Wednesday, May 30, 2012

A Ramble on Value & Growth

I've been thinking about Quality & Value lately. Inevitable when you're reading Pirsig (ZenMM & Lila - I'm currently a few chapters into Lila). Today when selecting music to play whilst doing domestic duties I came across this:


Now, it's not bad. Obviously accomplished musicians, good voices etc. And the blonde lady is very attractive. But there seems a vast difference in Quality when you compare it to this.


There's nothing that really lends itself to objective measurement about why one is higher Quality than the other. It could be about an authentic connection to the song? Whatever, it's all subjective. And yet there it is. A feeling for me, at least, of a tangible difference in Quality. And weirdly, it's not even really in what you hear or see, it's just there in the moment. I could watch Candice Night all day long, and it wouldn't really matter if Ian Gillan had hit bum notes, the Deep Purple video would still be of much higher Quality. I'd even hazard a guess that everyone in the Blackmore's Night video would agree with this. Even Richie Blackmore, himself.

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I've mentioned in a previous post the connection I perceive between Pirsig's conception of Quality (or Value, if you prefer - Pirsig says they're the same thing) and my conception of Money. I wonder what the relationship is between the difference in Quality of these two videos and the increase in Value that we associate with economic growth - not in mundane sense (as in which one sold more t-shirts or recordings) but more in a metaphysical sense; what is the relationship between Quality in music and Growth.

I nearly considered this issue before in my dissertation (here's a revised more reader friendly version of it). But I chickened out that time - there's only the very slightest reference to it. Let me try to make the idea more explicit, now.

People get used to using and seeing the term Economic Growth - they see it as a pretty solid thing. A proxy for a change in our general sense of well being. Of course, it's not solid at all. GDP - the most common measure for economic growth - has been referred to as an empty abstraction by the Austrians. And those on the other side of the fence aren't too keen on it either. I remember TFP (Total Factor Productivity) being a popular alternative measure of growth when I was studying. But there's also HDI (Human Development Index), ISEW (Index of Sustainable Economic Welfare), and even GNH (Gross National Happiness). All of these try to measure something to do with the change in the Quality of our life.

It's important to remember that the measures aren't it. They're not actually the thing. They're a way of getting a handle on the thing. I thought music might provide a glimpse of the thing itself. A whisper of the truth that underlies this improving Quality that we experience as economic growth.

In my mind a new musical genre is an increase in Value - or more precisely, it is an expansion of our experience of Value. Recognising genres helped to put those changes in Value in a time frame which allowed me to look at what was happening in the market for music when a particular genre was born.

Of course, the harder you look for music genres the more of them appear. And consequently it becomes harder and harder to see their Value. The growth that seems so clear when you look at the development of Rock n Roll from its Folk and Blues roots is much harder to see in the development of Grindcore from Industrial Metal and Hardcore Punk. Although granted, proponents of Grindcore may argue otherwise.

I don't think I was successful in trying to expose the relationship of new genres to economic growth. Nevertheless, I still think it's there. I can still feel it. I still think I can sense it in the difference between two performances of the same song (as above). But I couldn't tell a believable story about it. I couldn't find a way round the problem of subjectivity vs objectivity. I've since discovered, of course, that Pirsig has a lot of interesting stuff to say about this.

So, this thing - this economic growth, money thing, quality, value whatever you want to call it - has been on my mind for a long while. And I do tend to see it wherever I look.

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I took the dog for a walk after I'd watched the music videos. It was a beautiful day. Sunny with a warm summer breeze. I stood on the top of a hill, on one side of a valley and looked down across a field of wheat. Still green. I could see it shimmer in the sun as the wind skipped across it. I watched waves ripple through the field as the wind blew down along the valley. It looked and sounded like the sea. Wheat needs wind. Too much can flatten it and in the commercial production of wheat wind is viewed as a bad thing. But without it wheat wouldn't exist. Nor would we, of course.

I imagined each sheaf of wheat as a person - in fact, as an economic agent - being tossed to and fro by the winds of economic change, striving to grow in the face of uncertainty. It seemed like a good analogy and I wondered how 'economist-wheat-sheaves' would explain it.

[ Now you may say that biological growth is very different from economic growth (or the increase in Value that I tried to explore through music genres). But I'm not so sure. Wheat grows in relation to its DNA, the resources of our planet, and *something else*. Its tempting to believe that science explains everything completely. But it doesn't. Even for something as simple as Wheat there are many mysteries. Depending on what you believe, that *something else* can be God's plan, a morphic field, or some other explanation for the unexplained. For me, that *something else* - the unexplained bit - has to do with Money, Value, or Quality - a type of resonance to which we and wheat seem connected (I'll admit, that does sound close to both the morphic and the godhead explanations). ]

Let me leave that there. So, the economist-wheat-sheaves.

