Eclectic Spacewalk #8 - Four Futures of Narrative Economics
Narratives in the field of economics about life after capitalism.
Table of Contents:
Four Futures of Narrative Economics—
Act I
Chuck Prince & Alan Greenspan stop dancing
Economics is Politics
Blind spots deciding Socialism or Barbarism
Act II
Uncertainty abound
Equality & Abundance: Communism
Hierarchy & Abundance: Rentism
Equality & Scarcity: Socialism
Hierarchy & Scarcity: Exterminism
Act III
Narrative Economics
We are a superorganism
Audio (4 podcasts)
Video (7 videos)
What’s Next?
Reading Time: 20 minutes (Read sections you find intriguing, bookmark the media/links, and come back to anytime.)
Four Futures of Narrative Economics—
Abstract: “Critics of capitalism declare the impending end of the current system unfolding before our eyes. On top of that, we humans are facing two other uncertainty crises: our personal sovereignty/freedom is threatened by authoritarians around the world, and we are living during the Anthropocene epoch amid ecological degradation. Graphing those uncertainties unveils a four-future possibility of life after capitalism. Narrative Economics posits that the narratives we tell ourselves collectively about economics are the real drivers of change, and can have viral contagion effects similar to disease epidemiology. Put it all together, and we have Four Futures of Narrative Economics. The story of global human society functioning as an energy dissipating superorganism is an economic narrative for the future we can get behind.
Act I
Just before the 2007-2008 financial crisis, Citibank chief executive Chuck Prince said, in a now-infamous quote, “when the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance.” He, and everyone else, apparently stopped dancing shortly after.
Prince’s words would become prophetic after describing the boom-and-bust cycle of speculative bubbles that the world continues to experience, even today. This feedback loop of “reflexivity” is an effect of market sentiment that self-reinforces due to rising prices attracting buyers who then drive the price higher with their actions, which continues to make prices go even higher. This is not a bug, but a feature of our economic and social environment.
Alan Greenspan, former chairman of the Federal Reserve, whose job it is to set interest rates and monetary policy also stopped dancing. He even questioned whether we should be dancing at all. During a congressional hearing, Greenspan said he was “shocked” that he had a “flaw in the model that I perceived as a critical functioning structure of how the world works.”
THE HEAD OF THE WORLD’S LARGEST ECONOMIC INSTITUTION ADMITTED TO CONGRESS THAT HIS BIASED “IDEOLOGY” - AND NOT THE FACTS - INFLUENCED HIS DECISIONS THAT NEGATIVELY AFFECTED NOT ONLY AMERICANS BUT THE ENTIRE WORLD FOR DECADES.
So how is it possible that the chairman of the federal reserve recants on his free-market ideology? There is hardly ever one single reason, but the highlights include: 1) the fallacy of consumers and groups always making rational choices; 2) the fallacy of the all-powerful “invisible hand” or “the market” eventually making things right; and 3) economics not articulating its goals clearly and focusing on one objective - Growth. David Pilling, the author of The Growth Delusion, makes the link between economics and disease epidemiology, “Only in economics is endless expansion seen as a virtue. In biology, it is called cancer.”
Economics is, by default, political. “There is absolutely no way to understand events before, during, and since the financial crisis of 2007-2009 while ignoring the powerful political forces that have shaped them,” says Anat R. Admati. She continues, “applying inadequate economic models to policy in the real world is akin to building bridges using flawed engineering models. Serious harm may follow.”
Narrator: “Serious harm did indeed follow. To the tune of $22 Trillion.”
—
Economics is Politics
The previous essay on terrestrial politics outlined the theoretical framework for a different kind of global politics. NOT a global government. But, a governance system that is global and bears the fruit of economics of Earth’s scale and breadth. Several essays’ theses are synonymous with Admati’s research on technology being the catalyzing force behind it all: “Governance and politics are key to outcomes everywhere. Related issues about power and control and about the respective roles of governments and private sector institutions are playing out prominently today in the technology sector.”
