Global Economic Turmoil - An Inevitable Outcome Dictated by Logic
ONO Goro / Professor Emeritus at Saitama University
August 24, 2012
The essential purpose of a theory is to explain the "why and how." Logic and proof are merely part of the requirements that constitute a theory. Yet, owing to the elevated status currently enjoyed by econometrics, many profess to a "theory" when all they have to show is probable statistical significance. Economists who make indiscriminate use of mathematical formulas either do not understand the true meaning of a mathematical formula, or are deceiving the masses by taking advantage of their fondness for "experts."
By nature, economic statistics are intentional results premised on existing systems and customs. It is inappropriate to generalize such results into a theory or discuss issues based on a simple analysis of economic data in our world today, which is in need of a paradigm shift. Neither is economic data as refined as data used in the natural sciences. Results may differ greatly depending on the initial conditions. As the Chaos Theory says, "a butterfly fluttering its wings in Beijing will start a chain reaction that results in a hurricane stirring up in the Caribbean" Moreover, intellectuals tend to set the initial conditions to ensure that the end result will be music to the ears of the masses.
Consequently, most proposals are produced by setting a "desirable" goal and backing it up with reasoning that at first sight seem quite authentic. And people are left to choose what they consider to be the best option. The general public and policymakers are equally averse to hearing a painful scenario. This tendency has led experts to present unrealistic options and have allowed optimism to dominate. Incompatible demands have thus been made from time to time as if it was the perfectly normal thing to do. For example, in Japan the general public has demanded that a stable supply of electricity be maintained without raising the price, while at the same time opposing the reactivation of nuclear power plants. And in Greece, people sought to remain within the European Union but were nevertheless opposed to fiscal austerity.
The most persuasive yet most dangerous of these propositions is one that acknowledges the need for financial reform while recognizing the possibility of sustainable development even now, when it is already an impossible dream for the advanced countries. This forces people to choose from fictional options based on the misguided assumption that growth is still possible.
Judging from the historical fact that a time of decline came even for the Roman Empire and the British Empire, growth will eventually grind to a halt in the advanced countries. Not only will they experience an ebb in notable new technologies and industries, but they will also experience a dramatic drop in their growth rate, even as the absolute value of their GDP growth remains unchanged. This is because in advanced countries the denominator will continue to expand, while they will also face competition from countries that had formerly supplied them with resources and markets for their products.
In other words, the advanced countries are not emulating Japan's "lost two decades." They are simply following their own path of historical inevitability. To say that no one can argue against growth because it is tantamount to arguing against peace is an act of adulation that conceals the fact that excessive emphasis on economic growth can destroy peace from time to time.
The U.S. economy, which had shown signs of decline in the 1980s, did seem to have made a comeback by the 1990s. However, that was made possible by creating a financial bubble and covering it up by passing on the effects to other countries on its strength as a key currency nation. To do so required financial engineering based on the gold standard, where symbolic credit was traded for physical money, which could only be an illusion. This is evidenced by how the market actually treats the yen as a stable currency, despite the fact that Japan's finances is in shambles. Those responsible for manipulating the LIBOR are scarcely aware of having done any wrong, and this becomes understandable once we realize that the current financial market is itself built upon illusions.
Inevitably, erroneous assumptions and options such as these make fiscal reform impossible in advanced countries. I can offer a logical expression to prove this reasoning. However, a simple explanation would be to say that tax increases and fiscal restraint are more likely to cause individuals to focus on the direct losses they will suffer, rather than the indirect benefits of fiscal soundness. Where democratic procedures are in place, voters tend to favor tax cuts and pork barrel policies. And by the time people discover the errors in candied premises and feel the adverse effects of fiscal imbalance, it is too late.
As economist John Kenneth Galbraith has pointed out, today we are dominated by conventions based on pleasant words that are given the guise of reason by intellectuals. While this feeds people's expectations, dissatisfaction over the fact that such expectations are nowhere closer to being met makes them even more unhappy.
Conversely, those who call themselves an intellectual should seek to correct this bias towards optimism, which is a fundamental flaw of democracy. They should educate the masses by offering words that are harsh on their ears, rather than cater to the self-indulgent goals of the masses by providing the reasoning. To do this, an intellectual must speak the truth by returning to square one to offer logical consistency rather than probability, which is a tool used by various experts to fortify their theories. It is a task better suited to a generalist in the Keynesian sense, who is knowledgeable about things in general, rather than an expert who throws around theories that at first sight seem refined.
