Process Philosophy & Economic Theory – October 2010
Question: Does process philosophy have a particular leaning toward an economic theory (Marxian, Libertarian, Keynesian)?
Publication Month: October 2010
Dr. Cobb’s Response
I especially appreciate this question since, as a process theologian, I consider economics the most important of all topics. Economic theory has become the “theology” that actually affects global affairs. The fate of the Earth depends more on our economic thinking and practice than anything else. That dependence has led to very discouraging results.
My answer to the question is “none of the above.” All of the economic systems mentioned, indeed virtually all that have been developed in the past three centuries or more, have been oriented to growth. The question has been how to make the economy grow, that is, produce more goods and services.
Forced to choose between Marxian, libertarian, and Keynesian theories, process philosophy favors Keynesian theory for two reasons. First, it takes actual historical experience more seriously than the others and has, accordingly, proved more effective in dealing with human problems. Second, its assumptions about the nature of human beings and society are more concordant with the process view than are the extreme individualism of libertarianism and the failure to take individuals and their personal freedom seriously in Marxism.
Nevertheless, the answer remains “none of the above.” The goal of society, and therefore of the economic order so important to any society, should be the sustainable well being of its members. This is inextricably bound up with the sustainable well being of its natural environment and the other living creatures that inhabit it. The aim at growth is incompatible with this goal.
This does not mean that aiming at the sustainable well-being of the inhabitants of a region is opposed to every form of increased production. Systematically avoiding growth is no better than systematically seeking it. The question is not growth or no growth. The question is what will contribute to sustainable well-being, and that question should be answered by a case-by-case examination. It may be that in eighteenth-century England industrialization contributed to the sustainable well-being of the people. I am not sure. Karl Polanyi documented its complex effects on human well being. But at that time, the resources required for industrialization were abundant and the pollution it caused was local. Enabling labor to be more productive did not threaten the environment of human life.
That the theories developed in that period have been dogmatically built into Western economic thought is one of the greatest tragedies of human history. Today what is in short supply is the capacity of the environment to cope with our exhaustion of resources and especially with its capacity to absorb our waste. Economic theory should have taught economists to pay primary attention to what is in short supply, but they have blithely ignored the change of context, arguing that the principles of economics are ahistorical. The harm that this has done is incalculable.
Of course, a few economists have recognized this error. In 1971 I had the great good fortune of contacting Herman Daly. He understood from his graduate school days that growth economics was fundamentally wrong and destructive. He called for the development of a steady-state economic theory. This did not mean that no country needed economic growth. But it meant that many countries already had sufficient production to meet all real needs. The new need was to maintain this level of production and organize society so that its products would be well distributed. Unfortunately, economists as a whole continued to recommend policies that could sustain economic activity only through continual increase.
Years later I had the opportunity to collaborate with Daly in writing a book that is called For the Common Good. Even before I first contacted him, Daly had been influenced by Whitehead, and especially by his idea of “the fallacy of misplaced concreteness.” Our book organizes its critique of mainstream economics around this fallacy, critiquing its treatment of the market, economic success, Homo economicus, and land. In a second edition we added money. We argued for an international economy instead of a global one based on free trade. The book has had no influence on the direction that mainstream economics has taken, but it has played a role in the formation of the International Society for Ecological Economics and its national branches. Sadly, this society has had very little effect on the direction taken by the world economy.
For pointing out the obvious, which economists did not want to see, Daly was excommunicated by the guild. The economic community, by its uncritical addiction to free trade, has cooperated with transnational corporations to promote the global economy. This has carried us in exactly the wrong direction.
Now, forty years after Daly first criticized the addiction to growth, there are minor moves among economists to criticize some aspects of the community’s unqualified commitment to growth as the one good. Leading economists, such as Joseph Stiglitz, have worked on measures of the economy that include other elements besides quantity. The Chinese government has modified the way it measures economic progress. A recent book by Ian Fletcher, Free Trade Doesn’t Work, has received the support of many leading figures related to the actual economy, although no mainstream economists have signed on. These matters are just barely becoming discussable.
Sadly, the changes are far too little, and far too late. It is far too late to prevent major changes in global climate that will cause untold misery. And our Congress cannot even pass legislation that would slow the worsening of the situation. Indeed, the extreme opposition to government control over industrial activity is even intensifying. This is not all to be blamed on economic theory, but the economic guild has lent itself to the support of the economic interests that blindly push the world toward catastrophe.
The most recent book by Bill McKibben appraises the situation realistically. It is too late to discuss ways to avoid disaster. Disasters are coming upon us with increasing scope and intensity. McKibben entitles his book “eaarth” to signal that the planet on which we are living is already a changed one. The question now, in the language of the subtitle, is “making a life on a tough new planet.” On that planet the theories still discussed by mainstream economists are irrelevant. The global economy and the global financial institutions will contribute nothing to helping human beings obtain the food and other essentials of a decent life in a changed context. They will simply wither away as millions, perhaps billions, die from hunger, disease, and war.
Meanwhile, if we do not succumb to the final madness of nuclear war, in tens of thousands of localities, in tens of thousands of different ways, small communities will survive. This is the future that our growth economics has bequeathed to us. McKibben shows us that it need not all be bad.