This book opens with an explanation of the term “faiths” used in the book and goes on to discuss the inertia of established ideas. It describes economics as an orientation system for a market society and argues that bad economics has become a source of disorientation. In fact important ideas are delusionary.
Although we may not think that we do, we all live with faiths – ideas that we take for granted that appear so obvious that we do not feel a need to re-examine them – ideas that we do not usually want to re-examine. At points in life we make up our minds about things that we decide that we believe in and these beliefs have consequences perhaps for what we do, for who becomes our friends and colleagues,for how we earn a living or perhaps even for how we die.
These faiths may be, but are not necessarily, about the ideas espoused by religions.They may be political ideas, about science, or they may be ideas about economics. If we stop for a minute to think what the consequences would be of abandoning our faiths, we typically find the prospect unappealing. For one thing, if and when we were to abandon our faiths, we would have to unlearn and rethink a lot of what we thought that we knew and know. The people with whom we have relationships based on similar beliefs may be dismayed, horrified and then perhaps hostile or sarcastic. Worse still, because our faith’s structure – not just beliefs but our purposes; the things that we do; the direction of our lives; the structure of our days and weeks the loss of our faiths could leave us with the frightening prospect of being without a life altogether – losing relationships, purposes and day to day structure. Loss of faith in some circumstances would mean being alive in the sense of still being able to breathe, still being able to eat – and yet all the important relationships and activities that we had would evaporate. Unless we could in some way step from one belief system into another, at the same time step into another pattern of meaningful and purposeful relationships, perhaps also into another way of earning a living, we would find ourselves living in an empty life, in a limbo.
How do I know this? Because early in my adult life I lost my faith in my Marxist belief system and therefore drifted out of a political sect that I was in, lost the purposes of my life as well as the activities that underpinned my relationships, and ended up under the care of the psychiatric system. The emotional turmoil, the disorientation and the feeling at times of being lost, lasted almost two decades. From being an economist my life went on a long detour. This taught me a lot that I have brought into this book – including these ideas about faith. As time has gone on it has occurred to me that what I went through says something not just about the psychology of being in small Marxist political sects – it tells us about the psychology of belonging to groups and institutions in general. Thus, while it is obvious to everyone that faith underpins institutions like the Roman Catholic church, it is also true that a variety of faiths underpin many social institutions… and necessarily so.
I do not mean to say therefore that faiths are ipso facto always wrong. The faiths that we believe may be absolutely right. I am not against all faiths – that would be absurd. The point I am making is different. It is that we have to have them, and when we do, there are powerful reasons not to go back and re-examine them continually. For example, as an ecological economist it is one of my faiths that climate change is a serious threat to humanity. In my professional role I have, from time to time, read peer reviewed studies by climate scientists and I think that I understand the basics of the science. However, I am not a climate scientist and, beyond a certain point, I take the peer reviewed literature on trust, or on faith, without feeling the need to examine every point, as long as the scientific procedures like peer review have been kept to in producing it. What I notice is that most so called sceptics, more accurately called climate change deniers, do not play the game by those rules…
Even so there is an element of faith in my approach – and there has to be in everyone’s life because we cannot study all issues that confront us in huge depth with a level of professional expertise. Nor, once we make up our minds on things, can we repeatedly revisit the foundations of our belief systems. Our lives would become unstable and unliveable if we did this.
The inertia of established ideas
That is also why even science established theories have inertia. They are often sticky and difficult to change. The famous physicist Max Planck said that in science people rarely change their ideas radically in the way that Saul changed his ideas on the road to Damascus and became the apostle Paul. Rather, what does happen is that radical new ideas circulate among young scientists and only become the new way of thinking when the older scientists retire and die. I suppose that we should not be surprised by this because one of the things about faith is that, the older you get, the more investment of time you
are likely to have put into pursuing the ideas and purposes associated with a belief system. It may be associated with what a person sees as the narrative of their life, what was worked for, promoted and lived for decades. Then to acknowledge, at the end of one’s life, that it was all based on a mistake, an illusion, the wrong paradigm, or that there is a very different way of seeing things might be terrifying. It would almost be as if one had never existed.
