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Against Economic Fatalism

by proximity1 Sun Apr 16th, 2006 at 12:49:56 PM EST

As in the US, fewer people in Europe are reading a daily paper, and papers are feeling the pinch. Also, media groups are consolidating and combining--i.e. radio with press, television, Internet, etc.

To a great extent, only somewhat, if at all, later, the corporate trends in the US are being vigorously pressed in Europe, all as part of what is presented with tremendous consistency and repetition in influential mass-media news reportage as the inevitable progress of globalization.


Why? One leading reason, I believe, is that to an extent almost inconceivable only a generation ago, the world--not only the formal business-world but the world of all manner of trained professionals--has come under the influence of a single, coherent and forceful set of intellectual priorities--called variously, but amounting to economistic imperatives--and this, simply because now, to an extent never before seen, corporations of all sorts are peopled so heavily in their upper-management ranks by holders of a Masters of Business administration degree (with the Ph.D. of Business Administration perhaps already close on its heels).  One of the prime driving forces of globalization are the legions of these MBA graduates whose training encourages them to adopt and rely upon a set of habits of intellectual analysis notable for their abstract character and their narrow focus upon traditionally-defined private corporate business priorities. Rather than indoctrinating students with selected predetermined answers to particular issues in economics and management, MBAs learn the subtler art of "thinking like a" : chief financial officer or director of human resources, or managing director, etc.  The result is a commonly-shared set of points of view which are rigorously reductive and tend to preclude from the outset a consideration of other arguably worthy but competing interests.

 One of the most important things we can do is to come to see clearly what this mindset entails in its uncritically-accepted assumptions about society and economics.

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 some recommended reading (for francophones)

 Dé-penser l'économique : Contre le fatalisme, by Alain Caillé, Paris, 2005, La Découverte/M.A.U.S.S. ; isbn: 2 7071 4518 1

or, roughly: "De-think(ing) the economic: Against fatalism."

http://www.editionsladecouverte.fr

 and, for anglophone readers, I recommend as a substitute  starting-point something I've yet to read:
Marcel Mauss's
The Gift: The Form and Reason for Exchange in Archaic Societies published by W.W. Norton (US) and Routledge (UK). orig. in french: "Essai sur le don. Forme et raison de l'échange dans les sociétés archaïques» (1923-1924)

 Much, if not, indeed all, of the source of the constant drumbeat of "It's inevitable! Surrender to the tide of economic globalization!" comes from entirely questionable beliefs currently taught as the reigning "economistic" paradigm in MBA programs world-wide in which, among other things, that which cannot be reduced to a quantifiable monetary value is treated as secondary or as liable to being simply dismissed as irrelevant to decisive factors of decision-making and priority-setting.

 That is not to say, of course, that MBAs are simply and plainly brain-washed, incapable of critical thinking about the things they're given to believe.  However, the pressure to conform to the reigning economic paradigms --including a strong presumption that all values are, by definition, reducible to their simple monetary market-value--does not invite openly and vigorously bucking these articles of corporate faith nor is that a course which one should expect to lead to promotion along the ladder of corporate success.  MBAs, too, have to repay their loans and get a job and, of course, being in an MBA program in the first place indicates some predisposition to accept the doctrines being taught.

 Finally, there is, I think, immense acceptance, unthinking or little-challenged acceptance of certain economic assumptions (which form the core of corporate priorities making globalization an imperative)  on the part of the vast majority of Americans (and, now more and more Europeans) who, frankly, have never been seriously invited to consider anything else.  Second only to faith in the Christian God and in Jesus, comes an american faith in the all-powerful tenets of business enterprise and the supposed mainly benevolent "free market".  It's our mother's milk!

 To rethink all of this and to question and challenge it for ourselves and to prompt those around us to do the same is an inescapable part of any agenda which would offer a future promising anything beyond what the corporate directors tell us is worthy and desirable (for us).

 Step # 1: When they tell you, "It's inevitable!", don't believe them, and ask, "Why, please, is it 'inevitable' if we all choose otherwise?"

  That's the least we're entitled to demand.

 MBA-degree-holders: your comments, criticisms, are particularly invited here; agree, disagree?

