The Meaningful Economy
Musings of a Non-Economist
This book is not just about the so-called recession, but may be relevant to it. As I write, the recession still continues, longer than experts expected. The 'old normal' cannot understand the 'new normal' (as they are calling it).
Consider two questions:
- Why should economics be split into bits? - global v national v local ecoonmics, private v public, formal v informal, business v family economics Are they not all bound together?
- Are not some economic transactions and structures more meaningful and beneficial than others?
By addressing the second question, Meaningful Economics also addresses the first. It provides an integrating foundation for them, a wider picture into which they all fit. Meaningful Economics confines itself to the field of human activity that is economic in nature, but gains its confines from philosophy rather then seeking to encroach on other areas. In so doing it finds we can understand the ways in which it relates fruitfully to other areas - technology, education, health care, the natural world, transport, religion and ethics to name a few.
Some original thinking about the notion of economics and economy seems not only useful but urgent.
- Why should we make efficiency so important? Why should be expend so much effort and attention throughout all our organisations in reducing costs?
Suppose we are inefficient and have costs slightly higher than the minimum. It means that we give money to others more than needed. Is that not a good thing, in that it helps those others?
- Why should we the affluent keep growing in income and wealth?
When I have enough, why do I want more? Is it only greed, coveting what I see others have even though I don't need it? What's the point? (The Skidalskis suggest a consumption tax.)
A New Way of Thinking about Economics
Many think the foundations of the economic system are being shaken and we need a new way to think. This page suggests one new way to think. It tries to recognise the intricate, all-pervading aspect of economy in human life, the interwovenness between personal, family, organisational, business, national, international and global economic functioning, both public and private, both formal and informal economic functioning, and that the economy of everyday life is at least as important at the 'big', 'visible' things.
==== now intro from paper on walk.
- The individual: Why people desire wealth and more than they need Currently 40% of the world's wealth is owned by the richest 1% of people. That percentage has doubled since ???. (BBC R4 Thought for the Day 12 March 2013). Why do these super-rich keep on getting and wanting more? Probably not purely greed for pleasures and possessions, but something deeper that drives that:
- league tables of the rich (quantitative aspect)
- the thrill of, and desire for, achievement; it's creative and challenging fun to keep on; success breeds success (formative aspect)
- fear. fear lest I cannot cope with less. However rich we are, we feel impoverished if we lose a certain percentage. (economic aspect)
- they have got used to a particular lifestyle and cannot conceive of doing things differently (aesthetic aspect)
- expectations, especially from other rich; fear of jibes; keeping up with Joneses. (social aspect)
- pride. "I am the best" "I deserve this" "I am a self-made man" (pistic aspect)
- maybe send a message? (lingual aspect)
- Aspectual analysis to understand the real normativity. Those who try to diddle people out of stuff and take advantage of people. Meaningful in formative aspect and normative. Anti-nmv in the ethical aspect (not the juridical, even though it goes against ownership because juridical 'due' is basic due, not as defined by rules or laws, so it is only anti-juridical if they take advantage of the already-poor). 26 February 2013
- ethical aspect: self-protection.
- Jobs and economy; breaking under recession 26 February 2013: The current assumptions no apply: to reduce costs: before could reduce people and expect that people would eventually find other jobs, because of growing dynamic economy, in which many new kinds of jobs were being generated that could mop up unemployment by offering jobs that seemed 'better'.
- But were they 'better'? Better in what ways? They were new, but were they as meaningful? no consideration given to whether these jobs were meaningful or not.
- The meaningless jobs merely weakened the economy like impurities in molten steel weakens it. So when pressure comes, it breaks. That is what we have just found.
- Now d2013 we have to not only reform the steel rods but before that, remove the slag, those meaningless jobs are bursting. We no longer have the state where we can just ddevise new kinds of jobs.
- Or, rather, we must ensure that the new kinds of jobs that we devise are meaningful, especially in the last three aspects.
- Marginal Improvements 18 February 2013. What made the UK cycling team win 6 gold medals out of 9 at olympics. e.g. hot pants so muscles did not cool down, hour between heats and final used for relax, etc. Opposite of innovation.
- Creative destruction (Schumpeter, 1940s) - innovation, which means technology 1 is replaced and obliterated by technology 2. Keep innovating. Meritocracy. Steve Jobs as example.
