Blind spots of economic policy

About the theory of parallel worlds and the necessity of de-ontologization of reality

One cannot speak of the sea to a fountain frog, it does not see beyond its hole. It is impossible to speak of ice to a summer fly: it only feminizes its season. One cannot speak of the dao to a schoolman1: he is walled in his teaching. Now you have ventured beyond your shores to take a look at the rough ocean, and have realized your own poverty: therefore you can be told of the rough order. Zhuangzi2

they still shine, although they have long been extinguished. The sparkle of an exotic corpse

We do not see that we do not see.

Humberto maturana

The ideas of economists and philosophers of the state, whether right or wrong, are more influential than is generally amed. In fact, the world is dominated by not much else. Practitioners who believe themselves to be completely free of intellectual influences are usually the slaves of some defunct economist. Madmen in authority, hearing voices in the air, draw their wild insanity from what some academic scribe wrote a few years earlier. The ideas that state officials and politicians, even agitators apply to current events are probably not the latest. John maynard keynes, 19363

Yes, practically every nonsense that has ever been said about capitalism has been championed by a specialist national economist. Joseph a. Schumpeter, 19934

How economy works and how economic policy works cannot be said objectively. Economy does exist as a real system. However, the egoism of the systems corresponds to a narcissism of their theoretical constructors. How can the economist know that his knowledge is in accordance with the things of the world he calls economy?? He cannot. He constructs an economic world, his world, whose reality is undeniable. But others construct others, their worlds: economy as multiverse.

We contrast theoretical approaches with economics. Everyone constructs the economic world in his own way. Everyone operates within self-constructed intellectual barricades. Everyone is blind to the insights of the other paradigm. A paradigm survives because of the blindness of its adherents, not of its theoretical qualities. Everybody makes the imaginary model his instrument of explanation of the economic world. The world as he sees it becomes his normal world, the norm that excludes to reflect on other norms. The logic of the blind spot. We are in the role of an observer who sees what others do not see, what others cannot observe, for which they are (theoretically) blind. The view of the one who sees with the help of them cannot be seen by himself. He does not see that he is blind to the things he cannot see with his glasses, as long as he has his (theoretical) glasses on. What we observe is not the economy itself, but the economy as we observe it (through our theoretical glasses, with the help of our instruments).

The table below shows theoretical views, theoretically controlled possibilities of construction (invention) of economic worlds. This "inventions" include certain economic policy concepts and action parameters. What the table does not say: a certain phenomenon – for example competition or innovation – appears only on a certain level (in a certain paradigm). What it says: the respective phenomena – competition, innovation – are generated theoretically in a certain way and are processed accordingly in terms of economic policy. Neoclassical innovation policy (second level) is raised differently than in the schumpeterian paradigm (third level). Every economist knows about human capital. This does not mean that he thinks and acts (in terms of economic policy) within the framework of an evolutionary paradigm (fourth level). A schumpeterian makes (proposals for) a different monetary and fiscal policy than the council of economic experts.

Another thing to consider. Aus den erklarten wirtschaftlichen vorgangen werden grundsatze abgeleitet, um die wirklichkeit im sinne der jeweiligen erklarungslogik zu gestalten. If the politicians and advisors keep to these rules, a world can actually emerge as constructed by the model. Reality is the feedback construction of the paradigmatically standardized brains. Thus, in order for the world to change, it is not the paradigms that must change, which they cannot, but rather the people who handle certain paradigms.

Although the world is constructed, no objective reality exists, a world arises, which can correspond to the theoretically invented reality. A central bank increases the money supply according to the potential growth plus the inflation rate of the economy. Her theory tells her that this growth amounts to 2 +1 percent. As a result, the economy grows only slightly because it lacks liquidity. The central bank creates the invented reality.5 subject and object become one. Co-production:

Himmel und erde sind zugleich mit mir entstanden.

Zhuangzi

We can understand the table in two ways. First in the sense just explained. Theoretical points of view compete for the explanation of empirical phenomena, often of the same one. Some phenomena fit better into this theory, others better into that, etc. The table then shows different approaches, each blind to the other (we give examples below).

