Center for the Advancement of the Steady State Economy
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A Liberating (but Damned Uncomfortable) Conversion

by Herman Daly

Foreword to Wendell Berry’s What Matters? Economics for a Renewed Commonwealth

Herman DalyAs a poet, novelist, essayist, farmer, and thinker on matters agrarian, Wendell Berry needs no introduction. But he is not a professional economist, not a guild member with a Ph.D. union card. Nor does he claim to be such. In a world where knowledge is organized by discipline and professionalized in tight circles, it is often hard to be heard outside the circumference of one’s own silo. Therefore I fear that the very people for whom reading these essays would be most beneficial, and through whom they could have the most salutary impact on our ailing world, will simply not read them. I can imagine some of my university colleagues and students in economics departments asking: Why should I read a book by a noneconomist on “economics for a renewed commonwealth”? There likely won’t be a single equation in the book, and use of the archaic word “commonwealth” betrays a probable lack of understanding of the individualistic basis of neoclassical economic theory. Economists don’t write poetry or fiction (well, maybe a bit of the latter, but not on purpose), so let not poets or agrarian-environmentalist- localists write about the sophisticated technical science of economics in a globalized industrial growth economy. Leave it to the experts to continue to grow the economy and thereby provide the only possible solution to the problems of poverty, energy, and climate change. I can hear it now, complete with aggrieved intonation.

My purpose in this foreword is therefore to preemptively reply to this imagined but not unlikely invitation for Wendell to shut up. I want to explain why it is critically important for all citizens, especially professional economists, to read and reflect deeply on the essays in this book. Yet I understand the reluctance of someone with the commitments sketched above to give these essays a fair reading. To do so is to run a serious risk of conversion away from the dominant idolatry of our culture—a liberating conversion to be sure, but damned uncomfortable.

What do we economists have to learn from Wendell Berry? Many things, but here I will mention only two. First is a definitional correction regarding the basic nature of our subject matter—exactly what reality matters most to our economic life and why? Second, what mode of thinking does this reality require of us in order to understand it as well as possible, without seducing us into spurious substitutes for honest ignorance?

The definitional correction goes back to Aristotle and, while somewhat retained by the classical economists, seems to have been dropped from the current neoclassical canon. Aristotle distinguished “oikonomia” from “chrematistics.” Oikonomia is the science or art of efficiently producing, distributing, and maintaining concrete use values for the household and community over the long run. Chrematistics is the art of maximizing the accumulation by individuals of abstract exchange value in the form of money in the short run. Although our word “economics” is derived from oikonomia, its present meaning is much closer to chrematistics. The word chrematistics is currently relegated to unabridged dictionaries, but the reality to which it refers is everywhere present and is frequently and incorrectly called economics. Wendell Berry is, I believe, urging us to correct our definition of economics by restoring to it the meaning of oikonomia and freeing it from confusion with, and excessive devotion to, chrematistics. In replacing chrematistics by oikonomia we not only refocus on a different reality but also embrace the purposes served within that different reality—community, frugality, efficiency, and long-term stewardship of particular places.

Where today do we find chrematistics masquerading as economics? Certainly in the recent Wall Street fiasco—“selling a bet on a debt [as] an asset” as Wendell succinctly put it. It is amazing that people who have recently engaged in this disastrous stupidity on such a massive scale still have any credibility at all! Yet belief in “free markets” as the philosopher’s stone that alchemically transmutes the dross of chrematistics into the gold of oikonomia remains strong.

Other examples of chrematistics at work include monopoly pricing, tax evasion, subsidies, rent seeking, forced mobility of labor, cheap labor from union busting and illegal immigration, off-shoring, mergers, hostile takeovers, usury, and bullying litigation—not to mention the airlines’ successful shifting on to their customers the labor previously done by former travel agents, check-in clerks, and baggage handlers. Externalizing environmental costs—shifting the cost of depletion and pollution from the producer to the general public, the future, and other species—is probably the most common and most disastrous chrematistic maneuver. The unaccounted costs range from irksome noise, to mountaintop removal and filling up of valleys with toxic tailings, to a dead zone in the Gulf of Mexico, to global climate change and species extinction. Confusing oikonomia and chrematistics, misdefining the proper subject matter of economics, has deadly consequences. In the face of all this it is hard to remember that there are still some people doing useful work and creating wealth to really benefit the community. Chrematistics has not entirely displaced oikonomia, but it is trying to. In Wendell’s terms the little economy is trying to impose its puny logic on the mysteries and complexities of the Great Economy.