The writer is Professor Emeritus at Saitama University.
By nature, economic statistics are intentional results premised on existing systems and customs. It is inappropriate to generalize such results into a theory or discuss issues based on a simple analysis of economic data in our world today, which is in need of a paradigm shift. Neither is economic data as refined as data used in the natural sciences. Results may differ greatly depending on the initial conditions. As the Chaos Theory says, "a butterfly fluttering its wings in Beijing will start a chain reaction that results in a hurricane stirring up in the Caribbean" Moreover, intellectuals tend to set the initial conditions to ensure that the end result will be music to the ears of the masses.
Consequently, most proposals are produced by setting a "desirable" goal and backing it up with reasoning that at first sight seem quite authentic. And people are left to choose what they consider to be the best option. The general public and policymakers are equally averse to hearing a painful scenario. This tendency has led experts to present unrealistic options and have allowed optimism to dominate. Incompatible demands have thus been made from time to time as if it was the perfectly normal thing to do. For example, in Japan the general public has demanded that a stable supply of electricity be maintained without raising the price, while at the same time opposing the reactivation of nuclear power plants. And in Greece, people sought to remain within the European Union but were nevertheless opposed to fiscal austerity.
The most persuasive yet most dangerous of these propositions is one that acknowledges the need for financial reform while recognizing the possibility of sustainable development even now, when it is already an impossible dream for the advanced countries. This forces people to choose from fictional options based on the misguided assumption that growth is still possible.
Judging from the historical fact that a time of decline came even for the Roman Empire and the British Empire, growth will eventually grind to a halt in the advanced countries. Not only will they experience an ebb in notable new technologies and industries, but they will also experience a dramatic drop in their growth rate, even as the absolute value of their GDP growth remains unchanged. This is because in advanced countries the denominator will continue to expand, while they will also face competition from countries that had formerly supplied them with resources and markets for their products.
In other words, the advanced countries are not emulating Japan's "lost two decades." They are simply following their own path of historical inevitability. To say that no one can argue against growth because it is tantamount to arguing against peace is an act of adulation that conceals the fact that excessive emphasis on economic growth can destroy peace from time to time.
The U.S. economy, which had shown signs of decline in the 1980s, did seem to have made a comeback by the 1990s. However, that was made possible by creating a financial bubble and covering it up by passing on the effects to other countries on its strength as a key currency nation. To do so required financial engineering based on the gold standard, where symbolic credit was traded for physical money, which could only be an illusion. This is evidenced by how the market actually treats the yen as a stable currency, despite the fact that Japan's finances is in shambles. Those responsible for manipulating the LIBOR are scarcely aware of having done any wrong, and this becomes understandable once we realize that the current financial market is itself built upon illusions.
Inevitably, erroneous assumptions and options such as these make fiscal reform impossible in advanced countries. I can offer a logical expression to prove this reasoning. However, a simple explanation would be to say that tax increases and fiscal restraint are more likely to cause individuals to focus on the direct losses they will suffer, rather than the indirect benefits of fiscal soundness. Where democratic procedures are in place, voters tend to favor tax cuts and pork barrel policies. And by the time people discover the errors in candied premises and feel the adverse effects of fiscal imbalance, it is too late.
As economist John Kenneth Galbraith has pointed out, today we are dominated by conventions based on pleasant words that are given the guise of reason by intellectuals. While this feeds people's expectations, dissatisfaction over the fact that such expectations are nowhere closer to being met makes them even more unhappy.
Conversely, those who call themselves an intellectual should seek to correct this bias towards optimism, which is a fundamental flaw of democracy. They should educate the masses by offering words that are harsh on their ears, rather than cater to the self-indulgent goals of the masses by providing the reasoning. To do this, an intellectual must speak the truth by returning to square one to offer logical consistency rather than probability, which is a tool used by various experts to fortify their theories. It is a task better suited to a generalist in the Keynesian sense, who is knowledgeable about things in general, rather than an expert who throws around theories that at first sight seem refined.
The writer is Professor Emeritus at Saitama University.