Economist Ha-Joon Chang, along with a select group of others like Admati, is actively critiquing their own profession and its hegemony. Every decision we make as a society is a policy choice. Economics and politics are linked closer than anyone has wanted to admit. Laissez-faire economics is not an exception. Saying, “we aren’t going to do anything” is not the absence of policy, but a policy of absence of controls on externalities. and of any postmortem to learn. It is also an absolute absence of any legitimate logic that deals with human beings in a hyperconnected environment on a limited biosphere during the Anthropocene epoch---an economic AND political choice.
Chang, in his seminal series for the Institute of New Economic Thinking, breaks down five reasons economics and politics are inseparable.
Economics is largely about government policy
Economic Theory and politics influence each other
ALL economic theories contain political value judgements
Power relationships affect the economy
The market itself is a political construct
—
Blind spots deciding Socialism or Barbarism
Admati admits that economics has an interdisciplinary research problem, in not being able to see the bigger picture - in other words, blind spots. If our politics dictate our economics, then what are some problems that interdisciplinary research could benefit from? Historically it has been solely an economist’s problem to think about the economy - to the detriment of us all. We need more diverse voices dictating the theoretical and practical frameworks of our economy.
Admati lists low-hanging fruit that could use more diverse eyes: “Whistleblower policies, the impact of consumers, employees, and politicians on corporate actions, accounting rules for derivatives, the effectiveness of boards, audits and auditors regulation, the design of bankruptcy laws, money laundering, corporate fraud, the organization and pricing of deposit insurance, debt subsidies, the role of financial literacy and ideology in policy discussions, the structure and governance of regulatory agencies and central banks, lobbying of multinational corporations, the governance of international bodies such as Financial Stability Board, Basel Committee, and IMF, and the political economy of corporate enforcement.”
Each of the issues listed above could, and would, greatly benefit from more diverse voices in the conversation. Until now, the economics profession and those involved in it have systematically pushed out other modalities of research. I hope that soon comes to an end because we may be doomed if it doesn’t. In 1916 Rosa Luxembourg said that society must make a choice of how it acts in modernity, “Bourgeois society stands at the crossroads, either transition to Socialism or regression into Barbarism.”
If this quote made sense over 100 years ago and is just as prescient today, then, seriously, what are we doing?
I am not alone in thinking this. According to Edelman, a global research firm, “56% of the global public thinks existing capitalism is a bad system.”
—
Act II
During the 2007-2008 financial crisis a movement occurred against capitalism’s biggest benefactors: banks, corporations, and Wall St. That movement was called Occupy Wall Street. During one of the speeches in Zuccotti Park, famed philosopher Slavoj Zizek paid homage to Frederic Jameson by paraphrasing him and asking the crowd to seriously think of what kind of future they wanted to create moving forward, “It’s easy to imagine the end of the world, but we cannot imagine the end of capitalism.”
One of the defining characteristics of our current time is that it is fraught with uncertainty. What does the future hold for life on Earth? And are humans part of that future? Will we ever run out of resources? Can we truly make renewable energy a viable baseline for a society as large as Earth’s? Socialism or Barbarism?
If we take Luxembourg’s quote at face value, we can begin to plot possible scenarios of our future after capitalism. So for the remainder of this essay, let's take on the assumption that capitalism ends based on Peter Frases’s book Four Futures. This comes from what tech people call “full automation.” Basically robots, algorithms, or a mix of both in an Artificial Intelligence will make humans working for a paycheck, which is just working to survive, obsolete.
Two additional assumptions are ones of uncertainty, as counterintuitive as that may sound. One uncertainty is a question of class power. The other is ecological. These contradictory dual crises of uncertainty play out in society’s social dynamics, globalization of labor markets, automation technology prevalence, morality of the classes (especially to the most vulnerable), and, as we will see later, the dominant social narratives individuals and the collective create through feedback loops.
If we were to visualize this on an x-y matrix, the X-axis would be class power going from hierarchy to equality. To what extent does the 1% hold on to power? The Y-axis would then be the ecological framing of abundance down through the spectrum to scarcity. If we solve our limited “earth’s carrying capacity” resource problem then we will have abundance. If we don’t, then things get scarce.
Andy Hines created the handy graph above. In each quadrant is a confluence of values that add up to a value in relation to the Eco-crisis and class power assumptions.
