How did dogmatists negatively impact social progress?

     Frank   Mar. 18, 2016,  in Waterloo, Ontario, Canada

     http://www.kwcg.ca/bbs/home.php?mod=space&uid=61910&do=blog&id=4025

Social progress needs continuously to carry out innovation and reform in social governing. But, the dogmatists are always to oppose any social advancement according to their limited understanding for outdated doctrine.

The process of social progress is mainly the process of fighting against dogmatists, because they have broad deceive ability for grouping blindly ordinaries to form a strong resistance force.

Oct. 2, 2014, in the article Why China did not produce native religions, I indicate that: “People appreciate 5,000 years continuous civilization of China, however, most of them have overlooked the nature of the civilization, the valuable point, it is not in the length of time, but, in the continuously documented historical facts - the facts in success and failure made valuable references, so that the future generations can avoid to repeat the mistakes with lesser Detour.”

“The accumulation of experiences is wisdom.”

The dogmatic behavior of the dogmatists is the result that cannot make proper judgment caused by a limited wisdom in lack of study. Their conformist behavior is the main drag force for social progress.

Since the appeals of dogmatists are in line with the psychological state of most ordinaries, so they are able to play a broad deceive-role, and can cause widespread negative impacts with great harms.

Modern education seems in neglecting the content that can increase people’s wisdom, such as, humanities, especially, the history – a record of the facts in successes and failures – the basic references for rational reasoning, especially for public affair, but, with over emphasis on practical knowledge.

The outcomes of such education result massive people who are keen to grab material wealth in lack of social responsibility with social nerve numbness. They are even more terrible than those dogmatists.

A nation is composed of the nationals who are not care about public affair; the nation will be no hope. A world is composed of the people who are not care about public affair; the world will be no hope.

Feb. 27, 2013, in article Deng Xiaoping and Economic reform of China, I indicate that, any social progress will be resisted by conservative forces; it does not matter in East or West. In China at the time of economic reform beginning were those who adhere to the socialist dogma. In West countries now are those who adhere to the misplayed partisan politics and misused Universal Values. To break such dogmatic ideology is very difficult, and it is the key for making a social progress.

For this point, the practical experiences of the thoughts of the British economists Adam Smith and John Maynard Keynes are the best example.

For hundreds of years, their thoughts have been dominating world economy, but, in major part, was misinterpreted and misused by the dogmatists.

The rethinking for the mistake in practicing the great thoughts will affect the future of the world economy.

For the part of misinterpreted, the most compelling evidence is the fabrication of the Invisible hand.

May 12, 2014, in the article Who Gives Invisible Hand of Adam Smith a Super Power?, I introduced that it said that was Rothschild banking family of England to have persuaded and funded Adam Smith to write The Wealth of Nations with the purpose to pave a Boulevard for their controlling the national economy especially the monetary system by disabling the supervision function of the Government.

Some scholars have questioned the understanding for Invisible Hand. Among them, there was a most powerful questioner, Emma Georgina Rothschild who is a descendant of the Rothschild banking family, a British economic historian and a professor of Harvard University. In 2001, She published Economic sentiments: Adam Smith, Condorcet and the Enlightenment to question the understanding for Invisible Hand. In the paragraph of The Bloody and Invisible Hand she said that:

“The Invisible Hand of Jupiter”

“’Adam Smith’s ideas have had odd secular destinies, and the twentieth century was the epoch of the invisible hand.” the profoundest observation of smith,” for Kenneth Arrow, is “that the system works behind the backs of the participants; the directing ‘hand’ is ‘invisible’“For Arrow and Frank Hahn, the invisible hand is “surely the most important contribution [of] economic thought” to the understanding of social process; for James Tobin, it is “one of the great ideas of history and one of the most influential.” ‘The object of this chapter is to look at the intellectual history of the invisible hand, and to put forward a view of what Adam Smith himself understood by it. What I suggest is that Smith did not especially esteem the invisible hand. The image of the invisible hand is best interpreted as a mildly ironic joke. The evidence for this interpretation, as well be seen, raises interesting questions both about Smith and about the invisible hands of the twentieth century.’”

Another questioner is Gavin Kennedy who is a retired professor of business history and the history of economics, now is a prolific blogger. His central topic is Adam Smith’s “lost legacy”, on which he has written two books. His Blog has focused on the misuses of the metaphor of “the invisible hand”. He has questioned that Smith used the metaphor 3 times, but only once was in the Wealth of Nations, and never expressed anything like a “theory” of the invisible hand. In paper Adam Smith and the Invisible Hand: From Metaphor to Myth” he said that “A far cry from the almost mystical force it later acquired.”

