8 May 2023. Economics | Values
Reclaiming the idea of ‘freedom’. // Values and principles: on not doing things [#568]
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1: Reclaiming the idea of ‘freedom’
The progressive American economist Joseph Stiglitz has a new book out called The Road to Freedom, and a chuck of it has been adapted for a piece in The Atlantic. It becomes clear as you read the extract that the title is a play against Friedrich Hayek’s The Road to Serfdom, which became the academic text that legitimised neoliberalism.
Stiglitz has had a distinguished career in both American policy and also international institutions, and won an Economics Nobel (strictly speaking a Nobel Memorial Prize) for his work on how information asymmetries prevent markets working efficiently. But certainly since the financial crisis he’s been noisily critical of mainstream economics.
(Joseph Stiglitz. Raimond Spekking / CC BY-SA 4.0 (via Wikimedia Commons))
And it’s not the first time that he’s written a version of this book. But then again, as the French writer Andre Gide said,
“Everything that needs to be said has already been said. But since no-one was listening, everything must be said again.”
I’m guessing that The Atlantic’s extract is from early in the book, judging by its tone. Like other recent economics critics, he starts from economics needing to start from moral values:
Freedom—understood as having inherent ties to notions of equity, justice, and well-being—is itself a central value. And it is this broad notion of freedom that has been given short shrift by powerful strands in modern economic thinking—notably the one that goes by the shorthand term neoliberalism, the belief that the freedom that matters most, and from which other freedoms indeed flow, is the freedom of unregulated, unfettered markets.
Of course, you don’t need to have read much political economy to know that the idea of “unfettered” markets—usually just described as “free markets”—is a nonsense. All markets are arrangements of laws, agreements and social conventions that permit economic exchange. The question isn’t about markets are “free” or not, but about who they are designed to benefit. But markets don’t work without rules:
The idea of “unfettered markets”—markets without rules and regulations—is an oxymoron because without rules and regulations enforced by government, there could and would be little trade. Cheating would be rampant, trust low.... It wouldn’t be a market at all.
(When I was doing a lot of editing in my last job, I used to see a lot of articles in draft that would refer to “free markets”, and would routinely delete the word “free” because of this.)
All the same, part of the triumph of neoliberalism, notably in the United States, has been about normalising the idea that markets are the solutions to our problems. Stiglitz talks about Hayek and Friedman here, as the intellectual architects of all of this.
And he observes that our actually existing markets don’t look much like the idealised markets that we see in this economics literature.
Neoliberalism’s grim record includes freeing financial markets to precipitate the largest financial crisis in three-quarters of a century, freeing international trade to accelerate deindustrialization, and freeing corporations to exploit consumers, workers, and the environment alike.
The result of this has been to amplify, or in some cases, create, some of our most serious problems. The surge in economic inequalities is one of these; climate change is another. In the US, the “deaths of despair” that are the outcome of the opioid crisis is another symptom of actually existing markets. And, he says, markets are simply not the right vehicle to deal with change at a structural level.
They cannot manage the massive structural changes that we are going through—including global warming, artificial intelligence, and the realignment of geopolitics.
The story he’s telling here is that we have got the relationship between politics and economics the wrong way around. There’s a history lesson in this extract from the book where he revisits America’s Gilded Age and the New Deal.
Hayek and Friedman, he argued, thought that markets would “on their own somehow remain competitive.” But they ignored the Sherman Antitrust Act in 1890 and the Clayton Antitrust Act in 1914, which had both had to address the monopoly tendencies of capital if unchecked.
The Road to Serfdom in 1944 was Hayek’s metaphor for what he believed would happen if government continued to grow in scale. Stiglitz has a different historiography here:
It was because of democratic demands that democratic governments, such as that of the U.S., responded to the Great Depression through collective action. The failure of governments to respond adequately to soaring unemployment in Germany led to the rise of Hitler.
In other words, the theory that “economic freedom” would be the basis for “political freedom and democratic health” seems to have things the wrong way around. There’s an obvious reason for this. Economic freedom creates wealth and income inequalities, and the wealthy get a disproportionate voice (there’s research on this) in shaping both government policies and public narratives:
Neoliberal theorists and their beneficiaries may be happy to live with all this. They are doing very well by it. They forget that, for all the rhetoric, free markets can’t function without strong democracies beneath them—the kind of democracies that neoliberalism puts under threat. In a very direct way, neoliberal capitalism is devouring itself.
At the same time, it is also devouring democracy. The problem here is that the combination of neoliberal economics and liberal democracy is not a stable system. He talks about it needing “strong guardrails”, but in practice the guardrails that he talks about are designed to dismantle the assumptions of neoliberal economic and politics. In the economy, for example:
The guardrails come in many forms, such as competition policy, to prevent the creation, maintenance, and abuse of market power.
The guardrails also involve political participation:
Strong democracy, with widespread participation, is also part of what is required, which means working to strike down laws intended to decrease democratic participation or to gerrymander districts where politicians will never lose their seats.
This did lead me to an obvious thought, but one that I hadn’t had before, at least not as clearly. This is that commentators often talk about the possibility that democracies aren’t able to deal with climate change because electoral politics is short-term and climate change is long-term. (This may be wrong, as I discussed here last week).
