I just read Stephen A. Marglin’s The Dismal Science: How Thinking Like an Economist Undermines Community. He questions some fundamental assumptions of mainstream economic theory and makes the case for a more humane understanding of society. I found a great part of the book really interesting but I’m missing a conclusive ending. Anyway, here’s my personal summary in keywords which neither claims to be comprehensive nor one hundred per cent accurate.

1.

  • individual vs. community -> tension: good, healthy, creative
  • community is important to a good and meaningful life

2.

  • community (as opposed to ‘just’ association): asks for loyalty, commitment, identity:

    • not easy to opt out. leaving the community must come at a cost, otherwise it is vulnerable to centrifugal forces that often are irresistible.
    • diametrically opposed to the idea of market agents with set preferences that are free to choose

  • communities of necessity (the poor have to band together) are endangered by prosperity

  • communities of affinity (family, religious communities)

  • examples of community:

    • Amish barn raising. insurances undermines mutual dependence of the villagers and thus community
    • care for the elderly and sick. now nurses/professional health care

  • markets undermine community

    • markets push for expansion/competition/rivalry -> efficiency is the only measurement
    • impersonal market relations replace personal ties, undermine reciprocity, altruism, mutual obligations

3.

  • ideology of modernity:

  • four assumptions in economic theory:

    • individuals: have given/fixed/unchanging preferences, are rational, calculating, self-interested
    • privileging algorithmic over experimental knowledge
    • nation-state: only legitimate social grouping.
    • unlimited wants

  • Marglin challenges those ‘myths’: foundational critique

4.

  • individualism in economics is a very different kind of individualism than in other fields:

    • given preferences: individual doesn’t get influenced by its environment. idea is also opposed to self-realization
    • universal agency: act without coercion
    • radical subjectivism: there is no judge beyond the individual of his preferences
    • self-interest: it is a circular argument that everything an individual does is by self-interest, otherwise it wouldn’t do it. so it makes sense to define ‘self-interest’ in narrow terms (non-altruistic etc.)

  • holism as a different way to look at the world

5.

what gave rise to modernity?

loss of community is an unavoidable byproduct of a growing economy/increasing standard of living, or isn’t it? or is it about distribution (landlords pushing enclosure to save their fading power)

6.

the rise of the idea that if all individuals act in their self-interest, this is best for society as a whole

7. / 8.

  • algorithmic knowledge: can be written down, logically calculated
  • experimental knowledge: rooted in one’s own experience as well as trust in the accounts of others (parents-child, master-apprentice), therefore rooted in community

9.

  • (bosses get their share of the pie only for knowing how to assemble all the parts and keeping this knowledge to themselves)
  • economic theory doesn’t take experimental knowledge seriously: cannot model real people
  • economics as a mathematical science (algorithmic knowledge) heaves it above politics and withdraws it from political debate/democracy.

10.

  • economists are responsible for growing the pie (whatever the cost), politicians for (re-)distributing it.
  • nation-state legitimizes this

11.

modernity:

  • possibility of abundance as close as never before because of increased efficiency/productivity

  • impossibility of abundance because of unlimited wants

    • relative wants:

      • economic rivalry (having more stuff than the Joneses). wealth is now the dominating factor in defining people
      • believe in infinite growth as a non-zero-sum game (everybody wins as the pie keeps growing) makes it a common goal

    • absolute needs:

      • in an individualistic world-view new goods and stuff substitute for personal relations
      • as long as good health is a commodity, and med-tech keeps improving, it will remain scarce

  • we cannot rethink society when we have reached ‘enough’. rather, we shall have enough when we rethink society.

12.

fair trade as an imagined community between producers and consumers

13.

  • dominant views:

    • culture doesn’t exist, everybody thinks like a homo economics (a ‘modern’ individual)
    • western culture is superior, ‘developing countries’ need to catch up and become ‘modern’

  • but people can keep (and further develop) their cultures while modern technology is being introduced

    • individualism vs. holism: rights of individuals (liberty, autonomous and algorithmic decision-making) vs. rights of communities (experimental knowledge: tradition, spirituality)
    • nation vs. other communities