A political strategy is often either considered the most economically efficient tool or the only possible alternative. Both are absurd ideas in their own ways - it is rarely true that something is the only alternative, and being the most economically efficient tool to get something done isn't necessarily the best tool. It is important to keep in mind that a political strategy is a tool or an alternative, but it is man-made and often (if not always) a matter of (more or less) deliberate choice.
For instance the Swedish government are trying to make tax rebates on salary income, lowered unemployment and health insurance and privatisation seem like the only alternatives or most effective tools (and therefor necessary) to increase jobs, secure welfare and insure economic growth. Let's look closer at this.
There are really two parts to this strategy.
One is meant to provide incentive. It is claimed that "more money in the wallet" by reduced taxes on salary income, coupled with lowered welfare benefits, makes working more attractive. This is aimed at "lazy" citizens who'd rather live on welfare benefits, and the idea is that they are supposed to be motivated to get a job if you increase the income gap between salary income and benefits. Certainly this might be an effective way of making people work harder to find and keep a job - provided that there are jobs to be found. Of course, a big part of the problem today is that there aren't any jobs, in part because of the global recessesion but also due to changing production patterns and other conditions.
This brings us to the other part. There is a theory that lowered taxes (which are to a large extent paid for by lowered unemployment and health insurances) leads to an increase in private consumption and increased investments, and thus increased growth and more jobs. Possibly one might argue that lowered income taxes make it easier to hire more people - since if you free up capital for the worker in terms of lower taxation, you might in turn offer a slightly lower salary. Along those same lines I suppose it might be argued that starting your own company is easier too.
First of all, I am not convinced of the basic validity of these claims. While there are theories stating that tax cuts lead to increased consumption, more revenue for businesses which they can spend on investments in labour, knowledge and so on and therefor economic growth and general prosperity for all - there are also theories stating that the increased consumption is partly eaten up by increased prices and that a lot of the tax cuts end up in private savings. Likewise with the motivational power of the above policies - you've got theories in favour and theories against.
So, who is wrong? I don't think either is, really. Both theories probably have something going for them, but my own prejudices and inclinations have me siding with those not in favour of tax cuts, at least in general. But more than that, I think the theories also reflect and influence how we view social reality. Economic theory, like all theory, is situated in a greater context. It is interdependent of social and cultural theory, and theories such as these are dependent upon a view of human nature as driven by greed, ambition and (informed) selfishness. A lot of the opposing theories depend on a view of human nature as caring, altruistic and helpful. Some theories function on a mix of these views.
Personally, I don't think human nature is any of these. I think humans have the capacity for all of them however, and it is up to us as humans to decide which of these capabilities we want to nurture through the way we organise our societies, shape our myths and tell our stories.
So, if we cannot base our theories on some naturally given fact about human nature, can we judge the theories based on efficiency?
Saying that something is the most efficient way of doing something is a very poor argument I think. For one, it's difficult to know if it really is the most efficient way, there are any number of variables and uncertainties involved. Second, simply being the most efficient way is not necessarily a good criteria. Just because we can do something, or because it is the most efficient, doesn't mean we need to do it or that it is the best thing to do.
This is one of the great human capabilities. Whereas most other animals seem to act more closely to instinct and based on immediate rewards, humans as a species have the ability to reflect and use imagination and can thus think several steps ahead, and we can consider wider consequences of our actions. We might identify a policy as the most economically efficient method of achieving a goal, and we might claim that this is the route we must take (or are morally required to take). Yet in doing so, we lose sight of other values, values which are not purely economic. And in the end, I think few of us think that the main goal is purely economic - most people would regard economic goals as secondary to humanitarian goals. Is it worth it to lose those humanitarian goals in order to achieve the economic ones?
There is also a muddling of the arguments at play here. It is implied that if action A is more efficient than action B, action B doesn't have any good effects. This is along the same lines as many current business policies where we don't really care about profit per se. What we care about is maximisation of profit. A lower-than-expected profit is considered a loss, since it is measured against the expected profit. But a profit is still a profit, and an action B which is less efficient than action A is still an efficient action, even if it is not the most efficient one.
We really need to consider what we lose in terms of humanity when we place efficiency as our number one priority, and we need to realise that economic theory does not exist in a vacuum but is interconnected with both social and cultural theory. When we emphasise efficiency, people are viewed as centers of production and consumption rather than centers of experience, reducing us to producers and consumers and making society into a society of consumption. In this society, what matters is that we constantly increase our production, doing so by constant effectivisation of our exploitation of each other and the ecological and social systems we are a part of. Effectively we are dehumanising ourselves and depleting all resources on Planet Earth.
Ultimately these are value judgements of course, and therefor a question of ethics. Not to say that one view or another is "right" - unless you subscribe to an ontologically realist meta ethic there is no "right" or "wrong" ethic - but it is a question of what kind of society we want. It might be claimed that human nature is so-and-so - that humans are ultimately selfish or ultimately altruistic - and that we thus have no real say in the matter. I would suggest that humans are neither, but have the capability of both. As to the ecological systems, the basis for biodiversity and all life on Planet Earth, they are as real as our degradation of them, and the destruction of them would surely mean the end of all life as we know it. But even the preservation of the ecological systems is a choice we have to make.
It is up to us to decide which route we want to take, and what kind of society we want.
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