Dear President Obama,
Hopefully the failure of the Obama Administration will make it easier to communicate the need for fundamental paradigm and culture shifts.
Your failure is especially instructive because you have done everything right, or at least almost everything right. You have been a rational president. You have based policy on facts and not on unsupported opinions. You have sought the informed advice of acknowledged experts and by and large followed it. You have invited all parties to come to the table to share ideas for solving problems. You have not rushed to judgment, but have carefully weighed pros and cons and the views of others before arriving at a decision.
If you had been a crackpot, it would have been harder to see that rationality in its dominant forms is inherently unworkable.
A major qualification must be made to the thesis that you have done virtually everything right. You have intelligently administered the status quo, but you have not attempted to deliver the change you promised. In your campaign you spoke of “changing the rules of the game” and “change from the bottom up.” In your books you write of your anthropologist mother and of your visits with relatives in Kenya who practice different basic rules. You were moderately credible as a leader who might actually initiate change in America.
Although you disappointed us, it remains an encouraging fact that your message touched hearts and minds. People gave you money. They voted for you. Your campaign provided evidence that there are many people who realize that fundamental change is needed.
Today you are desperately trying to trim the deficit. You are keenly aware –although there are some liberal savants who deny it—that the nation cannot continue to go deeper and deeper into debt. A few months ago I heard you say on television that the point of your policy was to spend more money. Then you were desperately trying to revive a sagging economy. Today unemployment is not going away. Turning off the cash spigot can only make it worse. Turning on the cash spigot can only make the deficit worse.
You are checkmated. The problem has no solution under the rules of the game as it is currently played.
Further, even if you could do the impossible; even if you could get the economy onto a path of steady growth with declining debt and declining joblessness at the same time, you would still be checkmated. Sure we can support green technology to some extent without a paradigm shift, but to really get humanity off its collision course with nature we must get off the growth dynamic that has driven capitalism for the past 400 years. (See for example Ted Trainer, Towards a Sustainable Economy, the need for fundamental change. Oxford: Oxford University Press, 1996.) Now you are desperately trying to get the USA on the growth dynamic.
I am not the only one proposing paradigm shifts today. (See for example any issue of Resurgence magazine.) There are many books with concrete proposals, some of which I have written. There are many on-the-ground experiences, some of which I have participated in and/or evaluated.
Let me close with just one point about culture change. (See my and Joanna Swanger´s chapter on this topic in Handbook for Building Cultures of Peace. NY: Springer, 2008.)
Culture shifts do not come out of thin air. They come out of potential transformations of existing cultures.
Applying this principle to the USA here and now suggests renewed emphasis on volunteering, a practice that is already widespread. Bypass the economy. Mobilize resources to meet needs directly. You could start in your own neighborhood, in the slums near the White House, and you could take a few tips from The Church of the Savior, which is just down the street from you.
A renewed emphasis on volunteering is not just an emergency push to house the homeless and to provide useful and dignified activities for the unemployed during a short period until the recession is over. It is a strategy for beginning a sustainable future now.
Tuesday, March 9, 2010
Thursday, January 7, 2010
Letter to Barack #20: Slouching Towards Bethlehem
Dear President Obama,
Now we have celebrated yet another Christmas with millions on the outside looking in. They are outsiders excluded from our annual fête de la prosperité. They are selling knick-knacks on the sidewalks, washing the windshields of cars stopped at intersections hoping for a tip, panhandling, stealing, cooling their heals in prisons, surviving on pittances in dilapidated apartments, working long hours for pay so low that they are poor in spite of being employed, telling complicated lies to con somebody out of a few simple dollars, and so on and so forth.Meanwhile hundreds of think tanks and university departments and international organizations are grinding out more professional literature than anybody has time to read about how to end poverty. At a world level it is about how to achieve “development.”
It is the New Year, the first day of the new decade. It is a time to renew our minds.
“Be not conformed to this world, but be renewed by the transformation of your mind,” wrote Christianity’s first intellectual in his letter to the Romans.
What Saint Paul called “transformation” we epigones of Thomas Kuhn today call “paradigm shift.” (Read shifts, the singular always including the plural.)
You may remember President Obama that a year ago I predicted in a letter to you that your own experience would demonstrate the need for a paradigm shift. If you as a very popular president, advised by the leading lights of the mainstream economics profession, supported by majorities in the House and the Senate, could not get the economy humming along smoothly and successfully within a year, your frustration would demonstrate that there is something wrong with mainstream thinking. The year is up. The demonstration is, however, redundant. Even without current frustrations there are many anomalies that demonstrate the need to be transformed by the renewing of our minds.
Bucky Fuller wrote, “What they do not want you to know is that there is enough for everybody. There is enough to meet the needs of 100% of humanity without ecological damage.” Bucky spoke as a scientist, as one of the many scientists who know that appropriate technologies equitably applied could meet the needs of all the world’s people, although probably not the needs of the larger populations that would result from unchecked population growth.
Unfortunately, what Bucky Fuller attests is physically possible is not at this point in time socially possible. Accumulated anomalies that call for a paradigm shift are embedded in the curricula of the universities, in the minds of the experts, in the minds of the general public, and in our institutions.
Except for a few pioneers such as Genevieve Vaughan (none of whom were invited to your Jobs Summit) minds are not moving. Nevertheless reality is moving. Without consciously intending to do so, society is slouching toward a paradigm shift.
Evidence to prove my point: Millions of Americans are now newly on the government payroll, living from check to check as Congress passes successive extensions of unemployment benefits. The benefits are extended not because the reigning economic paradigm calls for them but because reality calls for them.
Crime rates have fallen in the USA as millions are less tempted to steal because the government gives them money, because houses formerly vacant during the day are now occupied by their unemployed owners, and probably also because law enforcement authorities have improved their techniques.
I believe we are slouching toward the realizations that unemployment is permanent; that millions more would be unemployed if they were not warehoused in jails, schools, and barracks; and that other millions more would be unemployed were they not employed in the security business keeping down the unrest partly caused by unemployment in the inner cities and in the outer periphery. Unemployment patent and disguised is structural. (Not just “structural” in the narrow sense of the economists, but also in the broader sense of the sociologists.)
Every day we realize more and more that for-profit employers will offer the millions just mentioned jobs only when the fifth derivative intersects the sixth integral in n-space. In other words, never. Every day we realize more and more that those millions should be doing something useful while waiting for that non-event to un-happen. And …
….for example, they could be planting trees. Here I have to congratulate you President Obama because you are taking a step in the right direction putting many people to work installing green technologies …
…and, to finish my thought with questions: Are we getting to the point where we will put our money where our mouth is by treating human beings as ends not as means? As the very purpose of the economic apparatus? Not just as human resources? If so, then all those millions could be supported not just to be useful, but to develop their own personalities. They could, for example, be in school studying massage or poetry or bass guitar or pole vaulting or astronomy or religion, or philosophy, or the history of algebra, or organic gardening, or whatever fulfills their dreams. We would always factor in also going back to school periodically to keep up with the skills required by the job market. Retooling is part but not all of lifelong learning.
Signs already point toward a silent transformation and paradigm shift in education. Throughout the world enrollments in tertiary education and in adult education mushroom. Public policy in every nation endorses the UNESCO goal of lifelong learning for all.
Another question: Are we backing our way into fulfilling the prophecy of Karl Marx that at some point in time pre-history (the epoch of domination of human beings by the economy) would end, and the history of humanity (the epoch of the full and free development of all) would begin ?
In practice if not in theory we are breaking the sales barrier. Even though if you listen to people talk, or if you listen to the justifications for micro-lending programs or for job training programs, you will hear that most people still believe the fish story (“Give a man a fish, and …”), in practice more and more people are able to achieve a livelihood without producing anything for sale. The market is losing its grip, becoming more docile, acting more like a servant and less like a master.