—
Equality and Abundance: Communism
“In order to imagine a totally post-scarcity world as a utopia, then, it is necessary to imagine the sources of meaning and purpose in a world where we are not defined by our paid work,” says Four Futures author Peter Frase.
Try to imagine a world in which your job is not the main determinant of life and the happenings of human beings. Suppose we had sufficient tech to give everyone on Earth everything they needed to survive, but also a way for them to get what they want as well. Suppose also that everyone lived not in one consolidated hierarchy but in many, none superior to any other. “It’s important to keep the lights on, and sometimes that takes work - but keeping the lights on is not what makes us human. It is merely a necessity that we can and must transcend if we are to truly be free. Freedom begins where work ends - the realm of freedom is after hours, on the weekend, on vacation, and not at work. And that remains true whether you work for a capitalist boss or a worker-owned cooperative. The space of work is still the realm of necessity and not of freedom,” says Frase.
Star Trek is the first thing to come to mind as an example of this type of abundance and equality relationship. The show’s replicators (imagine the most futuristic 3D-printer your mind can muster and this is much better). The show’s philosophy about the prime directive, and how to treat other beings morally and justly, stands in contrast to most Sci-Fi marauding around the galaxies; it is still way ahead of its time.
Do you love your job? Do you love it so much that you would do it every day till you died and not retire? For most of us, our labor is the only thing we have to sell, and selling it is the only way to get by.
Now, imagine not having to work for a living and still being able to survive and thrive. Currently, this is completely opposite for almost everyone on Earth.
Frase tells us about the main objective of this section, “The effect of the welfare state, at its most universal and generous, is to decommodify labor - in other words, to create a situation in which it is possible to survive without depending on selling your labor to anyone who will pay for it.” He goes on, “What distinguishes socialism from capitalism, then, is that production is rationally planned and democratically organized, rather than operating at the whim of the capitalist or the market.”
This essay is not an all-knowing panacea, and it is false to claim that we will not have any more problems. We will STILL have to work together. “So ending capitalism, and even ending patriarchy and racism, won’t end the possibility for conflict. Differences of opinion, conflicts of interest, and personality clashes will exist in any conceivable world,” says Frase.
Humans have been working only recently in evolutionary terms. Using our labor in exchange for value to purchase commodities of survival is a recent occurrence in homo sapiens’ long history. The question we face today is one of revolutionary reforms. Do we have the capacity to radically transform society that advances all? Believing, even falsely, makes one human.
Frase alludes to uncharted territories of meaning for ourselves and everyone if we were freed of our need to work for wages: “Taking care of each other, overcoming our isolation and loneliness---is this the essence of being human? But is what we want a world where we are all paid for an activity or one where we are freed from the need to work for wages so we can explore what it means to take care of ourselves and one another?”
—
Hierarchy & Abundance: Rentism
If we return to our matrix, and instead of equality we have hierarchy on one axis. The same arrangement occurs, but techniques to produce abundance are monopolized by a small elite. Fraser is specific about his terms and their definition, “Because it is based on the extraction of rents rather than the accumulation of capital through commodity production, I refer to it as “rentism.”
In 1879, Henry George, in his book Progress and Poverty, insisted that “the true remedy” to the problem of income inequality was nothing more or less than to “make land common property,” thus eliminating the largest sources of rents that existed in his day.”
Does rent serve an economic purpose? If not, then why does it exist? Should it exist at all? Before you can understand what makes some piece of property valuable, you have to know what makes it property in the first place. Frase quickly dismantles the reader's supposed innate reasoning that property just happens instead of being an ‘enclosure of the commons.’
“For partisans of capitalism, it is often convenient to pretend that property is some naturally occurring fact, but it is really a social construction that must be delineated and enforced by the power of the state. And the very idea that all of the physical and social world can be divided up into discrete parts, each tagged with the name of an owner, is part of capitalism’s ideological infrastructure that had to be painstakingly constructed over many years,” says Frase.
An ongoing power struggle is at the heart of public or private “property”. In many ways, we are already living in this rentism quadrant. Frase gives us two examples of how ridiculous this way of thinking results in real legislation: first, in space, and, second, on the farm.
