www.howardrichards.org
Constructing a New Global Dispensation beyond Economics
(Keynote talk at an international conference on “Democracy, Human Rights and Social Justice in a New Global Dispensation –Challenges and Transformations” University of South Africa, 1-3 February 2010)
I am trying to think of words to say.
Every time I think of words to say I think of a reason for not saying them. I think of how my words might be misunderstood, might mislead, might misguide.
But silence is not an option. The words of a new global dispensation must flow because the continuation of the status quo is not even possible, let alone desirable.
In the face of the crying need to rethink human institutions, to rethink human action, to rethink thinking, and to rethink the ecological functions of speech acts, silence is not an option. We must seek the words, and also the numbers and the images that will build a world that is possible and desirable. Words have work to do that cannot be postponed. We need words that will produce concrete results to solve the chronic problems that threaten to destroy our species and its habitat the earth, we need words that will heal broken relationships, we need words that will give meaning and joy to life.
Where are those words we need? Let me begin with a negative answer: They are not in economics as we know it. As we meet here today in this room, economists more than the members of any other profession are running the world outside these walls. As proof that economics as a science is a failure I offer the world as my evidence.
I refer of course to mainstream economists. If you ask them…
(1) how we can achieve full employment without inflation,
(2) how we can achieve economic growth and at the same time achieve a sustainable relationship with the biosphere,
(3) how we can stabilize financial systems without saddling future generations with unpayable debts,
(4) how the millions of people on the streets leading precarious lives can be brought out of the informal economy and into the formal economy,
(5) how the growth of the narcotics culture taking over large parts of the world’s cities can be reversed, persuading the drug dealers and professional criminals who compose it to go straight,
(6) how deep participatory democracy can be made compatible with keeping the social demands on the state at a level that it is possible to satisfy.
…if you ask economists such questions their answer is clear and unanimous, “We do not know!”
We must search elsewhere, we must construct social justice, human rights, and democracy elsewhere, because inside the mainstream academic discipline named economics vital questions such as these have no answers. Furthermore, vital economic questions such as the six examples I have named need to be reframed before they can be answered. In other words, we need a paradigm shift, a shift that reorients the questions, the answers, the methods.
The paradigm shift that is needed is not a shift to a new form of economics. It is a shift to a wider framework that reframes and then answers the questions economics used to ask.
Today practice is ahead of theory. The paradigm shift that is needed, the shift that we are here convened by the SARCHI chair to co-create, will draw on thousands of life-affirming practices already functioning in Africa around the world.
I will organize my presentation around two questions:
(1) What should we as academics do with economics?
(2) How should we reframe its questions in the terms of an epistemologically valid and practically useful comprehensive sociology?
I have no new ideas. My ambition is to contribute to reorganizing known ideas in a useful format.
My answer to the first question is that we should do with economics is to put it inside sociology. This is not a new idea. Reframing economics as a dimension or part of sociology started with Auguste Comte who coined the word “sociology.”
For Comte, as well as for Comte’s follower Emile Durkheim, and for Durkheim’s follower Marcel Mauss, economics was not a separate discipline. It was a sub-discipline inside sociology.
Before I finish I will make Auguste Comte, who is perhaps beaming now while he is being posthumously honoured, turn over in his grave. I will say that the word he coined, “sociology,” and not just sociology but all thinking, should be understood in turn with the help of an ancient and honourable word that Comte identified with an intellectual past now fortunately superseded. That word is an old one. Its history goes back more than two millennia to early editions of Aristotle’s works.
You have guessed that the word is “metaphysics.” Economics inside sociology; sociology inside metaphysics.
I trust that Auguste Comte, and more importantly you the audience, will forgive me. As a certified critical realist and follower of John Dewey and Roy Bhaskar, I have no intention of reviving the lies, the patriarchy, the essentialism, and the oppression that have brought down upon metaphysics the righteous wrath of positivists and post modernists. Following Bhaskar but not copying him exactly, not now but later, I will propose for your consideration that “metaphysics” is the mot juste required to make a certain necessary apology of Europe to Africa and the mot juste to add a certain necessary dimension to any possible future for humanity.
