Ever Changing Markets

Earlier in my experience of Rhodes I intended to become an economics major. I later decided to abandon a major in economics in favor of one in philosophy. Though I am no longer majoring in economics I have not lost my interest in it. Ironically, in many ways philosophy has enhanced my understanding of economics in a way that I would not have found in a strictly economics focus.
Philosophy is the quintessential liberal arts subject because it is concerned with knowledge, the basis for all other subjects. The distinction and disciplines of the sciences, arts, and all of their subsections is a purely artificial distinction. I, just as philosophy, am concerned with the seams of learning, the places where one subject is connected to another, in this instance the intersection between economics and philosophy.
The intersection between philosophy and economics is quite extensive, and so in my research paper I wanted to focus specifically on how Bergson’s idea of flux and ever changing laws and facts relates to economies and markets. Bergson’s ideas fit naturally into economics, specifically a free market view because they preclude any effective central planning.
Markets are an example of spontaneous order, and just like nature they are in constant flux. A key to a successful business is finding a niche in a market, but they key to maintaining a successful business is constantly adapting to the ever changing market. A visualization of this concept could be some sort of fluid puzzle in which the pieces were continuously changing shape and so forcing you to constantly adapt yourself to fit within the fluid model.
My first source is Bergson’s creative evolution. In my paper, markets behave like Bergson describes nature, a constant flux. It is tempting, especially to economists, to claim that with enough information they can predict the future of a market. It might initially seem that once the rules of economics are understood that if enough factors can be known the market can be predicted. This is not so, the flaw in thinking resides in the idea that the laws and factors are static, and can so be used to accurately predict the future of market.
The inability to predict the future of a market is driven at the most basic level by understanding the market to any degree. By measuring the market we change it, much like our inability to know the speed and location of a particle because by measuring it we alter its location or speed. So to by measuring a market and acting on that information do we alter the market. A good example of this would be the stock market where knowing the price of something, or knowing some information about a company in the market will actually change the market.
So how are we to respond and operate in a market with an unpredictable future? The second source I am using is The Art of the Long View by Peter Schwartz. Schwartz proposes a system of probably planning in order to deal with an ever changing and unpredictable model.
Schwartz suggest creating a frame work of possible solutions and developing options that contain in themselves solutions to multiple possible futures. Using this method one can have a variety of options each which can be adopted to a variety of possible futures allowing one plan somewhat effectively for an unpredictable future.
In dealing with Bergson’s ideas in general and specifically how they apply to economics it is important not to improperly emphasize the rapidity of changing laws and factors. While some factors may change at extremely fast rates, not all of them will, and the majority of the laws the govern and are influenced by the factors will be even lest quick to change. Schwartz recognizes this and makes comment by saying that while much of the future is unclear, there are certain immediate factors which will very probably happen. The example that he gives is that if it rains in the Himalayas then it will flood in the Ganges river.
Following this analogy we find that while much of the future is unpredictable some things in markets can be predicted with a fair degree of accuracy even if by acting on these probably events the markets themselves are changed.
My third source is Sigmund Freud Civilization and its Discontents . while Schwartz’s writings deal with the chaos of markets on a very practical level, Freud’s work as parallels the markets in the dynamic model he proposes of desire and the means by which we seek to satisfy them. There is a certain view of economics that claims that we have set needs, and on these constants we can begin to predict markets. The problem with this economics perspective is that it assumes that our desires are independent of the objects they pursue, making them static.
Freud however disagrees with this model of desires and objects. He proposes, in a similar line of reasoning to Bergson, that our desires are modified by the objects the pursue, as well as the reciprocal being true. In this model there is dynamic nature which defies prediction.
Freud and his work are important to consider because it focuses on the concept of flux at a very abstract and conceptual level. This abstract level is also the most basic level for practical applications. Dealing with these concepts at the abstract, or basic level, allows us the examine the concepts free of their practical actuation which can be distracting and limiting at times. Examining things at the conceptual level also affords a fresh perspective from which new patterns may be discovered and examined.
Markets are a spontaneous order that is in a constant flux. It is impossible to predict a market just by discovering all of the factors because the factors are constantly changing and modifying the laws that govern them. This model is reflected in Freud’s work Civilization and its Discontents with his argument about desires and their relation to objects . Peter Schwartz in his book The Art of the Long View discuses solutions and manners in which one can deal with an ever changing market.