Picture, if you will, a grim concrete tower block in a grotty and depressing area of north London. The year is 1989 and the tower block, which bears a plaque stating it was opened by a certain Margaret Thatcher, contains a host of nervous looking freshers seated on plastic chairs in a draughty hall. It’s their first day at polytechnic and they are undergoing orienteering and being told what to expect over the next few years of their lives.
Before them, an energetic Afghan man in a crushed velvet jacket that has seen better days is pacing around on a low stage, barking advice at the young neophytes. He looks slightly wild, as if he’s been up all night arguing about critical theory and smoking weed, and he has long unkempt grey hair which sprouts from a bony cranium above a pair of fiercely intelligent brown eyes. But his manner is more drill sergeant than hippy. “I need you to criticise everything!” he shouts, pointing a Kitcheneresque finger at his half-stunned audience. “If it moves, criticise it. I’m moving, so criticise me!”
At least one of those new students would recall these words over three decades later. They seemed rather profound to me, the idea that everything should be scrutinised and examined for authenticity rather than just taken at face value. It was probably the most valuable take away from my time there, but unfortunately for me I still had four long years of studying economics to get through.
At the campus bookshop we picked up the requisite texts for study. I’m not sure why they make economics textbooks so thick, but it was a struggle to carry them all back to my lodgings, which for me was my parents’ touring caravan in a cold and soggy field near the M25 (there had been no time to find a proper rental and my father was aghast that I had chosen to move to ‘sin city’). The core text outlined the basics of what is called neoliberal economics, and the very first sentence in the 800 or so page tome stated, “Economics is the study of the production and consumption of scarce goods, services and resources across society.”
I took a deep breath and asked myself why I hadn’t enrolled to do something more interesting instead …
In the spirit of those rousing words delivered by my Afghan tutor on that gloomy September day back when Cher was at the top of the charts hoping to ‘turn back time’, and cracks were appearing in the Berlin Wall as the Soviet Union tottered, I’m going to ask: what is economics?
This might sound like a silly question, or even a dull one, but it’s worth asking because economics has an enormous impact on all of our lives. For most people ‘economics’ is something that clever people in suits do, and its main purpose is to deliver money and jobs to the masses. The popular view is that the economy is a complex machine which only a select few know how to handle. If they pull the wrong lever or push the wrong knob then bad things happen, such as recessions and unemployment. On the other hand, if they are sufficiently skilful, they will steer the great juggernaut known as ‘the economy’ into the sunlit uplands of prosperity, and all of us will ride along on top of it.
There’s only one problem with this view, and that’s the inconvenient fact that it ignores reality in several fatal ways.
The first fatal way in which it ignores reality is that economics has a built-in flaw in that it only has a forward gear and not a reverse one. It assumes that the economy can grow without limit, overlooking the fact that we live on a planet that is anything but limitless. It is linear. Economics promises to continually increase the prosperity of human beings, but as we live within a closed system this must always be done at the expense of non-human beings.
Alas, in the same way that rapidly multiplying yeast cells never think they’ll run out of sugar in the demijohn, we seem to think we’ll never run out of fresh planetary resources to plunder and turn into products. Suggesting otherwise is taboo, and the idea of limitless economic growth is paramount. This tendency can be observed any time it is reported that economic growth (measured in GDP numbers over a certain timespan) has fallen below a certain arbitrary threshold, causing business reporters and news anchors to gnash their teeth and implore the gods for better figures next time.
Some have argued that it is possible to de-fang economics and shift the focus from economic growth onto human wellbeing, ecosystems health and other hard-to-measure and likely intangible indices. Doing so would no doubt be a good idea, but unfortunately the advocates of such a move possess little to no political power and, in any case, benevolent and well-meaning ideas such as ‘degrowth’ and ‘doughnut economics’ tend to go out the window the moment people sense real and tangible threats, such as hunger and conflict.
The second fatal error of economics is that it is tied up with money, the value of which is decided by people who have no business to decide anything. Of course, money is very useful, and it makes the system of exchange a lot easier. After all, who wants to go around bartering chickens and eels in return for a new TV? What’s more, money allows us to store wealth, so we can hang onto what we have earned without fear of losing it, assuming it is properly stored. But there are plenty of problems with money, and they stem primarily from the way it is created, and the way it has a growth imperative programmed into it.
