Market Reductionism

Thur Sep 30 08:21:13 1999

Hello Nancy,

Apologies for the delay in replying!

You are quite right. For the most part Economics - certainly in Western interpretation -predominantly represents the understanding of the Upper Right quadrant.

The free market approach is heavily based on individual behavior of consumers, producers and markets. The collective is then viewed as the aggregate of these individual units which leads to a very reduced notion of the collective. This simply represents the conventional scientific bias where wholes are not properly distinguished from their constituent parts.

Of course economics behavior is necessarily based on (interior) psychological assumptions. However because a direct correspondence is assumed as between interior assumptions and exterior behavior, then the interior aspect can be effectively ignored with a merely objective treatment resulting.

So Left-Hand is heavily reduced to Right-Hand understanding in Economics.

My key point is that reductionism necessarily takes place whenever we pursue a scientific analytic mode of inquiry. By its very nature it is not suited for dealing with dynamic interaction and therefore must freeze such interactions in interpretation.

So in conventional Economics, the Left-Hand is reduced to the Right-Hand (in horizontal terms). Economics is thereby understood as an objective study of (externalized) relationships

The Lower is reduced to the Upper (in vertical terms). The whole is understood in reduced terms as the sum of its individual constituents.

Finally the spiritual (emptiness) is reduced to the material (form) in diagonal terms. So Economics is understood in impoverished terms as a materialistic understanding of human behavior.

Though Ken Wilber rightly points out the need for a balanced four quadrant approach, his own thinking is surprisingly analytic and thereby not suited for properly achieving such balance.

Truly dynamic understanding requires a very different synthetic approach, which is inherently bi-directional in nature.

One fascinating example of this dynamic approach is represented by the economic contribution of Karl Marx. He was very influenced by the dialectical thinking of Hegel and applied it in a specifically materialistic context (i.e. dialectical materialism).

Though his thinking and categories were in many ways flawed, at least he attempted to portray Economics in dynamic evolutionary terms. Thus he was able to provide a far more convincing explanation of the business cycle than the conventional thinking of the time!

The failure to deal with the dynamics of the business cycle (in the movements between booms and recessions) in itself is due to reduced collective notions. According to the conventional wisdom (before the 1930ís) what was required for the overall economy to function was to ensure that the individual markets were performing smoothly.

Keynes showed in 1936 that this is not sufficient and that macroeconomic intervention (through the Government) in certain circumstances is vitally necessary.

However whereas his suggestions were successfully adopted in pragmatic terms, at an overall ideological level, the belief in the efficacy of individual markets remained. Even in theoretical terms Keynesianism has now been absorbed in a neo-classical approach (that really represents a return to the old individualistic philosophy). Indeed the belief in market Economics has probably never been greater following the collapse of Communism at the start of the 90ís. However this Economics (based on the free market approach) is deeply flawed and impoverished and greatly lacking in genuine dynamic appreciation. It still very much represents the understanding of the Upper-Right quadrant.

Interestingly Marxís contribution subsequently led to a somewhat rigid Lower-Right quadrant approach. Thus in the Communist system, the collective is primary and the individual complements are defined in relation to the collective whole.

So both free-market Economics and Communism operate Ė in effect - on different versions of whole/part reductionism.

In the free market, the whole is reduced to the individual part; in Communism, the part is reduced to the collective whole. What both are clearly lacking is any true dynamic appreciation of the two-way relationship as between parts and wholes (and wholes and parts).

However in other respects the free market and Communist ideologies are quite similar. Both attempt to reduce the interior to the exterior aspect of behavior; equally both attempt to reduce the spiritual to the material aspect.

To conclude Nancy I would like to once again re-iterate the key point, which I believe has been entirely missed in discussion of Ken Wilberís work.

Ken does of course talk at length about holons, evolution, development etc. However dynamic interactions cannot be properly translated using the analytic method of translation (that predominates in Kenís approach). The present reduced interpretation of economic behavior is adequate testimony to the limitations of the analytic mode of inquiry.

Best wishes,