Wednesday, 8 November 2017

Anti-Consumerism


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Anti-consumerism
Anti-consumerism is a sociopolitical ideology that is opposed to consumerism, the continual buying and consuming of material possessions. Anti-consumerism is concerned with the private actions of business corporations in pursuit of financial and economic goals at the expense of the public welfare, especially in matters of environmental protection, social stratification, and ethics in the governing of a society. In politics, anti-consumerism overlaps with environmental activism, anti-globalization, and animal-rights activism; moreover, a conceptual variation of anti-consumerism is post-consumerism, living in a material way that transcends consumerism.[1]
Anti-consumerism arose in response to the problems caused by the long-term mistreatment of human consumers and of the animals consumed, and from the incorporation of consumer education to school curricula; examples of anti-consumerism are the book No Logo (2000) by Naomi Klein, and documentary films such as The Corporation (2003), by Mark Achbar and Jennifer Abbott, and Surplus: Terrorized into Being Consumers (2003), by Erik Gandini; each made anti-corporate activism popular as an ideologically accessible form of civil and political action.
The criticism of economic materialism as a dehumanizing behaviour that is destructive of the Earth, as human habitat, comes from religion and social activism. The religious criticism asserts that materialist consumerism interferes with the connection between the individual and God, and so is an inherently immoral style of life; thus the German historian Oswald Spengler (1880–1936) said that "Life in America is exclusively economic in structure, and lacks depth."[2] From the Roman Catholic perspective, Thomas Aquinas said that "Greed is a sin against God, just as all mortal sins, in as much as man condemns things eternal for the sake of temporal things"; in that vein, Francis of Assisi, Ammon Hennacy, and Mohandas Gandhi said that spiritual inspiration guided them towards simple living.
From the secular perspective, social activism indicates that from consumerist materialism derive crime (which originates from the poverty of economic inequality), industrial pollution and the consequent environmental degradation, and war as a business. About the societal discontent born of malaise and hedonism, Pope Benedict XVI said that the philosophy of materialism offers no raison d'être for human existence;[3] likewise, the writer Georges Duhamel said that "American materialism [is] a beacon of mediocrity that threatened to eclipse French civilization".[2]


Background[edit]

Anti-consumerism originated from criticism of consumption, starting with Thorstein Veblen, who, in the book The Theory of the Leisure Class: An Economic Study of Institutions (1899), indicated that consumerism dates from the cradle of civilization. The term consumerism also denotes economic policies associated with Keynesian economics, and the belief that the free choice of consumers should dictate the economic structure of a society. (cf. producerism)

Politics and society[edit]


An anti-consumerist stencil graffiti saying "Consuming consumes you"
Many anti-corporate activists believe the rise of large-business corporations poses a threat to the legitimate authority of nation states and the public sphere.[citation needed] They feel corporations are invading people's privacy, manipulating politics and governments, and creating false needs in consumers. They state evidence such as invasive advertising adware, spam, telemarketing, child-targeted advertising, aggressive guerrilla marketing, massive corporate campaign contributions in political elections, interference in the policies of sovereign nation states (Ken Saro-Wiwa), and news stories about corporate corruption (Enron, for example).[citation needed]
Anti-consumerism protesters point out that the main responsibility of a corporation is to answer only to shareholders, giving human rights and other issues almost no consideration.[citation needed] The management does have a primary responsibility to their shareholders, since any philanthropic activities that do not directly serve the business could be deemed to be a breach of trust. This sort of financial responsibility means that multi-national corporations will pursue strategies to intensify labor and reduce costs. For example, they will attempt to find low wage economies with laws which are conveniently lenient on human rights, the natural environment, trade union organization and so on (see, for example, Nike).
An important contribution to the critique of consumerism has been made by French philosopher Bernard Stiegler, arguing modern capitalism is governed by consumption rather than production, and the advertising techniques used to create consumer behaviour amount to the destruction of psychic and collective individuation. The diversion of libidinal energy toward the consumption of consumer products, he argues, results in an addictive cycle of consumption, leading to hyper consumption, the exhaustion of desire, and the reign of symbolic misery.

