A New Wealth of Nations
A New Enquiry Into the Nature and Origins of the Wealth of Nations
The Sustainable Learning Arrangements Needed for a Sustainable Society
John Raven - 1995
"The central problem facing society is still to answer Adam Smith's question about how to empower widely dispersed, and mutually interdependent, bits of information so that they lead to a desirable future. This book outlines the institutional arrangements needed to do this. These will involve radical change in our concepts of democracy, bureaucracy, management, citizenship, science, and wealth."
Only Chapters 1, 4, and 17 are available on the web. Each chapter is sub-divided into sections. Each section is approximately 12 screens long.
Chapter 1 provides a sketch map of where the book is going and an overview of its contents similar to the final, summary chapter of many books.
Chapter 4 is entitled "Some Observations on Money"
Chapter 17 provides a review of the first 16 chapters, and a sketch map of the final Part IV - The Way Forward.
- Ways of tackling the serious ecological, economic, and social problems facing our society
- Toward the Heart of Our Problems
- 75% of the GNP is, in some sense, under government "control"
- The present public management system has come into being for the best of reasons.
- One effect of attributing our problems to government per se
- The main problems which plague the world today
- It would be a mistake to lay most of the blame at the door of the economic marketplace
- Most of the IMF's "solutions" to "problems" are likewise imposed by political fiat.
- A World of Problems or Opportunities?
- Our quality of life does not depend on the quantity of manufactured goods we possess
- One reason why the market mechanism is incapable of recognising the potential sources of life satisfaction
- A way forward will not evolve through trial and error
- Historical Connections
- Our book's title links it to Adam Smith's Wealth of Nations.
- The fundamental problem: decisions taken by politicians and government officials were often far from wise
- The problem was to create a dynamic self-correcting system ...
- The three most fundamental problems with this solution are:
- The primary purpose of this book is to propose an alternative solution.
- Smith's four fundamental errors
- While acknowledging that public servants contributed significantly ... Smith regarded them as "unproductive" members of the community
- ... to identify the wealth of a society with the quantity and quality of the manufactured goods it produced
- ... to misunderstand the nature of money
- ... was based on misunderstanding money, for it had to do with savings
- Responsibility for the direction of investment cannot safely be left to the marketplace
- The Way Forward
- The way we require to run our society turns out to have three components
- The result will be a devolved, dynamic, "experimentation,learning,and management" system very different indeed from what we have today
- How all this activity is to be paid for?
- Use of the words "learning" and "management" poses problems
- At the heart of the Japanese economic "miracle" lies another interpretation: the use of information
- The main aim of this book is to help to operationalise a concept of "the information society" as "a society in which information is collected, sifted, and used in an innovative way in the long-term interests of the planet"
- A Contribution to the Third World
The book was written as a contribution to the quest for ways of tackling the serious ecological, economic, and social problems facing our society.
To paraphrase Ekins: "There are endless good ideas for ways of dealing with these problems, but it is almost impossible to get our leaders to take the necessary actions and, especially, to act in concert on a worldwide basis. Ekins'observation suggests that the problems which face us are not, in fact, economic per se but arise mainly from the way society is run. That is, they have centrally to do with deficiencies in the arrangements made to collect information, sift it for good ideas, use it to initiate innovative action which will be in the long-term public interest, monitor the effects, and take appropriate corrective action when necessary. In other words, the need is for a better monitoring, learning,and management system."
Environmentalists who call on governments to address our profound ecological problems are whistling into the wind - for two reasons:
First, the actions they call for are generally insufficiently integrated and programmatic: They lack a foundation in an understanding of the systems processes of which acute problems are often but a symptom.
Second, they fail to acknowledge that government is already grossly overloaded and that our procedures for getting public servants and politicians to orchestrate communal action for the common good are inadequate.
As the work of the Taylor Nelson Monitor and the Aspen Institute has shown, more and more Westerners are concerned about conservation, our iniquitous trade with the Third World, and the waste of human and natural resources associated with centralised production and distribution.