It should not surprise that it is the young who are open to new ideas – and that it becomes more difficult as we get older to relinquish the ideas that we adopt. The economist John Maynard Keynes said it in a slightly different way. The problem, he wrote, is not in the creation of new ideas but in escaping old ones.
There is an argument that escaping old ideas in economics is particularly difficult because there are so many powerful interests at stake. For this reason I have no illusions that this book will pull economics off its pedestal no matter how cogent my arguments are. Mainstream economists have a devastating weapon against their opponents – they ignore them. That’s how most of us cope most of the time with critics whose ideas produce cognitive dissonance for us and economists are no different. What’s more, they can get away with it, for now at least. Because they are sponsored by corporations and institutions with money, power and media attention and because they are the people still setting the academic courses, they do not need to pay much attention to their critics and they don’t. If you are getting the attention and not your critics, you do not need to devote attention to the critics either. You only need to devote attention to critics when they are getting more and more attention because that is when, in the world of ideas, power is slipping away from you. In that sense faith is not just an individual choice, there is a social dynamic to it. Faith is easier to sustain when many others believe the same things and the experts with the faith are the ones that attract all the attention. When well-resourced social institutions exist to uphold a faith it can persist a long time.
Nevertheless, I believe that in ten years economics will be in serious difficulties and in twenty, mainstream economics will look nothing like it does today – if indeed there still is such an academic subject. This will not be mainly because of how eloquent I have been, or the other critics, although hopefully we will play some role. Rather it will be because the next two decades will see catastrophic effects because the economic system has overshot the limits to economic growth and crashed – given the limited and limiting capacity of the ecological system.
Economics as an orientation system
To return to the discourse about faiths – the point about them is that, when they are right it matters because they help us make sense of our worlds, and when our faiths are wrong we are liable to end up profoundly disorientated. Political economy should be a pattern of ideas that enables us to make sense of the world. It may not provide us with a detailed understanding of all that is going on but it should give us a general sense of world affairs. It ought to help us put together otherwise apparently unrelated events into a bigger pattern – a bigger story of what is happening and what is likely to happen. If it doesn’t do that it is failing badly.
In order to illustrate what I mean by this I will mention events that are occurring at the time that I am writing this book. The civil war in Syria is presented to us every day in the mass media, particularly as regards human rights violations, religious extremism and the horror of the conflict. What is not mentioned, or rarely, are the backgrounds to the conflict which would relate Syria to a bigger world picture. In the year before the conflict broke out, food prices in Syria doubled against the backdrop of a worsening of the agricultural crisis in that country. There had been many years of severe drought which seem related to climate change and growing water shortage in many countries in the globe.
At the same time oil production in Syria had fallen to a half of its level in 1996 when Syria was at the peak of its production. This produced rising fuel prices, which are a problem in agriculture, as well as a crisis in state nances. Furthermore, during the years of oil boom there had been a rapid growth of population. A young population eats more food as it approaches adult years. Many of the Sunni Muslim population migrated from the countryside to towns dominated by the Alawite sect which is the power base of the Assad regime. This is a large part of what drove the rise in tensions. These tensions were then exploited by political forces who have been sponsored with money, weapons and food to try to destabilise the Assad regime not only because it is not friendly to Israel, but because the outside forces have their own agenda for Syria which is not that of the Syrian government and its allies. These include pipeline routes through Syria to take natural gas from Qatar through Syria to Turkey and Europe. This would then be competition for Russia whose current political power is heavily dependent on its gas supply to Europe. (Ahmed, 2013)
Seen thus, the conflict in Syria is a reflection of global energy politics in an era of increasingly expensive fossil fuel supplies and in an era of climate change. The bigger story of which it is a part is the crisis for the world at the limits of economic growth. Of course, the Syrian crisis is not only this. It is also a religious conflict. It is a story about armaments, about human rights, about refugees. It has multiple dimensions. But that it is part of the limits to growth crisis is without doubt.
Also at the time of writing, multiple political conflicts have broken out in the UK about technologies that involve fracturing underground geological formations in order to recover shale gas and oil. Similar conflicts have occurred in the USA and other countries, particularly Australia. Just as in Syria oil production has fallen since 1996, in the British sectors of the North Sea oil and gas fields are now in rapid decline.
