Old wine in new bottles: Analyzing mixed socio-economic systems

Michel Bauwens.

Michel Bauwens –Image via Wikipedia

This is a response to “Should we worry about capitalist commons?” by Michel Bauwens of the The Foundation for P2P Alternatives. What follows won’t make as much sense if you don’t read that article first.

Avoiding the language trap

As Michel Bauwens acknowledged in an article about theories of property rights subtitled “The Ubiquity of Mixed Systems”, when we try to superimpose political and economic theories, doctrines, and ideologies on actual human society we nearly always end up needing to think in terms of mixed or hybrid systems. As he importantly noted in that article, an “arrangement that works in practice can work in theory.” (Ostrom’s Law) It is vital that in developing new economic and social theory we work from actual examples, cases, and histories as Elinor Ostrom did, and as Michel did  in “Should we worry about capitalist commons? by basing his discussion on the case of the free software movement.

Michel’s post also takes important steps in describing the relation between the socio-economic status quo at any given time and emergent relations and phase transitions. Michel writes:

It is simply inconceivable that a slave-based empire could undergo a phase transition towards the feudal mode of production, without the existence of proto-feudal modalities within that system; it is equally inconceivable that the feudal mode of production could have a phase transition towards the capitalist mode of production, without proto-capitalist modalities existing within that feudal system. It is the ultimate strengthening and intermeshing of these proto-capitalist modalities, which creates the basis for a political and social revolution that ultimately guarantees the phase transition.

This reminds me of the “include and transcend” trope in the Integral Theory of Ken Wilber and the Spiral Dynamics theory of  psychology professor Clare W. Graves.

Relationships between a status quo and an emerging transition state are often reflected in their respective linguistic and rhetorical idioms. Terminology can include and transcend or it can be provocative and divisive. Often a particular terminology is chosen precisely to signify affinity with one group and/or distinction from another, as in the case of “capitalist” terminology and “anti-capitalist” terminology.

I have learned as a computer programmer that I can take a flow chart depicting the logical relations between a set of inputs, outputs, and algorithms and I can code that sucker in any one of a dozen computer “languages”. What’s more, in any one of those languages I may have alternative choices of data structures, methods, etc. for accomplishing the same ends. Likewise a crafter of detective stories can tell the same story in many different styles and structures. Then that book can be translated into any number of languages.

The underlying logic, values, relations, and specifications of the computer program or novel are in many ways more important or fundamental than the language in which they are embodied. The latter becomes important only in relation to the environment in which the program must run or the book must sell. The same is true when it comes to expressing socio-economic models and theories with language.

One of my personal rhetorical preferences is to use terminology that is familiar and comfortable to people in the center in mainstream culture, especially when I am discussing ideas that may be culturally unfamiliar or uncomfortable to many. By choosing “business” terminology that is native to the mainstream, and even native to my political opponents, I sometimes alienate my own friends on the left. But my intent is a kind of rhetorical “Jujutsu” (a Japanese martial art for defeating an armed and armored opponent in which one uses no weapon).

Wikipedia says: “‘Ju’ can be translated to mean gentle, supple, flexible, pliable, or yielding. “Jutsu” can be translated to mean “art” or “technique” and represents manipulating the opponent’s force against him rather than confronting it with one’s own force.”

Or maybe I just take a perverse pleasure in being provocative towards my own philosophical and political community. Or both.

Actually, there is a good reason for stepping on liberal corns and tipping our radical sacred cows. All too often we liberals (and especially we “mavericks”) have emotional attachments to our chosen doctrines and jargon that are not justified by actual technical utility.  If we are students of history we may have observed how often old intellectual “wine” is simply repackaged in new bottles. How often does the re-bottling really accomplish anything, and how often does it cause unintended consequences such as the wine getting spilt or going sour? Occasionally the new package actually does something new like dispense single servings while keeping the rest fresh. But often it turns out the new bottle does little or nothing more than the old one did. Its the old “distinction without a difference”. (Or is it the other way around?)

In stark contrast, to actually improve the wine itself might require a long, laborious apprenticeship under a master vintner to acquire a thorough and pragmatic knowledge of soils, vines, cultivation practices, harvesting, pressing, blending, fermenting, racking, bottling, and cellaring. Within and between each subsystem there are many elemental, functional, or essential values and relations. The bottle is vital, but it is perhaps the most uncomplicated piece in all of this (less problematic than even the lowly cork), and for a wide range of bottle designs one kind may do just as well as another.

