Without an Effective Macroethics, Our Civilization is Doomed

By Michael Hoexter

In a previous post, I outlined how leaders in positions of political power, especially at the national level, are chosen to fulfill a unique ethical role, that differs from that which is appropriate for private individuals and business leaders.  Because of the power that accrues to political leaders and the hopes attached to them by their constituents, politicians’ actions in office have much greater repercussions than, for the most part, the actions of individuals and individual businesses in the private sector.  Once elected or appointed, political leaders have choices to make, often with room for their own discretion, which draw upon values they hold, values that are in part conditioned by, though not entirely reducible to their political and political-economic ideology.   These decisions most often are concerned with policymaking, budgeting, and legislation that impact an entire nation or the international system of nations.

Effective political leadership and government action are realized often via the fiscal policy of government, the spending decisions of government and the resulting activities of government and non-government sectors via that spending.  I have called the process by which political leaders budget and justify their budgeting decisions and overall economic policy “macroeconomic accounting,” a name which indicates that while some of the conventional business accounting rules apply to government finance, most do not.  A formalization of this activity into a new practical discipline, “macroeconomic accounting,” would provide a means by which the popular will (between elections), professed allegiances to various ethical ideals, as well as the findings of social and natural scientists could feed formally into government decision making, at least in best-case scenarios.  Most importantly, to introduce such a set of norms via this discipline would make it less likely politicians would ignore, in addition to the popular will, the data of macroeconomics, or at least some future version of economics, that is relevant to statecraft and, just as importantly, the social and natural sciences, overall.  Ultimately, each regime or government would compose its own version of macroeconomic accounting, but the pre-existence of such a discipline would increase the likelihood lawmakers would pay attention to a richer set of the relevant facts in making decisions and be held accountable to stated popular ideals.

To give a sense of the scope of what macroeconomic accounting for the 21st Century might look like, it helps to outline what would be the parameters which national-level politicians will use to guide policy decisions on the broad socioeconomic issues, that they must face.  Below is a preliminary list of the decision parameters:

1)    Appropriate accounting (nomenclature and numerical representations) of monetary operations of (monetarily sovereign) governments (making clear the similarities and differences with business and household accounting), e.g., can true “deficits” within its own national currency exist for the fiat-currency issuer?  Is a balance sheet the correct accounting format?

2)    Ranking/list of priorities of government according to popular opinion

3)    Ranking/list of priorities of government according to technical and scientific opinion

4)    “Size of government” – i.e., what functions should be public services, what functions should be publicly funded, but privately administered, and what goods and services should not be funded and delivered publicly.

5)    Unemployment

6)    Income Distribution/Poverty Rate

7)    Effective Tax Rates

8)    Inflation

9)    Exchange Rate Regime

10) Balance of trade/Management of trading relationships

11) Sovereign Bond Issuance and Management

12) GDP and Alternatives to GDP (measurement of overall economic performance of both private and public sectors combined)

13) Carbon Footprint and Carbon Intensity

14) Ecological Footprint

15) Energy Intensity and Fossil Fuel Dependence

16) Material Sustainability (Water, Food Production, Waste Management)

17) Measures of Health and Well-being

18) Cultural, Scientific and Educational Goals

It would seem these factors (and more) would all be worth considering in the formulation of government’s fiscal and regulatory policy.  Still, even an elaborate “formula” based on these variables would require a great deal of choice in construction, discretion in inputting data, care in maintaining, and judgment in interpreting the output and, finally, judgment and energy in executing the resulting policies.   Such is the complexity of human societies and economies, that no model of them constructed out of these or other parameters could ever be considered complete or optimal without the application of human judgment.  

As the harrowing political and economic incompetence of the last few years has shown, better analytic and technical solutions are required in the areas of the policy-relevant social and natural sciences and their consideration must be made mandatory in political-economic decision-making.  The idea of a macroeconomic accounting provides the outline of such a set of technical solutions.

Yet, technical and analytic solutions alone will not take the place of better choices on the part of leaders and their technical staff, as well as the choice in the first place to adopt rational assumptions and rigorous data analysis as fundamentals of good policy.  Ultimately, a public discussion of what is “the good” and what are better means to achieve the good is required to choose and structure technical solutions to our society’s massive challenges.  These operations and activities fall under the broad category of “ethics.”

What is Ethics?