No doubt I could write several posts about it and still not cover all the bases. But the BIG intractable problem with money is that it demands to be fed. More to the point, the financial system that creates money demands a return on it. It doesn’t care where that return comes from, only that it gets it. There’s a reason why every major religion puts money lending so high up on its list of deadly sins – Jesus himself pushed over the tables of the money lenders in a fit of pique, while interest on loans is haram to Islam and the Jewish Torah states that money may only be lent as a charitable act.
Why did Jesus get so annoyed? Perhaps because money, when lent out for no other reason than profit, attains a force of its own that is more or less impossible to contain. It’s like letting the genie out of the bottle or opening Pandora’s box: stated plainly, the major religions believed that finance unleashes a force that is downright demonic in nature.
The Irish writer and filmmaker Thomas Sheridan discovered this when he was working as a graphic designer for some of the major banks on Wall Street. Preparing some charts one day that related to the financing of a dam in the Amazon rainforest he noticed what appeared to be an anomaly – the numbers didn’t quite add up. He asked the client about this and was told the ‘sundries’ section was left deliberately vague because it related to funds allocated to securing the project. When he enquired further, he was told matter-of-factly that things such as bribing corrupt local officials, bulldozing villages and hiring mercenaries to eliminate local anti-dam activists were considered merely a cost of doing business.
Horrified at this blasé attitude, Sheridan investigated deeper and found this practice and attitude to be standard operating procedure in the world of corporate banking. Moreover, it seemed to attract the type of people to the top who got a kick out of it. This led him to research psychopathology and publish the book Puzzling People: The Labyrinth of the Psychopath, part of which is about how human-created systems can manifest characteristics that earlier cultures would have called ‘demonic’.
Yet this aspect of money creation, as disturbing as it is, isn’t a bug but a feature. The financial apparatus that enables our economic systems to function is amoral in nature: just like mobsters everywhere, it doesn’t care where you got the money, just so long as you got it. Incidentally, most of the people working in high finance are perfectly nice people with families and hobbies and are no more guilty of feeding Moloch than anyone who has a private pension or a bank account.
A third and final fatal flaw of neoliberal – that is to say modern – economics, is the assumption that it is infallible. Adam Smith, author of The Wealth of Nations, was credited with first writing about something called the ‘invisible hand’ back in the 18th century. Far from being a demon, this disembodied hand is more of a Casper the Friendly Ghost. Its job, which it does uncomplainingly, is to deliver whatever you want, whenever you want it.
The invisible hand pulls off this remarkable feat through something called the law of substitution, and it is motivated through market forces. So, if something runs out or becomes too scarce for people to get hold of, the invisible hand will find alternatives. For example, let’s say we cut down every last tree to make toilet paper. Rather than have to put up with no TP, the IH conjures up TP made from bamboo. Everybody is happy, especially the entrepreneurs who responded to the profit motive and have made a killing selling bamboo TP for £10 a roll. In time more entrants will be attracted by the high profits and make their own bamboo TP, causing the price to crash to affordable levels again. Thanks, Invisible Hand!
However, there’s a problem with this laissez faire (that is, ‘leave capitalism to just sort itself out’) attitude, and that’s because the invisible hand might have fingers, but it doesn’t have a brain.
So, in our TP example, everyone is now happy again, but another problem has arisen: people are struggling for breath due to a lack of atmospheric oxygen. Maybe it wasn’t such a good idea to cut down all the trees in the belief something else would replace the service they offered. People wait for the invisible hand to deliver an alternative to breathing oxygen … but alas, it’s too late and we learn the hard way that not everything can be substituted for something else when we need it! [Addendum: future archaeologists, descended from giant intelligent cockroaches, discovered the fossil remains of billions of strange monkey-like creatures clutching small cylinders made of organic matter. The discovery launched numerous fiercely debated theories about what these strange monkeys were, why they worshipped a floating hand, and why they all died gasping like landed fish.]
Jokey example aside, where does this leave us? Some readers at this point may be thinking that all this is a thinly veiled attack on capitalism: it’s not. From the point of view of the Earth, capitalism only does more efficiently what communism (or the control economy) does badly. If your starting point is a view that nature is simply a storehouse that we can raid at will and damn the consequences, then it makes little difference what ism is your favourite. Related to this, there’s a potential fourth fatal flaw of economics, and that is that it rarely considers the cost of energy in moving goods from one place to another. That’s probably because most economic theory was devised in times when there was plenty of low hanging energy fruit, and so it was not considered important enough to include as a cost.
