We think in metaphors – where “this is like that” – as our way to apprehend things. But all theory is specialized. Each is like a flashlight directing its shine in a jungle at night: we see what appears in the beam. There may be lions and tigers in the dark hidden from us. We know only what is specified within our restrictive field.
This is a case for multiple lenses, where each asserts its own essentials at the cost of all else. Such assertions of fundamentals are at the core of any theory, yet they are rarely justified in its own argumentative frame. Only through comparative vantages can we gain perspective on each, exploring other realms of vitality than those sequestered in any one view. We need to look in as many ways as we can, to see at all. Diverse intellectual outlooks save us from meaningful losses of vision.
As we enter adolescence, chaotic cacophony in our world dissolves into a system of frames that makes sense to us. So we cling to one view, rapt to have figured it out! But there is a next step to this process some of us never reach, where we open our minds to larger realms in which many outlooks are entertained, all living together to open new and unplumbed domains.
People often say: “If all you have is a hammer, everything looks like a nail.” This is the flaw in single-mindedness, when we only know one way. We hammer everything. If the earth is a sensitive flower, what is the impact of beating it down? Perhaps we need a watering can and a more nurturing view. The more ways we think about things the stronger we become.
This short essay unfolds economics in six separate steps, each extending those before, in a series of metaphors setting contexts sequentially in new ways. Standard theory is thereby unlocked to include things otherwise screened. Economics will thus unfold to unexpected truths.
We see theoretical insights through a metaphorical lens. Metaphors are frameworks of thought; they avert the need for any explicit depiction of grounds. Metaphors serve to enrich a model of thought beyond its articulate core. As theory involves selective focus on self-asserted essentials, the context of any particular outlook – the ground against which its figures are cast – is left inarticulate and undescribed. Any awareness occurs against an implicit contextual field, which goes silent if focus seizes attention. The pianist, suddenly thinking of fingers, loses the thread of the song. Framing counts, in its selection of fundamentals for choice.
Economics – indeed, all theory – is metaphorically bound. The relation of theory and metaphor is often misunderstood to mean that metaphors illustrate theories or give insight to applications thereof. Such a view misses the point. The analytical role of metaphor is primary and not derivative. Theories stem from, manifest or reflect metaphors, not the reverse. Focal awareness is shaped by theory arising from metaphor ranging through every thought, decision and dream.
Six choice metaphors are represented to open decisional challenges in economic analysis, starting with the simplest story and then unfolding into a series of views on social behavior. The economic implications are radically unexpected from a traditional line of thought. Each metaphor rises from those prior, repositioning them into a broader realm. But all have value when applied to where their assumptions pertain. The key is to learn the limits of each by understanding them all.
1. Choice in the Neighborhood Store
The neighborhood store is where all choices in neoclassical theory are made. Our options sit on shelves – be they consumer goods, production technologies, contingent outcomes, etc. – with their features known and accounted for, and a budget allotted among them maximizing its value when turned into goods. What each outcome will feel like to wear, pursue and consume is certain; neighborhood stores are familiar and these choices are made every day. The details shift – e.g., from consumption as an end in itself to production as a means to profit – but the pattern of action is standard. Choice in the store is an orderly process: stable, static, controlled and known.
The pricing decision is simple: maximize profit at some price P* with a markup on cost. The growth of output Q* is zero or at some expected rate: Q* moves through time at a pace set by P*. Pricing is simple and well-defined, disengaged from other concerns, with cost and demand transparently known.
Choices in neighborhood stores are familiar because we enter them every day; there is no need for rational long-term plans, strategic concerns, etc. Goals are met by seeking gains, undisturbed by others save via prices set by supply and demand in an impersonal market. The neighborhood store is a nexus of features simply taken for granted in the economics of choice: knowledge and total control of effects; independence of wants between neighbors through time; material goods; oppositional tradeoffs; stable intentions; etc. The framework in neighborhood store economics seduces us with simplistic conventions: short-term substitution and decreasing returns shifting gradually through technical change.