Professional economists should thank Wendell for his sharp reminder about what matters. However, if we are too proud to accept correction from a poet and agrarian, we can claim to have rediscovered Aristotle’s forgotten definitions all by ourselves. But then we will still be obliged to apply those definitions to the modern world and be brought face to face with the collective fantasy, idiocy, and horror that Wendell has identified and discussed.

The other thing economists can learn from Wendell Berry, as much from his example as from explicit discussion, has to do with the proper matching of our mode of thinking to the particular reality we are thinking about, and inevitably shaping. Blaise Pascal spoke of two modes of thinking: the “spirit of geometry” and the “spirit of finesse.” Similarly, economist Nicholas Georgescu-Roegen recently distinguished thinking with precisely defined analytic concepts that do not overlap with their other, from thinking with dialectical concepts that do overlap with their other at the boundaries. The best example of an analytic concept is a number. It is only itself and does not overlap with any other number. Land and sea would be dialectical concepts because, although for the most part distinct, they must overlap in tidal marshlands, estuaries, beaches, river deltas, or even the continental shelf, if they are to reflect reality. Each of these border areas in some reasonable sense is both land and sea—a logical contradiction but true to reality. Money is a notoriously dialectical concept, overlapping with nonmonetary assets of varying degrees of liquidity. When economists try to impose an analytical definition on money they end up multiplying categories (M1, M2, M3 . . .) or failing to capture the shaded subtleties of the borderlands. Analytical concepts employ mathematics to weed out contradictions where “yes-and-no” answers are not allowed. The virtue demanded by analytic thought is rigor; its defect is its inability to deal with qualitative change and evolution. If we do not allow something to overlap with its other then how could it ever evolve into anything different from what it is? The virtue of dialectical thinking is that it can accommodate qualitative change—what used to be dry land can gradually become sea or vice versa. Its defect is that it has to tolerate at least a range of contradiction. The virtue demanded by dialectical thought is good judgment, or as Pascal preferred, “finesse”—finesse in handling contradiction.

Today analytic thought is very much in vogue, and in economics quite dominant. It has the aura of science. Analytic thinking requires a reality that is like a number, and since chrematistics is about the maximization of exchange value numerically measured by money, it tends to attract those with a strong prior commitment to analytical thinking. Dialectical thinking is required by a reality that changes qualitatively through overlapping categories. Oikonomia deals with use values that are embodied in products that evolve over the long run to serve changing wants, and with changing technical efficiency in an evolving community that coheres around values that also change. A preference for dialectical thinking leads to a focus on oikonomia, and vice versa.

My point is not to say that one mode of thought is good and the other bad. Both are clearly necessary. There is a limit to what we can do with numbers, just as there is a limit to what we can do without them. But I do suggest that there is currently a bias toward the analytical and a corresponding prejudice against the dialectical. This quantitative bias is certainly not the only reason for the excessive importance given to chrematistics over oikonomia—greed, avarice, and intellectual sloth play a bigger role—but I think it is a contributing factor. In sum, the second thing that economists can learn from Wendell Berry’s essays is that clear-headed reasoning with dialectical concepts about what matters is possible, necessary, and enlightening. Here Wendell persuades by example.

When a problem yields neither to the spirit of geometry nor to the spirit of finesse, Wendell advises us to be more at home with ignorance and mystery. They are much better companions than either phony equations or empty verbiage, and more congenial to a creature trying to understand the overall workings of Creation and intuit the will of the Creator whose broken image he still bears.

