Thursday, June 14, 2012

First Stab at a New Book: The Matrix: The Conjunction of War, Economic Theory, and the Economy

Vincent Portillo, a colleague, will join me in putting a new book

together. We only have 10 paragraphs to show for our effort, but any

comments will be very much appreciated. Getting an introduction down

is important, not only for communicating with readers, but for sorting

out our own ideas. Thanks.

This book is an exploration of the complex and fascinating

interactions between war, the economy, and economic thinking. Whether

you realize it or not, a complex Matrix resulting from the

interactions of war, economics, and economic thinking creates a

powerful force field that affects almost everything you do. This

force field, not unlike gravity, is both pervasive and invisible.

However, the effects of the Matrix are unpredictable. In a world

vulnerable to the possibility of serious destruction as the result of

both military and economic miscalculations, taking account of this

Matrix is imperative.

The effects of the Matrix are far more complex than those of gravity.

Obviously, an engineer designing an airplane must take into account

the force of gravity to avoid future calamities. Complete command of

the necessary scientific knowledge and care in the building of the

plane is insufficient to guarantee future safety. The human interface

creates an ever-present risk once pilots, mechanics, and air traffic

controllers take over responsibilities for the plane.

A far more intricate network of human behaviors interacting with the

Matrix leads to pervasive uncertainty, making the challenges of

responding to the Matrix are far more daunting than the

straightforward responsibilities of those who are responsible for the

plane's safety. The Matrix presents another dimension of

complications. If a pilot flies into a mountain, the immediacy of the

consequences makes interpretation of the event fairly simple.

In the case of the Matrix, choices today may set off a chain of events

that may have important consequences years or decades in the future.

Looking back to identify a single -- or even a small set of events as

the cause is very difficult. After all, events occurring in previous

millennia still remain the subject of ongoing debates among

historians. To make matters even more complex, the Matrix can cause

contradictory outcomes.

Here again, the human element comes into play. Any attempt at

identifying causality comes up again the tendency to understand the

sequence of events in light of pre-existing ideas or ideology.

Consequently, one must exercise extreme caution in any attempt to

manipulate the Matrix. Nonetheless, the risks of doing nothing are

even more dangerous, considering the potential dangers or perhaps even

likelihood of environmental, economic, or military disaster. Actions

to prevent cataclysmic outcomes require great care, backed up with a

relatively holistic perspective.

Economics occupies a special place in this intricate Matrix with

economics serving as a bridge between the other two principals of the

Matrix: war and the economy. Almost unintentionally, in the

seventeenth century, modern economics developed to a large extent in

response to questions raised by the needs and the consequences of


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