THE QUEEN, RATIONALITY AND ECONOMICS
Once upon a
time there was this cobbler, following generations of his family working in his
shoemaking and shoe-repair shop – though it was becoming more and more ‘down at
heel’ as business got a little worse each year. Unfortunately the market had
changed; not only were mass-produced shoes now cheaper than any he could make,
but repairing them became irrelevant as they were glued rather than sewn
together and so easier to throw away than repair. The cobbler despaired: was
this the end of a long family tradition? Then a miracle occurred: the arrival
of a substantial legacy from a distant aged and now-deceased great aunt. With
this, the cobbler cheered up, determined to make a new start. He had his
shoe-repair shop completely revamped as a coffee-serving glitzy tattoo emporium
plus ear nose lip nipple and tongue piercer and nail bar. This rang all the
right bells to the extent that our now ex-cobbler was able to build up a chain
of outlets which in time became a nationwide business. Success had arrived with
modish versatility.
Such it seems
is the case with modern and post-crisis economics. Once, though still
flourishing in academia, the ‘dismal science’ was becoming side-lined as
business, governments and the media came increasingly to seek the advice of
successful entrepreneurs and traders, a number with the highly-popular MBAs,
rather than bona fide economists. Whole
swathes of the business community as well as government and news organs were
dropping economists from the payroll as they turned to those they considered
offered more relevant expertise.
As economics
ceased to be a progressive theoretical science about 150 years ago it gave up
‘the larger picture’ (or ‘grand narrative’) in favour of a more piecemeal,
nuts-and-bolts positivist approach to the economy utilising
ever-more-sophisticated econometrics in the process. Unfortunately this placed
economists on the same level with more hands-on MBA-type operators and
speculators who knew more about the practical side because they got their hands
dirty. Economists, however, with remnants of a loftier and pseudo-theoretical
approach, were carrying too much baggage, but without sufficient practical
experience, to compete successfully with those who had never seen themselves as
scientists or theoreticians in the first place. All the economists could offer
in addition were expensive jargon-trimmings of little use to business firms
competing fiercely for profits. A bit like entering a Rolls Royce for Formula
One. A saying went round to the effect that when you put two economists
together you got three opinions. Recently economics students up and down the UK
have been in revolt against university economics departments which they accuse
of offering them a narrow-minded and irrelevant curriculum which bears no relation
to the crisis-ridden economy they – and we – live under. The Queen (who decides
just how impartial she will be on any given occasion), when on a tour of the
London School of Economics after the crisis of 2008, asked economists why no
one had foreseen it, and they were rather embarrassingly and apologetically
unable to come up with an answer. The Queen’s point, it would seem, was how
useful could an economic science be that failed utterly to anticipate the
biggest economic crisis since the Great Depression? (In fact it had been anticipated by a few, but we’ll
come to them later.) Had Elizabeth II been Henry VIII one could imagine the
profs shaking in their shoes as the gallows awaited. They shuddered enough as
it was.
Miraculously,
from this nadir in fortunes the dismal science has been transformed into an
all-singing, all-dancing science. The theatre was saved by a smash-hit musical!
For when your science is holed up in a corner of wretchedness and irrelevance,
the thing to do is to go for broke – that is, to rejuvenate your science by
making it take over all the sciences. Imperialism abroad revives prosperity at
home. The vacuity of your own science lends it a positive advantage when
absorbing all others: the ringmaster need not have the talents and skills of
his circus performers, presenting all the better for having no particular
talent of his own.
The new
economics has displaced postmodernism as the absorber of whole disciplines
through the medium of the verbal sleight-of-hand.
