I have read a fair amount of economics, and I often experience a certain discomfort with it. There are theories that make perfect sense in the textbook, but just don’t work out in the real world. They don’t reflect the complexity of human experience, or stand up to the slippery reasoning of our decision making.
I find these problems hard to articulate, because I’m largely self taught. If the theory doesn’t seem right to me, I have to wonder if it’s because I haven’t understood it properly. But then I go back and read up on it, and still find it doesn’t sit right.
In his book I Spend, Therefore I Am, Philip Roscoe puts his finger on why this might be. Economics, he believes, has significantly overstepped its remit. It is a useful way of thinking, but its reductionist models of the world have been applied with too much enthusiasm into too many areas of life. “Economic relations” says Roscoe, “epitomized by self-interest, have colonized our lives.”
Economics assumes that we’re all self-interested. But, says Roscoe, language is ‘performative’ – it changes things. It creates the world it describes. Assuming people are self-interested is one thing, but when acted on “in the wild” it creates systems in which people have to be self-interested. It becomes learned behaviour.
So higher education becomes a market place where prospective students must weigh up future earnings and work out if their course is a sensible investment or not. Online dating subscribers browse potential partners like goods on shelves, seeing sets of attributes rather than complex people with life stories. Economists run cost-benefit analysis to see which bits of the country they will allow to flood in order to get the best value for money out of a shrinking budget.
There are some great examples in the book of how economic reasoning hides the true cost of things and narrows our decision making into simple profit-maximising. There’s an insightful dissection of the supermarket price label, for instance. All that matters in the price, and how the goods were made and by whom are all invisible. Other examples are less compelling. There’s a long section on online dating sites, and then at the end of it is a passing mention of a survey done in the US. It found that a third of marriages in America now begin online, and that they tend to be more satisfying and more stable than those that begin offline – which is intriguing, is left unexplored, and rather undermines the critique.
Economic thought is supposed to be rational and objective, but it’s not, the author argues. It is political. It is often arbitrary. There are always a host of hidden calculations and assumptions. And ultimately, somebody had to decide what the end goal of everything is. Cost benefit analysis “can only tell us what we should do if we have already decided that what matters most is maximizing a nation’s wealth.” But when did we decide that?
Economics needs to be put back where it belongs, the book concludes. It should be on a par with engineering – “an engineering that is subservient to principles and decisions made through a democratic process.” There are some areas where economics is not wanted. “We should not economize on love, care, or even art” says Roscoe. “Altrusim and civic virtue, love and care grow through exercise, and are not scare resources to be economized.” Indeed.
Unfortunately, the closing section on reclaiming an economics of human flourishing only really scratches the surface. It mentions LETS schemes and complementary currencies, but admits these are often symbolic rather than practical. It briefly describes Islamic finance and risk sharing, and celebrates the work of Alvin Roth as an example of “economic engineering at its best”.
There’s so much more that could be in here – what about the challenges to conventional economics from collaborative consumption, the commons movement, anarchic online cyptocurrencies like Bitcoin, or postgrowth economics? And surely there are other economists worth looking into as examples of a more human-centred economics?
We need more of these examples and challengers because the narrow, individualistic self-interest of modern economics will only get us so far. “The collective action that global crisis demands will require an entirely different kind of social contract, with self-interest perceived as inextricable from global survival”.
I Spend Therefore I Am is an intelligent and tightly argued book. It’s not a difficult read, but it’s not a quick one either. It warrants close attention. It’s helpful in articulating the shortcomings of economics, and the consequences of over-relying on economic reasoning. Where you go from there, is up to you.