It is also hierarchical. A (deeper or more fundamental) approach overcomes the preceding one and incorporates it. The integral depth of the paradigms increases. The lower is the foundation of the higher (here always as the "deeper" in the sense of more basic, more comprehensive, understood), and the higher includes the lower: hierarchical syncretism.

At least as far as economics is concerned, i claim such a hierarchical, also evolutionary unfolding linkage.

Paradigms of economic policy concepts

A higher level is, in the sense of arthur koestler, andrew smith and ken wilber, a more comprehensive holon6 that operates with its subordinate holons and transcends them in it. It can thus negate the particularity of the respective lower levels or stages, but preserve what is theoretically reflected by them. She can unite opposites and connect seemingly irreconcilable things.

Let us imagine the theoretical system of economy as a holon. It has evolved in time. In the process of this evolution, earlier theories are integrated into a new, deeper holon. In this sense there is theoretical progress. Problems previously theoretically impossible to get rid of – and also problems co-created by the old, more primitive theories – come into the theoretical horizon. If the theories are good, they are also more competent to solve problems. If they are not, the theoretical evolution stagnates. In my opinion, the theories described in the table form such a holarchy of problem-solving competencies. The deeper level is therefore less dogmatic or gets along with less dogmatism and power for its scientific legitimation.

The theoretical approaches are therefore not only next to each other, but rather above/below each other, whereby one theoretical view is not only deeper than another, but includes the higher (less deep) one. This means that the lower levels do not simply disappear when people ascend to a higher level (in ken wilber’s logic) "deeper") ascending the level of its existence. The (theoretical) development rather follows the law of inclusion and transcendence. The upper level (the "deeper" theoretical system) contains the lower levels as its components or elements. It is therefore a matter of transcendence and not transformation.7 the levels are related like nested russian dolls or chinese boxes: the coarser one contains the smaller one, but it is not the smaller one. It is a completely independent theoretical system.

While at each level the blind spot obscures the view of the theorist to what he cannot illuminate, the spot does not remain immobile in the scientific space. It moves – from level to level. But not randomly, rather following the laws of holarchic evolution. The problems not solved above are passed to the deeper (more comprehensive, more integral) level.

Therefore, from this logic, it is not possible to say that the different schools and theories approached the economic reality and the economic man from different sides. They approach different levels of economic being and entrepreneurial consciousness from different angles. I can not do otherwise. One must block out what the other observes. The theorist and "practitioners" (keynes) operates selectively blindly. He could only successively observe or theoretically construct other realities. Each approach defines ("sees") another normality.

For the neoclassical economist, the economic slump is an accident that disrupts equilibrium stability; for the wave theorists kondratieff and schumpeter, it is the normality of capitalist development8 "accident", i remove capitalism. Who is on the way, say laozi and zhuangzi, goes through cycles of death and birth. If i remove the wave, i erase with it the way of life.

What the theories do is theoretically explore and construct the various levels of the economy. Thus, understanding that the different theories and therapists address different levels of the economic world and the economic consciousness of its actors, we can also listen more patiently and open-mindedly and learn to understand what each one has to say at its particular level.

Theoretical tolerance in this sense includes the statement that the economic universe cannot be perceived in its totality. Theoretically constructed parallel worlds exist. Fish, as the chinese proverb says, cannot live in pure water.

Example: without production factors and consequently historically occurring accumulation processes (1. Level), there is nothing to optimize (2. Level), runs the schumpeterian recombination (3. Level) and is in the system economy an increase of innovation ability (4). Level) functionless and meaningless. On the other hand, the development economy does not need growth. As schumpeter says, who in his theory integrates all less deep levels; because even then there are still "economic development, if all these moments [of the less deep theoretical levels] were missing."9 it also follows that development is not evolution.10

From the "deeper" level: without competence development, the innovation system becomes a victim of the law of diminishing innovation returns (given capabilities). Those who do not recombine are passed through to the equilibrium and optimum, must familiarize themselves with the law of the falling rate of profit, or can only gain further profit and scale potential by tapping new (international) sales markets and by monopolization and expropriation: learning from karl marx.