The herald of
this development was a celebrated best-seller of 2005, Freakonomics, by Steven Levitt and Stephen J Dubner, which was
described as ‘melding pop culture with economics’. At bottom (and I have to
quote this from Wikipedia) the book accepts ‘the standard neoclassical
microeconomic model of rational utility-maximization’. Light-hearted and funny
in tone, it deftly pursues the economics of, for example, cheating, drug-dealing,
data-mining and myriad other human possibilities. However, its authors have
been criticised for writing a work of sociology-stroke-criminology rather than
economics, and some of the mathematics used also – in the opinion of those
mathematical scientists who have looked into the matter – appears to be ropey
in places. Ariel Rubenstein, an Israeli economist, presciently (from the
perspective of this article) called the book an example of ‘academic
imperialism’. While Arnold King referred to it as ‘amateur sociology’. But this
has not stopped it from becoming almost a household title, as it were, spawning
sequels, web sites, conferences, games and generating a load of publicity for
the new economics of everything. No more dismalism here. Everything is
potentially comprehensible through applied economics. Though not necessarily
the economy itself. It required someone else to bring the weight of ‘orthodox
economics’ to bear upon the new Renaissance.
With regard to
the Queen’s question to economists, Andrew Lilico, an economist writing for the
Daily Telegraph of January 23rd,
2014 (‘Economists are nearly always right about things despite what you may
think’) replies that
Orthodox
economics tells us that it is impossible to predict significant financial
crises in advance or else everyone would predict them and trade off that and so
they wouldn’t happen.
In fact, the 2007-08 crisis was predicted as imminent by, amongst others, Professor Nouriel
(‘Dr Doom’) Roubini , of New York University’s Stern School of Business, as
well as by various Marxist economic commentators such as Michael Roberts and
Alan Woods. For example, Woods wrote this for a Marxist website back on
November 14th, 2000:
The
scenario is, in fact, much more reminiscent of the 1920s than the beginning of
the post-1945 economic upswing. The collapse of the present boom will usher in
a turbulent period of crisis with far-reaching consequences for the whole
world. (‘Marxism and the Theory of “Long Waves”’, www.marxist.com/marxism-theory-long-waves-kondratiev
14100.htm)
Orthodox economists were perhaps so preoccupied with the
belief that significant crises are inherently unpredictable that these various
doom-sayers were entirely ignored.
Moreover,
significant financial crises have for so long been a constant recurrence in
their dozens since at least 1819 (some bigger than others) that it would seem
they were all too predictable, and perhaps growing more so.
And people do
respond to pessimistic predictions without this necessarily voiding the
oncoming crisis. Joseph Kennedy, for one, pulled all his money out of the New
York Stock Exchange just before the Great Crash of October, 1929, which left
him a rich man, able later to fund his son Jack all the way to the US
presidency; Kennedy was not alone in his prudence but the Crash came about all
the same.
Lilico seems
not to have encountered the economic herd instinct. One could post a
mathematician in a stall outside the entrance to every gaming casino in the
world with displays showing the actual odds of winning against the house.
Assuming management goons would not have these mathematicians quickly and
forcibly removed, it is likely that members of the gaming public would flood in
all the same. I am some 300 times more likely to be struck by lightning on a sunny
day than to win the top prize of the National Lottery (fortunately the Lottery
offers lesser prizes which lowers the odds on winning something). Millions of people are not taken in and gamble nothing
at all; but millions of others do and get back nothing, or enough perhaps to
sustain the habit but no more. Of course a tiny number of outright winners
serve as publicity to fuel the drive.
The Stock
Market works to large extent on this optimistic herd mentality, driven as
investment capital is to be invested somewhere,
somehow. But is this ‘rational’
behaviour? Lilico: ‘economics is the discipline that tells you why behaviours
make sense’. So why did buyers go on buying shares when virtually every
perceptive observer knew that the New York Stock Exchange had divorced itself
from the economic realities of the United States since mid-1929? (Even the
Federal Reserve Board had had interest rates raised in a vain attempt to stem
borrowing against spiralling speculation.)
I would have
thought that seeing people running away from the burning Twin Towers on 9/11
could better tell you why behaviours make sense. Though Lilico’s economics would make better sense of behaviours
too if its subject were shown to be fundamentally irrational, not rational.
Rationality has
been devalued since the days of Descartes (‘clear and distinct ideas’) to mean
a concept of material gain: you are ‘rational’ if you pursue a profit for gain
as opposed to going for a loss. So this writes off the Buddha, Jesus Christ and
St Francis of Assisi. A ‘rational’ Nurse Cavell would have turned state’s
evidence. Mozart was a hopeless case: an
avid and entirely non-rational gambler, he died poor. Never mind the music.