According to the (peer-reviewed) Internet Encyclopedia of Philosophy, ethics “involves systematizing, defending, and recommending concepts of right and wrong behavior.”  The philosophical discipline of ethics comprises the study of ethical systems from the point of view of their construction, argumentation, and logic, describing ethical systems as they exist in the world (e.g., an anthropology of ethics), and also putting forward normative principles and judgments of right and wrong, good and bad.  The latter is the “public face” of ethics, as it encompasses the activities of various “ethics committees,” as well as the sense people have that ethics and morality are about judgment of oneself and others, according to some standards of proper conduct.  More importantly, the law and jurisprudence can be thought of as a subdivision of normative ethics.

To assume ethical impulses exist and have social and economic weight, contradicts the assumption of amorality embedded within neoclassical economics, which shears off the notion of human ethical impulses or institutions premised on ethical principles, having a productive or positive effect on economic activity.  There are people who don’t seem to have consciences, whom we now call “sociopaths (or psychopaths),” that make up perhaps 2% of the population.  For them, ethical impulses are, either, incomprehensible or are viewed coolly as merely a tool to manipulate others and social institutions to get what they desire.  Conventional neoclassical economics has normalized sociopathy in economic life by assuming the “utility maximizing individual” at every turn, which aids sociopaths in gaining positions of power and influence in our contemporary society.  In the political science derivative of neoclassical economics, James Buchanan’s “public choice theory,” politicians are assumed to be as fundamentally amoral as neoclassical economics’ model of the person, which has the effect of excusing or making invisible political corruption.  To its great credit, the recent Modern Money Theory school of economics, assumes there exists a “public purpose” which economic policy serves, providing a respite from the atomistic and non-moral view of humanity promoted by mainstream economics.

Macroethics and Microethics

Recently, the term macroethics has been applied by engineering ethicist Joseph Herkert to describe collective action problems in engineering ethics:  how local technical solutions can make situations worse if systemic issues are not addressed.  In my view, the term “macroethics” and its contrast with “microethics” solves a classification problem we have in understanding the different scopes and scales of ethical action more generally, as well as qualitative differences in normative ethical principles.  The ethical analogue in the distinction between macroeconomics and microeconomics is important and highlights the role of different discrete perspectives in social phenomena:  one can look at society from a large-scale aggregate view or from a more granular view and come up with different and sometimes conflicting information and prescriptions for ethical behavior.

Macroethics could be construed, itself, to be a broad category, but two main defining concepts can immediately be called out:

1)    Macroethics is the broadly shared ethical framework of a “people” or nation as applied to group and national behavior: what is correct or right behavior for the group, what is the broad social contract or norms for communities and larger groups of people.

2)    Macroethics is specific sets of ethical rules that apply to people interacting with supra-individual systems, like the national or international economy, the polity, the climate system, the biosphere, etc.  Macroethics is the ethics of constructing, maintaining, changing, and disrupting systems.

By contrast, microethics is a more recognizable and traditional concept in our society:  microethics is the study of, recommendation, and promotion of standards of right behavior for individuals and simple social groups and organizations, that may be treated as individuals.

Within microethics as opposed to macroethics, individuals are more “empowered” and, commensurately, there are higher expectations for the individual to have control over (micro-) social outcomes.  By contrast, in macroethics, the degrees of freedom of ethical action are constrained by the affordances and tolerances of the relevant social systems, which are by their nature larger than the individual.  In addition to the rigidities of large systems constraining the individual will to do good, “good” or “better” actions in macroethics are often beset by collective action problems where individuals need to persuade others of the recommended course in order to act in a more effective, ethical manner.  While individuals may be less empowered in macroethics, the effects of successful, coordinated action guided by macroethics can be longer lasting and have more profound and wide-reaching effects.

The domain of ethical action and thinking, that is appropriate to political leaders, particularly at the national level, is, essentially, macroethical.  Individual and interpersonal ethical actions are, in some sense, not the specialty of a politician, who is supposed to act as the avatar of his or her constituency.  Politicians are chosen to act within the political and political-economic system for the benefit of this constituency, persuading other politicians to follow a particular course, that he or she believes is correct.  Furthermore, a purely ‘interest-based’ view of political power and bargaining overlooks the universalizing potential of politics and human interaction more generally: politics and policy-making have at least the potential to be more than “horse-trading” between interest groups, even though the exchange of political favors is almost inevitable.  The more fully grounded in a widely shared macroethics, the more likely a politician can have profound and long-lasting effects for the good of the region or nation, especially as regards the interests of those in the future and the non-human environment, as yet unrepresented in the polity.

