November 29, 2020

Roberto Mangabeira Unger

Brazilian philosopher. He was the first Minister for Strategic Affairs in Brazil from 2007–2009.  Dr. Roberto Unger Mangabeira was born and educated in Brazil and is the Roscoe Pound Professor of Law at Harvard Law School. Professor Unger’s work is directed to the reshaping of present institutions as well as to a re-orientation of our experience and a re-interpretation of our ideals. This transformative intention, animated by a committed interest in unrealized human opportunity, unifies his writing.

In view of Dr. Roberto Mangabiera Unger’s expertise in the areas of the knowledge economy, technology and society and alternative economic paradigms, and in accordance to his wishes, some of the questions have been oriented towards such issues.

1. Is economics really the study of the economy? If not, what is it?

Economics for a long time has not been the study of the economy. Economics has been the study of a method that was pioneered by the so-called marginalist theoreticians at the end of the 19th century and… The application of that method to subjects that don’t appear to be economic at all is regarded as economics and the study of the economy by some other widely different method, for example, the writings of the German social theorist Max Weber about the economy, are not regarded as economics.

So it is primarily the study of a particular method, the nature and consequences of which I hope will explore on the course of our conversation. What it’s important to understand, is how economics exemplifies in a particular way the situation of contemporary social form.

If we examine the whole field of social and historical study, we see that there are three main tendencies in command. In the positive social sciences, including economics, what is in command is the rationalizing impulse. The attempt to explain the established arrangements as natural, necessary or superior. In the history of philosophy, we would call this right wing hegelianism. The real is rational. In the normative disciplines of political philosophy and legal theory, what prevails is the humanizing impulse.

The attempt to place a pseudo philosophical gloss on the homely arrangements of mid 20th century social democracy and social liberalism and to improve them by the management of the economy and by compensatory redistribution through tax and transfer on the one hand, and by the idealization of law in the vocabulary of impersonal policy and principle, on the other hand. So the two disciplines of power, the two normative disciplines are mainly occupied in this humanizing project. And in the humanities, what prevails is escapism.

Consciousness embarks on a roller coaster of subjectivist adventurism, disconnected from the imagination and reconstruction of society. The representatives of these three tendencies, the rationalizing, the humanizing and the escapist pretend to be adversaries, but they are, in fact, allies in the disarmament of the transformative will and the transformative imagination. So the fundamental characteristic that all of these impulses have in common is the suppression of structural understanding and of the imagination of structural alternatives. We think in science, in natural science, that to understand the phenomenon is to understand what can be done. But it is precisely this transformative insight that is suppressed in the contemporary disciplines.

So if we go back to the rationalising impulse and the positive social sciences, what we find is that each of them severs the vital link between insight into the actual and imagination of the adjacent possible in a different way. It’s the way that Tolstoy describes family life at the beginning of Anna Karenina. All happy families are alike but each unhappy family is unhappy in its own way. And the unhappiness of the social sciences is their prostration and they’re aversion from transformative insight.

2. What is the characteristic method of economics? And what is the trouble with that method?

The fundamental method of the discipline that was created in the wake of this marginalist turn of the 19th century is the creation of models, the production of models in mathematical language against the background of a very special kind of theory. I have to say something about the fundamental nature of the theory. The marginalists understood the economy as a series of connected markets. The fundamental operation is the choice of comparative ways to satisfy desires or goals.

Against the background of the constraint of scarcity, in competitive or relatively competitive markets. As if the main task in economics will be the explanation of relative prices, although this method has never actually explained relative prices in any real economy. So that’s the background. The fundamental nature of the theory. This theory, as the Austrian economists who were among the main formulators and defenders of that perceived, was not really a causal science at all, it was closer to logic than to causal explanation. In its purest form it was analytically rigorous, but empty… The form of deductive reasoning. So it creates an analytic apparatus. That is innocent of factual stipulations, causal conjectures or normative commitments. It’s a machine and a logic machine and the gas has to be supplied from the outside, otherwise it doesn’t work. So when it is rigorous, it is empty and when it has internal content, the internal content has to be somehow smuggled into it and it becomes impure. It’s either impure and corrupted, intellectually impotent, or it is rigorous and pure, but impotent.