Although uncertainty and dynamic considerations appear in this scheme, it is in essence static and known, while only applied to immediate time: unexpected changes and complexities are ignored. The neoclassical view restricts itself to neighborhood stores, while life finds less sure realms. For example, the store is silent on chess.
2. Choice on the Chessboard
Neighborhood stores supply no insight to the game of chess. This situation is so different, one might well ask why. Chess is strategic; standard assumptions – of free choice, independent agents, known outcomes, stable preferences – shall not apply. Even game-theoretic conceptions fail to embrace its contingent decisions. One must abstract from moves and details: chess is a process of planning in the face of options shifting continually. Outcomes must be projected diversely, and the purpose – to win – neither defines nor requires action sufficiently to identify moves. The field of chess is as much an opponent’s style of play as the board, demanding a different approach than that in neighborhood stores. Time and planning command more regard.
One must step back from board positions to analyze their economics. The emphasis here is on planning in unpredictable, changing environs. The better that tradeoffs are understood and near-term contingencies culled, the further ahead can a player project. The move horizon in chess is similar to the time horizon of choice. So chess introduces planning horizons, as an ordinal index of vision.
Choices in chess, sequentially interdependent, are irreversible, like life and not in a store. Indeed, an ecological view – that any action engenders effects spreading outward forever – invites attention to the relative boundedness of our rational limits. Such is the notion of planning horizons, seen in strategic games like chess.
In neighborhood stores, outcomes cease with consumption, while choices in chess are linked through time, meshing with those of others. Every move is strategically placed, adjusted to rivals’ surmised reactions. Success stands on anticipation; move horizons spread by understanding the overall pattern of play based on repeated experience and a dynamic complex of plans. Entrepreneurial knowledge is similar: it is more of a skill from practice than transmissible learning.
The better one apprehends the world – the more reliable landscapes are – the further ahead and around decisions can their results be seen. Indeed, all outcomes are only imagined at any moment of choice in their range of valid projection. An agent’s planning horizon H* reflects a balance of short and long term prospects sensed in response to internal (psychological) and external (environmental) factors. There is a planning horizon implicit in every human act.
A static view of the pricing decision in neighborhood stores suggests that price P* involves a markup on costs at some optimal level of Q*. What chess suggests is that both the markup (based on demand elasticity) and the measure of cost per unit of output decline with longer planning horizons. As H* extends, P* falls, increasing Q*. Pricing and output turn on H*: longer horizons stimulate growth.
If so, the static model of pricing in neighborhood stores is incomplete, without defining horizonal limits. Chess has something important to offer that we cannot otherwise see in the complexity of its positions and options. The ‘move horizon’ in chess is like the ‘planning horizon’ in choice: both are reflections of agents’ skills, savvy and truthful learning. Chess sets the process of human decision into a complex system based on our ranges of vision.
The neighborhood store is static, closed to interrelated decisions. Chess is strategic, competitive, and encompasses interdependent decisions in rivalrous situations, showing how planning horizons relate through choice to pricing behavior and growth. But chess still entails substitution and individual action, not the full linkage of agents in time. Chess stresses opposition, where agents play to win; a transportation network captures a broader realm of vitality.
3. Choice in a Transportation Network
Choices in transportation networks spill their effects on others: externalities spread throughout these systems with no end. The boundaries here are horizonal, embedded in the projected effects internalized into each choice. The transportation network casts interdependent agents setting prices alone or together, with those differences serving as a measure of their interrelation. Take any connected group of firms and compare an individual profit-maximizing P* to an adjusted P’ based on jointly maximized profits. This difference shows the linkage of any one member to that group.
Substitutes favor a price hike while complements want it cut. Their joint effect on pricing – collectively vs. individually – yields an index of substitutability S = P’ – P* which is positive (for substitution) or negative (among complements). Within this metaphorical frame, both relations appear.