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of MBA holders I know. Most of them are quite capable of analysing and critiquing things at least as well as holders of any other Masters degree, and better than most. What you are taught does not always equate to what you think.
Oh I do not have one of these degrees myself.
by observer393 on Sun Apr 16th, 2006 at 02:27:15 PM EST
Thanks for posting this, proximity1, and welcome to ET.

I'm not an MBA holder, so I don't mind bashing them ;) (BTW, I don't know if there are many MBAs here...) However, I'm not sure that the "economism" you deplore (me with you) is to be mainly ascribed to them. I'm sure they must play their part. But I, and others here, see the role of think-tanks, economists in academia, pundits, and journalists as extremely important (there may be MBAs among them, of course).

The result, in any case, is that the belief is now widespread and deep that "the economy" determines what happens much more than representative politics or the nation-state. The resulting political credibility gap serves to increase the power of transnational corporations, thus validating the proposition that "the economy" rules. It's a vicious circle -- but, as you rightly say, we should not accept it as inescapable.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Apr 16th, 2006 at 03:27:04 PM EST
Thanks for crossposting this here (this was posted as a comment in a recent thread of mine on dKos).

I do not have an MBA, but I don't mind them being criticised after a headhunter explained to me, in all seriousness, that I needed to get an MBA to complete my educational profile (after Polytechnique and a PhD in economics...) in order to compete in the labor market...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Apr 16th, 2006 at 03:48:29 PM EST
Yeah, well we all know young French people have to stay on for years in the education system adding diploma to diploma in hopes of getting a job...

You folks need to loosen up that sclerotic job market of yours and at last stop fighting and let economism take care of everything!

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Apr 16th, 2006 at 03:58:46 PM EST
[ Parent ]
The Kaos Pilots in Denmark, who are producing some of the most interesting business students in Europe.

www.kaospilot.dk


You can't be me, I'm taken

by Sven Triloqvist on Sun Apr 16th, 2006 at 03:58:37 PM EST
I remember hearing about them a decade ago or so. Sounded like what we (in IT) call Process Managers at the time, but what do I know.
Thanks for the reminder and the link.
by Number 6 on Wed Apr 19th, 2006 at 12:45:52 PM EST
[ Parent ]
I have an MBA in Global Management, and the idea of globalized economy with no regulations is taught as if it has already happened, and there is nothing that can possibly change the current situation. Students in most of my programs did not question the validity of globalization, even though many of them appeared to have left-of-center views on other issues.


Mikhail from SF
by Tsarrio (dj_tsar@yahoo.com) on Sun Apr 16th, 2006 at 04:42:19 PM EST
Economic fatalism to accept globalization as inevitable?

1.  Globalization is already here, to some extent.  It's a very gradual process, and cross border trade has always been around.  Now why should we want to have borders that restrict trade??

For instance, the current EU tolls and subsidies on foodstuffs help keep the developing nations poor and unable to build self-sustaining economies.

2. There is no moral difference between opening up the old, feudalistic trade barriers between towns in medieval Europe to opening up the national borders of today.

Everytime a factory moves from Leipzig to Stuttgart some workers in Leipzig lose their job (and can move on to other things), and Stuttgart gains jobs, and the German economy as a whole has become slightly more efficient.

Everytime a production order is sent to China instead of Germany, China is helped develop its economy and catch up with us, and the global economy as a whole has become slightly more efficient.

------
Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Mon Apr 17th, 2006 at 06:23:55 AM EST
I think the concept, as noble as it sounds, is never what economists claim it is. Much of the production moved to developing nations is labor-intensive, where productivity gains are very insignificant. Furthermore, companies are under constant pressure to keep their labor costs down. Hence we witnessed companies like Nike and Rebook move their facilities from Korea to China several years ago, and now we are seeing more and more shoes made in Vietnam, Laos, and other even poorer countries. For all the talk of higher productivity resulting in higher wages, companies would just much rather keep the costs down by moving to a lower-cost country.

Additionally, there is an issue of a broader context. What is the point of making the global economy more efficient if you are one of the people in Germany who just lost the job to China? Do you really share the sentiment of those few elite economists that this process is good overall for the world economy? Economic efficiency is great, but we do not live in an economic vacuum, and governments must walk a fine line between economic dogma and doing what's best for the people of their respective countries. Sometimes, it is worth paying 2 bucks for a piece of tupperwear instead of 50 cents, if it means it will be produced by someone with a higher wage.