Conspicuous consumption[edit]

Main article: Conspicuous consumption
It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly.
— Bertrand Russell[4]
Trying to reduce environmental pollution without reducing consumerism is like combating drug trafficking without reducing the drug addiction.
— Jorge Majfud[5]
In many critical contexts,[citation needed] the term describes the tendency of people to identify strongly with products or services they consume, especially with commercial brand names and obvious status-enhancing appeal, such as a brand of expensive automobiles or jewelry. It is a pejorative term which most people deny, having some more specific excuse or rationalization for consumption other than the idea that they are "compelled to consume". A culture that has a high amount of consumerism is referred to as a consumer culture.
To those who embrace the idea of consumerism, these products are not seen as valuable in themselves, but rather as social signals that allow them to identify like-minded people through consumption and display of similar products. Few would yet go so far, though, as to admit that their relationships with a product or brand name could be substitutes for healthy human relationships that sometimes lack in a dysfunctional modern society.
The older term conspicuous consumption described the United States in the 1960s, but was soon linked to larger debates about media influence, culture jamming, and its corollary productivism.

Anti-consumerist stencil art
The term and concept of conspicuous consumption originated at the turn of the 20th century in the writing of economist Thorstein Veblen. The term describes an apparently irrational and confounding form of economic behaviour. Veblen's scathing proposal that this unnecessary consumption is a form of status display is made in darkly humorous observations like the following:
It is true of dress in even a higher degree than of most other items of consumption, that people will undergo a very considerable degree of privation in the comforts or the necessaries of life in order to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad in order to appear well dressed.[6]
In 1955, economist Victor Lebow stated (as quoted by William Rees, 2009):
Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate.
According to archaeologists, evidence of conspicuous consumption up to several millennia ago has been found, suggesting that such behavior is inherent to humans.[7]

Consumerism and advertising[edit]

Anti-consumerists believe advertising plays a huge role in human life by informing values and assumptions of the cultural system, deeming what is acceptable and determining social standards.[8] They declare that ads create a hyper-real world where commodities appear as the key to securing happiness. Anti-consumerists cite studies that find that individuals believe their quality of life improves in relation to social values that lie outside the capability of the market place. Therefore, advertising attempts to equate the social with the material by utilizing images and slogans to link commodities with the real sources of human happiness, such as meaningful relationships. Ads are then a detriment to society because they tell consumers that accumulating more and more possessions will bring them closer to self-actualization, or the concept of a complete and secure being. "The underlying message is that owning these products will enhance our image and ensure our popularity with others".[9] And while advertising promises that a product will make the consumer happy, advertising simultaneously depends upon the consumer never being truly happy, as then the consumer would no longer feel the need to consume needless products.
Anti-consumerists claim that in a consumerist society, advertisement images disempower and objectify the consumer.[10] By stressing individual power, choice and desire, advertising falsely implies the control lies with the consumer. Because anti-consumerists believe commodities only supply short-term gratification, they detract from a sustainably happy society. Further, advertisers have resorted to new techniques of capturing attention, such as the increased speed of ads and product placements.[8] In this way, commercials infiltrate the consumerist society and become an inextricable part of culture. Anti-consumerists condemn advertising because it constructs a simulated world that offers fantastical escapism to consumers, rather than reflecting actual reality. They further argue that ads depict the interests and lifestyles of the elite as natural; cultivating a deep sense of inadequacy among viewers.[10] They denounce use of beautiful models because they glamorize the commodity beyond reach of the average individual.
In an opinion segment of New Scientist magazine published in August 2009, reporter Andy Coghlan cited William Rees of the University of British Columbia and epidemiologist Warren Hern of the University of Colorado at Boulder, saying that human beings, despite considering themselves civilized thinkers, are "subconsciously still driven by an impulse for survival, domination and expansion... an impulse which now finds expression in the idea that inexorable economic growth is the answer to everything, and, given time, will redress all the world's existing inequalities." According to figures presented by Rees at the annual meeting of the Ecological Society of America, human society is in a "global overshoot", consuming 30% more material than is sustainable from the world's resources. Rees went on to state that at present, 85 countries are exceeding their domestic "bio-capacities", and compensate for their lack of local material by depleting the stocks of other countries.