Another analogy that bears on the subject of “sustainable terminology” is a recycling and re-purposing analogy. We can conserve intellectual capital and labor by recycling our “bottles” rather than tossing the old, used terminology in the linguistic landfill and manufacturing new ones from scratch. Perhaps only a small number of cracked or chipped bottles need to be discarded and replaced with new ones. Our new, improved intellectual wine might just as well be re-packaged in the same old bottles as the the old wine once they have been well cleaned and inspected.

I may have belabored these analogies a bit but I have demonstrated how ideas about one thing, such as terminology, can be repackaged in other terminology as foreign to that subject as  enology, or wine making. It is far less a stretch to repackage some new socio-economic understanding or sensibility in old soci-economic terminology with a minimal number of pragmatic tweaks and hacks.

One example I have recently seen is “copy-far-left”. I’m not sure if this term is technically a neologism, a portmanteau, or something else, so I’m just going to call it a “hack” of the familiar word “copyright” and the familiar expression “far-left” which signifies an ultra-liberal or radical political orientation. (The expression comes from the seating arrangements in the French National Assembly during the French Revolution. The most radical members were seated on the far left of the chamber.) But this expression and others such as copyleft, copywrong, and copy-just-right are somewhat subjective and come with various degrees of emotional, philosophical, political, and historical baggage.

I prefer instead the conventional term “conditional copyright” which signifies a copyright that is a bundle of individual and severable rights– any, all, or none of which may be explicitly retained or waived by an author. An author is anyone who has created a work or “added value” to an existing work. It can be argued that all works are derivatives of previous work but that does no harm to the notion of an author as someone who has added value either to a particular work or to the general body of  creative human expression. The latter generalization is perfectly consistent with a conventional conditional copyright, which can serve the same purposes as any of the other copy-whatever hacks. The conditional copyright is simply any copyright that has a specification which explicitly spells out the rights that are (or are not) either retained by the copyright holder or granted to others with or without other special conditions. This has always been the nature of the conventional copyright. The familiar specification “all rights reserved” is simply a special case of the conditional copyright where the entire bundle of rights is retained unconditionally by the specified copyright holder. This is by no means (and never has been) the only legal species of the conventional copyright.

A similar conditionality has long been established in the common law of real and personal property through the same bundle of rights metaphor.

I challenge any of my liberal or radical friends to define a form of property ownership, non-ownership, anti-ownership, enclosure, non-enclosure, or commons that I cannot model with a conditional property or copyright specification without the need for any new terminology whatsoever, proving that new terminology is unnecessary for a full and fair technical or legal discourse. If new terminology is still desired it should be admitted that it serves a poetic, rhetorical, emotional, or ideological need rather than a technical or analytical one.

(Disclaimer:  the only case to which I will not try to apply conditional copyright principles is the proposition that there is no value created or added; or that any value which may be added does not require any formal or legal means of protection because  some other, informal means is sufficient. Also, I’m not a copyright attorney–these conditional copyright principles may or may not be compatible with current national statutes and international agreements.)

“The map is not the territory” (Alfred Korzybski)

Regardless of what terminology we use to discuss socio-economic theories such as “commons-based peer-production” or “capitalist commons“, we should remember that “the word is not the thing” (Alfred Korzybski). We are discussing actual social and economic relations in vivo and in situ.

In our lives we have one-to-one, one-to-many, many-to-one, and many-to many relations–relations between people and people, people and groups, people and objects, groups and objects, groups and the environment, etc. You can find many of the same, identical relations across many cultures, past and present, spoken of via many different metaphors and ritualized/institutionalized in many different ways.

Our choice of terminology and metaphor should be audience-appropriate, but analytically and technically we need to focus on functional relations, values and criteria. We can call something public, private, civic, social, or common. We can call something a group, a partnership, an association, a corporation, a collective, or a community. But people can differ wildly about what any of those terms mean. Any distinctions we attribute to those terms really arise from a more basic and fundamental class of issues: power, rank, consent, transparency, accountability, democracy, inclusion, opportunity, sustainability, reciprocity, symmetry, justice, fairness, dignity, & etc., etc., etc. Too often when we argue at the level of public vs private or common vs corporate we are arguing about the “bottles” and fail to ever connect with those underlying assumptions, values, and relations that really make the wine what it is.

At the academic level there are heroic efforts to put economics on an empirical, scientific footing. Those efforts are largely thwarted by the influence of money and power. But at the level of public discourse economics is almost entirely a vehicle for ideology (a disease of the mind).

Michel Bauwens is taking important strides towards an interdisciplinary, non-ideological, doctrine-neutral analysis of social, political, and economic relationships and I really dig it. That is the kind of framework  I want to build on. That is the kind of framework we can all build upon collectively and cooperatively no matter what our personal biases may be.

