I would like to offer the following thoughts on Social Economics as a
contribution to the formulation of a theoretically coherent economics
for a Third Way. At the heart of Social Economics lies the
principle/concept of the non-antagonistic production system. In
Section 1 I elucidate this as and within an analytic framework. In
Section 2 I apply it.
I would like to close this opening by stating two conclusions derived
from, and providing a background for, Social Economics. Conclusion 1:
Capitalists labour to satisfy desires. Conclusion 2: Workers sell
labour to satisfy desires. The Background: Only within finity is
progress possible. Marxists - revolutionaries who aspire to be
conservative. Capitalists - conservatives who subscribe to permanent
revolution.
Section 1
As an economics Social Economics is concerned with production and
consumption and the nexus of institutions, stakeholders, (social)
relations etc. which surrounds these social activities. Its basic
principles are: Market Economics subsumed - Sustainable Production
Presumed - Subsistence Consumption Presumed.
At the core of Social Economics lies the principle of the
non-antagonistic production system. Marx used this term to refer to a
production system not founded on class based exploitation. His
argument was that all production systems had to date been necessarily
antagonistic, that is built on exploitation, because there was
`no-way' in which the needs of all could possibly be satisfied within
the constraints imposed by Mother Nature and the limits of available
`technologies'/'modes of production'. With the advent and victory of
(industrial) Capitalism however the situation changed and the goal of
the non-antagonistic production system became non-utopian, realistic
and achievable.
A definition by negation is analytically weak and I propose a
positively restrictive one for use in Social Economics - namely:
a non-antagonistic production system is one in which the historically
(in)formed material needs of everyone are sustainably met.
While an analytic improvement this understanding is
insufficient/unrealistic because it does not address the superfluity
or superabundance of the (existing) production system: in other words
it is over-restrictive as it passes over the production systems
capacity to produce beyond what is necessary to meet the historically
(in)formed material needs of everyone.
This fuller understanding of the non-antagonistic production system
reveals (to my mind at least) an analytic requirement for the
socialisation of `economics', that is for a Social Economics. This is
the case because it reveals the specifically economic problem of how
to ensure the first and `divvy up' the surplus (product), or more
formally how to manage and facilitate the sustainable meeting of
historically (in)formed material needs and the appropriation of the
superfluity. Note that within market economics where no such
distinction holds the idea of Society (and theories of distribution)
falls to Ocomans razor, and it is tritely/dogmatically true to say (as
did Mrs T.) that there is no such thing as Society.
Society is taken to refer to an organised collection(s) of individuals
which is finite (birth and death apply) and pre-exists and post-exists
any individual. The individual, the basic actor in Social Economics,
in turn is understood as a finite corporeal being who (except in the
case of feral children) is always, already within society. From the
definition of the non-antagonistic production system we have the idea
of individuals having needs. However as self-aware we know of wants
beyond the mere satisfaction of need wants which, for succinctness
(and because it allows for provocative/evocative formulations), I
refer to as `desires': here to keep the discussion within the area of
Economics both needs and desires are presumed to be `satisfiable' by
an act of consumption.
Needs are defined as what is `necessary' for the individual both per
se and as a `member' of society and as such refer to what is necessary
for corporeal existence (all need sustenance and shelter) and what is
necessary for him to participate in the life of society (e.g.
education, health, transport, access to_): in short needs are
historically/socially and not merely physically (in)formed. Desires
are taken to refer to preferences beyond the level of need held by an
individual (a good meal, a nice house, a (nother) holiday): these are
also taken to be historically (in)formed but, from the perspective of
Social Economics, in an overdetermined manner (i.e. by society and the
life history of the individual). Thus at the extreme needs are
understood as general, quantifiable, constant/(essentially)
predictable and satisfiable/finite while at the other extreme desires
are seen as individualistic, qualitative, whimsical and (in Otto and
arguably in principle) unsatisfiable/insatiable/infinite.
Here I would emphasise that the introduction of this distinction at
the level of the economic actor is not an arbitrary one. Rather it is
suggested/required by the core analytic presumption of Social
Economics, namely that the historically informed material needs of
every-body are satisfiable and more. In other words the proposed
articulation of our understanding of the economic actor is required at
the analytic level to `match' the fuller understanding of the
non-antagonistic production system sketched above. Note that within
market economics the only `differentiation' recognised at the level of
the economic actor is that of effective demand with all being,
`beyond' this, homogeneous (rational) decision makers.