Let us look further
at rationality.
You are a
clergyman with a wife and family and you have lost your faith. Now, in your
50s, it is not easy for you to think of qualifying for and being employed in
another career. So what do you do? Do you drive your family into destitution or
do you continue paying lip-service and going through the motions of something
you care nothing for and are even against?
The latter is, surely, the rational course, even if it is the wasted
life.
Let us tighten
the screws of authority.
Let us suppose
you are a citizen of Gestapo-run Nazi Germany. Is it rational to hide a Jewish
family in your loft? Is it not more rational to toe the Party line, holding
entirely Nazi views and professing undying allegiance to Hitler with every
salute whether or not you join the Party? And to gain brownie-points by
denouncing a neighbour you learn has hidden a Jew? It is easy to see which
course here is the most rational.
Is it not more
rational to rob a pension-fund legally than hold up a bank illegally?
Rationality in
Lilico’s economic concept he calls an ‘axiom’ – that is, ‘an accepted statement
or proposition regarded as being self-evidently true’ (Oxford Concise Dictionary):
No
behaviour can prove that people aren’t, in fact, rational, because for an
orthodox economist the only kind of explanation of any behaviour that counts as
an economic explanation is an explanation that makes sense of that behaviour –
that shows why the behaviour is rational.
(I have trouble with what I suspect is circular reasoning
here, but let that pass.) In other words, no explanation that includes
irrational behaviour as an economic explanation can make sense of the
behaviour; thus all economic behaviour is rational. So if you explain that the
capital system is rational or based on rational motivation and calculation you
can eliminate irrationality from it.
But suppose the
whole of the capital system is irrational, however rational its working parts?
Suppose the
working parts of Nazi German industry were highly rational while the Nazi power
system in toto was irrational?
Suppose that
concentration camps were organised and run on strictly rational premises but
that the concentration camp system as a whole was insane?
Suppose that
the need for profit and gain in so far as it is potentially insatiable is not
only irrational but insane? Suppose this because both the natural and the human
environment are finite whereas capital expansion is premised on infinity? This
is the capital that hated the introduction of the ten-hour working day and
child labour restrictions, and worldwide is continuing to try and undermine the
moral authority of both measures. Investments must ever achieve a higher return
than before, and then a still-higher return, and so on ad infinitum. Is this a
self-evident axiom? Is it rational? Or is it insane? It used to be said that
Hitler was insane because he wanted to rule the world. But can a system not also be insane for attempting
to do the same thing, which is what capital must attempt, the rule of the world
(and outer space besides)?
Industries
rational; the whole system irrational. Production rational; markets
competitively irrational. Thus is shown the Fallacy of Composition: that the
whole is merely made up of the sum of its parts. But a government is not a
business firm or a domestic household writ large; it is an entirely different
entity from either, even as it is of a country made up of firms and households.
In science, water comes from the combination of two flammable gases, neither of
which on its own is the least bit ‘watery’. 9+6=15, but 15 is neither 9 nor 6.
A business firm may be run rationally to maximise productivity; but the market
system of which it is a part is both anarchic and irrational. The whole is
nothing like the parts even as the parts make up the whole.
Lilico’s system
of rationality applies to the running of individual businesses in pursuit of
higher productivity but it is misapplied as a characterisation of the
competitive system taken as a whole, which plunders the earth of its resources
and humanity of its well-being solely for the sake of investing in pursuit of
more wealth and power, and more again. If it cannot achieve these ends it drops
all interest in achieving any other by the way, such as involvement in beauty,
truth and freedom. None of which is rational, according to Lilico’s premises.
As for academic
imperialism, we learn from Lilico that economics has superseded the science of
psychology, specifically behavioural psychology: ‘But economics is the
discipline that seeks to explain why I raised my left arm in terms that make
sense to me, given my objectives and beliefs.’ So long as you are in it for
some personal economic gain, any aspect
of your behaviour is thus explicable. This is the true homo economicus.
