Towards a New Story of Economics
Humans are storytelling beings. In fact one could argue that it is impossible to make sense of the world without story. Storytelling is how we piece together facts, beliefs, feelings and history to form something of a coherent whole connecting us to our individual and collective past, present and future. The stories that help make meaning of our lives inform how we shape and re-shape our environment. This re-created world, through its felt presence in structures and systems as well as its cultural expressions, in turn tells us its story.
We live in a time of powerful globalised narratives. We no longer (or rarely) sit and listen to tales that were born of places we know intimately and told by people deeply connected to these places. Ours is a world saturated with information from every corner of the planet, voiced by ‘storytellers’ on television, radio, the internet, mobile phones, newspapers, billboards, books and magazines. It would appear that we now have access to a multitude of perspectives and, with that, more understanding of the different options open to human beings to live fulfilling lives. In reality however, the majority of us have to conform to a narrow set of rules not of our own making: the rules of economics.
The way in which our lives have become dominated by the pursuit of financial gain is full of contradictions. We may not be driven by the ‘love of money’ but we still have to ‘make a living’. The fluctuations in the economy have a profound effect on our everyday lives, but very few of us understand how it works, let alone feel we have the power to influence it. This lack of agency fills most of us with a degree of ‘background anxiety’ that drives many of our decisions, consciously or unconsciously. The economic story is possibly the most powerful story being told at this very moment.
So how is this story being told (and sold) to us? How is it being framed?
1- The work/life balance
This term has become so ubiquitous that it is often used in its English form even in non-English speaking countries. It seems to be a concept that needs no translation; it can easily be swallowed whole. But hidden inside this seemingly innocuous phrase are some powerful assumptions.
On one side of the scales we place work, not just any work, but paid labour. On the other side we place life. By life we don’t mean the actual fact of being alive, but our aliveness, our joy, our pleasures. Placing work and life on opposite sides of the balance we are tacitly agreeing that paid work is worth sacrificing our aliveness for, that it is ok to be a little bit ‘dead’ in your job. If you are lucky enough to have a job you love the concept may seem irrelevant, but for people whose work is tedious, soul-destroying or even dangerous this is the perfect frame to diffuse any discontent: ‘We agree that having a degree of aliveness is important, but you cannot have all of it. You have to sacrifice some of your aliveness just to stay alive.’ The framing of paid work as a necessity for ‘earning’ one’s existence remains unquestioned.
2- The economy must grow
Having determined the necessity of jobs it’s no surprise to hear world leaders repeating the growth mantra over and over. The story goes like this: we need growth so we can create jobs so we can pay people money to buy stuff that creates more jobs. Nobody questions whether the jobs that are created are worth giving up their aliveness for or even whether what is being produced or provided adds any further joy or satisfaction to society. The frame of ‘employment for all’ is so sacred that anyone pointing out how many of the businesses providing these jobs destroy the planet we depend upon for our survival is presented with another false dichotomy: people against nature.
When George Bush sr, at the time of the Kyoto protocol, told Americans “I am the one that is burdened with finding the balance between sound environmental practice on the one hand and jobs for American families on the other.” he was setting up a frame that continues to be echoed by world leaders today. Even if in our heart of hearts we know we need the earth more than we need the artificial constructs of jobs and money, by now we have become so dependent on money to stay alive that this kind of language stifles our capacity to imagine a different solution. Fearing for the survival and safety of our loved ones we accept the war declared on nature in our name.
3- Humans are selfish
This experience of fearing for our survival dovetails neatly with our third and perhaps most powerful economic frame: the rational, utility maximising individual – Homo Economicus. This story tells us that given the choice humans will seek to get the most for themselves with the least amount of effort. It’s simply a ‘dog eat dog’ world.
Funnily enough it looks like the people who most fit the stereotype of the selfish utility maximiser are economists themselves. Various studies have repeatedly shown that non-economists are not as selfish or rational as economic theory would have us believe and that economists, or students of economics, consistently score higher on selfishness than ‘ordinary’ people. Despite these insights, the story that humans are by nature selfish and competitive persists.
But are any of these frames telling us the truth about ourselves and the world? Do we have to accept work as a necessary burden? Do we have no choice but to destroy the planet in order to survive? Are we really as selfish as economic textbooks suggest?
Perhaps the first thing we need to ask is: Is any of this about true economics in the first place?
To answer this question we need to travel back to ancient Greece where Aristotle was musing on two distinct practices: Oikonomia and Khrematistika. Oikonomia is where we get the word economics from and is described as ‘the management of the household so as to increase its use value to all members over the long term’. Khrematistika on the other hand (from khrema, meaning money) refers to ‘the branch of political economy relating to the manipulation of property and wealth so as to maximize short-term monetary exchange value to the owner’.
“Oikonomia differs from chrematistics in three ways. First, it takes the long-run rather than the short-run view. Second, it considers costs and benefits to the whole community, not just to the parties to the transaction. Third, it focuses on concrete use value and the limited accumulation thereof, rather than on an abstract exchange value and its impetus towards unlimited accumulation…. For oikonomia, there is such a thing as enough. For chrematistics, more is always better… “
By now you might recognise our current economic system in this description of chrematistics. No wonder we are confused. We believe we are practising economics when we are in fact practising chrematistics. This has far reaching consequences for both the practice of economics and its perception. By allowing chrematistics to masquerade as economics the owning classes have perpetuated the illusion that increasing their financial wealth will be good for all of us and we, in our own misunderstanding of the proper function of an economy, have accepted chrematistics as the dominant form of resource management.