In my eagerness to convince my fellow economists to read this book, I am afraid that I have failed to specifically address the general reader. So, dear general reader, for whom Wendell Berry wrote these essays, let me assure you that if you have read this far, you have gotten through the most obscure and convoluted part of the book. The rest is smooth sailing with a clear-headed and trustworthy navigator, albeit through deep waters. The essays require wakeful attention and focused thought, but priestly intermediation by professional experts is surely not needed.

9 Responses to “A Liberating (but Damned Uncomfortable) Conversion”

  1. gerald spezio says:

    I think that both you & Wendell Berry have much intelligence & advice to share with fellow travelers.
    But, it is both intellectually & scientifically irresponsible to make this claim:

    “When a problem yields neither to the spirit of geometry nor to the spirit of finesse, Wendell advises us to be more at home with ignorance and mystery.”

    Euclid, Newton, Bernoulli, Darwin, Boltzmann, Fleming, Einstein, & Feynman did NOT follow such blinding advice.

    Embracing Ignorance & mystery can only keep you ignorant & mystified .
    The best traditions of science would advise us to try harder.

    “Phony equations or empty verbiage” deserve our contempt because they are attempts to keep us ignorant & mystified.

    The best response to double talk & lying intended to keep us mystified is to go forward with honesty, intelligence, & the best science in order to expose the contrived deceptions.

    I want to be “congenial” with truth seeking, not creationist ostrichism.

    Herman, you sound like a “post modern” fool when you endorse such claims.

  2. Personally, I also don’t think it’s accurate to argue, as Berry does, that ordinary people have “granted proxies” to big business. Big business has labored hard from the start to preempt any and all democratic access to the powers it has taken. But Berry’s strength is not in explaining power.

  3. Bruce E. Woych says:

    I would seriously revise the “leaping label” of postmodernism to what you prologue to Wendell Berry’s idealistic “naturalism” simply because there is no accurate measure to draw that conclusion from all you have said. Without going into the precision of the rhetorical distinctions, it would be more accurate to say that the axiological (value theory) perspective you have vitalized does not answer to a dismissal as much as a reawakening. The question that needs to be raised, however, is whether economics is “science” at all in the great hallways that include Euclid, Newton, Bernoulli, Darwin, Boltzmann, Fleming, Einstein, & Feynman. Each of these measured nature not the relative costs of producing money to quantify human control in the process of harnessing human capital as an industrial system of social enforcement and market attractions. The equasive reduction of nature goes hand in hand with the equally reductive devaluation of the quality of life. Science is observation and measurement to be sure, but it is a sadly confused claim for modern science when the westernized ethnocentric or perhaps the egocentric subject can not see the forest for the trees.

    In this regard the active belief that science demystifies life is a reduction to ignorance itself. A false arrogance that sees science as a bottom line.

  4. gerald spezio says:

    William Rogers was the double talking establishment lawyer sent to cover up the foolhardy administrative fly order that lead to the deaths of Challenger’s entire crew.

    Rogers did his lawyerly best to double talk & mystify the entire investigative commission.

    Feynman wouldn’t buy any of lawyer Roger’s circuitous flapdoodle.

    Feynman refused to embrace Roger’s mystifications, & he proceeded to blow the entire homicidal farce out of the water.

    Below is a brief synopsis, but there is a thorough chapter in “Surely, you’re Joking Mr. Feynman” laying out Feynman’s ceaseless ability to always do science in the face of mystifying adversity.

    http://www.feynman.com/

  5. gerald spezio says:

    Modern Economics is elitist subterfuge, philosophical fluff, & literary opinion – not science.

    Classical economics openly denies the Second Law of Thermodynamics.
    I’ll go with the Second Law of Thermo.

    Darwin’s evolutionary theory surely demystifies the chaotic diversity of nature.
    I’ll go with Darwin.

    Elegance & finesse are best used for tailoring & high fashion.

    IF YOU ARE NOT DOING SCIENCE, WHAT ARE YOU DOING?

  6. Bruce E. Woych says:

    http://www.einstein-quotes.com/

    When I examine myself and my methods of thought, I come to the conclusion that the gift of fantasy has meant more to me than any talent for abstract, positive thinking.