Alternatives to mainstream economic concepts[edit]

Throughout the ages, various movements have tried to model alternatives to consumerism while remaining in the capitalist society. Intentional communities provide an example of this, as do monastic orders, barter movements and technology-driving sharing or exchange mechanisms.[11] For instance, an intentional community called the Bruderhof has a system of sharing within the community, and no money is used by the members.[12] The Bruderhof runs a successful manufacturing business that allows it to trade in the capitalistic society, but without the members indulging in consumerism.[13]
Such anti consumerist, anti capitalist notions are not without their detractors. New thought and theory has spurred movements to alter world economic climate. Green movements and some other thinkers are opposed to the focus put on economics. The need for terminology has created familiar ideas such as carrying-capacity, and ecological footprint.
David Ricardo, an early economist, had ideas that state the finitude of growth, rather than the opposite; his ideas were similar to those of Mark Twain, when he said "Buy land, they don't make it anymore." To Ricardian logic, land was a limiting factor.

Criticism[edit]

Many[who?] have accused anti-consumerists of opposing modernity or utilitarianism. Right-wing critics see anti-consumerism as rooted in socialism. In 1999, the libertarian magazine Reason attacked anti-consumerism, claiming Marxist academics are repackaging themselves as anti-consumerists. James B. Twitchell, a professor at the University of Florida and popular writer, referred to anti-consumerism arguments as "Marxism Lite."[14]
There have also been socialist critics of anti-consumerism who see it as a form of anti-modern "reactionary socialism", and state that anti-consumerism has also been adopted by ultra-conservatives and fascists.[15]

See also[edit]

Notes[edit]

  1. Jump up ^ http://www.postconsumers.com
  2. ^ Jump up to: a b Stearns, Peter. Consumerism in World History. Routledge
  3. Jump up ^ Web log. 17 July 2008. http://babs22.wordpress.com/2008/07/17/australia-pope-attacks-consumerism/
  4. Jump up ^ The Routledge Dictionary of Quotations, by Robert Andrews, Routledge, 1987, ISBN 0-7102-0729-8, pg 212
  5. Jump up ^ Majfud, Jorge (August 2009). "The Pandemic of Consumerism". UN Chronicle. 46 (3-4): 85. Archived from the original on 19 July 2013. 
  6. Jump up ^ The Theory of the Leisure Class, 1899
  7. Jump up ^ Renfrew, Colin; Bahn, Peter (2008). Archaeology: Theories, methods and practice (5th ed.). London: Thames & Hudson. ISBN 978-0-500-28719-4. OCLC 181139910. 
  8. ^ Jump up to: a b [ Advertising and the End of the World. Dir. Sut Jhally. Perf. Sut Jhally. DVD. Media Education Foundation, 1997.]
  9. Jump up ^ [Tim Kasser, "The High Price of Materialism", 2002, p.9, Achorn Graphic Services]
  10. ^ Jump up to: a b Joseph D. Rumbo, "Consumer Resistance in a World of Advertising Clutter: The Case of Adbusters", Psychology and Marketing, Vol.19(2), February 2002
  11. Jump up ^ "Bruderhof - Fellowship for Intentional Community". Fellowship for Intentional Community. Retrieved 2017-11-08. 
  12. Jump up ^ "5 Beliefs That Set the Bruderhof Apart From Other Christians". Newsmax. Retrieved 2017-06-16. 
  13. Jump up ^ "communityplaythings.com - Our History". www.communityplaythings.com. Retrieved 2017-06-16. 
  14. Jump up ^ Twitchell, James B. (August 2000). "In Praise of Consumerism". Reason. 
  15. Jump up ^ Varul, Matthias Zick (May 2013). "Towards a consumerist critique of capitalism: A socialist defence of consumer culture". Ephemera: Theory & Politics in Organization. 13 (2): 293–315. ISBN 9781906948177. ISSN 1473-2866.  open access publication – free to read

