by Allister McGregorLeonardo DiCaprio, are you part of the solution or part of the problem? The film, ‘The Wolf of Wall Street’ is receiving very positive reviews: it portrays and caricatures the behaviour of ‘out of control’ capitalism. Apparently (I have not seen it yet) it does not overtly judge this behaviour and comically portrays the possible returns to a ruthless and unscrupulous pursuit of wealth that some still dream of. It’s a comedy and a caricature, but this is still essentially what many experts see as necessary for the continued growth of the global economy.
The global financial crisis that emerged in 2008 and its related financial and commodity price crises should have taught us some lessons. The fundamental lesson is that the economics that has for so long guided and shaped how we think about development has become profoundly misdirected and dysfunctional (Krugman 2009, Smith and Max-Neef 2011, Skidelsky and Skidelsky 2012). A narrow and anti-social conception of economics that has focused on economic growth and profits, almost at any cost, is generating more problems that we can cope with globally. One of those problems is the persistence of debilitating and destructive poverty for many men, women and children in countries around the world.
Lest this be misunderstood, this is not a criticism of the insightful analysis or the many useful tools that economic science provides; it is a criticism of the way that economics and ideology have become fused at the level of policy and in public political narratives. This fusion provides a justification both for reckless profit-oriented public policy decisions and for individual behaviour that evidently produces damage to other human beings. This ideology is one that myopically champions individualistic gain as the driver of economic growth and relegates to secondary considerations the many problems that the underlying individualistic pursuit of profit produces. Thus, in this approach to economic development we must deal with environmental damage as a global side-effect; we must deal with persistent chronic poverty for some people around the world as a discrete technical problem; and we must cope with the increasing levels of social and individual damage that our development path is producing as if it had nothing much to do with the economic policies that have been promoted by the ideology.
But the problem is not solely ideological: a new kind of economics is also required. We need a global post-2015 anti-poverty initiative, but the nature of the post-2015 MDG settlement has the potential to be as much part of the problem as part of the solution. Or to be more precise the economics that we apply to the analysis of major global problems can be as much part of the problem as part of the solution.
The post-2015 debates should provide a global opportunity for new thinking and new development measures. To achieve this however will require a rethinking of how economics is formulated and is applied to the analysis of major global development problems. The challenge, as implied by the Sarkozy Commission Report, is whether economics can be reoriented to focus on improvements in human wellbeing as the fundamental purpose of societal development and economic growth. To do so involves a major reconception of the relationship between economic behaviour and society and
this hinges around how we conceive of human wellbeing.
In a Working Paper released by IDS this week, myself and Nicky Pouw, a colleague from the University of Amsterdam, begin to explore what an economics of human wellbeing might look like. We argue that such an economics would shift to build on a social conception of human wellbeing and a shift away from an individualistic notion of wellbeing. The problem for economics is to find modes of analysis that support us in meeting the challenges of living well together and away from legitimising the pursuit of living well as an individual. In ontological terms this involves a rejection of the pure methodological individualism that lies unquestioned at the heart of much popular economics.
In this sense the challenge to effective global governance for the coming decades is the challenge of finding ways of living well and sustainably together with others, from global to local levels. The reorientation of economics in a progressive and sustainable-post 2015 MDG settlement could make an important contribution to that effort to live well together.
- Deneulin, S. and McGregor, J.A. ‘The Capability Approach and the Politics of a Social Conception of Wellbeing’ European Journal of Social Theory 13(4), pp.501-519.
- Krugman, P (2009) ‘How Did Economists Get It So Wrong?’ New York Times, September 6th
- McGregor, J.A., Camfield, L. and Woodcock, A. (2009) ‘Needs, Wants and Goals: Wellbeing, Quality of Life and Public Policy.’ Applied Research in Quality of Life, Volume 4, Number 2, pp135-154.
- Saith, A. (2006) ‘From Universal Values to Millennium Development Goals: Lost in Translation’ Development and Change 37(6): 1167–1199.
- Sarkozy Commission Report (2009) Report by the Commission on the Measurement of Economic Performance and Social Progress.
- Skidelsky, R. and Skidelsky, E. (2012) How Much Is Enough? The Love of Money, and the Case for a Good Life. Allen Lane; London.
- Smith, P.B. and Max-Neef, M (2011) Economics Unmasked: From Power and Greed to Compassion and the Common Good. Green Books: Dartington.
 See Deneulin and McGregor, 2010 and the Final Report of the Bellagio Initiative, 2012