But what if there was another way of thinking and speaking about the economy, one that was in line with the true meaning of the word: the ability to manage the home for all, the art of living? What if we were able to redeem the language of economics so that it might liberate our imaginations and creativity and tell a beautiful story that expresses what we truly value?
Human Scale Development
In the 1970s, after many years of researching poverty in Latin America, Chilean economist Manfred Max-Neef came to the conclusion that conventional economics, in practising chrematistics, did not have the tools to adequately address the experience of poverty and could not serve to alleviate it. What was needed was a language that allowed poverty and wealth to be understood in much broader terms. Together with his colleagues he developed what is now commonly known as Human Scale Development (HSD) or ‘barefoot economics’.
HSD proposes that there are nine fundamental human needs which are universal across time and place (as opposed to wants which are subject to cultural and historical trends). These fundamental needs are: Subsistence, Protection, Identity, Understanding, Participation, Creation, Freedom, Affection and Idleness.
Needs are not the same as the strategies or satisfiers we use to meet those needs. Needs are finite; satisfiers are culturally determined and infinite. In HSD each satisfier is valuated according to its impact on the rest of our own needs, the needs of others and, most importantly, on the conditions for life itself: a living thriving planet.
In this model of economics, you are wealthy when your needs are satisfied and if one or more of your needs are not met you are poor. Whereas our current model has conventionally defined wealth as how much money you possess and poverty as a lack of money – expressed as a poverty of subsistence – in HSD you may suffer from any number of poverties if one or more of your needs are not adequately satisfied. So you may have a full belly and suffer from poverties of affection, understanding or identity. Or you may feel safe and protected by having a secure well-paid job, but work so much you suffer from poverties of creation, participation and idleness. When enough members of a community suffer a particular poverty for prolonged periods it develops into a pathology. It becomes a sickness that is often hard to recognise because it has been normalised. We may ask whether our tendencies towards addictive behaviours, whether they be addictions to work, alcohol, gaming or sex, are expressions of such pathologies.
In HSD the key to living well, and therefore the purpose of a true economy, is to adequately satisfy our fundamental human needs within the Earth’s natural limits. Our role within such an economy is not only to seek to get our needs met, but to use our gifts to meet the needs of others.
This is good news, because here the time you spend playing with your child and meeting their need for creation, affection and participation creates a positive balance in the economy. As does the meal you made for your elderly neighbour, (meeting the needs of subsistence, affection, understanding, and protection) as does joining a community garden, learning a new skill, lying in the grass watching the clouds go by. Framing economics in this manner tells us that we are economic participants regardless of whether we are making financial gains. Other skills, gifts or abilities become our ‘currency’. In fact most things that the conventional (chrematistic) economy ignores create wealth in a Human Scale Economy.
The reverse is also true. Actions that are now considered beneficial for the chrematistic economy – for example, cutting down forests to build roads – soon appear uneconomical through an HSD lens. The destruction of the natural world also destroys opportunities to meet many of our fundamental needs: for idleness (going for walks in nature) identity (these places hold meaning that stretches back over centuries) participation and creation (it is where the community gathers, connects, plays) and understanding (the opportunity to connect with and learn from the more-than-human world).
Economies are created by the people
Economies, large or small, local or global, are created by the people. They depend on our collective efforts, labour and entrepreneurship as well as our songs, our dances, our poetry, our joy, our curiosity, our dreams. The macro economy must be reformed from the inside out, it must start with an understanding of who we are, what is dear to our hearts and from that place radiate our values outwards in order to truly meet our needs. A ‘barefoot’ economy is an economy where people – liberated from wage slavery, and with access to the means by which they can satisfy their fundamental needs – are able to choose adequate satisfiers suitable to their region and culture. It is one where we acknowledge and respect our dependence on a thriving earth. It is a place where we have once again understood the meaning of ‘enough’.
“If we are looking for insurance against want and oppression, we will find it only in our neighbors’ prosperity and goodwill and, beyond that, in the good health of our worldly places, our homelands. If we were sincerely looking for a place of safety, (…) then we would begin to turn to our communities – and not the communities simply of our human neighbors but also of the water, earth, and air, the plants and animals, all the creatures with whom our local life is shared.”
“The Earth is what we all have in common.” (Wendell Berry)
I look forward to a time when students of economics are required to study the work of artists, poets and makers. When economic text books, as well as addressing how we manage the earth to provide food, homes, clothing and jobs, also speak of the need for beauty, intimacy, community and love.
The Art of Economics (and may it one day become an art) needs a new story and a new language that doesn’t require us to choose between self and others, work and aliveness, our own lives and the lives of fellow humans or the health of the planet. A language that has the potential to re-frame the story, re-educate our thinking and get us back on the side of community, on the side of the earth and on the side of life.
For talks and workshops on HSD and the Fundamental Human Needs framework please email [email protected]
This post was first published on the Leipzig Degrowth website.