The English-Speaking Union of Japan
論理的帰結たる世界経済混乱
小野 五郎 / 埼玉大学名誉教授
2012年 8月 24日
理論とは本来「何ゆえにそうなのか」を説明するもので、論理性と実証はその必要条件の一にすぎない。にもかかわらず、今や計量経済学等が持て囃され、統計上有意らしいくらいで理論とする者が多い。経済分野で数式を乱用する者は自ら数式の真意を理解していないか、難解な数式を使い「専門家」信奉の大衆を欺瞞しているだけだ。
元より経済統計数値は、それ自体現行制度・慣習下での人為結果だから、その解析結果だけから理論として一般化したり、パラダイム転換が求められる現下の世界情勢を論ずるのは不適切である。また経済数値は自然科学数値ほど精緻ではないから、「北京で蝶が羽ばたくと巡り巡ってカリブでハリケーンが起きる」とするカオス理論どおり、初期条件の設定如何によって結果は大きく変わる。しかも、有識者たちは人々にとって「耳に心地よい」結果を目指して初期条件を設定しがちである。
その結果、提言の大半は「望ましい」目標を設定し、それに一見尤もらしい裏付けを与えたものとなるから、人々はその中から己が好ましいと思う選択をせざるをえない。とりわけ大衆も為政者も「耳に痛い」話を避けたがることが、有識者にありもせぬ選択肢ばかりを提示させ楽観論をして支配的にする。例えば日本では「原発再開には反対だが電力料金は引き上げず安定供給も図るべきだ」、ギリシャでは「EUには残るべきだが財政緊縮には反対だ」との両立不能な要求が平然と為された。中でも尤もらしく最も危険なのが、「財政再建」の必要性を認めながらも、すでに先進諸国では望むべくもない「持続的成長」の可能性を今もって認めていることである。このため、人々は「今後とも成長しうる」という誤った前提で、どれも虚構に過ぎぬ選択肢の中から選ぶことになる。
かつてのローマ帝国や英国がやがて衰退した史的事実からすれば、先進国の成長はいずれ止まる。それは目ぼしい新技術・新産業が枯渇するだけではなく、先進国では分母が大きくなるためたとえGDP成長の絶対値は減退せずとも伸び率は急低下せざるをえず、資源供給源や製品市場だった後発国の追上げも受けるからだ。つまり、先進諸国は今「失われた20年の日本」の後を追うのではなく、同じ史的必然過程を歩んでいるだけである。それを「成長重視は平和重視同様異論がない」と言うのは、時に成長偏重が平和を破綻させるという事実を隠蔽した佞言である。
なるほど80年代に衰えが囁かれた米国経済が90年代復活したように見えたが、それはあくまで金融バブルを発生させ、その影響を「基軸通貨国」の立場から他国に転嫁して糊塗したにすぎない。そのために採用された金融工学は、一方で記号的信用貨幣を取引対象としながら、他方で実在するものとしての貨幣を取引するという金本位的理解の上に立つから、虚構でしか存在しえない。現に市場では、財政破綻した日本の円を安定通貨としている。ＬＩＢＯＲの利率操作に関し当事者に「不正を働いた」という認識が薄いのも、現下の金融市場そのものが虚構の上に成立していると解すれば何ら不思議はない。
かかる誤った前提・選択肢が示されるかぎり、先進国の財政再建は必然的に不可能となる。その理由は論理式をもって証明できるが、平たく説明すれば、増税・緊縮策では各個人からすれば財政健全化による間接的恩恵よりも直接的な利益喪失に目がいきがちとなるから、民主的手続きを踏む限り常に非増税(減税)やバラマキ政策が支持されやすい。ゆえに、人々が甘い前提の誤りと財政不均衡の弊害に気づく頃には手遅れになるということだ。
現状はガルブレイスの指摘どおり「耳に心地よい言葉に有識者たちが裏付けを与えて出来上がった通念」が支配するため、人々の期待感が膨らむ一方で、それが一向に達成されないことへの不満がより不幸な気持ちに陥らせている。逆に有識者たる者は、とかくこの種楽観論に傾きがちな民主主義の本源的欠陥を是正するため、「耳に心地よい」目標に迎合しそれに裏付けを与えるのではなく、「耳に逆らう」本音で大衆を啓蒙すべきである。それには、各分野専門家が理論武装に用いている「確率」などではなく、論理的一貫性という原点に戻って真理を説かねばならぬ。また、それができるのは、一見精緻な論理を振り回す専門家ではなく、ケインズ的意味で「物事全般に通暁する」ジェネラリストなのだ。
