Listening to a future of small farming forum on Late Night Live the other day reminded me that, despite over a hundred years of furious and convoluted oceans of internal debate, economics is still being represented to the rest of the world as a seriously sorted bunch of uncontestable universal laws.
Politicians have become ‘second hand priests’ proclaiming truths from notions that should more appropriately be regarded as contested propositions. When communities and traditions are allowed to fail on the justification of truths that may or may not be truths at all, the pain they are forced to bear might be a pain that impacts, ultimately, even more on the rest of us. It all depends on which particular version of advice is applied to guide the policy maker’s axe.
You can listen to the proceedings of this forum or watch the movie… (recommended for students of body language or, perhaps, those who like to form their impressions of pervasive insincerities and barely disguised contempt – through watching the subtle signals from the faces of those involved).
Listen in to hear just how many times the imperatives of the ‘market place’ were raised to the status of gospel truth via the responses of the ‘Minister for Everything’ to any and every complaint raised from the floor. Listen carefully and you will hear the exasperation in host, Philip Adam’s reactions to what that Minister Bryan Green (Deputy Premier and Primary Industries Minister in Tasmania – also minister for Water, Energy, Resources, Planning, Racing (!) and Veterans Affairs) had to say.
In summary, it would seem that the failings of small landholders are, in effect, perceived to be an inevitable sacrifice to the ‘better ordered economic affairs’ that can only ensue through the inevitability of larger, more sensible economic scale. Politicians need to be brave and uphold the universal Truth of efficiency: bigger is better. Smaller is less efficient. Efficiency rules. If the signal is to get bigger or get out, then getting out is the way to go. Oh, it’s all very very sad, and we really do feel your pain, but suck it up, boys, your demise is for the greater economic good. That’s how someone schooled from the so-called ‘Neo-Classical’ or economic rationalist tradition might interpret and advise on these particular matters at hand.
I am not quite the ‘econoclast’ I might appear to be. I spent 25 years exploring the nuances of heresy which have inspired excitements within the economics profession for over a hundred years. Most people don’t realise just how diverse a field economics really is. It seems that very, very few, of even those within the game, are aware of all the different ‘schools’ of economic thought that might inform how we interpret and deal with ‘adjustment issues’ of the kind outlined above. Institutional Economics, Ecological Economics and the so-called Austrian School are three other economic traditions that might context an entirely different character of advice from the dominant Neo-Classical school. Each school has its own traditions, journals, heirarchies and leading personalities. Each can legitimise its own ideosyncratic positions; each can critique the insights derived through alternative points of view with equal and opposite conviction – at least to those from within each particular tradition. Like religion, each ‘tribe’ can become a passion of deep but distinctive conviction. Each tribe self-referentialises the validity and importance their disciples imagine they should have. Some more than others… Neo-Classical economics is the master at that particular game.
My issue here is why most of the thinking that underpins rural adjustment issues of this kind continues to be dominated, overwhelmingly, by the Neo-Classical, economic rationalist school. But worse than that, I am always astounded by how amateurishly (cynically, naively, and fundamentally ignorant of the specific situations addressed) their economic prescriptions are devised and presented. And worse still, without recognition that alternative positions could, with equal conviction, be devised by their counterparts outside the dominant paradigm. I can see little justification for the privileging the insights that prevail from the Neo-Classical school over those from, say, their Institutionalist counterparts. And when can we expect the perspectives of Ecological Economists to see daylight any time soon?
I have an undergraduate economics degree delivered exclusively (manically – with religion-like fervour) by disciples of the Neo-Classical school. I have a PhD informed by the Institutional Economics perspective. And I directed a university research group that promulgated the Ecological Economics perspective for 10 years. From observation of just these three schools, I can most emphatically state that the Neo-Classical school is, by far, the most insular and non-reflexive of the three (no introspection on underlying philosophies or tenants of the principles they proclaim). I distinctly recall being thrown out of my first teaching position once my perspectives shifted to Institutional Economics. Ecological Economics was the final straw. And that’s not just at the particular university with which I was involved. Prejudices and a profound disinclination to explore the borders of alternative points of view is an endemic academic curse, in most parts of the world.