“Conventional natural gas production” has been in decline too in the USA. Alternative arrangements for energy must be made but these alternative arrangements, in the form of the plans and technologies of the fossil fuel industry, carry huge risks and costs for communities, as well as for the climate. These costs and problems will be explored later on, suffice it here to make the point that what we are witnessing are problems arising at the limits to economic growth. Although we cannot and should not reduce fracking to being solely a limits to growth issue, that it is this, is again without doubt.
Nor can there be any doubt that the financial crisis is connected to the energy crisis and the limits to economic growth and again it is connected through the energy system. Once again, I am not claiming that the global financial crisis is solely a result of rising energy and other costs. The financial crisis is far more complicated than that. Later in this book, I will look at some of these other influences – the too big to fail financial institutions; the way that financial institutions have been able to make money making loans to people who could not afford to service their debts and then have been able to pass the risk of these loans to other institutions; reckless credit creation to fund speculation on the asset markets; the inability to adjust for changing international competitiveness between nations in artificial currency constructions like the euro. All these have been causes of the monetary and financial sector turmoil. At root though the finance sector creates credit, lends or otherwise advances money on the expectation of repayment PLUS interest payments or other forms of financial return. Paying the interest and repaying the principle is possible if there is growth in the economy because the increased income provides the wherewithal for that payment. But as we will see, if the economy cannot grow, because the additional energy, the additional water, the additional raw materials are not there without an unacceptable amount of harm being done to extract them… or because climate change leads to falling harvests, then the financial system is bound to get into trouble.
There is no need to go into more depth on this point in the first part of the book. My point here is a general one. The economy is embodied and embedded in the physical world and in the ecological system. It sources energy and materials from the world and puts wastes and pollution back into land, water and atmospheric sinks. Beyond a certain scale the depletion of sources and the destructive effects on sinks floods back into the economy in such a way that the costs are greater than the benefits. What is happening in Syria, the conflicts over fracking and the growing instability of the financial sector, are all in one way or another connected.
That bigger picture that helps to make sense of the multitude of apparently disconnected events is what I call “orientation”. With orientation we can see the direction that events are going and we can see how they can get a whole lot worse – even though we may not have any idea what the detailed course of events will be. With orientation we can clarify what we ought to be doing.
I am using the word ‘orientation’ here in a particular way. In its more limited meaning it is the ability of people to recognise time, place and immediately surrounding physical objects. It is about coping. A somewhat expanded meaning might encompasses the ability to cope in the personal contexts and circumstances in which our lives are situated – an ability to cope in our homes and domestic arrangements, with our income and expenditure, in our jobs and in our personal and work relationships. Beyond this though there is a wider sense which I term ‘civic orientation’. This is necessary if one is to participate in the economic, social and political life of a community and have some impact on the life of the broader society and indeed of the world. Aristotle regarded political participation as vital to be able to flourish as a full person – however to be able to participate in our society one must understand the world as the elite itself understands it (and have all those resources and connections that the elite do).
Bad economics as a source of disorientation
To have a wider “civic orientation” requires a good education – whether formal or self taught – which a large number of people never get. What they get instead is a continual exposure to television, radio, newspapers and internet media where those who do play the political-economic game opine using a framework of ideas that are taken for granted among politicians, journalists, business and other interest groups. While differing over details almost all of these “public figures” share assumptions about how the world is which in what has been called the “elite consensus”. It represents their common orientation to the world. It is sometimes claimed that the market economy works in an apparently co-ordinated way despite no one controlling behind the scenes because of Adam Smith’s “invisible hand”. This quasi religious idea of an “invisible hand” is supposed to explain the coherence of self organising markets. The invisible hand works, according to the faithful, because people are pursuing their self interest. In reality the coherence of a market economy (to the extent that it has coherence) is not explained in self interest as such but the fact that a large enough number of participants in the economy share the same purpose – which in the case of a market economy is calculating and pursuing their self interest. Sharing the same motivations and rules of the self interest game created a common orientation and thus a common operating system for economic actors to participate in.
