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logo    The Quest for Human Progress


That human beings are rational can no longer be assumed as it was by the ancient Greek philosophers or even by eighteenth century thinkers; far too much anecdotal evidence has been accumulated that debunks the view. But rationality, nevertheless, plays a prominent place in many human endeavors. Those sciences that have increased in knowledge the most are eminently rational, and increasing knowledge is one way of measuring human progress. Unfortunately, there are many human enterprises in which progress has been dubious at best, the social sciences, for instance, and some, such as ethical behavior, in which there has been none at all. Thinking about the conditions under which human beings have lived historically can lead a person to question how much progress humanity has really made in the past twenty centuries. This question is important, for if a method of measuring human progress were available, it could be applied to various human activities to determine which of them are worthy of pursuit.

Rationality involves the use of well-defined patterns. If, for instance, an activity does not produce the desired results, the activity is abandoned as ineffective. For this pattern to work, however, the desired results of any proposed activity must be unambiguously stated and be measurable. When people continue to engage in any activity even after the activity's ineffectiveness has been demonstrated, those people can only be labeled irrational. Often, the failure to abandon such activities lies in deeply rooted ideological beliefs that have never been subjected to rational analysis. Belief in such ideologies can be likened to religious belief, and, I believe, are the cause of much human misery.

To evaluate any activity's effectiveness requires knowing what it aims to accomplish. In the absence of such knowledge, no one can ever know if the activity is worthwhile or not. Yet many human endeavors are carried on without such knowledge. Government, itself, often falls into this category of human activity. The Constitution of the United States, for instance, lays our how the government is to be operated, but it nowhere states, in precise and measurable terms, what kind of nation its writer's hoped to create. So no one knows whether this government is a success or a failure.

Over the course of Western intellectual history, rather precise goals of human activity have been stated. At least, until the Reformation, the goal of ethical thinkers has been to raise mankind above the bestial part of its nature. Even primitive ethical maxims have this aim. The Golden Rule, for instance, is not something wolves could ever be expected to conform to; yet it often is the primary ethical rule human beings are told to abide by.

Another tendency in Western intellectual history is been the slow, but until recently, inexorable movement from institutions to people. Totalitarian states, for instance, are often described as those in which the people exist for the benefit of the state rather than vice versa. Since the emergence of social compact theory in the eighteenth century, such states are usually considered illegitimate, since they are not governed with the consent of the people. So any attempt to measure human progress must measure the effects institutions, policies, and practices have on the people and not on some other real or contrived entity.

Recently, attempts have been made to measure income inequality in various societies over centuries. The results of those attempts are revealing.

 Comparing the Ginis of modern and pre-industrial nations, research has found that a sample of nine modern countries had a Gini of 43.3 while the pre-industrial revolution countries had a Gini of 45.7. So it seems that while human civilization has advanced by leaps and bounds over the past two millennia, income inequality has stayed relatively the same. (http://www.portfolio.com/views/blogs/odd-numbers/2007/10/31/a-new-way-to-measure-inequality) In other words, economic practices since the beginning of the industrial revolution have not materially improved the financial conditions under which human beings live, and if economics is to be judged by it effect on the people, that is, human beings in general, laissez faire economics must be considered a failure.

Of course, economics is one of those human activities without clearly stated measurable goals, so its effectiveness can never be measured, even though its periodic failures are evident. Every time the so called business cycle goes into a tailspin, the theory's failures are apparent, and the people are the ones who suffer the most. We have also now learned that Relative Poverty Kills as Effectively as Any Disease . (http://economistsview.typepad.com/) These new studies merely buttress this economic system's failure. It not only perpetuates poverty, it literally kills, especially children.

But how could any rational person ever have thought it could be otherwise? Adam Smith, the Adam in the laissez faire Garden of Eden, assured this failure. First of all, he was not interested in the welfare or wealth of people. The title of his seminal treatise is, Wealth of Nations. Second, he defined the wages of working people as those necessary for mere subsistence. And although not stated that way today, the subsistence wage has never been rejected by the theory. Even today, as real wages fall, economists tell us the economy is both healthy and growing.  So Adam Smith has not described an economic system fit for human beings, he has described the economic system of an ant hill in which workers, soldiers, drones are given enough to keep them alive and performing but never enough to make them prosperous.

This economic system also flies in the face of the long intellectual history of Western civilization.  Not only does it not contribute to the rising of mankind above its bestial nature, it reduces mankind to the level of insects. In this sense, the economy does not exist for the benefit of people, but people exist merely to benefit the economy. Laissez faire economics completely contradicts the essence of social compact theory. And if people were clearly and unambiguously told that the system permanently relegates them to the bottom rung of the economic ladder, I doubt that a single person would consent to being governed by it. In that sense, laissez faire economics is as illegitimate as any totalitarian government.

Yet American economists, especially the most prominent and even the somewhat liberal, continue to support it. They are, in reality, the Pat Robertsons and the Jerry Falwells of American economics. More specifically, among them is Dani Rodrik , Professor of International Political Economy at the Kennedy School of Government of Harvard University. He writes of his new book, One Economics, Many Recipes: Globalization, Institutions and Economic Growth, that this book is strictly grounded in neo-classical economic analysis. And therein lies the problem with economists. No matter how obvious or bad the consequences, economists can no more abandon the theory than some on the Christian right can abandon Creationism.

Of course, Mr. Rodrik and others will reject this analysis. He has been confronted with similar analyses before. He writes, on his blog, "I was at the University of Massachusetts Amherst yesterday . . . the department is well known as the hangout of left-wing critics of economics and economic policy, so I had a different reaction . . . than I am accustomed do. Instead of getting questioned on whether I am downplaying the benefits of further trade and financial liberalization, I was quizzed on why I thought standard economics was at all a useful starting point for my policy agenda.  And instead of people being worried about how policy space would be abused by developing nations, I was asked whether international financial institutions and multinational enterprises would ever tolerate such a thing. I don't think my answers . . . convinced anyone."

How strange! A person engaged in a profession that calls itself a science, gives a lecture to a group of his scientific colleagues, and convinces no one. That must mean that his arguments did not stand up to peer review and are therefore dubious or that no real scientific discussion took place, just as, for instance, none takes place in a discussion at the Southern Baptist Convention over the Bible's inerrancy.

I don't ever expect to see it, but a clear description of the economy's measurable goals and how fulfilling them will improve the financial condition of the people would be helpful (not the abstractions introduced into economics by William Petty). Then the system's effectiveness could be measured. Until classical and neo-classical economists can show that the system attains such goals, it can never attain the status of science or be considered anything but a suspect ideology. All of the claims, numbers, protestations, and predictions of economists will continue to be nugatory until they can answer the simple question that an old commercial asked, "Where's the beef?" An economic system that, from the people's point of view, is all talk and no substance will never attain universal respect. As someone said, "It's not the conspiracies that wreck the world but the series of wrong turns, failed policies, and little and big unfairnesses that add up." All the evidence that I can find shows that so called classical and neo-classical economics produce such a failed policies. (11/19/2007)