WHAT IS VULGAR ECONOMICS
A SYSTEMATIC ENQUIRY INTO THE PRODUCTION OF USEFUL THINGS OR VALUE IN USE
In 2021 I started the Millennia Challenge. A competition with one competitor and only one goal - to theorise the production and supply of things that might be considered useful to civilization.
Though neither a mainstream nor a heterodox economist, I have through my thinking and writing over thirty years transformed myself into a self described vulgar economist.
Those familiar with economic history, will remember that Marx coined the term vulgar economics to describe “unscientific” economic theories that focus on the superficial, outward appearances of capitalism like supply and demand and are most useful and therefore defended, by the wealthy who have become its primary beneficiaries.
But, vulgar also means making explicit and offensive reference to bodily functions.
Perhaps obscured for millennia by humanities disgust for excrement, the uncanny similarity between poo and the things we buy and the income we use to buy it with has somehow been missed. Dung is no less sweet to a dung beetle than the finest perfume is wrapped in a bow. But to the horse and the cosmetics company both are principally an output or a waste product. Only available to the beetle in the field and the consumer in the market because it is useless to and unwanted by the horse and the company that produced it.
Yes, sh#t.
Vulgar economics is based on the idea that economics is better understood as the study of unwanted skat rather than scarcity. Unwanted things being the central organising principle of capitalism and governed by Say’s second or number two law.
An immutable law of motion as old as the market, that compels a producer to no less dispatch products, services and even money that are useless to the producer to the market, than a bear is compelled by nature to dispatch its sh$t to the woods. And, most likely governed by the same law of supply. The echo of entropy heard as much in the market as in the woods.
Objective theories of value, like Marx's labour the0ry of value focus on the cost of production, and subjective theories of value, like neo-classical economics emphasise profits and preferences. Whereas a vulgar theory of value analyses market exchange from the perspective of the uselessness of sh#t to the producer. You might call it a scatological theory of value.
But it's not a sh#t theory of value.
It possible that the urge and urgency to supply to markets results in social purpose without social responsibility - unuseable things wanting to flow to where they are useful. The double co-incidence of unwanted unuseable things drawing buyer to seller together to distribute useful things to where they are used. With one existential proviso - if you're going to deliberatly turn something useful into sh#t you can't use, avoid exchanging it for sh#t that you can't or don't use. That's how climate change started.
Read this myth of a Greek myth, to understand why. Hermes, the mischievous god of finance, fates a herd of horses to value the frass of the dung beetle as highly as the beetle values the dung of the horse. What could possibly go wrong?
When properly understood, Say's number two predicts that an economy driven by individuals maximising their unexamined preferences and firms maximizing profits will inevitably lead to a collapse in the production and supply of things that might be considered useful to civilization. A system more vain than vulgar as the overwhelming number actions turn out to be fruitless and achieve nothing but the substitution of the useful for the useless. We end up winning some, but risk losing it all.
The goal of vulgar economics or modern value theory is to repair the damage caused by the other vain theory of value that mistakenly believes that supply based on profits and demand based on consumer preferences will produce the quantity and variety of things to thrive on this planet.
A vulgar market is the real and visceral market. An ignoble co-ordination device in which producers exchange their unwanted goods, services and income based on the utility of an unmistakable gamble of excrement. A type of calculated bet premised on the idea of everyone producing things that they can’t use and don’t want for the purpose of wagering that another producer has produced something they can’t use and don’t want.
But this is not a game of chance or a lottery.
In the Wealth of Nations, Adam Smith argued that the “propensity to truck, barter, and exchange” was inherent in human nature. But in the following passage, Jean Baptiste Say offers a more viceral explanation for trade. The urge to sell being less about human nature and perhaps more about the call of nature.
“When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. ”
— Jean Baptiste Say, 1803
though Say, is best known for “Say’s law” or the “law of the market” a classical principle that states the act of production of goods creates its own demand, it seems Say may have also have “discovered” a second or number two law of economics.
Say’s second law states that the act of producing a good or service that cannot be used by the producer (an “unwant”) creates an overwhelming urge to supply and sell that unwanted thing. An immutable law of motion as old as the market, that compels a producer to no less dispatch products, services and even money that are useless to the producer to the market, than a bear is compelled by nature to dispatch its sh#t to the woods. And, most likely governed by the same law of supply. The echo of entropy heard as much in the woods as in the market.
“But surely you’re mistaken” smiled Hermes.
With promethean hubris, the mischievous god announced that he, being smarter than their father, could do much better.
“I wager, I could squeeze out even more efficiency” he winked. “I’m the god of finance you know. Trust me. I know exactly what I’m doing.”
With that, and loving a good poo joke, he transformed the herd so that from then on the horses would eat the grass to produce the dung but the dung beetle would pay the horse with their delicious frass. The horse no longer getting their energy from the grass but by exchanging their dung for frass!
Hermes had cursed the horse to value frass as highly as the beetle valued dung.