At the beginning of this chapter I described as faiths those ideas and systems of belief that one would be reluctant to give up – but this pre-supposes that one is aware that one is holding what others, who do not agree with you, regard as a belief. The deepest and most firmly anchored faiths are however those held without people even being aware that they hold them – ideas used automatically in the interpretation of events. The deepest faiths are in the words and in implicit concept frameworks that one is not aware that one is using. Many of the ideas and the words used by economics have become like that.
John Maynard Keynes was saying much the same thing when he wrote:
“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual in uence, are usually the slaves of some defunct economist.”
So can we break free of these intellectual influences which we are not aware that we have absorbed? How do we break free of the taken for granted assumptions that we do not notice framing our thinking?
In one of his poems Rudyard Kipling wrote “What do they know of England, who only England know.”
It is by comparison with other places, other ideas, and other things that one notices what would otherwise be taken for granted. Taken-for-granted situations become visible when seen in contrast. By leaping above the surface a sh become aware of the water in which it is living.
That is why repeatedly through this book I compare how economists think about the world with the way that earlier societies thought. It is why I am interested in contrasts with how indigenous societies think. This throws into view the fact that “economics think” is not a natural or inevitable way of understanding things. It is the particular way of understanding peculiar to our society. It is our society’s system of belief.
For example, implicit in the economists’ belief system is the taken for granted assumption that the natural world is the property of human beings. It is for humans to do with it, to make from it, as they wish. A er a money purchase large parts of the world can be fenced o and arrangements made for access and use rights that exclude other people. With the aid of pesticides other species can be excluded too.
But let us compare these taken for granted assumptions of the economic world view with how indigenous societies see things. In indigenous societies people belong to places rather than places belonging to the people. The difference is profound. Belonging to a community which belongs to a place translates into a set of obligations and responsibilities which are not to be found in the economic religion. When people belong to places then individuals take different things for granted. They accept as a matter of course that they must look after the community, they must look after the place and often that they must look after the other species in the place (totem responsibilities). This is a responsibility that extends to future generations but it also extends as obligations to ancestors who came before and who have now died.
The Ubuntu philosophy of the Bantu speaking peoples of Africa is a triad comprised of the living, the living dead (ancestors) and the yet to be born. The living community answers to the living dead who ensure that the living can provide for the yet to be born. But to provide for the yet to be born the environment must be regarded as the fourth dimension of the community and it too must be cared for. (Ramose, Mogobe B. 2014)
It will be noted here that the Bantu people’s belief system is orientated in time and space. The past, the future and the place are all included in it as well as a set of duties, a code of ethics.
In the economics religion no such rootedness applies because the economic faith emerged in a different kind of society. When William the Conqueror invaded England in 1066 he awarded all the land in the country to himself and parcelled it out to his military commanders. Colonial invaders do not belong to places – they intrude into the places occupied by others with an assumption of superiority. The natives are perceived as inferiors. In later centuries the descendants of William’s gangster aristocracy took it on themselves to launch further wars of conquest in alliance with merchants. Traders were another group who, by operating between places, did not belong anywhere – rather they aspired to take over the places that they operated in so that those places belonged to them.
In this mind-set it is taken for granted that those people (and corporations) who own parcelled up parts of the planet can do with it as they wish. Ethical obligations of care and maintenance are no longer primary. Indeed the colonialists usually assumed that the people who were in the places that they invaded belonged to them too – as serfs or as slaves they were not different from wildlife that could be tamed, turned into work animals, transported and traded as property. “Economics” therefore evolved as a way of thinking about wealth production in dis-located and dis-placed societies, for people who were invaders and traders, people who had little understanding of the places, the species and people that they were taking over. Their exclusive focus was on making themselves richer and more powerful.
In brief, economics emerged as an orientation system for colonial gangsters. Of course the PR of economics made it look a lot better that this. Economics sis upposed to be a theory about what philosophers call “Hurrah words” like prosperity, progress and well being.
However, because it was justifying practices that dislocated the multi-generational relationships where people looked after each other and places it sowed destruction, oppression and chaos. It got the name the “dismal science” for good reasons.
