The Value of a Sceptical Economist

The summer is here and that means that at last there is time for some reading. I have finally had the pleasure to enjoy Jonathan Aldred's The Skpetical Economist, which has sat on my book tower no. 3 for several months. What I enjoyed most about the book was the way that he has put the mental effort into expanding my somewhat airy comment to students that costing the aspects of life we value most is 'spiritually offensive'. Aldred explores our objections to such processes and finds them not only ethically coherent but rationally sustainable.

Much of the content of the book was familiar territory for me, but the argumentation was excellent and the references to heterodox work, and work that tests the neoclassical theory in the real world and finds it wanting, are now all handily on one place. His central point is about the social and ecological threat of the system which respond to Gus O'Donnell's pithy phrase: 'If you treasure it, measure it', and more specifically, price it. Here is Aldred summarising his view of the risks this attitude poses:

'It is the practice of valuing things in terms of money which in itself leads us astray. Almost all of us have an instinctive sense that some things should not be valued in terms of money. But what exactly are we objecting to? . . . As well as the practical difficulties, monetary measurement presupposes a common scale of value; but the thing being measures may have multiple dimensions or attributes, with different kinds of values not reducible to being measured along a common scale. Or the thing being measured may have inherently qualitative attributes, which cannot be measured on any quantitative scale.' (p. 207).

The chapter that offered me most new and interesting insights was Chapter 7: 'New Worlds of Money: Public Services and Beyond'. This is the best account I have read so far of how the project to marketise the public sector has been driven by those who would privatise it and has been grounded in weak intellectual reasoning unsupported by evidence. Aldred makes a convincing case that ethics and motivations in the public sector are just different from those in those in the private sector. Assuming similarity, and introducing inappropriate systems of audit and incentive, is likely to reduce the quality of the service, while increasing its cost and impairing the performance of those who provide it.

Towards the end Aldred reaches one of his most pungent points: the danger of the performativity of economics. Performativity is one of those abstract, academic concepts that I can never keep quite clear in my own head, but how it translates is that if you spend enough time acting as if something were the case, it becomes habitual and starts to actually become the case for you. This was familiar turf for Dale Carnegie and exponents of assertiveness training, but its consequences in terms of economics are more sinister:

'The self-fulfilling nature of some economic analysis is one instance of a more general phenomenon: economics can be 'performative'. That is, the act of doing or performing it, of studying the world using the ideas and tools of economics, may change the world being studied. In other words, merely using economic theory can help to bend the world to fit that theory.' (p. 223)

Thus our own moral system may become skewed: we may begin to imagine trees with price-tags or to feel like looking after our patients less well because we have undergone a pay freeze. This is why the onward march of economics into the priceless areas of personal relationships and natural treasures should be strenuously resisted. Whenever somebody shares with you the now nearly common sense that you don't value something unless it has a monetary price, please join me in pointing them in the direction of their own children.
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