    Science without religion is lame, religion without science is blind. It was the experience of mystery – even if mixed with fear – that engendered religion.

    As far as the laws of mathematics refer to reality, they are not certain, and as far as they are certain, they do not refer to reality.

    Our task must be to free ourselves by widening our circle of compassion to embrace all living creatures and the whole of nature and its beauty.

    The most beautiful thing we can experience is the mysterious. It is the source of all true art and science

    I’ll stay with Einstein

  7. gerald spezio says:

    Analytical reasoning is fraught with the very same difficulties as the vaunted “problem of induction.”

    But we don’t jettison induction & embrace ignorance & mystification as the solution.

    Indeed, as scientists we embrace induction & analytical reasoning as the best method discovered so far.

    Three cheers for induction, numeracy & quantification – whenever possible & that includes ethical claims.

    As an antidote to cavalier literary criticism of scientific analysis, may I suggest E.T Jaynes truly magnificent magnum opus, PROBABILITY THEORY.

  8. gerald spezio says:

    Ever since I read your endorsement of Berry’s new age phenomenological flapdoodle, I have been chagrined because I respect you both.

    Your myths & reality page is an intelligent & clearheaded criticism of the continually expanding economy.

    BEYOND GROWTH is unsurpassed as the best treatment on the growth mania.

    You most assuredly didn’t achieve such carefully delineated wisdom by embracing ignorance & mystery!

    I think that both you & Wendell Berry are well meaning, intelligent, & conscientious men.

    But, I think that you have both seriously erred by telling us to embrace ignorance & mystery.

    Most especially, I would never suggest any such thing to a curious & innocent child.

    Your magnificent discussions of Fredrick Soddy & Georgescu-Roegen in BEYOND GROWTH are shining flood lights against ignorance & mystery about anything.

    Your work is up there with them.

    Feynman never suggested or intimated that we should embrace ignorance & mystery.

    Feynman’s whole life was charging right into the fire breathing dragons of mystery with hard nosed science & truth seeking.

    If I am getting this wrong, I would ask you to straighten me out by using good science, as in Feynman.

  9. gerald spezio says:

    I have unabashed respect for Hermann Daly & Brian Czech, & I have devoured their prescient work.

    I address the following to them.

    Because our politics & hopes are identical, may I suggest that B. F. Skinner & Marvin Harris, both dinosaurs to with-it literary moderns, could be an inescapable source & critical premise of scientific understanding.

    I know full well that many will guffaw at such a basic claim.

    Both Marvin Harris & Skinner are long departed.

    Try the first 40 pages of Skinner’s, Beyond Freedom & Dignity. Then, consider the possibility that you & many others routinely invoke the very same “autonomous inner man” solutions to our political & planetary peril.

    Many are full of the very same changing minds, mentalism, & free will that Skinner openly scorned.

    Skinner contends;
    “The function of the inner man is to provide an explanation which will not be explained in turn. Explanation stops with him. He is not a mediator between past history & curent behavior, HE IS A CENTER FROM WHICH BEHAVIOR EMANATES.”

    When I suggest Skinner’s very reasonable position to well meaning friends who have swallowed the so-called cognitive revolution, they are incredulous that I am so dated & completely out of the with-it loop of the cognitive revolution.

    The so-called Cog Rev is a return to mystifying mentalism, free-floating ideas, & “inner man coming forth to change verything. Its de-politicizing consequences are gigantic.

    Ehrlich is a good scientist & he does it regularly & routinely.

    Many bright peole are sincere & conscientious, but their professed mentalistic solutions are filled with Platonic foo-foo & ancient Greek free-will.

    I further claim that I see such a routine resort to “autonomous inner man” solutions in all manner of conscientious attempts to reverse the course of political events.

    I claim that such egregious dead end inner man mentalism shows up everywhere from Lewis Mumford to Paul Erhlich & Garrett Hardin.

    Mumford openly states his commitment to “free floating ideas” causing everything.

    What conditions behavior?
    No small issue.

    Here are 12 clearly written pages that could give you a good whack in your crypto cultural idealism.

    Science is determinism.
    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2223157/.