There is a catch.We are funding the greening of America; the groceries of the unemployed; ever greater military, police, and private security expenditures; and highly subsidized education for more and more students of all ages by borrowing ever more astronomical sums of money. The national debt, state and local debt, corporate debt, family debt, and individual debt are tending on the whole to go higher and higher without limit. World society is ever more polarized into a rentier class of lenders and a déclassé multitude of borrowers. The masses and the taxpayers owe the rentier class periodic payments from now to eternity.
Laboring under a steadily-mounting burden of public and private debt, with employment opportunities scarce and often low-paying, the majority somehow gets by. The majority works some of the time, goes to school some of the time, sometimes neither works nor goes to school, and sometimes manages to get by while simultaneously both working and studying. Living from check to check, bill to bill, stress to stress, in their ripe old age the majority finally finds economic security as the government picks up the tab for elder care. Life for the rentiers is sweet, while life for the majority is stressful but tolerable. But can a system based on steadily-mounting debt last?
There are ways to continue the present positive trends toward a society that is ever greener, ever more inclusive, and ever more highly educated. I will not list the negative trends that must be discontinued since I have already mentioned some of them and everybody knows what the others are. I will assert, echoing Bucky Fuller, that in principle they can be discontinued.
It can be done. We and our descendants can enjoy future Christmases without millions selling knick-knacks on the sidewalks, washing the windshields of cars stopped at intersections hoping for a tip, panhandling, stealing, cooling their heals in prisons, surviving on pittances in dilapidated apartments, working long hours for pay so low that they are poor in spite of being employed, and telling complicated lies to con somebody out of a few simple dollars, and so on and so forth. Christmases in the future can be fêtes de la liberté, de l´égalité, et de la fraternité.
Obviously the paradigm shift needed to keep the good trends going and erase the bad ones does not consist of prolonging indefinitely the present practice of going ever more deeply into greater and greater debt until finally the creditors realize that they will never be paid and the bubbles burst.
I will not give details of the needed theoretical and practical transformations here. Anybody who wants them can easily find my other writings, those of Pierre Calame, those of Charles K. Wilber, those of José Luis Coraggio, those of Marcel Mauss and Karl Polanyi, and those of feminist economists.
Peace and all good,
Howard R.
Now we have celebrated yet another Christmas with millions on the outside looking in. They are outsiders excluded from our annual fête de la prosperité. They are selling knick-knacks on the sidewalks, washing the windshields of cars stopped at intersections hoping for a tip, panhandling, stealing, cooling their heals in prisons, surviving on pittances in dilapidated apartments, working long hours for pay so low that they are poor in spite of being employed, telling complicated lies to con somebody out of a few simple dollars, and so on and so forth.Meanwhile hundreds of think tanks and university departments and international organizations are grinding out more professional literature than anybody has time to read about how to end poverty. At a world level it is about how to achieve “development.”
It is the New Year, the first day of the new decade. It is a time to renew our minds.
“Be not conformed to this world, but be renewed by the transformation of your mind,” wrote Christianity’s first intellectual in his letter to the Romans.
What Saint Paul called “transformation” we epigones of Thomas Kuhn today call “paradigm shift.” (Read shifts, the singular always including the plural.)
You may remember President Obama that a year ago I predicted in a letter to you that your own experience would demonstrate the need for a paradigm shift. If you as a very popular president, advised by the leading lights of the mainstream economics profession, supported by majorities in the House and the Senate, could not get the economy humming along smoothly and successfully within a year, your frustration would demonstrate that there is something wrong with mainstream thinking. The year is up. The demonstration is, however, redundant. Even without current frustrations there are many anomalies that demonstrate the need to be transformed by the renewing of our minds.
Bucky Fuller wrote, “What they do not want you to know is that there is enough for everybody. There is enough to meet the needs of 100% of humanity without ecological damage.” Bucky spoke as a scientist, as one of the many scientists who know that appropriate technologies equitably applied could meet the needs of all the world’s people, although probably not the needs of the larger populations that would result from unchecked population growth.
Unfortunately, what Bucky Fuller attests is physically possible is not at this point in time socially possible. Accumulated anomalies that call for a paradigm shift are embedded in the curricula of the universities, in the minds of the experts, in the minds of the general public, and in our institutions.
Except for a few pioneers such as Genevieve Vaughan (none of whom were invited to your Jobs Summit) minds are not moving. Nevertheless reality is moving. Without consciously intending to do so, society is slouching toward a paradigm shift.
Evidence to prove my point: Millions of Americans are now newly on the government payroll, living from check to check as Congress passes successive extensions of unemployment benefits. The benefits are extended not because the reigning economic paradigm calls for them but because reality calls for them.
Crime rates have fallen in the USA as millions are less tempted to steal because the government gives them money, because houses formerly vacant during the day are now occupied by their unemployed owners, and probably also because law enforcement authorities have improved their techniques.
I believe we are slouching toward the realizations that unemployment is permanent; that millions more would be unemployed if they were not warehoused in jails, schools, and barracks; and that other millions more would be unemployed were they not employed in the security business keeping down the unrest partly caused by unemployment in the inner cities and in the outer periphery. Unemployment patent and disguised is structural. (Not just “structural” in the narrow sense of the economists, but also in the broader sense of the sociologists.)
Every day we realize more and more that for-profit employers will offer the millions just mentioned jobs only when the fifth derivative intersects the sixth integral in n-space. In other words, never. Every day we realize more and more that those millions should be doing something useful while waiting for that non-event to un-happen. And …
….for example, they could be planting trees. Here I have to congratulate you President Obama because you are taking a step in the right direction putting many people to work installing green technologies …
…and, to finish my thought with questions: Are we getting to the point where we will put our money where our mouth is by treating human beings as ends not as means? As the very purpose of the economic apparatus? Not just as human resources? If so, then all those millions could be supported not just to be useful, but to develop their own personalities. They could, for example, be in school studying massage or poetry or bass guitar or pole vaulting or astronomy or religion, or philosophy, or the history of algebra, or organic gardening, or whatever fulfills their dreams. We would always factor in also going back to school periodically to keep up with the skills required by the job market. Retooling is part but not all of lifelong learning.
Signs already point toward a silent transformation and paradigm shift in education. Throughout the world enrollments in tertiary education and in adult education mushroom. Public policy in every nation endorses the UNESCO goal of lifelong learning for all.
Another question: Are we backing our way into fulfilling the prophecy of Karl Marx that at some point in time pre-history (the epoch of domination of human beings by the economy) would end, and the history of humanity (the epoch of the full and free development of all) would begin ?
In practice if not in theory we are breaking the sales barrier. Even though if you listen to people talk, or if you listen to the justifications for micro-lending programs or for job training programs, you will hear that most people still believe the fish story (“Give a man a fish, and …”), in practice more and more people are able to achieve a livelihood without producing anything for sale. The market is losing its grip, becoming more docile, acting more like a servant and less like a master.
There is a catch.We are funding the greening of America; the groceries of the unemployed; ever greater military, police, and private security expenditures; and highly subsidized education for more and more students of all ages by borrowing ever more astronomical sums of money. The national debt, state and local debt, corporate debt, family debt, and individual debt are tending on the whole to go higher and higher without limit. World society is ever more polarized into a rentier class of lenders and a déclassé multitude of borrowers. The masses and the taxpayers owe the rentier class periodic payments from now to eternity.
Laboring under a steadily-mounting burden of public and private debt, with employment opportunities scarce and often low-paying, the majority somehow gets by. The majority works some of the time, goes to school some of the time, sometimes neither works nor goes to school, and sometimes manages to get by while simultaneously both working and studying. Living from check to check, bill to bill, stress to stress, in their ripe old age the majority finally finds economic security as the government picks up the tab for elder care. Life for the rentiers is sweet, while life for the majority is stressful but tolerable. But can a system based on steadily-mounting debt last?