Mikhail from SF

by Tsarrio (dj_tsar@yahoo.com) on Mon Apr 17th, 2006 at 02:09:30 PM EST
[ Parent ]
Overall productivity gains comes in many, small steps, and leads to greater overall wealth in society.  For illustration, look at the industrial world's standard of living compared to 200 years ago, before the industrial revolution.  Heck, just compare it to the 50's, before the last half-century's worth of accumulated productivity gains.

Now in your post, you mix up the concept of overall productivity with productivity per man-hour.  These are two entirely different things.  If 10 employees' worth of work is moved to a place with 50% lower hiring costs, overall productivity in both of the two places increases (though the productivity per man-hour stays the same, unless the work itself is also altered).

Of course the person being laid off is mad and/or frustrated by this.  But just as it is natural for companies to hire lots of workers when they do well, it is natural for them to shed workers when they do less well, or are able to do things more efficiently.  The latter frees up labor for the companies that are hiring, and such shifts are what enables the work force to, over time, go from good overall productivity, to better, and even better.

------
Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Mon Apr 17th, 2006 at 03:04:32 PM EST
[ Parent ]
Again, you are not seeing the world outside of the economic vacuum. Companies are not shedding workers because they are not doing well. In fact, corporate earnings and profitability continue to increase to record levels. Companies are shedding workers in higher-labor cost countries, because they want to make even more money than they are already. Even those companies that are having tough times and are having to lay people off sometimes look at lay-offs as their main option to shed costs. It is not true, and it is not right as evident by the thousands of companies in Japan that have done their best to provide employment for life.

Mikhail from SF
by Tsarrio (dj_tsar@yahoo.com) on Mon Apr 17th, 2006 at 04:00:13 PM EST
[ Parent ]
"Outside the Economic vacuum" - as if economics somehow represented empty space?

Terminology aside, I am very much considering the whole picture.  Productivity gains are easiest to measure economically, but what it boils down to is quality of life, just as I mentioned in my post (and you failed to address in your argument).

That companies are reaching record profits is a good sign.  It means productivity is making big gains.  It also means there is an increasing space for competitors to move in and compete on price, to the benefit of consumers.  In part, but far from only, these profits are achieved through a shift of manual labor to developing nations.  This shift also brings with it a tremendous opportunity for these developing nations, their unemployment is lowered and their economies (and by extension their quality of life) grow.

Wealth is not merely being shared across the world due to globalization, it grand total is increased.  Trade is not a zero-sum game.

------
Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Mon Apr 17th, 2006 at 07:57:56 PM EST
[ Parent ]

Wealth is not merely being shared across the world due to globalization, it grand total is increased.  Trade is not a zero-sum game.

True - the problem is that it is being increased without being shared. Using average GDP numbers is becoming increasingly misleading in a number of countries as the increase seems to benefit only a happy few. Case in point the USA where median wages have been, at best, stagnant in the past 5 years - and have increased little in the past 30.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 18th, 2006 at 04:40:53 AM EST
[ Parent ]
No - the wealth increase is actually shared through globalization, one example of which was the labor shift process I mentioned in this thread.

------
Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Tue Apr 18th, 2006 at 08:51:10 AM EST
[ Parent ]

  Exactly.

  P.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Fri Apr 21st, 2006 at 09:01:52 AM EST
[ Parent ]
Additionally, there is an issue of a broader context. What is the point of making the global economy more efficient if you are one of the people in Germany who just lost the job to China?
First, let me acknowledge that losing a job is not a wonderful thing.  The whole issue of economic dislocation,,,losing jobs to other countries, retraining and finding another job, is incredibly stressful for the loser of the job.  But shouldn't we sometimes take a step up, and recognize that person in China is getting a job, able to better support him/herself and a family?  

