Reconstructing the Economy: A Methodological Journey from the Surface to the Essence and back

Abstract

The essential methodology in social science to “understand” phenomena is informed abstraction. But the way - how and what for the abstraction process is shaped - divides the economists into various schools. While mainstream econ- omists abstract from any links of the economy to human beings - replacing them by selfish machines maximizing their prof- its or individual utilities, and neglecting any deeper analysis of the basic constructions they use (like prices or money), heterodox economists try to look behind the surface, link them to certain periods of history and to the source of all value: humans are social beings and cannot exist without mutuality. The paper presents a heterodox way to reconstruct contempo- rary capitalist economies by applying the new science of information with its evolutionary concepts. It starts the description on a very abstract level: useful things and services produced by specialized labor. Step by step new layers of economic activities and related information are added and become the basis for the next one. Vice versa economic activities on lower layers become controlled and modified by higher layers. One can see that the higher controlling principles in contemporary capitalist economies do not assist the economic, social, and cultural well-being of the majority of people, but function ac- cording to the self-interest of a minority. For the first time in history capitalism has developed new technologies that in prin- ciple could allow for the participation of the many, to create abundance of information, and to offer tools for building a de- mocratic and sustainable society. But by the same capitalism, rigid Intellectual Property Rights and severe copy protection mechanisms enforce artificial shortage of information goods.