The contrast between microethics and macroethics is highlighted by effective or principled politicians and activists who lead less than exemplary private lives.  Eliot Spitzer is a recent example of a politician of high principle in the area of macroethics (a zealous prosecutor of Wall Street crimes among others), but who made some poor decisions in his personal life and marriage.  Franklin Roosevelt, a President who acted effectively in the national and international arenas with an apparent passion for his macroethical duties, had a number of affairs in his personal life.  While there are individuals who may be considered to be ethically scrupulous in both micro- and macroethical realms, the contrast in some individual cases points to different human capacities in these two areas of ethical life.

Outline of an Effective Macroethics

As macroethics is concerned with large scale systems, there are three important boundary conditions to assess whether one’s macroethics has the potential to be an effective guide to ethical action.

1)    Emotional investment in the welfare of a greater-than-self, inclusive social group – An effective macroethics requires individuals be emotionally invested in the welfare of a large and inclusive social group; macroethics is the mental and social-discursive space to better guide collective action or leadership of a larger-than-self grouping.  The concepts of “the people” or “humanity” are some of the most valuable anchors for a macroethics, though these are often difficult to represent and operationalize.  Efforts to marginalize or exclude groups from the group to which macroethics is attached make one’s macroethics less relevant to a world, which is increasingly internationalized and multi-ethnic.  Despite a movement and bias towards inclusivity, some groups or individuals may act in a way, that is antagonistic to the general interest and they may need to be fought against in order to achieve what most have determined to be “the good” for society or humanity as a whole.

2)    Deontological commitment to truthful representation – As large scale systems are often difficult to perceive via sense-data and are also more or less changing, one needs to know the state and trajectory of the system in which one is participating in, in order to effectively act in it.  To assume one can, via intuition or introspection alone, arrive at a correct course of action can lead to an egocentric bias which will, in many situations, lead to erroneous conclusions and damaging outcomes.  Therefore, as a potential actor, one needs to have a deontological (duty-bound, rule-based) commitment to truthful representation and one is, as well, dependent upon other people likewise committed to truthful representation.  Not all ethical actions can be derived from data or data analysis, but, without truthful data, one is most often disconnected from the field of action.

3)    Locating the critical system of focus in hierarchy of natural/social systems – In dealing with “larger-than-self” phenomena, it is crucially important to know where one is located in relationship to natural and social systems, that may or may not be in a critical state, therefore, requiring action.  There are probably two meaningful ways to locate the relevant system, starting, either, from the macroscopic or the microscopic.  As we are discussing economics, economic systems are mostly macrosocial systems, that are based on smaller systems studied by psychology and anthropology and bigger systems like the biosphere, the climate system, geological systems and astronomical systems.  On the same level of economics in terms of size of system are social systems studied by sociology and by political science.  Economics, in some future form, could be meaningfully integrated with, either, the study of politics or the study of society, more generally.

4)    Search for and timely application of best available or soon-to-be-available solutions – Good intentions and fine plans are not enough for an effective macroethics: an effective ethics leads to effective action.  Existing solutions may not suffice, so pushing for new solutions to large scale problems is important with the proviso that the “perfect not become the enemy of the good.”

The Austerity Campaign Confuses Microethics and Macroethics

Neoliberalism, from which the austerity campaign has sprung, is a political-economic doctrine, that, taking off from Adam Smith’s metaphor of the ‘invisible hand’ in Wealth of Nations, assumes macroethics is an appendage of a narrowed microethics, a microethics shorn of group-oriented impulses and oriented towards pursuing individual enrichment and self-interest.  The notion of the invisible hand of the market, which serves the highest common good by not imposing any transcendent ethical principle on social interaction, suggests macroethics is not an important differentiated area of ethical concern.  Progressives who want to salvage Smith for a more progressive politics point out that in Wealth of Nations as well as in his previous work of moral philosophy, Theory of the Moral Sentiments, Smith himself seems to contradict or supplement a “self-interest oriented microethics-only” view of optimal economic and ethical development.  However, it is not my interest here to, either, rehabilitate Smith or revise what has become a dominant misreading of Smith, that is at the foundation of neoclassical economic and neoliberal political economics:  methodological and ethical individualism.

Margaret Thatcher, one of the prominent early neoliberal politicians, phrased the basis of neoliberal ethical cosmology most succinctly when she said, “there is no such thing as society. There are individual men and women, and there are families.”  While more “Left” neoliberals, such as Tony Blair, Bill Clinton, and, now, Barack Obama, dilute their neoliberalism with calls to service to the common good, in critical areas of economic and social policy, the neoliberal trend towards individualized solutions to social challenges continued in full force in their policy prescriptions and perverse ideological loyalty to their nominal political opponents on the Right.

