Our Chief Mistakes

And How to Fix Them

Sometimes I like to imagine that people in general are capable of being swayed by strong arguments, and changing their behaviour when it becomes clear they have been making a terrible mistake. In that spirit, here is a list of things that Western society is clearly getting wrong, and strategies for correcting our errors.

This list is not exhaustive, of course. I am focusing here on our political economy, rather than democratic reform or aspects of social justice that go well beyond that, partly because many of the problems in those arenas are fed by economic inequality, but mainly because they bring in thornier questions with less clear resolutions.  I want to stick to a few things which are generally taken for granted by our politicians and mainstream media outlets, even though they are evidently wrong, and fixable. The fact they are taken for granted might have to do with the dominance of vested interests, inertia or sheer incompetence, but in the end, it goes on because we have been letting them get away with peddling this rubbish.

1. Money and markets can never measure the value of everything.

Photo by David Muir.

Markets are reasonably good at assessing the value of certain types of goods, in relatively equal societies. Unfortunately they are hopeless at taking account of any value or cost which cannot be easily tied to a monetary transaction. In highly unequal societies, they also skew priorities radically towards the very rich. Meanwhile, maximising profits often means artificially restricting access to good things. The more we marketise, the more this happens.

These simple, inescapable truths make the entire neoliberal project, which seeks to make markets the arbiter of all things, destructive, inefficient and ultimately futile.  Neoliberalism remains a central assumption of our political discourse not because it makes sense, but through the prominence of voices pushing it forwards, and the historical defeat of Communism, wrongly seen as its main ideological competition.

We can and must get past this by insisting on the importance of things which cannot be monetised without destroying or degrading them, and acknowledging the logical limits of markets.

2. There is no excuse for companies making profit their sole aim.

It’s not even good capitalism. If the only choice we had was between shareholder returns trumping all other considerations, or else state control of everything, it might make sense to choose the former. In fact, however, there are many other possibilities.

There is a strong case to be made for insisting that private corporations make something other than profit their central goal – providing the best possible services in their field, for example – and instituting independent oversight to make them accountable for pursuing that goal.

There is an even stronger case for encouraging the growth of cooperatives. Evidence shows that they employ more people, make them more satisfied, and have more space for ethical considerations alongside financial ones. They are also inherently far more democratic.

In particular, when it comes to natural monopolies – transport networks, distribution networks for power, water and so on – normal market principles like competition simply do not work. At best, regulators can try to bodge them back into place. It is beyond eccentric to expect companies in such positions to do a good job of serving the public as a side-effect of the pursuit of profit, especially given almost all experiences of privatisation to date.

3. GDP growth is a lousy measure of the health of an economy.

Gross Domestic Product is a convenient measure of the size of an economy, but as a proxy for the well-being or even the wealth of a population, its use is indefensible, and not only because of the inability of money to assess value.  Relatedly, limitless growth of GDP is clearly impossible, yet the assumption that it is necessary goes on underlying the political and economic narratives put forward by politicians and the media.

An income-adjusted figure might be a great deal more useful. Recognising the obvious fact that £1000 makes a lot more difference to someone earning £10,000 a year than it does to someone who already makes £1,000,000 suggests a straightforward but revolutionary modification of GDP: weigh changes in income in inverse proportion to their starting point. This would still leave out all the non-monetary aspects of a real economy, but it would at least give us a reasonable starting point. Other approaches to measuring the success of an economy include ‘Gross National Happiness‘ and other efforts to measure well-being, as well as direct measures of inequality.

4. The dole as we know it is unavoidably counterproductive.

Our current system makes payments conditional on claimants regularly jumping through humiliating hoops, and not benefiting from part-time work. It doesn’t need to.

An unconditional basic income, or Citizen’s Income, paid to everyone regardless of circumstances, would almost certainly be vastly more efficient. It would save on administration and lead to more productive work being done, by making the price of employing people more closely reflect its objective cost. Unfortunately, it would be quite a radical break from the way things are done now, and our politicians have become terrified of doing  or even suggesting anything radical at all, however clearly sensible. This would, of course,  be less of a problem if the status quo wasn’t manifestly broken.

All of this naturally leads on to the even bigger question of what we should do about the failings of representative democracy and existing structures of media ownership and control – but as I said at the beginning, I wanted to focus for now on things which are clearly fixable.

We can get onto the thornier questions later…

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