Now back to another key word: “sociology.” As Marcel Mauss pointed out following Comte and Durkheim in advocating one single science of society, no tears need be shed if its name turns out not to be “sociology,” but instead “anthropology,” or “human studies,” or “trans and multi-disciplinary studies, ” or “social economics” or “socio-ecology” or as Amartya Sen has suggested “socio-economics.” Whatever the name, the point is to recognize that it was a mistake from the get-go to regard social science as a number of separate independent disciplines. It was also a mistake from the get go to suppose that there was one economics and by implication one kind of economy.
If you listen to the grumpy sceptic living in the bottom of your mind you will hear it muttering, “Why is this guy saying it is OK to have one sociology but not OK to have one economics?”
It is OK because the comprehensive sociology we recommend just is a comprehensive framework for approaching the enormous historical and geographic diversity of human institutions; whatever the attitude of other people’s sociologies may be, ours adores diversity.
“Why is this guy speaking in the first person plural?” the sceptic mutters. It is because I am identifying with Catherine Hoppers, with the SARCHI chair, and with Joanna Swanger, who is the co-author of two of my books.
We and our approach to sociology adore diversity not just because in our hearts we have been socialized to be post modern Foucauldian individualists, but also because we are convinced in our heads that the future needs diversity Creative diversity is an objective necessity for any new global dispensation because in plurality lie the solutions to the life-threatening economic problems that now have homo sapiens sapiens on the endangered species list
Solutions are plural. Solutions are both/and sums. We do not need a one size fits all economics. We do need a broad, imaginative, and open-textured humanistic social science, simultaneously hermeneutic and causal. Our sociology draws on many strands of what the social sciences have been in order to morph today into a conceptual space where every soul can live and think.
Now: How are we going to reframe the typical questions of economics? We will reframe them pragmatically, in terms of problem-solving, and also ethically in terms of human action. Instead of defining economics in the currently orthodox way, as the study of rationally assigning priorities under conditions of scarcity, or, even worse, as the empirical and theoretical study of the behaviour of markets; we will define the economic part of sociology as about the conduct of people. Socio-economics is about how people actually do organize the production and distribution of goods and services. It has an ethical aim, namely finding better ways to organize the production and distribution of goods and services.
A sociology that includes economics is fundamentally about relationships, relationships among humans and relationships of humans with nature. Following Max Weber, who was not wrong about everything, sociology as we love it uses a notion of “relationship” to define a science of all that is human, and then makes economic relationships a subset of relationships in general.
Notice that the orthodox definition of economics, but not ours, falls into line with a less lovable aspect of Weber’s thought: seeing economic rationality as a peculiarly modern and western rationality. On this sort of view people who are non-modern or non-western have to be taught or compelled to become rational economic actors. As the European world system expanded, dripping blood from every pore, to become today’s global world-system, rationality and therefore economics gradually came to cover a larger geographical area.
According to our broader institutionalist definition the part of sociology that is about economics found its subject matter everywhere even before the global economy imposed Weberian economic rationality everywhere. Every culture has some way or other to organize solutions to its basic material problems.
The grump is beginning to cheer up. There is no hostility at all in his tone of voice as he asks: So why does this guy say socio-economics is epistemologically valid? Why does he say mainstream orthodox economics is not epistemologically valid?
The approach we are developing at SARCHI like any similar approach is valid because we start with what is, with human conduct as it has been discovered in anthropology and in history.
Mainstream economics is invalid because it is ethnocentric. As Joseph Schumpeter points out in his history of economic analysis, orthodox economists take for granted the juridical framework of contract law and property rights typical of the modern west. The ubuntu metaphysics of Africa either does not exist at all or exists negatively as an obstacle to development. Following Carl Menger and the Austrian school mainstream economics tends to postulate homo economicus instead of discovering empirically what women and men have done throughout history and around the world.