Meaningful economy: both technology 1 and technology 2 are meaningful, and should not be obliterated. We still use ships and railways. So using c.d. as a shibboleth, as a fashion-excuse for favouring the 'new', is evil. Often we use CD idea wrongly, as an excuse. Innovation: what is the meaning of it? Ideological support for capitalism. The term is used to try to smooth over e.g. unemployment.
But the logic of cd as a force for good in society depends on everyone having equal opportunity. In fact that is not true. Meaningless.
CD creates coalitions of losers. And cliques of intellectuals who don't like capitalism.
- taxes - what's meaningful about them 1 February 2013 state
- why burocracy creeps. cos senior management fears and distrusts and looks for more evidence than they need for their job. 2 February 2013 bz, org.
- we make flying part of our bz planning, i.e. we plan events that involve flying without any thought, esp in USA. Just because we can and it's prestigious and convenient. anti- normative 1 February 2013 bz
- meaningless or anti- normative : armed forces. 1 February 2013 state
- all is meaningful at least to the person in the economic aspect. But meaningful = the economic perspective serves something else. 1 February 2013 personal
- spare capacity - people could produce more of what they got skills for. 1 February 2013 skills in economy
- the price of things is determined by what people vvalue (a) elite in london (b) as determined by media (c) indirectly from those (eg price of land and labour)
Meaningless Bit 20 January 2013: university, careers, jobs
# 20 January 2013. 80s-00s Young people encouraged to go to university, aim 50%. Now 10s, many are without jobs, let alone careers, and sit at home all day watching sport on TV. The assumptions and expectations were wrong. Going to university is meaningless. What made it meaningful was the expectation of a career after it. But that is meaningless. What made it meaningful and possible was an ever expanding GDP. That is meaningless.
# Meaningless Bit: importing 8 January 2013
Why, in the uK, do we import blueberries all the way from Chile? Why do we import £10m per day of fresh fruit and vegetables and £3 m per day of 'ornamental products' from abroad? Problems:
- climate change emissions especially since these things are flown in
- increasing government expenditure on bio-security
- occasionally things get through, devastating our trees or other things
Answer: only because we stubbornly give absolute priority to business freedom, and to our luxury. These are meaningless ultimately.
Priorties of Managers
(Which things do managers respect most, and give most attention to?)
- Advertisers / Media
- The product
- The wider world
- The product
- The wider world
- Advertisers / Media
Because the Meaningful Economy sees its mission as helping the world manage its resources while the Meaningless Economy has no mission other than its own interests. |
Managers operate in that mindset, absorb it unquestioningly and then epitomize it.
The idea that the sole role of business is to increase owner value. "The market can deal with environmental issues." But what happens is that, e.g. in energy, people distrust the energy companies, "What's in it for them? What are they hiding". So people turn against responsible energy usage.
Should not have absolutized the economic aspect.
Every aspect is important, responsibility, generosity and faith as well as economy.
# 9 November 2012. Meaningful economy can explain why this 'recession' has lasted years longer than was expected. BBC Radio 4 Today 1.11.12 interview "No theoretical basis".
# 9 November 2012: Payment Protection Insurance over-selling, charging customers 5? times what it really cost (Lloyds-TSB).
# 9 November 2012: Import ash trees despite ravaging fungus that has killed 90% of ash trees in Denmark. Why? Ostensible reason: scientists thought it was the same fungus that was already here (so no point in banning imports). But why did they not check, given its devastating effects? I suspect that it was because they were operating in a mindset that trade is paramount. Also EU rules would not allow.
# 10 August 2012. The economkc collapse. UK economy still zero growth rate 5 years on. still in recession. We had been borrowing lots - but borrowing for meaningless purpose. Borrowing is ok if for a good purpose other than determined by economic means.
# the UK government and media and people forgot about envl and poverty justice as soon as economic collapse. Copenhagen summit 2008 the USA etc led in envl irrespy, in guise of self-protection. Then the economic collapse. God's judgment?
# Keynsian investment should always be into things that are meaningful not meaningless. We usually use it on:
» pleasures, comforts
» iconic projects
» boosting GDP
» getting better pay for workers
» competing up the league tables.