Let me try to summarise thee different takes that might apply to the consideration of the small landholder issues discussed on Late Night Live. The Neo-cCassical tradition would, as outlined above, be inclined to simply ‘let the market work’. The Institutionalist tradition would focus on how those small landholders interact via cause and effect into the wider economy within which they sit. They would seek ‘pattern models’ of interaction through which to inform judgements of what could be done. Much of the patterns they would review would NOT be reduced to simple quantitative, stick-figure like representations of the kind so encouraged by their Neo-Classical counterparts. And those patterns would certainly not be reduced, necessarily, to the uniform metric of money. Interventions might be proposed without recourse to the vaguest consideration of changes in net stakeholder wealth! The Ecological Economics perspective would, of course, contemplate how the economic and ecological dimensions of the situation under review might interact. Both dimensions are considered as two components of the same integrated whole. Once again, money might not be the metric through which to decide on what to do.
The Neo-Classical tradition is, by tradition of practice all about the simplification of choices down to uniform values that can be ranked and measured. Choices are reduced to facilitate the application of particular decision making instruments (hence, ‘instrumental rationalism’). That kind of game is particularly amenable to third party decision support. Namely, if a policy maker is particularly naive, he or she can be convinced that a choice that is anything but, can be construed as a simple case of yes or no.
I know enough about neo-classical economics to know that a fixation on over-simplification is not a necessary or compulsory mandate for those charged to provide advice. There are layers upon layers of assumptions that pertain to each and every choice economists of this persuasion are called upon to consider. A GOOD economist will consider those assumptions very carefully. A GOOD economist will write all those assumptions down and context all advice through their explicit recognition. Assumptions should remain attached to all advice right down to the most succinct of executive summaries. But that is rarely the case. Whether by negligence on the economist’s part, or through the intervening filters of the bureaucracy, the context of prevailing assumptions tends to be ruthlessly, and systematically removed. Politicians are now accustomed to receiving advice with all shades of grey removed. They are accustomed to now viewing their choices just in black and white. Which is both a tragedy and a shame. The tragedy is that, in many cases, the careful consideration of those excised assumptions might recommend an entirely alternative choice. The shame is that removing the assumptions will frequently remove the source of a wonderful laugh. You see, some of the assumptions of Neo-Classical economics are astonishingly absurd. Like the one that suggests we (farmers) should be and are just simple profit maximising machines. Or that choices are valued in simple linear terms (more is good, much more is much better; ten bicycles are ten times as much fun as just one). And best (worst) of all, feedback does not exist (or is at least assumed away because considering it is just too hard). Everything in our wonderfully curvaceous 3D this-effects-that-and-that-effects-this-all-the-way-back-again world is reduced to just a simple uni-directional line.
So, if Mr Green is advocating some plan of ‘natural unassisted attrition’ for the small farming community for which he has a duty of care, he is either astonishingly ill-advised or has some other agenda which he has not shared. I favour the former. Because I have witnessed the policy making process first hand for many, many years. Both here and throughout the world. Economists are in the very least negligent through underplaying the assumptions they have used. Cultures are at stake. Regional emergence – and even the character of our civilisation is at stake. And, via some fascinatingly complex feedback links, so to is the ecological foundations that sustain activities that generate our money. For instance, if we are to replace small farming with concentrated larger economies of scale, or even monocultures over diversified agricultural production systems, how will the ecological systems that sustain us fare? Are these things simply to be ignored. They are certainly outside the metric that Neo-Classical economics has a capacity to consider (via the tools economists of that kind are inclined to use). A GOOD economist, even of the Neo-Classical kind, should SHOUT the limitations and assumptions of the advice they provide. Choices should be shrouded in IF’s and BUT’s to a torrential degree. The decision maker should NEVER be misled to imagining that theirs is a simple choice to make. Ever. Unless you are in the business of constructing clocks, choices are never, ever a matter of yes or no. Choices are never, ever, black and white.
Rather than the unidirectional conversation we witnessed on the occasion of this small farming forum, what should have been considered was an interactive all-around learning exchange. No one position or point of view should ever be privileged above all the rest. Every perspective has some insight to add. And ALL perspectives should be open to evolution and emergence through effectively facilitated deliberation and consideration. Even that of Mr Green. The Economist’s job is much reduced in a setting such as that. The economist’s job is to present just a limited piece or two of a much larger puzzle to be considered. The economist’s job should never be to dominate discussions such as these. The economist’s perspective is limited and marginal, at best.
Are we to assume, then, that the persistence of perverse, blinkered, and yes, fundamentalist thinking of the kind evidenced by Mr Green, and just about every other politician we can observe with interests (at least) in regional development, is only a consequence of poor and unprofessional advising on the part of economists? If not, who is to blame? Because this kind of ‘reductionist’ thinking (reducing necessary rich complexity to the stupidity of digital-like ‘yes/no’ decision making) is so astoundingly generic in society these days, we must assume that there’s something much worse going on.