This assumed juridical framework and that postulated egoism constitute the paradigm I have been talking about. They constitute the paradigm we must shift out of. They are, to use a concept developed by Charles Taylor and John Searle, the global world-system’s constitutive rules.
We are using the Kuhnian word “paradigm” and the Wittgensteinian concept “constitutive rules” to update old conceptual links that tie economics to sociology. The logical subordination of economics to a single general social science advocated by Comte, Durkheim, Mauss and other sociologists has been acknowledged and still is acknowledged by a number of economists. Durkheim and Mauss in turn explicitly endorsed the work of certain economists who were their contemporaries in the early 20th century, notably the German historical school and the American institutionalists, not to mention the French economists who published in the Année Sociologique edited first by Durkheim and then by Mauss.
The dissidents within university economics departments who take a broader view of their subject are and always have been, we insist, logically correct. They have never been refuted. The mainstream is mainstream today not because it teaches valid concepts that have survived rigorous critique in academic debate, but because its adherents have won their battles in academic politics. They have won their battles in the national and international halls of power.
There is a moral here for us today in this room: If we are going to rethink thinking and to transform the university, we will not do it just by publishing more exposés of the fallacies of mainstream economics. Many have already been published. They tend to languish unread on the shelves of university libraries. Orthodox paradigms have never quietly faded away just because they were wrong and dysfunctional, and they will not quietly fade away even now, not even now when the question whether there is to be a future for humanity and the biosphere hangs in the balance.
On the contrary, we will transform universities if and only if we are able to form discourse coalitions of people who insist on epistemological validity and on practical problem-solving.
I move on to another aspect of the second question to which I am offering answers, namely: the practical usefulness of a reframed and broadened social approach to economics. Why is a comprehensive sociology including economics more practically useful than today’s politically dominant but intellectually bankrupt mainstream economics?
In showing the practicality of putting economics inside sociology I will refer to three of the six anomalies listed earlier as questions mainstream economics cannot answer. In each case I will briefly summarize points I have made elsewhere at length.
First, the question how to achieve full employment without inflation.
Full employment is generally held to be inflationary first because jobs for everybody will bid up wages, which will bid up prices, and therefore be inflationary; and secondly because the means for achieving full employment is generally government spending that puts too much money into circulation, leading to inflation standardly defined as “too much money chasing too few goods.”
The SARCHI paradigm starts by reframing the question. The question is not how to get jobs for everybody. It is how to get livelihoods for everybody. In standard sociological terms, the question is how to achieve social integration. Employment working for a boss who makes a profit hiring you because what you produce sells for more than your labour- power costs, is one way, but not the only way to achieve livelihood and social integration.
Shift the paradigm and you will see the answer. The duck becomes a rabbit. You will see that there are many ways to organize livelihoods for people. The currently excluded (or included in narco and\or criminal subcultures) can be brought into the family, into the clan, into the tribe, into deep democracy and into deep citizenship. They can be brought back from alienation while preserving money’s function as a store of value, without which money cannot perform its function as a medium of exchange.
Second, how to achieve economic growth and at the same time a sustainable relationship with the biosphere.
Again we reframe the question. Economic growth as it is usually defined requires achieving high levels of investor confidence. The need for investor confidence usually imposes a constraint that requires postponing real ecological sustainability. (However, some limited progress can and should be made even when this constraint cannot be quickly loosened.)
A reframed question should start by acknowledging that any possible future will be a green and austere future. Given this acknowledgement, a key question to ask regarding every neighbourhood and every region is the physical question how to fit viable forms of human life into the cycles of nature. A parallel question needs to be asked at the global level.
Given the physical requirements, the question becomes what cultural resources are available (or can be made available by culture-change) to achieve the human cooperation needed to satisfy those requirements --in Gramsci’s phrase to adjust culture to physical function. Institutions need to be rethought starting at the ecological level. Moving to that basic Deweyan and Maussian level where culture redesigns its takeoff from biology requires thinking outside the box of ethnocentric economics.