But actually this is looking at the wrong issue, because there is nothing—nothing—more short-termist than the financialised corporation that operates within a neoliberal market.
And maybe this insight says something about why Stiglitz needs to keep writing this book. The notion that the people are the problem rather than corporations and markets has been driven deep into our present politics. Yet it is failing widely, as Stiglitz points out by talking about the “good society”:
A good society, for instance, must live in harmony with nature. Our current capitalism has made a mess of this. A good society allows individuals to flourish and live up to their potential. In terms of education alone, our current capitalism is failing large portions of the population. A good economic system would encourage people to be honest and empathetic, and foster the ability to cooperate with others.
Reclaiming some of the language is a necessary start.
2: Values and principles: on not doing things
I’ve been doing some work recently with clients about using visions and values as a way to both to create impetus for change and to create a basis for a plan.
So I was interested to see a blog post at RadHR site from the activist organisation GRIPP about how they went through a process to make sure they didn’t end up with fluffy values which everyone agreed with but which didn’t act as a guide to action.
I should probably re-wind a bit at this point. RadHR was co-founded by Liam Barrington-Bush, whose book Anarchists in the Boardroomis one of the more entertaining business books out there. (There’s also a full text online, but if you’re interested buy the book, if you can afford it.)
That was published more than ten years ago, and since then Barrington-Bush has been involved in creating RadHR to create a place where people who want their organisational policies be human and equitable can share and compare what they are up to.
As they say on their front page,
RadHR is a space for social change organisations to share the nuts and bolts—the policies, processes, practices and stories—of how to organise ourselves based on our values and challenge oppression within our groups.
It’s a resource, in other words, and it’s also a network and a community, but from a futures point of view it is also a set of weak signals of change. The organisations who choose to share their policies and their guides are at the radical end of the HR spectrum.
The organisations they work with are often wrestling with more difficult issues than, say, Whitbread Holdings. They are typically activist organisations themselves, with all that implies about wage levels, burn-out, and the gaps that can exist between organisational power and organisational values.
Again, from the RadHR website:
when it comes to how we organise internally, we often end up replicating all sorts of crap—classist, racist, sexist, ableist, homophobic and transphobic norms, as well as the individualistic, competition-based values of the wider systems we oppose.
Which brings me to the blog post by GRIPP on the RadHR blog. GRIPP stands for Growing Rights Instead of Poverty Partnership, which is a coalition of organisations working against poverty by addressing the politics of poverty.
They have a set of shared principles:
Poverty is a Human Rights Violation
Undocumented experience needs to be shared
Bringing together lived and learnt experience creates the knowledge for change
Bringing people, groups and communities together builds a social movement for change.
(Image via GRIPP)
But they were in their two day residential meeting in the autumn of 2023, planning for 2024, and they were trying to reaffirm their values. There’s a specific reason in the blog post why this came up, but it basically amounts to someone doing something that went against one of the principles of the group because... it had never been written down.
On designing this GRIPP residential, the potential was there to do another session on organisational values… but how many times have we all been in that conversation – Respect, Empowerment, Inclusiveness, Equality – just to find the working culture and decisions of the organisation are constantly violating those proclaimed values?
So the facilitators decided to turn this on its head. Instead of asking the group what they believed in, they asked them instead for the things that they wouldn’t do:
The shouts started to come “We will not be ignored”, “We will not be a tick box”—these voices shouting for recognition, authentic recognition. But the shouts went further: “We will not perform” – the refusal to repeat that all too familiar experience of rolling out the lived experience stories, the victim narratives, the poverty porn. And growing from this: “We will not give without taking”, “We will not ‘work’ for free” – knowing full well that so many of us have sat on panels for the cost of a travelcard (and a sandwich if lucky) whilst the academic or policy maker sat alongside us has charged a fee of hundreds of pounds. (Emphasis in original).
Some of the not statements seem more mundane, but do speak to being human—for example, “we will not have a meeting without food—and not just biscuits”. Or “we will not start a meeting without a check in”.
Relationships with government, and with funders come up here as well:
And of course, the relationship with funders brought passions and objections. “We will not take ‘blood money’” and “We will not accept funding with strings attached”... the strength in objecting to these power dynamics also gave rise to “We do not need to be grateful”... And mindful of those power dynamics around us, “We will not take someone else’s agenda”, “We will not be silenced by government and big entities.”
There’s more here, and I can see that the session was clearly cathartic. It also generates some clear shared beliefs. I have a feeling that the facilitators might have had to do some work afterwards. But I can see that these would lead to some powerful guiding principles, which would help people know how to act the next time people came up against something they were unsure about because shared knowledge about the history of the organisation and its partners has been lost.
They probably still need to do the work on visions and values, since if you’re trying to build a strategy and a plan against an organisational purpose, you need to know what success would look like. But what this exercise does do is to create the edges of the cone of the journey towards purposeful outcomes. And it also creates a tone that is definitely not fluffy.
If you’re interested in finding out more about RadHR, here’s a short video:
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