After the initial panic surrounding the global financial crisis of 2007-2008 subsided, an opportunistic brand of neoliberalism emerged, that continued neoliberalism’s attack on government as a stabilizing, moderating force in society.  This re-energized brand of neoliberalism advocates fiscal austerity and balanced government budgets, “worrying” that public bond issues floated during the economic stabilization process were “unsustainable” debts, that the prime drivers of fiscal austerity were representatives of the financial industry, which had just been bailed out by government and had gotten themselves into trouble via high levels of private “leverage,” has, so far, escaped the notice of most sectors of the press in Europe and the United States and, therefore, the consciousness of the public.  Furthermore, the potential future advantages to that same industry of austerity’s selective shackling of government’s ability to create and control the liquidity of the economy have also, so far, escaped the notice of a gullible press and, by extension, a good portion of the public.

The fundamental premises of austerity go against the re-discovery 80 years ago by John Maynard Keynes of the ancient paradox of thrift, that if everybody tries to maximize savings in an economy at the same time, the economy itself shrinks.  The virtue of being thrifty, of saving, has appeal to each individual, both, micro-economically and also in terms of conventional morality.  The paradox of thrift is one of the foundations of the distinction between macroeconomics and microeconomics and also of there being an equivalent macroethics by which leaders and the people who elected them attempt to guide their society overall.  Resistance to Keynes’s discoveries and to the existence of a distinct macroeconomics has for the most part come from people who insist that personal and business experience are the only models for economic management and for economic morality.  At basis, the resistance to Keynes may be viewed fundamentally as a denial of the idea that “more is different,” that at larger scales, social and natural phenomena require a different lens, that is not necessarily a direct translation from day-to-day experience.

While the economic rationale for austerity is non-existent when viewed from the perspective of the economy as a whole, the austerity campaign operates on the level of political and (misguided) ethical argumentation.  Austerity campaigners, like Pete Peterson and Congressman Paul Ryan, either, are subject to and/or foment in others a fundamental ethical confusion between individual ethics and the macroethics of economic and political leadership.  Repeated over and over again is the equation between a business or household budget and a national budget.  So persistent is this mantra and so well placed its ideological sponsors, that austerity’s perverse infliction of economic pain without gain seems to be hidden from politicians who delude themselves to think the morality of political leadership is identical to the morality, that applies to that of business owners or householders.

This fundamental moral confusion may be mere pretense in the sociopaths and Machiavellian political operatives who are, no doubt, crucial to the success of the austerity campaign.  Yet, their (fallacious) ethical argumentation has swept along more gullible political leaders who have not paused long enough to consider the uniqueness of their role as leaders of governments.  These leaders, with the exception of the Euro-Zone countries, can move their governments to issue currency to bail their nations out of any real or imagined financial bind (though finances do not necessarily solve real economic difficulties).   Either, believing the fiscal reality of currency-issuing governments was identical to that of a business or a household or fearing their constituents would view them as immoral if they did not treat the national budget as that of a household, politicians have, so far, acted as if they do not recognize their distinct macroethical duties as regards the national budget.

Civilization and Macroethics

Neoliberalism and austerity mania have led to a perversion of the macroethics of government where politicians take, as their primary ethical object, conserving the virtual resource of the currency, mistaking dollars or pounds as a limited vital resource, while leaving almost entirely to one side the welfare of the real people and the state of the physical assets of the country, that support their welfare.  There are two flavors of macroethical and macroeconomic blindness to choose from in the political spectrums of the US and other countries, but the people of the United States and European countries should not be confused:  their welfare and the integrity of their economies are being overlooked or damaged by both sides of the traditional political spectrum as well as the compromising “centrists” in the middle of that spectrum.  In the midst of a long economic downturn with private households unable to earn and spend adequately to fuel economic recovery and reconstruction, it is up to government to spend and reshape economies, so that they can function and face emerging realities like climate change and the huge energy transition it demands.

Without an effective macroethics, our civilization and economy cannot survive; strong macroethical commitments by political leadership and a large swath of the population are not optional.  Macroethics provides the implicit framework within which people give consent to government to represent them and lead them, as well as to each other to behave in a manner, that is respectful of the interests of one another.  Broadly construed concepts of what is the “good” and what is the “bad” guide people to accept lawmaking, that is more or less in their favor and to participate in large scale projects, that in some way or another incorporate their hopes and aspirations.  We face in climate change and human alteration of the natural basis of life, collective action problems of enormous dimensions.  The civilization and global economy, that have emerged in the last century and a half have been premised upon the availability of copious non-food energy used to power mechanical and electrical devices, which now must be sourced in an almost completely different manner than has been the case for that the last century.  The fossil energy we have used endangers the stability of the biosphere from which we have, in turn, been able to produce the food, that we need to survive.