A system – any system, not only any economic system, but any other system – that at any given time exploits its possibilities as advantageously as possible may nevertheless be inferior in the long run to a system that does not do so at any given time, because its inferiority may be a condition of the level or pace of long-term performance.

Joseph a. Schumpeter, capitalism, socialism and democracy, 1950

"Wie das?" fragt der wirtschaftstheoretische laie und dem mba und universitatscontroller strauben sich die haare. Totally crazy from the logic of level 2. Whoever says something like that in the exam can forget about his diploma. What schumpeter formulates here is the non-conflict transition from one stage of functioning of the system economy (optimal use of resources) to a "tieferen" ebene innovativer reproduktion mit (zunachst) gegebenen ressourcen.

From the second-level input logic, misallocations are systemic imbalances. As a rule, self-repair no longer takes effect, the state intervenes, the controller ensures the operational efficiency of the university and the health insurance fund. The opportunity costs of such – from an allocation-logical point of view – reasonable measures are, from a development-logical point of view, the death or the non-birth of innovation. Danger: optimizing the wrong things. Doing the wrong things right. In other words: the systemic cost of the blind spot of one level is the non-realization or. Cancelled evolution of the respectively "deeper" level.

More elegantly put by the daoist philosopher zhuangzi two and a half thousand years ago: "from the moment of birth, death begins at the same time, and from the moment of death, birth begins at the same time. Every affirmation is the negation of something else, and every negation is the affirmation of something else."11 if my ministry affirms controlling (2. Level), it negates creative research (3. Level) – and vice versa. The rise of the optimized university is the decline of the scientific entrepreneurial university. In simpler terms, you cannot have everything (at the same time). "There is no free lunch." (milton friedman).

If one persists in of a theoretical level, you don’t see level conflicts. Further examples:

Environment

The discussion of environmental problems shows the horizontal and vertical structure of the blind spot. The intuitive-theoretical entry into ecology is the first level. Overconsumption of resources, absorption capacity of the environment, overuse, ecological limits to growth, club of rome, sustainability, buzzwords of this level. For the second-level economist, a theoretical tragedy. Malthus and no end.

The markets may not work. But incentives always work. Every child female, dab free good be overused.

The leap to the third level. The kyoto hawk and moralist george w. Bush in his 2003 state of the union address:

In this century, the greatest environmental progress will come about not through endless lawsuits or command-and-control regulations, but through technology and innovation. Tonight i’m proposing $1.2 billion in research funding so that america can lead the world in developing clean, hydrogen-powered automobiles. A single chemical reaction between hydrogen and oxygen generates energy, which can be used to power a car — producing only water, not exhaust fumes. With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom, so that the first car driven by a child born today could be powered by hydrogen, and pollution-free.

The first level observer takes mr. President his "naive" optimism not off. Too short thought. You throw a boomerang (an innovation) into the air, it flies back – and strikes you dead. The growth compulsion of the capitalist economy, the compulsion for expanded production and reproduction and with it the increasing burden on the natural environment cannot be compensated by technological innovations. Not to mention the massive resistance of growth interests, which also tend to torpedo the incentive solutions of the second level. Ethicists love the first level. Finally something that kant fits one hundred percent. Since kant, the decisive principle of morality is: a behavior is not moral if it cannot be generalized. The conclusion, as the philosopher enlightens us, is obvious:

If everyone lived the way people in the west live, the earth would collapse within 20-30 years… From this follows something very simple: that our lifestyle is immoral.

And then the deep blow on the ethical kidney:

The central principle of the ecological economy – the concept of carrying capacity – is not able to prove that economic growth cannot be sustainable. Ecological economics [first level economics] is unable to demonstrate a single scarcity of natural capital, which knowledge and ingenuity are unable to mitigate.

Mark sagoff, 1997

Wages and employment

The i-incorporated company is a child of the first and second level. Arbitrage and allocation, approach for routine reasons. The employment office finances a wage fund (first level) for three years to help an unemployed person to start a self-employed existence. Why not use the money that we have to spend anyway to build their own existence? The founder sets his own hourly wage. He sets his own working hours. Minimum wage and protection against dismissal no longer exist. An allocation paradise. "The basis of everything else, is just on the ground free work possible."12

How can such a thing work? Can someone with 800 euros per month in the first year (in the following years less) – and he mub of it also live – to found a company? Can he use this money to create a new combination? He can get purchasing power. Where from?

