Monday, August 18, 2008

How does economic thinking undermine community?

You might well find the answers in Harvard economist Stephen A. Marglin's recent release, The Dismal Science: How Thinking Like an Economist Undermines Community.

The primary provocative premise is given on page 1:
... over the past four hundred years, the ideology of economics has fostered both the self-interested individual and the market system, and has undermined, and continues to undermine, the community.
What is "the ideology of economics?" What is "the community?" And how to they conflict? Unfortunately, the Wendall-Berry-of-economists (just look at his picture!) declines to state a succinct argument, instead indulging in chapters deep in nuance and philosophical ramblings. That leaves me to give a stumbling shot at interpretation:
  • A community of affinity is exemplified by the typical contemporary American church: members come and go based almost entirely on personal preference. By contrast, a community of need is exemplified by the feudal manor, the family unit (at least in the days before divorce was convenient), or the self-contained "village." The communities we're focusing on here are communities of need.
  • Individual wealth and industrialization undermine the traditional communities of need. Health insurance policies make people independent of one another. Home equity serves as insurance against hard times for individuals. The banking and credit card industries give individuals the ability to store up and spend wealth without the protection or approval of a community. Personal wealth frees us (often from bondage) and isolates us (often from love).
  • By contrast, "communal wealth" may refer to a good environment, strong relationships, strong habits and customs that enable people to live healthy lives without needing to be especially intentional about it.
  • Personal wealth clearly undermines communities of need, but what does that have to do with "thinking like an economist?" It's awfully subtle. Here's some more terminology for ya:
  • Algorithmic knowledge is math, statistics, science, the measurable, thing that can be published in a journal or a cookbook. Experiential knowledge includes not only our subjective "experience" of life, how we feel, but also the things we are able to do without following a recipe. A large portion of what we is learned by doing and improved by intuition. And a large portion of how we experience life is based on our context rather than our explicit (algorithmic) image of our context.
  • To Marglin, economics is a dismal science because it completely ignores experiential knowledge, and in doing so, economics promotes the individualism embodied by algorithmic (explicit) economic models. They evaluate the success of an economic policy by its effect on the sum of all individual happiness, or "utility," without trying to interpret utility beyond saying that individuals get more utility as their personal wealth increases.
  • Economists seem to be making the questionable assumption that individuals are at least as well qualified as communities to make the "value judgments" necessary to gain the most utility -- or any utility at all -- from their personal accumulations of wealth.
  • Economists, with complete attention to the individual and little concept of community (other than communities of affinity, which individuals may buy into), focus primarily on creating policies which maximize the size of the "pie," or the total output of the economy, and leave it to the political process to determine the best way to distribute the pie, to decide whether to tax the rich enough to have free public health care, etc.
  • In fact, the community just might be a far better mechanism for the distribution of pie than the state, thus justifying at least a slight reduction in the total size of the pie in favor of a return to communal power structures. For example, creating barriers to international trade might reduce the size of the pie, but might also shift power away from abstract international organizations towards local communities, whose vitality could possibly have intrinsic value above and beyond the ability of the community to provide materially to its members.
  • The individualism of economics is not only a way of speaking: it shapes how people understand the meaning of their lives and determines where people look for value. Instead of inheriting a sense of place and purpose from a community, individuals immersed in Western economic thought subconsciously take on its individualistic creeds and seek fulfillment through the advancement of self. Until economists acknowledge the potential power and felt value of the commune, their quest for individual fulfillment may be dismal indeed.

2 Comments:

Anonymous dad said...

I'm waiting with bated breath for YOUR analysis/commentary/pronouncements.

6:29 PM  
Blogger My Freakwentness said...

I possibly agree with all of the above pronouncements. Too much remains uncertain to translate these into clear policy recommendations. While we have lost SOMETHING with the rise of the economist's individualism, I think we have also gained some things. As Marglin emphasizes, we have gained nationalism, which can form the basis for national welfare, national health care, broad freedom ... It's not clear to me exactly what things should be left to communities to grapple with.

6:56 AM  

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