Have you ever seen giant chickens fighting? No, I hadn’t either before my friends’ hen do, where people took it in turns to don sumo chicken suits and battle it out in a plastic arena. Seldom have arms and hands been so ineffectual as when flapping around in giant plastic wings, or feet rendered so useless in giant hen’s claws. Unable to see much out beyond the giant cockscomb dangling in their eyes, the fights became about simply who could push who the hardest.
I wouldn’t normally mention such extra-curricular activities, but this one provided me with so much illustrative mirth coming, as it did, hot on the heels of my recent visit to a much more solemn affair. In June, I revisited my Northern roots at the York Festival of Ideas, where the ever-brilliant Joseph Rowntree Foundation (JRF) were hosting a themed day of talks and discussions on the topic: “Economic Growth for the Many, Not the Few” – talking about the opportunities and battles which now await the UK economy post the biggest financial crisis in living history.
There are clearly some big questions to be answered here: Is capitalism to blame for the economic crisis? How do we ensure it doesn’t happen again? Is it time for a new world order? If so, what should that be? How do we make the system more equitable? Is socialism the way forward? Should we be looking for a third way?
Now I’m no ornithologist, but it doesn’t take much to see the current situation as one in which the banks and other financial institutions are flapping around like headless chickens blaming each other, crying “‘fowl’ play” and seeing who can trample on who to survive. At the risk of ruffling a few feathers I could go on…and I will!
The first discussion of the JRF themed day introduced ‘academic cosmologist’ Bob Swarup, author of Money Mania: Booms, Panics and Busts from Ancient Rome to the Great Meltdown. And Bob had some bad news for us all: financial crises are endemic and “efficient markets are a lie” he said. Constant change (boom & bust) is necessary, innate and inevitable. Apparently you can no more teach a chicken to fly long-distance than to get humans to step off this roller-coaster.
So far, so bad. But how so, you might ask? Why is this boom and bust cycle inevitable? Because money accentuates natural human biases, making us more prone to errors over money than in any other arena. This is one of the key findings from my field of economic psychology (like behavioural economics) over the last few decades.
But what errors and biases are these? Is it simply 'greed' at the heart of human folly over money? "Individuals and institutions are captured by the wondrous satisfaction from accruing wealth," asserted the economist J.K. Galbraith. Or, put another way, does our short-termist nature mean that we are doomed to setting up booms and busts as we chase short-term gain instead of looking at the longer term picture?
The problem is that money makes us go a little funny. We imbue it with many different psychological values which end up over-inflating its real price. So does 'human nature' mean financial crises are the cost of progress? After all, you’ve got to crack some eggs to make an omelette. They call it ‘creative destruction’!
Arguing for capitalism, in the blue corner, we have “the rational optimist”. This point of view holds that constant economic growth is an increasing good, that increased commercialisation (economic progress) should (and will) go on ad infinitum without causing the end of the world; so why worry? The market will come right in the end. In the blue corner, arguing against this, we have the likes of the Occupy Movement spitting feathers about the 1% versus the 99%, and arguing that booms don’t benefit everyone, and inequality being the root of all our woes. A battle between these two polar opposites would indeed be like a giant sumo chicken fight – ineffectual and hard to tell if anyone can win.
But is there a third way? Recent figures have shown that productivity in the UK has slowed almost to a halt over the last few years. This has been called ‘The UK’s productivity puzzle’, and the New Economics Foundation has recently asked whether it has hit an invisible ceiling? In fact, productivity growth has been slowing across the whole developing world at least over the last ten years or so. But before we panic that progress has unthinkably been stymied, NEF wonders instead whether we should be rethinking economic growth - not just in terms of ever-increasing GDP, but instead in terms of more meaningful goals, such as greater wellbeing for all?
This is also the thesis of Umair Haque, author of The New Capitalist Manifesto: Building a Disruptively Better Business, who reminds us that capitalism in its twentieth-century form under-estimated the costs of destruction while over-estimating the benefits of creation. This imbalanced equation of creative destruction could not continue indefinitely. The new order needs to value wellbeing over profit, and in order to be sustainable needs to create value which makes people, communities and society better off as well as making profit.
So what’s the solution? I believe that these ‘third way’ concepts are ideas which have come of age. These are ideas which supersede the old behemoths of capitalism, communism, and GDP. Now all they need to do is prove themselves. Metaphorically speaking we need to throw them into the ring with the Anzu Wlyiei; because I hope and believe that these are quicker, nimbler, more agile fighters which will succeed in battering the giant chickens – more Bantam-weight than old-fashioned heavyweight.
Despite my beliefs, however, I’m not betting my shirt on it yet because, as they say: never count your chickens before they hatch, and definitely don’t put all your eggs in one basket!
This post first appeared in September 2014 as an article in e-news, Directory of Social Change