From himself. Self-exploitation (first level). He reduces his entrepreneurial wage to the subsistence level. He gets nothing from the bank. Maybe through a 3f-network (family, friends, fools). The more innovative his project, the more difficult it is to mobilize financial capital. Without innovation he will be out of the market tomorrow. What is missing: seed financing for the ich-ags and similar constructions. Let’s go one level deeper: competence, not only technical, but also interdisciplinary, soft skills. Without entrepreneurial skills – game over. Where and how does he learn these – if he doesn’t already bring them with him. Who already brought them is rarely unemployed.13

Each of the approaches thus has something to offer. Let us therefore invent the integral ich-ag.

Wages and unemployment are a topic without end. The second level (council of experts): wages are too high, not differentiated enough by industry, region, etc., flexibility is lacking, please stick to economic reason (on average no higher wages than the increase in productivity) etc. "No one knows where the six million jobs that are so urgently needed will come from."14 no one? The author correctly corrects himself: "what really needs to be done can be read in the recommendations of the economic experts since the 1990s." also this "wisdom" is unfortunately a theoretically constructed. On one eye she sees sharply, on the other she is blind.

Reason, of course, always applies only ceteris paribus. As shown by the example of a certain henry ford, who was declared insane, who put double ($5 per day) into his workers’ pay envelopes overnight. Ford: "one of the best measures to reduction of the costs we have ever made."15 the second-level manager believes he has optimized everything. No room for improvement. Ford’s entrepreneurial activity follows the japanese kaizen philosophy with its basic amption: at the present moment an activity is never satisfactorily carried out. Always there are possibilities of improvement. No equilibrium, no maximum, no optimum.

The example of henry ford shows the relevance of the theory of parallel worlds and the necessity of a de-ontologization of reality. What henry ford does can be construed in different ways, depending on the theoretical lens used. The neoclassical economist – if we negate the exploitation logic of the first level of theory16 – says: ford paid "efficiencyless" (a higher wage increases the intensity of performance) and can therefore reduce labor costs despite wage increases.17 wie konnten nur die hersteller von postkutschen nicht auf eine solche idee kommen? Massively increase productivity and sales through wage increases – but where to put the unsalable scrap??

Blind spots of economic policy

T-model of henry ford

The third level: ford was a pioneer of lean management, practicing what is now considered japanese innovation decades before the japanese. These innovations allow ford to cut the price of its famous t model in half in five years and capture half of the american market. Organizational and technological innovations allow henry ford to increase wages and, despite rising real wages, to demand more workers and retain them in his company

From the point of view of innovation logic, the release of labor (unemployment) is always the consequence of an entrepreneurial imbalance. On the fourth level (evolution), however, henry ford fails miserably. Like many super-entrepreneurs, success clouds his creative thinking. Success leads to failure. He does not listen to other people. His narcissism gets him into trouble. He loses touch with the dynamics of innovation. General motors passes by. Bankruptcy looms. He brings in machine guns to keep his workers in line. "Henry ford has never changed", judges a biographer18 – he failed to evolve himself.

And finally vw brings the 2-liter car on the market, can hardly save itself from orders, and roughly grants its employees a bonus of 100 percent without going bankrupt. How the? Of course, the second level is right: without innovation (d.H. If managers do not do their homework19) there is more work in an open economy only by lowering wages. An economic law of nature – and the road to poverty. Someday, and it won’t be long, we will pay the german worker the same wage as his indian and chinese colleague. Labor remains affordable. What is paid becomes less and less. Poverty (falling real wages) increases ceteris paribus the demand for labor. In the swahili there are no unemployed people. Also in the neandertal, according to recent findings of economic history, such plants should have been unknown. In a modern economy poverty is en masse always not a natural one, but one created by the political class ("voices in the air horendously") in harmony with certain theoretical concepts ("what some academic scribe had written a few years before") artificially produced.