If, persuaded by the neoliberal indoctrination of the last 30 years and the austerity mania of the last four years, political leaders and their constituencies believe a widely shared macroethics is impossible, we will be unable to act in concert and retool civilization to face the upcoming challenges.

31 responses to “Without an Effective Macroethics, Our Civilization is Doomed

  1. Wonderful, well written, and thought provoking post! Thank you.

    • Thank you for you kind words, Jan…

    • Lori Frederick

      This is the most breathtaking, gimlet-eyed prescription for 21st century politicians that I have seen to-date. I am forwarding this to my microethical Congressman forewith! Thanks for introducing a simple idea with meme-like vocabulary needed to garner attention…

  2. Glad to see this here.

    What is the moral purpose of an economy? A civilization? Simply or primarily “winner-take-all” for the benefit of the most skillfully rapacious? A zero- or negative sum game is OK (for now) because it seems like enough people are “winning”?

    We get to decide that.

    • Yes, an EFFECTIVE macroethics is not created by any one individual but is a social co-creation of peoples and their leadership groups. Without social movements, I don’t see leaders coming up with anywhere close to good policy decisions on many of the most important issues facing us.

  3. I will go over this a few more times, so this is a bit tentative. I will cast my response in two different contexts. As implied by Warren Ault’s Open Field Farming in Medieval England, there is no commons without commoning. Secondly from Istvan Meszaros what is missing is a communal critque as an element of a socialized culture. Though this excursion into moral philosophy is useful it lacks a certain sort of political literacy. The same sort of outcome is produced under the dominating political fictions of what I tend to identify as celebrity politics, or as waiting for the white knight to ride up and save the day. In my opinion we need to rebuild a culture of commoning, and that goal is not entirely out of reach unless the related discourse remains structured under the assumptions that are at the same time antithetical to commoning. Part of this ethical impasse is a result of history having been over-written to diminish the imagined capacities of people to understand and participate in a communal critique. To a strong degree this is very similar to the fallacies of the neo-classical economics. For the neo-liberal pathology it becomes a self fulfilling fallacy. In short the obstacles are not just economic and ethical, but more toward being in the economic world on multiple levels. This will also involve understanding and disabling various types of personality dysfunctions including the out right sociopaths and the chronically co-dependent. I recommend again Myles Horton and Paulo Friere’s We Make The Road By Walking It. The didactic approach is also likely to have a limited positive effect. Being in the Economic World is critical, certainly. for now, Tadit Anderson

    • I recommend reading “The Rise and fall of the Great Powers” by Paul Kennedy.”

      All empires ultimately fall since they overextend themselves. It costs more money to maintain them than it took to build them in the first place – second law of thermodynamics.
      The US will be no exception.

      The bread and circuses of the Roman Empire is exactly the same as US food stamps and TV. All hail Obama the Savior or is it the Grand Betrayer ?

    • Tadit,
      Thank you for your comment. I don’t really have anything specific to add to what you have written only that it is not addressing and/or not contradicting the main points I am making in this piece: people have consciences and minds and we should be using them about now to guide our actions.

      • My intent was to augment and suggest a broader spectrum approach. There is a massive difference between the narratives of historicism and the histories of actual socializing movements. Unlike the under the bridge devotee to dis-empowerment, I prefer to seek out useful means over righteous negativity. The industrial counter revolution in England was substantially repressed for thirty years or so, and spent the time learning how to organize constructively and in their own interests. The US Civil Rights movement from the late forties into the mid to late sixties. Each time China established a new dynasty it was preceded by a mass rising. So much for inevitability. At this point the PR ascendency knows that it is only another dynasty in China’s history. It is in the suppression of a communal critique which forced the collapse of empires.

  4. A powerful article !

  5. Neo-Liberalism relies upon a tacit assumption which was perhaps best expressed by John Locke in his “Second Treatise of Civil Government” in which he stated:-

    “men have agreed to a disproportionate and unequal possession of the earth”

    Chapter V. Of Property. Sec 50. “Second Treatise of Civil Government” 1690

    In reality human beings will never agree to such permanency, any agreement is always contingent upon the circumstances and their primary drive is “strong reciprocity” where they seek equitable arrangements and seek to punish those who selfishly try to avoid such arrangements in order to free-ride at the expense of others. Professor Dan Kahan of Yale Law School does a good job in explaining the ethical logic behind reciprocity:-


    • Thanks for that link.