References[edit]

External links[edit]

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Monday, 6 November 2017

Genetic algorithms in economics

From Wikipedia, the free encyclopedia 
Main article: genetic algorithms
Genetic algorithms have increasingly been applied to economics since the pioneering work by John H. Miller in 1986. It has been used to characterize a variety of models including the cobweb model, the overlapping generations model, game theory, schedule optimization and asset pricing. Specifically, it has been used as a model to represent learning, rather than as a means for fitting a model.

Genetic algorithm in the cobweb model[edit]

The cobweb model is a simple supply and demand model for a good over t periods. Firms (agents) make a production quantity decision in a given period, however their output is not produced until the following period. Thus, the firms are going to have to use some sort of method to forecast what the future price will be. The GA is used as a sort of learning behaviour for the firms. Initially their quantity production decisions are random, however each period they learn a little more. The result is the agents converge within the area of the rational expectations (RATEX) equilibrium for the stable and unstable case. If the election operator is used, the GA converges exactly to the RATEX equilibrium.
There are two types of learning methods these agents can be deployed with: social learning and individual learning. In social learning, each firm is endowed with a single string which is used as its quantity production decision. It then compares this string against other firms' strings. In the individual learning case, agents are endowed with a pool of strings. These strings are then compared against other strings within the agent's population pool. This can be thought of as mutual competing ideas within a firm whereas in the social case, it can be thought of as a firm learning from more successful firms. Note that in the social case and in the individual learning case with identical cost functions, that this is a homogeneous solution, that is all agents' production decisions are identical. However, if the cost functions are not identical, this will result in a heterogeneous solution, where firms produce different quantities (note that they are still locally homogeneous, that is within the firm's own pool all the strings are identical).
After all agents have made a quantity production decision, the quantities are aggregated and plugged into a demand function to get a price. Each firm's profit is then calculated. Fitness values are then calculated as a function of profits. After the offspring pool is generated, hypothetical fitness values are calculated. These hypothetical values are based on some sort of estimation of the price level, often just by taking the previous price level.

References[edit]

  • J H Miller, 'A Genetic Model of Adaptive Economic Behavior', University of Michigan working paper, 1986.
  • J Arifovic, 'Learning by Genetic Algorithm in Economic Environments', PhD Thesis, University of Chicago, 1991.
  • J Arifovic, 'Genetic Algorithm Learning and the Cobweb Model ', Journal of Economic Dynamics and Control, vol. 18, Issue 1, (January 1994), 3–28.
  • R Hoffmann, 'The independent localisations of interaction and learning in the repeated prisoner’s dilemma', Theory and Decision, vol. 47, p. 57–72, 1999.
  • R Hoffmann, 'The ecology of cooperation', Theory and Decision, vol. 50, Issue 2. p. 101–118, 2001.

External links[edit]

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Algorithmic Economics

The Internet has produced new service platforms and marketplaces, such as online advertising auctions and social media networks, which involve advanced algorithms, economic exchanges and social systems. Algorithmic economic professionals strive to understand and document these processes.

