WILL THEY NEVER LEARN?
Many people in powerful positions - in economics, banking, industry, politics and government - seem impervious to learning. WHY?
Time and time again, we can witness people in power repeat strategies that have, time and time again, manifestly failed. We need look no further than economics and finance to see a rugged adherence to market fundamentalism despite the fact that a thirty year experiment in free market economics has produced inequality, instability, misery for the many - and wealth for the few.
In the social sphere, left wing politicians yearn for a return to centralised government action, whilst the right continue to trumpet the virtues of unfettered markets. The sustained success of social market nations prove both to be utterly wrong, but understanding how social market economies work seems to be far too complex for zealots of all political colours.
In the US, there is a large body of people that hearkens back to the early days of America, the Boston Tea Party and a Constitution written in the eighteenth century as providing strategies for action in the contemporary world. Another substantial body of people believes that both testaments of the Bible represent literal truth. Yet another group are captivated by the idea of frontier values, rugged individualism and the “freedom” of all to compete in a market unfettered by the state.
How on earth they can hold so passionately to these views beggars rational belief. For instance, a document written in the eighteenth century is most unlikely to be appropriate in a literal sense to the modern world - as an example, guns no longer need to be carried to fight the British colonialists.
Most reasonable churchmen, Moslem, Christian or whatever, do not believe that stories written over a thousand years ago by a variety of different people can literally represent the immutable word of God. They need to be interpreted to suit a contemporary context, otherwise hundreds of years of scientific discovery is negated.
Market fundamentalism is a creation of economists who seem to have a complete blockage when it comes to understanding human nature.
In Britain, there seems to be a large group of people inside politics and in the wider population who behave as though they believe there is still an Empire and that Britain can stand alone in the world.
Reasons for ignoring evidence and lack of learning
FaithIn this context, faith can be defined as a belief in something for which there is a lack of objective evidence.
I have no argument with people holding such beliefs - that is their business. But problems arise when faith becomes zealotry, which leads to imposing faith-based views on others, demonising those who hold different opinions; or trying to convert others by force.
It can be argued that throughout history more loss of life and misery has been caused by zealots intolerant of others' views than by any other human agency. And of course, the process continues - religious intolerance is killing thousands every month. More insidiously, faith in political and economic theories that have little basis in objective evidence is even now undermining the world economy - and causing misery to the majority - whilst a minority is wallowing in riches.
Self interestAs a general tendency, powerful people and groups seem possessed of a strong desire to exploit and hold on to privilege. This tendency is observable right across the world. In essence, there is little difference between despots and enormously rich organisations and individuals. They all seek to maximise and retain their wealth and power, resist attempts to control their activities for the good of society and hide their wealth in safe boltholes.
This seems to me to be one of the strongest pieces of evidence against market fundamentalism. Free markets aren't “free” at all: without very strong external intervention: they are open to exploitation by powerful interests. Adam Smith understood this, his latter-day disciples seem not to have understood him.
In this context, politicians in Britain and many other democratic countries are subjected to barrages of lobbying and financial support by massive commercial interests - banks, corporations and individuals. But nowhere is such influence stronger than in the United States, where commercial sponsorship and lobbying of politicians is virtually unfettered and no politician can hope to compete in “democratic” elections without massive financial backing. In Britain, where politicians are maybe somewhat more constrained from accepting tainted money, the prospect of a wealthy future after politics has not escaped the minds of prime ministers and senior politicians.
This trend is absolutely anti-democratic - ordinary people without wealth cannot influence the direction of policy on a continuous basis - and four or five-yearly elections for political parties is a weak substitute for a permanent inside track to influence.
Media InfluenceTaking excessive account of media-fuelled public narratives. There is a constant stream of comment in the press and other media about the economy, crime, the causes of poverty and exclusion and the state of public services. Much of the material is put out by journalists who simply take a story from another source, juice it up and put it out. Nick Davies, in his book, Flat Earth News1 quotes research indicating that only 12% of newspaper stories put out by journalists are checked with reliable data sources. It is extremely difficult for politicians and others to avoid being influenced by the constant public 'noise' however inaccurate it often is, because it is also strongly shapes public opinion. Politicians tend therefore to tailor their policies and spin to satisfy a fickle media.
Davies, N. :Flat Earth News, Chatto & Windus (2008)
Ego-needsMany politicians are of necessity highly resilient and strongly intentioned. They share many of the characteristics of Chief Executives in the commercial world. The more prominent roles require people with high ego needs to be able to go through what would be a punishing experience for those with lesser needs for public recognition. Such people very often find it difficult to listen to opinions contrary to their own or are impatient with nuances and complexity. They can therefore tend to live in a world of their own making, surrounded by supporters and unwelcoming of challenge or inconvenient evidence.
Lack of relevant practical, hands-on experienceThese days, and particularly in Britain, many politicians, especially in national government, have come up a professional political career route. This means that they have probably worked in political research or a think tank before becoming ministers, rather than having a career involving getting things done through large organisations. Thus, many are excessively influenced by the ideas of policy 'wonks' rather than the real lives of people in communities.
The same increasingly applies to top managers; too few of them have enjoyed wide experience of working in many functions and of coming through from the front lines of their organisations.