      In collective action settings, individuals adopt not a materially calcula ting posture but rather in a richer, more emotionally nuanced reciprocal one. When they perceive that others are behaving cooperatively, individuals are moved by honor, altruism, and like dispositions to contribute to public goods even without the inducement of material incentives.

      AynRandistas are having a collective aneurism.

  6. Pingback: Without an Effective Macroethics, Our Civilization is Doomed | Fifth Estate

  7. Perhaps I need to be a clearer here. What I have witnessed is that generally there is an absence of a communal critique or a sense of ethics and macro-ethics, in your framing, even at a local level. It is also in the contexts which present themselves as promoting alternative and democratic values. There is massive investment in various forms of dys-function, by way of the asundary pay-offs favoring self interest. When this level of substitution has such a wide acceptance, introducing the process of a communal critique is often treated as heresy. Without an installation of a communal critique at a face to face level, expecting it to rise about the turbulence below seems at least unlikely. In this framing having an installation of a communal critique becomes primary way to move toward. Lacking that the descent into the sort of chaos we now have, including vanity on a presidential scale. Churching becomes a fashion statement, more than a statement of ethics. Establishing a macro-ethics of the scale to validate MMT fiscal objectives will have to be literally cultivated from below first. I’m not suggesting that it can’t be done, only that starting at the top is highly unlikely as a primary principle.

  8. Thatcher’s full statement is worth looking at and I’d like to offer critical comments so, apologies for such a lengthy quote:
    “I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”

    My goodness, where to begin!?
    In a limited way I can accede the point on ‘no society’. The average person, living on limited means, is usually participating in the larger society in a very limited way. To take an example by way of illustration: I may purchase symphony concert tickets, attend the concert but yet not be able to participate fully in the all round society surrounding the symphony as I do not have the means to contribute the minimum set by the Symphony board-$2000/yr-to gain access to the ‘inner circle’ that propels and guides the symphony governance. In fact the minimum to the inside group is probably over $10,000/yr or more. My point is, and one could think of other examples, full participation in society requires sums of money that most people don’t have.
    So to move to the main point, the larger the sums of wealth controlled, the greater the extent to which one can participate. The pertains to social nature of politics in particular. ‘I have a problem, I’ll get a grant.’ Thus spake the 10 largest banks in the US and they received and continue to receive trillions in grants.

  9. I love this post and the general point it makes. But it doesn’t explicitly make the point that MMT itself is an emerging fact-value network, a macroethics, rather than just a descriptive theory of economics. MMT became more than a descriptive theory the moment it brought in Galbraith the elder’s idea of “public purpose,” and said that economic policies ought to be in line with public purpose.

    These posts



    make that case and also specify a list on components of the public purpose similar to Michael’s just above.

    This paper is about the bankruptcy of the fact-value dichotomy and its implication that purely descriptive theories involve no value assumptions: http://bit.ly/WncSkc

    One of the obvious implications of the paper is that all macroeconomic theories have macroethical applications, impoverished though some of them may be.

    • I believe that JKG the elders’s nsertion was by way of his identification of technocracy in The Affluent Society, which is accurate enough as such, and it fails to serve the public purpose when it is enveloped by the “props” of science by way of positivism and the circus parade of the willing and shilling pundits. The issue then becomes thee lack of participation on the citizen side of the discourse, minus the shilling pay for play corruption of the nominal public discourse expected under the privatization of governance. This is also where the vain hand wringing faux progressives show up seemingly concerned about “inequality,” but not quite motivated enough to become economically literate.

      The USGP for instance seems to be generally devoted to supporting candidates who trade on the supposition of a celebrity-ship by virtue of which side of the microphone they are on. This not a communal critique, likewise the hair on fire austerity mongers of the nominal left. The gold bug and the pop-level libertarians are equally mia from anything other than a pretense of a critique. And then there are the neo-liberals who don’t accept that even should be a communal critique., beyond the bread and circus side show. It still comes back to the level of literacy on a face to face basis. The posturing of the nominal left is the most vile by the fraud of its postured concern about the public purpose, while invested in all sorts of self interests. The recent exposure of the US Sierra Club serve as an example. When it came to engaging a brief process within the state GP here they threw a table cloth over the offer of a briefing process, because their candidates did not want to appear to be as ignorant about the means of correcting the public purpose as they are.

      There was/is though a coalition of local politicians along the northern interstate highway that was proposed to be privatized as a tollway under the premise of an “austerity solution,” which came together to advocate for the actual public purpose. That was farther removed from the connection to actual fiscal and monetary capacities. It still comes back to that the principle of the commons has be integrated with the principle of commoning against the political darkness.