Third, how can we stabilize financial systems without saddling future generations with unpayable debts?
To explain how debt piles up and eventually becomes unpayable I start with Paul Krugman’s new book. Krugman is the winner of the 2008 Nobel Memorial Prize in economics. In his new book he asks what economic theory has learned from the series of financial crises of the past two decades. What we have learned is, in five words, to go back to Keynes.
We have learned that there really is, as Keynes said there was, a chronic lack of effective demand. There are too few customers. Since business depends on sales, too few customers means too few jobs. Full employment --as Keynes taught us theoretically and as history teaches us practically-- rarely happens and when it happens it does not last long. Governments struggle to cope with chronic unemployment and related ills by chronically increasing spending. Since the entire system depends on customers who buy, and because there are chronically too few customers, the government steps in as buyer of last resort. The result is an ever mounting burden of public debt. (Private debt increases too for related reasons.)
The problem manifest today in key nations as unpayable public debt has no acceptable solution in the terms in which it is posed. Keynes himself did not pretend to have solved it; Keynes himself said it was a consequence of how our institutions are organized, which might be solved if the institutional framework were different.
Suppose now that we dissolve economics into sociology. We make a sociological observation: Prior to European contact there were no financial crises in Africa. Prior to European contact there was no unemployment. The institutional framework that makes these problems possible and inevitable did not exist on this continent.
It must therefore be possible to devise institutions in which it is not necessary to run up unpayable debt to keep people employed producing goods and services. Historical studies by Karl Polanyi and others show that there have existed on this planet, particularly but not only in Africa, ways of organizing livelihood that did not display the inherent tendency to become unstable due to a chronic weakness of effective demand analyzed by Keynes. Neither unpayable debt nor a warfare state nor a culture that invents artificial needs and insecurities to foment mass consumption nor any of the other contortions modern economies perform in desperate attempts to stabilize themselves were necessary. Unfortunately none of the actual and possible stable systems are included in the subject matter of the orthodox economics currently dominant in our universities.
Now it is time to buzz the telephone extension in the coffin of Auguste Comte to give him a wakeup call. The message is that open-mindedness and practicality will end up respecting the proclivity of peoples the world over to legitimate their institutions and give meaning and joy to their lives with cosmologies that we recommend naming as “metaphysics.”
At the risk of inviting ridicule, let me confess before the coffin of Auguste Comte and before you my sisters and brothers what I really believe:. A decision to revive that venerable and controversial word can help us to understand the past and, more importantly, to improve the future. It will help us to treat each other with more respect. There will be more peace. Our lives will be better organized.
A similar claim was made by Mahatma Gandhi concerning the related word “soul.” He said that the first requirement for the practice of non-violence was to believe that people are souls, and not to believe in soul just as an intellectual concept, but as a heartfelt conviction put into practice.
In welcoming metaphysics back into sociology, let me recall some points about the circumstances of its departure. What sociology set out to do in the beginning was to discard theology and metaphysics and to replace them with science. Auguste Comte explained that sociology was needed to establish social cohesion after the French Revolution. The monarchy was deposed. The church was disestablished. Deprived of God and King, the people needed authority. The authority would be science. It would be sociology.
But as sociology carried out its research agenda to build a science of social reality, what was thrown out by the front door returned by the back door. Human beings as observed are in fact perpetually seeking meaning in their lives; they dance in Pentecostal meetings, they wear the colours of soccer teams, they go into mystical trances at rock concerts; they thirst for cosmological joy. They organize their institutions with stories and with ceremonies. They spin webs of charming and spooky ideas that even as they charm and spook organize collective action. Cultures have patterns. Ideas organize norms and norms guide action.