I have always wanted to go to the moon. It seems like the space race is reheating again, and missions to the moon are being planned by not only governments but also by private enterprise. This is making things a little squirrely…
Bigelow Aerospace, “has requested government approval” for “a ‘zone of non-interference’ around their future lunar operations.” Bigelow is arguing through their actions and through legislation that what they say is “protecting their investment.” The idea is that since Bigelow spent all this money, time, and resources to get to the moon, through legalese they can basically box out anyone else from that “property.” They are totally forgetting that no one “owns” the moon. Only in humanity’s hubris do we assume such ownership.
“The right to intellectual property is ultimately not a right to a concrete thing but to a pattern. That is, it does not just protect “your right to control your copy of your idea” in the way that it protects my right to control my shoes or my house. Rather, it grants the right to tell others how to use copies of an idea that they “own,” says Frase.
The other example comes from the US farmland. If I were to ask you what company’s logo has a green background with a yellow deer jumping, I bet you would be able to guess John Deere. Also, I presume if you know the logo, then you know what the company is famous for: tractors in all shapes and sizes.
What if I told you that John Deere is quite literally stretching the definition of private property to its legalese limits. “The company, for example, has argued to government officials that it is illegal for farmers to make modifications or repairs to the software that runs their tractors. This is, they say, because nobody actually owns their tractor - they merely have “an implied lease...to operate the vehicle,” says Frase.
That’s correct, John Deere says IN COURT that you can’t change their tractor because it really isn’t yours. You can operate it on a lease. This is insane, but par for the course in rentism land.
However, Frase offers just one thought experiment that completely upends this whole idea of private property, “This is not a right ordinarily or automatically granted to the owners of other types of property. If I produce a cup of coffee, I have the right to decide whether or not to sell it to you or drink it myself. But my property right is not an automatic right both to sell you the cup of coffee and to tell you how to drink it.”
Even if you are a staunch capitalist, there is a threshold at which you believe in some type of redistribution of wealth downward to support demand. We can then collectively wish for a society that reaches a state in which you get things because of your humanity instead of your labor. Frase says “you deserve a decent standard of living because you’re a human being and we’re a wealthy enough society to provide it, not because of any particular work that you did to deserve it.”
—
Equality & Scarcity: Socialism
Humanity’s belief in our anthropocentric supremacy, one separate from all other nature, is ultimately a fallacy. We humans are not separate from all the rest of life on earth, or in the cosmos, and are but one node in our vast universal system.
“If you view ecology as the project of preserving an unchanging nature, then you’ll inevitably wind up as a apocalyptic nihilist: there is no way to preserve nature as-is or restore it to some pristine state, at least not while also preserving human societies...In the end, nature doesn’t care about us; it has neither interests nor desires; it simply exists,” says Frase.
In the third quadrant, socialism, we live in a future where nobody needs to perform labor, but people are not free to consume as much as they want. There is some type of central planning that happens through government regarding human habits and influence on the Earth. In contrast to the plans of the twentieth century, however, those of the resource-constrained future are mostly concerned with managing consumption, rather than production. Controlling the waste products of human civilization becomes paramount due to our knowledge of our limited resources and the adherence to an egalitarian power structure.
If we assume that we get the replicator from Star Trek, the task now becomes managing the inputs that feed it. The question, in other words, is not how we reduce our impact on nature, but how we can better manage and care for nature.
It’s the values we hold that drive your actions.
Frase mentions an anecdote from Bruno Latour about the story of Frankenstein. Latour posits that it is a parable about tech’s relationship to ecology. Frankenstein is a warning about technology and humanity’s hubris. The real sin of the story was not making his creation, but in abandoning it to the wilderness rather than loving and caring for it. We have to do something counterintuitive and lean into not forsaking nature by knowing about it. We hate and demonize what we don’t understand!
“Yet we cannot (recoil in horror over tech’s consequences), nor should we, abandon nature now. We have no choice but to become more involved in consciously changing nature,” says Frase.
Limits on resources and the like make socialism different than communism, but it is a world of freedom compared to its opposite in the next section. The environment shapes our future, and with equality in plenty, we could redefine and make a new nature (with humans ironically having some type of pseudo-control of planning and resources) moving forward. We could still actually figure it out. Humans literally evolved to adapt and solve problems. Let us continue, with as many diverse voices, advocating for a better future.