There are ways to continue the present positive trends toward a society that is ever greener, ever more inclusive, and ever more highly educated. I will not list the negative trends that must be discontinued since I have already mentioned some of them and everybody knows what the others are. I will assert, echoing Bucky Fuller, that in principle they can be discontinued.
It can be done. We and our descendants can enjoy future Christmases without millions selling knick-knacks on the sidewalks, washing the windshields of cars stopped at intersections hoping for a tip, panhandling, stealing, cooling their heals in prisons, surviving on pittances in dilapidated apartments, working long hours for pay so low that they are poor in spite of being employed, and telling complicated lies to con somebody out of a few simple dollars, and so on and so forth. Christmases in the future can be fêtes de la liberté, de l´égalité, et de la fraternité.
Obviously the paradigm shift needed to keep the good trends going and erase the bad ones does not consist of prolonging indefinitely the present practice of going ever more deeply into greater and greater debt until finally the creditors realize that they will never be paid and the bubbles burst.
I will not give details of the needed theoretical and practical transformations here. Anybody who wants them can easily find my other writings, those of Pierre Calame, those of Charles K. Wilber, those of José Luis Coraggio, those of Marcel Mauss and Karl Polanyi, and those of feminist economists.
Peace and all good,
Howard R.
Thursday, April 30, 2009
Letter to Barack # 17: A Life and Death Question of Methodology
A Life and Death Question of Methodology (Obama 17)
Dear President Obama,
The physical facts imply that it is necessary to reform our institutions. There is a threatening fact: The present relationship of our species to the biosphere is unsustainable. Buckminster Fuller and other scientists have affirmed a corresponding encouraging fact: There would be enough for everybody indefinitely if we (we humans) could learn to cooperate, to share and to use appropriate technologies. We need to learn to live simply. (See www.davidhilfiker.com). We need to learn to share. (“Poverty will end when we learn to share with the poor.” —Mother Teresa). We need to use ecological criteria when we invent and choose technologies.
Economics, and the set of institutions it studies and tends to justify, collides with the physical facts. It tends to tell us that we need to get back on the road to growth, that we need to restore consumer confidence so that consumers will buy more, and that we need to restore profitability so that investors will create more jobs. (I am paraphrasing your speeches, and I assume that in your speeches you paraphrase the advice your economics team gives you.) Economics tends to tell us that it is necessary to increase social inequality (for example formerly by means of the Bush tax cuts for people in upper income brackets, and today through reluctance to reverse them). Now more than ever, economics tends to say, at a time of economic crisis, it is necessary to reward the investing class because their expectations of profit are the sine qua non of growth, which is, in turn the sine qua non for at least trying to create that will-of-the-wisp full employment. It tells us that we need to make our automobile industry more competitive by dismissing the employees of unprofitable operations and cutting wages. From an ecological point of view, we really should be shutting the automobile industry down completely. From a human point of view, we should seek adequate incomes for all. As a half way measure we should at least be allowing only automobiles with technologies so green that they will reduce global warming. Economics tells us this even this half way measure is not now feasible because the green cars cannot be produced at affordable prices soon enough to create the mass buying needed to restart the economy.
In short, our actions are mainly driven by a logic that characterizes both the science of economics and the institutions it studies. What we should do to adjust to the physical reality we face, and what we should do to assure that every member of the human family is cared for, is overwhelmed by what we must to make our economy function. In this letter, I offer a few reflections on the present and past of economics. I am looking for ways to change it from a voice that clothes the imperatives implicit in our present institutions in the garb of science, to a voice for change.
Alan Krueger, a brilliant economist whom you recently appointed to an important post in the Treasury Department has written, “Early work in economics was primarily deductive” while the current trend is to work inductively. Today’s economists emphasize the importance of detailed empirical studies of facts. They are aware that an economic theory “is a model of reality, not reality itself.” The model is to be justified, if it is to be justified at all, by its usefulness in organizing facts. (See Krueger in Journal of Economics Education, volume 32)
Other members of your economics team, including Christina Romer and Larry Summers, have expressed similar views on methodology. Your team tends to agree with Krueger that new economics is better than old economics because it (today’s economics) is more inductive and less deductive. Krueger himself and his co-authors have shown that while deductions from the theory of supply and demand imply that raising the minimum wage will increase unemployment, inductive empirical studies show that a moderate increase of the minimum wage has no significant effect on the rate of unemployment.
We should be grateful to contemporary trends in economics for saving us from the sorts of confusion of mathematical models with real-world human behavior that led, for example, Leon Walras to write over and over again (and to put in italics) that under pure competition the satisfaction of every participant in the market is maximized. This sort of talk is tautology with no empirical content; it must be true because of the definitions used by the theorist and therefore it tells us nothing one way or the other about what happens in fact. Nevertheless, contemporary economists tend in practice, however aware they may be of the historical relativity of our institutions in principle, to naturalize our institutions and therefore to naturalize the logic that makes us an unsustainable species. They follow the bad example of John Stuart Mill by treating our socially created realities as if they were simply logical extensions of natural realities. (See the opening chapters of Mill’s Principles.) Consequently, they clothe the imperatives implicit in our present institutions in the garb of science more than they design constructive paradigm shifts.
The dichotomy “deductive vs. inductive,” or arbitrary model vs. insight into reality, or any dichotomy whatever, tends to blind us to multiple options, different interpretations, different ways of slicing reality into categories. Although all dichotomies reflect an unfortunate bias of the human brain in favor of dualities, deduction vs. induction is an especially fuzzy way to slice economic research into two categories, since—as logicians will tell you—there is not much difference between the two. Induction is deduction for which the premises are facts.
Nevertheless, Krueger’s meaning is roughly clear. He reflects a tendency among economists toward praising their current research practices as better than older ones because they are more parsimonious (i.e. recognize fewer entities) and more rigorous (i.e. more mathematical). Without using the word “inductive” we can use related although not identical terms and say that today economics is more empirical, or more econometric, or more positivistic. In the sense in which Paul Samuelson thought he was improving Alfred Marshall’s economic principles by restating them in mathematical terms in his Harvard doctoral dissertation, today’s research can be praised as more capable of stating hypotheses precisely and therefore more capable of testing them.
Any research methodology requires a series of choices. Whether the point is phrased in terms of one or another dichotomy, or even if it is phrased in a way that succeeds in categorizing the rivers of economic research flowing from universities and think tanks in non-dualistic terms, there are many alternatives to currently prestigious approaches. I do not propose to replace a tendency among your advisers and among mainstream economists generally to believe they have made the right methodological choices, with another equally overconfident tendency. But there is nonetheless one particular neo-institutionalist and critical realist alternative I do want to propose. It can be called a cultural structures approach.
I want to rescue some of the voluminous literature of the old-fashioned economics that was “mainly deductive.” Certain older theories legitimately claim to have insight into “reality,” as distinct from being “models” that make it a point “not to be reality.” An example is Marx’s theory of relations (Verhältnisse) of production, which is not a model but an economic theory resting on sociological and juridical foundations; that is to say, in the terms I propose, on cultural structures.
The approach I am recommending takes as first premises the constitutive rules that define the type of society we have, which Charles Taylor has characterized as a bargaining society –most notably the rules that constitute property and contracts. Vandana Shiva illustrates the fundamental character of constitutive rules dramatically when she describes how multinational companies in India promote the legal constituting of property rights in water, air, forests, traditional medical practices, and genetic codes in order to make it possible to sell them.
Unlike the older economics, which Krueger and others regard as surpassed by today’s superior parsimony and rigor, the cultural structures approach does not postulate non-physical entities (“metaphysical” entities in positivist nomenclature). For example, unlike Smith, Ricardo, and Marx it does not postulate that there is something called “value” that stands behind and causes prices. So far, we agree with the contemporary mainstream. However, unlike Milton Friedman and his followers it does not say that models used –to continue with the same example—to explain prices requires no insight into reality. Instead, like Ludwig von Mises, we think it very important to notice that a price is a contract. A price is an agreement between a buyer and a seller. Its historical conditions of possibility (to borrow a phrase from Michel Foucault) include the constitutive rules of property and contract.
