Why read a book providing advice to radicals?

I doubt whether many people would consider me to be a radical, even though I look forward to the withering away of the state as the social singularity subverts government activities. My views about politics have been most strongly influenced by people who were once considered to be radicals, including John Locke and Adam Smith, but these days people who hold such views are more likely to be described as conservatives. Following Friedrich Hayek, I reject the conservative label because I am strongly opposed to the use of the powers of government to resist spontaneous social change.

I have been reading Derek Wall’s book: Elinor Ostrom’s Rules for Radicals: Cooperative alternatives beyond markets and states. My main reason for reading the book was my previous advocacy, on this blog, of Elinor Ostrom’s approach to discussion of economic and social issues as a means of promoting dialogue across ideological divides. Elinor Ostrom argued that instead of presuming that individuals sharing common pool resources will inevitably experience the tragedy of the commons, we should leave ideology aside and seek to learn from experience why some efforts to solve commons problems have succeeded while others have failed. I suggested that if we apply Elinor Ostrom’s research methodology to national politics we should also seek to learn from experience why some countries have been more successful than others in coping with the tendency of interest group activity to have wealth-destroying impacts that are analogous to over-fishing.

Derek Wall describes himself as a “left-wing member of a Green Party”. When I started reading the book I didn’t expect to be able to endorse it as suitable reading for anyone other than people who self-identify as having radical views, or have some desire to be able to have a dialogue with radicals. The fact that I endorse it as worthwhile reading for a wider audience illustrates the potential for Elinor Ostrom’s views to have wide appeal across the ideological spectrum. The nonpolemical tone of the book is a credit to the author. The deep impression that Elinor Ostrom’s views have had on Derek Wall will be obvious to everyone who reads the book.

The rules for radicals that Derek Wall has derived from Elinor Ostrom’s writings are listed below, with some brief explanation summarised from the book:

1. Think about institutions. Economic activity is shaped by institutional rules. Formal rules are less important than the “dos and don’t that one learns on the ground that may not exist in any written document”.

2. Pose social change as problem solving. Those who look at politics and economics in an abstract way often fail to deal effectively with particular issues.

3. Embrace diversity. Polycentricism promotes good decision-making. The idea of a god-like leader or committee with perfect information is a myth.

4. Be specific. Move from slogans to analysis. Keep asking what can we specifically do in a specific context.

5. Listen to the people. People who participate in commons may be more likely to have good ideas about solving problems than outside experts.

6. Self-government is possible. The Ostrom approach of promoting self-government at a local level provides an attractive alternative to both top-down bureaucratic management and exercise of power by populist politicians.

7. Everything changes. Evolution happens. Technological change is creating new opportunities for collective economic activity e.g. Wikipedia.

8. Map power. If you can map flows of power, you are in a better position to change the flows.

9. Collective ownership can work. It is not always utopian and unrealistic.

10. Human beings are part of nature too.  Ecological problems are profoundly political. The politics of humanity has an influence on the rest of nature.

11. All institutions are constructed, so can be constructed differently. Communities need to keep adapting and reinventing institutions. Institutional development should occur constantly and engage all citizens.  

12. No panaceas. Imperfect humans cannot design utopia. If we attempt to construct institutional blueprints failure is likely.

13. Complexity does not mean chaos. Polycentricism and overlapping jurisdictions can be more efficient than hierarchical structures with linear chains of command.

It seems to me that most of those rules are as relevant to conservatives as to radicals. In all modern democracies conservatives and radicals seem to share the misconception that all economic and social problems can be solved if they can win and hold on to power at a national level.

Can MEMEnomics help us to predict social change?

MEMEnomics is the title of a book by Said Dawlabani, a cultural economist. The book, published in 2013, is an application of the psycho-social model of human development pioneered by Clare Graves and Don Beck. MEMEnomics has been praised by several prominent people, including Deepak Chopra and Bruce Lipton, but I have yet to see any praise by prominent economists. The author does not claim that his book is part of the economics mainstream.

