Thursday, August 6, 2015
INQUISITION 11: On Changing the Course of History
'It is amazing what you can accomplish if you do not care who gets the credit.' Harry S Truman
"The past is never dead. It's not even past," William Faulkner
ATOM BOMBS AND ECONOMICS
My generation was required to practice 'duck and cover' drills in elementary school to prepare for an atom bomb attack from the Soviet Union. Air raid sirens would sound and we would crawl under the desk for a few minutes. Later in the day we would go to the auditorium and watch movies showing the vaporizing of buildings and mannequins representing people, including teachers at a blackboard and children like us sitting at our desks.
In one of the Terminator movies, Sara Conor has a nightmare of children being vaporized from an atomic blast. Lots of kids had that nightmare.
After graduating college in 1963, I went to graduate school at the London School of Economics and studied the Soviet Union to see if they were about to bomb us. Or, if we were not going to be bombed, would Communism take over the world?
FAILURE OF THE COMMUNIST ECONOMIC SYSTEM
After two years and an M. Sc. (Econ), my conclusion, and the conclusion of many other academics, was that the Soviet Union's economic system was not capable of creating both military power and civilian prosperity simultaneously. Further, it was clear that both military might and political influence require a prosperous economy as a foundation. The Soviet Union was simply not capable of producing both things due to its badly designed system of central planning and collectivization enforced by mass murder.
The corollary conclusion is that sustaining military strength and influence requires economic strength; a system which devotes too much of its economy to military power will lack the long term resources to maintain that power at an effective level.
Those conclusions were not popular at the time since the received wisdom in the United States was that Communism was an imminent threat. To counter that threat, the United States was required to build a massive military. Nevertheless, I relayed that conclusion to a person of some influence in conservative political circles in 1966.
Over the years, the Soviet system gradually weakened and eventually collapsed in 1991; it was replaced by the Confederation of Independent States (CIS). The final straw in that collapse was probably Ronald Reagan's aggressive posture in confrontation with the Soviets. The most likely spur to Reagan was his apparent conviction that the Soviet system was weak.
MODEL OF CHANGING PERCEPTIONS WITH WAR
Another similar series of events involved World War II. The Japanese attack on Pearl Harbor in 1941 changed the perception of everyone in the United States. We went from a country seeking peace to a country determined to enter and win the war. It has been argued that Franklin D. Roosevelt as President made a decision to delay entering the war until the mood of the country changed in favor of war.
Apparently, it is possible to change the course of history by changing the dominant perception of events. Many writers have explored this topic.
When one consciously tries to change events by changing perceptions, it can be called 'propaganda'.
But, it's 'propaganda' only when it is obvious and crude.
When the event which changes perceptions is not noticed as a change at all, it is more effective.
THEORY OF CHANGING PERCEPTIONS DELIBERATELY
When an organization or person wants to change events, then he needs to change the basis of the thought by which people make their decisions. To be effective, the generally held perceptions are altered so that the decisions people will make are more favorable to desired objectives.
The question becomes how a person can change the way people perceive reality so that they will reach the conclusions wanted by the person creating the changes.
Of course, that is not to say that every change in perceptions is caused by some evil genius, but it is to say that some of the changed perceptions are created deliberately.
From Keynes: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back... soon or late, it is ideas, not vested interests, which are dangerous for good or evil."
-- John Maynard Keynes, "The General Theory of Employment, Interest and Money"
DIRECTING PERCEPTION CHANGE TO THE COMMON GOOD
My goal is to change the way the world thinks about economics so that more people will be better off materially. One of the failures of Classical Economic Theory as proposed by Adam Smith in 1776 is that it creates an economic model which explicitly excludes any concern for the welfare of individual people. Keynesian theory partly addresses that deficiency by providing instances when the government is required to intervene in the economy to avoid extreme human suffering as was seen in the 1930's.
The more recent Nordic economic model extends Keynesian government interference in the economy to the individual level; governments which adopt that model take responsibility for individual health care, education, employment and housing by raising taxes on wealthy citizens to pay for a better life for the population.
One of the requirements for both the Keynesian and Nordic economic models is that the economy must grow in order to provide for more people. Since the population constantly increases, the amount of material goods required to avoid misery also grows every year.
Economic theories about growth have been inadequate to address the real problems of providing for more people. The most recent significant theory was proposed in the 1950's and is no longer adequate. Previous theories of economic growth rely on capital accumulation to create growth. They assume that employment would grow if the GDP grew.
In 1995 I created a list of economic policies which can be followed by any country and which will ensure economic growth. The stated purpose of the policies is 'the betterment of humanity through the promotion of sound economic policies.'
The basis of the policies is to create as many jobs as possible. Thus, it is called the "Jobs Theory of Growth" and can be read here http://www.mkeever.com/apply.html
Effectively, it is a new and different economic theory of economic growth.
Students in my economics classes have the option to write an analysis of how well their home government performs on each of the 34 individual policies, which are designed to ensure growth. I publish their country analyses on my website here www.mkeever.com. Currently, there are nearly 60 analyses of individual countries prepared under my direction on the website.
Perhaps some countries may be persuaded to change their policies affecting economic growth when they face the probability of receiving a grade on those policies.