These might be meaningful in one aspect, but they absolutize that aspect over all others. Leading to ultimate failure. I must explain why each of those not meaningful.
# 7 August 2012. On why M.E. is helpful and important:
e.g. Hedgefunds mixing risk. getting the right meaning for risk is important, otherwise unforeseen disasters might occur. If someone had objected at the time to what hedge people were doing, nobody would have listened, because "where's the evidence?" - it had not had time to accumulate. But with meaningful economy we can find out what is the right thing to do even before the evidence is accumulated, before disaster struck.
M.E. says: risk is not a commodity but a commitment. Commitment depends on generosity and justice especially. So risk should be entered freely, without forcing people to take risks they know not.
# UK survey of 6000 parents: x% spend 10-49 hours per month ferrying children; x% spend 50 hours or more. 12 April 2012 bbc radio 4 today
# 'Unfair competitive advantage' - e.g. minicab drivers in London cannot use bus lanes while black cabs can, complain of unfair competitive advantage. But why is it important, Meaningful, that minicabs have same rights as black cabs? 27 April 2012 after hearing BBC R4 Today.
# 7 May 2012. Greeks and French have voted against austerity. But what if my non-austerity means not just austerity but poverty for someone else?
# 14 May 2012: SOmeone once told me they would rather steal something than be given it. Why?
» because of the thrill of achieving something by one's own cleverness; being given it is boring (aesthetic aspect)
» is it not a little demeaning to be given it? pistic aspect
Now, get evidence that it is the thrill of achieving something by one's own cleverness that drives much in the financial and business and economy areas. Psychology of financiers?
Fuel prices (keeping warm in cold climates)
Family disposable income
Churches and religious organisations
Banks as repository for wealth
Investments in industry and business
Investments by gambling
Promises, agreements and contracts for casino economy
Contracts for services
Having spare capital to invest
Technological advance, innovation
Choice of supply
Choice of customer
Climate change emissions
Repair of damage
Prevention of problems (e.g. climate change, malaria)
The going rate for 'top' people
Value to customer
Goods v services
Manufacturing v service economy
The bulk of customers in society (average customer)
Deliberate alteration of prices
Public v private
Feeling you have enough
Feeling the pinch
Anomalies in pricing (e.g. £6.25 to Hadfield, £7.75 to Manchester)
Travel and transport
Special prices, offers
Encouraging people to buy
Desire to obtain
Ownerless corporations (weak shareholders),
Ownership v. governance of businesses
Need to pay every higher bonuses in order to "get the best"
Breaking even (bottom line)
Owner value (shares)
Quality of products
Foreclosure on debt
Return on capital
Return on investment
International investment banks
City of London (employing French selling to Chinese)
Need a lot
Money used to do good;
Socially useful finance
Salesmen in split-up energy companies
Equality of pay
Standard of living
Cost of living
Race to bottom
Amount of high quality human effort devoted to trivia (aesthetic or fashion) merely to try to shift money, tricking the fashion-led e.g. supplement of F.T
Financial reserves in banks
High-status sales are most-meaningful sales. Arms sales are among the highest-status sales of most countries, especially those countries that want to be 'top'. This is stupid.
Failings of Traditional Economy
Barclays Bank fined £290 million ($450 million?) in June 2012 for fixing the exchange rate during 2005 - 2009. First they fixed it too high so as to increase their profits, then they fixed it too low when financial downturn occurred so as to make markets believe they were stronger than they really were. In both cases, lying. I recall that during the recession Barclays made a show of not needing government help. It turned out that the root of the problem was attitude, and making the bank the most meaningful thing on their horizon. When a thing is most meaningful then all other things are subjected==== to it, subservient to it.
In the UK NatWest Bank's computer system failed, so that all transactions were halted for days. As a result, not only did many people go unnecessarily into the red and lose their credit rating but for example what was due on a house was not paid on time, so they lost the house and became homeless. Problem: error in updated version of batch scheduling software, inexperienced operative in India, offshored.