To return to the basic principles of Social Economics. Subsistence
Consumption refers to the satisfaction of historically (in)formed
material needs. Note that subsistence consumption is not equivalent to
subsistence existence: it refers to more than the corporeal
requirement to keep body and soul together and (as argued above)
incorporates a necessary reference to what is needed for the
individual to participate in the life of society.
Sustainable Production refers to the ability to sustain the production
system over the long term. Here long term is to be interpreted at the
social level, that is in terms of Society as pre-existing and
post-existing the individuals which make it up at any one time. It is
this perspective, that is the requirement to incorporate/adopt a
generational time frame, that in turn (to my mind) necessitates at
the analytic level the incorporation of the notion of sustainability
into our understanding of the non-antagonistic production system
prefigured by Social Economics.
The third principle of Social Economics proposes the subsumption of
Market Economics. The subsumption turns on two observations, one
analytic the other assertive/contingent. The first observation is that
the individual has distinguishable needs and desires with the former
being presumed to be general and satisfiable at the level of the
individual qua social individual, while the latter are presumed to
arise `chaotically'/'arbitrarily' at the level of the individual qua
individual. The second observation is that at the social level the
resources or means (i.e. the superfluity referred to above) to satisfy
these desires will always be scarce
These two observations suggest that `market economics' with its focus
on the allocation of scarce resources and with its analytic
presumption of homogenous (socially undifferentiated) individuals
varying only in effective demand is the mode of organisation of the
`economic' sphere most appropriate to the satisfaction of desires. In
short market economics, and with it Capitalism, is within the area of
Social Economics that mode of organisation of the economy which would
`work best' in the allocation of resources to the satisfaction of
individual desires.
At the level of society Social Economics builds on a robust sense of
inclusion and a radical moment of individuation. Or, to use other
words, it includes at the level of subsistence consumption (where the
satisfaction of the needs of the individual qua social individual is
acknowledged as a right) and at the level of the individual qua
individual with arbitrary/idiosyncratic/incommensurable desires. As
part of this moment of radical individuation, this recognition that
"self determination is a defining human characteristic", it is
presumed that only the individual qua individual can determine the
focus, scope and strength of their own desires and (from an `economic'
perspective more significantly) what they will do to satisfy them.
Thus to extend the corporeal motif Social Economics prefigures a Body
Politic such that Sustainable Production - the bones Subsistence
Consumption - the muscles, the sinew Desires to shape the flesh Thus
it is individuals pursuing their desires within society that gives
shape, or (precise) form, to the flesh: this `flesh' derives from the
essential superfluity of the production system and, as argued above,
its allocation or appropriation is the arena of market economics and
the capitalist ethic(sic). At the socio-political level it is my
feeling that the case is much the same. In particular Social Economics
does not I believe in abstracto reveal a single compatible form of
`political' organisation for the non-antagonistic production system it
pre-figures. Or, to put it another way, these are to be subject to
the `will of the people' acting collectively under the realities,
illusions, constraints and opportunities of contingent history with
precise form(s) being `indeterminable' purely from within the
perspective of Social Economics.
Social Economics and the not-antagonistic production system it
prefigures also I believe provides a basis for an answer to the Big M
question: fundamentally it can be done so it should be/it is immoral
not to. Thus Society has a `moral' duty to ensure (generationally
understood) sustainable subsistence consumption and a `moral' right to
demand that (collectively) individuals qua individuals assess their
desires in this light. On the `other side' individuals have the right
to (sustainable) subsistence consumption and the pursuit of
happiness/desires. They also have a moral obligation to ensure for
other individuals (most hopefully well into the future) no more or
less than is their own right as an individual qua individual: in other
words to ensure the continuance of the non-antagonistic production
system in which individuals have a right to (sustainable) subsistence
consumption and the pursuit of happiness/desires.
Having travelled this far the ground on which the opening conclusions
stand can be seen. Thus to say that `Capitalists labour to satisfy
desires' is to say only that within Social Economics `market
economics' and the Capitalist ethic(sic) are appropriate to the
functioning of the economic sphere as this relates to the quest by
individuals qua individuals to satisfy their desires. Further to say
that `Workers sell labour to satisfy desires' is to say only that
within Social Economics with subsistence consumption needs satisfied
the `sale of labour in and on the market place' by the individual qua
individual is a matter of choice not necessity: a choice moreover
which can be understood, at the analytic level at least, as made on
the basis of an evaluation by the individual qua individual of his
desires. Other conclusions which can be seen to flow from this
analysis is that formulations such as Social Capitalism, Sustainable
Capitalism etc. are neither oxymorons nor the result of analytic
`compromises' or a project of amelioration but are rather formulations
with a clear or clean meaning/import derivable from first principles.