A model may not be “reality itself,” but if it is a good model, or a good approach, it will not be a free-floating imaginary construction à la Friedman either. It will draw on insight into reality à la Lonergan, namely the insight that economic behavior is human behavior. In Wittgensteinian terms human behavior consists of language games. Alternatively, one can drop the idea of model altogether –since the very idea of model may connote an arbitrary construction—and begin with the premise that economic behavior is a subset of the human behavior studied by sociologists, anthropologists, and other scholars.
Contrary to what David Hume and his followers would have us believe, science advances when it achieves realistic insight into the causal powers that produce the phenomena under study. (Harré, Principles of Scientific Thinking). To continue with the same example, the study of prices advances when we observe that a price is a contract governed by ethical and legal norms. Similarly, chemistry advanced with Dalton and biology advanced with Darwin –not by running data through significance tests but by gaining insight into the causal powers of the mechanisms that produce the phenomena (mechanisms which correspond in economics to cultural structures, as I have shown in my book Understanding the Global Economy). Much of the “scientific method” studied in high schools and much of the “inferential statistics” studied in colleges reflects a superficial understanding of the natural sciences as if they were essentially about finding statistical regularities in the phenomena observed. (Compare, for example, the monetary histories of Friedman and Schwartz). On the basis of a superficial understanding social scientists are trained to do not what natural scientists historically have actually done to achieve insight into reality, but rather what a neo-Humean imagination imagines them to have done. (Harré.) Economics has been one of the fields most damaged by procedures that treat, for example, multiple regression analysis as a substitute for studies of human behavior. (Here “studies of human behavior” is meant as a generic term referring to several paradigms in social science I and other critical realists regard as more realistic than running datasets through multiple regressions, including Margaret Mead´s “customs,” Bourdieu´s “logic of practice,” Foucault´s “archaeologies” and “genealogies,” Glaser and Strauss´ “grounded theory,” Wallerstein´s world-systems approach, Goffman and Garfinkel´s micro-sociology, Patomaki´s version of post-international relations theory, Catherine Hopper´s “culturally determined behavior,” and Harré´s own anthropomorphic method. Among the more realistic mavericks in economics itself one would have to mention the German historical school, Veblen, Commons, Mitchell, Cyert and March, Drucker, Sen, feminist economists, and most Marxists.)
To the extent that economics simply accepts institutions here and now as natural and inevitable, then regardless of its mathematical sophistication and regardless of the sheer quantity of detailed empirical studies it produces, it is a “science” only in the sense that there is a “science of real estate finance,” a “science of tax return preparation,” “a science of life insurance” and a “science of banking.”
Grounding economics less ethnocentrically and more fundamentally in the basic social rules that constitute bargaining rescues some “mainly deductive” passages in older texts: Their general discussions of the human condition are not always the vague approximations of pioneers, waiting for their Samuelson to restate them in rigorous terms so that they can be empirically tested. They are often interpretations of cultural structures in historical evolution. When Adam Smith, for example, goes on and on about what is and is not natural, he is not a metaphysical essentialist; he is a liberal ethicist. Smith´s “natural justice” is precisely security of property and enforcement of contracts. Smith is quite clear that the political economy he describes is made possible by “civilization.” “Civilization” is the reign of the civil law protecting the rich against the poor that makes accumulation possible. The civil law was developed in early modern Europe drawing mainly on Roman jurisprudence, although Smith considered that China too was civilized in its own way. Smith always implicitly and frequently explicitly identifies the historical conditions of possibility of economics with the historical emergence of modern western institutions.
Now in 2009 when sustainability and social cohesion are at stake, and the odds are against them, humanity cannot afford to reject even illusions if the illusions will help to get it off the endangered species list. But dissolving what has hitherto been known as economics or political economy into the general study of human behavior requires no such pragmatic dishonesty. Realism is practical. In practice, we need realism. We need to adjust our behavior to reality. Our behavior is determined mainly by our institutions. Therefore, we need to change our institutions.
A neo-institututionalist reconfiguration of what is now known as economics, bringing it into closer touch with its own history, with the other social sciences, with law, with theology and its history, and with the humanities, would help us to change our institutions. It would help because it would be studying the logic of our institutions, and, by implication, the alternative logics we desperately need.
Peace and all good,
Howard R.
Dear President Obama,
The physical facts imply that it is necessary to reform our institutions. There is a threatening fact: The present relationship of our species to the biosphere is unsustainable. Buckminster Fuller and other scientists have affirmed a corresponding encouraging fact: There would be enough for everybody indefinitely if we (we humans) could learn to cooperate, to share and to use appropriate technologies. We need to learn to live simply. (See www.davidhilfiker.com). We need to learn to share. (“Poverty will end when we learn to share with the poor.” —Mother Teresa). We need to use ecological criteria when we invent and choose technologies.
Economics, and the set of institutions it studies and tends to justify, collides with the physical facts. It tends to tell us that we need to get back on the road to growth, that we need to restore consumer confidence so that consumers will buy more, and that we need to restore profitability so that investors will create more jobs. (I am paraphrasing your speeches, and I assume that in your speeches you paraphrase the advice your economics team gives you.) Economics tends to tell us that it is necessary to increase social inequality (for example formerly by means of the Bush tax cuts for people in upper income brackets, and today through reluctance to reverse them). Now more than ever, economics tends to say, at a time of economic crisis, it is necessary to reward the investing class because their expectations of profit are the sine qua non of growth, which is, in turn the sine qua non for at least trying to create that will-of-the-wisp full employment. It tells us that we need to make our automobile industry more competitive by dismissing the employees of unprofitable operations and cutting wages. From an ecological point of view, we really should be shutting the automobile industry down completely. From a human point of view, we should seek adequate incomes for all. As a half way measure we should at least be allowing only automobiles with technologies so green that they will reduce global warming. Economics tells us this even this half way measure is not now feasible because the green cars cannot be produced at affordable prices soon enough to create the mass buying needed to restart the economy.
In short, our actions are mainly driven by a logic that characterizes both the science of economics and the institutions it studies. What we should do to adjust to the physical reality we face, and what we should do to assure that every member of the human family is cared for, is overwhelmed by what we must to make our economy function. In this letter, I offer a few reflections on the present and past of economics. I am looking for ways to change it from a voice that clothes the imperatives implicit in our present institutions in the garb of science, to a voice for change.
Alan Krueger, a brilliant economist whom you recently appointed to an important post in the Treasury Department has written, “Early work in economics was primarily deductive” while the current trend is to work inductively. Today’s economists emphasize the importance of detailed empirical studies of facts. They are aware that an economic theory “is a model of reality, not reality itself.” The model is to be justified, if it is to be justified at all, by its usefulness in organizing facts. (See Krueger in Journal of Economics Education, volume 32)
Other members of your economics team, including Christina Romer and Larry Summers, have expressed similar views on methodology. Your team tends to agree with Krueger that new economics is better than old economics because it (today’s economics) is more inductive and less deductive. Krueger himself and his co-authors have shown that while deductions from the theory of supply and demand imply that raising the minimum wage will increase unemployment, inductive empirical studies show that a moderate increase of the minimum wage has no significant effect on the rate of unemployment.
We should be grateful to contemporary trends in economics for saving us from the sorts of confusion of mathematical models with real-world human behavior that led, for example, Leon Walras to write over and over again (and to put in italics) that under pure competition the satisfaction of every participant in the market is maximized. This sort of talk is tautology with no empirical content; it must be true because of the definitions used by the theorist and therefore it tells us nothing one way or the other about what happens in fact. Nevertheless, contemporary economists tend in practice, however aware they may be of the historical relativity of our institutions in principle, to naturalize our institutions and therefore to naturalize the logic that makes us an unsustainable species. They follow the bad example of John Stuart Mill by treating our socially created realities as if they were simply logical extensions of natural realities. (See the opening chapters of Mill’s Principles.) Consequently, they clothe the imperatives implicit in our present institutions in the garb of science more than they design constructive paradigm shifts.
