The Editor argues for the revival of Benthamism.
This from John Plender in yesterday’s FT:
‘What is needed globally is for both debtor and creditor countries to rebalance their economies. The debtors need to tidy their balance sheets, while the creditors need to bump up domestic consumption, let currencies float and reduce export dependence’.
This is about as elegant a summary as you’ll find of what’s wrong with globalised capitalism in the short term; but none of it will happen, because in Washington there is an economically illiterate President, in Beijing a bunch of old minds with hardening arteries – and in the EU, a whole army of bureaucrats desperate to save their cosy wealth-sharing club. And even if it did, the solution isn’t really the answer: it’s all process and policy.
The day before in the FT, Joseph Stiglitz – they don’t come any more eminent than this chap – called for a New Paradigm for capitalism. Personally, I’d call for anything but an old cliche, but you could see what he was on about….and it was refreshing at last to find somebody beyond arguing Friedman v Keynes and talking about a different future. But Stiglitz too – while he does at least give economics a social context – is hung up on the mechanics of systemic change.
I posted some weeks back on the subject of fisco-economic ‘experts’ being consistently surprised, shocked and bewildered by every release of data showing a level of performance. The get it wrong over and over again because they don’t seem to grasp that people do the performing – and people are weird.
Economics and banking are not the study and financing of business and commerce: they are the social science of watching Man engaging in business and commerce….and in turn responding to other members of their species variously regulating, buying and ignoring their products and services.
If you want to know what the likely human reaction is going to be to something, ask a social anthropologist, or a CBT therapist, or a neuroscientist – or even a shrink. But don’t ask an economist.
Similarly, if you want to find the answer to a social problem, don’t ask a lawyer who became a politician because it seemed like more power and more fun. They won’t know, because they don’t do people.
But best of all, if you want to test your own instincts on a likely reaction or possible policy, look for parallels in your own life. Remember what you expected – and then how people confounded that – and what you learned from being wrong.
Economists and politicians don’t learn, they spout. But in politics especially, the ones that survive for a long time and enjoy huge success (however ill-deserved) are those with an instinct for what the audience wants to hear. There is a nutshell, you have the difference between Blair the Great Pretender, and Brown the autistic, mentally odd booby.
We don’t need a new paradigm for economic activity: we need a new Jeremy Bentham to come along, explain some elements of happiness – and suggest which style of business and commerce is more likely to produce that. It very clearly isn’t trickle-down, globalist, free-market, vulgar greed; and it sure as hell isn’t centralised and nationalised command economies.
We are not a one-size species. We feel differently about stuff, live in thousands of varieties of culture and community, and prefer those ‘pack’ sizes to be manageable rather than huge. Some of us are entrepreneurs, some hard working drones, some laid-back jobbers, some artistic, some scientific, some academic – and quite often, we are not very bright.
In the past, people have talked about mixed economies; but again here, they are giving a systemic description. What we need is a social economics of mixed motives. Not fat nationalised idlers – and not ‘everything must wash its face’ multinational either. But rather, a broad spectrum of what societies need to be content and stable. In short, horses for courses….in a bid to produce the Greatest Happiness of the Greatest Number.