A Starter on Support-Bargaining and Money-Bargaining in Twenty-Eight Digestible Bites

Patrick Spread

• Publisher: Palgrave Pivot
• Year: 2018
• Print ISBN: 9783030052300
• eBook ISBN: 9783030052317
• Topic: Economics
• Subtopic: Econometrics
• Index: Economics

This book provides an introduction to the theory of support-bargaining and money-bargaining.Support-bargaining arises from the propensity of all individuals to seek the support of those around them and is the underlying mechanism of democratic societies.It is also the underlying mechanism of theory formation. Intellectual support-bargaining is the process by which support is assembled for ideas and theories.

Mainstream economic theory, or 'neoclassical theory', can be seen as formulated to advance individual interest. It is mainstream because it has assembled sufficient support to give it ascendancy in academia. It reconciles private and public interest in a mathematical account of resource allocation. Money-bargaining, in contrast, explains the process of economic exchange. Transactions are based on information, so that the character of information itself influences the conduct of exchange.

This volume provides a radically new explanation of the functioning ofhuman societies that will be recognised as entirely consistent with common observation and experience.

© The Author(s) 2018

Patrick SpreadA Starter on Support-Bargaining and Money-Bargaining in Twenty-Eight Digestible Biteshttps://doi.org/10.1007/978-3-030-05231-7_1

Begin Abstract

1. Appetiser

Patrick Spread¹  

(1)

Witney, Oxfordshire, UK

 

 

Patrick Spread

Abstract

The Appetiser suggests that the neoclassical economic model responds to a conjecture regarding the relationship between private and public interest rather than a question about the working of economic exchange. The Starter explains economic exchange. To explain economic exchange, it is first necessary to explain the process of ‘support-bargaining’ and the creation of money. With that, it is possible to explain how money is used in ‘money-bargaining’, the process of economic exchange. The Appetiser also identifies ‘communal interests’ as outcomes of support-bargaining. Money-bargaining accommodates communal interests as well as the individual interests that are the basic concern of neoclassical theory.

Keywords

Support-bargainingMoney creationMoney-bargainingNeoclassical theoryEconomic exchangeCommunal interest

End Abstract

Psychologists have noted that when asked a question, people often answer a different question which they find easier to respond to. Neoclassical economic theory, or ‘mainstream’ economic theory, seems a good illustration of the phenomenon. Instead of answering the question, ‘How does economic exchange work?’ neoclassical economists have answered a different question: ‘What does a system look like in which the pursuit of private interest leads to the fulfilment of public interest ?’ The answer to the different question is the neoclassical economic model.

The first question is the subject of this ‘Starter’. The answer requires first an answer to the broader question: ‘How does social and political society work?’ ‘Democracy ’ provides a fine set of principles but does not explain how ‘democracies ’ actually function. It is suggested that they function through ‘support-bargaining’. People need support from those around them as a matter of personal security , and will change their opinions and behaviour to get it. Individuals instinctively bargain for support with each other and in the process form groups committed to certain interests, actions, ideas, opinions and theories. The mutual support of members promotes confidence in a group regarding the rightness of its commitments, however odd they may appear to non-members. ‘Support’ functions as a bargaining counter in a bargaining process through which individual interests and group or social interests become adjusted to each other.

It is then possible to answer the first question. Amongst the varied outcomes of the support-bargaining process is ‘money’. ‘Money’ gains support in a community because it is useful in a bargaining process with a similar dynamic to that of support-bargaining. ‘Money’ is a precise and divisible bargaining counter particularly useful in transactions involving items with similar qualities. ‘Support’ is a matter of psychology , lacking the characteristics desirable in a bargaining counter for use in economic transactions. So long as a form of money has the support of the community in which it is used, it will function as a bargaining counter in a process of ‘money-bargaining’. So, the answer to the first question is that economic exchange is a money-bargaining system.

Mainstream economic theory recognises the ‘public interest ’ as the ‘optimal allocation of resources ’ arising from the pursuit of private interest through economic transactions. The outcome is optimal in the sense that no redistribution of resources can make anyone better off without making others worse off. Few would recognise this as being the public interest in any but a technical sense. The idea of support-bargaining makes apparent that a great variety of group or communal interests can be identified through support-bargaining. It is then necessary to realise through money-bargaining not just the individual interests that are the concern of neoclassical theory, but also communal interests . To accommodate communal interests , it has been found possible to make levies on private money-bargaining, without disabling private money-bargaining systems, to provide revenues for government budgets . Money can then be disbursed for the accommodation of communal interests . Support-bargaining agencies, including political parties and governments, are accorded responsibility for communal interests . Governments are able to realise communal interests through budgetary expenditures. They become part of money-bargaining systems. Money-bargaining systems are concerned with both individual and communal interests .