We are back to
that old ‘propensity to truck, barter and exchange’, known to the classical
political economists of the 18th century, which explained a priori all human behaviour and
psychology. For it all makes sense in a society that is entirely commodified,
including the commodification of all values and ideas, the commodification of
the entire natural environment.
In this sense –
both ultra-modern and very antediluvian anthropologically – is Lilico the
herald of a new science of everything, provided that ‘everything’ is up for
sale and able to render a money profit. Increasingly, not much in the world now
lies outside that. Meanwhile, the new economics is finally freed from any
responsibility to do with bringing about a reversal of worldwide economic
instability and stagnation, because ‘rationality’ in this case becomes a form
of insulation from troubling episodes and portents of disaster. Just as the
Catholic clerics refused to look through Galileo’s telescope because it was
impious to do so. What I don’t know or refuse to examine is not worth knowing –
and may even be damnable: ‘By disregard they sought completeness.’ [1] The new economics must perforce take on all rationality
as it rises to the challenge of justifying the reality of a Ptolemaic solar
system called capitalism. Lilico’s final words:
The
insights orthodox economics will eventually produce in reaction to the
financial crisis will advance our social and economic life and prosperity even
further than economics has done already. For good economists, given time and
sound theory, are almost always right about everything.
Which might also be said for astrologers and theologians,
whose premises can never be questioned – ‘axiomatic’ as they are in their own
way. But more like the theologians than the astrologers, who actually do predict things.
Only today in The Guardian I read this by Paul Mason: that
our present poor working practices
typically
prevail where a political system is stacked so heavily against the workforce
that there can be no countervailing voice, and where an economic model in its
infancy requires the urgent extraction of profit through coercion.
You
need under-resourced inspection agencies; unions forbidden to organise; and a
ready supply of cheap labour. So it was in the England of George III, so it is
in Britain in the second decade of the 21st century. (Guardian G2, 26.07.16, p.5.)
This makes Andrew Lilico with his ‘rational’ orthodox
economics lo0k like no one so much as the immortal Dr Pangloss (everything is
for the best in the best of all possible worlds). I flatter myself perhaps as,
in a small way, Mr Lilico’s Voltaire.
Once upon a time there was this
cobbler, following generations of his family working in his shoemaking and
shoe-repair shop – though it was becoming more and more ‘down at heel’ as
business got a little worse each year. Unfortunately the market had changed;
not only were mass-produced shoes now cheaper than any he could make, but
repairing them became irrelevant as they were glued rather than sewn together
and so easier to throw away than repair. The cobbler despaired: was this the
end of a long family tradition? Then a miracle occurred: the arrival of a
substantial legacy from a distant aged and now-deceased great aunt. With this,
the cobbler cheered up, determined to make a new start. He had his shoe-repair
shop completely revamped as a coffee-serving glitzy tattoo emporium plus ear
nose lip nipple and tongue piercer and nail bar. This rang all the right bells
to the extent that our now ex-cobbler was able to build up a chain of outlets
which in time became a nationwide business. Success had arrived with modish
versatility.
Such it seems is the case with
modern and post-crisis economics. Once, though still flourishing in academia,
the ‘dismal science’ was becoming side-lined as business, governments and the
media came increasingly to seek the advice of successful entrepreneurs and
traders, a number with the highly-popular MBAs, rather than bona fide economists. Whole swathes of
the business community as well as government and news organs were dropping
economists from the payroll as they turned to those they considered offered
more relevant expertise.
