A rant about markets

Harvey Cox’s The Market As God, published in a couple of weeks, drove me nuts. I alternated between scribbling ‘X’s and ‘?!’s in the margin, and skipping over long chunks about Christian theology, in which I have zero interest. The book is built out from the notion of orthodoxy and heterodoxy in economics. Of course, ‘orthodox’ economists would use an adjective like ‘mainstream’ to describe themselves, which I guess (self-described) heterodox economists would say is the point. These debates always seem to me more relevant (or rather less irrelevant) to macro than to the empirical applied micro-economics so many of us do; I never know which label to wear myself.

Anyway, back to the book. The conclusion sums up the message: “First, the Godlike role The Market now exercises is misplaced, and the web of values, narratives and institutions it anchors needs to be critically re-examined. Second, precisely because The Market, despite its disavowals, does operate as a surrogate religion, the kind of rethinking that is needed has been deflected and discouraged.”

Many people will agree with this. I’d guess the ever-thoughtful Branko Milanovic would – he and I had a brief debate here, here and here on ‘commodification’ (ie the status of the market) recently. There are some truly interesting ethical questions in this territory.

Not in this book, however. One of my problems with Cox’s account is the assumption that there is substantial overlap between people who worship The Market and economists, because isn’t that what economics is all about? Given that I teach a whole course exploring the subtleties of the relationship between state and market in public policy, this is personally irritating. It’s also factually incorrect: many economists work on how government/collective intervention can fruitfully bring about higher economic welfare, including by influencing markets. Sure, economists are perhaps more likely than Ms Average to believe markets operate in beneficial ways (or than Mr Average when he is a businessman running a large, dominant company), but that’s far from religious faith in markets.

Market-worship was always more of a political than an economic project, although certainly there was a tide in economics of free-market rational expectations modelling – a tide at its height in the mid to late 1980s. Even the politics seems to be changing. This book comes just as here in the UK we’ve seen the new Conservative Prime Minister pronouncing the need for an industrial policy, while the system shock of the Brexit vote/Trump propularity has alerted the political classes in both the UK and US to the fact that we’re not in libertarian free market-land any more.

There were also minor irritations in the book. For instance, it paints Adam Smith as the ‘saint’ of modern economics, “the patron of the unfettered free market.” This overlooks a raft of recent work highlighting the importance of The Theory of Moral Sentiments to any interpretation of Smith – from Emma Rothschild’s Economic Sentiments, Nicholas Phillipson’s biography Adam Smith: An Enlightened Life, through Roger Backhouse’s history of economics to Russ Roberts’ [amazon_link id="1469029758" target="_blank" ]How Adam Smith Can Change Your Life[/amazon_link].

Anyway, it will be clear that The Market As God falls foul of my regular gripe that it would be great if critics of economics from outside the discipline had more of an idea of what economists actually do. It would have been far more interesting if Cox had addressed, say Al Roth‘s question about repugnant markets, kidney exchanges etc. Or maybe the questions raised by behavioural economics about when humans are more or less rational than pigeons or capucin monkeys. Still, if you enjoyed Michael Sandel’s What Money Can’t Buy: The Moral Limits of MarketsWhat Money Can’t Buy: The Moral Limits of Markets by Sandel, Michael on 26/04/2012 unknown edition (which also irritated me hugely), you might well like this book too.

The imagined north

I’ve felt weirdly silenced for the past few days while this blog was down – am sincerely hoping the tech problems are fixed for good now. Meanwhile I’ve been writing a paper, an outline, a research proposal, and reading for light relief Peter Davidson’s The Idea of North. It’s a cultural history that does what it says on the cover, a lovely book. It has many wonderful passages but the most quirky, I suppose, was the revelation about the economic significance of beaver pelts in the exploration and staking of claims in Canada. The highly desirable fur led to ever-expanding hunting of the creatures, which in turn prompted fighting between different tribes as well as competing imperial explorers. “The pursuit of ever more distand beavers thus become the impetus both for mapping and for the creation of empires, indigenous and colonial.”

The Idea of North (Topographics)

It set me thinking about what else I’ve read about norths. I have a treasured signed copy of Seamus Heaney’s North. There’s Paul Morley’s The North about the north of England. Ted Hughes and Faye Goodwin’s Remains of Elmet, ditto but more poetic. Charles Nevin’s Lancashire, Where Women Die of Love, ditto, in a very different way. Elizabeth Bowen’s novel To the North.

Moving to a wider geographic stage, Jill Ker Conway’s memoir, True North, Into the Silence by Wade Davis about George Mallory and Everest, Francis Spufford’s brilliant (like all his books) I May Be Some Time: Ice and the English Imagination.

I’m sure there must be others. As Davidson says, there is something so simply evocative about the phrase: “To the North.”

Wandering around looking at people

My concentration has been rubbish this week, waiting for the youngest son’s A Level results (he did well). So I indulged in reading Laren Elkin’s Flâneuse: Women Walk the City. Very enjoyable reflections on women walking in cities, on women writers carving out independence, and also on uprooting in this globalised world.

