Tuesday, 15 April 2014

Keeping my own company

I thought it might be fun to come at economics from my own point of view, with a focus on the company.  I shall hopefully touch on real economics and finance writings, but specifically with this emphasis.  I want to have a top down approach and a bottom up approach.  The top down approach will look at the domain of companies in general, where they fit in from a macro-economic point of view.  And the bottom up approach is like the perspective of an equity analyst or management consultant - looking at the innards of companies, what specifically they can do and create, both as a primary output and also with respect to their funding.  With each of these two directions, I can approach the subject more theoretically and also more pragmatically or empirically.

I know my natural disposition is to approach this subject from a syntagmatic or evolutionary point of view - both with respect to the shape of the company generally, and with respect to the shape of the finance group of organisations (i.e. how they fund).  This contrasts a little bit with the so-called equilibrium approach to economics which tries to give priority to steady state models, where change applies as perturbations (differential equations with shocks, mathematically).  At this point I'd just like to point out that the evolutionary approach is just as amenable to algorithms and mathematics so I am free to reject the recent criticisms of the overly mathematical approach to this common steady-state approach.  

For me, the evolutionary perspective is more anthropologically real, allows me to see connections with the history of humanity over the last 70,000 years, gives me a very broad perspective.  At all points I will be trying in my head to find a way of model things, which of course means to simplify them.  That's totally acceptable and I see no significant downside.  That part is maybe somewhat controversial, since often you hear thinkers suggesting that models can be too simple.  Not for me.  Not for developing an understanding.  Start simple.  Work up.  

The picture above is said to be the oldest company in the world.  It is nearly 1,300 years old and is a hotel which is said to have been run by several dozen generations of the same family.