30 May 2010

Rational choice?

The rise, and now fall, of David Laws genuinely merits the over-used journalistic adjective meteoric. The man had moved from relative obscurity to the position of Lord High Executioner in a matter of weeks. His story seems to have the mark of a mystery play; his character is the rational economic man.

In the past month, much has been made of David Laws's double-first in economics from Cambridge. This has been touted as a reassuring indication of brilliance: here is a man who understands the workings of the market and can therefore save us from our financial travails. His rise to prominence in the Liberal Democrats was the result of his persuading them to leave behind their days of beards-and-sandals economics and wholeheartedly embrace the market, through the publication of the Orange Book.

I always ask my students why they chose to study economics. Over the years I have found that they are often vulnerable, shy, and socially dislocated. In the iron laws of the market they find a sense of security. Learning to read the movement of finance markets or the mathematical formulae of a regression equation brings power to those who have often felt powerless. In the rational economic man they see an icon to aspire to: a role model of elegance and control.

The ecofeminists detest the rational economic man. As Mary Mellor writes:

'Economic man is fit, mobile, able-bodied, unencumbered by domestic or other responsibilities. The goods he consumes appear to him as finished products or services and disappear from his view on disposal or dismissal. He has no responsibility for the life-cycle of those goods or services any more than he questions the source of the air he breathes or the disposal of his excreta.'

Rational economic man is ashamed of his own embarrassing body, his sexual idiosyncrasies, his dependence on women, his need for rest and sleep. These are interpreted as weakness, rather than humanity, and must be hidden ever deeper within a shaved and moisturised skin, a sharp and expensive suit. Once they are revealed he has become, in the words of today's headline, 'a broken man'.

Yet it is this very dislocation of our identity from our physical existence that is writ large in the way our economy is dislocated from nature. As we hide our weakness and our illnesses, so we deny the planet's need for rest. The superficial manifestation of the late-capitalist world is impressive, but behind the facade the earth itself, and the indigenous peoples who still live close to it, are slowly dying.

The loss of David Laws from the Treasury is a mixed blessing. His competence in understanding the crisis we are in was a counterbalance to the crass ignorance of Boy George, although both, as wealthy men, have faced a problem of credibility when trying to persuade us to live on less. Did he make a rational choice to deny his need for love, to conceal his lover, to deceive the world about the sexuality that made him ashamed? The door has been left open for him to return, but before he does, in the style of a true mystery play, he must learn the lessons of his own humanity, and the greater wisdom that the earth teaches.


  1. Yes. Compartmentalism. The division between rationality and emotion. It goes back to the Nature-Grace diad of Aquinas. The answer though is not for economists to deliver their formulae to the accompaniment of excited screams, but for their rationality to work from more realistic presuppositions. Indeed, the market itself is too emotional, showing many characteristics of a bipolar illness.
    Reason is a fine and valuable tool, but it has to be built from a healthy foundation. The Jesuits are intensely rational, but build on the presupposition that the tenets of the Church are immutable. The most rational economist is going to end up talking nonsense if he (and I use the word deliberately) starts with the premise that the market is the foundation of economics. We know that ecology is the real foundation of economics. It is a slow job turning the supertanker around, but it is happening.

  2. All this rational economic man stuff leaves me,as a muddling through kind of bloke, stranded in irrational exuberance. The Laws of neo-liberal cons? As for the efficient market hypothesis, the economist's sense of humour is shown by their touching faith in predicting growth to the nearest tenth of a per cent.