Posts Tagged ‘economics’

I don’t know about you but in the middle of this “world economic crisis” I’m just not hearing what seems like a decent plan. The main so-called solutions seem to be about how to get people borrowing and spending again. But weren’t borrowing and spending actually at the heart of the problem? Wasn’t it the system which encouraged the unregulated pursuit of self-interest which produced exactly the current crisis? But tired old slanging matches between free market capitalists and state control advocates just seem like debates about who should hold the reigns of power. It feels like something more radical and new is needed. I found myself saying, don’t we need a society more based on love, than on power? (and does that mean I’ve never quite left Woodstock, flower power, and the “LA habit” behind?)
I’ve long since been impressed with the work of Richard Wilkinson and been convinced about his findings on inequality so when he commented on one of my posts recommending his latest book, The Spirit Level (ISBN 978-1-846-14039-6), I knew a trip to Amazon was imminent.
Most of The Spirit Level, which he has written with Kate Pickett, re-presents the findings and the arguments I’ve read before. If you’ve never read any of his work, then is, for sure, the best starting place. However, where it got exciting for me was at chapter 14. In fact, the last three chapters of the book were the three which gripped me most strongly.
The authors quote Thomas Hobbes who believed that there was always a danger of conflict in human societies as people competed over scarce resources, so the purpose of strong government was to keep the peace. You’ll be familiar with the Hobbes’ phrase that without such government life would be “solitary, poor, nasty, brutish, and short”. Against this view they propose

“As well as the potential for conflict, human beings have a unique potential to be each other’s best source of co-operation, learning, love and assistance of every kind. While there’s not much that ostriches or otters can do far an injured member of their own species, among humans there is.”

They describe the ‘ultimate game’ where volunteers are paired randomly, one is given a sum of money and told to propose to the other a share of the money. If the ‘responder’ accepts the proposal both keep the money. If they reject it, neither keeps the money. Interestingly, what happens is that the commonest offer is 50%. This is despite the fact it’s made clear that there will be only one ‘round’ of this game and the volunteers will never meet again. ‘Responders’ reject offers less than 20% on average, so punishing greedy proposers. This shows two interesting human characteristics – co-operation and “altruistic punishment” which reinforces co-operative behaviour.
Somewhat startlingly, but undeniably, they claim that human beings have lived for 90% of our history in egalitarian societies based on co-operative, hunter-gatherer groups, and only with the invention of agriculture did dominance hierarchies develop.
Their conclusion is to call for more “affiliative strategies”

At one extreme, dominance hierarchies are about self-advancement and status competition. Individuals have to be self-reliant and other people are encountered mainly as rivals for food and mates. At the other extreme is mutual interdependence and co-operation, in which each person’s security depends on the quality of their relationships with others, and a sense of self-worth comes less from status than from the contribution made to the well-being of others. Rather than the overt pursuit of material self-interest, affiliative strategies depend on mutuality, reciprocity and the capacity for empathy and emotional bonding.

I think this hits the nail on the head. I think we need some bright minds to come up with the  detailed methods, but I do believe what we need now is a radical realignment of our energies and our structures away from the mistaken belief that competitive self-interest producing dominance hierarchies are the best model for society, back to our roots, to the 90% of our history, to

“mutuality, reciprocity and the capacity for empathy and emotional bonding”

Wilkinson and Pickett make it clear that their research has compared existing developed nations, not current models against a hypothetical utopian one. If we can reduce our enormous economic inequalities, we can look forward to less violent, more healthy societies. If you’re not convinced about that, read this book.

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The main news programme on the BBC tonight had the word RECESSION plastered behind the newsreaders for virtually the entire duration of the programme. Got me thinking about what on earth’s going on in our “global economy”. It seems the economic system we are all living with is designed around the concept of growth. Technically, a growth rate less than zero for two consecutive quarters is the official definition of a “recession”. Some of the items covered under this heading included fears of shop owners that people won’t buy so much this Christmas. But hold on a moment. Does this make sense? Can you really design a system that will work forever on the basis of consumption and production of more, more, more? We’ve already seen in recent weeks the consequences of a financial system geared around the mantra of making more and more money. In a finite world, does any of this make sense?

And what happens when human beings just keep consuming more and more? Oh sure, they grow all right – take a look at this map of the increasing levels of obesity in the USA – watch it spread across the whole continent like a contagion. This growth, this getting bigger, fatter, consuming more……this is health? This is a goal worth striving for? This is a system which will deliver good lives for the human race?

I don’t think so.

You see growth in a healthy way, growth in Nature isn’t about ever increasing consumption and accumulation. It’s about development. A healthy child grows into a healthy adult by maturing and developing. This involves learning, experience, acquiring skills, becoming resilient, adaptable and fit. That kind of growth is sustainable. That kind of growth is worth pursuing.

I don’t have the answers to this one, but it just strikes me that maybe we need an economic model which is based on a more natural and a more human concept of growth…….development, maturity and the fitness to be able to cope with what comes along. Not the current model based on greed, consumption and ever increasing production. The current model doesn’t work. It’s an illusion.

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