Many wish to see care for the aged, the isolated, and the sick being provided through re-designed communities which facilitate neighbourly support rather than through the (highly unsatisfactory) channels of the commercial marketplace and impersonal bureaucracies, and many want those who provide such care to be appropriately rewarded.
Most people are by now well aware of at least some aspects of the perilous state of the environment and population time bomb. They sense the social disintegration of their own society, and are acutely aware that our current societal management arrangements - whether" market" or "public-sector management" based - are not only ineffective, but are unlikely even to engage with the problems looming on the horizon.
These concerns lie at the heart of the British Liberal Democrat and Green parties' raisons d'etre. But a large proportion of those who vote Labour, and many Conservatives, also share them. The Taylor Nelson Monitor's surveys show that, cross-culturally, the proportion of the population endorsing this cluster of concerns and priorities (collectively termed "The New Values") is higher in the UK, Holland, Austria, and Norway than it is in the other countries studied.
A similar conclusion emerges from work carried out by Social and Community Planning Research. The majority of the British public have not actually embraced the "enterprise culture" and they never endorsed the aims, procedures, and beliefs of Thatcherism.
The problem is that they neither know how to translate the New Values into effect nor see social research and organised reflection as a way of gaining the necessary insights or developing the required social arrangements.
Toward the Heart of Our Problems
It is easiest to grasp the nature of the problems which confront us by reflecting on the implications of two modern realities.
First, as will be documented in Chapter 3, in many countries, including most countries of the European Union, the spending of some 75% of the gross national product is, in some sense, under government "control".
This means, among other things, that the role of money in the management of society has been overturned. Whereas such authors as Adam Smith and Fred Hayek argued that adoption of a money-based market mechanism would enable everyone to give effect to their knowledge and feelings - and thus determine the direction of development - by voting with their pennies, the situation now is that the control of cash flows is used to orchestrate actions which have been determined through the politico-bureaucratic process.
It follows that the economic system no longer - if it ever did - provides a management system per se.
Second, as will also be shown in Chapter 3, the present public management system has, at least in part, come into being for the best of reasons.
It gives us control over physical, social, and economic forces which lie outside the marketplace and were previously beyond the control of humankind. We are no longer totally at the mercy of plague, disease, famine, and blind economic forces.
Moreover, if our society is to take appropriate action in the light of the information which is available about the state of the environment and what is likely to happen in the future - that is to say, if we are to create a society which has a future - we will need more, and especially more effective, information-based management.
Unfortunately the need to undertake even current levels of public management has grossly overloaded our governmental apparatus. The result is poor decision-making on the one hand and feelings of powerlessness on the other. These symptoms of malaise are often attributed to public management per se when they are, in reality, attributable, to the way in which we manage our affairs.
One effect of attributing our problems to government per se is that, although there is an urgent need to gain still more control over economic, social, biological, and physical processes (or to get more control over our own behaviour so as to live in greater harmony with biological processes), many people are reluctant to call for the kind of action that would be needed because they believe it would mean government action of a kind of which they are (rightly) suspicious.
In fact, there is a conspicuous need to co-ordinate policy in different parts of the world and, within countries, to co-ordinate what at first sight appear to be relatively independent domains of activity. Examples include agriculture, urban planning, and health; education and employment; and disease control and population policy.
This need has become even more significant with the growing internationalisation of problems. One country's effluent, efficiently disposed of into the air, rivers, or seas, has become another country's poison. Western knowledge of pest and disease control has been largely responsible for the population explosion. Western prosperity, based on trading policies (such as GATT) orchestrated and enforced by the G7 through, among other things, the International Monetary Fund (IMF), is increasingly based on the impoverishment of other countries.
These countries in due course export pollution, disease, migrants, and social unrest to the West. It is this need for more, and better co-ordinated, intervention which has led, on the one hand, to the establishment first of federal countries like the USA and then to federations like NAFTA and the EU, and, on the other, to recommendations - by, for example, the Brandt and Brundtland Commissions - for still greater intervention in world economic processes.
