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The least worst solution
on 30 January 2011
How often have you started off a book full of enthusiasm, loved the first few chapters, and then found yourself wishing the author had stopped half way through? I get that all the time. I imagine it's because it's natural to deal with problems in two parts - `what's wrong with the current system; what we should do about it'. Unfortunately it's much easier to knock the existing system than to outline a new one. So lots of books follow a detailed and interesting critique of the current state of play with a woolly cry of `something must be done, and it should look a bit like this'. This is a case in point.
There's a growing consensus that conventional economics contains some very, very dubious assumptions at its core. One of the most dubious is that of `homo economicus' - the person who in any given situation will act so as to maximise their utility. Another is the Efficient Markets Hypothesis - roughly the claim that markets are `informationally efficient', that prices reflect all publically available information and instantly change to reflect new information. A lot of economic models require these assumptions to get going.
Now, I'm not exactly an economics insider, but it's becoming increasingly obvious that neither of these claims comes close to representing the world as it really exists (as opposed to as it exists in the heads of certain members of the Chicago school), and that the most interesting work within the discipline is being done by people who make contrary assumptions. Patel takes aim at both of them - especially effectively at homo economicus - and scores a number of hits. We do not, it seems, behave much like this in real life. We would be pretty horrible if we did. Companies, however - those artificial `people' who hold so much power in our world - behave exactly like this. That is why they are horrible.
Of course, he's not the only person saying this. It's been done in a lot of other recent books (particularly effectively by David Orrell in `Economyths'). But where he really scores is in his enthusiasm for alternatives to conventional property holding structures. Patel is a big fan of `the commons' - rather than accept the conventional wisdom that any communally held property must inevitably be destroyed by competitive use, he believes that the relationships that exist between individuals in groups working together to secure and hold assets in trust can make this the best form of `ownership' in many ways. I'm not sure I agree, but it's always good to hear an articulate attack on the way things are done. We all need to be jolted from our complacency occasionally and shown that there might be another way.
Unfortunately, Patel's strength in critiquing the existing system turns into weakness when he tries to put something in its place. There's value in being a utopian dreamer when you're criticising hard-nosed corporates; when what you have to propose looks like utopian dreaming, what you need is hard-nosed facts. Patel doesn't seem to have much of a grip on these, so his `proposals', such as they are, look an awful lot like wishful thinking.
Patel's core claim seems to be that many of the world's problems - from poverty to climate change - can be solved by the spread of local democracy. Oppressed people can and should take charge of their situations; grass roots movements are better able to solve problems in `human-friendly' terms than corporations or governments. Governments themselves should return power to people and place limits on corporates. To illustrate this, he provides a series of case studies covering things like the shack-dwellers' rights movement in South Africa, or participatory budgeting in South America. And, I have to say, they are fascinating and uplifting. Many of them could provide the material for books by themselves; some of them have done.
The problem is, though, this is all he provides. It's fine to be anti-corporate and pro-local democracy. Personally, I'm as anti-corporate as the next tree-loving hippy. But, if you know anything about history, you know that - greedy and nasty as they are - corporates don't have nearly as bad a track record as governments. Bluntly, Stalin wasn't head of IBM, and the world would have been a better place if that had been the limit of his `achievements'.
Nor do small, `grass-roots' groups of people have a particularly glorious record of living in harmony with nature. Whenever I hear someone going on about the wisdom of indigenous people, it's fun to remind them that the reason the conquistadors had to reintroduce the horse to America is because the ancestors of the native Americans had butchered theirs (as well as the American Camel and various other higher mammals) with an almost mechanistic efficiency, while the Australian Aborigines had slashed and burned their way through a forest that once covered the entire island and ancient peoples provoked economic and environmental collapses in the Middle East and South America through degrading the soil. This is the unavoidable truth of the `tragedy of the commons' that Patel claimed doesn't exist.
It's easy to find uplifting examples of small groups fighting David and Goliath struggles against big business, because at the moment their interests are often antithetical to those of big business. Take big business out of the equation and you'd find lots of examples of small, grass-roots organisations fighting other small, grass-roots organisations. Actually, come to think of it, it's pretty easy to find these examples anyway. The problem lies with us. Carve us how you like, big groups, small groups, or even wrapped up in companies, we're still the same old homo sapiens we've come to know and love - greedy, selfish and stupid, but nonetheless capable of great goodness and wisdom from time to time.
So, there's no `answer' to the problem Patel raises. The `answer' doesn't lie with local democracy and common land holding any more than it lies with greater government intervention or the market. The interesting and important thing to do, then, would be to analyse what might be the `least worst' solution we might hope for, and then what mixture of government, corporate, individual and group activity would best deliver it. That is what we have a right to hope for from a book like this; sadly it was entirely lacking.