      Grand flourishes in the name of the public purpose generally don’t reach soil, not that it as a piece of the process isn’t needed. Meanwhile the impulse to political vanity and constraints of the cliched rhetoric of zombie politics. The actual definition of the word “fiduciary” in the expectation of fiduciary responsibility refers to having the basis for trust, and in this case relative to the public purpose. The primary reason there is such a cottage industry of “populist”-level of econo-pundits, and I could name several, is that the public purpose is not being served, and yet the public tends to favor anyone who even pretends to favor the public purpose. The principle of commoning has to revived at the face to face level as well.

      • I believe that JKG the elders’s nsertion was by way of his identification of technocracy in The Affluent Society, which is accurate enough as such, and it fails to serve the public purpose when it is enveloped by the “props” of science by way of positivism and the circus parade of the willing and shilling pundits.

        JKG talked more about the dimensions of public purpose in Economics and the Public Purpose, rather than in The Affluent Society. I agree with your view on positivism, but I’m not sure why you’re introducing that issue here. I don’t think any MMTers are positivist, and I also think that any commitment to economics for the public purpose must be non-positivist, since a concern with that is a concern about value theory and is beyond the scope of positivism.

        • My pointing to positivism has to do with one of its key patterns and the slippery slope nature of functionality(Lerner) and instrumentality(Lowe). In the 19th century the premise was that through the adoption of “scientific” methods that a “positive” sort of society could be composed and advocated. This was in direct opposition to those who held to the political economy approach. What we ended up with was the fictional version as sciencism. The premises of functionality and instrumentality were articulated in a parallel context when atomic power would be “too cheap to meter,” and the space program was a priority just long enough to establish GPS surveillance. In the same period after the 20th century Great Depression and Sputnik etc there was a very similar “positive” regard for technology. Milton F. even presented his material as “Keynesian” for a span of time, in part because the neo-classical framing was still shamed at least in the eye of the public if not in the political culture. And this created a level of conceptual dust and air borne debris, that was countered by “bastard Keynesianism” as a distinction that to a degree only aided in the muddling of the public discourse.

          While calling for a macro-ethics for fiscal policies is largely a positive, for me it is a bit like trying to eat the turkey in a few bites. Thus far the orientation of MMT has tended to be nominally value neutral in pointing out the fiscal capacities of fiat sovereign currency particular as used by the agency of governance. And MMT folk have tended to be progressives though somewhat atypical in their ability to assimilate economics of a practical tilt, and able to analyze the body of history and practice that MMT is based upon.

          The hair on fire brigade, that favors fiscal cliffs, austerity, and grand betrayals, already knows about the fiscal capacities of sovereign fiat currencies, because they have been abusing those capacities for decades, if not longer. What they actually object to is the potential for using those capacities for the common good as in favor of those who were once upon a time named as commoners. What has been tacitly recognized as the tether to (small “d”) democratic fiscal objectives seems like a hair breadth off of being open to a similar co-optation as neo-liberal flourishes promising trickle down prosperity.

          What happens when someone like Larry Summers or Brad Delong declares himself to be a born again MMTer? First off most of the current MMT community will be at first pleased, and then suddenly it will dawn that someone needs to quickly count the silverware and double check the punctuation. At the minimum, because of the assumed investment in certain values, and the typical innocent acceptance of actors in lab coats or with stethoscopes draped around their necks, voila “functionality” can become appropriated for non-democratic objectives. Call it a sort of cultural positivism by way of the man/woman on the street in good, but naive, faith of being in the world.

          One way to approach the need for a macro level ethics is to actually define the ethics and objectives, rather than just the fiscal potentialities of MMT in increasing the national net sovereign equity. Another part goes to how to translate macro-ethics into practice other than merely offering to be the driver of the runaway fiscal bus, waiting for objectives to be defined. An ongoing communal critique will not be established by manifestos, other than as a place to start the public discourse for real. And then there are the effects of the privatization of the formerly public media. The only way I can see around this sort of usurpation of instrumentality by sciencism, is to promote the communal critique as broadly and deeply as possible. We need an ongoing communal critique as well as successive efforts to point in the direction of a macro-ethics.

          Thanks for the question, Tadit

    • Joe Firestone (LetsGetitDone)

      “I love this post and the general point it makes. But it doesn’t explicitly make the point that MMT itself is an emerging fact-value network, a macroethics, rather than just a descriptive theory of economics. MMT became more than a descriptive theory the moment it brought in Galbraith the elder’s idea of “public purpose,” and said that economic policies ought to be in line with public purpose.”