Faiths are attractive when they help us to make sense, help us to find meaning and orientation – and thus, to know what it makes sense for us as individuals and groups to do, given the bigger picture. Faiths are thus not only a way of making sense of what we read in the papers and hear on the news broadcasts. Faiths help us choose our purposes – they help frame our imagination of what way we might live out our personal and collective story. They contextualise what we decide will be the projects, the agendas, the games or the careers to which we devote ourselves. However, there is a problem when we just absorb the destructive frames of reference of the power elite without even noticing that we are doing this. In the language of a variety of French thinkers we have allowed our “imaginaries” to be “colonised”. (Latouche 2014)
The use of the adjective “imaginary” as a noun, as “the imaginary”, has a long intellectual tradition in France. Novelists like Gide, philosophers like Sartre and Castoriadis and psychoanalysts like Lacan all used “L’Imaginaire” in different contexts. The idea is that the words and symbols used in human communication, as well as in our thinking, do not necessarily match or correspond to the realities they represent. The words and symbols that we use may have an invented component that corresponds to nothing ‘out there’ in the world. In fact imagination is necessary to thought. Our ability to shape patterns of words, images and symbols in creative writing or painting is not merely a capacity to create fictitious realities. The mind has to have this capacity to imagine if it is to be able to think at all. How else can a scientist theorise except by imagining what might be the explanatory causes for some phenomena? The imagination can later be tested against evidence and found to be true or false but the initial act of making a hypothesis is an ability to construct what might be, to imagine. (Castoriadis C. 1987)
Furthermore it is through our ability to imagine the way in which things might be otherwise arranged that our freedom to act in the world lies. Our imagination can create visions of how future technological, social, economic and political realities might be constructed differently. This is why, according to the Greek-French philosopher Cornelius Castoriadis, history cannot be analysed in a determinist way. A significant role in the historical process must be acknowledged to be the creative imagination of people in societies. Once we give way to the idea that “there is no alternative” (e.g. to neo-liberal economics) we have not only got a failure of the imagination but have allowed our freedom to disappear. We have given up our autonomy – in the sense of not exercising our ability to give rules and laws to ourselves independently and consciously in co-operation with others. (Deriu, M 2014 (a))
Hence the case made by Serge Latouche in for the need to “decolonise” our “imaginaries” from the ideas of market economics. (Latouche 2014)
While true this is true within limits. I can imagine that I can raise a bag of ten apples one metre into the air with one joule of energy but that is an ‘imaginary’ that I cannot make happen “in real life”. (An average weighted apple takes one joule to raise one metre). While some imaginaries can be made to fly, some imaginaries are too off-the-wall and crash to the ground. Some imaginaries are nice to look at in a surrealist painting but non functional. Some imaginaries are not only crazy but criminally insane and plain dangerous. As a matter of fact “perpetual economic growth” is a political imaginary that is collectively suicidal. Imaginaries have to have some connection to practical possibilities and actual developments in material reality and current mainstream ‘economic imaginaries’ of growth are problems because they are imaginary in another sense of that word in the English language – as in where “imaginary” means “existing only in imagination” (Oxford English Dictionary 1964). Where there is strong belief in something that only exists in the imagination then this belief is delusionary. Where acting on the delusion has consequences that are dangerous then it is akin to a form of insanity.
However, collective insanities are not recognised as psychiatric symptoms because to qualify as evidence of insanity a delusional belief must be held by only one person. A man who is eating fish and chips with a cup of tea and believes that he is eating the body and blood of Jesus might be judged to be insane by a psychiatrist – but not if he is eating and drinking communion wafers and wine together with others.
Unfortunately, with mainstream growth economics firmly embedded inside the organisations of the state and inside companies the failure to question this faith is going to lead to a lot of people becoming bewildered, confused and unable to make out what is actually a very clearly emerging big picture in the decades ahead. Economics as it is will fail them, and fail them very badly.
From all that I have written thus, far I do not mean to imply only that economics needs to take on board the embeddedness of the economy in the ecological system, as well as the limits to growth. That is only a part, albeit a crucial part, of the story. If we are going to survive the turmoil of the years ahead, we are going to need a deeper understanding of ourselves and what makes for our emotional well-being. I believe that we will need ideas which are very different from the current concepts of “economic man” and “welfare”.