Poor Richard

Related PRA2010 Posts:

The Economical Bestiary

Mythical Beasties of Economyland

The world of economics and economists is a world populated with many mythical and fantastic beasties. This Bestiary or Bestiarum vocabulum is a catalog of some of the most familiar as well as some of the most exotic and bizarre!

“Bestiaries were made popular in the Middle Ages in illustrated volumes that described various animals, birds and even rocks. The natural history and illustration of each beast was usually accompanied by a moral lesson. This reflected the belief that the world itself was the Word of God, and that every living thing had its own special meaning.” (Wikipedia)

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Detail from the 12th century Aberdeen Bestiary (Wikipedia)

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“If all the economists in the world were laid end to end, they wouldn’t reach any conclusion.”George Bernard Shaw

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“For every economist, there is an equal and opposite economist”. –Source?

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“The first refuge of a scoundrel is economics” — Poor Richard

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Economyland Safari Contributors:

Poor Richard: Safari Guide

Lori : Mythical Exo-taxonomist

“Natural Lefty” : Super-Natural Historian

This is an open-source peer-2-peer project owned by its contributors
Please see details here.

You are invited to leave content suggestions in a comment.

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Preface

Both liberal and conservative economists and economic partisans seem to have difficulty separating reality from fantasy.  “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” (Upton Sinclair)

In the culture war each side relies heavily on propaganda or spin (a mixture of valid and false reasoning with a mixture of fact and made-up bullshit); both sides tend to reason backwards from conclusions to any facts that might confirm them while studiously ignoring inconvenient truths. That’s generally known as confirmation bias.

I hope that the reality-based community may find something in the Economical Bestiary that they can use, or at least something that will amuse.

Introduction to Economyland: Reductio Ad Absurdum

(Alternate title: Escape from the Planet of the Economists)

Economyland is a place on the flat world of Reductio Ad Absurdum where the Economical Bestiary’s mythical beasts run wild in a free state of nature. Economyland is the true center of the universe around which the sun, planets, stars, and all the rest of the universe revolves. Economyland was created by God and placed under the dominion of man, a sort of Disney-esque theme park for economists of all species. In ancient times Economyland was known as Economia:

In the Eastern Orthodox, Greek-Catholic Churches, Latin Catholic Church,and in the teaching of the Church Fathers which undergirds the theology of those Churches, economy or oeconomy (Greek: οἰκονομία, oikonomia) has several meanings. The basic meaning of the word is “handling” or “disposition” or “management” or more literally “housekeeping” of a thing, usually assuming or implying good or prudent handling (as opposed to poor handling) of the matter at hand. (Wikipedia)

War of the World-views

Pius conservatives are fond of accusing science of being reductionist, of reducing the divinely-wrought human being and the world of nature to an oversimplified, materialistic machine. This is, as always, the conservative pot calling the kettle black.

Liberal economists don’t do much better. Most economists share a model of the economic world that is simplistic, reductionist, and naively anthropocentric.

<– click on the image for a closer view of Economia

Capitalism defines the economic system in terms of the dynamics of capital and labor; production, distribution, and consumption; or as it is often framed, the supply and demand of goods and services. The natural world is seen only as a supply depot for raw materials. The production and consumption of goods and services of and by the biosphere , is treated as a giant externality. And that view is a giant existential blunder.

Of course, it is a conveniently self-serving (if short-sighted) blunder in some quarters; and we need not wonder too hard about how and why this oversight has persisted for so long.

In contrast, “economics as if people mattered” (see below) has to begin with economics as if the biosphere mattered. The biosphere can not be treated as a free supply depot and waste dump. The ecosystem cannot simply be seen as a magical black box that God put here to provide for all human wants and dispose of all human garbage. You’d have to be either a moron or a person with serious conflicts of interest skewing your judgment (or both) to hold such a view. Yet that is just the view of most economists, for whom nature is simply a part of the human economy rather than vice versa.

One of the first widely respected economists to correct this misapprehension was E. F. Schumacher who published Small is Beautiful in 1973, which placed the study of economics where it belongs, inside the study of the ecology of the biosphere. His ideas were of course treated with contempt by most conservative economists and they are generally still ignored by or unknown to most liberal economists.

Small Is Beautiful: Economics As If People Mattered by E. F. Schumacher.