“In other words, the socialist future can be as mundane as spending one’s replicator rations and reporting to duty in the Ecological Reconstruction Corps. Or it can be as grand as terraforming our own planet, reconstructing it into something that continues to support us and at least some of the other living creatures that currently exist - in other words, making an entirely new nature and ensuring that we still have a place in it,” says Frase.
—
Hierarchy & Scarcity: Exterminism
Have you ever seen Mad Max? How about TheHunger Games?
Those are more well known popular culture examples, but I think the best movie to represent our fourth and final quadrant - exterminism - isElysium. In the movie, the rich exist in a quasi-perfect world revolving inside a giant space station orbiting Earth. The rich in the ship have everything they need, including the best medical tech, while billions of poor humans battle for the survival of the fittest within a robot overlord de-facto police state run by the smaller elite above.
“Ironically, the life enjoyed within Elysium’s bubble appears not too different from the Communist scenario sketched out several chapters earlier. The difference, of course, is that it is communism for the few,” says Frase.
How is this fundamentally different than our present time?
If you have enough capital, you can effectively “purchase” a more balanced, healthier, and longer life while we peons live below our possible potential, says Frase, “The very richest inhabit a world in which most goods are, in effect, free. That is, their wealth is so great relative to the cost of food, housing, travel, and other amenities that they rarely have to consider the cost of anything. Whatever they want, they can have. For the very rich, then, the world system already resembles the communism described earlier.”
E. P. Thompson proposed that we needed a new category (Exterminism) to understand this social formation, “This term covers these characteristics of a society - expressed, in differing degrees, within its economy, its polity, and its ideology - which trust it in a direction whose outcome must be extermination of multitudes.”
Exterminism creates a militaristic default setting for civilization as it is a race to the bottom of “we (insert any country, state, government, or group) are going to get ours regardless of others.” In our scenario, there are scarce natural resources, so the people with power, influence, and, ultimately, capital make sure they are the ones in charge of those scarce resources. This is what sociologist Bryan Turner has called an “enclave society.”
“Despite the myth of increasing mobility under globalization, we, in fact, inhabit an order in which “governments and other agencies seek to regulate spaces and, where necessary, to immobilize flows of people, goods and services” by means of “enclosure, bureaucratic barriers, legal exclusions, and registrations. Or course, it is the movement of the masses whose movements are restricted, while the elite remains cosmopolitan and mobile,” says Turner.
Sound familiar?
Once you start thinking like you are enclosed and everyone else is “the other” we start heading down the road from enclosure to genocide (if that is the theoretical end of the road). Bad moral decision after bad moral decision, absent the egalitarian values, could easily slip humanity into a terrible future, says Frase, “of inhuman prisons, violent police crackdowns, and occasional summary executions to more systemic forms of elimination. Algorithmic targeting, combined with the increasing power of unmanned combat drones, promises to ease the moral discomfort of mass killing, by distancing those who mobilize violence from their targets.”
Genocide? Really?
“Things in our world may not play out with such literal deceptions, but we can already see how our political and economic elites manage to justify ever-higher levels of misery and death while remaining convinced that they are great humanitarians,” says Frase.
—
Act III
So which of the four futures are we headed toward? I agree with the main premise behind Frase’s concluding remarks, “We can’t go back to the past and we can’t even hold on to what we have now. Something new is coming - and indeed, in some way, all four futures are already here, “unevenly distributed,” in William Gibson’s phrase. It is up to us to build the collective power to fight for the futures we want.”
Narrative Economics, written by Nobel Laureate Robert Shiller, posits that the narratives we collectively tell ourselves about economics are the real drivers of change, and can have viral contagion effects similar to disease epidemiology. When stories go viral, humanity’s capacity for storytelling trumps statistics, proportions, or anything similar.
Kevin Mitchell, the author of INNATE and “a neurogeneticist interested in the genetics of brain wiring and its contribution to variation in human faculties,” says humans are messy in how we abstract the world and significance. “Statistics are great for making statistical (probabilistic or group) predictions. The problem is once you've abstracted away all the messy details, you lose power to make accurate predictions for individuals (who are nothing but messy details),” says Mitchell.