（筆者は埼玉大学名誉教授。）
元より経済統計数値は、それ自体現行制度・慣習下での人為結果だから、その解析結果だけから理論として一般化したり、パラダイム転換が求められる現下の世界情勢を論ずるのは不適切である。また経済数値は自然科学数値ほど精緻ではないから、「北京で蝶が羽ばたくと巡り巡ってカリブでハリケーンが起きる」とするカオス理論どおり、初期条件の設定如何によって結果は大きく変わる。しかも、有識者たちは人々にとって「耳に心地よい」結果を目指して初期条件を設定しがちである。
その結果、提言の大半は「望ましい」目標を設定し、それに一見尤もらしい裏付けを与えたものとなるから、人々はその中から己が好ましいと思う選択をせざるをえない。とりわけ大衆も為政者も「耳に痛い」話を避けたがることが、有識者にありもせぬ選択肢ばかりを提示させ楽観論をして支配的にする。例えば日本では「原発再開には反対だが電力料金は引き上げず安定供給も図るべきだ」、ギリシャでは「EUには残るべきだが財政緊縮には反対だ」との両立不能な要求が平然と為された。中でも尤もらしく最も危険なのが、「財政再建」の必要性を認めながらも、すでに先進諸国では望むべくもない「持続的成長」の可能性を今もって認めていることである。このため、人々は「今後とも成長しうる」という誤った前提で、どれも虚構に過ぎぬ選択肢の中から選ぶことになる。
かつてのローマ帝国や英国がやがて衰退した史的事実からすれば、先進国の成長はいずれ止まる。それは目ぼしい新技術・新産業が枯渇するだけではなく、先進国では分母が大きくなるためたとえGDP成長の絶対値は減退せずとも伸び率は急低下せざるをえず、資源供給源や製品市場だった後発国の追上げも受けるからだ。つまり、先進諸国は今「失われた20年の日本」の後を追うのではなく、同じ史的必然過程を歩んでいるだけである。それを「成長重視は平和重視同様異論がない」と言うのは、時に成長偏重が平和を破綻させるという事実を隠蔽した佞言である。
なるほど80年代に衰えが囁かれた米国経済が90年代復活したように見えたが、それはあくまで金融バブルを発生させ、その影響を「基軸通貨国」の立場から他国に転嫁して糊塗したにすぎない。そのために採用された金融工学は、一方で記号的信用貨幣を取引対象としながら、他方で実在するものとしての貨幣を取引するという金本位的理解の上に立つから、虚構でしか存在しえない。現に市場では、財政破綻した日本の円を安定通貨としている。ＬＩＢＯＲの利率操作に関し当事者に「不正を働いた」という認識が薄いのも、現下の金融市場そのものが虚構の上に成立していると解すれば何ら不思議はない。
かかる誤った前提・選択肢が示されるかぎり、先進国の財政再建は必然的に不可能となる。その理由は論理式をもって証明できるが、平たく説明すれば、増税・緊縮策では各個人からすれば財政健全化による間接的恩恵よりも直接的な利益喪失に目がいきがちとなるから、民主的手続きを踏む限り常に非増税(減税)やバラマキ政策が支持されやすい。ゆえに、人々が甘い前提の誤りと財政不均衡の弊害に気づく頃には手遅れになるということだ。
現状はガルブレイスの指摘どおり「耳に心地よい言葉に有識者たちが裏付けを与えて出来上がった通念」が支配するため、人々の期待感が膨らむ一方で、それが一向に達成されないことへの不満がより不幸な気持ちに陥らせている。逆に有識者たる者は、とかくこの種楽観論に傾きがちな民主主義の本源的欠陥を是正するため、「耳に心地よい」目標に迎合しそれに裏付けを与えるのではなく、「耳に逆らう」本音で大衆を啓蒙すべきである。それには、各分野専門家が理論武装に用いている「確率」などではなく、論理的一貫性という原点に戻って真理を説かねばならぬ。また、それができるのは、一見精緻な論理を振り回す専門家ではなく、ケインズ的意味で「物事全般に通暁する」ジェネラリストなのだ。
（筆者は埼玉大学名誉教授。）
一般社団法人 日本英語交流連盟