Building a new economy

Coins falling into waterOne of the things I’ve noticed recently is that people generally fall into one of two camps (warning, sweeping generalisation coming up). There are the quantitative types – people who like to be able to measure things, with numbers, and ideally in a very precise way. They often seem most comfortable dealing with big data and a macro view of the world, and they like precision and order. The others are the qualitative types – they’re interested in individuals, like describing things with words, and telling stories and anecdotes rather than analysing numbers. These types are more comfortable with the messiness of human nature, and woolly concepts.

Obviously this is as sweeping a generalisation as they come, and in reality everyone is probably somewhere on a spectrum between the two extremes, but it’s been on my mind lately when thinking about the economy, and austerity, and whether it’s possible for left and right ever to agree. I went to a great lecture last night, as part of Bristol University’s alumni program: it was presented by Julia Slay of the New Economics Foundation and focused on NEF’s position on the economy generally.

Julia was an excellent speaker – clear and articulate and well-prepared – and it was really encouraging to hear that there are people who genuinely believe, from a position of solid research and knowledge, in many of the things I believe. As Owen Jones pointed out in his article following Peter Oborne’s resignation, people who argue for such things as nationalisation of public services or a statutory living wage are often “treated as chronically naive, or as a dinosaur who isn’t aware of their own extinction [by the media]” – despite the fact that many other people in Britain believe the same things.

So what did Julia’s lecture have to do with the quants and the quals? The NEF’s view is that the economy is broken, because it is increasingly unsustainable, unfair, unstable and unhappy. Their analysis is that this is because it is focused on the wrong goals, and based on a set of neoliberal economic principles that are simply wrong: for example, that continued growth is necessarily a good thing. Economic growth as a measure of whether a country is successful is a limited and inadequate measure that doesn’t reflect any of the important aspects of a society. To illustrate how long this has been argued, Julia showed a video of Robert Kennedy outlining exactly this point back in 1968.

The attraction of GDP, and growth and other macro measures, however, is that they are nice, neat numbers. You can plot them on a graph and assuming you have applied the measurements rigorously, you can’t argue with them. And according to neoliberal economics, high growth and high GDP is good for everyone: if there’s more money and more jobs, then everyone will be better off except the people who can’t be bothered to work. If you’re not rich it’s because you’re not trying.

But that means that for people who believe in the numbers, arguing that the economy is broken because it is unfair and unhappy isn’t going to work. If you genuinely believe that success is about getting as big a pile of cash as possible, sticking it in an offshore trust and sitting on it, and that the opportunity to do this is open to all, then fairness and equality are not compelling arguments for change. Even instability isn’t that much of a concern if you have amassed enough money to insulate yourself from the boom and bust of the market. Whereas if you believe that society exists to bring the highest level of wellbeing to as many people as possible, then fairness and equality are the only arguments that matter.

So how do you reconcile two seemingly diametrically opposed points of view? We all sit somewhere on the spectrum and it would be arrogant to assume that one side is ‘right’ – or even that there is such a thing as right. It seems to me that democracy struggles in the face of these opposites, either swinging to one side or the other with successive governments undoing everything the one before did, or with uneasy coalitions that can find it difficult to make useful decisions. Perhaps the best we can hope for is a series of course corrections as we lurch from one side to another, ultimately resulting in forward progress in the same way that a sailing ship tacks against the wind. Right now, the climate change crisis and the insane rise in inequality, for example, are exerting separate pressures on how we sail, and hearing voices from all sides of the debate is going to be vital in avoiding violent about-turns.

So on that basis, I should probably go and hear from a right-wing think tank next.


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