Reading Blake Doyle’s article “Complexities of Growth,” in Saturday’s Guardian left me wondering how he ever became the Guardian’s “small” business columnist.
Week after week, Doyle praises all things “big”: whenever he even mentions small business, it’s to offer advice on how what is “small” can get “big” much faster….he’s continually pushing the erroneous notion that when it comes to business and the economy, “big” is always better – and, if you’re still pretty small on your way to getting bigger, the way to measure your progress towards economic “success” is to track the rate you’re growing bigger. It’s not a view he defends…it’s just assumed: it’s both exhausting and discouraging.
Here’s a few phrases along those lines in his Saturday (September 15, 2018) article:
“To quote our political leadership, ‘the economy is on a tear’. While positive, it is not as profound as that statement may suggest.” [That’s to say, “Our economy’s growing alright, but not as fast as we could be growing”].
“Our economy is performing well; the U.S. economy, by contrast, is experiencing unprecedented growth.” [By Implication, the U.S. economy is doing much better than our economy, because it’s growing faster than ours].
“For all our collective sakes, we must support the continued growth of the economy ….This is a non-negotiable.” [No commentary required!]
Sadly, it appears the Guardian’s “small business” columnist has contracted a not-so-rare form of economic deformity which E.F. Schumacher – in his now-famous “Small is beautiful: Economics as if people mattered” – dubbed GIGANTISM! Here’s a fitting quote from chapter five of that book (titled “A Question of Size”) which offers a summary diagnosis of that debilitating economic disorder, to which formally-trained economists seem especially susceptible:
“The conventional wisdom of what is now taught as economics bypasses the poor, the very people for whom development is really needed. The economics of gigantism and automation is a leftover of nineteenth-century conditions and nineteenth-century thinking and it is totally incapable of solving any of the real problems of today. An entirely new system of thought is needed, a system based on attention to people, and not primarily attention to goods—(the goods will look after themselves!). It could be summed up in the phrase, “production by the masses, rather than mass production.”
The brand of “conventional wisdom” Schumacher speaks about here is clearly a lot more “convention” than “wisdom” – and it appears Blake Doyle has (perhaps inadvertently) swallowed an unhealthy dose of that “people-less” view of economics.
Doyle’s economic philosophy is precisely what has gotten us (and our fair Island) into such a mess in the first place – encouraging a kind of economic “growth at any cost” development that now has roughly 55% of all potatoes going to one corporate entity – Cavendish Farms – owned by one private, transnational corporation, K.C. Irving, destroying thousands of “small businesses” (family farms) in the wake of this rapid consolidating trend glorifying “big is better”, and degrading much of our natural environment with unsustainable farm practices and thousands of tons of toxic chemicals year after year after year.
It was the infamous 1969 “Comprehensive Development Plan” ushered in under Liberal Premier Alex Campbell that not only “rocked the cradle” but unceremoniously tossed the baby out to sea in the process, causing – and still causing – untold damage to our personal, social and environment health.
The reckless economic ambition to “rationalize” our small businesses and primary industries forcing them to get “bigger and bigger” in a bid to be more competitive and survive selling in global markets – adopting more automation while producing less employment; using bigger machines with more sophisticated and expensive technology – has had major negative personal and social consequences. This obsession to maximize “economies of scale” at any cost, with corporate managers embracing a tunnel-visioned focus and single-minded commitment to improving balance sheets and increasing profits, all the while disconnecting themselves more and more from an operating moral awareness of the growing negative impacts of relying solely on the flawed Gross Domestic Product (GDP) to measure “economic growth” and wealth – a model which deliberately refuses to recognize and calculate the true costs of those negative impacts – has brought us to a sorry social state in PEI, both economically and environmentally.
A Guest Opinion I published in the Guardian last year (“Relying on the GDP is unethical”) explained just how seriously skewed the GDP model is when it comes to the measurement of economic wealth, in that it fails to take into account the true social and human costs and long-term damage caused by much of what usually gets billed as “positive” economic news in PEI, not to mention how it refuses to calculate any positive economic activity that doesn’t pass through the formal “buy and sell” marketplace.
Doyle is by no means the principal agent of this misinformation – he is just one of many neo-liberal disciples promoting this corporate ideology. He is only repeating what the economic establishment has been pushing as the preferred economic philosophy and worldview for decades. I’m sure that most of his articles – including Saturday’s requiem for economic growth – get an enthusiastic “thumbs ups” from the executives with the Atlantic Provinces Economic Council (APEC), Canada’s Chartered banks; Transnational corporations; our local Chamber of Commerces; and, of course, both the federal and provincial Liberal governments.
