|May 28, 2007||Posted by Fred Foldvary under Progress Report, The Progress Report|
Yoga for the Mind
by Fred E. Foldvary, Senior Editor
by Fred E. Foldvary, Senior Editor
In the original practice in India, Hindu Yoga consists of physical postures and mental methods such as meditation which create both better health and a more enlightened understanding of the nature of our existence. As usually practiced throughout the world, yoga involves postures and exercises that build physical strength and vitality.
Since yoga stretches the mind as well as the body, we can apply the concept of yoga to strengthen our way of thinking. The two main mental poses of yoga thinking are the questions, “What do you mean?” and “How do you know”? These two mental stretches are associated with the philosopher Socrates in ancient Greece.
By asking “What do you mean?”, mental yoga clarifies our understanding of words, or else exposes words as lacking in meaning. You can do this mental yoga exercise when you read an article. Identify the key terms, and determine whether they have clear meanings either from the context or from a definition.
For example, many texts use the word “capitalism” without defining it, and without making the meaning clear by context. In so doing, they shift the meaning without being aware of it. Capitalism can refer to today’s economies, or to the pure market, or to the seeking and getting of privileges by owners of capital, or to the exploitation of labor by the owners of capital. Sloppy writers often implicitly mix in land into their concept of capital, and confuse today’s mixed economies with non-existent free markets. It requires the discipline of mental yoga to sort this out.
The question “How do you know?” seeks to determine the truth about propositions. The two ways of knowing in thought yoga are logic and evidence. In scholarly writing, evidence is always provided for facts, and sources are cited for sayings. But even in non-scholarly writing, one can provide the sources and evidence for statements whose truth is not obvious. Otherwise, the proposition is an opinion or a conjecture.
The logic of reasoning can be deductive, inductive, or abductive. Deductive reasoning is the foundation of thought yoga and involves avoiding logical fallacies and being able to think conditionally, i.e. if X then Y. Inductive reasoning creates a general proposition from observed facts. The expert in thought yoga recognizes that such generalizations are probabilistic and could be falsified by better evidence. False generalizations can create prejudice and leaps to false conclusions.
The most difficult posture of yoga for the mind is lateral reasoning, using abduction. Abductive logic involves examining the premises of an argument to determine if there are missing items. The argument can be valid, the conclusion correctly deduced from the premises, yet the conclusion can be false because a necessary premise has been omitted. The value of submitting one’s thoughts to others for criticism is that they can provide those missing premises better than the author.
The main benefit of learning economics is not facts or theorems but the ability to understand the implicit reality beneath the explicit appearances of economic activity. Economics should be an exercise in abductive reasoning. Economics yoga teaches one to stretch one’s mind to think in a different way than that of the ordinary unenlightened mind.
For example, economics recognizes that the true cost of something is not the money one pays, but the most important things that one gives up. For example, if you buy a car for $20,000, your true cost is the other things you could have gotten with that money. Thus all costs are opportunity costs, the foregone alternatives.
Therefore economic yoga tells us that the true profit of an enterprise is not the money you have left after expenses, but the gain after also subtracting all opportunity costs, even if they are not paid in money. For example, your gain from self-employment has to exclude the wage you could have gotten working for somebody else.
Economists like to say that there is no free lunch. This is true in the sense that there is no economic magic. We cannot increase production and income by waving a wand, such as increasing the minimum wage or creating more money. In economics, we have to keep it real.
But to say that there is never a free lunch is unenlightened. The yoga economist recognizes that the social benefit from an economy is entirely a free lunch. The free lunch in economics is the surplus from economic activity. The consumer gets a surplus when he buys something at a lower price than the most he would pay. Production creates a free lunch when the product fetches a higher revenue than the economic cost. Most of the surplus from production goes to land rent – all rent is surplus and a free lunch, because land has no opportunity cost. Workers get a surplus when they get paid more than the least they would have accepted. There is even a surplus from government when its services are worth more than they cost, although often the reverse is true.
These surpluses are destroyed by taxation and excessive restrictions imposed by government. Economists call this a deadweight loss. Yoga economics tells us that the true cost of government is not the taxes paid but rather the elimination of social surpluses. The deadweight loss can be avoided by obtaining public finances from use fees, pollution and congestion levies, and land rent.
But this free lunch and its destruction are not visible and not obvious. It requires the abductive reasoning of economics. People who think they are progressive or liberal or compassionate and advocate governmental medical care and welfare for the poor and deprived have not practiced yoga for the mind. People who think that their conservative traditions and authorities are universally valid have not asked themselves “how do you know?’ Those who criticize or praise “capitalism” have not asked “what do you mean?”
Yoga for the mind involves both discipline and a way of thinking. Just as one needs an instructor for physical yoga, one benefits from a teacher in learning mental yoga. They may not realize it, but good economists who coach students into the economic way of thinking are actually practicing a type of mental yoga. Yo!
Copyright 2007 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report. Also see:
From Income Tax to Environmental Tax: Time for a Shift
Immobile Taxation in a World of Mobility
The Need For a New Economic Paradigm
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