Graeme Maxton's The End Of Progress

The Daily Ticker had an interesting interview with economist Graeme Maxton a few days ago (video below). Maxton is the author of a new book with the welcome title The End of Progress: How Modern Economics Has Failed Us. I am happy to report that Maxton makes the following statements in the interview.

In 2008 the world economy reached a turning point. It wasn't just a bump in the road, we reached the end of a 30-year period of history. We can't carry on that path anymore... The belief that growth was going to go on forever, the belief that we could carry on borrowing, the belief that consumption was the goal, all of that has to change, because we simply can not carry on borrowing anymore. I mean, if you look at the average American consumer they've borrowed beyond their capacity. Banks are bust, although we don't talk about that. The Federal Government's debts are just off the scale. And at some point, you have to stop borrowing or go bust. And start paying that money back.

And nobody wants to do this, nobody wants to hear the message that we can't carry on growing on forever. But ... "on a finite planet, the only people who believe we can grow forever are the mad, or economists."

Thus it would seem that Maxton's thinking is in accord with the baseline view here on DOTE.  Nevertheless, I have mixed feelings about Maxton's approach. Who is to blame for the mess we're in?

We should blame the economists for their sloppy thinking and the politicians for selling us such twaddle.

Indeed, I do blame economists and politicians, but lost-at-sea economists merely affirm political agendas after the fact, while corrupt politicians carry out the agendas of those who bought and paid for them. But my disagreement goes much deeper than that. Maxton seems to think that ideas and belief systems are the principal motivators of human behavior. This quote is from an essay at Graeme's website called Economic Growth: Is That It?

Too many of us believed that growth was good, that it was a valid measure of human progress. We believed that unregulated free-markets were the most efficient way to allocate the world's resources. We believed that globalisation was advantageous for everyone, despite the unequal way in which we knew the benefits accrued. We believed that big businesses and big banks would behave benevolently, and in our interests, just as  long as they were free from government interference.

As well as blaming ourselves for such foolishness, we should blame the economists for their sloppy thinking and the politicians for selling us such twaddle. Our belief in these wrong-headed ideas has allowed economic power and wealth to become concentrated in the hands of a few people and institutions, with the combined wealth of the 793 richest people [in the world] now equal to that of the three billion poorest.

And because it was merely human belief systems that got us into this mess, Maxton says this about the huge problems facing humankind—

All these problems will be resolved, of course. It is how they are resolved that is the question.

Yes, that is the question. And here comes the optimism. We will change our expectations, and thus our behavior, and things will work out, at least for some.

We can probably find a way to overcome the financial troubles and the coming resource shortages. We can change our diets and improve crop yields to ease the suffering of the poor. We can find diplomatic answers to the sources of conflict between the world’s peoples.

But much thought will need to be given to dreams and expectations. Many developing countries need to accept that they have been condemned by the current system, that they will never become industrialized nations as they once hoped.

I think that many in developed countries (like the United States) need to accept that they have been condemned by the current system. That's what we're seeing. You'd have to be blind not to see it.

Here's my view. Human "beliefs" like markets should not be regulated, globalization is advantageous to everyone, and big businesses and banks will behave benevolently are mere rationalizations which conveniently allow a certain class of powerful humans to do what they are wont to do—figuratively speaking, they want to rape and pillage. They always do so in the name of Progress. And that's what they've done. Human Nature is where the problem lies. How else can we account for the fact that 793 powerful monkeys (by Graeme's reckoning) have more wealth than the three billion poorest? Surely this outcome wasn't a result of mistaken belief systems!

Confusion arises when material Progress for some is conflated with actual Progress—real positive changes in human behavior—for all.

Nevertheless, I do not mean to be too hard on Maxton today. He starts the essay cited above like this—

Why are we all here? It is a difficult question to answer, having troubled philosophers and thinkers for centuries. Thankfully, modern-day economists have found the answer. Better still, we have all accepted their conclusion. The purpose of life is to consume...

And ends with this—

We also need to ask ourselves what life is about. It is not about economic growth. There are a vast array of other pursuits that can fulfill us—social, cultural, intellectual and spiritual—which do not drain the planet of its resources or promote disharmony.We need to take control of our future, to create just and sustainable societies.

Most of all, we need to develop a model for the future that is not held captive by the free market, by consumption and by growth for its own sake. We need to think differently about inequality, poverty and population. We need to think about how we can restore the bonds of good society. We need not abandon free market economics entirely—but we need to ensure that our economies are managed to meet our needs—all of our needs.

I couldn't agree more, although I am not hopeful that any of these noble goals will be accomplished, and therefore I am not sanguine about future outcomes. I haven't read Maxton's book, but I'll bet the farm it includes the Obligatory Hope. Otherwise, how can we explain why The End of Progress has been nominated for the Financial Times and Goldman Sachs Business Book of the Year Awards for 2011?

 

Comments

[Alexander Ač]

Now we can wait till the rest of 99,999999 % of BS economists will join him... or not.

[Wanooski]

You'll notice that he makes no mention of climate change, really only resource decline. Good luck with all your hopes for agriculture there friend, 'cause climate change is gonna throw one big rusty monkey wrench into those works.

