real economics is philosophical - like history or literature -- in the sense that it merely tries to observe and understand, not to manipulate people as if they were 10-penny nails.

The other kind of 'economics'-modern, 'scientific' economics -- is a fraud. It pretends not only to understand an economy...but to be able to improve it. Modern economists have been at it for nearly 100 years -- planning, organizing, theorizing, controlling, adjusting, pontificating, forcing, setting prices, suppressing interest rates and committing other acts of wanton economic vandalism. During that time there has not been a single confirmed sighting of anything close to success.

But, assuming you're still with us, of course...why bother to try to figure things out at all? Nobody cares. Nobody likes philosophers. They forced Socrates to drink poison. They drove Nietzsche to insanity. Wittgenstein went insane on his own.

Sensible people have no use for philosophy or philosophers. It's men of action they want. Larry Summers! Ben Bernanke! Alan Greenspan! Yes...they want big-mouth humbugs...people who will 'do something,' no matter how foolish it is.

Ooops...We're beginning to rant and rave like a total lunatic.

Back to our story...where were we? Oh yes... Our mission: to try to understand.

But why do we want to? Good question, dear reader; you're really on your toes today.

First, because we want an edge...we want to understand things other people don't... Why? Maybe because it makes us feel superior. That is the goal of all honest feel superior to their fellows. Fortunately, it's not hard to feel superior in today's America. .

But there's another reason...

The more you understand what is really going on, the better you are able to make long-term investment decisions. Or not. Some people believe you should not even try. They say you'll never be able to do it. You'll only mislead yourself, thinking you know something that you really don't. Besides, the effort of trying could be better spent on stock research.

They may be right. But we've been trying to connect the dots for a long time. And we're not going to stop now.

That doesn't mean we always get the dots connected in the proper way. But we keep at it anyway.

Now, back to the excavator. We had decided to put in a "cool tube." You see, when we are not trying to figure out how the dots should be connected, we are usually at work connecting other things or repairing the connections we put together years ago. One of these projects - which we put up about 25 years ago - is an architectural marvel. It is a ferro-cement, partially underground house, in the shape of a football helmet. We can confidently tell you than no one ever built such a house before. Nor has anyone done so since.

Imagine a football helmet, with the visor made of south-facing glass, and the rest of it mostly buried in the dirt. Inside, there are three floors, with an atrium in the front, behind the glass.

The sun warms it. The earth cools it. It is extremely energy efficient. It needs no heating...and no cooling. Modern economists - who believe people become richer by consuming, rather than saving - are appalled by it. Not only does it need no energy, it needs almost no maintenance, because most of it is buried.

It is 'green.' Well, the walls are green...because the warm, moist air of Maryland summers comes in and licks the wall with its wet tongue. Result: green slime.

What to do about this? Cool tubes. They take in the it 6 feet underground, where the humidity collects on the cool pipe walls, and then brings the dryer, cooler air into the house.

Will they work? We don't know. But we'll let you know when we find out.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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