[OPE] estimating the severity and duration of a capitalist economic crisis

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Thu Mar 27 2008 - 16:51:40 EDT

In my opinion, the problem with forecasting, using Marxian terms, relates to why you do it in the first place, the interest or motive you have. 

I did not focus on consumer confidence per se, but on market confidence, i.e. the faith that markets can deliver the goods. 

The problem of whether "too many variables" exist depends a lot on what exactly you are seeking to forecast, what the question is. If I am vague about what the question is, then I can bury myself in all kinds of complexities without getting to a good forecast. As an analogy: I could ask, will tomorrow be a sunny day or not? But I could also ask, "what will the weather be like tomorrow"?

If economic forecasting is "more likely to be 'on target' in pre-capitalist civilisations, the reason must be that those civilisations had a relatively small, stable population and did not change very much, most of the time. In post-capitalist civilisations, forecasting becomes even more important. But I doubt whether your argument holds anyway. Agrarian societies are very dependent on the weather.

More importantly, a science of forecasting becomes necessary precisely BECAUSE there is broad, rapid change going on. If everything stays pretty constant, I don't need any special forecasting science, because common sense tells me that tomorrow will be more or less the same as today, and I have no reason or experience to think otherwise.

Marx says that human work is rather unique insofar as it involves a conscious, thought-out purpose. Forecasting is merely the highest development of that purposiveness. If people are rather bewildered in a world that seems to lack any sense of purpose, forecasting offers solutions. It enables us to say that if you do X, then Y will be the most likely consequence.

My argument is that if you lose control over the extension of credit, you will generate a lot of extra uncertainty. But that does not deter a good forecaster, because he just frames what the uncertainty consists in and what its roots are, what is the real cause of disorientation. Something may be this, or it may be that, but it usually cannot be "just anything at all". 

If you reject the possibility of forecasting, then in doing so you not only reject the influence of regularities in human life, but implicitly also a lot of other things, which make any rationality, science or planning impossible. Actually, markets cannot exist without some forecasting and indeed powerfully develop it.

Saying we cannot predict things can be a very convenient apology or even a source of money-making. But all that does is just to alert us to a certain state of consciousness. 

What is truly amazing is just how much you can predict, if you overcome the obstacles of the type that I mentioned, i.e. if you remove the source of unpredictability.


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