The transportation network captures social links. The relevant difference is one of parallel lines as rivalrous substitutes, so collusion raises price (S > 0), while serial linkages like complements strive for price reductions (S < 0). This method defines the interrelation of firms in a group. Complementarity means collusion of sequential lines shall lower price. But substitutes and complements join in network contexts; one shipper’s alternate tracks are another’s end-to-end ties. Purposive valuation and travel direction define our relations here. A use of ‘industry’ obviates systemic complexity.
A market defined as substitution is not universal, like in stores or chess. The linkage of agents to radiant externalities – S = P’ – P* – represents how integration impacts price through feedback from external profit effects. The social welfare result turns on S, our index of substitution, dismissing ‘industry’ as a case where – by assumption, necessity and definition – S > 0, with complementarity absent.
This new rule of composition transcends substitution with a more resilient frame embracing complementarity. The method delivers a case for cooperation through positive feedback. A network casts substitution into a complex systemic context.
What are the welfare effects? The issue is whether my own gains reduce or add to yours. Substitutes see a conflict of value while complements are aligned. The point is, substitution and complementarity join in networks.
The question is one of fundamentality. Stores and chessboards are rivalrous scenes. A transportation network captures complementarity in a dynamic concatenation with substitution. Are there realms where complementarity overrides substitution? With intentions aligned, dividing us stifles efficiency: we prompt each other by working together. Collusion among complements supports social welfare, activating common needs in organization and education. Competition is self-defeating for complementary yields. Love is a an example, like any intangible good.
4. Choices in Love and Other Intangibles
Love is surely a realm where complementarity overrides substitution. Indeed, love is as close to a purely complementary good as we get. There are other examples: information; ecological health; ethics; joy; etc. But how will complementarity work? Where we find concerts of interest, such as with beer and pretzels or wine and cheese, instead of conflicts like beer vs. wine, how do we analyze this situation, especially as all four are complements for a party plan? Tradeoffs are context- and purpose-specific in networks and complex systems.
Dismissing complements as ‘nonrival’ exceptions is not enough. Substitution is not primary, nor is complementarity second. The issue of fundamentality opens efficiency issues. Substitution demands competition and complementarity, cooperation. In networks we find both, invalidating ‘industry’ answers.
Love exemplifies complementarity. How do we deal with that? Complements make collusion efficient: they support each other, obviating marginal theory. Here, partial approaches fail; holistic concepts are needed. The transportation network combines interdependencies, while love forces substitution totally out of frame. Smiles on the street, devotion, caring, culture – all intangible goods – suggest a role for abundance.
So what is an economics of love? First, this is a puzzle for a rational economics. Why, when love is so costless to produce, while always sought, is it so rare across society? Why are we not all awash in love? We yearn for love in songs and stories and mourn its potential loss. We treat it as scarce, which it is. But why?
Here is a key to the answer. Love is complementary; ‘what goes around, comes around’ here. As in teaching and learning, conservation laws fall short; no scarcity is inherent to love or other intangibles. Complements support each other, raising well-being for all. In this domain, deeming complements scarce makes them so.
There are no tradeoffs here. Substitution does not apply: conservation is counterproductive for complementary goods. The best strategy is to give them away, like squandering smiles on the street: the more you provide, the more you get, along with everyone else, so the more reinforcement you receive for sharing additional love. The core of complementarity yields contagious social effects. Such should be openly shared and not treated as scarce. An economics of substitution does not apply among complements, stifling outcomes sought. Competition among complements spawns scarcity over abundance.
A transportation network captures the point truly and well. Among complements, P* exceeds P’ , making S < 0 and collusion our route to improvement. Competition truncates supply; intangible goods should be gifts. Complements – starved by competition – expand through cooperation. An economics of scarcity undermines intangibles. Smiles and love should be openly shared to maximize social gain.