"The teutonic plague"

source: the economist, 15. May, 2003

A member of the council of experts, wolfgang franz, recently published his work "labor market economics" in 5. Edition before. The theoretical and empirical considerations of the author are almost exclusively based on the second level paradigm. Innovation dynamics – "the essential fact for capitalism"20 – (almost) does not exist. Entrepreneurship – a ufo (unknown research object). Corporate foundations – do not occur. From the point of view of the third level, what is theoretically hidden is that which constitutes the job dynamics, the creation and destruction of jobs since the industrial revolution (this is not a criticism of this excellent work).

An economic policy based on the theoretical principles of the second level is considered in germany to be "modern"21 and as a reform target. This may also be true. After all, second-level neoclassical thinking is not "wrong". However, it becomes relevant for a modern economy only and only in connection with considerations of the third level. Flexibility, rights of termination, etc. Indeed make eminent sense in an innovation regime. Under the conditions of a "new economy" – shortening of innovation cycles, increasing global economic integration, entrepreneurial knowledge society – they are indeed indispensable.

The level-2 thinker cheats himself out of the effect of his reform proposals by a theoretically non-reflective linkage to capitalist innovation dynamics. When these are brought into play, worlds of reform open up that dwarf what takes place on the second level, both theoretically and in terms of reform.

The kreditanstalt fur wiederaufbau has set up a demand program "capital for labor" at. If a existing if a company creates a job, it receives a credit. By mid-april 2003, kfw had committed 225 million euros in loans. Euro given. New jobs: 303322 (aming they are new, d.H. Without deadweight effects). Expenditure per job 750,000 euro. There are incubators, which create – via demand of new companies – one job for one hundredth of this sum. With the kfw expenditure per workplace, highly effective incubators could be set up at all 300 german universities and financed for three years. Instead of 3000, we had – via the schumpeter effect – a multiple (perhaps a hundredfold) of new jobs created by new companies.

Prosperity

Where does it come from, how is it produced? Each level gives a different, its, answer. All answers are correct, but incomplete.

How can incomes increase per capita in the long term when the available resources are not not be recombined (the third level question: schumpeter/kondratieff)? Response:

  1. First level: exploitation, primal accumulation, theft, specialization.
  2. Second level: optimal allocation + resource growth; resource-optimized input growth is the most important determinant of output growth.

Historically, these factors have been exhausted for a long time. The east germans (and the south italians) can sing a song about the beneficial effects of this paradigm. Could a stone age economy mutate into a high tech economy with first and second stage influx factors? Never, says the logic of the third level.

After the collapse of the soviet empire, western advisors fall like locusts into the russian foderation (and into the territories of our "brother and sisters") a. What do they have in mind? The second level thinking. What do they deliver?

Blind spots in economic policy
  1. Third level: innovation – income – assets

In germany, house prices have been more or less stagnant for years (see table). As the average family has invested a large part of its wealth in land, a bitter development. What remains after taxes and duties, the banks collect in interest and repayment. The hope earlier: rising value of the real estate, eventually sale, higher loan-to-value, more consumption supported by higher assets (often loan-financed, as the value of the collateral rises), a nice inheritance. No more. You may call it an economic crime. Who are the criminals?

Blind spots in economic policy

If you want to see germany on top, you have to turn the table: house prices 1995-2002

Of course, here as elsewhere in the structural couplings between politics and business, there are no ascribable responsibilities: responsibility diffusion. On the one hand, because the complexity of cause-effect-chains is too high, on the other hand, because such results are not the consequence of personal mistakes – everybody obeys laws and regulations, everybody does his duty. Kant perfected and dialogued with habermas.

Result: almost everyone is worse off. Deontological poverty. Everything is regulated in such a way that no one has to take responsibility anymore. For every decision there is an exculpatory rule. Be it the labor market, be it the market for real estate, be it the decline of the german university, be it lack of innovation.

Stagnant prices of residential property are a huge brake on the economy. Why no demand for real estate? No increase in disposable income to purchase, etc. To finance. Why no rising incomes? No innovation, says the third-tier economist.

"Thanks already, china"

"In general, our costs fall by 15 percent every year", yu yao chang, manager of a factory that makes microwave ovens in the pearl river delta (hong kong hinterland). He claims that his 13,000-man assembly line is eight times more efficient than factories in developed countries:

In europe, people work five days a week, maybe six hours a day. We work three shifts of eight hours each, every day.