The main problems which plague the world today and, unless things change dramatically, are likely to plague it even more forcefully tomorrow, stem in part from the world-wide mis-management of human resources, energy, food, and minerals and in part from the pollution of the land, the seas, and the atmosphere.
These problems will not be tackled by the so-called `invisible hand' of the economic marketplace. It was processes associated with the" marketplace" (actually largely a facade for corporate and government management) that created the problems in the first place.
Despite the claims of Smith and Hayek that the marketplace provides a mechanism whereby widely diffused bits of information can influence what happens, there is in fact no mechanism whereby much of the most important information - such as that on the effects of our activities on the global environment - can influence market processes.
Left to themselves the unfettered workings of market processes - and, perhaps more importantly, those which have promoted a market facade which conceals a very different reality - will lead to further disintegration of our social fabric and further destruction of the fertility of the soils and the seas. They will, in the end, lead to the elimination of many more species, perhaps including homo sapiensing the required social arrangements.
As Keynes observed, market mechanisms work, if they work at all, too slowly and too destructively. Perhaps more importantly, one of the things which will be demonstrated later in this book is that faith in market processes is even more misplaced than even the more sceptical among us suspected.
Many of the industrial plants (if not their owners' head offices) responsible for our problems are located in countries which have inadequate legislation to control pollution and insufficient resources and international influence to maintain the health and well-being of their citizens. The reasons why standards are so low, and enforcement of the legislation so poor, include lack of information on the consequences of the processes involved whether they be manufacturing, agriculture, mining or waste disposal. But they also include the lack of an effective bureaucracy to generate and enforce standards. This is itself a product of the intrusive demands of the trans-national corporations and the IMF's insistence that "debtor" countries should export food, raw materials, and manufactured goods in an artificially induced buyer's market at prices far below their costs.
It would, however, be a mistake to lay most of the blame for the world's ills at the door of the economic marketplace.
Much more destructive have been the actions which governments and international bodies have taken to advance their own interests in the name of creating conditions in which market processes and democracy can function. Market processes are, in reality, rarely allowed to take their course on the international scene. Instead, highly interventionist, ideologically-based, "solutions" are imposed by financial and military might.
This imposition of an economic faith by the sword is nothing new. It was not economic forces which led subsistence farmers to move off the land. It was the demand for taxes - enforced by private militia and the army. It was not the attraction of pay which forced even these destitute migrants to accept work in factories.
Rather it was the confiscation of common lands and the press gangs who forced "beggars" into workhouses where they could not avoid their fate. Likewise, it was not an absence of food which led to the mass starvation and emigration from Ireland at the time of the "famine". It was the government military interventions which were deemed necessary to ensure that market processes could work: The large amounts of food still available in the country had to be exported under armed guard and replaced by grossly inadequate food "aid" inhumanely administered by the same military personnel who "knew" that if the people were starving that was because they were too lazy to work. Exactly the same processes can be observed in many parts of Africa today and in the Ethiopian famine of the late 1980s.
Most of the IMF's "solutions" to "problems" (which anyway often only exist in the minds of economists and statisticians) are likewise imposed by political fiat.
The "problems" to be tackled include, not the number of starving people, the quality of life, or the predictable worsening of the conditions of life on the planet, but highly suspect abstractions like balance of payments, the "money supply", or the "need" for debtors to "repay" "debts" (which are, actually, as we shall see in Chapter 4, entirely notional).
The "solutions" to these moneylenders' problems are imposed on the "debtors" rather than the moneylenders - and not infrequently by overt or clandestine military intervention.
The overall effect is achieved by an alliance between the IMF, Western governments, Western banks and the trans-national corporations. (The question of the extent to which this is a conspiracy rather than an effect of like attracting like will be discussed in Chapter 11.)
Continue to Section II
Return to NWN Introduction
Continue to Chapter 4 Some Observations on Money
Continue to Chapter 17 which is a Summary of Parts I, II, and III, and an Introduction to, and Overview of,
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Copyright : John Raven, 1995
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