Tuesday, 13 October 2009

Guest post by Niall Douglas: Progressive pluralist economics or left-wing economics?

During the next few days we will be putting up a number of guest posts arising from the TASC Autumn Conference - Towards a Progressive Economics - held over the weekend. The first critique is by Niall Douglas.

Niall Douglas: I attended the TASC Autumn Conference - Towards a Progressive Economics - and managed to make it through from start to finish, despite having woken at 3.30am in order to travel to Dublin. I found it most illuminating and I offer my thanks to its organisers and speakers for a most welcome discourse.

Much was spoken of the failings of Neo-Classical Economics and Neo-Liberal Economics – the two not being the same, I might add, as the former is the (supposedly) apolitical collection of theories and models and the latter is the avowedly political application of those theories. Suggestions for improvement seemed to me to centre around the need for the reintroduction of pluralism within economic discussion, and the transfer of power from “the markets” to political control which could be more rationally and humanely directed than the necessarily chaotic, and often psychopathically selfish, free market. This, it seemed to be implied, is the only form of “progressive” that there is.

This is simply untrue: there are progressives on the right just as much as there are on the left – indeed, throughout human history one finds that which side is the more progressive alternates across the decades. From inspecting the last century, I would personally say that both left and right-wing politics have enacted just as much progressive legislation across the world as the other.Human rights and welfare have without doubt been improved dramatically since the 19th century, and both sides can take credit.

Most people know of the great suffering presently endured by far too many in our planet, and anyone humane feels angered and motivated to create change by their plight. What makes a person politically progressive is a profound and deep-seated belief that it IS possible to improve the state of our world and that the Thomas Malthuses of our world are wrong (I should hasten to mention that Rev. Malthus did not believe that humankind was doomed, and ascribing such negativity to the man does him an historical injustice).

Every progressive is united by a burning desire to enact social and environmental justice, to bring equality of both opportunity and outcome to all, to provide a better world for our succeeding generations and to instil freedom and democracy at every level of our world.

If TASC is a think-tank dedicated to progress, then in my opinion it needs to bring the progressive right into its debate as well – most especially its economic debate. Much of last weekend’s conference had (in my opinion) those speaking to the already converted, which is surely nothing like as progressive as advocating progressive ways ahead to a politically mixed audience.

For example, the progressive religious right in the USA are just as appalled with the events of recent years as anyone on the left: they have been instrumental in withdrawing the support of the religious right away from the Republican Party which so failed them. Without their efforts – and their progressive ideas – Obama would never have become elected, nor would he be expending so much political capital on bringing the Republican Party on board with his legislation in health, climate change and so many others still to come.

One cannot but conclude that the progressive right are instrumental to the near-term future of this world.

A good start would be to add a few voices of the progressive right to this blog – I don’t doubt that the comments will wonder who I would suggest, so I will freely admit that I have no idea as I am profoundly ignorant of the current political scene: I do look forward to seeing who commentators might suggest. I am sure that, by providing a counterfoil to left-wing arguments, the quality of the overall debate would become greatly improved and intellectually more robust: so much so that government, business and the markets would find it hard to ignore the arguments for progressive change.

In the end, pluralism is a double-edged sword: if you truly believe in it, you have to let it cut you from time to time, and in so doing hopefully become better and stronger than before.

Niall Douglas holds degrees in Business Information Systems, Economics and Management and Software Engineering. He is a member of the international Toxic Textbooks movement


tgmac said...

I too would like to find out who resides in the progressive right wing of politics. I can imagine such a person or organisation, and I'd imagine their political-economic outlook to be shaped by popular neo-liberal capitalist doctrine. In fact, I would like someone to broadly define the doctrine in somewhat concrete terms.

Pluralism is indeed a great idea. It's just too bad that discourse in the MSM media about economics and the economy is so warped by so-called free-market analysis. The language, terminology and thesis of all economy activity and polity is steeped in a non-pluralistic framework. The current doctrine is that capitalism, whatever its form or name, is the only game in town. Historical economic polity is now a montionless entity according to popular thinking.