In reality, how are we really going to help Africa long term?  Yes, raising the level of funding for AIDS, and donating money for food are incredibly important efforts right now--stopping the wars, the slaughter, etc.  But at the end of the day, we're going to have to help them develop economies, so they can not only support themselves, but have the pride of supporting themselves.  And that too will cause the same economic dislocations of which you speak.

it's sad at times, always challenging, but do you see a better way forward to help the billions of people that are truly at poverty levels in the world--$1 per day kind of poverty.

by wchurchill on Tue Apr 18th, 2006 at 02:51:07 AM EST
[ Parent ]
So let me get this straight..as long as we can pay someone in China just enough to where they are not considered as living in extreme poverty, we have done our due diligence in terms of lifting people up? True, the wages in China have been increasing over the past years, and there are record numbers being lifted out of extreme poverty, but anybody will tell you this process has been grossly uneven. Again, we have to look at various specific earnings classes to determine if the spread has been fair. Even the Chinese government has acknowledged their current system is generating a very uneven society.
As for African and other countries, I believe lifting them out of poverty includes empowering them not through low-paying labor-intensive jobs but through living wages, microlending, sustainable energy base, and other meaningful and creative ways. Solving AIDS, hunger, and other problems, albeit extremely necessary, will not help these countries in the long run, because we are not tackling their root-cause.

Mikhail from SF
by Tsarrio (dj_tsar@yahoo.com) on Tue Apr 18th, 2006 at 03:03:10 PM EST
[ Parent ]
we have done our due diligence in terms of lifting people up?
What are you saying here?  American and European companies are susposed to go into China, a sovereign nation, and do what as due diligence?  Find out who is going to get the jobs, how much money they are paid?  And then assess if China is lifting their people far enough out of poverty?  How much out of poverty would qualify for you?  And are you the judge of that, or who would it be?  The American company?

There are proven models as to how countries come out of poverty around the world.  I would suggest we follow them, and allow the markets to work--not saying no controls are needed, but what you are describing would slow the progress, and the lifting of living standards around the world to a crawl.  

by wchurchill on Wed Apr 19th, 2006 at 07:49:22 PM EST
[ Parent ]
we should also acknowledge that this globalization is not just economic.  Communications have put us so much closer together.  So many professions are sharing data across languages and across country boundaries--medicine certainly being one.  I wonder if there is not just a certain inevitability of the world getting closer,,,,broader than the inevitability of globalization in a business sense.  In a small sense, look at us at ET--we wouldn't be dialoging like this 15 years ago.  Don't we all, at ET, get our music from around the world, read our papers from around the world?  I'm one of those that no longer gets a hard copy paper every morning--it's too narrow and too boring.  I read the local paper for the sports--but I get it online.  Even the weather I don't get from the local paper--I'm sure most of you like me get these wonderful up to date, daily, hourly weather stuff, and perhaps like me look at 5 other locations where I have family and friends.

And in a broader historical context, hasn't this really been going on for centuries?  There was a time when city-states really supported themselves, almost completely.

I too sometimes think of this globalization thing primarily in economic and business terms,,,I guess because it's in our face so much.  But when I step back and reflect, I think it's much broader.

by wchurchill on Tue Apr 18th, 2006 at 03:02:54 AM EST
Your first two sentences say it all.  The reduction of trade barriers and the arrival of the communications revolution of the last few decades has simply made globalization more obvious to us.  It's just a matter of the business side of globalization being in our faces much more today.

But isn't it good that the average Joe (Jacques) learn about international business?  Doesn't that provide an amazing educational opportunity?  I think so.

I may be in the minority on this, because I think globalization is great.  I know I'd much rather live in the Internet Age than the Iron Age.  I like being able to talk with all of you about the issues of the day.

It (globalization) is inevitable.  Globalization has been present for thousands of years -- at least since Rome.  It has already happened.  The fact that we're sitting here talking on computers connected to the Internet is all you need to examine.  Surely this is not a bad thing, is it?  I love the fact that I can jump onto the Internet and find out what happened in Paris or Tokyo or London or Beijing while I was asleep -- and in a matter of seconds.

As I've said, what form globalization takes can be altered, but the general direction -- that being towards economic and social integration -- cannot, nor, in my opinion, should it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Apr 18th, 2006 at 06:43:38 PM EST
[ Parent ]
Drop me an email, by the way, wchurchill: jones.drewj@gmail.com

I've got some data to share, but I'm afraid I wouldn't be able to squeeze a diary out of it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Apr 18th, 2006 at 06:50:47 PM EST
[ Parent ]
 To all who have commented on my post, my sincere thanks for your thoughts, the examples you offered and for your opinions.

 In particular I want to thank Tsarrio, whose posts present in most or all instances here the very reactions I had to the posts to which s/he replied.

  I hope and intend to spend more time reading and posting here.


"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Fri Apr 21st, 2006 at 09:14:27 AM EST


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