The dichotomy “deductive vs. inductive,” or arbitrary model vs. insight into reality, or any dichotomy whatever, tends to blind us to multiple options, different interpretations, different ways of slicing reality into categories. Although all dichotomies reflect an unfortunate bias of the human brain in favor of dualities, deduction vs. induction is an especially fuzzy way to slice economic research into two categories, since—as logicians will tell you—there is not much difference between the two. Induction is deduction for which the premises are facts.
Nevertheless, Krueger’s meaning is roughly clear. He reflects a tendency among economists toward praising their current research practices as better than older ones because they are more parsimonious (i.e. recognize fewer entities) and more rigorous (i.e. more mathematical). Without using the word “inductive” we can use related although not identical terms and say that today economics is more empirical, or more econometric, or more positivistic. In the sense in which Paul Samuelson thought he was improving Alfred Marshall’s economic principles by restating them in mathematical terms in his Harvard doctoral dissertation, today’s research can be praised as more capable of stating hypotheses precisely and therefore more capable of testing them.
Any research methodology requires a series of choices. Whether the point is phrased in terms of one or another dichotomy, or even if it is phrased in a way that succeeds in categorizing the rivers of economic research flowing from universities and think tanks in non-dualistic terms, there are many alternatives to currently prestigious approaches. I do not propose to replace a tendency among your advisers and among mainstream economists generally to believe they have made the right methodological choices, with another equally overconfident tendency. But there is nonetheless one particular neo-institutionalist and critical realist alternative I do want to propose. It can be called a cultural structures approach.
I want to rescue some of the voluminous literature of the old-fashioned economics that was “mainly deductive.” Certain older theories legitimately claim to have insight into “reality,” as distinct from being “models” that make it a point “not to be reality.” An example is Marx’s theory of relations (Verhältnisse) of production, which is not a model but an economic theory resting on sociological and juridical foundations; that is to say, in the terms I propose, on cultural structures.
The approach I am recommending takes as first premises the constitutive rules that define the type of society we have, which Charles Taylor has characterized as a bargaining society –most notably the rules that constitute property and contracts. Vandana Shiva illustrates the fundamental character of constitutive rules dramatically when she describes how multinational companies in India promote the legal constituting of property rights in water, air, forests, traditional medical practices, and genetic codes in order to make it possible to sell them.
Unlike the older economics, which Krueger and others regard as surpassed by today’s superior parsimony and rigor, the cultural structures approach does not postulate non-physical entities (“metaphysical” entities in positivist nomenclature). For example, unlike Smith, Ricardo, and Marx it does not postulate that there is something called “value” that stands behind and causes prices. So far, we agree with the contemporary mainstream. However, unlike Milton Friedman and his followers it does not say that models used –to continue with the same example—to explain prices requires no insight into reality. Instead, like Ludwig von Mises, we think it very important to notice that a price is a contract. A price is an agreement between a buyer and a seller. Its historical conditions of possibility (to borrow a phrase from Michel Foucault) include the constitutive rules of property and contract.
A model may not be “reality itself,” but if it is a good model, or a good approach, it will not be a free-floating imaginary construction à la Friedman either. It will draw on insight into reality à la Lonergan, namely the insight that economic behavior is human behavior. In Wittgensteinian terms human behavior consists of language games. Alternatively, one can drop the idea of model altogether –since the very idea of model may connote an arbitrary construction—and begin with the premise that economic behavior is a subset of the human behavior studied by sociologists, anthropologists, and other scholars.
Contrary to what David Hume and his followers would have us believe, science advances when it achieves realistic insight into the causal powers that produce the phenomena under study. (Harré, Principles of Scientific Thinking). To continue with the same example, the study of prices advances when we observe that a price is a contract governed by ethical and legal norms. Similarly, chemistry advanced with Dalton and biology advanced with Darwin –not by running data through significance tests but by gaining insight into the causal powers of the mechanisms that produce the phenomena (mechanisms which correspond in economics to cultural structures, as I have shown in my book Understanding the Global Economy). Much of the “scientific method” studied in high schools and much of the “inferential statistics” studied in colleges reflects a superficial understanding of the natural sciences as if they were essentially about finding statistical regularities in the phenomena observed. (Compare, for example, the monetary histories of Friedman and Schwartz). On the basis of a superficial understanding social scientists are trained to do not what natural scientists historically have actually done to achieve insight into reality, but rather what a neo-Humean imagination imagines them to have done. (Harré.) Economics has been one of the fields most damaged by procedures that treat, for example, multiple regression analysis as a substitute for studies of human behavior. (Here “studies of human behavior” is meant as a generic term referring to several paradigms in social science I and other critical realists regard as more realistic than running datasets through multiple regressions, including Margaret Mead´s “customs,” Bourdieu´s “logic of practice,” Foucault´s “archaeologies” and “genealogies,” Glaser and Strauss´ “grounded theory,” Wallerstein´s world-systems approach, Goffman and Garfinkel´s micro-sociology, Patomaki´s version of post-international relations theory, Catherine Hopper´s “culturally determined behavior,” and Harré´s own anthropomorphic method. Among the more realistic mavericks in economics itself one would have to mention the German historical school, Veblen, Commons, Mitchell, Cyert and March, Drucker, Sen, feminist economists, and most Marxists.)
To the extent that economics simply accepts institutions here and now as natural and inevitable, then regardless of its mathematical sophistication and regardless of the sheer quantity of detailed empirical studies it produces, it is a “science” only in the sense that there is a “science of real estate finance,” a “science of tax return preparation,” “a science of life insurance” and a “science of banking.”
Grounding economics less ethnocentrically and more fundamentally in the basic social rules that constitute bargaining rescues some “mainly deductive” passages in older texts: Their general discussions of the human condition are not always the vague approximations of pioneers, waiting for their Samuelson to restate them in rigorous terms so that they can be empirically tested. They are often interpretations of cultural structures in historical evolution. When Adam Smith, for example, goes on and on about what is and is not natural, he is not a metaphysical essentialist; he is a liberal ethicist. Smith´s “natural justice” is precisely security of property and enforcement of contracts. Smith is quite clear that the political economy he describes is made possible by “civilization.” “Civilization” is the reign of the civil law protecting the rich against the poor that makes accumulation possible. The civil law was developed in early modern Europe drawing mainly on Roman jurisprudence, although Smith considered that China too was civilized in its own way. Smith always implicitly and frequently explicitly identifies the historical conditions of possibility of economics with the historical emergence of modern western institutions.
Now in 2009 when sustainability and social cohesion are at stake, and the odds are against them, humanity cannot afford to reject even illusions if the illusions will help to get it off the endangered species list. But dissolving what has hitherto been known as economics or political economy into the general study of human behavior requires no such pragmatic dishonesty. Realism is practical. In practice, we need realism. We need to adjust our behavior to reality. Our behavior is determined mainly by our institutions. Therefore, we need to change our institutions.
A neo-institututionalist reconfiguration of what is now known as economics, bringing it into closer touch with its own history, with the other social sciences, with law, with theology and its history, and with the humanities, would help us to change our institutions. It would help because it would be studying the logic of our institutions, and, by implication, the alternative logics we desperately need.
Peace and all good,
Howard R.