Nor does pluralism, in and of itself, gaurantee that a meaningful exchange of ideas will occur or that common ground is or should be found. More often than not, imo, neo-classical/neo-liberal analysis (I don't make a distinction between the two as I don't buy the idea that neo-classical analysis is natural and therefore immune from political discourse) often isn't interested in finding commonality but in highlighting what it considers to be the unalienable proof of its own tenets. The US version is particularly evangelical in its approach.

However, if you find TASC progressive ideas to be too leftist in orientation, I would be interested in seeing some alternatives. To my mind, while I fully support TASCs remit, I would find generally or broadly that their approach is rather tame and already significantly couched in classical economic thought. This is not a criticism but just a personal viewpoint. In fact I hope TASC, just because it is familiar with the classical economic excercise(s), is successful in their efforts to open up economic discourse in its entirety.

Aidan R said...

I really enjoyed the conference, and credit to TASC for providing a forum to discuss alternative (and practical) approaches to our current crisis.

I agree with the above comment that it is neccessary to bring progressive thinkers across the political-economic spectrum into the debate on how to reconceptualise the organisation of our economy. One way to do this is through real empirical social research. We should take as our starting point a skepticism toward deductive type economic modeling, as such deduction is, more often than not, based upon ideological conviction than empirical reality.

I am 100 per cent confident that in a rational discussion, premised upon empirical research on how to organise our economy, that most neo-classical deductive models would be shown up for what they are: empty logical constructs. Political economy grounded in social science is more than a methodological tool. It makes explicit its normative-institutional framework and grounds its methodology in empirical reality (involving real actors and real institutions, with real interaction).

In this regard, labour markets are examined not through the perfect comeptition hypothesis, but as an instituional ensemble that attempts to minimise income inequality, because it has been shown that this leads to optimal outcomes in citizen health and social well being. The question is what institutional configuration (centralised wage bargaining or sector led bargaining etc) produces these 'normative outcomes' (as opposed to competitive mathemathical equilibrium).

Also, to a poiltical economist, examining how best to organise the production and distribution of a public good like 'communications' (given our attempt to create an export led knowledge based economy), it would become obvious (through basic empirical research) that leaving it to the private market leads to inefficient outcomes. The comparative example of Eircom would prove this. The same could be applied to a whole host of other public goods.

Thus, regardless of whether one is left or right (politically), it should be obvious that the organisation of certain sections of the economy cannot be left to pure market forces (which is what deductive models would conclude, and is in-itself hypothetical). This political-instituional approach can provide a platform against the deductive consensus.

The battle against the current ideological consensus is certainly a battle of ideas (politicaly). But, it should also be a battle of concrete material evidence. It is the latter that will convince those on the 'right' as well as the 'left' that the prevailing consenus is defunct. This can be a rallying call for all economists, social scientists, activists and policy makers alike. A paradigm shift is required.

tgmac said...

Nice post Aidan R. Research based on concrete evidence is obviously a methodology worth considering and pursuing. I do wonder, however, at humanity's ability to take concrete evidence and "bend" it to its own interpretation(s); nor do I think it particularly apt to exclude philosophical inspection and theory from the exercise as this addresses the aspirational/ethical side on the human condition and is every bit as important as empirical inspection.

I also have a tendency to think that the a-political approach is often used as a veneer or cover for the neo-classical assertion that economics is a natural and immutable scientific pursuit that can be summed up in a few neat formulas or mathematical equations. Nevertheless, I do find, from time to time, that some semi-mathematical/empirical data do pop up which shed light on the poltical economy such as Pareto's work. Also, I'm finding Madlebrot's works on markets (the easy stuff) to be illuminating.

If you are pursuing empirical studies, the best of luck. The more I pursue a sceptical/critical approach to the political economy the more I find myself crossing over the boundries of economics, philosophy, biology, physics, psychology just to name a few.

John Barry said...

