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12/07/2005: "Nelson's economics are inane"
Russell Nelson has responded, in "Everyone is Lazy" to my assertion that (all other things being equal) a paycheck is the only motivation for work.
What would someone do if they really did prefer work to leisure (again, keeping everything the same)? The difference between work and leisure is that you get paid to do things other people choose, whereas nobody pays you for leisure of your own choice. Clearly everything is not the same, so let's assume that you get paid for your leisure. If anybody preferred to work under those conditions, then they would prefer to NOT do what they wanted, but instead to do things that other people chose. Does anybody actually act that way? No, of course not. This assumption generates ridiculous conclusions like "employees will never quit no matter how little you pay them, because under identical conditions they choose work over leisure."
[...]
A preference for leisure over work is a special case of another principle: that everyone wants to minimize the value (to them) of the things they give away when they trade. People are naturally cheapskates. Again, look at the counterexample: What if somebody didn't want to minimize the value they traded away? Do you ever see people arguing that they should pay a higher price? No, of course not.
Taken to its logical conclusion, Nelson's premise would justify many acts, including prostitution. "Were everything else were equal, who wouldn't fuck for money?" could be his claim. I hope that Nelson doesn't view sex as "trade", but if he does, then it helps explain the shallow field for the economics he sows.
Russell claims to be an Economist. I make no such claim, thought I do enjoy the subject. I tend much more toward the views of E.F. Schumacher's "Economics as If People Mattered".
There is universal agreement that a fundamental source of wealth is human labour. Now, the modern economist has been brought up to consider "labour" or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation. From the point of view from the workman, it is a "disutility"; to work is to make a sacrifice of one's leisure and comfort, and wages are a kind of compensation for the sacrifice. Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view from the employee is to have income without employment.
The consequences of these attitudes both in theory and in practice are, of course, extremely far-reaching. If the ideal with regard to work is to get rid of it, every method that "reduces the work load" is a good thing. The most potent method, short of automation, is the so-called "division of labour" and the classical example is the pin factory eulogised in Adam Smith's Wealth of Nations. Here it is not a matter of ordinary specialisation, which mankind has practised from time immemorial, but of dividing up every complete process of production into minute parts, so that the final product can be produced at great speed without anyone having had to contribute more than a totally insignificant and, in most cases, unskilled movement of his limbs.
The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth goods and services needed for a becoming existence. Again, the consequences that flow from this view are endless. To organise work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldy existence. Equally, to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.
From the Buddhist point of view, there are therefore two types of mechanisation which must be clearly distinguished: one that enhances a man's skill and power and one that turns the work of man over to a mechanical slave, leaving man in a position of having to serve the slave. How to tell one from the other? "The craftsman himself," says Ananda Coomaraswamy, a man equally competent to talk about the modern west as the ancient east, "can always, if allowed to, draw the delicate distinction between the machine and the tool. The carpet loom is a tool, a contrivance for holding warp threads at a stretch for the pile to be woven round them by the craftsmen's fingers; but the power loom is a machine, and its significance as a destroyer of culture lies in the fact that it does the essentially human part of the work." It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by man's work. And work, properly conducted in conditions of human dignity and freedom, blesses those who do it and equally their products. The Indian philosopher and economist J.C. Kumarappa sums the matter up as follows:
If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality.
If a man has no chance of obtaining work he is in a desperate position, not simply because he lacks an income but because he lacks this nourishing and enlivening factor of disciplined work which nothing can replace. A modern economist may engage in highly sophisticated calculations on whether full employment "pays" or whether it might be more "economic" to run an economy at less than full employment so as to ensure a greater mobility of labour, a better stability of wages, and so forth. His fundamental criterion of success is simply the total quantity of goods produced during a given period of time. "If the marginal urgency of goods is low," says professor Galbraith in The Affluent Society, "then so is the urgency of employing the last man or the last million men in the labour foce." And again: "If...we can afford some unemployment in the interest of stability--a proposition, incidentally, of impeccably conservative antecedents--then we can afford to give those who are unemployed the goods that enable them to sustain their accustomed standard of living."
From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity. It means shifting an emphasis from the worker to the product of work, that is, from the human to the subhuman, a surrender to the forces of evil.
While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. But Buddhism is "The Middle Way" and therefore in no way antagonistic to physical well-being. It is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them. The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist's point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern--amazingly small means leading to extraordinarily satisfactory results.
For the modern economist this is very difficult to understand. He is used to measuring the "standard of living" by the amount of annual consumption, assuming all the time that a man who consumes more is "better off" than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum well-being with the minimum of consumption....The ownership and the consumption of goods is a means to an end, and Buddhist economics is the systematic study of how to attain given ends with the minimum means.
Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity, tasking the factors of production--land, labour, and capital--as the means. The former, in short, tries to maximize human satisfactions by the optimal patten of consumption, while the latter tries to maximize consumption by the optimal pattern of productive effort. It is easy to see that the effort needed to sustain a way of life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to sustain a drive for maximum consumption. We need not be surprised, therefore, that the pressure and strain of living is very much less in, say, Burma than it is in the United States, in spite of the fact that the amount of labour-saving machinery used in the former country is only a minute fraction of the amount used in the latter.
