An Objective Science of Economics?

Physicists and even biologists can pretend to an objective understanding of the phenomena they study. That is to the degree they can stand outside the systems concerned. Is that possible for economists? While the economist is perhaps more akin to the anthropologist, even the latter is traditionally an outsider to the cultural systems studied. The ubiquity of modern global capitalism poses the same dilemma to the economist now that the anthropologist will face when all indigenous cultures have been absorbed into modernity.

This has not stopped generations of economists from holding forth on the “true” nature of such concepts as value, wealth, capital, and growth. Biologists, and even anthropologists, have been able to analyze living systems in their own human terms—as distinct from terms proper to the living systems themselves. That is, scientists dwell in a world apart from the world they observe. No such separation is possible for economists, who inevitably think in the terms characteristic of their society, which is increasingly a monoculture alienated from nature.

Economic concepts reflect values current in modern capitalist society. Despite rival and contradictory theories, on some level this renders all economic theory fundamentally self-serving, even self-confirming. At worst it is misleading and deceptive, often embraced by governments to legitimize their policies. For example, the “trickle down” notion endorsed by Reagan and Thatcher was used to justify an unregulated market, on the promise that profit going to the elite would ultimately benefit society as a whole, if not equally. This, when it was already widely apparent that inequality of wealth was expanding far more rapidly than wealth itself! The tacit assumption is that no one should object to the accelerating concentration of wealth, provided their own situation was moderately improving or at least not getting worse. By hiding behind averages, however, economic analysis can obscure what people on the ground are actually experiencing, which in any case is subjective and includes things like envy and perceived unfairness. Concepts like ‘national income’, ‘GNP’, ‘total capital’ (private or public) are statistical averages that usefully reveal inequalities between countries or regions, and over time. Yet, they mask huge inequalities among individuals within a given country.

Life in consumer society has in many ways been visibly democratized. We are theoretically now equal before the law, each with a single vote. The modern upper class blends in with the rest of society more easily than traditional aristocrats, who flaunted their class status. The modern gated community is far less conspicuous than the castle on the hill. The Jaguar or Tesla is not as flagrant a status symbol as the gilded horse-drawn coach; it must travel on the same public highways as the rest of us and obey the same traffic laws. First class air travel is only moderately less uncomfortable than “economy” class; most of us have not seen the inside of a private jet and probably not the outside either. The extreme wealth of the very rich consists less of evident status symbols than invisible stock portfolios and bank accounts. Yet, while the modern rich may be unobtrusive, they are increasingly powerful. And the poor are increasingly numerous, obvious, and disenfranchised.

Most of economics since Marx has been little more than an apology for systemic inequality. One reason for this may be that “the economy” is as complex as human being. The stock market and modern investment “instruments” are accordingly abstruse, with those in the know privileged to gain from them. It is little wonder that the theories devised by economists (mostly academics) have been so esoteric. But this makes it all the harder, even for them, to call a spade a spade or to declare the emperor nude. Yet, millions of people are possessed enough of common sense to see that the rich are getting richer and the poor even poorer for reasons that can hardly be historical accident. The gains of the middle class in mid-twentieth century are quickly eroding. Their very assets (such as mutual or pension funds) are being used against them to line the pockets of corporate executives. The modern capitalist system has been honed by those who control it to siphon wealth from the now shriveling middle class. This can hardly be surprising, since—to put it bluntly—the purpose of capital has always been to create inequality! What is surprising is how efficient it has become in the last few decades at undoing the hard-won gains of the middle class.

Modern economists may or may not be capitalist dupes, and the top-heavy capitalist system itself may or may not be doomed to collapse. But is there another role possible for a science of economics? The traditional focus of economic theory has been anthropocentric by definition. It is about the production and distribution of wealth in very human terms, and in many cases from the perspective of the ruling class. In particular, it does not consider business and growth from a planetary point of view, in terms of its effects on nature. Such a perspective would be nearly a negative image of the human one: all that is considered an asset in human terms is largely a deficit in the natural economy. This deficit has become so large that it can no longer be ignored by the human economy; it threatens to break the bank of nature. If an objective economics is possible at all, it would at the least have to encompass the planet as the true stage upon which all economic concepts must be redefined to play out. By this I do not mean carbon credits or assigning a market value to natural resources or to services provided by nature, such as recycling air and water. I mean rather a complete shift from the human perspective to that of nature. From that perspective, what would have value would be services provided to nature by human beings, rather than the other way around.

No doubt, from the natural point of view, the greatest service we could perform would be to simply disappear—gracefully, of course, without wreaking further havoc on the planet in the process! I don’t think people are going to agree to this, but they may ultimately be forced to concede at least some rights to the rest of the biosphere as a co-participant in the game. A more objective economics would at least give parity to human and natural interests and would focus on the interaction between them. Concepts like “value” and “growth” would shift accordingly. In human economics, value has been assigned a variety of meanings, reflecting the daunting convolutions of the human world in which economists are perforce enmeshed: labor-value, use-value, exchange-value, surplus value, market value, etc. Yet, an economics that focuses equally on the needs of nature could simplify matters by moving the human player from center stage. It could become an actual science at last, insofar as it would study the world independent of human values, like other sciences are supposed to do.

The various anthropocentric concepts of value could fold into to a single parameter representing an optimum that maximizes both human and natural interests. This approach is used in game theory, where contending human players vie strategically, and the optimum looks like a compromise among opponents trying to maximize their individual “utility” and minimize their losses. Why not consider nature a player in the game? And why not consider strategies based on cooperation rather than competition? Suppose the aim is to arrive at the best possible world for all concerned, including other species and the planet as a whole. Value then would be measured by how much something advances toward that common goal, rather than how much it advances individual human players at the expense of others and nature. Growth would be the increase of overall well-being.

Money in such a world would be a measure of duties to perform rather than privileges to exercise. It is often said that money confers freedom to its possessor. In an objective economics, this freedom would be put in the context of how it affects other beings, human and non-human. The value of a “dollar” would be the net entitlement it represents: its power to benefit its holder minus its power to damage the environment, which includes other beings. Put more positively, money would measure the power to contribute to the general welfare—not the power to consume but the power to do good. The individual would benefit only statistically and indirectly from spending it, as a member of an improved world. As in prehistory, the individual would again figure more as an element of a community than as a competitor with other individuals. Admittedly, this would be communism—perhaps on steroids. But communism as we’ve known it is passé, both as a failed social system and as a dirty word in the capitalist lexicon. There are many who wish to continue to believe in the opportunism of modern capitalism, bumbling toward ecological and social collapse. But they are obliged to find a new scare word to castigate the threat to their individual liberty, which is little more than freedom to hasten the destruction of the planet.