Tuesday, March 10, 2009
Letter to Barack #16: A Principle of Principles
Letter to Barack #16: A Principle of Principles
Dear President Obama,
The hopes of many hang by the slender threads of the pragmatic and communitarian ideals you express in every speech. In a speech to Wall Street financiers early in your campaign you said that Americans have always viewed the economy not as an end in itself but as designed to serve a higher purpose. From time to time Americans have redesigned the economy to improve its service of its higher purpose. You identified the higher purpose by saying, “We are all in this together.” My favorite line from your Inaugural Address was, “We can choose our better history.” You reminded your listeners that history can be read in many ways. We can choose our identity by choosing what we say we have always been. We can project our chosen identity into the future. In your recent Presidential Address to a joint session of Congress, the line that moved my soul was, “Problems are to be solved.” It was a short phrase that is true by definition. It was an invitation to cooperate. It was an echo of the line, “We are not quitters,” penned by a young correspondent who wrote you a letter. A principle of principles.
“Problems are to be solved.” This principle implies a humanitarian solidarity you have often explicitly asserted. You have often said we are going to solve our problems “above all together.” The problem-solving intention is to solve the problems of Main Street, of the people, in short of everybody. We are going to transform America from the bottom up, not from the top down. To drive home the point that you are talking about transforming civil society, not just about reinventing government, you invited to the Presidential Address as special guests a man from Florida who shared his retirement bonus with his employees, and a young lady from South Carolina committed to improving her school. You praised a town in Kansas where the citizens are working together to green and to uplift their community. You made your point even more dramatically when you spent part of the day before your inauguration painting a DC school together with neighborhood volunteers.
Your repeated emphasis and your clarity were lost on the Governor of Louisiana who gave the Republican reply to your Presidential Address. You spoke of “we.” He spoke in terms of them and us, the former being the government and the latter the people. You were talking pragmatism. Problems are to be solved. If Plan A does not work, we go on to Plan B, and if it does not work either then to Plan C, and so on successively until the problem is solved. For the Governor we do not need successive approximations because we already know the correct answer to almost all questions. The correct answer is less government and lower taxes.
My own views concur with those who believe that at this point in time neither the Republican opposition, nor you as President, nor the Congress, nor the majority of academics, nor the majority of the public, is proposing any feasible and sustainable solution for any of today’s major problems. I concur with those who do not on the whole expect Plan A to work, and who do not expect Plan B or Plan C to work either, even though each succeeding plan will have some desirable features. Perhaps Plan P or Plan R will work. Therefore we want your pragmatism and communitarianism to be durable. If your humanitarian open-mindedness endures through seas of troubles, and continues to find broad support in public opinion, then a combination of rational critique by enlightened minorities and learning from experience by suffering majorities may eventually increase the influence of the paradigm-shifting approaches that really do solve problems.
You said in your Presidential Address that problems are to be solved. Our job is to solve the problems. We will pull together. We will take responsibility for our future. We love our country and want it to succeed. Many hopes hang by the slender threads of your words.
Peace and all good,
Howard R.
Dear President Obama,
The hopes of many hang by the slender threads of the pragmatic and communitarian ideals you express in every speech. In a speech to Wall Street financiers early in your campaign you said that Americans have always viewed the economy not as an end in itself but as designed to serve a higher purpose. From time to time Americans have redesigned the economy to improve its service of its higher purpose. You identified the higher purpose by saying, “We are all in this together.” My favorite line from your Inaugural Address was, “We can choose our better history.” You reminded your listeners that history can be read in many ways. We can choose our identity by choosing what we say we have always been. We can project our chosen identity into the future. In your recent Presidential Address to a joint session of Congress, the line that moved my soul was, “Problems are to be solved.” It was a short phrase that is true by definition. It was an invitation to cooperate. It was an echo of the line, “We are not quitters,” penned by a young correspondent who wrote you a letter. A principle of principles.
“Problems are to be solved.” This principle implies a humanitarian solidarity you have often explicitly asserted. You have often said we are going to solve our problems “above all together.” The problem-solving intention is to solve the problems of Main Street, of the people, in short of everybody. We are going to transform America from the bottom up, not from the top down. To drive home the point that you are talking about transforming civil society, not just about reinventing government, you invited to the Presidential Address as special guests a man from Florida who shared his retirement bonus with his employees, and a young lady from South Carolina committed to improving her school. You praised a town in Kansas where the citizens are working together to green and to uplift their community. You made your point even more dramatically when you spent part of the day before your inauguration painting a DC school together with neighborhood volunteers.
Your repeated emphasis and your clarity were lost on the Governor of Louisiana who gave the Republican reply to your Presidential Address. You spoke of “we.” He spoke in terms of them and us, the former being the government and the latter the people. You were talking pragmatism. Problems are to be solved. If Plan A does not work, we go on to Plan B, and if it does not work either then to Plan C, and so on successively until the problem is solved. For the Governor we do not need successive approximations because we already know the correct answer to almost all questions. The correct answer is less government and lower taxes.
My own views concur with those who believe that at this point in time neither the Republican opposition, nor you as President, nor the Congress, nor the majority of academics, nor the majority of the public, is proposing any feasible and sustainable solution for any of today’s major problems. I concur with those who do not on the whole expect Plan A to work, and who do not expect Plan B or Plan C to work either, even though each succeeding plan will have some desirable features. Perhaps Plan P or Plan R will work. Therefore we want your pragmatism and communitarianism to be durable. If your humanitarian open-mindedness endures through seas of troubles, and continues to find broad support in public opinion, then a combination of rational critique by enlightened minorities and learning from experience by suffering majorities may eventually increase the influence of the paradigm-shifting approaches that really do solve problems.
You said in your Presidential Address that problems are to be solved. Our job is to solve the problems. We will pull together. We will take responsibility for our future. We love our country and want it to succeed. Many hopes hang by the slender threads of your words.
Peace and all good,
Howard R.
Monday, February 23, 2009
Letter to Barack #15: Better Science, Better Policy
Dear President Obama,
The questionable epistemological status of mainstream economics is displayed daily in the press and on television as scholars trained in that discipline purport to derive explanations of the current crisis (and associated predictions and prescriptions) from a single prior case or period. For some everything went wrong with the deregulation of recent decades. For others today´s case is comparable to the recession of 1981 and 1982, or to the Great Depression of the 1930s, or to the crisis of 1873. The chairperson of your Council of Economic Advisors distinguished herself by studying monetary and fiscal policy in the 1930s, and she is on record as encouraging graduate students who wish to advance in the profession to do detailed empirical studies of particular historical cases similar to those she does herself.
If one accepts the two premises that (1) Observed phenomena do not reveal the causal powers that produce them, and (2) What is happening now, as we move from a chaotic present to an uncertain future, is not a repetition of any single pattern of past events; then we must conclude that comparisons with the Great Depression or any other period or case are not likely yield reliable guidance as we endeavor to select among the options available to us those present actions which will produce a better future.
To begin to dissolve economics into a broader socioeconomics that will be capable of explaining the phenomena we are experiencing, and of contributing to a more reliable guidance of social reconstruction, it helps to consider circumstances in which it is logically valid to draw general conclusions from a single case. When biologists study a single specimen, they have good reasons for believing that their findings will be true of all individuals of the same species. A beginning student who dissects a frog finds structures common to all frogs of the species dissected. A frog, unlike a Great Depression, is made of bones, tissues, and organs that repeat themselves over and over again in numerous similar cases.
Why? Because living beings are built according to instructions encoded in DNA. In a normal environment, a given seed will grow into a given plant or animal.
The ecohistorican Thomas Berry frequently remarks that the human species is biologically coded to be culturally coded. The same word used in speaking of DNA, the word ¨code,¨ can be employed to refer to cultural codes that organize behavior (norms, rules, customs, habitus). Up to a point the anthropologist can echo the biologist in generalizing from a single specimen, learning about a culture by interviewing and observing a single informant who has internalized its codes.