Schumacher was a respected economist who worked with John Maynard Keynes and John Kenneth Galbraith. For twenty years he was the Chief Economic Advisor to the National Coal Board in the United Kingdom, opposed the neo-classical economics by declaring that single-minded concentration on output and technology was dehumanizing. He held that one’s workplace should be dignified and meaningful first, efficient second, and that nature (and the world’s natural resources) is priceless.

Schumacher proposed the idea of “smallness within bigness”: a specific form of decentralization. For a large organization to work, according to Schumacher, it must behave like a related group of small organizations. Schumacher’s work coincided with the growth of ecological concerns and with the birth of environmentalism and he became a hero to many in the environmental movement. (Wikipedia)

The Happiness Index (E.F. Schumacher Society/New Economics Institute)

The E.F. Schumacher YouTube Channel

Another writer, Richard Heinberg, a Senior Fellow of the Post Carbon Institute, is making an effort to put the study of economics into a modern scientific perspective. Following are a few excerpts from a pre-publication version of his book The End of Growth:”

The classical [economic] theorists gradually adopted the math and some of the terminology of science. Unfortunately, however, they were unable to incorporate into economics the basic self-correcting methodology that is science’s defining characteristic. Economic theory required no falsifiable hypotheses and demanded no repeatable controlled experiments. Economists began to think of themselves as scientists, while in fact their discipline remained a branch of moral philosophy—as it largely does to this day.

…For help, we can look to the ecological and biophysical economists, whose ideas have been thoroughly marginalized by the high priests and gatekeepers of mainstream economics…

The ideological clash between Keynesians and neoliberals (represented to a certain degree in the escalating all-out warfare between the U.S. Democratic and Republican political parties) will no doubt continue and even intensify. But the ensuing heat of battle will yield little light if both philosophies conceal the same fundamental errors. One such error is of course the belief that economies can and should perpetually grow.

But that error rests on another that is deeper and subtler. The subsuming of land within the category of capital by nearly all post-classical economists had amounted to a declaration that Nature is merely a subset of the human economy—an endless pile of resources to be transformed into wealth. It also meant that natural resources could always be substituted with some other form of capital—money or technology. The reality, of course, is that the human economy exists within, and entirely depends upon Nature, and many natural resources have no realistic substitutes. This fundamental logical and philosophical mistake, embedded at the very heart of modern mainstream economic philosophies, set society directly upon a course toward the current era of climate change and resource depletion, and its persistence makes conventional economic theories—of both Keynesian and neoliberal varieties—utterly incapable of dealing with the economic and environmental survival threats to civilization in the 21st century.

Another giant of economic empiricism and innovation, though not an economist per se, was W. E. Deming.

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American statistician, professor, author, lecturer, and consultant. He is perhaps best known for his work in Japan. There, from 1950 onward he taught top management how to improve design (and thus service), product quality, testing and sales (the last through global markets, through various methods, including the application of statistical methods.

Deming made a significant contribution to Japan’s later reputation for innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Despite being considered something of a hero in Japan, he was only just beginning to win widespread recognition in the U.S. at the time of his death. (Wikipedia)

Though still virtually unknown and unappreciated in the US, Deming was almost solely responsible for the transformation of Japanese industry from having, in my childhood, a reputation for manufacturing cheap junk goods to, by the mid-70′s, a reputation as the maker of the world’s highest quality and highest value automobiles, electronics , and many other consumer goods. Though his ideas of continuous improvement were originally widely rejected in the US until recently because they did not fit with autocratic US corporate culture, in the 80′s and 90′s US industry imported many Japanese manufacturing consultants due to the reputation for quality and efficiency that Japan had gained, ironically, as a direct result of adopting Deming’s ideas.

Demings methods, rejected by US captains of industry for decades, swept through the entire Asian world and are largely responsible for the fact that Asian manufacturers are still kicking US industry’s ass today in markets as diverse as cars, cell phones, personal computers, and solar cells.

Where would American workers be without such enlightened and visionary corporate management? Perhaps still in the middle class instead of in unemployment lines or among the the ranks of the working poor. The story of W. E. Deming proves yet again that a profit is without honor in his own land.

The US Is Becoming an “Underdeveloping Nation”

Maxneef

While President Obama tapped former corporate executives to become his top economic team, many economists question the path the United States is on. Amy Goodman of Democracy Now speaks to the acclaimed Chilean economist Manfred Max-Neef. He won the Right Livelihood Award in 1983, two years after the publication of his book Outside Looking In: Experiences in Barefoot Economics.

