by Anthony Painter
The most infuriating aspect of recent political history is the way in which the old regime has reasserted itself so quickly. There is little doubt that the downside of neo-liberalism has been demonstrated in spectacular fashion. What is the response? Neo-liberalism.
A different way of doing things is desperately needed. It is not just about a different ideology, but also new institutions, a different way of thinking, of doing business, and of running an economy. At this time of enormous opportunity for change, the left has responded with sanctimonious triumphalism and off-the-shelf Keynesian social democracy. And so default neo-liberalism is winning. It doesn’t have to be this way.
Both Jeffrey Sachs and Umair Haque have constructed a credible alternative argument – one is aimed at US politics, though is relevant this side of the Atlantic too, and the other is aimed at business. Haque challenges business to be better; not more profitable but more meaningful. Sachs challenges society to be more “mindful” and politics to adhere to a greater ethic of good. This is all well and good, but it is in their practical arguments that both succeed – and make a contribution to helping us understand how we can shift our economy and society away from neo-liberalism.
The price of civilization is a game of two halves. The first half is a canter across well trodden ground. The failure of the unregulated free market, political corruption and Washington’s capture by corporate interests, inequality, the decline in wages and hollowing out of the middle-class through globalisation, and hyper-consumption and the “low attention” society. It’s a mainly good collection of the relevant data and research. Some of it is massively over-interpreted, such as when Sachs claims that American politics doesn’t follow the values of its society. The internal contradictions of attitudes data is well-documented and there is a bit of pick and choose going on here.
However, it is in the second half of the book that things really start to get going. There is a false start: a detour that takes in Aristotle and Buddha. Such is the fashion of the times, but I’m not sure “mindfulness” is going to be a big winner when it comes to making a case for change. Where this book triumphs though, is in the argument it makes for shifting the US budget towards long-term investments and an expansion of social provision. He doesn’t do this by ignoring the budget deficit. In fact, he argues that both stimulus spending and unaffordable tax cuts are, “gimmicks that distract us from the deeper reforms that are needed in our society.” He proposes reducing the deficit in the US to 2% by 2015.
Instead, Sachs argues for tax increases: a new value-added tax, reversal of the Bush cuts, and a new wealth tax. He seeks to divert spending from bombs to roads and childcare. The focus is the long-term. His case for new welfare outlays reflect a different baseline for the US compared to the UK. There are several wrong turns: for example, down the “happiness” street. Overall though, this a powerful case for institutional, political and economic reform. And, dare I say it, it is very “in the black Labour” in its approach: fiscal consolidation and shift to long-term investment and institution building.
Where Sachs implores us to be “mindful”, Haque asks us to be “meaningful”. Both seek Aristotle’s “eudamonia” – the “good life”. To be “meaningfully rich” is to be:
“rich with relationships, ideas, emotion, health and vigor, recognition and contribution, passion and fulfillment, and great accomplishment and enduring achievement, exactly what “business,” “output,” and “product” seem so achingly deficient at producing”.
Future prosperity relies on “getting out of business and in to betterness”. There are three remarkable things about Haque’s book: (i) that it has been written at all, given that he is a leading thinker in the business community; (ii) that the consequences are a revolution in our entire way of doing business; and (iii) that he deploys ethics as a means to open new frontiers rather than to admonish and limit.
The centre-piece of his argument is that psychology shifted around the time of William James from a focus on avoiding pathology to creating positive approaches that enable people to achieve their psychological potential. He sees the economics of Adam Smith onwards as very much about removing pathology (he is no romantic about the pre-commercial economy of guilds and restrictive practices.) What we now need is a new economics that reaches beyond utility, profit, efficiency, output, and productivity and becomes a vehicle – through better institutions – of human well-being and betterness. Accept the necessity of Smith then move on.
Along the way in this short but punchy ebook, he has some real fun with corporate mission statements and objectives. Where he is very effective is in drawing clear and neat distinctions between businesses that corrode and those that create (and it works for a business writer in a way it doesn’t for, say, a leading politician) I enjoyed his The New Capitalist Manifesto immensely. This is pithier, but even stronger in many respects.
It is in their ability to present real choices that both Sachs and Haque succeed. The reason that neo-liberalism is reasserting itself is because the other options on the table don’t seem grounded and real. Business can help people live better lives and prosper in the process. We can organise our politics in a more open fashion and build in a greater long-term bias to public policy. But there’s lots of hard work to do to get there. The problem with the alternatives to neo-liberalism at present is that they want to get to an alternative way of doing things the easy way. As a consequence, they are riding off into sunset leaving the cart containing public legitimacy behind; easy picking for the neo-liberals. Sachs and Haque can help keep those looking for alternatives grounded.
Anthony Painter is an author and a critic.