Example: Quantitative Easing by USA, designed to protect the US economy, created a huge wall of money that stoked up massive inflation in developing countries. So bread and rice prices rose enormously. Maybe this contributed to fuelling the revolutions in Tunisia and Egypt. But at the same time it brought misery to all others. The failings were:
- a focus on the economic rationality to exclusion of all others (absolutization of economic aspect)
- self-serving, self-protective attitude by USA that did not care about the rest of the world (going against norms of ethical aspect)
No wonder it did not work in the longer term, and brought gross harm. Meaningful Economics says we need to take every aspect into account in our economic deliberations. 30 January 2012
We have massive choice of marginal differences, especially online
Many things in current economic behaviour is meaningless. Not absolutely, because nothing in this created cosmos is absolutely meaningless, but relatively. Relatively meaningless involves:
- It doesn't deliver what it seems to promise.
- It is harmful. (Truly meaningful is good.)
- Might be meaningful to one or two people or organisations, but has little meaning or importance in the overall scheme of things, as humanity fulfils its mandate to 'open up' the potential of all creational spheres.
- In particular, when someone does something that others follow, they set an example; is that example one that is worth setting?
Here are some examples of behaviour that is meaningless, at various levels.
- As XXX  has pointed out, everyone reduces costs in order to gain competitive advantage, but if everyone does it, then all competitive advantage is ultimately wiped out.
- So the whole process has been meaningless, i.e. doesn't deliver what it seems to promise.
- Moreover, other things are sacrificed along the way, leading to harm, such as fragility of products and greater throw-away.
- It might be meaningful for one organisation if they do this ahead of others, in that they gain competitive advantage for a short time, and gain over others - but why is that important in the scheme of things? All that happens is that one organisation gains and others fail; why is that good?
- Furthermore, the organisation that does this ahead of others is setting the example of 'reducing costs by sacrificing other things'; that is not an example worth setting.
- Competitive advantage itself is meaningless. Why is it important if company X gains at the expense of company Y?
- Fails to deliver: Competitive advantage is transient, and much meaningless effort is required to maintain it. The organisation becomes self-absorbed, and diverts its attention away from the good.
- Harmful: Competition instils a self-centred attitude into society. It also inhibits sharing of knowledge that is for the good of the cosmos (even when there are communities of practice).
- No ultimate importance: Only if company X is good in other aspects, such as justice, is this important; for example, I would want an 'ethical' company to gain competitive advantage over an 'unethical' one. Problem is: the way competitive capitalism operates, the opposite often occurs.
- Example not worth setting: Example of self-centredness.
# need to work out the mechanism by which focusing on meaningless stuff disrupts, undermines, jeopardises economy.
PRINCIPLES OF MEANINGFUL ECONOMICS
Everything is meaningful, that is 'for' something, and the meaningfulness of it determines, or at least strongly influences, the activities, plans, strategies, rules, visions etc. that occur within, related to and around it.
Explain shalom and that each aspect should serve the norms of all others not just its own norms.
here: argue why last three aspects help economics healthy; it is needed for the following
"To get the brightest and best to run our corporations, we must pay the going rate; they'll go elsewhere to wherever pays most." is the excuse heard by many wanting to defend the massive bonus payments and salaries of their colleagues. But have we really got the 'brightest and best' by paying massive amounts? It was those 'brightest and best' that caused the financial crash in 2008. // How can we explain this, and what to do? // Explain: Meaningful Economics says that all aspects are important in running corporations, including the attitudinal aspect of self-giving, the juridical aspect of justice for those whom we overlook, and the faith aspect of the underlying vision and aspirations that pervade society. It is these that make a corporation run well, especially setting the foundations for the longer term. Those who will go where the money is the most break all three of these norms: they are self-centred, they overlook justice to those not so well off, and they instil into society at large a worship of money rather than of the True God. // What to do? Resist them, call their bluff, get rid of them, and then concentrate on developing good people who will function well in all aspects especially these three, as well as the economic aspect of carefulness. It is necessary for us all to take responsibility to keep healthy our functioning in these three latest aspects, not to assume they will be taken care of by others - at least so it is in a democracy where there is freedom of press. And today it is those who are maxed in economic aspect who are seen as leaders, icons and role-models to set the aspirations and attitude and values of society. // Often, added to the excuse is "It's a globalised economy!" True - and the principles of Meaningful Economics are especially relevant for the global economy, especially these three aspects. In a nation it might be possible to keep the vision and attitude healthy while being selfish in money, but in the global world there is nobody who has the power to take responsibility for global justice, attitude and vision, so we must all take responsibility by each and everyone of us setting example. 30 January 2012