* * * *

This Starter provides an account of support-bargaining, the formation of theories through support-bargaining, the origins of money-bargaining in support-bargaining, the dynamic of money-bargaining and the interrelation of money-bargaining and support-bargaining. It evaluates the role of information in human affairs. It explains also how it is that mainstream theory has emerged as the mainstream when it so manifestly fails to provide a faithful account of the dynamic of economic exchange. There is little that is novel, but the Starter is not simply a summary of previous work. It is a new expression of the theory of support-bargaining and money-bargaining. The compact format makes apparent the relationship of the different components to each other. It provides direct answers to the questions thrown up by the many who challenge the mainstream model. It provides a new account of economic exchange, but one that will be instantly recognised as consistent with everyday experience.

‘The Main Course’, at the end of the book, provides summaries of the contents of the seven books already published on support-bargaining and money-bargaining.

‘Notes from the Kitchen’ at the end of each chapter identify the main coverage of the issues of each bite in earlier books, with an indication also of the main sources used. A full account of the sources used is provided in the earlier books.

Notes from the Kitchen

Sources

The Introduction to Economics for an Information Age (EIA) considers responses to questions. Chapter 9 of Kahneman (2012) is ‘Answering an Easier Question’.

References

1. Kahneman, Daniel, 2012, Thinking, Fast and Slow, Penguin.
2. Spread, Patrick, 2019, Economics for an Information Age: Money-Bargaining, Support-Bargaining and the Information Interface (EIA), Routledge.

© The Author(s) 2018

Patrick SpreadA Starter on Support-Bargaining and Money-Bargaining in Twenty-Eight Digestible Biteshttps://doi.org/10.1007/978-3-030-05231-7_2

Begin Abstract

2. Support and Support-Bargaining

Patrick Spread¹

(1)

Witney, Oxfordshire, UK

Patrick Spread

Abstract

Support-bargaining arises from the need of all individuals for the support of those around them. It leads to the formation of groups and the identification of group interests. High cohesion is necessary to the effectiveness of groups, most readily achieved when a group is under external threat. Individuals and groups identify their interests by reference to their situation. Humans use their sense of symmetry to determine what will ‘fit’ their situation. Situation-related interest causes societies to evolve from situation to situation. In a threatening situation, individuals will recognise that their individual interest is inseparable from that of the group. This can give rise to rigid groups, with the extreme cohesion necessary to violent action. Groups organise, with hierarchies and budgets, to increase their effectiveness.

Keywords

Support-bargainingGroup interestExternal threatSocial evolutionOrganisationsSymmetry

End Abstract

Bite 1: The Importance of Support

One enduring feature of human behaviour is that we seek reassurance. Children run to a parent at the first sign of trouble. Adults complain to their friends in the expectation of reassurance that they are put upon, or the trouble is not so bad. Humans have an innate sense of insecurity and the necessary remedy for that insecurity is the support of others. It is, perhaps, at the most basic level, a concern for self-preservation in a threatening world. Security comes only with the assurance from others that they are on our side, are with us. Social media like Facebook and Twitter help people to obtain the reassurance they need.

Such support does not come free. It has to be earned. At the very least, we have to perform the same offices of reassurance for our friends. If we do not support them, they will not support us. But support derives not just from reassurance against specific troubles, but the reassurance that arises from shared opinions and actions that benefit the group. We adjust our opinions and behaviour to gain the approval of those around us, in the expectation of ongoing support from the group.

Behaviour that elicits support includes what is called ‘altruistic ’ behaviour. Altruistic behaviour implies that individuals disregard their own interests to serve the interests of their community. It is difficult to reconcile with the self-seeking dynamic of human evolution by natural selection . But if ‘support’ is a psychological necessity, individuals gain an essential return from the performance of altruistic acts.

The importance of this sort of support can be seen in the language we use to communicate . By choice of words, we can signal to those we are speaking to the responses we expect from them. If we say, ‘good morning’ to someone, we elicit a little support, for it is customary to regard all mornings as ‘good’. If we refer to someone as ‘slim’, we expect the person we are addressing to respond in favourable terms about the person referred to. But a reference to someone as ‘skinny’ is a prompt for disapproval of the person in question. Language has inbuilt facility for directing support and opposition in desired directions and reducing the risk of people failing to provide the desired support.

‘Support-bargaining’ is conceived as the underlying process by which individual insecurity is allayed by ‘negotiations’ with associates. It gives rise to the formation of groups. People support each other when they find their views and opinions in accor...

Table of contents

• Cover
• Front Matter
• 1. Appetiser
• 2. Support and Support-Bargaining
• 3. Political Support-Bargaining
• 4. Intellectual Support-Bargaining
• 5. Money-Bargaining
• 6. Information
• Back Matter