Flaneuse: Women Walk the City in Paris, New York, Tokyo, Venice and London

It joins my list of excellent books about wandering around cities looking at people. Two by Rebecca Solnit, Wanderlust and A Field Guide to Getting Lost. Patti Smith’s latest memoir, M Train. The Lonely City by Olivia Laing. Jan Morris, Trieste and the Meaning of Nowhere. Geert Mak’s In Europe.

I’d have thought this was a rich vain, so I’m sure others will have suggestions. Anyway, with son 2’s next steps sorted, it’s back to economics books for me now.

A Field Guide To Getting Lost M Train Trieste In Europe: Travels Through the Twentieth Century Wanderlust: A History of Walking [ WANDERLUST: A HISTORY OF WALKING ] by Solnit, Rebecca (Author) Jun-01-2001 [ Paperback ] The Lonely City: Adventures in the Art of Being Alone by Olivia Laing (2016-03-03)

On difference

Steve Silberman’s Neurotribes was the last of my holiday reading, just finished. It is as excellent as you’d expect from all the reviews and prizes. As well as being a fascinating account of the intellectual history of psychiatric/medical approaches to autism, including the dramatically changing approaches to diagnosis and treatment/support, it’s very well written. For instance, I liked the description of Leo Kanner, a central character, as having “the woebegone countenance of a sad beagle.” The book also has sections on the links between autism and the technology and sci-fi fan communities, dating back well before SIlicon Valley. The book quotes an expert on science fiction as describing the “subversive impulse at the heart of science fiction as an expression of ‘cognitive estrangement’ from the mainstream.

I was frustrated to learn on page 375 that, throughout the disputes and discoveries in the US I’d been reading about so far, British researchers and doctors were “light years ahead of their American peers in their understanding of autism”; this is a highly US-centric book. British readers might also be surprised that Simon Baron-Cohen gets just two passing mentions. I’m certainly no expert but think he’s quite well known on this side of the Atlantic. The despicable Andrew Wakefield does get appropriately – ie. highly critically – described. My other frustration was that – given my lack of knowledge of the subject – there wasn’t more of a summary of the state of play at the end of the book. It’s clear enough that there is no ‘epidemic’, but rather a better understanding of the character of autism and much more diagnosis; and that the explanations are to be sought in genetics, not environmental factors. Still, I’d have liked a bit more.

Of course, wanting more of a 520 page book is a good sign. Interesting, compelling and important.

Markets and humans

Brank Milanovic has an interesting post on what he decries as the commodification of life by markets, something that will surely strike a chord with the many fans of Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets and others. While I absolutely agree that there ought to be limits to what resources are allocated by markets as opposed to other means, Branko lost me in this early paragraph: “The most obvious case is commodification of activities that used to be conducted within extended families and then, as we became richer and more individualistic within nuclear families. Cooking has now become out-sourced and families often do not eat meals together. Cleaning and child-rearing have become more commercialized than before or ever.”

The trend towards buying ‘domestic’ services outside the home dates back decades now, linked to urbanisation and women’s participation in the paid workforce. The switch from home cooking to ‘outsourced’ meals, and similar market activities, has saved women millions of hours of labour in the home. I’m all for it.

Indeed, one of the social advantages in general of a switch toward markets (or ‘commodification’) is precisely the anonymity of the market as compared with the personal (patriarchal) power relations involved in from home production and household/village economic activity. Robert Putnam’s classic Making Democracy Work: Civic Traditions in Modern Italy touches on this in its contrast of northern and southern Italy – the south being more family-centred, with ‘strong ties’, in all sense of the word family, the north more oriented toward ‘weak ties’ in the wider urban community. Partha Dasgupta’s Economics of Social Capital is very good on this tension.

Branko’s post goes on to criticize the so-called ‘gig’ economy. Again, I think this isn’t so straightforward. Some of the ‘gig’ corporations are deeply unpleasant and the conditions of work unsatisfactory. However, those conditions are determined by workers’ outside options in the job market, so corporations’ behaviour to these workers can be improved by the framework of labour law and its enforcement. There is every reason to believe – from the numbers participating if nothing else – that very many people appreciate the opportunity to make money from participating in this segment of the economy; and indeed that it offers a route into the formal job market for people who otherwise find it hard to participate (see for example this on Uber in France by Anne-Sylvaine Chassany).

Branko writes: “The problem with this kind of commodification and flexibilization is that it undermines human relations and trust that are needed for the smooth functioning of an economy. ” This seems obviously true, and indeed the tension was identified by Daniel Bell in his The Cultural Contradictions of Capitalism, and all its forerunners.

I’d certainly agree that western economies are not in a good place in terms of this balance now. But to illustrate this, I wouldn’t pick on the exactly the examples of markets that empower women and marginalized workers.

What Money Can’t Buy: The Moral Limits of Markets Making Democracy Work: Civic Traditions in Modern Italy (Princeton Paperbacks) By Daniel Bell – The Cultural Contradictions Of Capitalism (20th Anniversary Ed)