There will always be some 'inefficiency' (as accountants see it) in an organisation run according to principles of Meaningful Economics. Because the aspectual functioning that really matters and really makes healthy economics will not generate financially measurable effects. Justice for the overlooked (which prevents the stoking up of anger and trouble later, at least), self-giving attitude (which makes most other people grateful and generous and generates 'extra good'), and true vision (which inspires people to take this attitude and courageously fight for right). These it is that ensure financial and other health. But most of what they do cannot be seen nor measured not set budgets for (whether of time or money). These things can only flourish when people have a modicum of 'leisure' or leeway in their time. And this leeway is very visible to accountancy-minded as waste that can be cut. // Of course, leeway 'leisure' time can also be abused, by people being selfish and wrongly envisioned. Vicious circle; Catch-22 here. If society is already self-centred in attitude then everyone who has 'leisure' leeway will use it for their own self-centred ends, making things worse. Moreover, people of goodwill will not have the space in which to develop the 'extra good' that makes society's attitude more healthy. Except for some courageous committed people who believe it right even at their own costs (try 'New View' people!). Capitalise on such people of good faith and goodwill, look out for such (they occur in unexpected places throughout society) and give those people space. 30 January 2012
Activating Meaningful Economics
Ask "What's it for? What is its meaningfulness? What drives it?" At any level. These determine the activities, plans, strategies, rules, visions etc. that occur within, related to and around it.
Example: A shop in a rural village in the UK. What's it for, what primarily drives it?
- For making money?
- For survival of the business?
- For getting a bit of money for the owner's family?
- For giving the owner something to do?
- For carrying on the family business?
- For providing the local community with goods?
- For providing tourists with pleasurable items?
ASPECTS OF THE MEANINGFUL ECONOMY
Quantitative: (to do with quantity, amount)
Spatial: (to do with continuous extension, space)
Kinematic: (to do with movement; flowing movement)
Physical: (to do with energy + mass)
Biotic: (to do with life functions)
Sensitive: (to do with sense, feeling, emotion)
Analytical: (to do with distinguishing )
Formative: (to do with history, culture, technology: shaping and creativity)
Lingual: (to do with symbolic communication)
Social: (to do with social interaction)
Economic: (to do with frugal use of resources)
Aesthetic: (to do with harmony, surprise, fun)
Discretionary income is income that people have above that which is needed for the basic requirements of living. People spend or otherwise use most if not all of their their discretionary income in ways they like to, in ways they fancy. This use is governed by the aesthetic aspect of enjoyment. By definition, therefore, discretionary income is the aesthetic aspect of economy.
Discretionary income is almost universally applauded. Aspirational for those who have little of it. It is a brave person indeed who would question whether it is so absolutely good, because they would be seen as someone who wants to hold down people in poverty. It is assumed that everyone should have discretionary income, and that those who have it should have more and more of it. There is no limit to how much is good.
As the amount of discretionary income increases, the amount of aesthetic functioning increases. The question that Meaningful Economics asks is:
What is the appropriate level of discretionary income?
Poverty. Poverty is seen as not having discretionary income. Being constrained to the necessities of life. This defines poverty by the aesthetic aspect. But perhaps poverty should be defined by the juridical aspect?
Juridical: (to do with what is due; 'retribution', rights and responsibilities)
Poverty. Not having resources that are due.
Ethical: (to do with self-giving love)
Attitude. Self-giving generosity or self-seeking greed? It is attitude that led to Barclays' Bank fixing the exchange rate deceitfully. Both individual and corporate and sector attitude. Individual attitude: "It will improve my bonus". Corporate and sector attitude: "It's OK to take advantage of situations" "Giving the nod to rate fixing for the sake of the country".
Attitude is not just within the corporation or the financial sector, but in the nation as a whole, and even the (West and West-aspiring) world as a whole. Attitude of competition (self-seeking, self-protecting, self-vaunting) and attitude of disdain for the poor (denying self-giving love).
The positive side of ethical aspect: generosity, gifts, voluntary work, sacrifice. Investment is partly ethical, insofar as the investment is made without expectation of due return. That kind of investment and generosity builds up the economy of the future, via the attitude of the near future.