When I look down from my privileged position on the hill, it's immediately apparent that economist-wheat-sheaves are subjective. They're are right down there amongst the rest of the wheat.

There'd still be a whole bunch of wheat that regarded the wind as divine. Not the economist-wheat-sheaves of course. The only belief common to them is that they're sheaves of science. The Wind is divine ! Pah ! Wind is made of Air. Therefore it is our actions upon the Air to which we must look to explain Wind. The origins of how the first Wind was invented are a bit of a mystery. But great wheat-sheaf-economists of the past had looked hard at this question, and decided it wasn't important.

Things had moved on. Theories had been worked out. Positions established.

The Austrian-Economist-Wheat-Sheaves (AEWS) see each sheaf bowing and bending according to its own will and in response to the actions of the sheaves around it. The air is neutral; wind is a result of the millions of tiny movements by individual sheaves. Hence wind is a resource limited by the bending and bowing, the whims and desires, of individual sheaves. Too much wind is just an indication that the sheaves should stiffen up, stop all this reckless movement before they fall over completely. It's unfortunate that some do fall flat but for air to be in equilibrium, actions must have consequences.

Modern-Monetary-Wheat-Sheaf-Theorists (MMWST) also see the wind as created by the movement of the sheaves themselves. They call it endogenous wind creation. But they wouldn't regard the air as neutral. If wind is created by the movement of the sheaves, then the air must be too. It's actually a lack of wind that causes sheaves to fall over. If the wind blows from the south they'd say, what we need to do is encourage more wind to blow from the north. To do this we must create more air. And air is really just still wind. So we can avoid sheaves being flattened by coordinating the efforts of all sheaves to make counter-veiling winds.

The Austrians would mock the Monetarists. They'd ask by what right do they seek to curb the liberty of each sheaf to bend and bow as it pleases. Coordination, they'd claim is just another word for slavery. The wind is theirs, individually. It was created by them individually and each individual is in the best position to know how to move. The Monetarists would call the Austrians cruel for ignoring the plight of those sheaves flattened by the wind. They'd say that the prospects for the field as a whole would be better served by the community of sheaves helping the individuals to bend and bow in the right way - to benefit all. The Austrians would be aghast. How do you know what is the right and what is the wrong way to move? they'd ask. If sheaves make mistakes in the way they move the wind punishes them. Its natural, they'd claim. Of course the Monetarists wouldn't see it like that at all. The 'natural' thing to do would be to help a neighbour in trouble.

In the middle of course would be the pragmatists. The Neo-Classical-Wheat-Sheaves (NCWS). Having identified AEWS and the MMWST as the outliers in the sheaves' dualist experience of the world, the NCWS would win over opinion with an appeal to monism and moderation. Forget the purity of thought of the outliers, they'd say, the world in which we wheat sheaves grow is not perfect. What we need is an explanation of events that is resilient enough to reassure us, yet flexible enough to adapt to circumstance. And so they'd say 'probably' and 'it's likely that' and 'on balance' and they'd get lots of letters after their names. One or two would be awarded the Nabisco international 'Prize in Economic Sciences'. The highest honour accorded to any wheat-sheaf-economist. The general populous of sheaves would hear their reasonable tone, be impressed with their credentials, and generally be too busy swaying and frowing in the wind to worry too much about the theories of the economist-wheat-sheaves. So the outliers would be dismissed by most of the wheat sheaves. Only when a storm hits would they think about the wind again, for a moment. Then when a still day came once more, they would just bask in the sunshine and grow.

From up here on the hill though, you can see that they're all wrong. You can see how the wind flows over and through the wheat. And that although each sheaf does move like its neighbours, the wind is really what moves them all. It's a force they cannot control. It's not of their making. Rather, it has made them.

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I go back to those wheat fields often. In a few weeks I'll be there and I'll no longer be able to see even the tip of the dog's tail wagging as she chases the birds who hover above the fields. The wheat will have grown tall and turned to gold. 

I was reading something the other day that suggested that surplus wheat was our first real commodity. That it was instrumental in our creation of the idea of debt and credit - and so, of course in the birth of money. I'm not convinced of that, myself. I think that's a bit like thinking that we make the wind, and that air is just still wind.

Pirsig's way of expressing 'science fact' is illuminating. This is how I think he'd express the 'facts' about wind using his Metaphysics of Quality:
The air in a high pressure area values movement towards a low pressure area.
Anyway this has been a long and random ramble through Value and Growth. I was intending to take a look at uncertainty along the way and then stop off at morality. Remembering of course that economics itself was born as a 'Moral Science'. But I've gone far enough already. Morality is a tricky one anyway.

Sweet child in time, you'll see the line.
The line that's drawn between good and bad.
Blackmore, Gillan, Glover, Lord, Paice Child in Time (1970)

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