June 21, 2010, on the Website of Adask’s law, there is a post The Real Father of Modern Economics said that, “Where Smith advocated a “free market” wherein each individual’s “self-interest” would result in “benefit” to all, our current markets are manipulated and their “benefits” are primarily reserved for a few “insiders” rather than the nation at large. Smith advocated “natural liberty”; today’s economics push for debtor bondage. Smith’s classical (moral) economics promoted The Wealth of Nations; today’s monetary economics promotes The Wealth of Special Interests (or perhaps, The Wealth of Bankers).” The writer indicated that “the “father” of today’s monetary economics” is “Mayer Amschel Rothschild (A.D. 1743-1812), the founder of the Rothschild fortune and dynasty that controls much of the world’s economy to this day.”

From above comments, we may understand that appealed to control the economy by the Invisible Hand instead of regulation of Government was not the original intention of Adam Smith at all, but intended over-advocated by interest individual or group for removing the barrier of their looting social wealth.

Although, the thought of Keynes that Government intervenes in the economy has applied widely, however, the Invisible Hand is still misused widely, too.

The monetary easing policies based on Keynesian have been promoting the rapid expansion of the financial economy, and exacerbated the financial economy plundering on the real economy. Plus there are no enough regulations to restricting to those greedy people who are protected by the umbrella of Invisible Hand, so that caused the disaster of Financial Crisis of 2007, and will be to gestate more disasters inevitably.

In viewing that over developed financial economy is wildly plundering real economy without rational control, in Dec. 13, 2015, I wrote article World Economy Will Continue Toward Recession.

For the part of misused, the most compelling evidence is the the government intervene in the economy,  such as, Fiscal Deficit.

Dec. 28, 2013, in the article The Precious Legacy that John Maynard Keynes Left to Us, I indicate that, talking about Keynes, people respect his The General Theory of Employment, Interest and Money (General Theory) 1936. But, I prefer The end of laissez-faire 1926, by which Keynes tries to reverse the ideological confusion. I think, it was the ideological foundation for later writing General Theory, by questioning those people who were dogmatically and mechanically insisting the Invisible Hand Doctrine of his ancestors Adam Smith:

“These many elements have contributed to the current intellectual bias, the mental make-up, the orthodoxy of the day. The compelling force of many of the original reasons has disappeared but, as usual, the vitality of the conclusions outlasts them.”

“An orthodoxy is in question, and the more persuasive the arguments the graver the offence. Nevertheless, venturing into the den of the lethargic monster, at any rate I have traced his claims and pedigree so as to show that he has ruled over us rather by hereditary right than by personal merit.”

Keynes knew that people accustomed to conservative in ideological is the major resistance to impact on the progress of human society, so he continued: 

“The next step forward must come, not from political agitation or premature experiments, but from thought.” 

The way of his bold but sensible questioning about orthodoxy with advancing ideological could help us to advance the way of our thinking, and avoid falling into the trap of dogmatism, it is the prerequisite to do anything correctly.

The world is in constantly developing, the objective conditions are constantly in changing, and the nature of the problems is in updating, too. Facing the ever changing reality, only boldly breaking the restraints of old ideological frame, the horizons of vision is able to be expanded, the new innovative ideas can be emerged, so that, when facing particular new problem, we can quickly make out specific corresponding solution. 

This the Precious Legacy that John Maynard Keynes Left to Us. 

Talking about Keynes, indeed, his fiscal means of government intervention in the economy has been misused by those dogmatists.

The current economic sick is caused by over-developed financial economy over plundering real economy to have made the profit margins of the real economy is too narrow to survive. However, the governments in major countries are still practicing monetary easing policy, to further expand the scale of financial economy, and to make it more powerful to plunder real economy, which is acting as to extinguish fire with oil.

Feb. 16, 2014, in article  Why Can Germany Economy Fly Against Economic  Rcession, I indicate that:

 “In the last century, after the U.S. President Roosevelt successfully saved the Great Depression by the means of the government intervene in the economy, the most of countries take Keynesian theory, such as, Fiscal Deficit, as the magic to stimulate their economy. Now, most of them are debt-ridden, and some of them become losers with bared buttocks and broken spine.”

“However, at that time, rational Germans did not silly go with the flow. May be that they have foreseen that Keynesian Fiscal Deficit is the economic heroin with instant excitement, but long-term fatal. So, they adopts own Freiburg School neoliberal theory that can sustain for long-term stable development.”

“Now, nearly 80 years practices have shown that the choice of Germans was smart prescient.”

“Many facts show that Fiscal Deficit is not only has lost its positive effect, but also has become economic heroin, and the addiction is quick growing in most of countries. Great many countries have become drug addicts, if, stop using the drugs, they certainly cannot stand. However, if, continue in drug use, destined to premature death. Now, Fiscal Deficit has become unbearable economic nuisance.”

“However, those are not the fault of the great Keynes, but the fault of the dogmatists of the policy makers due to they are too ignorance to make a rational judgment independently with a instinct that can only draw a tiger by copying home-cat, without ability for making a solution according to the actual objective situation in changing constantly.”

“As my view, one kind of medicine corresponds to one kind of disease, the disease has changed, and the good medicine may become deadly poison.”