Simplicity and non-violence are obviously closely related. The optimal pattern of consumption, producing a high degree of human satisfaction by means of a relatively low rate of consumption, allows people to live without great pressure and strain and to fulfil the primary injunction of Buddhist teaching: "Cease to do evil; try to do good." As physical resources are everywhere limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other's throats than people depending upon a high rate of use. Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade.
From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases, and on a small scale. Just as the modern economist would admit that a high rate of consumption of transport services between a man's home and his place of work signifies a misfortune and not a high standard of life, so the Buddhist economist would hold that to satisfy human wants from faraway sources rather than from sources nearby signifies failure rather than success. The former tends to statistics showing an increase in the number of ton/miles per head of the population carried by a country's transport system as proof of economic pro-gress, while to the latter--the Buddhist economist--the same statistics would indicate a highly undesirable deterioration in the pattern of consumption.
Another striking difference between modern economics and Buddhist economics arises over the use of natural resources. Bertrand de Jouvenel, the eminent French political philosopher, has characterised "western man" in words which may be taken as a fair description of the modern economist:
He tends to count nothing as an expenditure, other than human effort; he does not seem to mind how much mineral mater he wastes and, far worse, how much living matter he destroys. He does not seem to realise at all that human life is a dependent part of an ecosystem of many different forms of life. As the world is ruled from towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is not revived. This results in a harsh and improvident treatment of things upon which we ultimately depend, such as water and trees.
The teaching of the Buddha, on the other hand, enjoins a reverent and non-violent attitude not only to all sentient beings but also, with great emphasis, to trees. Every follower of the Budha ought to plant a tree every few years and look after it until it is safely established, and the Buddhist economist can demonstrate without difficulty that the universal observation of this rule would result in a high rate of genuine economic development independent of any foreign aid. Much of the economic decay of south-east Asia (as of many other parts of the world) is undoubtedly due to a heedless and shameful neglect of trees.
Modern economics does not distinguish between renewable and non-renewable materials, as its very method is to equalise and quantify everything by means of a money price. Thus, taking various alternative fuels, like coal, oil, wood, or water-power: the only difference between them recognised by modern economics is relative cost per equivalent unit. The cheapest is automatically the one to be preferred, as to do otherwise would be irrational and "uneconomic." From a Buddhist point of view, of course, this will not do; the essential difference between non-renewable fuels like coal and oil on the one hand and renewable fuels like wood and water-power on the other cannot be simply overlooked. Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence, and while complete non-violence may not be attainable on this earth, there is nontheless an ineluctable duty on man to aim at the ideal of non-violence in all he does.
Just as a modern European economist would not consider it a great economic achievement if all European art treasures were sold to America at attractive prices, so the Buddhist economicst would insist that a population basing its economic life on non-renewable fuels is living parasitically, on capital instead of income. Such a way of life could have no permanence and could therefore be justified only as a purely temporary expedient. As the world's resources of non-renewable fuels--coal, oil and natural gas--are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.
This fact alone might give food for thought even to those people in Buddhist countries who care nothing for the religious heritage and ardently desire to embrace materialism of modern economics at the fastest possible speed. Before they dismiss Buddhist economics as nothing better than a nostalgic dream, they might wish to consider whether the path of economic development outlined by modern economics is likely to lead them to places they really want to be. Towards the end of his courageous book The Challenge of Man's Future, Professor Harrison Brown of the California Institute of Technology gives the following appraisal:
Thus we see that, just as industrial society is fundamentally unstable and subject to reversion to agrarian existence, so within it the conditions which offer individual freedom are unstable in their ability to avoid the conditions which impose rigid organisation and totalitarian control. Indeed, when we examine all of the foreseeable difficulties which threaten the survival of industrial civilisation, it is difficult to see how the achievement of stability and the maintenance of individual liberty can be made compatible.
Even if this were dismissed as a long-term view there is the immediate question of whether "modernisation," as currently practised without regard to religious and spiritual values, is actually producing agreeable results. As far as the masses are concerned, the results appear to be disastrous--a collapse of the rural economy, a rising tide of unemployment in town and country, and the growth of a city proletariat without nourishment for either body or soul.
It is in the light of both immediate experience and long-term prospects that the study of Buddhist economics could be recommended even to those who believe that economic growth is more important than any spiritual or religious values. For it is not a question of choosing between "modern growth" and "traditional stagnation." It is a question of finding the right path of development, the Middle Way between materialist heedlessness and traditional immobility, in short, of finding "Right Livelihood."
It is this, "Right Livelihood" which I have sought for years, and am now enjoying. Nelson's economics are bland and superficial. As far as I know, Nelson claims no credentials in economics, but has professed himself to be "an economist". Schumarcher was trained my Milton Keyens, and then rejected the Keyensian school of thought.
Schumacher proposed the idea of "smallness within bigness"; in other words, for a large organization to work it must behave like a related group of small organizations. Schumacher named this principal "decentralization", and I believe that "decentralization" is the grain of truth so many found attractive in Raymond's otherwise tasteless hominem, "The Cathedral and the Bazzar".