[CHilke]

“The economic arrangement of society is to the liking of those who profit most from it. And it is no coincidence that they are exactly those who wield the power — the power to maintain intact the arrangement that suits them,”

-Manfred Max-Neef in "Economics Unmasked"

http://erikcurren.com/2011/09/economics-dismal-but-not-a-science/

[Gail]

Beliefs have consequences?

http://www.youtube.com/watch?v=WTrN2y_ueBU&feature=relmfu

[Dave Cohen]

As that video points out, beliefs are flimsy things, like tissue paper. They need not be based on anything at all, and usually aren't.

I "believe" it best to take a psychological view of belief systems. Beliefs are sugarcoating, they mask all sorts of hidden agendas, some of them conscious but most of them not (residing in the unconscious).

Like the virulently anti-homosexual congressman who is a closet homosexual. That's an easy example, but this human tendency goes far beyond this simple textbook case.

We could go around all day analyzing why some people absolutely deny that we are changing the climate. But the explicit stuff they offer up (their opinions, beliefs) is absurd on the face of it. There are all sorts of hidden agendas behind those statements. Without a brain-o-scope, we'll never know the real reasons, the psychological motivation, for their denial. I'm sure in some cases it is just a matter of getting paid (bribed) to make those statements. They have what Twain called corn-pone opinions. But of course, they will all deny that, too.

It seems astonishing that all sorts of people "believed" that free trade agreements would NOT, in time, help destroy the American job market. Yet all sorts of politicians pushed that agenda, and most economists and that redoubtable man of the people, Paul Krugman, supported them. Of course globalization has served the corporations and the Powers That Be very well, and served the American people not at all. And naturally there was opposition to these trade agreements from the beginning by people who could see that Americans were being sold down the river. So much for beliefs.

-- Dave

[Gail]

Well, upon closer inspection, God's bowtie is poorly knotted. His glasses are pretentious. And the Captain Kangaroo fetish wig is...kinda creepy. So without further ado, I beg you to retract that video linked to in my earlier comment. It can only lead well-intentioned, hapless readers of DOTE, following the entire series, inadvertently into the worst sort of youtube perdition.

Please, accept my apologies!

[xraymike79]

I've never heard of the term "biostitute" until today by a former biology researcher who was unhappy with a career change he made and was ready to go back into performing research for consulting firms that do field studies required by government regulatory agencies. As he explained it, businessmen have bought off the politicians and regulators so that their construction projects get pushed through, no matter the severity of environmental degradation that they cause. "Money corrupts everything so that the entire earth gets paved over."

"Our associates have Ph.D. degrees in numerous areas and have produced and written hundreds of EA's (Environmental Assessments) and EIS's (Environmental Impact Statements) that were so misleading and cleverly crafted that power companies have been able to fragment and destroy thousands of acres of fragile native forest and other ecosystems, coal mining companies have been able to blast off entire mountain tops, and departments of transportation have been able to spend billions of dollars helping urban blight and sprawl consume thousands of acres of farmland so that the petroleum industry could sell millions of barrels of oil to new hordes of commuters."

To some degree we are all prostitutes to the system.

[Paul]

What of the pre-historic communities that flourished as co-operative systems thousands of years before the invention of money? Even recent examples, such as Australian aborigines, provide evidence that human beings can behave differently.
Is individualism etched in our DNA or is it simply learnt behaviour?

[Ed]

Dave,

I think mr. Gore summed it up quit rightly as he used a quote from mr. Churchill back in the "inconveinient truth days".

>It's hard to make a man believe something if his livelyhood depends on him not believing it.<

That's what this is all about. The stupid simple fact that if you believe climate change exist, that peak oil and peak everything exist and even that peak credit exist, you will have to drasticly alter the way you live (up to the point of hiding in a closet in your basement armed with a Winchester and 40 can's of beans and 80 packets of beef jurky :-)). And you and I know full well (since we are sane people) that if you and I change our habits we will suffer the consequences and the world still will not be a better place.

Who is willing (or able) to say no to consumption? Who is willing or able to live life to his or hers own drum without seccumbing to pear presure? For instance who of the OWS movement would still want to change the rest of his or hers world and his or hers behaviour if his or hers college loan was refunded or his or hers salary was raised substantially (so he or she could buy into the American dream). For whome that American dream (and European and Asian and African dream) has become a nightmare not just because they CANT live it anymore, but because they don't WANT to live it anymore? I guess that's another 1 versus 99%. Now those 1 procent are the seed of a new dawn. Small group of people huh, so much for hope.

Greetings, Ed

[Hawkeye]

Hi Dave

I wonder if Maxton's acceptance into the mainstream (e.g. FT & Goldman awards), is because he offers the elite a cunning get away plan.

When faced with the failure to deliver material well being for the masses, they may just end up "fobbing" us off with sentimental platitudes; "you all should be content with your own love and spirituality - don't worry about such materialistic nonsense".

The 99.9% just need to learn to live off the milk of human kindness - whilst the 0.1% hog the remaining dwindling real resources!

[John Andersen]

I agree that precious few are willing or in a position to take the flak that comes from rejecting the empire.

Those who can are lucky, courageous, what have you.

Most people will remain stuck in the old paradigm even though they are aware it is wrongheaded.

[CB]

Human nature and failure of belief systems. But the beliefs have been based upon a constant flow of marketing propoganda.

[Tony Weddle]

There seems to be a growing number of books and articles that signal the end of economic growth. A good one I read recently is "The End of Growth" by Richard Heinberg. It doesn't really have an obligatory hope section, in the way you'd expect, so is a fairly rounded examination of the limits (both economic and environmental) that signal the end of growth. A fairly easy read, too.