Monday, April 16, 2007

Economics: What might non-materialist economics look like?

Non-materialist economics would look far more like the world we really live in and far less like the world of current economic theory. In a most interesting article in the Sydney Morning Herald , business journalist Ross Gittins introduces "kudonomics", the economics of esteem, or "the intangible hand" (as opposed to Adam Smith's "invisible hand" of the free enterprise marketplace).
The notion that most human beings primarily make economic decisions to maximize profit or the accumulation of goods is an economic ideology that can be refuted simply by reflecting carefully on the life choices of a cross section of the people we have encountered in life. Once we have met our basic physical needs, we turn our attention to an astonishing variety of interests that do not maximize wealth. Indeed, the few people I know who became wealthy through their own efforts were precisely the few who made it a systematic goal. The people who saved wetlands, got published in obscure poetry journals, or traded Hummel figurines were poor but happy - and very proud of their possessions and achievements, even though others thought them bunk and junk.
Gittins introduces his readers to the thesis of a recent book from Oxford U Press, The Economy of Esteem by Geoff Brennan and Philip Petit, that addresses the need we have for others - living, dead, or yet to come - to think well of us and the ways in which this immaterial need shapes our choices. He argues,
... the effects of the desire for esteem have escaped the sustained attention of social scientists. It's almost as if there were a conspiracy not to register or document the fact that we are, and always have been, an honour-hungry species.

this view that it's an interest in esteem that fuels the desire for material goods and services largely disappeared with the development of mainstream economics.
Most economists came to assume that people naturally sought accumulation and wealth, and only the odd renegade, such as Thorstein Veblen, stood against the trend. He argued in 1905 that in the pursuit of accumulation "the struggle is substantially a race for reputability on the basis of invidious comparison".

Studying the importance of esteem may give us both a more accurate picture of how the world works and help us better understand the real impact of proposals for change. Changes that improve material welfare while reducing esteem, for example, will probably lead to an increase in consumption accompanied by a decline in well-being.
It's none too soon. Materialist economics encourages the false belief that more material goods make people happier - which has a devastating effect on the environment. And when the fix fails, we mistakenly believe that upping the dose is the answer. So we proceed from Timex to Rolex and miss the way altogether.
Long ago, E.F. Schumacher tried to say something like this in Small Is Beautiful: Economics as if People Mattered, but, among other problems, he was fighting a losing battle against the rising tide of popular materialism.
(Disclaimer: I am in no way advocating any type of leftist economics. Leftism is a failed materialist system - Marxism lite. Neither the economy nor the planet would be healthier if governments owned and distributed all goods and policed everyone (all political correctness! All the time!) Rather, our inner and outer spaces would be healthier if we all lived out the implications of the role that esteem, reputation, and other essentially immaterial qualities truly play in our perceptions of our quality of life and standard of living. Many traditional cultures understand this very well, and we need to recover that understanding.)

Note: Anyone who is concerned that their post did not get published recently should be aware tht, without telling me, Google moved this blog to New Blogger. When I accessed the system again after numerous fruitless attempts, I found a number of posts waiting for me. I approved them all. I will remove anything that advocates hair loss or weight loss products, et cetera, assuming I can still do so.




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