What is the balance of substitution with complementarity here? Though rivalry is suited to scarcity, cooperation nurtures abundance, so our institutional choices stand on their relative weight. Substitution is not alone, but how important is complementarity? Which is our most sweeping case? The question needs an answer in transportation network contexts, though in love – for all intangibles – it is very clear.
A composition rule based on own and joint profit effects – our index of substitution as S = P’ – P* – implies complementarity calls for reform in economics. Another relevant metaphor emerges from education.
5. Choice in the Educational System
Neighborhood stores are wholly focused on physical sources of value, emphasizing consumable goods. Scarcity under a budget constraint depicts a maximization process central to orthodox theory. Complementarity says something else, as shown by love and transportation. Love and information are not scarce unless we make them so. This is the core of horizonal theory and the case for cooperation in a world of rational limits swamped by information. Here we find an economics of educational systems.
The educational system metaphor raises our range of awareness with horizon effects, stressing complementarity. If substitution is special – not general – efficiency comes from cooperation. The argument is as follows.
The neighborhood store reduces pricing to profit maximization. The chessboard adds a planning horizon H* as a measure of savvy in the ‘move horizon’ of players, suggesting prices shaped by H*. A transportation network captures profit externalities as spillover pricing effects on a group. This supplies us with a rule leading beyond the ‘industry’ concept. Love frames a case of complementarity yielding cooperation. If so, S = P’ – P* < 0 applies to realms where alignment trumps separation.
An educational system metaphor opens orthodox substitution along horizonal lines. ‘Interhorizonal complementarity’ emerges from role model effects shaping economic relations. So networks show S = P’ – P* replacing any ‘industry’ aggregation.
Now we examine S as an index of substitution. Substitutes (S > 0) make P’ more than P* as the group’s joint-profit price exceeds a member’s own-profit price, while complementarity brings S into a negative range by moving P’ below P*. If private horizons shift together with interhorizonal complementarity, horizonal lengthening alters relations, shrinking S and transforming conflict into concerts of value. In sum, dS/dH* < 0 in all economic cases, as a universal law. Horizonal growth turns substitute tradeoffs into complementary yields, suggesting a new welfare rule for regulatory systems: horizonal growth does good by aligning our representations.
Horizons spread through time and space; their range is set by valid awareness circumscribed by surprise: we may think our horizons long when they prove very short. Interhorizonal linkages shape economic relations through horizon effects.
Where does education come in? First of all, learning opens horizons; knowledge broadens awareness of outcomes. Second, the educational system is almost purely complementary, akin to love where rivalrous systems shrink common needs. Sharing, here, is our route to growth. If so, competitive frames in education are regressive.
In sum, a cooperative venue advances social learning, with other important effects. For example, longer planning horizons stifle interpersonal conflict. If I am myopic, concerned with myself, I ignore my impact on you, as I don’t care about anyone else. But with a larger social embrace, I am moved by your concerns, so I extend my span of attention into a broader realm of conscience, social, ethical and ecological.
Education needs to be unified for horizonal growth, turning conflicts into concerts of value. Longer-range and larger perspectives serve to resolve violence, stress and discord through an extension of caring. Synergistic cumulative feedback characterizes horizon effects, for better or for worse.
Interhorizonal complementarity yields sweeping connotations for systems design. Complementarity makes separation stifle learning, urging integration. Competition does not apply in modern knowledge economies. Such are the lessons of education.
The five metaphors stated above can be summarized thus. The neighborhood store reflects the realm of neoclassical economics, with no horizon effects. Chess stresses ‘move’ horizons, in a rivalrous zero-sum game. The transportation network captures synergistic connections. So will love foster abundance, shared freely, yet degrade to rarity if framed through rivalrous strife. Interdependencies shift – with educational learning effects – away from conflicts to concerts of value as civilizations mature. Social linkages are not static; they are dynamically poised in negative vs. positive feedbacks (substitution and complementarity). This systemic configuration is best seen as a human ecology through a horizonal lens.