As economics ceased to be a
progressive theoretical science about 150 years ago it gave up ‘the larger
picture’ (or ‘grand narrative’) in favour of a more piecemeal, nuts-and-bolts
positivist approach to the economy utilising ever-more-sophisticated
econometrics in the process. Unfortunately this placed economists on the same
level with more hands-on MBA-type operators and speculators who knew more about
the practical side because they got their hands dirty. Economists, however,
with remnants of a loftier and pseudo-theoretical approach, were carrying too
much baggage, but without sufficient practical experience, to compete
successfully with those who had never seen themselves as scientists or
theoreticians in the first place. All the economists could offer in addition
were expensive jargon-trimmings of little use to business firms competing
fiercely for profits. A bit like entering a Rolls Royce for Formula One. A
saying went round to the effect that when you put two economists together you
got three opinions. Recently economics students up and down the UK have been in
revolt against university economics departments which they accuse of offering
them a narrow-minded and irrelevant curriculum which bears no relation to the
crisis-ridden economy they – and we – live under. The Queen (who decides just
how impartial she will be on any given occasion), when on a tour of the London
School of Economics after the crisis of 2008, asked economists why no one had
foreseen it, and they were rather embarrassingly and apologetically unable to
come up with an answer. The Queen’s point, it would seem, was how useful could
an economic science be that failed utterly to anticipate the biggest economic
crisis since the Great Depression? (In fact it had been anticipated by a few, but we’ll come to them later.) Had
Elizabeth II been Henry VIII one could imagine the profs shaking in their shoes
as the gallows awaited. They shuddered enough as it was.
Miraculously, from this nadir in
fortunes the dismal science has been transformed into an all-singing,
all-dancing science. The theatre was saved by a smash-hit musical! For when
your science is holed up in a corner of wretchedness and irrelevance, the thing
to do is to go for broke – that is, to rejuvenate your science by making it
take over all the sciences. Imperialism abroad revives prosperity at home. The
vacuity of your own science lends it a positive advantage when absorbing all
others: the ringmaster need not have the talents and skills of his circus
performers, presenting all the better for having no particular talent of his
own.
The new economics has displaced
postmodernism as the absorber of whole disciplines through the medium of the
verbal sleight-of-hand.
The herald of this development was a
celebrated best-seller of 2005, Freakonomics,
by Steven Levitt and Stephen J Dubner, which was described as ‘melding pop
culture with economics’. At bottom (and I have to quote this from Wikipedia)
the book accepts ‘the standard neoclassical microeconomic model of rational
utility-maximization’. Light-hearted and funny in tone, it deftly pursues the
economics of, for example, cheating, drug-dealing, data-mining and myriad other
human possibilities. However, its authors have been criticised for writing a
work of sociology-stroke-criminology rather than economics, and some of the
mathematics used also – in the opinion of those mathematical scientists who
have looked into the matter – appears to be ropey in places. Ariel Rubenstein,
an Israeli economist, presciently (from the perspective of this article) called
the book an example of ‘academic imperialism’. While Arnold King referred to it
as ‘amateur sociology’. But this has not stopped it from becoming almost a
household title, as it were, spawning sequels, web sites, conferences, games and
generating a load of publicity for the new economics of everything. No more
dismalism here. Everything is potentially comprehensible through applied
economics. Though not necessarily the economy itself. It required someone else
to bring the weight of ‘orthodox economics’ to bear upon the new Renaissance.
With regard to the Queen’s question
to economists, Andrew Lilico, an economist writing for the Daily Telegraph of January 23rd, 2014 (‘Economists are
nearly always right about things despite what you may think’) replies that
Orthodox economics
tells us that it is impossible to predict significant financial crises in
advance or else everyone would predict them and trade off that and so they
wouldn’t happen.
In fact, the
2007-08 crisis was predicted as
imminent by, amongst others, Professor Nouriel (‘Dr Doom’) Roubini , of New
York University’s Stern School of Business, as well as by various Marxist
economic commentators such as Michael Roberts and Alan Woods. For example,
Woods wrote this for a Marxist website back on November 14th, 2000:
The scenario is, in
fact, much more reminiscent of the 1920s than the beginning of the post-1945
economic upswing. The collapse of the present boom will usher in a turbulent
period of crisis with far-reaching consequences for the whole world. (‘Marxism
and the Theory of “Long Waves”’, www.marxist.com/marxism-theory-long-waves-kondratiev
14100.htm) (now discontinued)
Orthodox economists
were perhaps so preoccupied with the belief that significant crises are
inherently unpredictable that these various doom-sayers were entirely ignored.
Moreover, significant financial
crises have for so long been a constant recurrence in their dozens since at
least 1819 (some bigger than others) that it would seem they were all too
predictable, and perhaps growing more so.
