economics
LONELY COLOSSUS
Alan Patience
Hugh Stretton
Economics: A New Introduction
UNSW Press $49.95pb, 852pp
0 86840 498 5
HUGH STRETTON STANDS LIKE a lonely colossus astride Australian social science. He is the elder of the tribe, writing with consistent intelligence, honesty, originality -- and where necessary bluntly, even scathingly. His writings are mostly about imagining good public policy grounded in humane social philosophy and clear historical understanding. They are distinguished by a moral authority and scholarly eclecticism that are rare in the contemporary Australian university. Like the late 'Nugget' Coombs he is a public intellectual, offering wisdom and ideas both to government and the academy. Yet he remains curiously taken for granted, especially in those fields where his brilliance sheds much-needed light.
Those who know Stretton's work have been anticipating his 'big book' for some time. The wait has certainly been worth it. Economics is a magnum opus disguised as a text book. In fact it is at least three books rolled into one.
First, it is a lucidly didactic study in the philosophy of social science, invaluable for students beyond the converging boundaries of economics. Stretton rehearses here a picture he elaborated with sublime clarity in The Political Sciences. He highlights the seamlessness of social life which is violated if specialist social scientists reductively account for the whole of human experience within their small paradigmatic frameworks.
Secondly, it is a root and branch interrogation of libertarian economics (or 'economic rationalism', to use a discredited but well-known term). He offers a water-tight defence of finely tuned mixed economies where the private sector is balanced by an ideology-free public sector. At this level the 'text' does for economic rationalism what The Political Sciences did for behaviouralism: it buries it.
Thirdly, it outlines some basic principles for imagining sensible public policies in a globalising world. He is horrified by the anarcho-capitalism of the 'new' Russia and is more optimistic than some of the pragmatic and gradual liberalising of the Chinese economy. The former is a case study in mindlessly opening an economy to the rapaciousness of global forces; the latter is, in Stretton's perhaps overly benign view, a more cautious and controlled transition from a command to a mixed economy.
The new economics that Stretton evokes in the book is free of that hoary old doctrine about individualistic humans rationally competing and therefore necessarily co-operating (Or, if they do, they collude) to generate wealth. This 'theology' (the word is not Stretton's) has bedevilled the theory and practice of economics for too long. It has infiltrated a libertarian fundamentalism and neo-positivism into mainstream economics. The result is a discipline that is grotesquely naive about ethics, hopelessly ahistorical, philistine in its ignorance of aesthetic and philosophical developments, and crassly ideological. It is also -- let us be utterly clear -- destructive of human lives. As Stretton notes in his introduction: 'Bad economic theory can cause as much suffering and death as bad medicine and engineering can.' Yet bad theory pervades most Western university economics departments, whirling away like an ideological black hole, sucking in and crushing sister social sciences (especially psychology, sociology, and management and policy studies). The social, cultural and economic consequences are appalling -- the more so because policy makers and influential commentators seem not to notice or are intentionally ignoring them.
Those consequences include fast growing inequalities -- such as needlessly high unemployment and young people being pushed into dead-end part-time jobs rather than entering meaningful careers. They lurk behind an epidemic of depression -- vide, rising suicide rates, drug and gambling addictions, relationship breakdowns, the implosions of communities (especially rural communities). They feed off the vandalising of public goods and services, the overthrow of sensible (and historically effective) state regulative regimes, and the duplicitous privatisations of essential public utilities. Some particularly ugly chickens, let loose by these unexamined, economically driven public policies, are already coming home to roost.
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Return to Australian Book Review /September 2000