To make matters worse, he presents us with this chinese wisdom (cribbed from david ricardo, the inventor of the theorem of comparative costs, 1. Level): "people outside should say ‘thank you already’ to china because we help them save money with which they can buy high value-added goods."23 by the proverbial chinese courtliness, he probably means high value-added health insurance contributions, okosteuer, etc.. He is right.

On the third level, wages (generally costs) naturally play a role as well. But the questions are different: why is the german economy being dragged down in terms of its innovation dynamics?.24 what prevents german managers from doing their entrepreneurial homework?? Those who do not make them will be punished by the market, and with them the human capital, which they optimally combine (on the second level) and keep under control through supercontrolling. And they don’t do it (see table). In the sales structure in the manufacturing sector, stagnation and shrinkage prevail in germany: 51.4 percent of sales go to stagnating markets (year 2002). And in shrinking markets, german managers make 16.1 percent of their sales (see the table showing the structure of sales in germany’s manufacturing sector). Nearly 70 percent of german industry’s sales go to potentially dead markets. China, india and other new industrializers are rolling up the german product and technology cycles from behind, and too little is happening in the pioneering and growth phase to keep the economy on a growth path.

Hail confucius, the doomed dug you

Sales structure (in %) in the german manufacturing sector

What could help here wage reductions etc.? First, it would have to be proven that lower real wages would stimulate innovation behavior.25 on the second level of theory, this is not possible. Here reigns a flatland of innovation. What an adjustment of wages to the "reality" could bring about, was to breathe a little breath of life into condemned companies, markets and regions. An old man does not become a baby. But maybe the old man can still produce babies (innovations), if he decides to drink nanotechnologically produced hunza water. There is almost no evidence for this: "barbaric shortage" (karl marx) of an innovationless economy.

To strengthen our competitiveness against the railroads and to preserve jobs, we demand: a drastic reduction in wages.

Verband der postkutschen- und pferdefuhrwerkmanufakturen e.V.

The sustainable (not rapaciously acquired) wealth of nations, of all nations, is the result of the misallocation of resources. Schumpeter is quoted once again:

The educational protection argument (protection of the domestic market for the purpose of building new industries) has a certain validity. And it is only the special case of a much cruder truth: that protection and other interventions in international trade helped to create new things and could make it easier to realize advances in methods of production and industrial organization.

Schumpeter

This is an in the sense of karl r. Popper refutable (falsifiable) hypothesis, which, moreover, follows the holon logic mentioned above. Protection is ceteris paribus waste of resources. However, the conditions under which this development takes place cannot be dealt with at the allocation level. To do so, it would have to be integrated into the logic of development; it would become part of a deeper theoretical holon, part of a coarser truth. Intervention in the market can contribute to this under conditions that can only be reflected theoretically at the third level, "create new things" and it "make easier" to bring about technical progress. How such a thing is theoretically possible and practically feasible is beyond the second – allocation-logical – and first – accumulation-theoretical – level.

Adam smith (first level) does not at all deny that something like what schumpeter claims could be possible. Yet it does nothing for the economy.

Admittedly, with the help of such control, one or another sector of the economy may have been established or built up more quickly than would otherwise have been the case…And yet this will … National income could never be controlled, although the labor force in the country would have been increased earlier than it might otherwise have been, quite successfully has been steered in a certain direction. The reason for this is easy to see: gainful employment … Can only increase to the extent that its capitalization becomes coarser, and that increase in turn depends on how much citizens can gradually save from their incomes. Meanwhile the immediate the consequence of such an intervention is that the national income decreases ….

Adam smith

The founder of nationaloconomy thus sees a conflict between educational protection and accumulation. The first one may work, but is cancelled out by the accumulation dynamics. Schumpeter’s logic: innovation does not require an increase in capital endowment or savings; available resources are recombined; if necessary, they are obtained through bank credit. Another theoretical world.

