The economist's creed

May 27, 2013

sedlacekAfter his 89th minute goal in at Wembley last Saturday, finally winning the Champions League final for Bayern Munchen, Arjen Robben declared he was going to get drunk that night, and probably for the next couple of days too.
Such a statement, declares Czech economist Tomas Sedlacek, debunks the myth of human rationality on which our modern economics has been developed.
In a colourful and provocative address to the recent State of Europe Forum in Dublin, the curly red-headed Sedlacek challenged the assumptions of the economic community which he described as man-made myths which we had come to believe as facts.
Humans, it is assumed, behave rationally. But, asks Sedlacek, how do you explain drunkenness? Robben was not drunk when he declared his intention to go and get drunk. You never get drunk while you’re drunk, observed Sedlacek; sober people get drunk because they want to get rid of reason for a little while. Drunkenness is a rational dumping of rationality.
While pretending to be ethics-free, economics has a very strong ethical system and set of beliefs. Free market economists believe in the invisible hand of the market.  Humans are egoistic, and that egoism is fine, so the economic theory goes; the invisible hand will take care of the social impact of our egoistic deeds.
Economics has become our god, and the current crisis has been a religious surprise and disappointment. How could something we believe to be almost divine fail?
Since when were human beings rational? he asked. Were children rational? What miracle happened when they turned 18 that made them suddenly rational? Are aboriginal tribes rational? Rationality is surely culture-defined; by westerners, Europeans.
Modern economics was not what it claimed to be: value-free and ethics-free. Private morals were said to be irrelevant for economics, which was itself a value statement. Economists preached the value of efficiency, for example. But the Bible taught that this was not the highest value. The fourth commandment, to keep the Sabbath holy, meant ‘thou shalt not be efficient all the time’.
In truth, economics had an undercover ethics of its own, best disguised by not being considered ethics at all, he argued. In Sodom and Gomorrah, two girls were punished for giving bread to a beggar. One was nailed to a wall, covered in honey and eaten by the bees; the other was burnt at the stake. They had transgressed the community’s ethics that the only way to deal with the poor was to make them learn not to rely on others. Sodom and Gomorrach had their own ethical code, said Sedlacek. Communism had one too. Modern economics had its own ethics also.
The home run of every ideology was not to be considered an ideology but to be true. Why was it difficult to think of an alternative to capitalism, he asked. It was easier to imagine the end of the world than to imagine the end of capitalism. Many movies had been made about the end of the world. But how many about the end of capitalism? Here was an ideology so deeply embedded it seemed to be fact, argued Sedlacek.
So, economics has become our god. Like the priests of Baal dancing around slashing themselves, we dance around asking ourselves what sorts of cuts we have to make to satisfy the god of growth.
But do we have to grow? We have come to believe that growth is a prerequisite of market democracy. Without growth we will cease as democracy. But this, Sedlacek believes, is a myth. Paraphrasing Job, he asked, can we only take the good from the hand of the market and not also the bad?
We have fetishised economics to the point of becoming slaves to the market. We have had other fetishes in past times, like nationalism. Jesus accused the pharisees of making ethics a fetish, he said.
And we have ended up being controlled by our own human creation, as in The Matrix where computers control human destiny. We have to find a way to reset the system.
Every programme in our laptop or mobile phone sooner or later freezes. Yet computer programmes are rational, mathematical and logical! Instead of finding a better system, maybe we should find a way to reset the system that is fair and predictable. We have enjoyed an unprecedented period without war in Europe. In the past, war has been an unjust and unsystematic reset mechanism.
But the Jubilee in the Old Testament meant resetting the system every 50 years, in response to the ancient wisdom that every system freezes. So, suggested Sedlacek, how about a European jubilee?
Which I suppose would create its own problem: many would want to go out and celebrate à la Robben.
Till next week,
 Jeff Fountain

Till next week,

8 responses to “The economist's creed”

  1. Read Sedlacek’s book during my sabbatical and found him engaging and penetrating in his analysis.
    What we need is a global, not just a European, jubilee.

  2. Thanks Jeff! This was excellent… reminds me of a great book I read years ago called “The R Factor” by Michael Schluter that was trying to explore relational alternatives to the “either capitalist or socialist” paradigm. Now that capitalism has “won” over socialism, it is taken as a given far too often — as if winning means it is the best option out there.

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