6. Choice in a Holistic Human Ecology
A holistic human ecology is tied to a full living earth. If so, our aggregation of groups with no attention to organization ignores systemic concerns. Such matters cannot be avoided when embracing complexities in networks of interrelated decisions.
Human ecology opens us beyond a reductive view. We are part of understanding; our regard is from ‘inside,’ not as ‘outside’ observers. Systems stress interdependence, feedbacks, homeostasis, ethics, community, organizational learning and institutional links. Systems survive and thrive through an ecology’s interactive vitality.
Lifeforms sway with their environment, tracking any immediate aims into larger realms. Systems show three elements: feedback can be negative or positive, framed by time. This triad can be seen as substitution, complementarity, and planning horizons.
In networks, systems and economies, ‘externalities’ are ubiquitous: all we do ramifies outward forever on everything else. If so, a partial look is incomplete and leaves us blind. Systems act like organisms in an incessant diversity.
An urge for rigor in economics set a focus on partial analysis, shunning complexity issues. Substitution means spillovers shrink in negative feedback; complementarity yields their growth. Living systems are interreactive; externalities matter. An aim of human ecology is to integrate people and nature. Its economics stresses system design over control, learning consilience through horizonal growth.
Engagement is central to human ecology; we are embedded within a system, all of whose elements are required for the whole process to work. Closed-system models shun the inclusive vitality of the Whole, leading to unexpected effects. Our restrictive vantages show in deeply tragic cultural, ethical and ecological losses.
Successful design demands a fit of frame to application, too often denied by an economics so wedded to unrealistic constructions. The closer the fit of theory to fact, the longer our planning horizons, so the better our choices. Otherwise, we squander resources into wasted effort. All local decisions should include their broader effects.
Planning horizons stand on the fit between image and truth throughout all choice. If longer planning horizons shift our relations from discord to assent, then we need to urge horizonal growth through systems design. How we incorporate organizational learning incentives in business settings is studied in management theory, yet is ignored throughout economics.
Systems need tight feedback loops to preserve their resilience. If forces become misaligned, energies shift from production to conflict, taking costly resources. Weak cognitive feedbacks stem from management failures and doubt; to bind them means incentive alignment, to link group plans with higher aims. Organizations engage us with goals beyond immediate needs, suggesting a tension of individual with systemic concerns. Cooperation thrives on trustful loyalty, joining private to social incentives.
Cooperation enhances learning and tightens feedback control loops with help from established traditions. If such connections are loose, we may not tie effect to cause. Planning horizons thrive on understanding, creating cohesion through rational links. Social learning combines common knowledge with horizonal growth.
Interhorizonal complementarity augurs social cohesion. Social leadership patterns offer routes to meaningful learning. In an educational setting, cooperation nurtures success; systems hold together by sharing complementary goods. No planning process survives in the absence of ethical linkages spreading through a cohesive frame.
Competition brings systemic collapse into inchoate disciplines seen in academe. If knowledge fosters integration by encouraging open awareness, social conflicts stem from massive failures of competition. Intellectual efforts for research should be joined together. This is why academic science survives as a gift economy.
Organizational learning has structural links. For example, a price system guides and teaches, showing complex system effects in its causal lessons and feedbacks. Here, rivalry is self-defeating; competition fails, sabotaging consilience.
Endeavors involving information justify integration; here rivalry yields social loss. A more realistic economics shows a route past stores, chess and transport into an educational system placing growth at the fore.
Healthy organization emerges from a sense of engagement, trending past traditional lines of hierarchical order. Treating adults like kids spurs symptoms of fragmentation, including conflict, disengagement, dissatisfaction, frustration, failure, rivalry, antagonism, materialism, myopia, and other signs of stress. All emerge from management practices stifling higher-order needs for recognition and truth.