Is there a nation that has become prosperous through free trade transactions following the principles of the second level?? It is not about the countries that are at the top of the ladder of prosperity today, but about those that are climbing the ladder. If we follow schumpeter’s theorem above and the logic of our argument, they have to rise at least to the level of sacrificial reallocation. If they don’t make it, or if they are prevented from doing so (by those who are already on top), or because they believe that living on one level of allocation is already the most that can be achieved in this life, then they stay on the bottom. Optimized – but poor – a german university just. We had it before: a reagrarization of sudbayern. The bavarians and their mantra of planning security – pioneers in the grinding of germany as a business location?

We discuss here examples of level conflicts between the second and third level. Between 3 and 4 something similar happens.

Mergers and acquisitions are at the first level accumulation and power ies. In the neoclassical/austrian paradigm, the optimal operating scale and synergy to be discovered in the market, economies of scale and scope, static efficiency/allocation problems are in the center of attention. Problems of recombination and thus dynamic efficiency effects (schumpeter efficiency) can be theoretically illuminated and influenced by economic policy only on the third level. (this does not mean that static efficiency or power ies are irrelevant. However, they are on a different, less deep theoretical and conceptual level. The innovation level includes them, integrates them theoretically, but not vice versa).

How do mergers affect the innovation performance of existing firms and potential competitors?? The evolutionary dimension comes into focus only on the fourth level. Increase or decrease m a the capability of companies to tap new (innovative) potentials for value creation? How do the competence and virtue ethics of corporate leaders influence the propensity to buy out?? Ma as ego food. What would remain of mergers if those who run them were other people??

The problems of one level can only be overcome at the next level. Each level is blind to the relativity of its viewpoint. Everyone dances around his golden calf. "Madmen in authority". Economic policy lacks theoretical integrating power and thus conceptual effectiveness.

In modern societies, economic policy as political control of an operationally closed economic system cannot be implemented in a paradigm-pure manner. However, it is not difficult to identify conceptual focal points (last column of the first table; patchy; illustrative only). No approach is right or wrong, only one-sided and imperfect. Each approach constructs its own world, micro- and macro-economically. Theoretical and conceptual parallel worlds exist – and displaced realities. What is the common of mushroom, grasshopper and scientist?? Everybody lives in of its world.

The mushroom that sprouts in the morning and dies in the evening knows nothing about the difference between day and night. The grasshopper does not know the difference between spring and autumn.

Zhuangzi

The rough bifurcation exists between the approaches in the upper and lower half of the lineup. The two above describe economic worlds and political action spaces with actors and processes without development perspective: economic worlds without innovation and evolution. A stone age economy in a development trap like a hightech-system in one high-level-equilibrium-trap (japan) love can be simulated identically in theory – and steered in terms of economic policy by identical action parameters. They differ in their complexity, not in their "organization" (maturana). In her policy concepts, action parameters are used that cannot be theoretically effective on the deeper levels – even if practice works with such parameters. This does not mean that they are ineffective. An eskimo in the leadership of the transrapid can achieve a lot. What they cannot achieve: influence and demand development and evolution processes in a theoretically controlled way. Where structures, processes and competencies have to be developed and evolved, we observe a continuous failure of neoliberalism – which, however, can never fail on its level of reflection. The joys of nirvana. Also the joys of the nobel prize (all prizes fall on representatives of the second level).

What is the lack of hierarchical integrating power of politics?? (1) when the hierarchical levels are not conceptually and impact-politically integrated: one level works against another or in ignorance of the limitations and potentials of the other (concepts and measures of levels 1 and 2 work – not necessarily, but in practice almost regularly – against an unfolding of the impact mechanisms of the innovation and evolution level; example: anti-innovative competition policy; destruction of reflective competence – fourth level – through a commercializing liberalization of radio and television); (2) intellectual and emotional intolerance toward other hierarchical levels of impact. Each level has insights and impact potentials to offer that the others do not (cannot) possess.

A comfort that we all dream in our paradigms. Only when we wake up, we know that we have been dreaming.

While dreaming, one does not know that one is dreaming.

Zhuangzi

How or when do we know that we have (theoretically) woken up? And when we wake up, we are sure that we are not still dreaming? In our paradigm? Do we live in theoretical prisons, in which we are only "dream free", but not free "make" can?26

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