Posts Tagged ‘economics’


real world economics

June 9, 2009

i knew that me and economics didn’t go well together when i tried to study it at A-level. It just seemed so confident in itself, and its view of the world was not one that i recognised: it was too rigid and linear; too eager to present an objective view of Facts. But these sorts of criticisms make me sound like a tree-hugging sandal wearer, so I’m glad that I took some time out this morning to listen to the first of Harvard Professor Michael Sandal’s BBC Reith Lectures.

His argument can, I think, be summarised by his statement that ‘markets leave their mark on social norms’. His brief introduction (looking forward to the development of the themes in later lectures) was simply that we cannot separate the study of economics from broader social, moral and political questions. To only consider what is the right thing to do from the economic perspective (e.g. efficiency) denies the consequences of introducing market mechanisms to new sites of society. They are not morally neutral.

Two good examples he gave. First, the childcare providers who began to charge parents for collecting their kids late. Economists would assume that incentives such as avoiding this fine would mean that there would be fewer late parents. What actually happened was that more parents started to be late. They no longer felt they were putting the teachers out by making them stay late, but instead that they were paying for a service. Second, on blood donation. Sandel argues that we need to consider the social consequences of turning something which had been a gift into a commodity. What does that say about society and its values? It’s not that he was saying we shouldn’t ever commoditise stuff – but rather, that we should recognise and debate the consequences of doing so.

Sandel is not alone in arguing that the dismal science becomes a whole lot less dismal when we start talking about political economics – situated in the real world, where morals and values are given parity with efficiency. Paul Ormerod’s brilliant books – The Death of Economics and Butterfly Economics – make this case powerfully too, arguing that we have allowed economists to believe that they can use their rules and theories to predict the world and to decide how to act. Ormerod believes this betrays economics’ roots, as a science that sought to understand and describe the real world as it unfolded.


more on local pounds and transition towns

March 2, 2009

thanks to T for mentioning an article in the FT this weekend on the Lewes pound that I mentioned in the blog below. And I am very, very interested in the transition towns network. Their wiki is exciting and inspiring. I especially love their 12 step plan, which includes stages like ‘the great unleashing’ and ‘honour the elders’. Wise advice indeed.


support economy

November 19, 2008

Last week S and I were talking about the fears and challenges that come with trying to set up a new business at a time of such economic and political turbulence. I for one am finding it a very daunting but exhilarating experience, and it’s not easy.

One of the things we were talking about is a book that took the world (well, the London thinktank world at any rate) by storm in 2003, entitled The Support Economy. Written by charismatic husband and wife team, Jim Maxmin and Shoshana Zuboff, the book predicted the emergence of an entirely new economic paradigm. They argued that it takes three things for a change of this scale: first, the growth of new technologies, second, a manifest failure of existing economic models, and third, a set of unmet needs.

S and I were thinking that the first has been kicking around for a while – although I still feel that the social media world is struggling to connect itself to really meaningful societal change. People involved in web 2.0 still talk too much about change simply in the vacuum of what the web can do. In itself, that’s not enough: I want to know how it connects more deeply to some of the major challenges we now face.

The second of these barely needs more elaboration. It’s not clear yet what will emerge from the crisis in our current model of capitalism but there’s no question that its foundations have been shaken by recent events. And on the third – well, we were wondering whether there isn’t a case to be made that people are looking for a new kind of meaning these days, a way of life that goes beyond consuming and working ever harder.

Maxmin and Zuboff argue that if these three things happen, then the way we get things done will begin to change forever. The last time it happened, they argue, heralded an era of mass production, where what they called the ‘metaproduct’ (ie the most valuable thing to all of us) was service. This time round, they predict that we will see the emergence of a much more distributed enterprise era, of federations and networks that are built around people rather than products and services – where the metaproduct will be support. We will find new ways of organising ourselves in order to meet the new demand for meaning and personalisation.

Personally, I find this dangerously close to hyperbole. But as I worry about whether it’s a good idea to be setting up a small business, I take a bit of comfort from the fact that the more industrial size organisations out there may find themselves hopelessly out of date in the coming years….