There’s really nothing out-of-the-ordinary in Blake’s Saturday article with his not-so-subtle disdain for all things “small” in our Island economy – coupled with his enthusiasm for anything growing bigger. No, what prompted me to write this critical commentary is his ludicrous claim that the “market” operates rationally and (because it is “reasonable”, obeying and following predictable laws and rules) it is – by virtue of its very nature, bringing about a greater degree of well-being for us all, like some quasi-divine, benevolent power – worthy of our unconditional faith and trust.
Such a belief is not only foolish and easily proven false, it’s extremely dangerous! It encourages ignorance about the structural inequities within our economic and political systems, not to mention those tangible, malevolent forces empowered by wealth and social privilege making those social inequities even worse.
Here’s a couple of things Doyle says about the predictable and rational nature of the market in his short Guardian article:
“….the economy keeps fortifying the wheel of progress…”
“The wheels turn; and the impacts can absolutely be predicted. There are no shocks in this system…”
“Markets are rational and their responses to stimuli can be tested and forecast.”
The “markets are rational”? Really? What exactly was “rational” about the major housing crisis that nearly collapsed the world economy just a few short years ago… something Doyle briefly references when he says: “….the industry has been slowly regaining footing since the 2008 housing crisis”? Full stop Blake. Think about it for a minute. How exactly did that unprecedented and massive “housing crisis” come about if the market is so rational and predictable? Anyone who hasn’t been brainwashed by years of University economic consumption of conventional economic wisdom can tell you exactly how it happened: corruption and greed.
The “housing crisis” is, in fact, the best “recent” evidence we have of how corrupt and greedy people can completely knock the “rational” out of the market – that is, whenever politicians leave greedy and corrupt elites free to operate without adequate oversight, regulation, accountability and public transparency, which was unfortunately the case at the time of the housing crisis.
The details explaining how the housing crisis happened can be easily learned from any number of excellent documentaries which explain in straightforward terms how it had nothing to do with the rational laws of what Doyle calls the “supply-demand challenge”….and everything to do with the wealthy and powerful keeping secrets, being greedy, and engaging in self-serving “irrational economic activity”.
Inside Job is one such documentary – or if one prefers learning facts through the telling of a good “story”, the hollywood movie The big short” starring Brad Pitt shows how “irrational” the market can become when those with tons of money decide to get many more tons of money by “betting on” and “profiting from” planned economic collapse!
It may be ruthless and evil, but that kind of economic activity can be very profitable nonetheless, and is not something below what unscrupulous power mongers who value wealth and power more than the well-being of others are willing to do, in the U.S.A, or even here on our fair Isle!
If documentaries and hollywood movies aren’t high brow enough for a trained economist, perhaps a succinct economic analysis of the crisis titled “The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street,” by Justin Fox might be the ticket.
But alas! The tendency in those who give the market their unquestioned trust to cling to a belief in the existence of some kind of angelic “Invisible hand” (which Adam Smith spoke of so warmly, with it’s mysterious power to bring benefits to everyone else when the wealthy and powerful act out of self-interest to benefit themselves – hip hip hurrah! three cheers for the “trickle down” theory). Despite all evidence to the contrary, that irrational mindset tends to persist with many, especially with those stuffed full of formal economic training. As Paul Krugman concluded in his review of “The Myth of the Rational Market,” which he wrote for the New York Times:
“My guess is that the myth of the rational market — a myth that is beautiful, comforting and, above all, lucrative — isn’t going away anytime soon.”
Touché!
Doyle concludes his own piece with a rah-rah nod to his “bigger is always better and leads to more economic progress” mantra by proclaiming : “…we must all get behind more economic growth.” He seems oblivious to the fact that by supporting the further growth of those who are already wealthy and powerful in PEI…those who already largely control the economic levers of our mighty Island’s future economy – we are actually making a bad social, cultural and yes, economic situation worse.
True “economic progress” for PEI will come about only when we foster self-sustaining productive systems which are “smaller,” more local, and owned and controlled by many more people. We need stable economic ventures capable of creating meaningful labour by producing valuable products and real wealth, without having to continually “grow” in both size and power – displacing others in the process – and further concentrating ownership in fewer and fewer people and corporate entities.
One last quote from Schumacher on what truly ethical and sustainable economic progress entails… from his chapter titled “Ownership”:
“The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment.”
PEI may be “mighty” in many respects, but the last time I drove around this beautiful Island I arrived back home with a profound sense that we’re also pretty darn “finite”.