So that’s the background, the analytical background then the main activity of the economist in this tradition is to formulate different models, which are stylized accounts of a part of economic reality against this undisputed theoretical background. So if a model doesn’t work they change the model by introducing new elements into it or altering the values of the elements. It’s like Groucho Marx said: I had principles and if you don’t like them, I have other ones. So this is widely regarded as an advantage because it makes the background theory invulnerable.

Something doesn’t work, you replace the model. But of course, it’s not an advantage, it’s a condemnation. And it risks condemning economics to an eternal infancy because it lacks this vital dialectic between theory and facts, empiricism. There is a great deal of theory and there is plentiful empiricism, but they have very little to do with each other in the science or the pseudoscience that resulted from this marginalist term of the late 19th century.

So that, I would say, is the fundamental problem with the economics that resulted from this revolution. There have been many other projects in economics. For example, Alfred Marshall, who wrote and taught in England at the same time of this marginalist revolution proposed that economics should be developed by the methods of natural history. It should be a context dependent causal science, like the science of the tides or the weather. But that’s not what on the whole it became.

So that is the fundamental character of this method, and to understand it fully, we have to take that is just the first of a series of flaws.

Because there are three other flaws that follow that fundamental one. So the second flaw has to do with the deficit of institutional imagination. In the economics that resulted from the margin of error and particularly institutional imagination with respect to the institutions of the market or the order itself. So from the standpoint of institutions, you could say there have been three main types of economics versus pure economics, which has no institutional assumptions. It’s, as I said, a kind of logical apparatus.

And as was demonstrated in the mid 20th century, it can be applied even to a command economy, a socialist economy. It’s innocent. This is so that the purists had raised their ethic, the ethic of Pontius Pilate. My hands are clean. I have make no commitments. My only commitment is to logical regard. And of course, this helps to explain a peculiarity of this economics, which is that it worships mathematics but employs only primitive mathematics. The mathematics developed before the middle of the 19th century because no other mathematics is of any use for deductive reasoning, which is what it mainly does, as opposed to the use of mathematics and contemporary physics to explore complicated and paradoxical types of connections in nature.

And then there’s a second kind of economics which you could call fundamentalist economics with respect to institutions. So it identifies the abstract notion of the market with a particular set of economic institutions. And this is the belief of the vulgar economists that a market is a market, property is property, contract is contract. Everyone knows what they are. In fact, the jury has demonstrated over 150 years that the market has no natural law and it can be organized in radically different ways.

So in this fundamentalist tradition, we have, for example, the school of Friedrich Hayek. And its assumption is that if Robinson Crusoe traded long enough on his island, he would eventually reproduce spontaneously the whole system of German private law because it’s intrinsic to the nature of the market. And then there’s a third kind of economics, with respect institutions, that you can call equivocating economics in which, exemplified by the practice of the so-called macroeconomists, who are the American followers of Keynes, who reduced his teachings to the theory of fiscal and monetary policy…

So there the idea there are warlike relations between large scale economic aggregates, like the level of employment and of inflation, and if you challenge and would say, well, these so-called laws depend on a host of detailed institutional arrangements. For example, whether it’s unemployment insurance or how labor is organized or how… Who has power over monetary policy and so forth. And then the macro economy will concede that that’s true. But if he is in a situation in which de facto there is institutional stagnation he will disregard this concession, this pro forma concession, and go back to what he was doing before, which was the exploration of these pseudo laws.

So this is the second effect. The third defect of the economics that resulted from marginalism is that it has no view of production. So it views the economy solely as a system of exchange mediated through the price system. This wasn’t true of the economics that existed before marginalism for the two greatest economic thinkers, previous, Karl Marx and Adam Smith. The theory of production was of equal weight to the theory of exchange. But the economists came to think of the world of production as a shadowy extension of the system of exchange.