When applied to economics (or, rather, to dissolving economics into transdisciplinary social science) an approach that starts by detecting and articulating cultural structures built from codes (¨¨symbolic structures¨¨ in the terminology of Jürgen Habermas) calls for giving greater attention to what Joseph Schumpeter called ¨institutional framework¨, and for contextualizing what he called ¨¨analysis.¨ When Smith and Ricardo assumed that society divided into three classes of human beings: (1) the landowners, (2) the merchants and manufacturers, and (3) the laborers; they assumed what Schumpeter calls an institutional framework. When they took it to be the task of the science of political economy to explain the natural and proper division among the social classes of society´s annual produce (or, what for them was the same thing, its annual revenue), they were doing what Schumpeter calls analysis. They were proposing a theory of rent, a theory of profits, and a theory of wages.
In Schumpeter´s muddled mind it was possible to write a history of politically neutral economic analysis, devoted to explanation while rigorously avoiding prescription, while assigning to a separate discipline, sociology, the study of the constitutive rules of the institutions that created the phenomena observed. But we will not make much progress in improving the performance of our institutions until we reform our social sciences to bring the basic rules of institutional frameworks into focus; for they are the principal causes of the phenomena observed.
Dissolving economics into a transdisciplinary social science that studies the causal powers of cultural coding contributes to solving what Michel Foucault called the principal political problem of our times. Foucault remarked that the principal political problem of our times was lack of imagination. His remark describes the debates in the United States Senate and House of Representatives on the stimulus package, which were almost entirely about one or another proposal to get the economy moving again by restoring the confidence of the investors who invest, restoring the confidence of the consumers who buy, restoring the confidence of the bankers who lend, and restoring the confidence of the executives who manage firms.
Retiring economics from its splendid and disastrous isolation, connecting it with sociology and with history and all the arts and sciences, helps to free us in many ways. One of those ways is that it frees our imagination and therefore our vision. We see that basic cultural structures might change; we see that they have changed (“Always historicize!” wrote Fredric Jameson): we open our eyes and see that human behavior is in practice not nearly as dominated by profit-seeking as it has been in mainstream economic theory from Smith to Friedman.
We see the present crisis as an opportunity. It is an opportunity to wean ourselves from our excessive dependence on the for-profit subsector of the private sector. We see that the public sector and the non-profit sector can take up the slack when for-profit private business sags. Instead of chasing the will-of-the-wisp ¨confidence¨, which always depends (as Keynes taught us) not on any rational or objective standard whatever, but on people´s subjective perceptions of other people´s subjective perceptions, we can come down to earth and focus on the physical task before us: building sustainable cultures that mobilize resources to meet needs.
We can be thankful that just as global warming is getting out of control, while human population growth is continuing to spiral out of control, and –to generalize a series of ecological warning signs without naming each specifically—just as we are on the verge of destroying our habitat and therefore destroying our species; a financial crisis has come to save us. The financial crisis is slowing down the profit-driven machine that is destroying us. A better epistemology helps us to see the financial crisis as an opportunity to let the private for-profit economy slow down, as an opportunity to bring that machine under ethical and rational control, and as an opportunity to supplement it with other ways (public and non-profit) to mobilize resources to meet needs. The present crisis is our opportunity to become a sustainable species in a sustainable biosphere.
Peace and all good,
Howard R.
The questionable epistemological status of mainstream economics is displayed daily in the press and on television as scholars trained in that discipline purport to derive explanations of the current crisis (and associated predictions and prescriptions) from a single prior case or period. For some everything went wrong with the deregulation of recent decades. For others today´s case is comparable to the recession of 1981 and 1982, or to the Great Depression of the 1930s, or to the crisis of 1873. The chairperson of your Council of Economic Advisors distinguished herself by studying monetary and fiscal policy in the 1930s, and she is on record as encouraging graduate students who wish to advance in the profession to do detailed empirical studies of particular historical cases similar to those she does herself.
If one accepts the two premises that (1) Observed phenomena do not reveal the causal powers that produce them, and (2) What is happening now, as we move from a chaotic present to an uncertain future, is not a repetition of any single pattern of past events; then we must conclude that comparisons with the Great Depression or any other period or case are not likely yield reliable guidance as we endeavor to select among the options available to us those present actions which will produce a better future.
To begin to dissolve economics into a broader socioeconomics that will be capable of explaining the phenomena we are experiencing, and of contributing to a more reliable guidance of social reconstruction, it helps to consider circumstances in which it is logically valid to draw general conclusions from a single case. When biologists study a single specimen, they have good reasons for believing that their findings will be true of all individuals of the same species. A beginning student who dissects a frog finds structures common to all frogs of the species dissected. A frog, unlike a Great Depression, is made of bones, tissues, and organs that repeat themselves over and over again in numerous similar cases.
Why? Because living beings are built according to instructions encoded in DNA. In a normal environment, a given seed will grow into a given plant or animal.
The ecohistorican Thomas Berry frequently remarks that the human species is biologically coded to be culturally coded. The same word used in speaking of DNA, the word ¨code,¨ can be employed to refer to cultural codes that organize behavior (norms, rules, customs, habitus). Up to a point the anthropologist can echo the biologist in generalizing from a single specimen, learning about a culture by interviewing and observing a single informant who has internalized its codes.
When applied to economics (or, rather, to dissolving economics into transdisciplinary social science) an approach that starts by detecting and articulating cultural structures built from codes (¨¨symbolic structures¨¨ in the terminology of Jürgen Habermas) calls for giving greater attention to what Joseph Schumpeter called ¨institutional framework¨, and for contextualizing what he called ¨¨analysis.¨ When Smith and Ricardo assumed that society divided into three classes of human beings: (1) the landowners, (2) the merchants and manufacturers, and (3) the laborers; they assumed what Schumpeter calls an institutional framework. When they took it to be the task of the science of political economy to explain the natural and proper division among the social classes of society´s annual produce (or, what for them was the same thing, its annual revenue), they were doing what Schumpeter calls analysis. They were proposing a theory of rent, a theory of profits, and a theory of wages.
In Schumpeter´s muddled mind it was possible to write a history of politically neutral economic analysis, devoted to explanation while rigorously avoiding prescription, while assigning to a separate discipline, sociology, the study of the constitutive rules of the institutions that created the phenomena observed. But we will not make much progress in improving the performance of our institutions until we reform our social sciences to bring the basic rules of institutional frameworks into focus; for they are the principal causes of the phenomena observed.
Dissolving economics into a transdisciplinary social science that studies the causal powers of cultural coding contributes to solving what Michel Foucault called the principal political problem of our times. Foucault remarked that the principal political problem of our times was lack of imagination. His remark describes the debates in the United States Senate and House of Representatives on the stimulus package, which were almost entirely about one or another proposal to get the economy moving again by restoring the confidence of the investors who invest, restoring the confidence of the consumers who buy, restoring the confidence of the bankers who lend, and restoring the confidence of the executives who manage firms.
Retiring economics from its splendid and disastrous isolation, connecting it with sociology and with history and all the arts and sciences, helps to free us in many ways. One of those ways is that it frees our imagination and therefore our vision. We see that basic cultural structures might change; we see that they have changed (“Always historicize!” wrote Fredric Jameson): we open our eyes and see that human behavior is in practice not nearly as dominated by profit-seeking as it has been in mainstream economic theory from Smith to Friedman.
We see the present crisis as an opportunity. It is an opportunity to wean ourselves from our excessive dependence on the for-profit subsector of the private sector. We see that the public sector and the non-profit sector can take up the slack when for-profit private business sags. Instead of chasing the will-of-the-wisp ¨confidence¨, which always depends (as Keynes taught us) not on any rational or objective standard whatever, but on people´s subjective perceptions of other people´s subjective perceptions, we can come down to earth and focus on the physical task before us: building sustainable cultures that mobilize resources to meet needs.
