[Extractfrom The Nature of the Beast, Chapter 4]
Prior to the twentieth century, science had built up a picture of the universe as a giant clockwork. Starting with an investigation of mechanics by Galileo, a series of “laws” had been inferred, and these laws were extremely successful in describing the physical world. It seemed that the world had been reduced to causes and effects that were precisely known, and therefore it would tick inexorably along according to those laws. This view was very discomforting to philosophers and theologians, among others, because it seemed to eliminate free will, and to imply that our fates were all sealed at the beginning of time. The neoclassical theory of free markets is firmly of the clockwork universe kind.
However science underwent three revolutions during the twentieth century, revolutions that profoundly changed scientists’ views of the universe.
Everyone has heard of quantum mechanics and relativity, but it is the third, least-known revolution in systems science that has more immediate implications for our everyday lives. The recognition of self-organisation, complexity and chaos makes clear why living things seem so different from the inanimate world. The new view also accords better with our experience of life, which is not predictable and therefore requires choices, and the free will to make them. Because economies arise from living human societies, we must appreciate the lessons of the third revolution if we are to gain a useful understanding of economies.
A much older attitude is also woven deeply into mainstream economics. For at least the last several thousand years the predominant Western view has been that nature is a foe to be conquered, dominated and used. This view finds expression, among many other places, in the Christian Old Testament, in Plato’s contemplation of abstract ideals versus imperfect reality, and in Descartes’ explicit separation of the pure realm of thought from the corrupt world of the flesh.
Economists’ attitude to global warming is a direct manifestation of the continuing influence of this world view. Until very recently economists were nearly unanimous that reducing our emissions of greenhouse gases would disrupt economic growth and therefore should not be undertaken until there was near scientific certainty that we are the cause of global warming. It took decades of arguing by scientists, that the risk of global warming is high and the consequences potentially catastrophic, to get to the point where one prominent economist, Sir Nicholas Stern, was willing in 2007 to argue that the cost of not reducing our emissions is likely to be substantially greater than the cost of reducing them. This reluctance by economists is an expression of the mainstream economics worldview, in which the environment is an expensive luxury, something you attend to after you have got the economy to grow some more. Always some more. We never seem to be quite rich enough to make the environment a high priority, it is just one more call on budgets, like roads and hospitals.
The problem is that, in the mindset that currently dominates the planet, “the environment” is something out there, something external, not part of the important real world. If you live and work in very tall towers in the middle of a very large city doing things that involve lots of money, and so are regarded as very important, then the environment must seem rather abstract, and perhaps a bit scary. Better to remain remote from it and to contemplate it only as a resource. And a dump. Such attitudes are the modern expression of the old Western view that nature is a foe to be conquered, dominated and used.
Yet in the United States, a country borne of Descartes’ Enlightenment and where Christianity is prominent and many people are committed Christians, fully two thirds of adults agree that humans are part of nature, and three quarters agree we have a moral duty to protect and preserve all God’s creatures. Two thirds of adult Americans agree we will destroy our environment if we don’t change the way we live. Two thirds are concerned their children will inherit a degraded world, and four fifths agree we should change the way we live now so future generations can enjoy a good quality of life. Nine tenths of Americans think economic growth and protecting the environment should be compatible27.
Even those who hold such views do not realise they are so widespread. This is because our public discussion is dominated by the official view that the environment is a resource, and people feel embarrassed and afraid to say what they really feel. Their real views only emerge when they come to feel comfortable and safe during in-depth interviews and within focus groups.
In contrast to the dominant modern Western view, an appreciation of our dependence on nature is widespread among indigenous cultures. A common ethic among native Americans is that one should take only what one reasonably needs, and one should leave the world in at least as healthy a state as one found it. Australian aborigines commonly regard their ancestral land as integral to their identity. Their spirits lived in the land before they were born, and return to the land after they die. To disturb a sacred site is to put at risk one’s core identity. Other traditions also recognise respect for nature and our interdependence with nature. The book Small is Beautiful by E. F. Schumacher28 is an expression of a Buddhist ethic that an abundance of material things is not required for, nor conducive to, a good life. Taoists gleaned deep lessons on the conduct of a good life from close observation of nature.
Science also now leads us to the view that we are dependent on nature, and a part of it. The new scientific view is at least as clear as many philosophical or religious views. This may be surprising, given that scientific discoveries have for the past several centuries abetted and accelerated the exploitation of nature. However the systems science revolution presents us with a very different view of living systems than that of traditional Newtonian science. It is a view that calls for a fundamentally different relationship between economics and the natural world.
Self-organising systems exhibit emergent behaviour, which is behaviour that individual components of the system cannot exhibit. One person cannot perform a Mexican wave. Complex self-organising systems are neither random nor rigid in their behaviour. They exhibit order, but it is a shifting order. They are continuously changing, but not randomly. The changes are usually small, and the system will fluctuate around a recognisable state for some time. Physicists would call this a metastable state, one that has some limited stability but that is not immune to change. Occasionally the internal fluctuations grow, a bigger change does occur, and the system may shift into a new state with recognisably different behaviour. During such a shift, the system is hypersensitive to slight disturbances, and for this reason the outcome of the shift is not in practice predictable, even though the system is always deterministic.
This description of the behaviour of complex systems could also be a description of our experience of life: a kind of shifting order, with small changes happening all the time and every now and then a large change. It could be a description of your own life, or of the history of nations, or even of an economy.
In the previous chapter we saw that instabilities pervade modern economies. The instabilities due to economies of scale are the most readily apparent. Because new technologies often emerge, and because businesses developing such technologies can exploit economies of scale, new businesses bubble up and change the business landscape, and all the other businesses have to adjust to some degree. Therefore we can argue that modern economies are complex self-organising systems. We might expect them to be anyway, because they have emerged from human societies, which have emerged from the living world, and living systems are complex self-organising systems.
We remain intricately, intimately, immediately connected with the fabric of living things that embraces our planet. Every molecule of our bodies comes from and returns to wild nature. In our very thoughts we are the products of wild nature. Wild nature lives within us.
A useful theory of economies will start with the fact that an economy is part of a society, and that humans and their societies are part of the living world. It will avoid absurd assumptions such as that we can have complete knowledge and that we can predict the future. A theory of economies can now draw on the concepts of self-organisation and complexity. It can also draw on a great deal of knowledge from paleoanthropology, archeology, anthropology, sociology and psychology that tells us a lot about who we humans are, where we have come from and how we work. It can take account, for example, of well-documented irrationalities in our thinking, and of well-documented tendencies for us to behave in ways that reinforce social stability rather than to behave selfishly and disruptively. (I said tendencies, I didn’t say laws.)