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Andrea Westall
© Andrea Westall 2007
I was asked to write about alternative economics. But if you want an overview of different theories and ideas, then a blog is not the best place to do it. If you have a look at Issue 30 of Soundings in 2005, you will find an article by me on alternative economics (its theory and potential applications), and, in Issue 29, one by Edward Fullbrook on Post-Autistic Economics (see also www.paecon.net) - a movement that attacks the 'mainstream' version of economics which, they argue, "illuminates a few facets of its domain rather well [but] wants to suppress other theories".
You've probably already thought, "I'm just not going to bother then" and understandably this is the attitude of most people to economics - "it's all about equations, graphs and the reduction of life to a few simple rules of strange and, often rather nasty, human behaviour". True, but …. Given the absolute dominance of economic thinking in political policy-making and in the world generally, then maybe it's worth reflecting a bit on the implications of not taking that much interest - or just knee-jerking against something for which opposition or grudging acceptance are the easiest options.
With a few exceptions, Left commentators have recently appeared much more comfortable with culture and society. That is also true for both supporters and critics of Labour. Many though have illustrated the implications of an economic neo-liberalism at the heart of New Labour and Blairism, whilst others, like Polly Toynbee, have argued just as vociferously for the acknowledgement of positive social change over the last 10 years. It really was 'business as usual' but there is no denying that at one level, Gordon Brown has done remarkably well ensuring that standard macro-economics works, and he and his advisers are well-versed and competent in that area. It is also true that he has used models and policies based on neo-classical (not really neo-liberal) economics to achieve some social goals, for example, limited redistribution.
And yet the cracks, indeed fissures, in this approach have always been there and have been probed and commented on by many people. The reason, partly as Edward Fullbrook said in his article, is that a certain form of economics, referred to as 'mainstream economics' (and to be fair not entirely the same as neo-liberal economics although the basis of it) has become pretty much the only game in town. It is no surprise then, that despite the huge amount of evidence and analysis on climate change, it required the Stern report to 'economize' the arguments before they were taken more seriously. Of course the inevitable policy tools that follow from that way of looking at life - tax, carbon markets etc - are now increasingly on the agenda. It is to the government's credit though to be at least exploring personal carbon credits - ie recognising and imposing limits but the need for a different understanding of societal change and the role of government in this area is clear. And when Jeffrey Sachs, an internationally renowned economist, can produce a book The End of Poverty , with a foreword by Bono, in which he presumes originality in recognising that economics has not been able to incorporate 'real' human behaviour, it illustrates that there is little knowledge of the many different kinds of economics being taught.
Equally, there is much relevant work in other discrete disciplines that has never been acknowledged or integrated by an economics that thinks itself more relevant, more rigorous, and more powerful than any other equally partial discipline. (It is quite interesting that in regeneration, many people seem to have a background in social geography rather than economics and would admit to being a jack-of-all-trades.)
But would the Left have done much better on the environment? I really don't think so. Why? Because, despite the rhetoric, most Left thinking has been about the social and the economic for understandably historical reasons. The kinds of thinking and analysis that takes on board the environmental, the social and the economic all at the same time is difficult - creating new ways of negotiating between competing claims and recognising where issues and potential solutions, or their effects, work together and where they work against each other. It hasn't yet been achieved (although sustainable development and ecological economics are two exceptions that are ploughing ahead with useful theory and practice).
There have been great analyses though of the current implications of this narrow economistic approach to policy and practice - the 'privatisation of the public realm', the 'commodification of experience', the 'individualisation' of, well, everything … etc.
But the priority has to be for the Left to work through a more coherent approach. Rather than just thinking in discrete areas - housing, health - economic policy and theory, social policy and theory, environmental policy and theory - or in historical disciplines - eg sociology, psychology, economics - there is a need to create new disciplines and practices that are able to deal with issues and complex behaviours that cross-cut our old ways of dividing up the world.
It's also time for the Left to create a political economy or indeed a politics that, as I said in my article, is "able to deliver on a clear vision of society and the good life, harnessed to meet people's and society's needs and within environmental constraints." Clearly the Third Way was a partial but very limited attempt to do this. It failed partly because Anthony Giddens' grasp and use of economic needs, realities and potential was weak.