      This is true but it can be simplified down to the simple fact that just as morality is instruction so is money. We use money as the medium of “instructing” exchange. Accordingly money can be used for both self-enhancing and self-transcending purposes but getting the moral balance right in these purposes is the difficult task for which as human beings we make use of “collective governance” when ever we see fit to create the opportunity.

  10. Merely a note:
    Just how are the U.S. public to be educated about Economics,
    when they haven’t a clue to their history? or cannot be bothered?

    From BBC news:
    That war continued on from 1968 until 1973, brought short, not by economic considerations, but by oil:
    http://en.wikipedia.org/wiki/1973_oil_crisis#Yom_Kippur_War and:
    http://en.wikipedia.org/wiki/1973_world_oil_market_chronology which was the result of:
    http://en.wikipedia.org/wiki/1973_oil_crisis#End_of_Bretton_Woods which allowed US dollar depreciation and undermined the value received for oil for those producing oil. Drug addicts know better than mess with their suppliers.

    • Can someone please inform as to why this comment was held in suspension for so long before being released? If there are some rules to observe that prevent this kind of situation, please advise. Thanks.

  11. If our modern populous societies are to transition to an effective “macroethics” we need to thoroughly understand our human nature, where it came from and why it developed morality in such a developed and extensive way. In my view the anthropologist, Christopher Boehm, has developed the most plausible and detailed account of these matters:-


  12. A fine and apt thesis, outline and framework.
    If “economics is a social science” (JKG snr), it has a natural ethic, and claims that it can be value-free have no general merit. Arguably, even the legendary US Wild West had its ethic.

    You mention “ethics committees” as if this were purely a social or political issue, but don’t further discuss who or what. Towards basing this robustly, I suggest that as rank-and-file humans have been operating the economy time out of mind so should have reliable feel for it, that the final approval should be from a large non-specialist group (an instance of your “emotional investment”?).
    Also, there may be some objective constraints (not “soon-to-be-available”), for one of which I introduce the concept of the “full economy” – full employment, full order books, and full supermarket shelves. Everyone has an interest in this; the only question is in which sense?
    We are currently far from this, as a result (I infer) of actions based on the untested assumption that “A larger slice of a smaller cake is more”. If in fact the converse is true, there is a win/win scenario available which is currently ignored because people “know” better. The value of this is that it’s one thing for potential sociopaths to consider their actions unethical, but quite another to consider them stupid or of doubtful sanity.

    I suggest review of the “paradox of thrift”, as it is one instance of many cases where behaviour that’s obvious and normal in the individual is insane in the population. It’s possible that the true meaning of the “paradox” is that thrift (as we understand it) is unsound on all scales, and the topic requires recasting.

    You quote Margaret Thatcher expressing a misconception that extends back at least to Sigmund Freud: That the largest unit of humanity is the household. Does a nation have its own distinct, persistent economic style? If not, on what smaller scale? This indicates your proper scope.
    Hindsight suggests that Mrs T should have been asked “Do you as PM need those of lowest income (including the unemployed) to be economically active and productive?” – MMT (and my reasoning) says “yes”, so the full economy may be both desirable and ethical.

  13. It was the philosopher John Rawls in the early 1970’s with his publication of “A Theory of Justice” who drew our attention to the fact that Human Morality drives the Social Contract and this has been affirmed with the later discovery of Strong Reciprocity by an assortment of scientists from different disciplines. Today I would argue that Modern Money Theory adds to these insights because a moral Social Contract can only be implemented by effective collective governance making rational use of money. Collective Governance accordingly has to have a measure of control over money. MMT shows this is possible because through macro balance sheet accounting it makes clear that the domestic private sector automatically by default runs a deficit and not a surplus requiring a net money contribution from the private sector. This holds true when considering accounting across all the worlds’ economies that trade with each other, A country that runs a trade deficit can only continue growing with a government net contribution. In plain and simple terms whilst morality drives the Social Contract money is its servant!

  14. Oops! Should read “MMT shows this is possible because through macro balance sheet accounting it makes clear that the domestic private sector automatically by default runs a deficit and not a surplus requiring a net money contribution from the government sector. “

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  17. Rory Rasavong

    The general meaning of ethics: rational, optimal (regarded as the best solution of the given options) and appropriate decision brought on the basis of common sense. This does not exclude the possibility of destruction if it is necessary and if it does not take place as the result of intentional malice.,:

    Catch you around