Ross Gittins today in the SMH, regarding the bewilderment of the Howard government’s economic-rationalism ideologues as to why we sheeple aren’t more happy about the wonderful economy: It’s not only the economy, stupid
Gittins points out that growth in real incomes is not enough to satisfy when people no longer compare their circumstances only with themselves 10 years ago but also with the people around them, and all can see that the disparity in wealth between the social classes is growing. The evidence in the electoral polls shows that a growing proportion of voters prefer predictable job security to a booming share price, and are made more anxious that their children will be able to afford home-ownership than grateful over their own capital gains in the skyrocketing property market.
Economic-rationalism has never sufficiently factored in people’s attachment to intangible goods. Gittins’ final line nails it:
Another explanation for our base ingratitude, of course, could be our dawning realisation that there’s more to life than economics. No, that couldn’t possibly be right.
Categories: economics, Politics, Sociology
Abbott wants to stop measuring gender equality in the workplace 
Are cultural politics worse than no politics at all? 
What this election says about women getting themselves pregnant 
Speaking as a bitch who has read some macroeconomics 
Hoyden About Town 
And I’m sure all those economic rationalists (at least in Ozblogistan) will be going off and blaming Clive Hamilton for this.
“sheeple” : If that’s an ovine rather than feminine pun, I love it.
I’d correct Gittens, saying “There’s more to economics than capital and consumption”, although I think he is starting to get it.
I can’t claim credit for “sheeple”, Dave. It’s a staple of libertarian rants.
You are quite right – there’s no inherent reason that economic analysis can’t encompass intangibles and uncommodifiables such as unpolluted air, but the economic rationalists will never go for it.
The biggest problem I’ve noticed with economic rationalism is in its insistence people are all rational about economic decisions, when the overwhelming evidence is against the proposition. People don’t make decisions based purely on economic factors, and until economics as a “science”[1] can start to integrate itself more with the psychological disciplines and accept people aren’t going to do what the straightforward economic theory says they should all the time, they’re going to continue to be stunned by the results.
The other big problem is most economic theories which have any kind of public impact are the ones which benefit those who are already at the top of the heap. Socialism has been discredited, in part, because while it does improve the conditions for the majority of people in a society[2], it doesn’t show the same massive improvements for the conditions of those at the top of the economic tree that (for example) capitalist consumerism does. Indeed, a properly run socialist system will actually result in those at the top of the socio-economic tree being slightly worse off than they were before. So what’s in it for them? Given our economists, politicians, business leaders and other such types all tend to come from the existing “winner” class, they aren’t too interested in anything which will alter the existing structures.
[1] The quotes are intentional. While economists will say that economics is a “science”, they show very little interest in the use of the scientific method, or in the gathering of evidence to prove or disprove their pet theories. The more intellectually honest term would be “belief system”.
[2] With caveats about it being correctly administered and all the rest – I’m thinking of Scandiwegian socialism, rather than Russian, Chinese or Cuban versions.