Uprightness rather than self-serving

October 2013

There are many schools of thought in economics. But is it school of thought we need, or a schooling in thinking, especially economic thinking? How would such a schooling come about? What would characterise it? Of what would it consist?

A school of thought can mean that one begins with a thought and then follows it out logically and then derives policy and practice in conformity with it. Such, for example, could be a description of Marxism or Keynesianism. The thought in itself may be ever so valid and obvious, but does it originate in link with or to one side of economic life? It is born of economic experience or of contemplation, and then often not from an economic point of view, but from the perspective of social concern, a sense of injustice and so on?

To school one’s thinking is not the same as to have and follow out a thought, though this may be part of it. While to school one’s thinking in a way that is compatible with economic life needs even more precision. Do our thoughts stem from the wish to treat and preserve money at all costs, in which case it would be more the thinking of a banker than an economist? Or does it derive from entrepreneurial experience, in which case it is more born of experience in the field than meditating in an ivory tower?

Can such thinking be inductive or deductive, both of them relying on a gap between experience and thought which they, in their different ways, leap over. Or should it be descriptive – in effect the description of actual experience, raising what lives unconsciously for the most part into the light of day?

And how are we to avoid spinning off into abstract theorising, when economic life itself is the base of what we experience and what (if that is the aim of thinking economically) we wish to affect, change and manage? The most effective way to do this is to link one’s economics, and therefore one’s economic thinking, to the method used by businesses to make their activity conscious, namely accounting (rather than supply and demand theory, for example). For accounting, when used for its true purpose, which is not to avoid tax, is an instrument that makes visible to us what we do in economic life, what our intentions are, what the effects of our actions are and whether these are (a) as we thought they would be and (b) socially acceptable. The fact that we can act into economic life without permission to do so (or so we think) means that our thinking usually follows our deeds, and so we have to render them conscious after or independently of our behaviour.

Key in accounting for this purpose is the technique of double entry bookkeeping, a technique that ensures that we see what we do, that we maintain balance in our affairs but also in the affairs of the world which we, in effect, invade, disturb. The words balance sheet, the image of a T-account, and many other things in accounting are not understandable in their deeper sense until one sees them as images of huamn uprightness. Even as provocations of uprightness.

Ultimately, it is this that is being trained – the ability to stand upright, to know what one is doing and why, and what its actual, as distinct from intended, effects are. Or as economists say, to distinguish between intended and unintended consequences. For it is the latter which play a large part in economic life and it is these especially that must be made conscious.

Was it, for example, the intention of Adam Smith that his ‘invisible hand’ sound bite should be used as justification of so much unconsciousness in subsequent economic life? Or is this an opportunistic philosophy convenient to those who believe in narrow self-interest as the only driver of economic behaviour?

On the practical side, what is the better way to learn how to manage a multiplicity of variables: managing one’s cash flow or that of one’s business, especially if it is negative; or learning about such things in textbooks? And is one really conscious of how economic and business life unfold and take their course if the accounts one uses are not those of one’s own activity? An external analyst may have all sorts of comments to make, but it is one thing to look at someone else’s business from outside and another to look at one’s own.

Finally, what is being schooled? Surely it is one’s will life, one’s deeds that often follow on from instinctive, subjective or in other ways unconscious acts? Acts in which one’s deeper intentions live and can be seen, but also much else. One’s egoism, for example, or one’s shadow side (greed and all that). 

In an age that prides itself on free will, the idea of training the will may seem unfashionable, anachronistic and invasive. But so many of today’s problems as regards economic life stem precisely from unschooled actions. Laissez-faire, laissez-passer is a two-edged sword. Yes, we need to be free to follow our noses in economic life, to take initiative and not be afraid of our shadows. But, no, we ought not use this as license to do anything and everything we can get away with, whether with the intention of a thief or the subtler method of externalising costs.

When people go to economics classes or business schools, is it to learn to school their will or to exploit the economy in furtherance of their private interests and proclivities only? For the most part it is the latter, which goes a long way to explaining why modern economic life is so much the battleground it has become.