Short time horizonsThe life of political administrations may be short and in any case, the life span of a presidency, parliament or local administration is insufficient by comparison with the time needed to develop an initiative or change a social system. Many potentially beneficial initiatives have been spoiled by changes in priorities and funding commitments by government. Exactly the same applies in many cases to top management. Major decisions in large corporations will take many years to work through. Domineering and impatient investors are unwilling to countenance this. Thus innovation and investment are inhibited.
Action, not reflectionPolitics and business to-day are scrutinised by media and investors 24 hours a day with intense moment-by-moment coverage. There is no time to absorb relevant information before acting. Competing parties often feel the need to make instant response to media comment or to counter the initiatives of rivals. Thus, many initiatives have been announced half-cooked, without sufficient thought given to their likely impact in the real world or to that modern bane, unintended consequences.
Equally, corporations fire top managers and tune strategies to satisfy media and investor pressures.
Concern over loss of controlIn a context where the actions of government officials and elected politicians have become the objects of 24-hour scrutiny and comment; it is unsurprising that official bodies set up by governments and reporting to them have become far more concerned with control, measurement and governance than action, and with setting up elaborate infrastructures before doing anything. This has always been the tendency of bureaucracies and local government officials, where public finance might be at risk and where accountability is paramount. But where the issues at stake are matters of fine detail, the result has become an oppressive type of micro-management. Perhaps it is not surprising that both main parties in Britain are attracted by private sector involvement, where the principal of “shared risk” means that the contractor can take a lot of the blame when risk leads to failure, thus absolving politicians.
Narrow SpecialisationAcademic specialisms have tended to become more and more narrow and seqmented. Many modern academics concentrate on mastering a specialism in great depth, losing sight of the wider context around it.
This certainly applies to economics, a discipline that has been very significant in shaping public policy. The discipline of economics ought to be a social science - that means that competent economists should have a good grasp of human behaviour, in groups and at the individual level. In addition, they need to understand the significance of historical events and trends - especially examples of recurrent dysfunctional behaviour. They obviously need to have a grasp of mathematics and money, together with a broad sweep of economic theory from an historical perspective.
Most important of all, they need to be able to synthesise many strands of evidence and data in order to form coherent multi-faceted perspectives.
How many economists can do this? The answer seems to be very few. Most are specialists - and in government many economic specialists in Treasury departments are lacking broad experience. The same applies to disciplines like investment management and banking. There are very few people in either occupation who can or care to venture outside the narrow confines of their specialisms.
Thus the world is subject to theories that have little contextual relevance or substance, and recurrent fashions that burst on the world, have their time in the sun and fade away. Alas for the wellbeing of the world, economics has become like fashion.
What can be done?
There are no simple or universal solutions to problems that are rooted in some of the less attractive facets of human nature. But here are some strategies that may alleviate some of the worst excesses of the powerful:
Enhancing the roles of womenThere is good evidence to indicate that educated women in the populace of less developed countries can have a manifestly positive influence through collective enterprise. The same applies to developed countries. Public and institutional life in the UK is still dominated by men. The role of women in society is grossly undervalued; from parenthood to caring and through to business and politics.
Education in life, social and critical evaluation skillsThe education systems of Britain and America in particular are seriously degraded. They focus excessively on examination league tables and narrow learning. A revolution is needed to help young people to develop effective social skills, empathy and the ability to work collaboratively with others. Equally important, education does not equip the majority to develop critical appraisal skills - this leaves them prey to enormous hurricanes of advertising and propaganda with little ability to sceptically appraise the merits of political arguments and commercial manipulation.
Control political lobbying and stop financial influence by the rich and powerfulFunding of politicians and political parties by financial and commercial interest groups is a form of corruption. Special interest groups are enabled to gain privileged access and control political agendas through the use of money.
This should be stopped in Britain, and political parties should be funded impartially from the public purse. Otherwise the main political parties will be subject to special influence by interest groups and rich individuals with axes to grind.
In the United States, the situation is far more poisonous. No politician can stand for state or national office without enormous funding and massive advertising. Special interest groups, such as those opposed to controlling environmental destruction by large corporations, are providing massive funding to individuals politicians and their parties. America is rapidly moving away from being a democracy towards a plutocracy in which the power of the rich trumps the will of the people.
Massively encourage social enterpriseSocial enterprise can have transforming effects on the lives of individuals and communities. Quite simply, individuals with a real stake in the lives of communities are supported and funded to take initiatives addressing problems and opportunities that will have a beneficial effect locally. There is good experience* to indicate that, properly supported, local enterprise across a wide spectrum of activities from savings and banking, education and skills development, supporting the needy and deprived to leisure, culture and sports can have hugely beneficial effects. The benefits are two-fold: People gain confidence and skills in organising and working with others - and local issues get beneficially addressed.
The UK-based Joseph Rowntree Foundation has conducted community based initiatives which strongly indicate that top-down initiatives from local or national government (or large corporations) are far less effective in establishing sustainable local enterprise than small-scale local support and small parcels of money to enable locals to “do it for themselves”. Such initiatives supported by “viral” networking are also shown to be far more effective than the bureaucratic strategy of “scaling up”. * For example, see: Sustainable Paths to Community Development - helping deprived communities to help themselves. School for Social Entrepreneurs, London. www.sse.org.uk