Economics dominates our conversation about the state of society and we are not good at discussing history (the stories of what happened), anthropology (observations of how others had or still live), Philosophy (thoughts about who we are and how then to live). Much is being written, driven by the expanding awareness of crisis. At times it seems to me we would be better off without the word “economics” – just drop it all, all of which makes it look like the experts are in control and making sense. We could continue to discuss things more specific like interest, money, investment, class, technology, trade, but not using the awkward vocabulary of economists such as marginalists, GDP, utility.
But I have come to a different view. That there is lots of good in the idea of “economy”, just that it has been co-opted by those who are the supporting cast for the seriously wealthy who use economics as a justification to legitimate their exploitation.
The history of economics shows that the discussions started, with the Athenians around Plato and Aristotle, as a larger self-conscious reflection on the purpose of the use of land to feed us, and the emerging social organization to manage the whole. They were able to discuss the role of elites and the meaning of community good in the same conversation. But over time generations of economists reduced economy from being a natural part of life to being a mechanical system of a few forces in quantifiable interactions.
This evolution of economic thought made some sense because the relative importance of the land-food-families logic was slowly overshadowed by trade, manufacturing and finance. The early debate – just prior to Adam Smith’s Wealth of Nations in 1776, was about those thinkers, pamphleteers really, called the physiocrats who maintained stubbornly that all wealth came from land, and that manufacturing was just a rearrangement of what was already produced.
The industrial-minded won that argument stressing abstract aggregates, contracts and tax policies, trade balances and resources, but at the cost of avoiding the realities of the impact of these on land used to grow food of quality to support families’ well being. The best known egregious example , clearest from England, was producing more wealth from the land by forcing local farmers off the land and out of their houses so there could be more sheep. Interesting that the kings and queens of the time tried to prevent such policies, because of their concerns (of sorts) for the well-being of the whole, whereas the policies were of clear benefit to large land holders, who won out in the Parliaments
The conflict was about which image of society helped manage the wealth – in one case the wealth of owners of large estates, in the other of the wealth of new factory owners who saw the opportunity to get rich by putting new technology on large enclosures called factories with steam-driven belt manufacturing for example. The general good of society, which was at least a part of the earlier thinking about economics in a line from Aristotle to and including Adam Smith, was being forgotten. It has been as though there was a new merry-g-round emerging in the middle of society, and economics was for those managing it and their support staff (the lawyers, accountants, teachers, police) and not for those who failed to get a ride and play a role in the flow of wealth.
Nature for early economic thought was around food, land and families and all that went with it. Imagine a country scene with cows and calves, and men with scythes cutting hay, little cottages. But the nature important to manufacturing was the nature being explored in in the natural philosophy which became physics: energy, heat, speed, mechanics – not sexual reproduction. The nature of Newton was about timeless differential equations, energy and force. It was as though economics became the operation manual for those who were or wanted to be rich – obviously a part, not the whole, of the population.
Pamphlets were written starting in the 1600’s with lead sentences like “X is about wealth and how to obtain it, ”wher X could be commerce, trade, manufacuring. The word econmy had not yet reentered the mainstream. This shift in focus, fitting the needs of an industry as a machine for wealth creation (at the expense of society), has basically ruined us. The human aspects of a full life in society has been stripped out of economics, reducing economics to a mechanical rather than organic perspective. Many are making this complaint. I take for example
“What they care about is what it means to be human, what it mean have relationships, what it means to live life, to have loves, or to tell lies. If you want to engage such people, YOU have to tell a story about culture and values—who we are, how we got that way, where we’re headed and What makes us tick. That’s what has always interested me; it’s what my reporting has always been about. The gee—whiz technology is just a Win:dow through which to gaze upon human nature.” – Joel Garreau in Radical Evolution.
What has gone missing..
“Economy” is suggestive of a more holistic interest and was used by Aristotle as estate management. The farm or estate was the major unit of social organization and production and Aristotle discusses everything: land, grain, animals, slaves, family members and relation to others – politics. It as an exploration of how to manage in order to produce the livelihood of human beings. All societies have an economy, but the many discussions such as in the marvelous book, Money Changes Everything by William Goetzmann, do not lead with a philosophical view built on reflections on the purpose of an economy. Much economic writing starts with a complex society but fails to look at origins. It talks of “tax changes…”, “interest rates retreated… , incomes rose, investment declined.” Just look at the vocabulary used in the sessions of the 2018 American Economic Association annual meeting (https://www.aeaweb.org/conference/2018/preliminary). No mention of real people and the way they deal. Quantification requires aggregation, not details.
A reintegration of humans with nature is the core task for this century. It implies a better understanding of people in relation to each other. it means people in the full scope of the human life cycle and the families in which these are lived. The imply a concern for the belief systems and meanings understood by the population , from births into community and out of the community through death.
Plato and Aristotle saw that well-managed estates produced a surplus. Simple analytics. People require food, the estate is organized to produce that food, but, if well done, there is a surplus beyond sustainability. The modern answer is to reinvest to make even more (of which scraps to the people, feasts to the very rich and scraps for the people) or buy stuff, from chocolate chip cookies to Yachts.
Plato and Aristotle’s answer was clear: the surplus should be used to create leisure time, and that time to be used in self-development, education and participation in the community in politics and philosophy. The surplus should not be spent on things because human development was more likely an outcome from surplus used to create leisure used for study and serious conversation than surplus used for buying things beyond the tools of production. The welfare of society depends on good thinking and community conversation.
This is very important because, as soon as we have two possible views of the uses of surplus, the conversation is opened up to further exploration. We are no longer stuck in the TINA – there is no alternative – world of Margaret Thatcher and We desperately need such a conversation to get out of our current mess. The key thought here is to resurrect the original meaning of the concept economics, which has become almost useless and dangerously misleading. Since most of us want to live in a healthy blend of civilization and nature, why don’t we use our wealth to go there? Amazing how economics avoids that idea and is not much help in us getting there. In fact the standard advice taught within economics is contrary to that goal.
Lets do better with ourselves, our society and our planet.We need clarity of purpose and clarity of means. We all have the responsibility to think about our future and manage the present? The purpose has to be growing good and interesting people, and that means developing our environment and society to support that goal. So we need an approach that is comprehensive, including understanding people, society, and the planet. Hence revitalizing economics. We need to break the vocabulary of economics out of its protective cocoon and be more of a butterfly.