And so if you open an economics textbook and look at the chapter called The Theory of Production, you’ll find that there is almost nothing in it about what we would call production. It’s about the substitution of factors of the shape of markets. And this is facilitated because in these economies that they study, labor can be broadened and sold and therefore viewed under the lens of relative prices.

The fourth defect of this economics that resulted from the march of this term is the theory of a method of competitive selection.

Bereft of any account of the diversification of the material on which competitive selection operates. So, it’s as if it were the neo Darwinian synthesis in the life sciences without the second half. So there’s a half about competitive selection. But whereas the other half about genetic mutation in recombinant, that doesn’t exist. And that’s a problem because the fecundity of a method of competitive selection depends on the richness of the material from which it selects. So this is like the truncated half version of some undeveloped theory.

Now you’ll notice that this is a pretty obvious account of these flaws, but it’s not part of the debate because the general public, the complainers, the hostile but confused enemies of economics can only think to say that the assumptions are not realistic. Real people are not these economic automatons and so forth. They don’t understand what the method was supposed to be. And so the economists can dismiss these complaints that arise from ignorance and confusion. And the real flaws in their pseudo science are never exposed there, as it were secrets, the secrets of this intellectual empire.

And that helps to explain this somewhat disastrous situation in which the discipline that has the greatest influence and authority among the social sciences should rest on such fragile foundations.

3. What do you see as the crucial flaws of the dominant tradition of economics? Is Marxist economics the alternative we need? And what about Keynes and Keynesianism? Most non-Marxist critics of economics seem to return to Keynes.

One way in which the method is defended is, well, what’s the alternative? I haven’t seen you point to a better alternative. But of course, we reach an alternative through critique.

Now in the history of economics there are now two main alternatives. One is Marx and the other is Keynes, and we should say a word about each of them so we have a broader picture of the situation. So Marx was a great thinker, a philosopher, all great economists are philosophers when they are not corrupted by worldliness in some way. So Marx’s great achievement manifest in his critique of English political economy, which is a new economy, has studied these regularities of economic life as if they were the universal laws of the economy. In fact, they are just the laws of a particular regime which he called capitalism.

So there is this insight that what was claimed to be universal and eternal was in fact provincial and transitory. The insight that the economic institutions, like all structures in society, are artifacts, they are our creations, is like a kind of frozen finding. So what are the structures of social life like? You could say it’s like a game of musical chairs. The fighting, the practical and visionary strikes in history is the music.

The music stops, everyone has to sit down. The strike is temporarily interrupted or relatively contained and the chairs and then the structures… There are the residues, there are these troops lives. That’s what’s implicit in classical social theory. It’s immensely fertile idea. But this idea, which was circumscribed and eviscerated much of its power by a series of illusions. So first there’s illusion, there’s the illusion that there’s a closed list of regimes in history. Slave economy, feudalism, capitalism, social state. It’s a fixed menu. And the parts of the menu are enacted progressively.

The second illusion is that each of these regimes is an indivisible system. So you either manage it and humanize it or you replace it all at once, and that leads to a binary idea of politics. So either there’s reformism or there’s revolution. All of this is false because real structural change is almost invariably fragmentary. And it can be revolutionary in its outcome, but it’s piecemeal in its method, and then suppressed by this idea. And then the third illusion is that there are these laws. There’s a script. Governing the foreordained succession of these regimes in history.

And so we don’t have to have a program or project… History has a program for us. And so this is Marxism. What’s happened in much of the world, in the third world, in the developing countries, for example, is that instead of being criticized so that one could rescue the central insight and liberate that insight from these illusions, what’s happened is it’s simply been watered down. And the result is a series of conclusions… The intelligentsia in much of the world has received and acts from the zeitgeist in the spirit of the time, with that action to cut Marxism in halfs throwning out the good part, which are the transformative aspirations and it’s kept for itself the bad part, the historical fatalism.

So we see in much of the world, in the intelligentsia, two main currents of thought. The degenerate copies of American style economics. On one side and this kind of watered down confusion, Marxism on the other. And there are two different kinds of fatalism and pseudoscience, drowning out this chorus of fate, drowning out the development of real transformative insight. So it’s a problem of Marxism… Marxism is not an alternative.