So what economic narratives should we tell ourselves moving forward that take into consideration each, or a combination of, the four futures? If we want our narratives to go viral, then we need to take into account the seven propositions of narrative economics.
1) Epidemics can be fast or slow, big or small
2) Important economic narratives may comprise a very small percentage of popular talk
3) Narrative constellations have more impact than any one narrative
4) The economic impact of narratives may change through time
5) Truth is not enough to stop false narratives
6) Contagion of economic narratives builds on opportunities for repetition
7) Narratives thrive on attachment: human interest, identity, and patriotism
—
We are a superorganism
In an ambitious and fascinating paper, N. J.Hagens proves to have the pole position in creating a cohesive narrative on how human evolved behavior, money, energy, economy, and the environment all fit together. Hagens recognizes, like most everyone mentioned in this essay, that our environment and economy are at a crossroads. However, Hagen’s reasoning is a bit more nuanced: “Global human society is functioning as an energy dissipating superorganism.”
Hagens says we have arrived at a species level conversation, “A bunch of mildly clever, highly social apes broke into a cookie jar of fossil energy and have been throwing a party for the past 150 years. The conditions at the party are incompatible with the biophysical realities of the planet. The party is about over and when morning comes, radical changes to our way of living will be imposed.”
The sooner we face this reality of our uncertain four futures, the sooner we can rise to the challenge of the times. “Under this dynamic we are now behaviorally ‘growth constrained’ and will use any means possible to avoid facing this reality. The farther we kick the can, the larger the disconnect between our financial and physical reality becomes. The moment of this re-calibration will be a watershed time for our culture, but could also be the birth of a new ‘systems economics’, and resultant different ways of living,” says Hagens.
Richard Roberts says we have to broaden our thinking about capitalism’s key performance indicators to really progress in any meaningful way, “Transforming capitalism to serve people and planet is a multi-layered challenge, and progress will be anything but linear. To stay the course, it is vital that we have a clear idea of what progress looks like over different timescales.
Otherwise, we risk falling into one of two traps:
The credulity trap - giving too much credence to good intentions and public statements that are not backed by meaningful action.
The cynicism trap - giving up too soon on the prospect of transformation because our expectations were unrealistic or too intangible.”
Whichever narrative we collectively tell ourselves needs to think about not only righting wrongs of the past but also being honest about the problems of the present while stewarding humanity towards a better future for our descendants. If society has forgotten its contract, we would do well to not just remember it but to do something proactive toward goals that intersect with our ecological crises and power struggles.
“Whatever we’ll call it, we are desperately in need of a set of guideposts and principles that include not only ecology but also biology, psychology, physics, and emergent behaviors. This discipline will focus at least as much on 'what we’ll have to do' as on 'what we should do'. And it will apply the evolving knowledge of experts with a view to the maps and charts made by generalists,” concludes Hagens.
May the best narrative win! And hopefully the most moral. And the most equitable. There is no utopia emerging-- I hope just better choices. The more diverse voices we have making the choices, the better chance we have of a better future for all, or as Buckminster Fuller challenged, “to make the world work for one hundred percent of all humanity in the shortest possible time, through spontaneous cooperation, without ecological damage or harm to any individual."
Audio—
Four Future author Peter Frase joins Majority Report with Sam Seder
Narrative Economics author Robert Shiller is a guest on Bloomberg podcast
Video Playlist—
Playlist
https://www.youtube.com/playlist?list=PL8ADA5JhLe28BETZfUR5eG_LKM8SoptSM
1) What Happens When Economics Doesn’t Reflect the Real World?
2) The Nature of Economics | Economics for People with Ha-Joon Chang
3) Four Futures: Life After Capitalism
4) Peter Frase - Socialisms and Barbarisms: Speculative Fiction and Post-Capitalist Imaginaries
5) Robert Shiller on Narrative Economics
6) Robert Shiller | Narrative Economics
7) 1. Change the Goal - 1/7 Doughnut Economics
What’s Next?
The next newsletter will be on: Consilience
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