“We are simply, dramatically stupid. We act systematically against the evidences we have. We know everything that should not be done. There’s nobody that doesn’t know that. Particularly the big politicians know exactly what should not be done. Yet they do it. After what happened since October 2008, I mean, elementally, you would think what? That now they’re going to change. I mean, they see that the model is not working. The model is even poisonous, you know? Dramatically poisonous. And what is the result, and what happened in the last meeting of the European Union? They are more fundamentalist now than before. So, the only thing you know that you can be sure of, that the next crisis is coming, and it will be twice as much as this one. And for that one, there won’t be enough money anymore. So that will be it. And that is the consequence of systematical human stupidity.”

“First of all, we need cultured economists again, who know the history, where they come from, how the ideas originated, who did what, and so on and so on; second, an economics now that understands itself very clearly as a subsystem of a larger system that is finite, the biosphere, hence economic growth as an impossibility; and third, a system that understands that it cannot function without the seriousness of ecosystems. And economists know nothing about ecosystems. They know nothing about thermodynamics, you know, nothing about biodiversity or anything. I mean, they are totally ignorant in that respect. And I don’t see what harm it would do, you know, to an economist to know that if the beasts would disappear, he would disappear as well, because there wouldn’t be food anymore. But he doesn’t know that, you know, that we depend absolutely from nature. But for these economists we have, nature is a subsystem of the economy. I mean, it’s absolutely crazy.”

“The principles of economics should be based in five postulates and one fundamental value principle.

  • One, the economy is to serve the people and not the people to serve the economy.
  • Two, development is about people and not about objects.
  • Three, growth is not the same as development, and development does not necessarily require growth.
  • Four, no economy is possible in the absence of ecosystem services.
  • Five, the economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.
  • And the fundamental value to sustain a new economy should be that no economic interest, under any circumstance, can be above the reverence of life.”

View the entire interview with Amy Goodman and Manfred Max-Neef.

Max-Neef’s Keynote at Zermatt Summit 2012

Keeping It Real

Modern economists need to get over their hair-splitting theories, self-serving technical jargon, and their detached, ivory-tower naïveté, and get real.

As E. B. White once aptly advised, “Bend down, Librarians, and taste the page.” I think it was also he who said “All their biology is Latin names.”

That is the message of the Economical Bestiary, which ridicules the brand of economics which persists to this day as little more than, as Richard Heiberg calls it, moral philosophy. The moral hazard for economists is succumbing to the personal, financial, and academic conflicts of interest between the cognitive corruption of their profession and the objective imperatives of reality.

Poor Richard

Ecological economics (Wikipedia)

Environment Equitable Sustainable Bearable (Social ecology) Viable (Environmental economics) Economic Social

Ecological economics is a transdisciplinary field of academic research that aims to address the interdependence and coevolution of human economies and natural ecosystems over time and space. It is distinguished from environmental economics, which is the mainstream economic analysis of the environment, by its treatment of the economy as a subsystem of the ecosystem and its emphasis upon preserving natural capital. One survey of German economists found that ecological and environmental economics are different schools of economic thought, with ecological economists emphasizing “strong” sustainability and rejecting the proposition that natural capital can be substituted by human-made capital.

(Wikipedia)

Natural Capitalism: Creating the Next Industrial Revolution is a 1999 book co-authored by Paul Hawken, Amory Lovins and Hunter Lovins. It has been translated into a dozen languages and was the subject of a Harvard Business Review summary.

Their fundamental questions are: What would an economy look like if it fully valued all forms of capital? What if an economy were organized not around the abstractions of neoclassical economics and accountancy but around the biological realities of nature? What if Generally Accepted Accounting Principles recognized natural and human capital not as a free amenity in inexhaustible supply but as a finite and integrally valuable factor of production? What if in the absence of a rigorous way to practice such accounting, companies started to act as if such principles were in force. (Wikipedia)

The principles used by Natural Capitalism Solutions are:

1. Buy time by using resources dramatically more productively.

This slows resource depletion, lessens pollution, and increases employment in meaningful jobs. It lowers costs for business and society, halts the degradation of the biosphere, makes it more profitable to employ people, and preserves vital living systems and social cohesion.

2. Redesign industrial processes and the delivery of products and services to do business as nature does, using such approaches as biomimicry and cradle to cradle.

This approach enables a wide array of materials to be produced with low energy flows, in processes that run on sunlight, emulating nature’s genius. It shifts to circular economies in which materials are reused, remanufactured and waste is eliminated.

3. Manage all institutions to be restorative of natural and human capital.

Such approaches enhance human well-being and enable the biosphere to produce more wealth from its intact communities and abundant ecosystem services and natural resources.(Natural Capitalism Solutions)

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