Schumacher's most radical break with the mainstream of economic thought, however, comes with his willingness to sacrifice economic growth - for so long the Holy Grail of economic policy and strategy - for a more fulfilling working life. Perhaps more than any economist since Karl Marx, Schumacher called attention to the quality of people's lives as producers, even stressing its importance over their lives as consumers. Work, rather than being, as in neoclassical theory, a "disutility," becomes in Schumacher's philosophy a means towards satisfaction, fulfillment, and personal development.
In order to bring about these more fulfilling working lives, Schumacher proposes a radically different relationship between human beings and technology. The purpose of technology up until this point, he argues, has been to produce as much output per labor input as possible. The devices invented for this purpose, however, have not only served the dubious end of making many workers redundant, but their prohibitively high cost discourages self-employment. As a solution, Schumacher proposes an "intermediate technology," one which can be easily purchased and used by poor people, and which can lead to greater productivity while minimizing social dislocation. Properly used, the Internet and Software Freedom are examples of Schumacher's "Intermediate technology".
If you want something slightly more modern, Paul Hawken's "The Ecology of Commerce" is a critical analysis of the way we conduct our business and our society today, whether we work for Earth First or DuPont. Decidedly non-aligned with either the left or right, Hawken's book demonstrates clearly that only cooperation from all sides will lead us towards a sustainable future.
According to Hawken's manifesto, restoration of the natural environment isn't possible without a substantial change in prevailing economic attitudes. For instance, corporations have to abandon the profit motive as their central organizing principle. This is hardly news, it's either heresy or platitude. But Hawken does us the service of testing it against reality. First he considers the ecological state of affairs today, then the ambiance of corporate culture, then the original sins of our current economic structure, and finally the practices that might jump-start a reorientation of the large-scale industrial frame of mind. I haven't read a better overview of such practices as ecological economics, industrial ecology, and radical energy efficiency improvement.
Hawken, a long-time Whole Earth contributor, writer, and the founder and former proprietor of Smith and Hawken Tools, argues passionately that the money imperative -- the drive to achieve by building up the most stuff -- is fundamentally obsolete. Hawken insists that the world is evolving out from under traditional western business (and economic) values.
...To create an enduring society, we will need a system of commerce and production where each and every act is inherntly sustainable and restorative. Business will need to integrate economic, biologic, and human systems to create a sustainable method of commerce. As hard as we may try to become sustainable on a company-by-company level, we cannot fully succeed until the institutions surrounding commerce are redesigned. Just as every act in an industrial society leads to environmental degradation, regardless of intention, we must design a system where the opposite is true, where doing good is like falling off a log, where the natural, everyday acts of work and life accumulate into a better world as a matter of course, not a matter of conscious altruism. That is what this book tries to imagine…
In response to Nelson's 'Xist/Xism' rant, I believe that man is homo viator—that each of us has a purpose. And that it is the failure to recognize this fact which leads to society's ills. Were mankind to openly acknowledge that he is in fact homo viator, he would recognize a purpose to life outside himself. Life would be seen as an objectivized existence necessitating a selfless, as opposed to a selfish, appraisal of, and interplay with, reality. And since each man has a purpose, it is his duty to fulfil the purpose for which he was created. He is individually responsible for his actions.
For Schumacher there were three main culprits who should bear the blame for modern man's refusal to accept or recognize individual responsibility. These were Freud, Marx and Einstein. Dubbing them the 'devilish trio', he considered that they had all been corrosive agents in a world which had lost its way. Freud, through his teaching that perception was subject to the complex interplay of the ego and the id, both of which in turn were subject to sexually based imperatives, had subjectivized perception, literally rendering it self-centred. This led inevitably to a change of attitude in human relations where self-fulfillment took precedence over the needs of others, Marx, by seeking a scapegoat in the bourgeoisie, had replaced personal responsibility with a hatred for others. If something was wrong with society someone else was to blame. Einstein had undermined belief in absolutes with his insistence on the relativity of everything. The subsequent application of 'relativity' in the field of morals led logically to a rejection of all morality except that which was personally convenient.
This slippage of the view that other people matter too explains Nelson's "People are vociferous pattern-matching machines, and we have a natural tendency to find meaningless patterns.", "Blacks are lazy" and even (much worse) Raymond's new call that his government's "extraordinary rendition" is perfectly acceptable. Raymond appears to believe that the morality of the state is absolute, that the government can do no wrong in the name of perserving peace. ...the U.S. government has no constitutional, legal, or moral obligation to treat foreign terrorists or foreign enemy combatants as though they were American citizens. Raymond is wrong, both legally (according to various treaties, which trump both the constitution and legal system), and morally. Raymond blinds himself to the stark moral reality that we are not sending these "enemy combatants" back to their homeland so much as we are sending them to be tortured and murdered. Yes, even those who later turn out to have been innocent.
Under our system of law, all men who stand accused are entitled to due process, even those who are not citizens of our country.