One of the most pernicious self-centred attitudes that pervades the Western world is "I have a right to ...", where what we have a right to is whateever we happen to have become used to in our affluent lifestyles - e.g. cheap motor fuel - rather than basic thing like subsistence food. Moreover, with this attitude, we are not willing to give up some our luxuries-seen-as-necessities when it becomes clear that they are damaging thw world and are unsustainable or either a planetary or moral basis. We turn against those who warn and suggest we should not be so selfish, with more than logic. This brings us to the faith or pistic aspect.
Pistic: (to do with vision, aspiration, commitment, creed, religion)
Our vision of who we are, what reality it, what we are worth (and thus what is due to us from reality).
The global economy, national economies, business economy, community economy, househole economy and personal economy are all driven deep down by this pistic belief and vision. Our pistic functioning is often not visible except in times of crisis or threat, being indicated by: What we fight for, what we sneer at, the causes we work for sacrificially, with courage enough to sacrifice ourselves.
Greece has been highly indebted. The problem, according to some, is that it has few exports. Only three. Shipping - but its shipping is owned by people outside Greece, so the money does not enter the Greek economy. Tourism - but the infrastructure is wanting. Agriculture - but it is difficult to get the product to the (external) market.
That seems to demonstrate three problems with the traditional approach to economics, which Meaningful Economics might be able to address:
- Major industries owned by outsiders. Ownership should be meaningful, not self-seeking.
- Tourism: Unsustainable and 'trivial'. What is meaningful tourism? Not tourism for the sake of grabbing income. But, for example, to benefit the world by what Greece has to offer that is unique.
- Agriculture: This should feed the people, and not be seen as an export.
Self-protection is bad. It transgresses the ethical aspect of the meaningful economy and, as such, it will lead to problems and hinder the development of a good meaningful economy. Self-protection hinders investment.
Investment is good, insofar as it is a giving of the self, a letting-go, a generosity, a giving without guarantee of reward. That, perhaps, is why investment works, and why a society in which there is investment tends to be more prosperous. The usual explanation for why investment works, namely that it stimulates human work, creativity or innovation that would not otherwise occur, has some validity, but it is not the full or even the most important explanation. It explains the functioning of investment in its formative aspect. But the later aspects are more meaningful and impinge on the formative. The ethical aspect, as the second-last, provides meaningfulness for most of the other earlier aspects.
Making Money For Self
Now let's go down to the level of the individual person who is active in business. They are always on look out for a way to make money. (Note the subtle shift away from "to meet people's needs".) They hear someone say "Cost of getting it wrong is much greater than the cost of using a head hunter." (This morning 10 February 2012 they were talking about why use head hunting organisations to find England's next football manager.) Now, my immediate inner response was, "Ah! If I had the skills I would become a head hunter, because there are many who believe that, and will pay me whatever I ask because of their fear of getting the wrong person." Notice the selfish motive in me. Notice also how I now see my business not as meeting human needs but as a way to get 'them' to give me a lot of money. Notice how I am attracted to the idea because of my-excitement. Those are very common tacit motivations of many in business at all levels.
But finding a good England manager, is that not 'meeting human needs'? Dome argument could be made for that. But not really. By 'needs' we are talking about important things. Why is England football manager important? Think of it from God's point of view: does it really matter whether England is good at football? What is the meaning of football?
We are here challenged with meaningfulness. I espouse the notion of a 'meaningful economy'. That is, every economic activity should be towards meaning that is important and good.
The Happy Planet Index
The Happy Planet Index, produced by the New Economics Foundation, tries to take multiple aspects into account of economic happiness in its widest sense, in the sense meant here. The 'components' it includes in HPI are:
- Life expectancy
- Life satisfaction
- Ecological footprint
See also A New View on Economics for a theological basis.
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About This Page
Offered to God as on-going work, this page is designed to stimulate discussion on various topics, as part of Andrew Basden's pages that open up various things from one of the Christian perspectives.
Copyright (c) Andrew Basden 2010. But you may use this material subject to certain conditions.
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Last updated: 17 August 2012 whats it for. 7 September 2012 slight. 9 November 2012 priorities of managers, PPI, ash trees. 19 November 2012 markets sort out green.