Section 2
I would now like to turn to consider `policy' issues. Here I will
attempt to use Social Economics as a framework in terms of which to
formulate `policies' and interpret policy principles. My intention is
to provoke and `sketch' rather than convince and demonstrate. I first
consider implications of the three principles of Social Economics and
then its application in the elucidation of two `policy' rich themes.
When considering the implications of the first of the principles of
Social Economics developed above, namely subsistence consumption, a
key observation is that within the non-antagonistic production system
prefigured by Social Economics wage slavery (that form of class
exploitation peculiar to the Capitalist production system) will have
been abolished. Or, more prosaically, the situation will be one in
which the individual, because his basic consumption needs are met,
will not be compelled to sell his labour on the market in order to
meet those needs, but will rather do so in order to gain the means to
satisfy his desires: e.g. for a better house/flat/car, a (nother)
holiday, designer clothes, a more `accomplished' child, a more
attentive lover etc. etc.
A practical mechanism that would allow this presumption of satisfied
minimum subsistence needs to be achieved is that of a Minimum Income
`disbursed' for example via a Mondex type smart card: note that
something along these lines is `in the pipeline' for pensioners. The
income necessary to satisfy basic consumption needs would be
specified/quantified on a consensus basis under the constraint that
Society not only can not but also should not aim to directly address
individual desires but only the needs of individuals qua social beings
and their general right to the pursuit of happiness/their desires
Given some such a state of affairs a number of other `policy'
implications suggest themselves. One is that beyond health and safety
concerns the labour market should in principle be de-regulated: the
individual as a `free' or `voluntary' player/participant in the
market place is and should be `free' to sell his labour for what he
can get for it. Thus (this hurts) the Chairman of the CBI/RenttoKill
is (or rather would be) in theory correct to argue against the minimum
wage and against restraints being put on the remuneration of `fat
cats' and, more generally, gross inequalities of `wage' (e.g. £3
phour in a low end burger joint vs. £30,000 a week for a successful
footballer) would be acceptable, if still iniquitous.
An implicated policy area is that of `pensions' and by extension
pension funds. Given that subsistence consumption needs are met a
`pension' can be seen as income to be expended in the pursuit of
`desires', specifically a more `comfortable' retirement. As such
saving for a pension should in principle not be treated `favourably'
at the level of tax and the income derived from such savings should be
taxed ordinarily as earned income. As regards policy an argument might
be made that that there are general social benefits (to do with
inclusion and continuing involvement in society through market power)
with good levels of post retirement `income' so special treatment to
encourage such saving is appropriate. Such a policy might involve
treating savings hypothecated to `personal pension provision'
preferentially when invested with pension funds restricted to
long-term investments in (global) `subsistence' needs and
infrastructure areas, e.g. the utilities, transport/communications,
health, education etc. Another policy implication in this area, one
made more feasible by the development of technology, is that the
retirement age should be abolished and retirement treated as an
individual decision vis a vis ones relation to the labour market and
not a rigid consequence of the ageing process.
Another particularly appealing policy implication derivable from the
presumption of satisfied historically (in)formed material needs is the
abolition of the Welfare State and the destruction of the corrosive
`dependency' culture associated with it. Such a `policy' would not
only `free up' significant financial resources and `workers' for
productive activity it would also (finally) allow the debate about the
`deserving' poor and that "quaint" Mr Field to take their rightful
place alongside the Welfare State in the dustbin of history.
Another set of policy implications are revealed by the second of the
three principles of Social Economics: namely sustainable production.
In particular the generational time frame requires/suggests the
enactment of mechanisms/laws to forestall current activities which can
be shown to be (radically) detrimental to the generationally viewed
continuance of the non-antagonistic production system/society. Thus
Social Economics reveals a clear analytic meaning/force with the
purely economic arena for steps to forestall the continued devastation
of the eco-sphere (e.g. the destruction of tropical rain-forests, the
pollution of the seas, over-fishing, aggressive mono-culturing etc.)
Much work has been done on ecologically based `costing' schemes but
within the current economic paradigm these have been able to claim a
place `merely' on moral or `obvious good sense' grounds.
