« My Twitter account has been hacked | Main | Has Global Finance Reformed Itself More Than It Appears? »

January 16, 2018


Jacques René Giguère

It remain to be explained why 1923 hyperinflation experience got ingrained into prior but not the 1930-1933 unemployment despite the far worse consequences.

Rich C

A stronger interest based argument for German support for austerity would follow Peter Swenson's cross-class coalition analysis. German manufacturers, and the unions representing skilled workers, y benefit from export demand, are largely insulated from domestic demand shocks, and would be harmed by higher inflation (which would raise input costs without raising output prices). So there was a strong political-economy coalition supporting austerity, even though the alternative strategy would have involved more rapid consumption growth in Germany (but w/higher inflation => lower export sales & manufacturing employment).


Outside ordered contexts like totalitarian states & dictatorially governed organisations, economic behaviour is an emergent outcome of complex adaptive systems.
Seeking unidirectional causal relations to explain it is pointless.
It is path dependent, dependent on a lot behaviour elsewhere in the system and constrained only to a limited extent by characteristics of the system as a whole.
Unless the economic system is a chaos or in crisis economic behaviour IS coherent, but the coherence cannot be modelled with causal hierarchies.
It forms emerging & shifting patterns, like boom and bust cycles, tendencies to open or close to interventions and intrusions from outside the system, centralising and decentralising tendencies, homogenising and diversificatoin tendencies etc..
Often contradictory tendencies and patterns in different part and subsystems.
Our perception of those patterns and tendencies and our expression of our perceptions (especially if we have well-connected positions in the system) amplify some of them and counteract others.

Choosing between 'interests' and 'ideas' as 'drivers' of behaviour is not going to help us to understand it, even if it might have a role in influencing it...


Blindness - is a key factor in interests’ vs ideas prioritization by actors. This "blindness" can be caused by the psychology of inadequate justification where actors become committed to a path due to prior often misguided decisions.
Brexit is a good example as there appears to be a "blindness" related to outcomes which will run counter to the British national interest of taking back control from Europe.
I have found the same applies in corporate business where the interest of the business owners - maximise profit through growth, is opposed by individual actors or employees who act against business interventions such as Lean Manufacturing which would eventually benefit the employees albeit with the pain of changing their current behaviours.
My solution to this in executing change in the 8 US multinationals that I have supported in globalizing their businesses as well as development of country ICT strategy development has been to implement targeted benefits focused on the individual actors rather than the business.
Thus reducing time taken in the actors current tasks by workflow changes or tactical automation reduces the resistance to changing ideas and behaviours which is often embedded by cognitive dissonance factors.
Thus individual benefits reduces resistance to change in an organization and facilitates deployment of effective changes which drive bottom line productivity.
This process has been effective whether I have been a leader with power to elicit compliance from individual actors or as an advisor who must use the gentler but enduring techniques of persuasion as espoused by Robert Cialdini.


Wim has hit the nail on the head and i could not agree more.

The comments to this entry are closed.