michael wilkesEconomist Michael Wilkes continues to advocate a more benign form of economic organisation – for the common good; socionomics should replace the desiccated, manipulated, disloyal, extractive and highly unequal economy that has been allowed, and – by some administrations – encouraged.

Edited extracts

“This should be one without acute moral wrongs such as greed at its heart, one that is interwoven with the kind of society in which we wish to live, in other words one which furthers the common good. This, rather than the one that we are told we must put up with because there is no alternative. In other words I believe that we need socionomics* rather than just economics.

“It is claimed that there are some things about economics that you cannot change any more than you can change arithmetic simply because you happen to dislike it. One example often put forward in defence of this position is that unregulated prices must rise when supply goes down and/or demand goes up. But even this is not necessarily so. It overlooks the fact that it is people who set prices and not markets.

“It was famously once said that there was no such thing as society. Quite the contrary is true, as we all confirm when we interact with other people every day. In fact there is no such thing as ‘the market’. Even in an ideal form the market is just a more or less useful concept for aggregating individual behaviours, and those behaviours are based on the values of the individual participants and of the society that nurtured them.

“Then there are the all-too-familiar ‘imperfect’ forms of market instanced by informal cartels as in energy supply and finance. And of course there are the totally sham markets such as that in which executive pay is supposed to be determined.

“But I hear the protest that ‘you can’t change human nature’. Oh yes you can. Greed, for example, is a cultural and moral aberration and there is relatively little that is hard wired in our conduct towards each other as the enormous variety of individuals, peoples and societies confirms. Economies as well as societies are what we make them and attempts to duck out of this responsibility by appealing to ‘hidden hands’ and ‘markets’ are merely self-serving verbal devices.

“There is a great deal that could be changed from the system that we have today if the will was there. Most importantly there is no reason why there should not be a ‘virtuous economy’ serving not just the top few percent but the well-being of all citizens. This, rather than the desiccated, manipulated, disloyal, extractive and highly unequal one that has been allowed, and by some administrations encouraged, to develop in much of the Western world for many years, as if it was the only game in town. It certainly is not, though it is deeply embedded and considerable time and patience will be needed to change it.

“To this end, a full description of my views on a virtuous economy, the common good and how these desirables may be brought about is given in postings on this blog for September 2011 and subsequent months.

“The original name for economics was political economy and we have seen partisan governments produce policies that favour wealthy organisations and individuals who in return favour the governing politicians. This sort of conspiratorial behaviour continues to debase and diminish democracy in our country. The nation’s polity is in just as much need of reform as is our economy and it is deeply linked to it.

“I won’t go into the electoral system that defrauds and insults people and allows them to be manipulated (“Don’t vote for what you believe in, vote for us or you’ll let the other lot in.”) or the underhand policy peddling through which parties get their money.

“But consider the spinning of falsehoods – aided, abetted and often initiated by the ‘free press’ – free that is from scruple but not of course from money, bias and partisan influence.

“Take just one example: the role of the State (and the state, by the way, is ourselves in legislative and executive modes) and the view that this should be shrunk.

Governments are often portrayed as lumbering, bureaucratic and risk-averse. This opinion is used to support reducing the role of the state and making the private sector even larger to the enormous profit of its owners, domestic or foreign. Again the opposite is true. States can set long term visionary objectives and create an environment for innovation to achieve them. And we know full well that the private sector can come bowler hat in hand to the state when they make another fine mess.

“The confident and pro-active state can boldly invest in risky and uncertain areas where private capital often fears to tread. It has been known for many years that private ‘venture’ capital is much less risk-taking than is generally supposed – with a tendency to invest at high rates of return in comfortable areas. In modern times the private sector rarely produces revolutionaries and the state, far from being in the way, may lead it and participate to help make radical innovation happen”.

Some elements of a virtuous economy could be introduced relatively quickly, including:

  • restoring equitable and redistributive taxation,
  • introducing living wages,
  • plugging the many loopholes for tax avoidance,
  • undertaking thorough corporate reform
  • and recreating an active, interventionist and self confident public sector.

“Other important elements, such as the social and moral education needed to produce a citizenry of good intent that will make the socioeconomic system work properly and sustain it for future generations, and winding back globalisation will take longer and will involve more people and organisations and other countries.

“These measures would represent leadership in its finest form. This, and the promotion of the concept of stewardship in place of the present self serving forms of ‘leadership’, would move the country towards a greatly improved quality of life for the majority of citizens and a well rounded prosperity that would be something to be proud of and an example to the world. Such would be the gifts of socionomics”.

Read the full text here: http://michaelwilkesblog.blogspot.co.uk/2014_01_01_archive.html

* no relationship in theory or practice with this institute: http://www.socionomics.net/about-the-socionomics-institute/#axzz2sIHHP3Z1