These cultural limitations show how we treat each other; rivalrous systems sink catastrophically into stressful lives. Complementarity is more relevant to intangible goods, supporting cooperation and peace.
So human ecology opens an unfamiliar realm of feedbacks, circular reasoning and dynamic complexity in a systems approach. An introduction of planning horizons suggests some meaningful lessons, seeing cooperation as a means to restore respect and truth through ethics, civility and dignity in economic cultures.
Positive feedbacks show why human ecology opens a route to wean economics away from materialistic conceptions into a cognitive field. The very idea of planning horizons stems from an inductive frame based on dynamic complexity. A proper embrace of systems theory invites a meaningful economics of values and personal growth. Thus shall human ecology as a model of economic analysis show where reciprocity yields a route to learning, growth and welfare. Rivalry has been abortive, foundering on ecological losses spilling across society, opening questions of viability in our habits of thought.
Summary and Conclusions
These six metaphors show a need for horizonal economics. Standard theories fix our horizons, stressing short over long term models. Choice in neighborhood stores is simple, lacking any projection. Chess stresses savvy; the move horizon in chess is like the planning horizon in choice, suggesting broader ranges of vision. Substitution is not our only economic connection; ‘industry’ has significant costs if conflicts swamp prior concerts of value. A transportation network captures a balance of both through profit effects, in an alternative view.
Reciprocity opens us up beyond substitutional links. Here, we reap what we sow; positive feedback casts its shadows. Structures seeking efficiency through rivalry yield distress among complements such as love and learning. Competition may encourage physical output (with rising cost), but starves intangibles in domains of far more importance to us. Standard theory in economics has led us severely astray, yielding myopic cultures, social unrest and destroying cohesive vitality.
The educational system metaphor raises another issue: the balance of substitution and complementarity opens a question of how horizons shape our relations. In normal economics all linkages are substitutional, leading to rivalry as an optimal institutional form, making competition a route to efficiency. Alternatively, a systems approach embraces substitution joined to complementarity: the first demands separation while the last seeks integration. Merging substitutes, like partitioning complements, is self-defeating. A network combines them both, implying an irresolvable issue of efficient design. This is where an introduction of planning horizons saves the day.
How do planning horizons affect the balance of interdependencies in educational systems? The answer is quite general: if horizons shift together, longer planning horizons move our relations into concerts of interest and away from rivalrous strife. Horizonal growth is stifled by a competitive frame; if so, institutions should evolve, favoring cooperation. Otherwise progress slows and the transformation is stopped. Competition in complementary settings is counterproductive: here rivalry keeps society immature and dumb, mired in narcissistic concerns, suffering catastrophic cultural, ethical and ecological loss.
Planning horizons serve as an engine of growth in a complex systems economy; horizonal learning is spread through cooperation and blocked by competition. The failure of neighborhood store economics stems from mainstream models shoving complementary goods and planning horizons out of frame.
This essay addresses a need for horizonal economics. Standard doctrine is savaging all life on earth, imposing substitution as a universal law. Any ecology – human or otherwise – is a complementary system, making conventional economics responsible for ecological losses spilling out from myopic cultures spawned by competition. The institutional shift from competition to cooperation needed to open social planning horizons has stalled due to economists’ stubborn denial of complementarity. A brief view of human ecology offers some meaningful lessons on why economics should open a cognitive frame. Whether economists pay any heed cannot be answered in the abstract. All one can do is point the way, and hope that colleagues will listen.
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NOTE: A more rigorous and detailed treatment of the issues addressed above can be found in The Journal of Philosophical Economics, Volume II, Issue 2, Spring 2009, on pp. 34-77 at: http://jpe.ro/?id=revista&p=138&cuprins=vizibil.
Further discussion of these issues can also be found on the following website: https://independent.academia.edu/FredericJennings.
Teaser photo credit: By Melburnian – Self-photographed, CC BY 2.5, https://commons.wikimedia.org/w/index.php?curid=1527488