One of the key thinkers to recognise the dysfunctionality of modern economics was the German-British theorist Ernst Friedrich Schumacher, whose 1973 book Small is Beautiful: A Study of Economics as if People Mattered, outlined these flaws and offered an alternative vision that was more in tune with nature. Schumacher saw that the age of machines, combined with an ideology of exploitation, had been a disaster. He advocated for a return to doing things on a smaller scale ‘as if people mattered’. The popularity of his books (his philosophical work A Guide for the Perplexed is an excellent short read) coincided with the so-called appropriate tech movement, which sought to move towards simpler and less energy hungry forms of technology and economic systems in our day-to-day lives. Unfortunately, as promising as it seemed at the time, their efforts were mostly snuffed out during the Reagan-Thatcher years I touched upon in my last post. The modern ‘green tech’ approach advocated by the likes of pressure groups such as Extinction Rebellion bears almost no resemblance to that earlier, more innocent, attempt to live less energy extravagant lives.
Politics aside, one of the reasons the appropriate tech movement failed was because of the doctrine of infinite substitutability. At the time, there was enough demand from people for adopting less damaging ways of harvesting and using energy, but by deploying simple hardware such as home-made wind turbines and hot water tanks made from old radiators the appropriate tech pioneers had thumbed their nose at the concept of a profit motive as demanded by modern economic theory. Stated plainly, you can’t make a pile of money from people who disconnect themselves from the grid and start producing things for themselves.
Governments, of course, recognised this, and saw it as a potential threat to tax revenues. After all, it’s remarkably easy to stick a tax on electricity you buy from a utility company, but far harder to collect revenue on electricity you generate yourself using a couple of solar panels on the chicken shed roof. And so big government subsidies continued to flow to large scale centralised forms of energy generation (the owners of which, of course, had the money to grease political wheels), while smaller ‘human scale’ efforts were left to rot on the vine or were smothered under the weight of local ordinances and regulations.
So, what’s to be done? How can we break free of this seemingly suicidal way of doing business? There’s an irony at the heart of all this in that, while the main religions forbade the creation of the ‘demon’ of usury, it was the scriptures laid down in their holy books which may have created the idea that the Earth was created for humans to dominate. After all, Genesis tells us: “And God said, ‘Let us make man in our image, according to our likeness; and let them have dominion over the fish of the sea, and over the birds of the air, and over all the wild animals of the earth, and over every creeping thing that creeps upon the earth.’”
If this dominator mindset was an inbuilt assumption in the development of modern economics, how different would the world be if a religion that lacked these characteristics had been at the heart of our assumptions about our place within it? What if, instead of the prevalent linear mode of thinking (that is, getting from Point A to Point B – poor to rich – unenlightened to enlightened etc.) we had adopted a model that recognised things moving in a circular fashion? Such a system, incorporating cause and effect, would recognise that cutting down every last tree to produce TP would not be such a great idea because there would be a heavy price to pay for such short sightedness.
Moreover, the system would not be strictly material, as it would see the Earth and all the beings and ecosystems that comprise it as possessing unique worth in the web of life, and that we are but a strand in the overall tapestry. After all, it would be impossible to strip mine a mountain or empty a sea of fish if your outlook meant that this was an attack on yourself. The ‘externalities’ of modern economics would be turned into ‘internalities’ – it would be like punching yourself in the nose.
Strange as it may seem, such a system has already been in place for many thousands of years, and it was only when it was usurped by modern theories of economics that the ecological crisis we are living with today really got going. The people who adhered to its tenets were known as Pagans – that is, people who lived close to nature and whose religion was inextricably entwined with it.
Perhaps we could sketch out what a new version of Pagan economics would look like – we could call it Paganomics … economics as if Gaia mattered.
Next week I’ll look at some of the solutions offered by Schumacher and others along these lines, and I’ll share my recipe for blackberry mead.
For anyone who partakes in social media I’ve set up a couple of pages for Beyond the Wasteland on different platforms. There’s one on Facebook here, or fans of free speech can connect with me on Parler here.