One can transform it into something else, but then one has to have an ambitious intellectual project. Then we have Keynes. And what has happened in much of the world is that when the leftist and the progressive economists lose faith in Marxism and socialism, they embrace Keynes and Keynesianism. Keynesianism is the kind of truncated or failed theory and as a guide to the alternative, it suffers from several problems.

So first of all, although it is not just logic as pure marginalism is, Keynes returned to the older English psychological tribute in economics. All the crucial variables in his system, the liquidity preference, the propensity to consume, the state of long term expectations are psychological variables. There’s no institutionalization, there’s no vision of structure. Second, there’s no account of production. His economic theory entirely return to the demand side of the economy, not to the supply side, not to the periodic revolutions in the productive ravage that so concerned Marx and Smith and the classical predecessors of marginalist economics.

And without a vision of the supply side of production, you can’t understand what happens in economic history.

The third problem with Keynesianism is that despite the title of his main work, the general theory, it’s not general theory of even of slumps, of crises, of ways in which demand and supply could fail to meet. It’s a theory of a very particular kind of slump. One characterized by the hoarding of saving rather than its productive investment and by the rigidity, the downward rigidity of a particular price, the price of labor.

And that leads to the fourth defect, which is that it is quite somewhere in between being a theory of the equilibrium of the economy at a low level of economic activity and being a theory of permanent disequilibria, and it has no way to resolve this ambiguity because of all the other limitations. The other three limitations of Keynes are very practical, unlike Karl Marx and Adam Smith, who were either otherworldly or revolutionary, he wanted to shine in his own time and to prosper and to influence.

And his activity in the world illustrates the proposition that the worldly is unable to change the world. So his occasional writings, his journalistic writings are often more profound than his theoretical work. Because in his theoretical work, he chose the approach which he regarded as politically most doable, which was the control of demand to avoid all confusion with the dangerous leftist or the wild social theories and to do what seemed to be feasible in the circumstance. And so he did shine as a result of this Faustian bargain that he paid the price for his worldly shining in the relative shallowness of his theoretical views.

So this is now a very abbreviated picture of the situation in which we find ourselves in the evolution of the discipline of economics in which the main tradition suffers from fundamental limitations that are disguised by its abundant empiricism, well, it’s a kind of flaccid empiricism. And because there’s no hard core causal core. So there’s no real causal view within the discipline of economics, either the causal views have to be imported from some other discipline like psychology, or they have to be invented ad hoc on the spot.

But this discipline is immensely prestigious and influential. And it has been used then as one of the two disciplines of power to manage the established order. Adapted to the social liberal or social democratic compromise of the mid 20th century. Now, in that there is a very interesting intellectual history. Let’s return to the example of Keynes just so we see… Now we’re not talking about theory, we are talking about real people, these theoreticians, and how they deal with their time.

As I said, Keynes’s theory, which a kind of unfinished or truncated, avoided theory… Avoided by the heretic himself who didn’t want to be burned at the stake. So Keynes already downsized his own theory, then come his disciples, like Hicks, who did the little diagrams that are in all the economic textbooks around the world. Then come the American followers of Keynes, who then take this system. And instead of taking it as a rival of theoretical paradigm, rival to marginalism, they redefine it as the theory of fiscal and monetary policy to manage this compromise of the mid 20th century.

And then they call it macroeconomics superimposed on the untransformed body of marginalist theory, which they rename microeconomics. So what had begun as a contest of two ways of thinking, ends up as two chapters in the same textbook. That having happened, the defenders of the main line of marxist economics are able to say whatever is new in this theory, it’s false. And whatever is useful in it, can be restated in our own language: we don’t need this so let’s get rid of it. And this goes under various labels, such as the study of the micro foundations of macroeconomics.

So we’re left with this situation in which we have this powerful methodological tools… We have one of these writings, this combination of logic with empiricism, but we don’t really have a way of thinking about structural change and structural alternatives in the economy, and we have reason to think about structural change. I hope that can be the next topic of our conversation.

