Show blog for Too Fat for Our Pants on Radio One, 91 FM, Dunedin, New Zealand. Airs Mondays 10 am - 12 pm.

If all economists were laid end to end, they would not reach a conclusion.
~ George Bernard Shaw

Sunday, 29 January 2012

The Darwin Economy with Dr. Robert H. Frank

For the whole interview with Dr. Robert Frank, you can go to Radio One or Facebook.  What follows is my commentary on certain aspects of the book which I wasn't able to fully address in the interview itself.  Please read the book for yourself, here.

So I did take some issue with some of the smaller points made in the book, and though I brought some of them up in the interview I really do agree with his main point, which is that individual and group interests often diverge, and that we should find fair and progressive ways of guiding individual behaviour so that it cleaves as closely as possible to the interests of the group. That sounds like social engineering, of course, which is always what neoliberals start shouting as soon as  you mention prescriptive taxation, and it is.  But everything is; every tax policy influences behaviour, every single law is meant to prescribe acceptable behaviour and discourage negative, harmful actions – there’s a definite tendency to assume that the way things are is the way they should be, that there’s something inherent or natural about the status quo, and that messing with it or trying to change it is social engineering.  This argument comes up all the time in discussions about gender – remember that family in Toronto who are bringing up a child without announcing the gender publicly?  Though it’s obviously not a perfect model, some of the least coherent arguments were that it’s cruel and inhumane to experiment on a baby – so the experiment is not assigning the child to one side of a gender binary, but assigning a child to one side of a gender binary is somehow not a social experiment.  It’s natural that girls like pink and boys like blue, and not telling your child which one he or she prefers based on what their chromosomal sex is, is a dangerous social experiment.  

 Listen: we are all socialized.  
 We grow up in a culture which tells us to behave in certain ways, makes others taboo, and we all agree very early on some basic rules, which is how we’re able to live in society together.  Make no mistake about it: everything we do is a social experiment; just because one experiment is run more often or more pervasively than others does not make one more “right” or “natural”, or any less of an experiment.  One of our biggest problems, at least in the realms of gender, race, and class discussions, is that we refuse to acknowledge that we create our own realities, because it means we have to be responsible for the negative actions that arise as a result.  So we could agree that there are some behaviours that we would like to encourage, such as let’s be idealistic and say honesty, trustworthiness, a desire not to inflict harm on others, and some that we do not, like murder and theft, and we make laws and systems of economics and social institutions which elevate and denigrate those behaviours accordingly.  But we can’t agree on our ability to assess and influence human behaviour, let alone take responsibility for the systems which perhaps are influencing the wrong kinds of behaviours, and so often the only recourse is to fall back on “human nature”. 

The existence of social institutions and laws which already seek to govern our behaviour for the good of society – I’m talking about laws against murder, theft, collusion, etc – should allow us to talk about governing our behaviour for the good of society.  But often we’re precluded from having that conversation by the “human nature” defense, which posits corporate culture as just “the way people are” - sure, we’re often selfish.  From there, though, shouldn’t the question be: “what impact does 200 years of economic and cultural narrative which insists that we are all selfish have on our tendency towards selfishness?”  Couldn’t we be asking how we’ve managed to survive so long as a species if we’re all so inherently selfish? Could we ask what cultural narrative would emphasize the traits of compassion, respect, understanding?
That pervasiveness of the economic philosophy into all aspects of contemporary culture creates a sort of side problem that I can’t seem to get away from, I even fall into it myself sometimes.  It’s the insistence that we can’t talk about doing things simply because they’re the right thing to do, at least not at the level of politics.  Dr. Frank spends a lot of time in the book arguing for income redistribution, progressive consumption taxes, and in general higher taxes on those people with higher incomes.  To me, the fact of such extremely poor people and the fact of such extremely rich people makes income redistribution attractive – simply because it’s not right that some people are so rich while others are so poor.  What’s astounding is that this is such a controversial statement – Dr. Frank says, repeatedly, that his prescriptions have nothing to do with social justice or morality, he’s very explicit on this point.  His prescriptions are about economic well-being, not about social justice. But if everyone will benefit, why would it matter if it’s about social justice instead of economic justice?  Why does he feel its necessary to package his ideas in explicitly economic terms? Why does he have to go out of his way to disconnect the economic aspects from the social ones? It’s a completely fallacious dichotomy, in any case: capitalism is a class-based system, and as such there is no separating the economy from society; there is no difference between social inequality and economic inequality, and presenting them as separate only serves to reinforce the idea that we can only talk about things which can be objectively measured.  Can’t talk about right or wrong because they’re not objective enough.  Having seen no evidence of the fundamental objectivity of human beings, I’m not sure why we think it’s such a good idea.

There was one other big main point that I wanted to bring up in interview but just didn’t have time, and that is that some of the conclusions drawn from his admittedly remarkable insight about Darwinian competition lack a certain rigor.  For example, he claims that many of his lefty friends have the knee-jerk response of exploitation to explain market failures, but that in reality “unfettered competition … fail[ing] to promote the common good has nothing to do with monopoly exploitation.  Rather its a simple consequence of an often sharp divergence between individual and group interests”.
Now, maybe it’s because I am not an economist, it’s possible that I’m missing a point here that’s simply too subtle for me to apprehend, but I can’t see that those two things are necessarily mutually exclusive.  Why can’t monopolistic exploitation be a manifestation of the divergence between individual and group interests?  

To wit: the example of the Irish elk’s antlers: because the male elk are competing with other male elk for mates, and that competition is won or lost on the size of the competing antlers, it is in each individual male elk’s best interest to have larger antlers.  However this creates a kind of arms race, whereby eventually all the antlers get so big that they become a hindrance, so that all male elk as a group would benefit from having smaller antlers, but no individual elk would be better off if they had smaller antlers, and so the antlers keep getting bigger. This is the divergence between individual and group interests.  Now I think that monopolistic exploitation is a perfect example of that playing out in real life – in much the same way as house sizes get bigger and bigger, which he talks about, in the book, and yet still makes this statement about monopolistic exploitation.  Walmart, as a stand in for corporations that size, competes with its competitors, and as it wins, it drives them out of business.  It does this by being bigger than they are – big enough to control the shipping routes and the production costs, big enough to outsource manufacturing, big enough to cut wages and lobby governments.  Other businesses, then, in order to compete with Walmart, also have to do those things, to the benefit of the individual business but to the detriment of the group as a whole.  So now we have walmart, the winner, which is so big that it can’t move or turn around, it’s consuming resources faster than they can recover, it’s driving down wages in the towns where it employs people, it’s forcing the wholesale purchase cost of products down below the price of production in many cases, particularly food (and I can hear you saying now “oh, but there are some people who can only afford to shop at walmart, they couldn’t pay more for those products; the consumer is the ultimate winner here”.  This is not true for two reasons: one, that we all have to live in the environment Walmart built, which is depleted and knee-deep in cheap plastic detritus, and two: that walmart is part of the reason people can’t afford to pay more for their products.  Aside from the general cultural disconnect between price and value, walmart drives wages down as far as they can go, so that people in a walmart town would have been making more and able to afford more before walmart came along).  So really, we’d all be better off if Walmart, as a stand-in for giant corporations, was smaller, but because no one of those businesses would be better off, they have no choice but to keep competing.  Otherwise they get eaten.  In fact, quite contrary to what Dr. Frank was suggesting, I think the Darwin economy gives us a good vocabulary to talk about monopolistic exploitation and its role in market failures – it’s the divergence between individual and collective goals.

No comments:

Post a Comment