If the title sounds familiar, it is because I borrowed it from the pioneering and award winning documentary produced for Springbok Radio in the 70’s by broadcast doyen, the late Bryan Chilvers. The programme covered the generation rift that had developed in society at that time, demonstrating again the old cliché that “the more things change, the more they stay the same.”
One can’t help thinking, though, that this time there are many more broken links than one between generations, which is endlessly repetitive in any case. There is some inkling of this in an unassuming French “book” Indignez vous (Cry Out) whose 13 pages of text have smashed all publishing records in France, selling more than 600 000 copies in the first 3 months. It has been written by 93 year old French resistance hero and activist, Stephane Hessel who urges people to recapture the spirit of war time resistance against the Nazi’s to challenge what he claims is today’s market tyranny. Against the background of popular protests against austerity in much of Europe one can’t avoid seeing Hessel’s pamphlet as striking a chord of popular discontent in many parts of the world.
The broken links are many and profound.
The link is broken between population growth and what the planet can sustain. In turn this has broken other links such as that between consumption driven prosperity and sustainable resources; between growth and bio-diversity; and between human activity and the balance in nature.
The link is broken between prosperity and contentment. Despite an 8-fold increase in prosperity in the last 50 or so years, there has been little increase in human contentment as argued by Richard Easterlin. This may be because of our difficulty to determine what makes us happy as individuals, or even the definition and measurement of contentment itself. But economies clearly fail in an important respect if they do not enhance social contentment, whether perceived or not.
The link is broken between economic systems and equitable wealth distribution. As the latest World Economic Forum report has recognised, it is no longer an ideological or emotive issue when it starts to ferment social disquiet. Classical theorists will find it difficult to present rational arguments to an irrational mob, whether at the polls or in the streets. The truth is that there is no solid market argument for the huge income disparities. Failing to recognise that envy based on comparisons is the main source of human discontent is not much different from Marie-Antoinette’s famous “let them eat cake” remark.
The link is broken between expectations and reality. This deadly economic virus is still being nurtured. An example is the promise in the New Growth Path to create 5 million jobs in the next 10 years. However laudable the intent and perhaps even the plan itself, pegging a “big, hairy, audacious goal” to something so exposed to market uncertainties is needlessly flirting with social discontent. Another is the let down recent matriculants must feel when 9 out of 10 of them can’t find jobs within a year or more.
The protests in Europe are a reflection of unrealistic expectations. But it is more than the let down from the “good years” which in turn were based on another broken link: that between prosperity and tangible wealth creation or the froth generated in a cappuccino economy. It is clearly based on an expectation that governments can do something about it: like borrowing to roll over debt – which most of them have done. The expectation that there won’t be a future price to pay in greater austerity or inflation is unrealistic. It is also a tab that we may have to pick up sooner than we think.
This shows that the link between popular politics and sound economic policies is also broken. Some may argue that it has never existed and is impossible. We have seen time and again that the popular thing is not always the right thing. We have come to understand democracy as being about elections rather than about governance, transparency and accountability and the ability to make the right rather than the popular decision during tenure, even with a well informed electorate.
The link is broken between economic models and reality. I reflected with interest on the usual medley of annual economic reviews and forecasts this past month or so. They range from cautiously optimistic to a touch of euphoria about the year ahead, with one or two even declaring the end of the recession. Apart from an occasional reference to “Black Swans” most seem to have been written out of the context of the “scary world” that Felicity Duncan so aptly extrapolated from the WEF report.
This is understandable. According to the Wall Street Journal, economic models simply have not come to grips with that erratic, unpredictable, complex and most important component of all – human nature. It’s a component that simply cannot be reduced to a mathematical formula and it has made attempts to model the economic future inaccurate at best and futile at worst. Very few of us understand ourselves, let alone the nature of others. A growing realisation of this defect is bound to challenge our understanding of all economic theory. It will also challenge our stance on systems, measurements, policies and ideologies all of which are based on preconceived ideas of human responses. This need not imply rejecting proven best practices, but a more comprehensive understanding of our world and human responses will help us avoid unintended consequences: such as labour laws that destroy jobs, social grants that encourage layabouts, and interest rate cuts that fail to stimulate job creation.
Let us join the optimists who proclaim that with a bit of luck, the absence of major sovereign debt defaults, fewer floods, tsunamis, earthquakes and other displays of nature’s wrath, we will “muddle” though the next decade or so. But in the meantime, this is also a time to “let a thousand flowers bloom” as Robert Johnson of the Institute for New Economic Thinking put it. Such a process will be infinitely enhanced by extending economic modelling to seriously include other disciplines such as psychology, the social sciences, science itself, religion, and medicine - indeed all branches of knowledge. The existing firewalls between these disciplines have to be dismantled completely.
Such a vastly extended model will come closer to the truth: that economics is much more complex than what we have thought, perhaps not in basic principles, but certainly in the human dynamic that drives it. Yet it is simply unthinkable than human kind with its superior intellect, vast accumulation of knowledge and the information revolution, cannot find solutions.
It is not too outlandish to say that economics as we know it, is itself broken and we cannot rebuild new structures on broken foundations. Returning to old ideological paradigms and assumptions will not do. We should be pursuing new holy grails rather than protecting old holy cows.
The more things change, the more we have to change with them. Einstein’s definition of insanity is “doing the same thing again and again and expecting different results”.
But there is one constant: it is the one that made us the greatest species on the planet - the capacity for compassion.