We can be thankful that just as global warming is getting out of control, while human population growth is continuing to spiral out of control, and –to generalize a series of ecological warning signs without naming each specifically—just as we are on the verge of destroying our habitat and therefore destroying our species; a financial crisis has come to save us. The financial crisis is slowing down the profit-driven machine that is destroying us. A better epistemology helps us to see the financial crisis as an opportunity to let the private for-profit economy slow down, as an opportunity to bring that machine under ethical and rational control, and as an opportunity to supplement it with other ways (public and non-profit) to mobilize resources to meet needs. The present crisis is our opportunity to become a sustainable species in a sustainable biosphere.
Peace and all good,
Howard R.
Thursday, February 5, 2009
From One of Your Voters: Letter to Barack #1
This is me speaking.
I am one of the 52 million people who voted for you, one of the 3 million in your database who contributed small amounts of money to your campaign.
Remember me?
I am writing to make sure I understand our deal. I watched your acceptance speech at Grant Park in Chicago. I watched many of your speeches.
You said together we are going to transform America and the world. Right? We are going to transform not from the top down but from the bottom up. Did I get that right? It is not you who are going to transform America but we. Is that the deal? You are calling for a spirit of service and sacrifice. That’s what I heard.
In a speech to financiers on Wall Street you said the economy has a higher purpose. The higher purpose is that we are all in this together. From time to time we change the rules of the economic game to make the economic machine serve its purpose better. (I read the speech on your website www.barackobama. com) Your Wall Street friends voted for you even though you told them you would raise their taxes. That sent a message.
So –here is my conclusion, my message: I am not supposed to be just watching TV waiting to see whom you will name to cabinet posts. I am supposed to be out on the street transforming my town and neighborhood. Right?
This afternoon I will donate twelve bottles of cooking oil to our neighborhood food pantry. I will talk up cooperation. I will also work on changing our irrigation system from spray to drip (Drip benefits the environment by producing more food with less water.)
I am copying this to lists of transformers. If I am missing something, or if I have misunderstood something, hopefully somebody will set me straight.
Howard R.
Nov. 6, 2008
I am one of the 52 million people who voted for you, one of the 3 million in your database who contributed small amounts of money to your campaign.
Remember me?
I am writing to make sure I understand our deal. I watched your acceptance speech at Grant Park in Chicago. I watched many of your speeches.
You said together we are going to transform America and the world. Right? We are going to transform not from the top down but from the bottom up. Did I get that right? It is not you who are going to transform America but we. Is that the deal? You are calling for a spirit of service and sacrifice. That’s what I heard.
In a speech to financiers on Wall Street you said the economy has a higher purpose. The higher purpose is that we are all in this together. From time to time we change the rules of the economic game to make the economic machine serve its purpose better. (I read the speech on your website www.barackobama. com) Your Wall Street friends voted for you even though you told them you would raise their taxes. That sent a message.
So –here is my conclusion, my message: I am not supposed to be just watching TV waiting to see whom you will name to cabinet posts. I am supposed to be out on the street transforming my town and neighborhood. Right?
This afternoon I will donate twelve bottles of cooking oil to our neighborhood food pantry. I will talk up cooperation. I will also work on changing our irrigation system from spray to drip (Drip benefits the environment by producing more food with less water.)
I am copying this to lists of transformers. If I am missing something, or if I have misunderstood something, hopefully somebody will set me straight.
Howard R.
Nov. 6, 2008
To Barack from the South: Letter to Barack #2
OK Barack, I sent out a thousand copies of my first letter to you. Several friends responded by correcting my number: You got nearly 65 million votes, not 52 million.
Nobody questioned my concept.
The concept is that together we are going to transform civil society.
In the campaign your opponent sang the rancid old Republican theme song: Get the government off our backs. He repeated the perennial liberal utopian ideology: He assumed there is nothing wrong with civil society. He said too much government is the problem, less government is the solution.
You put together phrases from Abraham Lincoln, Franklin Roosevelt, Martin Luther King Jr., John F. Kennedy, …. stirring old roots with Spring rain. You emphasized some relatively new dimensions: bottom up, service, transform, higher purpose, save the world.
Some people say you won our votes by appealing to our emotions, and then less than 24 hours after the polls closed confirmed that although your words expressed crowd-pleasing sentiments they referred to nothing concrete when you by appointed a no-nonsense conservative Democrat as your chief of staff. I say behind the emotion there is a concept: transform civil society.
People are as delirious about your victory in Asia and Africa as they are in Chicago and Los Angeles because you touched their hearts with a dream of CHANGE. Although you are legally the President-elect of the USA , and only in some people´s imagination the President-elect of the world, you are for billions the incarnation of HOPE. The world´s billions may harbour enthuasism without clarity, but what they feel in their hearts can be clarified. It can be put into practice.
There was a promise in your campaign that John McCain did not understand. You are not the tax and spend Democrat he was attacking. Amitai Etzioni is right to call you a communitarian. blog.amitaietzioni.org/2008/01/a-communitarian.html
CHANGE and HOPE have an operational meaning above and beyond Rooseveltian social democracy: above and beyond stronger government; above and beyond defending the economic interests of the middle and working classes; above and beyond reversing the dismantling of the welfare state. They mean a groundswell of social responsibility in the private sector; they mean a culture shift. Without the second the first is not feasible.
Without the transformation of civil society CHANGE and HOPE will deflate to gasless plastic balloons.
I appreciate the difficulty of keeping track of your 64 million electors and your 3 million contributors, even though you have promised to listen carefully to what we have to say. I imagine myself as number 32,641,211 among the electors and number 1,025,986 among the contributors. If you look up number 1,025,986 on your database you will find a California address, but actually I am an expat. I live on the Continent of Hope ( South America ), and vote by absentee ballot. I do not usually vote for Democrats. I made an exception in your case because I thought that because of your background as a community organizer you would know in practical terms what it would take to give concrete meaning to your words. I thought that someone who had imbibed anthropology with his mother´s milk, and who had lived as a child in Indonesia , would be capable of rising above the ethnocentrism of his father´s profession. I thought that you could facilitate turning the culture shift the masses vaguely dream and desire into an operational reality. I thought the other world that is happening at thousands of sites around the planet would find in Barack Obama a leader who symbolized it and understood it because of his personal history.
Today I went to a meeting. You know about meetings. “Participation” sounds good but meetings are …….. well ……. er ………….. ah………………….. ..…………..indispensable. If you cannot endure the boredom and/or petty quarrels that typify the average meeting you cannot change the world. You are like a soldier who flunked boot camp.
Today´s meeting was better than average. It was at the office of our communal union of neighbourhood councils. Our little town of 40,000 people is divided into 52 neighborhoods, each with its council. On the pretext of preparing for the impact of the world financial crisis, and taking advantage of the opportunities created by our recent success in electing a new mayor with new ideas (who happens to be a gay man who won handily in spite of homophobic propaganda against him) we are doing what we should be doing even without the crisis and even without the new mayor. Every neighbourhood will have a community food pantry run by volunteers, through which anybody who is unemployed can earn food by community service. We are not giving anything away. Those who do not succeed in selling their labor in the labor market work for the local community and the local community pools resources to make sure they get by. We have already organized food security in one neighbourhood, and now we are extending the practice to other neighbourhoods.
Next time you are in Argentina you might consider visiting Cordoba or any of several other cities to see ABC (Abastecimiento Basico Comunitario). It is a project of the National Institute of Industrial Technology headed by my friend Enrique Martinez. Enrique´s proposal is that every Argentine have assured at the neighbourhood level adequate nutrition, primary health care (at the neighbourhood clinic), and housing. Then let the storms brew as they may at the level of the national economy and the global economy. (See www.inti.gov.ar)
More later. I aim to contribute to the transformation of civil society in the North by making better known some of the seeds of transformation that are already germinating in the South.
Howard R.
8 November 2008
p.s. Scholars will notice that my use of the term “civil society” blends its classic sense (that of Hegel´s bürgerliche Gesellschaft ) with its more recent senses popularized by the World Bank and others.
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