My thinking on this is that all humans, me included, are more comfortable with decision making when a stormy ocean of frequently conflicting signals that pertain can, somehow, be rendered down to a more finite, simpler set of criteria to consider. Simpler makes the brain hurt less… It’s vastly easier to choose from a menu of five or fewer choices than five thousand or more. It’s vastly easier to assume that our advisers have grappled with all that nasty complexity for us. Our job is then to simply empower that trust and chose from the options presented. That’s what most Ministers do when dealing with difficult choices. That’s why we have legions of advisors backing up each key political office. It’s perfectly true that the human brain is finite in terms of the detail we can take on board through which to inform the decisions we make. It would seem that some people’s brains are more inclined to simplicity than others… Via the modern culture of ‘managerialism’ (wherein the complexities confronting and characterising any organisation are fallaciously reduced to the delusional simplicity of running a clock-like machine) managers everywhere seek to reduce the depth and breadth of the information we really need to make decisions, more and more the higher up the decision making chain we go. So much so that the person in charge could, in essence, be simply replaced by a switch. With a culture like that, the siren call of ‘reductionism’ to which Neo-Classical economics is so prone, is an offer that’s usually too hard to refuse.
If the desire is for simplicity, as fallacious and dangerous as that desire might be, then those economist charlatans who would ignore their duty of care to context all their advice with an appropriate accounting of assumptions and limitations, will always find favour in decision making circles. Institutional economists have a harder time breaking into the domain of public policy making. Their advice is almost always a study in context, the very antithesis of reductionism. They cannot provide simplistic advice. They always test the patience of politicians and managers hell bent on managerialising the systems under their command. That’s partly why Neo-Classical economics remains the dominant school in public decision making these days. That’s why Institutional Economics remains as an essentially academic pursuit.
Even Ecological Economics has a harder time in breaking into prime time decision support. The interlinked dimensions of economy and ecology is one dimension too many for many managers who we have over-empowered these days. True Ecological Economics (rather than the cynically rebranded environmental economics to which that domain is so tragically drifting) is never about the reduction of all ecological concerns down to the metric of money. True Ecological Economics is a ‘transdiscipline’; a meta discipline of synthesis and synergy releasing insights above and beyond what either discipline could illuminate alone. Synthesis and synergy releases a richer picture through which to context choices; so once again, reductionist decision makers will feel annoyed.
I have contempt for those economists who, knowing the limitations of whatever perspective they follow, still play the game of simplification and placation so that their name will be known and their voice heard. That, in my book, is the true terrorism of this age. They discredit their profession and disservice the society of which they are a part. Part of this blame can be fairly attributed to academic economists who train each generation of decision makers with a stripped-down, over-simplified ‘economics for dummies’ training programme. I’ve seen economics courses pitched at science majors that are so over simplified as to present an entirely toxic perspective on what economics really is all about. If an economics teaching programme can’t accommodate a comprehensive accounting of assumptions/axioms and limitations, that programme should simply not be offered. There is no such thing as the ‘fundamentals of economics’. I know lots of economics professors who don’t even have a basic grasp of the diversity that their field embraces. I know lots of economic professors who submerge themselves in a spiral of ever tighter marginal contribution to an ever tighter sub-sub domain of the economics game. They higher their pay, the ever more marginal their contribution tends to become. We need economist teachers of the other kind to teach decision makers what it is they need to know. We need more generalists, and ever fewer specialists in a world where decisions are always broader in spectrum than any single discipline could ever accommodate. The economics teaching profession is, in my view, in need of a total overhaul.
Re-engineering the teaching side of economics is probably the most strategic lever to pull towards improving public decision and policy making. That decision makers like Mr Green can sit by and let ‘the market’ destroy small farming communities for the sake of toxically simplistic economist mantras of market efficiency and the like is an overwhelming indicator that something is seriously wrong with the processes and substance of politics these days. The character of public decision making needs to change. Changing the way we teach our decision makers is a sensible and fundamental priority for improving all our prospects into the long term.
As E F Schumacher (roughly aligned to the Institutional Economics domain) advocated so convincingly a long time ago, small is beautiful when it comes to managing the future of our regions and local communities. There are huge economic, social and environmental virtues from propagating the small as beautiful in the face of the all-consuming voracious appetites of ugly global corporate greed. It’s about time that our politicians and their advisers should aspire to positions and postures that are vastly less naive. Maybe this means that instead of standing back and allowing the small farmers of Tasmania to disappear, the Government of Mr Green should proactively invest (not necessarily just money) in their sustained future.