And people do respond to pessimistic
predictions without this necessarily voiding the oncoming crisis. Joseph
Kennedy, for one, pulled all his money out of the New York Stock Exchange just
before the Great Crash of October, 1929, which left him a rich man, able later
to fund his son Jack all the way to the US presidency; Kennedy was not alone in
his prudence but the Crash came about all the same.
Lilico seems not to have encountered
the economic herd instinct. One could post a mathematician in a stall outside
the entrance to every gaming casino in the world with displays showing the
actual odds of winning against the house. Assuming management goons would not
have these mathematicians quickly and forcibly removed, it is likely that
members of the gaming public would flood in all the same. I am some 300 times
more likely to be struck by lightning on a sunny day than to win the top prize
of the National Lottery (fortunately the Lottery offers lesser prizes which
lowers the odds on winning something).
Millions of people are not taken in and gamble nothing at all; but millions of
others do and get back nothing, or enough perhaps to sustain the habit but no
more. Of course a tiny number of outright winners serve as publicity to fuel
the drive.
The Stock Market works to large
extent on this optimistic herd mentality, driven as investment capital is to be
invested somewhere, somehow. But is this ‘rational’ behaviour? Lilico:
‘economics is the discipline that tells you why behaviours make sense’. So why
did buyers go on buying shares when virtually every perceptive observer knew
that the New York Stock Exchange had divorced itself from the economic
realities of the United States since mid-1929? (Even the Federal Reserve Board
had had interest rates raised in a vain attempt to stem borrowing against
spiralling speculation.)
I would have thought that seeing
people running away from the burning Twin Towers on 9/11 could better tell you
why behaviours make sense. Though Lilico’s economics would make better sense of behaviours too if its subject were shown
to be fundamentally irrational, not rational.
Rationality has been devalued since
the days of Descartes (‘clear and distinct ideas’) to mean a concept of
material gain: you are ‘rational’ if you pursue a profit for gain as opposed to
going for a loss. So this writes off the Buddha, Jesus Christ and St Francis of
Assisi. A ‘rational’ Nurse Cavell would have turned state’s evidence. Mozart was a hopeless case: an avid and
entirely non-rational gambler, he died poor. Never mind the music.
Let us look further at rationality.
You are a clergyman with a wife and
family and you have lost your faith. Now, in your 50s, it is not easy for you
to think of qualifying for and being employed in another career. So what do you
do? Do you drive your family into destitution or do you continue paying
lip-service and going through the motions of something you care nothing for and
are even against? The latter is, surely,
the rational course, even if it is the wasted life.
Let us tighten the screws of
authority.
Let us suppose you are a citizen of
Gestapo-run Nazi Germany. Is it rational to hide a Jewish family in your loft?
Is it not more rational to toe the Party line, holding entirely Nazi views and
professing undying allegiance to Hitler with every salute whether or not you
join the Party? And to gain brownie-points by denouncing a neighbour you learn
has hidden a Jew? It is easy to see which course here is the most rational.
Is it not more rational to rob a
pension-fund legally than hold up a bank illegally?
Rationality in Lilico’s economic
concept he calls an ‘axiom’ – that is, ‘an accepted statement or proposition
regarded as being self-evidently true’ (Oxford
Concise Dictionary):
No behaviour can
prove that people aren’t, in fact, rational, because for an orthodox economist
the only kind of explanation of any behaviour that counts as an economic
explanation is an explanation that makes sense of that behaviour – that shows
why the behaviour is rational.
(I have trouble
with what I suspect is circular reasoning here, but let that pass.) In other
words, no explanation that includes irrational behaviour as an economic
explanation can make sense of the behaviour; thus all economic behaviour is
rational. So if you explain that the capital system is rational or based on
rational motivation and calculation you can eliminate irrationality from it.
But suppose the whole of the capital
system is irrational, however rational its working parts?
Suppose the working parts of Nazi
German industry were highly rational while the Nazi power system in toto was irrational?
Suppose that concentration camps
were organised and run on strictly rational premises but that the concentration
camp system as a whole was insane?
