Economists should not be afraid to bring in matters of the heart and soul, write Manuel Pastor and Alex Balcazar. If they do, we can begin to transform our economy into one that is more equitable and prosperous.
To address inequality, economics needs not just another set of policy alternatives but a whole new narrative. Without this, efforts to address inequality will be derailed by the mindsets that created and accepted glaring disparities in the first place. We need an economic frame based on a new set of assumptions that draws on our inner qualities – what some might call our “spiritual” ambitions – rooted in our mutuality and solidarity.
In Solidarity Economics: Why Mutuality and Movements Matter, co-authored by one of the writers of this post, the authors explain that our traditional economic story – what many call neoliberalism – is based on a set of highly problematic assumptions. Among them are the beliefs that people are rational, self-interested individuals seeking to maximise their utility and that actively promoting equity comes at the cost of economic prosperity.
We need an economic frame based on a new set of assumptions that draws on our inner qualities – what some might call our “spiritual” ambitions
Taken together, it depicts a soulless and disconnected world, one in which the misery of others is not just one step removed from our concerns but may actually be the fuel for the success of our dreams. No wonder that living in this world feels so draining, both in the daily grind and in the marginalisation of our deeper hopes and aspirations. No wonder, too, that young people, including an emerging generation of economists, are looking for a vision that is more equitable and more humane.
Pulling back the blinders
Fortunately, this new generation is increasingly questioning the assumptions underlying our traditional economic narrative, and stressing that the neoliberal gods of efficiency and endless growth blind us to concerns of human well-being and planetary sustainability. New research is challenging old shibboleths. For instance, when we recognise and reinforce the collaborative elements in our economy, it turns out we get better social and economic outcomes.
Even here in the USA – so long the poster child for neoliberalism – there are signs that markets are no longer considered the be-all and end-all. Industrial policy is on the rise, most recently in the form of the Inflation Reduction Act which, despite the name, represents a commitment to investments in a more climate-friendly future. Also on the upswing are labour movements seeking to rebalance power. For example, fast-food workers in California recently won the passage of a bill which raised their minimum wage to $20 an hour while last year striking auto workers managed to push auto companies to better share the gains from a shift to electric vehicles.
There is also growing interest in alternatives to current forms of economic organisation. According to the latest World Cooperative Monitor report, the top 300 cooperative enterprises in the world had a combined revenue of more than $2.4 trillion in 2021. Community land trusts have sprung up in the United States as a way to prevent the forces of gentrification from displacing long-time residents, pushing back against the currents of dispossession and privatisation that first stirred capitalism in its inception.
Beyond fragmentation: reaching deeper into who we are
While new policies, revitalised social movements, and small-scale alternatives are all critical, we are still largely operating in a system designed to rob us of our nature as collaborative beings. The basic narratives that we tell and the institutions that we build must be transformed if we are to truly release and channel the best in us. So, what is preventing us from such a transformation?
Unsurprisingly, there are those in power who benefit from the status-quo and who move to repress movements for change. And since the status quo is neoliberalism, this means those in power benefit precisely from our alienation from each other.
Those in power benefit from maintaining the status-quo. And since the status quo is neoliberalism, this means they benefit precisely from our alienation from each other
At the same time, there has been a failure of progressives to capture the day with a compelling story. For example, a recent report from the Roosevelt Institute warned that in their efforts to strengthen an alternative economic narrative, progressive policymakers and movements have focused too much on technical policy proposals and not enough on our deeper human or spiritual desires.
By contrast, right-wing movements and politicians have been able to channel the widespread longing for an alternative to neoliberalism by focusing on the deeper elements of people’s lived experiences and concerns. They do this, however, by appealing not to what we have in common, but to how particular groups could band to protect themselves from the ravages of the economic system – hence the new populism that has resulted in Brexit, Trump, and Orban. But precisely because these political forces seek to fragment rather than unite, they have helped further an economic agenda that reinforces the neoliberal order.
Forces seeking to push us away from each other therefore operate on three levels. Our everyday lives in today’s capitalist economy are marked by feelings of alienation; our default narrative for talking about the economy – neoliberalism – reinforces this sense of separation; and the movements posing as the solution to our malaise rely on an even greater fragmentation of society as they pit one group against another. To move beyond this predicament, our only option is to tap into our instincts to connect and collaborate with others.
Centering connection not commodities
So what are the values that should guide a new economic narrative?
To have this discussion requires us to reflect on the emotions that drive us and in particular those which matter most to us as human beings. This is not a conversation which we economists tend to be comfortable having: if we were, we would not have reduced people to either disembodied utility functions or faceless masses acting in their respective class interests. But if we are to find a way away from inequality, it will be because we highlight that seeing your neighbour (or anyone’s neighbour) go unhoused or hungry is just not tolerable in a world where care is a concern and not just a commodity.
Or going one step further, Valerie Kaur, a Sikh-American activist who found her political footing combatting the wave of xenophobia that swept over the United States after 9/11, has stressed the importance of what she calls “revolutionary love.” She means to inspire us not just to resist injustice but to avoid what john powell has called the kinds of “othering” that drive the fragmenting of our economic system.
Crucially, then, it’s not about pursuing an alternative model of selfless altruism – simply putting oneself to one side to care for others – but rather lifting up what we can be when we value all. Indeed, look for the secret of a successful business and you will often find not a swashbuckling entrepreneur but an ethos of cooperation and meaningful connections that allows teams to succeed. Dig into what makes a society work well and you will likely find not cutthroat competition but a sense of common destiny and a desire to support everyone – as far as possible, and always striving to do this better – to realise their dreams.
For a new economy, we need a new economics, one that understands that, as a species, we are hard-wired to collaborate. The key is to not shy away from what gives life meaning – not money but mutuality, not individualism but interdependence, not separation but soul.
The key is to not shy away from what gives life meaning – not money but mutuality, not individualism but interdependence, not separation but soul.
It’s a tall order for a profession that is often more comfortable with data and regressions than with people and values. But that is the challenge for equity-oriented economists and policymakers in the years to come: if we are to create an economy for all, we must create a society that cares for all, and we must help craft the stories and movements that will get us there.
All articles posted on this blog give the views of the author(s). They do not represent the position of LSE Inequalities, nor of the London School of Economics and Political Science.
Image credits: Banner image from People Images (copyright). Thumbnail image by Aleksandar Malivuk via Shutterstock.
true & timely