The Needed Paradigm Shift: Letter to Barack #10

Dear President-elect Obama,
           The shift from an economics paradigm to an anthropology (or anthropology/ecology, or transdisciplinary) paradigm is not complicated or hard to understand.  It is a matter of enlarging the field of human practices studied. 
When designing policies it is a matter of considering more possibilities, more options.  And more actors.
          At the present time efforts to revive the American economy concentrate on creating conditions under which producers can sell their products at cost-covering prices.   For the most part the efforts are even narrower than that:   They concentrate on stimulating demand and cheapening credit in order to make it profitable for employers to hire employees.   The fact that human beings lived on this planet for two hundred thousand years without capitalism is ignored.   As is the fact that millions still do.
          The needed shift consists of taking a broader viewpoint; it consists of doing socioeconomics as Jose Luis Coraggio,  Amartya Sen, and others recommend; and even in going beyond their recommendations to study basic cultural structures and to develop methodologies for social transformation grounded in such studies.   (As I have explained elsewhere, my recommended broader viewpoint is a “paradigm shift” with respect to some of the ways Kuhn employs the concept of “paradigm” although not with respect to all of them.)
          Thomas Kuhn’s studies in the history of science tend to show that paradigms are not abandoned because facts demonstrate their inadequacies.  There are ways to adjust theory to data to save the paradigm even when an accumulation of anomalies strongly suggests that the paradigm is out of touch with reality.   For example:  when the economy of Indonesia unexpectedly collapsed in 1998, mainstream economists did not question economics.  Experts at Harvard, at Oxford, and at the World Bank had been praising Indonesia as an example of correct macroeconomic policy.  When reality flatly contradicted what they had been saying, instead of admitting that their science is one that is incapable of accurately predicting future phenomena, and incapable of providing policy advice that works, they attributed the anomaly to “crony capitalism.”   Instead of questioning the basic ethics and dynamics of capitalism they employed the adjective “crony” to explain after-the-fact why the collapse observed in Indonesia differed from the stable growth that before-the-fact they had anticipated.   As you will remember from your debates with him, John McCain somewhat similarly used “greed” as an explanation of the debacle that was unfolding as he spoke.    Thus an imaginary ideal survives by attributing its real world failures to flukes.    These examples came too late to be included in Kuhn’s books, but he could have cited them if they had happened earlier and if he had undertaken to include the history of economic thought within the scope of his studies. 
          Although Kuhn’s findings tend toward the conclusion that a paradigm is never refuted by a crucial experiment, it appears that we have a paradigm-testing crucial experiment, or something very like one, underway at the present time.
          You have selected a highly competent economics team, backed up by colleagues in the profession who will feed your team even more expertise than they themselves already have.   Nobody knows the details of past recessions and the details of past Federal Reserve and government policies as well as your advisors.   I think it is fair to say that if they cannot give you good advice, then mainstream economics cannot give you good advice.
          You are approaching the inauguration with nearly a 75% approval rating.   You have Democratic majorities in the House and Senate.   You have solid friends on Wall Street and in organized labor.   If ever there were a United States President positioned to get good expert advice and to implement it, you are he.
          If December 2009 finds the United States economy worse instead of better, then we should be able to rule out professional incompetence and political impotence as causes of the phenomena observed.   After a year (or perhaps less than a year, or perhaps more than a year) of floundering and sinking in spite of well-advised and capable leadership, the country may be ready to consider the dominant paradigm tested and refuted.    More people may come to agree with Anthony Quinn (author of Ishmael) that what we need are not new policies but new paradigms.
          If, on the other hand, December of 2009 finds the American economy humming along nicely, producing appropriate goods and services and distributing them equitably, then we should be able to conclude that the paradigm we already have is in synch with reality.   We should be prepared to acknowledge the validity of the worldviews of the Paul Samuelsons and the Paul Krugmans and the Joseph Stiglitzes who find the centrist economics of the bulk of the profession to be sound, and attribute the downfall of the economy to the bizarre ideologies of the likes of George W. Bush and his radical conservative clique.    Normal science will be vindicated.    Professional economists will have been shown to be not only well read in their chosen field of study, but also (because their research paradigms tap the causal powers that produce the phenomena observed) experts on how the world works.
          Meanwhile, even before the rest of the country is ready to see beyond the dominant paradigm, those of us who are already convinced that trying to make for-profit business profitable again is too narrow a focus will continue to support the people’s economy, public sector employment, non-profits, community service, and usable parts of the many other alternative forms of livelihood practiced throughout history and around the globe.  We will support the Rotarians and the American Friends Service Committee, the Salvation Army and Catholic Charities, and whomever organizes emergency relief; expecting that as it gradually dawns on people that the emergency is permanent, the relief will become permanent.   “Relief” here is a word that refers not just to keeping the food pantries restocked.   It refers to social integration–to dignity, discipline, meaning, and useful employment.    At an academic level, we will continue to dissolve economics into transdisciplinary social and natural science.
Peace and all good,
Howard R.
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