One can of course say that what sociology has learned is that humans have collective representations, or that they have belief systems, or mindsets, or worldviews, or mentalities, or habitus, or that they live in myths that are waking dreams and dreams that are sleeping myths, or that they have ideologies, or that discourses and practices mutually constitute each other. We recommend that whatever else one may say, one reserve a space in one’s vocabulary for what Aristotle called first philosophy, meaning the categories that organize thought. Aristotle’s notion that categories organize thought has a long tradition that has been called metaphysics. Today we do not believe there is one metaphysics at all places and times; we believe that throughout history and still today societies have organized and are still organizing some degree or other of social cohesion around one or another set of central guiding ideas –ideas not independent of passions, even when, as in Plato, they are strongly identified with mathematics and with formality generally. Homo sapiens sapiens is a metaphysical animal; if she were not, she never would have organized cohesive cultures and she would never have survived.
A merit of recuperating “metaphysics” is that it implies that sociology is making an apology. It is acknowledging that the anti-metaphysical worldview that gave it birth is in many ways dysfunctional. It is acknowledging that today we must engage in serious dialogue with people who come to the table thinking in categories different from the western categories that presided at sociology’s birth. It suggests that rather than name our categories “science” and theirs “belief systems” we name both with the same ancient and honourable word.
Following out this train of thought, the wise sociologist becomes a philosopher, a lover of wisdom, a seeker, a soul open to seeing truth in every other soul.
Let me return now to the list of six chronic problems economics cannot solve within its paradigm. I have already discussed how locating economics within sociology helps to solve three of them. Now I will discuss how a sociology reinforced by seeing itself and its history as inside metaphysics might be of practical use for reframing and solving the remaining three.
I suggest rephrasing the fourth unsolved problem mentioned above as,” How can the millions of rejected people on the streets leading precarious lives be made to feel loved and secure?” This rephrasing suggests that the concepts of “informal economy” and “formal economy” already fail to see the problem. They do not see the soul of the metaphysical animal. The rephrasing suggests a sociological approach that is also an idealistic and metaphysical approach, and often too a religious approach. My rephrasing is meant to turn an economic problem with no feasible solution, namely how to create enough jobs in the formal economy to absorb the enormous numbers of people who need jobs more than employers need them, into a social problem with a feasible solution.
The solution becomes feasible from the moment one realizes that no employer is needed. Not only is no employer needed. It is also not necessary to find enough customers to make a living as self-employed. A plural economy with many more than two or three types of livelihood is possible and to some extent already in existence as researchers called social economists is demonstrating as we speak.
Bringing everybody into the fold will be the result of many complementary efforts. I personally especially like to work with people on the street one soul at a time. Start with understanding emotional and physical needs. Connect people. Connect resources. Build on whatever solidarities exist.
Let us neither underestimate nor overestimate the contributions of the public sector. A key point: public sector actors should not be ashamed to pay people to do art, music, dance, science, sports, tree planting ... Private donors should not be ashamed either. There is enough for all. We must break with the prejudice that the right to share in society’s wealth depends on being employed. It is true that everyone should contribute to society, but it is not true that everyone’s contribution must necessarily take the form of finding an employer whose ability to pay them depends ultimately either on sales or on taxes.
Livelihood means having something to do that is worth doing; it means having a dignified role in society; it means having material provision to meet one’s needs. It need not mean a job.
Much more can be said. I think I have said enough here to illustrate once again that putting economics inside sociology is a conceptual move with practical advantages.
The fifth question concerns how the drug dealers and professional criminals leading a crazy life in the narcotics culture outside officially authorized institutions can be persuaded to go straight.
It would be relevant but repetitive to repeat here what I have already said about reframing questions about jobs as questions about livelihood and social integration.
Instead here I will augment the point that a more comprehensive science is practically useful by observing that as an antidote to narcotics culture economics alone has virtually nothing to offer. Economics can to be sure promise jobs to graduates of rehabilitation programs. But even if a job promise is kept it cannot compete with the extreme pleasures and passions of the crazy life. Most jobs are boring compared to the excitement of danger, of drug trips, of sex, of drinking, of the mind-blowing music, the easy money, the glory, the love life and hate life within the low life crowd; and in not a few cases the mystical passion of being saved by religious conversion and then backsliding, and then being saved again repeating the cycle several times.