“Nowadays, compared with that of formation period of Keynesian theory in before and after 1930s, the big changes in the economic structure, the large increase in the economic capacity, the over triple times increase in the population, and the bestial mad plunder of over-developed Financial Economy to the Real Economy, especially, the rapid free flow of the large amount of international hot money that large enough to destroy the economy of a nation, and the access is as easy as that of just a finger click.”

“International situation has undergone earth-shaking changes; however, the governments worldwide are still dogmatically continuing Keynesian economic theory that developed under old situation and certainly is not suitable for new problems.”

The thoughts of Adam Smith and John Maynard Keynes was misinterpreted and misused shows that this world, in most of time, in major part, was dominating by the irrational people.

Here, we would like to point out that why is Keynes’ macroeconomics misused widely, as my view, that Keynesian fiscal means was focusing on stimulating or boosting without regulation - how to restrict these means being abused. This provided dogmatists a popular space with no scruples.

Then, what kind of regulation do we need?

Aug. 24, 2014, in article Ovweheated real estate market is ruining Canadian economy form Japan mirroring Canada, I discussed the harm of financial economy, which is worth to review here, now I excerpt some as follow.

The Real Economy is concerned with actually producing goods and services. Financial economy is concerned with buying and selling on the financial markets to make money by money.

Nowadays, the vast majority of social unrest is associated with the difficulties in life, which is not mainly due to the shortage of the social wealth, but the unequal distribution of wealth in society that caused by speculators over plundering on the real economy with financial instruments, the overheated real estate market is playing such a role.

The real estate is a part of the real economy. However, it is a wand with opposite magic that either can benefit or harm to the economy. In the financial economy over developed today, in most cases, it harm to the economy.

On one hand, due to the common sense of the real estate has a hedge against inflation with a better appreciation expectation, so people prefer real estate as a measure against currency devaluation. Therefore, it possesses the potential of attracting investment to drive the development of related industries to play a positive role in promoting economic development, even being taken as the indicator of the economic development.

On other hand, the overheated investment on the real estate easily pushes up the prices of housing and land, and thus to raise the operating cost of the industrial and commercial businesses, as well as the cost of people’s daily life. Therefore, it possesses the potential of deteriorating economic environment to play a negative role of hindering economic development.

As the result, in some extent, the real estate has been used as a kind of predatory means to plunder on the real economy.

Recent years, the speculators are squeezing city’s builders out of Vancouver Canada by pushing Real Estate market overheated and thereby, to cause sharp rise in the cost of living, especially, the enterprises, the key cells of the real economy, are facing difficulty for survival.

Vancouver is losing the foundation for economic development.

The harm of the Real Estate is great, but, this is just mainly from ordinary people who are intended to protect their hard earnings from work.

The more dangerous is that rapid flow of huge amount of the international hot money in legally plundering on the real economy with the power to easily destroy the economy of a country.

People will not forget the 1997 Asian financial crisis that gripped much of East Asia and raised fears of a worldwide economic meltdown due to financial contagion.

August 1997, in the article Currency “sabotage” should be an international crime, the writer Martin Khor said that:

“Dr. Mahathir said he was disappointed that while certain people championed human rights, the same people allowed those like Soros to undermine the economies of not just countries but regions.”

“’We have worked 30 to 40 years to develop our countries to this level, but along comes a man with a few billion dollars and who in a period of just two weeks, has undone most of the work we have done. And as a result, the people of our countries suffer.’”

“The Prime Minister said there was much talk about human rights and the protection of people, but the public ‘must be protected from people like Soros who has so much money and so much power and is totally thoughtless because he is not only hurting the people of Myanmar but the poor people in Indonesia, Malaysia, the Philippines and Thailand. These people suffer because the cost of everything has gone up.’”

Many lessons lesson us that the financial instruments developed to today, have been powerful enough to achieve an effect as that of a strong military power cannot achieved. Especially, the rapid global mobility of financial capital that is just easily by playing fingers has been boosting such speculative activities.

A country is full of wealth-speculators and lack of wealth-creators; it certainly will be no hope.

A world is full of wealth-speculators and lack of wealth-creators; it certainly will be no hope.

Continue to develop as the current way, human society is rapidly toward self-extinction.

Now, it is clear that what kind of regulation do we need?

Those for the purpose of unearned speculations should be banned. Such as, various hedge funds, short sale activities, currency speculation, and so on. The development of real estate market is also need to be regulated.

Follow is two of my articles.

Germany timely regulation of real estates market sets a model for Canada.

Why German real estates market can keep in sound development.

Finally, it needs to point out that the dogmatists or conservative forces are not entirely from those who are vested interests as that of advocates of Invisible Hand, but, also from those who are keen to make ridiculous fuss without intention for personal interest, and their life's mission is to oppose everything, by which to prove their un-ordinary, such as, the majority of those socialist dogmatists at the time when beginning of China’s economic reform.

For this regard, I made introduction in article Deng Xiaoping and Economic reform of China.

However, the most terrible harm of dogmatists is not in the economic field, but at the social governing, it is at being misplayed partisan politics and being misused Universal Values.