4. What is the most important debate in economics today?

I think the most important debate in economics today, to my mind, is the debate about economic growth… Why are we practically interested in the economy so that we hope it will lift… That economic growth will lift from humanity, the burden of poverty, infirmity and drudgery… The development of our practical, productive powers. Up to the end of the 20th century we thought that there was a shortcut to economic growth. Development economics developed… proposed this shortcut… The shortcut was industrialization, conventional industrialization, what we call mass production work for this mass production.

And so it was the vanguard of that time, relatively more productive part of the production system. The shortcut to economic growth consisted in taking resources and workers from the relatively less productive part of the economy and putting them in the relatively more productive part. In practice, that meant taking them from agriculture and putting them in industry. Now, for various reasons, this shortcut had stopped working all over the world and one country after another is deindustrializing. So that vanguard is no longer the vanguard, it’s a leftover of an earlier vanguard. Or it is a satellite to the new vanguard. The new vanguard is what we call the knowledge economy. Dance in technology and science based practice, turned to permanent innovation. The trouble is that this new vanguard, where it exists and it does exist in every part of the economy, not just advanced manufacture, but also intellectually done services and even scientific agriculture… Where it exists, it exists only as a series of fringes, excluding the vast majority of workers and businesses.

And this insular and exclusive character of the new vanguard then becomes a driver of both stagnation and inequality. So that’s the dilemma. That’s the most important debate. The old road to economic growth has stopped working, but the alternative to it, which would be an inclusive form of the knowledge economy, seems inaccessible, doesn’t exist. And that is then the debate that begins to concern the whole world. That’s the most important debate… For that debate we need ideas, that these types of economics I’ve just described, are not sufficient to explore.

5. What is the knowledge economy, what is its future, and why does that future matter?

With knowledge economy then we have to understand in this broad way. It doesn’t reveal its full potential because it hasn’t spread. The dissemination and the deepening are two sides of the same process. An advanced practice of production reveals its potential only as it spreads across a wide range of economic circumstance. It’s arrested. It’s quarantined in its cabins and in these fringes and islands that I described. So it’s deeper potential is not manifest. But it does have a deeper potential and we can understand that potential in several ways… It brings together the activity of producing and of discovering production and imagination.

It requires a change in the moral culture of production. The traditional forms of production are based on the generalization of low trust among strangers. And thus they require and sustain command and control type of organization. The knowledge economy depends on a higher level of reciprocal trust and a discretionary initiative by all who are involved in the process of production. And it has the potential to loosen or reverse what has been the most persistent constraint in economic life, which is what we call diminishing marginal returns.

You can be an input to the process of production, the returns to that input rise, the plateau and then at the margin they begin to fall. Why? It’s because the process of innovation and investment is episodic. What the biologists call punctuated equilibrium… The knowledge economy has the potential to organize the form of innovation that is perpetual and that is internal to the process of production itself and to the extent that it does that, to relax or even reverse this constraint of diminishing marginal returns.

So this has vast potential. But to realize its potential, we would have to be worried about things. So, for example, we would need a different kind of education. Traditional industry doesn’t really need educated workers… it needs only elementary literacy and numeracy, a disposition to obey and physical dexterity. But the knowledge economy requires a form of education characterized by the mastery of analytic and synthetic capabilities. By flexible, practical and conceptual powers that are demanded for the… to take full advantage of numerically controlled machine tools. And it also requires a series of institutional changes in the economy and in the way of organizing the market so that more people can have more access to the resources and opportunities of production in more ways.

Now, there are many models that we have from the past of how we could begin. For example, there’s the model of 19th century agricultural extension. The state comes to the aid of the family farmer with scientific advice, with access to practice, so that family scale agriculture can have entrepreneurial attributes and organizes a regime of -what in today’s vocabulary- we would call cooperative competition. The family farmers have their own property, but they also pool resources, including even labor, to achieve economies of scale.

