Contribution to GTI Roundtable "On Economism"
Thanks to Richard Norgaard for this impressive essay, which pulls together, but also goes beyond, many existing theoretical critiques. While broadly agreeing with the article’s thesis, I have two major differences, if not in substance at least in emphasis, one being theoretical and one practical.
On the theoretical side, I think it is a mistake to conflate “economism” and “economics.” While the essay specifically targets “economism” or “neoliberal economics,” I think there is a tendency to refer more broadly to economics or “market-based economics” as the quasi-religious system that is being critiqued. I would view things a bit differently. From my perspective, the dominant neoliberal orthodoxy represents a perversion or rejection of the best traditions in economics. These include the broad theorizing of classical economics, dealing with specifically ethical issues and consideration of the importance of resource limits; Marshallian economics with its more modest focus on partial equilibrium analysis rather than the truly quasi-religious assumptions of Walrasian general equilibrium analysis; Keynesian economics, especially its more radical interpretations, such as those of Joan Robinson; and more recent heterodox disciplines, including feminist, ecological, institutionalist, post-Keynesian, and neo-Marxist schools. While these traditions vary in their degree of acceptance or rejection of market capitalism, they all contribute to a broader understanding of economics, consistent with the original purposes of the classical economists, including J.S. Mill, who argued that “the stationary state of capital and wealth… would be a very considerable improvement on our present condition” long before Herman Daly educated the current generation along similar lines.
The problem with taking too broad an aim at the church of economism is that it may have the effect of also throwing out many of the insights of these schools, as well as their potential guidance on policy. Keynes specifically stated that his goal in introducing a more aggressive government role was to save, not destroy, capitalism, and Norgaard also acknowledges that “we will need markets, but we will have to be far more aggressive in telling the ‘invisible hand’ where to go.” Beyond this, his recommendations for replacing the current system are rather broad and vague: commendable goals such as “furthering justice” and “fostering an ethic for an equitable and sustainable planet,” but few policy specifics—and a very reasonable concern about “crashing” the current system without having developed a workable alternative. That leads to my practical point—not so much a disagreement as a difference in focus.
The current system may be doing a fairly good job of crashing itself, without assistance from critics. The most obvious evidence of this is the steady degradation of fundamental ecological support functions, including atmospheric climate balance, ocean ecology, water systems, forests and grasslands, etc., as well as the destruction of social cohesion through growing inequality. In this context, it is essential for critics of neoliberal structures and policies to propose workable alternatives, and fast. To do so, we need to draw on all the positive traditions in economics that I have enumerated, and translate them into specific policy proposals.
This would include, for example, massive transition to renewable energy systems, using “green Keynesian” government-led investment; dismantling commercial input-intensive agriculture in favor of sustainable, community-based agroecology and agroforestry; changing transportation systems to emphasize public transit, bicycling, and hyper-efficient vehicles; expansion of health and education services both in developed and developing nations; and development of cooperative and “benefit corporation” structures including cooperative finance. It is certainly true that all of this also requires a change in attitudes and beliefs, which is where Norgaard's emphasis on the faith-based nature of consumer capitalism comes into play. But many of these policies can be—and in some cases are being—implemented starting immediately, at levels ranging from local to regional, national, and global.
An emphasis on practical policies, which have to be presented in terms that people can understand and accept, will impose a discipline on theorists that can prevent an unfortunate tendency to talk to ourselves and preach to the choir. There are a significant number of academics—not in mainstream economics but in heterodox economics schools and other disciplines—who understand and agree with the broad critique that Norgaard has set out in this article. The challenge now is to get beyond this group and find allies, even including some less dogmatic neoclassical types who may agree on specific policies, to implement transitional policies in the real world. Some may fear that “reformist” initiatives could be co-opted and swallowed up by neoliberal orthodoxy. I am less concerned about this than about the dangers of glorious isolation. The broader critique is essential and should be shouted from the rooftops, but without practical policy implementation, it will be ineffectual. And I suggest that successful practical policies may also help to persuade people to accept the broader critique.
Progressive policies at the national level, such as the Obama administration’s efforts at carbon reduction, may not go far enough, but if so, they need to be strengthened, not abandoned in favor of the idea that a few organic cooperatives may survive climate catastrophe. Solar systems, with modest government subsidy, are now making significant inroads into utility markets (gaining support among others from some conservative groups concerned more about freedom from the energy grid than global climate change); organic agriculture has expanded rapidly in response to growing consumer demand; and trends like these could be greatly strengthened both through the market and through specific policies at local, state, and national levels. Ecologically-oriented economists and others promoting a transition to a sustainable system need to be active at all levels, adopting diverse approaches to major economic transition and seeking allies wherever they can be found.
None of this should be taken to detract from Norgaard’s impressive presentation in this article, but rather to present a different slant, arising, I think, from the same unease that he expresses towards the end of the article about where to go next in an attempt to transition to a different system.