The reality of the need to mount alternatives that are both emotionally compelling and materially feasible makes hash of the divisions among the disciplines. It also makes hash of complacency. To those whose comfortable leafy suburbs have not yet been taken over by drug-related gangs, the people who live in the favelas of Rio de Janeiro and on the US/Mexico border and many other people can say: de te fabula narratur, the story is about you.
The sixth example of a problem with no solution in the currently dominant paradigm concerns how deep participatory democracy can be made compatible with the dynamics of existing economic institutions. According to Norberto Bobbio for example, democracy must be limited in order to keep the social demands on the state at a level the state can satisfy. The crux of the problem is that what Schumpeter called the tax state, the state whose income is derived from taxes, cannot simultaneously create the investor confidence needed for capital accumulation and redistribute wealth from rich to poor. There results what Michael Kalecki called an inconclusive tug of war in which those with most of the money tug one way while those with most of the votes tug the other way. Globalization raises the stakes as it makes it easier for those with most of the money to play the exit card, responding to political defeat with capital flight. Many like Bobbio conclude that too much democracy, pejoratively known as populism, can only lead governments to founder in incompatible efforts simultaneously to create a friendly business climate and to satisfy the social demands they generate by encouraging social movements and grassroots participation.
Reframing the problem: the problem is not how to tone down democracy to make voters demand less from their governments. The problem is how to free ourselves from the need to please investors at any cost. It is how to build democracies where the overwhelming necessity to establish the conditions necessary for capital accumulation is no longer overwhelming.
Let me briefly in the time remaining suggest one way in which reframing the question helps to answer it.
Throughout I have been following the French sociological economist, or economic sociologist, Jean-Louis Laville in praising the plural economy. I have been praising Africa because of its diversity, because it is a continent where you can go to regions where according to the World Bank 90% of the people are unemployed and find everybody working; where you can go to places where according to official figures people are living on less than one dollar a day, and therefore logically must be dying, and find that everybody there is alive. Let me now suggest that this plurality, this diversity, loosens the constraint that requires us to please investors at any cost. In plurality and in diversity there is resilience. Let me praise the academics that have devoted themselves to studying the details of how people are surviving even when according to the postulates of standard economic theory they died many years ago.
Let me close with a particular example. In Chile I am a panellist on a call-in radio talk show. It was recently brought to our attention that the sales women at a major department store in a major Chilean city are being compelled to work twelve hour days, and are not being given sufficient time to eat lunch or to go to the bathroom. Nobody dares to complain of these flagrant violations of Chile’s labour laws, for fear of being dismissed and ending up on the street unemployed. Let me hypothesize that if Chile were a stronger and deeper democracy than it now is, then the government would step in and enforce the law. But if that happened the department store might close. It might and might not be able to turn a large enough profit to keep its investors interested in continuing to operate at that location. It would be compelled to hire more clerks because it would have to pay each of the existing clerks the same wages for working fewer hours. Its costs would go up, its competitiveness down.
The question how to deepen democracy can be reframed in a specific form in the light of this example as, “Under what conditions is it possible to adopt the criterion of the Swedish post world war II Rehn-Meidner model that a business that is unable to pay high wages and provide good working conditions should not exist; it should cease to exist: it should go out of business?”
The answer to the question thus reframed is, I think, “when the employees who would lose their jobs, and the employers who would lose their businesses, have good alternatives to fall back on.”
We are back to plurality, to multiple complementary partial solutions that add up to meeting everyone’s needs in harmony with the biosphere. We are back to something we as academics can do. We can do research on alternatives that are working and make them better known. We can break down rigid concepts that close down possibilities and replace them with flexible concepts that open up possibilities. We can make more alternatives possible by making more alternatives thinkable.