So from those relatively modest beginnings, we would have to start to redesign the market. So then instead of having a market order that it’s fastened to a single dogmatic version of itself, we have many ways in which economic agents can secure decentralized access to productive resources and opportunities. Alternative property and contract regimes will begin to coexist experimentally in the same market order. And those suggestions then lead into this wider debate about what’s wrong with the existing market order and what kind of a market where do we do we want to need.

6. What is the best way to think about the relation between economic growth and the preservation of nature?

Well, let me step back and first, before we go there to nature, to discuss this further this question we were just exploring of the problems of the market workers and then take the questions of nature as an extension of that larger debate. So, I was suggesting that the market orders now crucified on the cross of a dogmatic version of itself… A single form of property contract. And on the basis of this false idea that the market order has an intrinsic legal and institutional form. Let me explain in a very general way why and how this idea is false.

So even at the most abstract level, the idea of a market has at least two dimensions. One dimension is the absolute level of economic decentralization. How many different economic agents have access to productive resources and opportunities and are able to bargain on their own initiative and for their own account? But there’s another dimension, which is the absoluteness of the degree of control that each of those agents enjoys over the resources at this command. Dimensions supposed to go natural, naturally necessary to gather data.

The ways in which we can extend the degree of decentralization is by creating claims on productive resources that are temporary or conditional or fragmented so that there can be a churning. For example, we say the state holds productive resources and trust for society and whoever can assure the highest rate of return for the use of those resources, gets to use them while they can ensure that rate of return. In other words, instead of having just one way of decentralizing economic resources, we have many.

And we can combine resources and achieve scale without committing ourselves just to the traditional, unified, isolated property right. We can create many different forms of property and contract. As the background to an experimental innovation economy. Now, under the present form of the market order, what we find is that the market generates a huge amount of inequality. And then the inequality is supposed to be corrected after the fact by progressive taxation and redistributive social spending. But the result of that is that then there’s a fight, a tension between the economic incentives and arrangements on one side and the logic of redistribution on the other.

The redistribution would have to be massive to fix the inequalities that are anchored in these radical divisions between the advanced and backward parts of production. And long before they reach the threshold to make them sufficient to address those inequalities, they would begin to disorganize the economy an exact and unacceptable cost in output. So that’s what happens in the real world. We need to anchor the impulse to equality and inclusion in the way of organizing the market rather than just to correct the inequalities after the fact through compensatory redistribution, by taxing transfer. One of the most important aspects of that objective is the question that we addressed earlier in our conversation of the access to the most advanced part of the production. Will the access be for an elite or will the knowledge economy, today’s vanguard be for an elite, or will there be a knowledge economy for the many? There cannot be a knowledge economy for the many just by the horizontal vegetated extension of the present knowledge. It has to be organized. It has to be arranged. Which is the design of the institutions of the market. And therefore we need the kind of economics that is capable of forming such a transformative project.

This is not simply an instrument of manipulation of economics, because as I argued at the outset of our conversation: insight is always transformative insight and if we don’t understand how the actual can be changed into something else, we don’t understand it at all. All we have is a retrospective rationalization under the disguise of an explanatory account.

Let me begin by characterizing the main temple of preservationism or ecology in the rich North Atlantic countries. Main spirit is a post ideological or post structural politics. So the idea is: history has disappointed us. With the alternatives produced in politics and national politics, so we will seek refuge in the great garden of Nature and then imagine a series of parks. Now we need something else. We need to show how the imperative of the preservation of nature, instead of being a way of escaping from the imperative of structural change, can serve as a provocation to reinvent structural alternatives in a new form.

Let me give the example that concerns me as a Brazilian of the Amazon. OK, so the example of the Amazon. So we have this vast area, the richest, most diverse tropical rainforest in the world, in South America, a large part of it being in Brazil.

How can we give practical content to the idea of sustainable development? Only by developing missing linkages between the urban industrial complex and the green complex, technological, technical, economic and legal linkages, and an advanced science based form of production to mobilize the resources of the world in a way that preserves, in other words, that’s only possible through Vanguardism, to the most advanced knowledge and science based form of production. It’s not possible through an artisanal craft like form a production bereft both scale and technology or science.