Computational Economics

The science of economic algorithms and computer science have been historically combined for different reasons. There are complex applications that are utilized by large-scale digital markets in popular shopping websites like EBay and Amazon. These websites are now global markets that handle millions of transactions and visitors every day. These applications are gold mines of fascinating data for market researchers and economists. Alternatively, academic researchers seek to understand the computational complexity of things like game theory and the Nash equilibria. In order to productively model and study the Internet’s novel algorithmic phenomena, computer scientists need tools and insights from areas like sociology, game theory and economic theory.

The Purpose of Economic Algorithms

Most economists now feel that a computational point of view is essential to understand the digital world of networked markets and online platforms of economic transactions. The field of computational economics is less than 20 years old, but has already achieved a remarkable degree of collaboration between various fields and made notable progress on many shared research questions related to digital auctions and mechanism design. Thus, the ultimate goal is to further the interactions between theoretical economists and computer scientists in order to identify and understand online financial transactions and relationships. As more information is gleaned from computational economics, businesses will understand consumer behaviors and economists will better understand digital microeconomics.

Research Topics

The research spans a wide variety of topics at the crossroads of economics and computation. Software application areas include online auctions, gaming, polling, advertising, crowd-sourcing and information aggregation. As crowd-sourcing rapidly replaces traditional forms of entrepreneurial funding, business and government organizations need to better understand this unique digital phenomena. Application areas also include prediction engines, digital monetization, market optimization and machine learning in markets. Online service providers and companies now require dual research in social science and computer science. This means that they need integrated information from the social sciences, such as economics, sociology and psychology, and technology areas, like algorithm programming, system interfaces and machine learning.

Research Sample

Economic and computer science researchers combine their expertise to bridge the gap between modeling human behavior and engineering large-scale market systems. For example, researchers often study several problems related to game theory within the frameworks of computer systems, network design and ecommerce applications. When it comes to mechanism design, researchers aim to develop structures that optimize objective functions, such as the seller’s revenue or global inter-connectivity. They apply techniques from machine learning and online algorithms to mechanism design in order to understand and streamline processes.
Those who want to understand this fascinating new field can earn a degree in algorithmic economics.
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Wednesday, 11 October 2017

Why capitalism wins. And how a simple accounting move can defeat it

                     
Lorenzo Fioramonti

Author

Disclosure statement

Lorenzo Fioramonti does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

   

Blazing remnants of the off shore oil rig Deepwater Horizon, off Louisiana, in 2010. The losses produced by polluting companies should cost as ‘negative’ for a country’s growth. Reuters/US Coast Guard/Files   




      


Notwithstanding its many flaws and centuries of criticisms, capitalism is still the dominant economic system globally. What made it so resilient?
Without denying the importance of entrenched interests among ruling classes, I believe the real strength of capitalism stems from the theory of value it has imposed on society. The theory can be summed up as follows: value is only created through market transactions, which are always positive for the economy. The rest - like social costs and ecological impacts - doesn’t matter.
Classical sociologists and economists like Max Weber, Joseph Schumpeter and Werner Sombart saw the adoption of a specific form of accounting for measuring performance in industries - so-called double-entry bookkeeping - as a critical factor to explain the rise of capitalism before and after the industrial revolution. Since then, we have simply assumed that what is good for the firm must be good for society.
As I show in my book Gross Domestic Problem, even socialist systems largely accepted capitalism’s accounting approach, ultimately failing to beat capitalism at its game.
But the global debate is shifting. The Sustainable Development Goals recognise that real value is only created when economic development leads to improvements in social and environmental dynamics. I argue that, by changing our headline indicators of prosperity in line with this new thinking, we can show capitalism’s inefficiencies and contribute to its demise.