Niall, Good post and you of course raise an excellent point that pluralism and debate about 'progrssive economics' cannot be confined to the 'left' as conventionally understood. I would take issue with your distinction between 'Neo-Classical Economics and Neo-Liberal Economics' - with the latter being an ideologically corrupted implementation/interpretation of the 'objective/scientific' teachings of the former. As I hope I made clear in my contribution to Saturday's conference (and in postings to this site) it is an illusion and just plain wrong to think that there is such a thing as a 'value-free', 'neutral' and 'objective' theory of the economy. All accounts/theories of the economy are normative, political and are based on and express clear value judgements - including 'neo-classical economics'. Pluralism in economics in my view must begin from the view that all theories of the economy are forms of 'political economy' and what is required is for all competing or complementary forms of political economy to be honest and explicit about their normative bases and assumptions. That's all. This does not mean the automatic 'rejection' of neo-classical economics, but it does mean its removal from its self-assigned position of authority as somehow non-political, non-normative while 'progressive economics' are not objective, neutral etc. What does neo-classical economics have to lose from being up-front about its own normative principles and assumptions?

Niall Douglas said...

Firstly my apologies for such a late reply - we had a guest here this week and I also had to move email servers for my company as the old server expires tomorrow as well as a full work load. I'll split the replies by person.

Much as it might be anathema to many reading here, the Neo-Conservative movement in the US began as a progressive movement in the right before going on to eclipse the "old right" much as the "new left" has eclipsed the "old left" in politics in Britain. One of the most fascinating political stories of the next half century will surely be about how Neo-Conservatism corrupted itself from within such that it eventually turned itself into everything it hated in the world: Godless, big government, high deficit spending and opposed rather than welcomed by the rest of the world who views it as retrograde rather than progressive.

Regarding economic discourse being limited by its own terminology, I don't personally think that this is a limit of Economics or anything to do with Economics. The world since WW2 is one of technocrats trying to enforce rational behaviour on a world underpinned by chaos: very desirable when nuclear war could happen at any moment, but terribly costly in terms of humanity because now all scope for individual behaviour must be stamped out, rules must dictate all human interaction and selfish (i.e. rational) behaviour enforced - though, curiously, simultaneously we must encourage consumption at all costs which is highly irrational!

Niall Douglas said...

Aidan R:
What "a market" is is entirely defined through historical precedent and convention. When one argues whether intervention is appropriate or not one sadly usually tends to skip arguing whether the market should simply be changed to perform tâtonnement on something more desirable instead. Those on the right would tend to argue that government's sole purpose is to manage and enforce the rules for the market(s), whereas those on the left view that as too chaotic, unpredictable and wasteful and feel a centralised direction of human effort is superior.

This debate by the way is extant since Babylonian times for a good ten thousand years now. They rather sensibly placed it at the core of their society as they recognised that they couldn't answer the dilemma of which is the best choice for a given circumstance. Unfortunately we have veered somewhat off into splinterised subdivisions of belief since, and we waste far too much effort on validating our own particular sub-belief.

The truth is that both approaches have very significant merit, that both are also non-ideal and that it is the "perfect" combination of the two which is as ideal a solution as possible. The Neo-Classical model actually does recognise its own failings here even if most Economists don't realise it: furthermore externality theory has made significant progress in the last few decades. Of course, one is still calling the pot black: Economics ought to be taught in terms of dimorphism of solution rather than in terms of one glove fitting all comers.

John Barry:
I do agree with you that all Economics - indeed all of everything - must absolutely be treated as based on a series of ideological assumptions. However I disagree that the theory part should not be held as separate - and supposedly at arm's length - from the interpretation.

My issue here is mostly one of historical precedent: most fields of human endeavour in the West have performed this mind-body split of theory and practice with a bias placed on the theory (mind). When it works well, it does work very well indeed as the last few centuries have shown; equally when it goes pathological then it can be very difficult to untangle in a short period of time as our collective reaction to climate change is showing.

Were Economics to mend this split, I personally think that it would become unacceptable to the vast majority of people. Economics *has* to be conservative, and it *has* to appear to have the definitive word on Economic matters because as any politician is well aware, the populace get extremely upset if they even get a hint of economic mismanagement.

Put another way: we as a society are not yet ready to include doubt in Economic matters. We may become so in a few generation's time, but not yet. Sadly this in effect means that we must seek to replace the one single truth of Neo-Classical Economics with the one single truth of a pluralist treatment of Economics!