Four Futures of Narrative Economics
Table of Contents:
Four Futures of Narrative Economics—
Act I
Chuck Prince & Alan Greenspan stop dancing
Economics is Politics
Blind spots deciding Socialism or Barbarism
Act II
Uncertainty abound
Equality and Abundance: Communism
Hierarchy and Abundance: Rentism
Equality and Scarcity: Socialism
Hierarchy and Scarcity: Exterminism
Act III
Narrative Economics
We are a superorganism
Audio (4 podcasts)
Video (7 videos)
Four Futures of Narrative Economics—
Abstract: “Critics of capitalism declare the impending end of the current system unfolding before our eyes. On top of that, we humans are facing two other uncertainty crises: our personal sovereignty/freedom is threatened by authoritarians around the world, and we are living during the Anthropocene epoch amid ecological degradation. Graphing those uncertainties unveils a four-future possibility of life after capitalism. Narrative Economics posits that the narratives we tell ourselves collectively about economics are the real drivers of change, and can have viral contagion effects similar to disease epidemiology. Put it all together, and we have Four Futures of Narrative Economics. The story of global human society functioning as an energy dissipating superorganism is an economic narrative for the future we can get behind.
Act I
Just before the 2007-2008 financial crisis, Citibank chief executive Chuck Prince said, in a now-infamous quote, “when the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance.” He, and everyone else, apparently stopped dancing shortly after.
Prince’s words would become prophetic after describing the boom-and-bust cycle of speculative bubbles that the world continues to experience, even today. This feedback loop of “reflexivity” is an effect of market sentiment that self-reinforces due to rising prices attracting buyers who then drive the price higher with their actions, which continues to make prices go even higher. This is not a bug, but a feature of our economic and social environment.
Alan Greenspan, former chairman of the Federal Reserve, whose job it is to set interest rates and monetary policy also stopped dancing. He even questioned whether we should be dancing at all. During a congressional hearing, Greenspan said he was “shocked” that he had a “flaw in the model that I perceived as a critical functioning structure of how the world works.”
THE HEAD OF THE WORLD’S LARGEST ECONOMIC INSTITUTION ADMITTED TO CONGRESS THAT HIS BIASED “IDEOLOGY” - AND NOT THE FACTS - INFLUENCED HIS DECISIONS THAT NEGATIVELY AFFECTED NOT ONLY AMERICANS BUT THE ENTIRE WORLD FOR DECADES.
So how is it possible that the chairman of the federal reserve recants on his free-market ideology? There is hardly ever one single reason, but the highlights include: 1) the fallacy of consumers and groups always making rational choices; 2) the fallacy of the all-powerful “invisible hand” or “the market” eventually making things right; and 3) economics not articulating its goals clearly and focusing on one objective - Growth. David Pilling, the author of The Growth Delusion, makes the link between economics and disease epidemiology, “Only in economics is endless expansion seen as a virtue. In biology, it is called cancer.”
Economics is, by default, political. “There is absolutely no way to understand events before, during, and since the financial crisis of 2007-2009 while ignoring the powerful political forces that have shaped them,” says Anat R. Admati. She continues, “applying inadequate economic models to policy in the real world is akin to building bridges using flawed engineering models. Serious harm may follow.”
Narrator: “Serious harm did indeed follow. To the tune of $22 Trillion.”
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Economics is Politics
The previous essay on terrestrial politics outlined the theoretical framework for a different kind of global politics. NOT a global government. But, a governance system that is global and bears the fruit of economics of Earth’s scale and breadth. Several essays’ theses are synonymous with Admati’s research on technology being the catalyzing force behind it all: “Governance and politics are key to outcomes everywhere. Related issues about power and control and about the respective roles of governments and private sector institutions are playing out prominently today in the technology sector.”
Economist Ha-Joon Chang, along with a select group of others like Admati, is actively critiquing their own profession and its hegemony. Every decision we make as a society is a policy choice. Economics and politics are linked closer than anyone has wanted to admit. Laissez-faire economics is not an exception. Saying, “we aren’t going to do anything” is not the absence of policy, but a policy of absence of controls on externalities. and of any postmortem to learn. It is also an absolute absence of any legitimate logic that deals with human beings in a hyperconnected environment on a limited biosphere during the Anthropocene epoch---an economic AND political choice.
Chang, in his seminal series for the Institute of New Economic Thinking, breaks down five reasons economics and politics are inseparable. Economics is largely about government policy
Economic Theory and politics influence each other
ALL economic theories contain political value judgements
Power relationships affect the economy
The market itself is a political construct
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Blind spots deciding Socialism or Barbarism
Admati admits that economics has an interdisciplinary research problem, in not being able to see the bigger picture - in other words, blind spots. If our politics dictate our economics, then what are some problems that interdisciplinary research could benefit from? Historically it has been solely an economist’s problem to think about the economy - to the detriment of us all. We need more diverse voices dictating the theoretical and practical frameworks of our economy.
Admati lists low-hanging fruit that could use more diverse eyes: “Whistleblower policies, the impact of consumers, employees, and politicians on corporate actions, accounting rules for derivatives, the effectiveness of boards, audits and auditors regulation, the design of bankruptcy laws, money laundering, corporate fraud, the organization and pricing of deposit insurance, debt subsidies, the role of financial literacy and ideology in policy discussions, the structure and governance of regulatory agencies and central banks, lobbying of multinational corporations, the governance of international bodies such as Financial Stability Board, Basel Committee, and IMF, and the political economy of corporate enforcement.”
Each of the issues listed above could, and would, greatly benefit from more diverse voices in the conversation. Until now, the economics profession and those involved in it have systematically pushed out other modalities of research. I hope that soon comes to an end because we may be doomed if it doesn’t. In 1916 Rosa Luxembourg said that society must make a choice of how it acts in modernity, “Bourgeois society stands at the crossroads, either transition to Socialism or regression into Barbarism.”
If this quote made sense over 100 years ago and is just as prescient today, then, seriously, what are we doing?
I am not alone in thinking this. According to Edelman, a global research firm, “56% of the global public thinks existing capitalism is a bad system.”
To read the rest of the essay, go to either the Substack or Medium link.
Substack: https://eclecticspacewalk.substack.com/p/eclectic-spacewalk-8-four-futures