Change accounting, change the world

Accounting is not a neutral exercise. As the term suggests, indicators “indicate” the path to follow to improve performance. In the end, governments, companies and societies at large strive to achieve what is counted, while disregarding what is not.
Of all accounting tools, the most powerful is the gross domestic product (GDP), the headline indicator of economic performance. GDP fully endorses the capitalist theory of value: it views market transactions as the only drivers of development, as opposed to non-market exchanges; it considers as positive all forms of production and consumption, regardless of their impact on economic welfare; and it neglects social and environmental impacts. For as long as our approach to economic growth is determined by GDP, capitalism will continue having the upper hand.
The good news is that, for the first time in almost a century of national income accounting, there is now a window of opportunity for change. A growing number of global institutions, including influential actors like the World Economic Forum are calling for a shift beyond GDP.
When we apply any of these new indicators, which integrate social and environmental impacts into the concept of economic performance, the alleged efficiencies of capitalism disappear. For instance, the genuine progress indicator shows that the global economy has massively under performed since the early 1980s, at the same time as free market reforms were boosting GDP. The genuine progress indicator deducts costs of environmental damage and social ills from economic performance.
Using a similar approach, UN-sponsored studies conclude that some of the world’s largest corporations actually generate more costs to society than profits. This is particularly true of fossil fuel and commercial food companies. The negative environmental effects of their operations are estimated to be in excess of USD$7 trillion a year.
The Organisation for Economic Cooperation and Development, the club of the world’s richest countries, has developed a “better life index”. It underlines how prosperity is determined more by factors like community engagement, work life balance, health and the environment than by income.
The organisation estimates that value generated for the economy by families and communities through self-production and informal exchanges – notoriously neglected by GDP – is equivalent to over 50% of everything the market produces.
And what about the non-monetary activities performed by civil society? According to the World Bank, associations have a massive impact on the economy by building the interpersonal trust – a precondition for a functioning market. In money equivalent, their contribution would be over 20% of the value of all goods and services produced by businesses.
These are the real ‘invisible hands’ supporting the economy.

A new world

By portraying corporations as the sole creators of value and by hiding their social and environmental costs, GDP has further entrenched the capitalist grip on power. But as we move beyond GDP, we begin to realise that the emperor has no clothes. A new accounting approach linking economic, social and environmental dynamics – what I call ‘wellbeing accounting’ – can indeed have game-changing effects.
Take fossil fuels. After the recent hurricanes in the US, several experts rightly argued that oil companies should be taken to court and charged with covering the costs of damage.
New accounting would make such an approach automatic. The losses produced by polluting companies would count as ‘negative’ for the country’s growth. This, in turn, would force policy makers to push renewable energies if they want to improve their economic performance.
The alleged virtues of globalisation rest almost entirely on GDP’s blindness to global trade’s environmental and social impact. But new accounting methods do the opposite: they reveal global trade’s negative effects and highlight the more efficient value creation of local and regional exchanges.
Our perception of global leadership would change too. The US and China may look “big” in GDP terms, but the real champions of social progress are some middle powers. These include Costa Rica to New Zealand which have built strong economies while improving the quality of social and natural dynamics.
Moving away from GDP would also benefit developing nations, especially in Africa. It would put an end to the traditional capitalist approach that equates prosperity with exploitation of people and nature, This in turn would allow countries to experiment with new forms of development.

Wellbeing accounting

GDP accounting is what keeps capitalism on life support. As I discuss in two recent books The World After GDP _and _Wellbeing Economy, a shift to new forms of accounting would eliminate the statistical foundations on which capitalism’s credibility rests.
In the end, this is precisely what Adam Smith did with the founding book of capitalism,The Wealth of Nations He questioned the traditional approach to value creation. Smith argued that the real creators of wealth were not the kings and knights that dominated the political scene, but the captains of industry who steered the new industrial market. By shifting the accounting approach, he reinforced the demand for power that would soon lead to the modern revolutions and the dominance of capitalism.
Similarly, well-being accounting shows that an economy promoting the public good and the commons can generate more wealth than the capitalist market. Through new numbers, it aims to embolden all those actors marginalised by the capitalist theory of value. Above all, it equips them with new tools to demand more power and a radically different approach to growth and development. It’s a smart way to beat capitalism by stealth, once and for all.
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