Another policy implication of this principle of Social Economics
relates to energy: specifically such a base to the costing of `energy
sources' would (I am sure) result in a radical change in current
`energy policy' priorities away from intrinsically destructive forms
of energy generation (e.g. fossil fuels, fission power) to the
exploitation of inexhaustible or renewable sources (sun, sea, wind,
geothermal, organic etch). More topically such a perspective would
have a significant impact on the formulation of an integrated
transport policy: my personal expectation would be that the second and
third order costs associated with car/lorry transport over a
generational time frame (e.g. 100 years) would clearly demonstrate the
`economic case' for other forms of transport. More generic areas of
application would include: the pace and form of technology transfer
from the over-developed to the other-developed
economies/countries/regions - the transfer of old, dirty and no longer
acceptable modes of production to the other-developed world would (I
am sure) within a generational perspective (and the `global'
application of the first principle) be revealed as economically short
sighted: the economics of recycling: the determination of `just'
environmental and polluter pays taxes.
Another set of policy implications are revealed by the last of the
three principles of Social Economics: namely the subsumption of market
economics. Here beyond what can be said from the first two principles,
and remembering that the market place is the `playground' for the
satisfaction of desires, it is I think pretty much a case of all
change no change. Thus there will be a continued need for regulation
and for mechanisms/laws to ensure minimum market standards and, on
efficiency and effectiveness grounds, the `fair' and `open' operation
of markets, but beyond this de-regulation should be the expectation.
However with the `place' of the market place (in principle) settled
this leaves unsettled questions regarding the `economics' of
sustainable subsistence consumption. Here I would argue that the
generational time frame within which the sector works, and the nature
of its product (i.e. predictable, steady, assured and `easily'
quantified demand) both suggest that the mechanisms (e.g. venture
capitalist financing) and presumptions (e.g. 20% ROI, 3 year payback
periods etch) of the market place do not and should not apply. More
positively, to pick up a theme of the discussion, as regards financing
(given that State ownership is not used) I would imagine that some
form asset based egalitarianism built around Community Capital Funds
(perhaps of the unit trust variety) might be applicable: note that
existing pension funds could be `transitioned' in this direction . The
charter of such funds/trusts would mandate the investment of a
proportion of their funds (e.g. 100%) in areas to do with sustainable
subsistence consumption (i.e. utilities, health, education,
transport/communications infrastructure etch)/'opportunity goods(?)'.
Such funds would also be the sole place for individuals to invest
their `tax efficient' hypothecated savings. They would also be
`competitive' in character vis a vis the individual investor. To make
such funds/trusts attractive savings vehicles the `state' would need
to incorporate tax shelter and/or tax-efficient-income-stream elements
for the investor. Note that such funds would also provide the `state'
with extra levers to impact on economic activity: for example varying
the `ceilings' on the amounts individuals could hold in their
different hypothecated saving instruments, manipulating the levels of
tax exemption for resulting income streams, granting/removing tax
shelter status for area/elements/funds for `footloose' capital etc.
Having applied the principles of Social Economics to policy
formulation I would now like to apply it to the policy themes of Life
Long Learning (education, education, education) and egalitarianism.
As a theme Life Long Learning can be/is related to the earlier
arguments on sustainability, namely that Social Economics reveals at
the purely economic level social needs. In particular as a condition
of its continuance Society needs an appropriately
trained/qualified/educated population which, given the rapidity of
technological/economic change, suggests that the phenomena of
`learning' and the institutions/structures that support it need to be
`widened' beyond their current (early) age-ist base. Given that
subsistence consumption needs are met, that `educational' provision is
to be structured to support `life-long' learning, and that
individuals can be economically active `life-long' (and pursing
education with a view to increased marketability as well as `personal'
growth) two suggestions occur. Firstly that the individual should fund
their own `market' rate based tuition costs: here one could envisage
tax efficient hypothecated savings mechanisms for the individual
(possibly `matched' for those below a certain qualification level
and/or age) and `tax breaks' for employers for sponsorship/scholarship
arrangements. These mechanisms could be supplemented at the margin on
a `social engineering/need' basis via the more `traditional' routes of
low interest loans or `grant recovery' tax elements and `state'
sponsorship. Note that such a re-structuring would also be able to
exploit the increasing digitalisation of content and increasing reach
and ubiquity of digital communications infrastructure to break down
the `mass education' paradigm in favour of a more individualised modus
operendi. Secondly that in recognition of the `life-long' nature of
learning (as well as the desires of significant numbers of customers)
the school leaving age should be lowered to 14 with compulsory
education being focused on `life skills': namely the 3Rs and good
citizenship.