Said Dawlabani suggests that MEMEnomics represents the coming together of two fields: memetics – the study of the replication, spread and evolution of memes - and economics. Just as genes carry the codes that define human characteristics, memes carry the codes that define cultural characteristics. The book is focused on value-system memes - the varying preferences and priorities that humans have in their lives depending on their level of development. The way human values may change with levels of human development was discussed in a recent post on this blog.

The author defines MEMEnomics as “the study of the long-term effects of economic policy on culture as seen through the prism of value systems”. Much of the book is devoted to attempting to explore the cultural implications of changes in economic policy in the United States. The author recognizes the desirability of ensuring that his model can explain history before it is used to attempt to predict the future.

There are three memenomic cycles identified in the book:

·         a “fiefdoms of power” cycle, peaking around 1900, in which American industrialists played a dominant role - large-scale exploitation, fraud and corruption came to identify the values of that era;

·         a “patriotic prosperity” cycle, peaking around 1950, characterized by economic expansion and government intervention – Keynesian macro-policies and social polices – and ending in stagflation;

·         and an “only money matters” cycle, peaking around 1980, characterized by monetarism and deregulation of the economy, and leading to the financial crisis of 2008.

I am not sure the author succeeds in demonstrating that changes in economic policies have led to cultural change. The cycles identified seem to me to be caricatures of beliefs held by powerful elites rather than accurate descriptions of deep-seated changes in values held by ordinary citizens. Nevertheless, it might be reasonable to argue that the cycles represent changes in ideologies of opinion leaders that have been reflected superficially in voting preferences and priorities of the American public.

The author suggests that we are standing on the cusp of a fourth cycle, “the democratization of information cycle”, in which technological advances are allowing social networks to play a pivotal role in affecting social change. That view has merit in my view, but I think this technology-driven change is better viewed as an exogenous factor rather than a new ideology emerging from the down-side of “only money matters”. At this stage it seems that, in the aftermath of the 2008 financial crisis, social networks have aided the return of economic nationalism rather than a policy environment placing higher priority on human development and living in harmony with nature.

As discussed in previous posts (here and here) there does seem to be scope for technological advances to have profound impacts on human values and the way we organise ourselves relative to each other over the next few decades. However, since some of those innovations threaten the scope of government, it seems unlikely that government policy will play a top-down role encouraging them to happen. Policy change seems more likely to occur in response to the demands of ordinary citizens for governments to get out of the way, so citizens can make effective use of new technology.

I enjoyed reading the final chapter of the book discussing the concept of a sustainable corporation. Inspirational examples are provided of corporation leaders setting out to define how the core values of their organisations can enable them to simultaneously pursue profits and a higher purpose. Unfortunately, some of the shining examples of 2013 do not all shine so brightly today.  Said Dawlabani has written an interesting article recently on the reasons why that has happened.

 Entrepreneurs who are selling new sets of values to investors, staff and customers will always encounter naysayers. In the face of this negativism some of these pioneers will succeed, many will not.

One of the messages I get from MEMEnomics is that individual entrepreneurs are likely to play a crucial leadership role in facilitating transition from a subsistence value system limited to expressions of selfish interests, to a value system that understands the interconnectedness of all life on the planet.

It strikes me that for economics to shed light on the role of the entrepreneur in this process it needs to recognize that the value created by entrepreneurs is likely to have a large non-pecuniary component in future. In pursuit of personal values some innovative entrepreneurs are offering investors the opportunity to feel that their funds are being used for the betterment of humanity and/or the environment, as well as generating financial returns. Similarly, they are offering employees the opportunity to feel they are engaged in a meaningful venture rather than just an income earning activity, and are also offering consumers opportunities to feel good about their purchases.

The economic model that seems most relevant in this context is 'identity economics' - as discussed in a book of that name by George Akerlof and Rachel Kranton. The key idea is that people gain satisfaction when their actions conform to the norms and ideals of their identity. In a tribal society, identity economics is like identity politics – people adopt the norms and ideals of the tribe to which they belong. In a cosmopolitan society the relevant norms and ideals are those of the market economy, incorporating a large measure of respect for the rights of others and social trust. Over the next few decades, hopefully the relevant norms and ideals will incorporate greater concern for the well-being of all humans and other living creatures.