My fellow Mile End Road Economist, Prof Danny Blanchflower, had good things to say on economics in his Peston Lecture yesterday.
This annual event is given at Queen Mary, University of London, in memory of Maurice Peston who founded the economics department there. He was a member of the House of Lords from 1987. He was the father of Robert Peston, who may be better known now. Queen Mary is in the Mile End Road, so called because it is a mile beyond the City of London. The perspective is different as a result.
As Danny noted, perspective is key. He began with this text, the opening paragraph of Adam Smith's Theory of Moral Sentiments:
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.
This is the fundamental perspective of economics that it seems that those who claim to be the followers of Smith, but are not, have forgotten. Economics should be about caring about the other person, because that really matters.
If we do care then Danny suggested that we must listen to what people have to say. He calls this the economics of walking about. By this he means being open to hearing what people think.
As he argued, there is good reason to do this. It would seem that if you look at reported sentiment based on survey data from both business and households / consumers what you discover is that there is unrevised timeline data that shows they are able to predict recession better than any other data, which is in any case subject to timeline revision.
The worrying news is that this data suggests that the US will be in recession in 2022, with the UK heading the same way. Despite that the UK government is planning austerity and the Bank of England interest rate rises that will make matters very much worse for the real people on the Mile End Road. It would simultaneously keep those in the City happy.
We have a choice in perspectives. Priorities are ours to choose. For reasons that deny the critical aspects of humanity that Adam Smith observed but which most libertarian economists seek to deny exist, our government chooses indifference to real people. Putting concern back in economics is what really matters. You start to do that by walking about.
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“My fellow Mile End Road Economist”…you follow him around and seek acceptance like a little lap dog..quite embarrassing for someone of your age
Actually – he name-checked me yesterday – just for the record
And you are a troll
It would seem that you are now on your seventh identity
I work in the field of social housing as a developer but I am also a former housing manager.
In housing management, the increasing use if I.T. and I.T. driven performance metrics mean that we manage housing increasingly through I.T. only. And the service suffers. Service users are now encouraged to use IT to engage – channel shift they call it
But if someone is coming to you with a problem, how can you weigh up what they need by not actually seeing them face to face?
‘Management by walking about’ is taught at the better business schools – I learnt about it on my MBA at the University of Derby of all places in the early 2000’s and I would recommend it – it works every time.
UoD called it ‘GOYA management – Get Off Your Arse’ and its related to the Japanese concept of ‘Gemba’:
“Gemba Kaizen is a Japanese concept of continuous improvement designed for enhancing processes and reducing waste. Within a lean context, Gemba simply refers to the location where value is created, while Kaizen relates to improvements”.
Basically, the manager is encouraged to go to the place where value is created and watch and learn and think. Going to the coalface is what good managers should be doing.
Sadly in my own field and elsewhere, this is still not happening.
Thanks
I managed by walking about
It still staggers me how few managers don’t thnk talking to their staff important
They pay consultants to do it instead
Some of you may already .have read this post of mine on Progressive Pulse, but if you haven’t, it seems apt to repost it here:
One of the problems is the capture of economics by economists who wanted to turn it into “economathematics”, effectively turning it from a social science, into and exact science, and burying its true meaning.
Here’s Wikipedia’s take on the word:
Oikonomos (Greek: οἰκονόμος, from oiko- ‘house’ and -nomos ‘rule, law’), latinized oeconomus or œconomus, was an Ancient Greek word meaning ‘household manager’.
The only danger of this definition is that it could seem to validate the “household budget” model of economics, until one realises that “household manager” refers centrally to the members of the household in whose interest the household is being run – in other words, people.
In other words, the money is managed for the benefit of the household, and not the other way round, as the ‘economathematicians’ (and econometricians) would have it, fitting people to the Procrustes’s Bed of econometric theory.
Actually, I wish ancient Greek had gone for ‘oikianomos’, rather than ‘oikonomos’, because ‘oikos’ refers more to the building, with the people implicit in the concept, where ‘oikia’ means both ‘household’ and ‘estate’.
‘Ecianomomics’ would thus refer to the whole complex of people, buildings and estate/land, linking them together into an organic, and people-centred whole – exactly what economics should always be about, with people as the subject and money and resources as the object, and not the other way round.
The Modern Money Scotland Facebook site is prefaced by this apt quotation from the great economist (and true ecianomist), Joan Robinson:
“The purpose of studying economics is not to acquire a set of ready made answers to economics questions, but to know to avoid being deceived by economists.”
(From ‘Contributions to Modern Economics’, 1978)
Very good
[…] have already discussed Danny Blanchflower’s Peston lecture. It us now available on […]
My partner said the other day that as well as dealing with ‘climate change’ (global warming), that we needed to deal with ‘Kindness Change’ – that people were being less nice to each other as we became more polarised.
On Netflix at the moment there is a really good documentary called ‘The Divide’. It comes from a long line of goof doc’s that have not had the sort of impact we would have liked to have seen since 2008 (‘Inside Job’, ‘Capitalism – A Love Affair’ and my favourite ‘The Flaw’ – as well as much of Adam Curtis’ output on this subject). This film is based on the book ‘The Spirit Level’.
https://thedividedocumentary.com/
https://www.theguardian.com/film/2016/apr/21/the-divide-review-spirit-level-documentary
https://www.theguardian.com/film/2016/apr/11/the-divide-inequality-documentary-katharine-round
I’d highly recommend to those on this blog.