Another general area of concern to which the arguments presented here
seem appropriate is that of egalitarianism. Egalitarianism understood
in terms of `equality of outcomes' in as much as it passes over desire
by supposing uniformity contradicts the moment of radical
individuation at the heart of Social Economics and represents the
impossible project of sustainably meeting infinite demands. Where
egalitarianism is understood in terms of equality of opportunity the
case is somewhat different. In as much as Social Economics
defines/mandates the satisfaction of historically informed material it
also defines/mandates an equality of opportunity. However as an
individual is always already within a _. and as `opportunity' is an
intrinsically ecological phenomena (i.e. revealed as such only within
a context) I believe a `strict' form of equality of opportunity is
untenable as a social project: for example the support of an
`appropriate' family background, following your fathers/mothers
footsteps, who you know not what you know, help to kith and kin and so
on are and are always likely to remain truisms of human society and
the project to `equalise opportunity' over them as such a chimerical
and divisive one. Egalitarianism in the current debate is often linked
to the idea of inclusion and it is in this sense that Social Economics
can be seen as an `egalitarian' mode of analysis/thought: namely in as
much as it acknowledges from first principles that self-determination
is an essential element of the human condition and defines a
subsistence consumption level which is sufficient to allow the
individual to play an active role in society and which all have
`equally'.
Often associated with the theme of egalitarianism are policies of
redistribution: take from the (rich) few to give to the many (poor).
Here Social Economics would suggest that at the level of theory a
re-distributive policy would be hard to distinguish from a politics of
envy. Thus within Social Economics there is no justification (that I
can see) for taking from an individual who, for whatever reason,
desired wealth and successfully pursued this desire and giving it to
another who had no such desire (for whatever reason: e.g. travellers)
and acted accordingly. Within Social Economics as I interpret it
society has an obligation/duty to ensure sustainable, subsistence
consumption and that individuals are free to pursue happiness/their
desires, but it has no obligation to ensure equality of wealth, nor a
project to maximise equality (or minimise inequality) beyond the area
where it ensures it
In concluding this section I would like to look flippantly at what is
always with us: namely death and taxes. As regards the first I am at
one with Carnegie in his observation that the rich man who dies rich
brings shame and ignominy on his head and I would see it as my duty to
my fellow man to protect him from such a fate. Consequently death
duties for non-communally committed `wealth' would/should be punitive
both on the estate of the `leaver' and the bequest (treated as income)
of the beneficiary. On the question of taxes I would argue that within
Social Economics that all personal allowances be scrapped, that a
non-punitive progressive income tax system be adopted, that all
distinctions concerning `modes of income' be dropped and that on
principle all economic transactions be subject to tax.
Conclusion
I would like to conclude by relating the above to `cherry picked'
themes for the Nexus debate and by summing up.
Thus Social Economics as outlined supports a situation of "Economic
Justice and Social Dynamism", which one contributor (Wier:30:9)
described as better capturing "..what most contributors (to the Third
Way discussion) have in mind" than that offered by Tony Blair (i.e.
Social Justice and Economic Dynamism). Further it also it seems to me
to answer to what another contributor (Jacobs: The Third Way)
identified as the fundamental principle of the Third Way project
namely "..to balance the autonomous demands of the individual with the
need for social cohesion and community." It also places
sustainability (Painter:22:7) at the heart of its project and
addresses the questions of `inclusion' and equality of life
opportunities directly. A cavail - in the transition from now to then
redistribute policies/strategies remain (morally) imperative:
oppressive poverty is a fact of life for so many people - massively
unequal starting points and mechanisms of structural privilege are
still the (global) norm. As I see it the key `real' difference that
Social Economics introduces to the debate on redistribution and
inequality is that it transforms it into an end-point focused as
opposed to an open-ended project.
To sum up Social Economics presumes/asserts the existence of a
non-antagonistic production system in which the subsistence
consumption needs of all individuals are met in a sustainable manner
and in which the `desires' of individuals are met (at the level of
theory) in a blindly `fair' way by the workings of `market forces'.
Put the other way market forces, and thus(?) Capitalism, within
Social Economics `runs free' within the `limits' set by the need for
the sustainability, at the generational level, of the production
system and the `pre-requirement' that the subsistence consumption
needs of everyone are met. Thus, to close by way
of fading into the opening background, in the non-antagonistic
production systems prefigured by Social Economics capitalists and
marxists can say "we are both conservatives now".
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