Policy / Uncategorized / World Situation

Economics: Science or Astrology

I have been having been thinking a great deal about economics. The market crash of 2008 was my inspiration to understand more, that along with a series of discussion with my son, Asher, who is the Executive Director of the Post Carbon Institute. It was Asher who introduced me to the work of Chris Martenson and in particular his Crash Course on Economics which I highly recommend. The more I learn about economics the less I understand. I have also begone to question the ability of economist to predicate the future (of course some will get things right sometimes but that may be the result of the lows of probabilities).  I have more faith in the long term weather reports.

At the same time, I have been giving a lot of thought to the difference between intuition and analysis. Those of you that know me, know that I am governed more by my intuition than my ability to analyze things. I think analysis is great for understanding the past but not the future. You can read about how I used intuition in my business life here. For me intuition really has to do with trusting that part of our mind that is not conscious. It is trusting our ability to see patterns and to solve puzzles. I good example is how one might try to do an actual puzzle. You could try to use analysis to figure out what the puzzle represented or you could try to put the pieces together. And in doing that you would find pieces that fit together starting with the pieces that might be candidates for the corners. As you got clumps together you would try to arrange them. At some point you might think, wisely, that you should just stare at the board and hope that some imagine would appear. Once you saw the imagine, putting together the pieces would happen rapidly.

So here is the problem with economics. The people that practices are trying to be rational. They are using analysis to build models. But the best people at predicting might not even know why they believe that certain things will happen. I know many people that manage money that just go with their “guts” . But they could never really tell someone that. They would have to put together a story the supported their feelings.

It is a shame that we do not trust our own intuition. Maybe we could actually solve some problems if we did.

3 thoughts on “Economics: Science or Astrology

  1. Thank god for your insights, Avram.

    I have a friend who told me that “intuition is bad” and that “unless it can be evidenced with hard figures, predicting the future is risky”.

    Like you, I see patterns and can “feel” trends. It’s taken me from the PC wave to the Internet wave to the mobile wave and beyond. That being said, I’ve always felt inferior because of the above remark, even if my friend has failed many times while I’ve succeeded (I think he’s a really smart guy and they may be my problem).

    Now, I have renewed confidence in knowing that I’m not the only one.

    You have been, and always shall be, my hero!



  2. I find the connection between how and what we think, rather than the linear content of thoughts to be more influential than many people realize. When I lived in New York, I spent a lot of time watching the news, mostly CNBC, because my boyfriend was in finance. He would spend a lot of time going over theory, definitions and possible outcome scenarios, but we could never establish a definitive answer or predictive theory as to why people invest the way they do. Much of that behavior seemed arbitrary and based on following other’s behavior.

    After a great conversation with one of my design clients, he expressed that he was so glad to be able to actively participate in the design of his spaces with me, as he just learned how to look at space not as a map divided into quadrants, but as volume, which can be occupied by color, mass, light and/or emotion. It was a great A-ha moment for me, and I think there is much to be said about intuition as the doorway into understanding that our thoughts have a volume component, and conversely that is how things like the Economic crash of 2008 can happen. Like a herd running in a field- if one gazelle spooks because it spies a leopard, the entire herd can stampede. If they all had the ability to think: But wait, I can run in another direction and my chances of survival are still great- but no- instinct teaches to safety in numbers. Intuition teaches the importance of understanding HOW we occupy our minds, and the greatest asset is the ability to trust that.


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