And that is the kind of preservationist project that would interest us. One that is connected to the structural imperative rather than one that serves as an exemption from that imperishable.

7. What should we want from the organization of economy? What’s wrong with the way the market order is organized now in the rich North-Atlantic countries? Can and should the market economy be organized in a radically different way from how it is organized now? Or is the best that we can hope for to humanize the market and correct the extreme inequalities that it generates, as social democrats have historically proposed?

Right, excellent. So that’s that’s nature. So the next question is, what should we want from the organization of the economy?

What’s wrong with the way the market order is organized now that we just did a different sequence, I think.

OK, but so.

What do we want in the most general terms? First of all there are productive powers to be enhanced. Now, you know, in the rich countries today there’s a discourse that goes under the labor secular stagnation that tries to give a semblance of naturalness and necessity to the slowdown in the growth of productivity. And it attributes this slowdown, for example, to the supposedly lesser potential of today’s technologies when they are compared with the technologies of 100 years ago.

But it’s strange. How could anything be more revolutionary than artificial intelligence? There’s a much simpler and more straightforward account of the slowdown in productivity. The most productive practice is denied to the majority of economic agents, of individuals and firms. So we want to lift the majority up and equip it with the most productive resources. That’s the first thing we want. The second thing that we’ve learned is that the impulse to inclusion and equality, rather than being only provided retrospectively through compensatory redistribution and redistribution of social spending, be anchored in the logic of economic growth itself.

And that’s then the reason to redesign. Even the fundamental arrangements of property in this contract. And the third thing that we want is that the distinction between work and creation or even work and measure be attenuated. And that work not just be an instrumental and hateful burden but that it be a way of transforming ourselves by transforming the world around us. And a form of production that enacts the imagination, that is mindful.

Part of the promise of the knowledge economy has this potential. All of the great economists of the past including Martin Smith, had a vision of the unrealized potential of humanity, and there is the idea, which is central to our civilization, that the spirit does not simply float over the world - it is embodied and embody in material life. In the Hebrew Bible, God says: I will pour out my spirit unto all flesh. It is embodied spirit. And we don’t just think of our material life as something to get over, but it is something to transform.

And therefore the fundamental idea is an idea of transcendence, of greatness, of liberation, of deep freedom… Realized not simply by being excused from work, but in work itself. And these are all of the high ambitions that we should have for our material life. Right now, we have to find a way of thinking in detail and in practice about the institutional and structural changes. They could make these ambitions real, and this is in a way the most profound criticism of the rating methods of economics, that they do not equip us to fulfill this spiritual vocation. This vocation of transforming our material life.

So the hard nosed statistical economists who impersonate what Thomas Carlyle called the dismal science, who appear at the door as the ones who present the bill, the bill of the trade offs, all of that is useful and even indispensable. But it is not enough. We don’t want just the science of the trade offs, we don’t want just the presentation of the bill by the bill collector at the door. We want a way of associating our highest ambitions with the transformation of our practical experience.

And that’s what best economics has been. And what we should want it to be again.

8. Both Marx and Keynes believed, in different ways, that we were about to overcome scarcity and that once we overcome it we can free ourselves from the hateful burden of productive labor and devote ourselves to higher tasks. But what if we fail to overcome scarcity? Can we hope for freedom in the economy rather than just for freedom from the economy?

It’s not enough to be liberated from scarcity so that we can be free. We have to be free in the midst of scarcity. Marx and Keynes, who were so different, shared two ideas, one idea was that we’re at the eve of overcoming scarcity. And the second idea is that ordinary work, ordinary labor is a hateful burden… Once we overcome scarcity, we will be able to devote themselves to the higher pursuits, to the things that are sublime and will be poets in one time of the day and fisher in another time of the day and will be in a perpetual evening.

Now, it’s not true, we’re not about to overcome scarcity, scarcity is perpetually renewed in different forms, but it’s also not true that work has to be simply a hateful burden. We should have the aspiration to achieve freedom in the economy and not simply freedom from the economy. And it’s for that reason that we should reorganize our institutions and reshape our way of understanding economic life.

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