Suppose that the need for profit and
gain in so far as it is potentially insatiable is not only irrational but
insane? Suppose this because both the natural and the human environment are
finite whereas capital expansion is premised on infinity? This is the capital
that hated the introduction of the ten-hour working day and child labour
restrictions, and worldwide is continuing to try and undermine the moral
authority of both measures. Investments must ever achieve a higher return than
before, and then a still-higher return, and so on ad infinitum. Is this a
self-evident axiom? Is it rational? Or is it insane? It used to be said that
Hitler was insane because he wanted to rule the world. But can a system not also be insane for attempting
to do the same thing, which is what capital must attempt, the rule of the world
(and outer space besides)?
Industries rational; the whole
system irrational. Production rational; markets competitively irrational. Thus
is shown the Fallacy of Composition: that the whole is merely made up of the
sum of its parts. But a government is not a business firm or a domestic
household writ large; it is an entirely different entity from either, even as
it is of a country made up of firms and households. In science, water comes
from the combination of two flammable gases, neither of which on its own is the
least bit ‘watery’. 9+6=15, but 15 is neither 9 nor 6. A business firm may be
run rationally to maximise productivity; but the market system of which it is a
part is both anarchic and irrational. The whole is nothing like the parts even
as the parts make up the whole.
Lilico’s system of rationality
applies to the running of individual businesses in pursuit of higher
productivity but it is misapplied as a characterisation of the competitive
system taken as a whole, which plunders the earth of its resources and humanity
of its well-being solely for the sake of investing in pursuit of more wealth
and power, and more again. If it cannot achieve these ends it drops all
interest in achieving any other by the way, such as involvement in beauty,
truth and freedom. None of which is rational, according to Lilico’s premises.
As for academic imperialism, we
learn from Lilico that economics has superseded the science of psychology,
specifically behavioural psychology: ‘But economics is the discipline that
seeks to explain why I raised my left arm in terms that make sense to me, given
my objectives and beliefs.’ So long as you are in it for some personal economic
gain, any aspect of your behaviour is
thus explicable. This is the true homo
economicus.
We are back to that old ‘propensity
to truck, barter and exchange’, known to the classical political economists of
the 18th century, which explained a priori all human behaviour and psychology. For it all makes sense
in a society that is entirely commodified, including the commodification of all
values and ideas, the commodification of the entire natural environment.
In this sense – both ultra-modern
and very antediluvian anthropologically – is Lilico the herald of a new science
of everything, provided that ‘everything’ is up for sale and able to render a
money profit. Increasingly, not much in the world now lies outside that.
Meanwhile, the new economics is finally freed from any responsibility to do
with bringing about a reversal of worldwide economic instability and
stagnation, because ‘rationality’ in this case becomes a form of insulation
from troubling episodes and portents of disaster. Just as the Catholic clerics
refused to look through Galileo’s telescope because it was impious to do so.
What I don’t know or refuse to examine is not worth knowing – and may even be
damnable: ‘By disregard they sought completeness.’ [1] The new economics must perforce take on all rationality
as it rises to the challenge of justifying the reality of a Ptolemaic solar
system called capitalism. Lilico’s final words:
The insights
orthodox economics will eventually produce in reaction to the financial crisis
will advance our social and economic life and prosperity even further than
economics has done already. For good economists, given time and sound theory,
are almost always right about everything.
Which might also be
said for astrologers and theologians, whose premises can never be questioned –
‘axiomatic’ as they are in their own way. But more like the theologians than
the astrologers, who actually do predict
things.
Only today in The Guardian I read this by Paul Mason: that our present poor
working practices
typically prevail
where a political system is stacked so heavily against the workforce that there
can be no countervailing voice, and where an economic model in its infancy
requires the urgent extraction of profit through coercion.
You need
under-resourced inspection agencies; unions forbidden to organise; and a ready
supply of cheap labour. So it was in the England of George III, so it is in
Britain in the second decade of the 21st century. (Guardian G2, 26.07.16, p.5.)
This makes Andrew
Lilico with his ‘rational’ orthodox economics lo0k like no one so much as the
immortal Dr Pangloss (everything is for the best in the best of all possible
worlds). I flatter myself perhaps as, in a small way, Mr Lilico’s Voltaire.
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