Another part of society's problem is the tendency to think and act in black and white - Left/Right being the obvious example. Another example might be the way in which the term 'individualism' is seen as being either positive and negative, often by the same people and in different contexts. The development of human rights and a society where difference is increasingly celebrated, or at least tolerated, is seen as very positive. However rarely do you see a discussion of how these societal changes may have contributed to more negative forms of individualism and a culture where, for example people assert their rights vehemently and sometimes violently, resorting to the creation of a black and white legalistic world. How has this mentality become more prevalent and how is it linked to, or reinforced by, drivers coming from more economic activities and policies? And which is the more powerful?
I also remember an argument with a colleague where he berated consumerist society using the example of white goods - fridges and washing machines. I argued that most women, and probably most men, would not necessarily equate the two given what they have meant for our changing lifestyles. Of course, both our views are valid. It's similar to the implications of a photo I once saw in a Blackpool newspaper which showed Friends of the Earth planting signs warning people not to go into the water because it was contaminated. The local guest house and hotel owners chased after them, pulling the signs up because their livelihoods were on the line. We all need to stop using partial, and often negative, analyses and start recognizing, thinking about, and responding to other's needs. In my article in Soundings, I point to the work of Jake Chapman and others in promoting systems models of analysis and practice, working with different points of views and complex realities to create agreed change (see, for example, www.demos.co.uk/publications/systemfailure2). You could easily dismiss that as just taking the easy way out. But the challenge is to also combine strong overall values into final decision-making and action.
Many people use the arguments for a voracious China and India to warn against tinkering at all with economics. But policy analysis and theory that is unable to deal with international realities (rather than new simplifications) or the complex nature of human behaviour can only ever be partial.
For example, the implicit critique of so many on the Left has roughly and simplistically equated enterprise and entrepreneurship to acquisitive individualism. Well, maybe reality is a bit more complicated. One way to look at entrepreneurship could be 'getting resources together to make something happen'. What the resources are and what the something is can be very different - it might be a group that does this (co-operatives being a good example) or you might be doing something social or equally something completely immoral. Now you can either decide that we need to call this kind of behaviour something different or you can try and reclaim or expand the ideas of enterprise and entrepreneurship, embedding them in society and the environment. You might even think about entrepreneurship as being similar to wellbeing - if you think of both as being about curiosity, an outward-orientation to life, and having the confidence in yourself to realise your own goals, and those of others, in life, just as much as in work.
In some ways, this kind of thinking has always been there, particularly in Europe. It is behind co-operative socialism or the idea of the 'social economy'. So it is not true that it is anathema to the Left. Maybe, we also need to look at the other currents of socialism coming from more co-operative or anarchist roots. These ways of thinking and living are also intimately linked to exploring and realising different ways of achieving democratic outcomes (and there is therefore plenty of practical evidence of where that works and where it clearly doesn't).
In fact, a recent analysis of the third sector or social economy in Europe, saw 'social enterprise' as being less about trading and more about the creation of new spaces for democracy and dialogue over the use of resources. This is not dissimilar to the ideas of the late Paul Hirst in his development of 'associative democracy' - the creation of spaces and opportunities for decision-making for different stakeholders and not just a simple dichotomy between direct and representative democracy ( Associative Democracy). Any instinctive knee-jerk by the Left against the 'voluntary sector' or 'social enterprise' may need to be replaced with a much subtle analysis that claims, and indeed reclaims, appropriate elements for itself.
The obvious point is that life is made up of complex interconnected systems. I remember a discussion (heated) with a prominent academic. His analysis was pure economic determinism and he defended himself by saying that he was an economic historian and that was how he looked at the world. Well, fine to a point. We have to look at part of this complex reality otherwise we would end up with a set of pretty useless fully interconnecting diagrams or conversations that always say 'on the one hand, and the other, and the other'… But that's no excuse for not breaking rules, old habits of thinking, identities even (without necessarily destroying core values) and re-making, re-thinking and re-presenting how we think about and practically link economic issues to society and the environment.
Andrea Westall is an Independent Policy Analyst, Researcher and Writer. She was previously Deputy Director of the New Economics Foundation and a Senior Research Fellow at the Institute for Public Policy Research.
Andrea Westall will be debating the arguments of 'Feelbad Britain' with David Purdy at the Compass Conference . See Break out Session 12.30-1.30pm.
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