Rousseau-esque angst over modern life?

THE VEIL OF CIRCUMSTANCE: TECHNOLOGY, VALUES, DEHUMANIZATION AND THE FUTURE OF ECONOMICS AND POLITICS By Jorgen Orstrom Moller (Singapore, Institute of Southeast Asian Studies, 2016)

AS the subtitle suggests, this book is about the most fundamental challenges now facing the world economy and its nation-states. The author - a now-retired senior career diplomat with Denmark's foreign ministry, Danish ambassador to Singapore from 1997 - 2005, and author of several other books - is pessimistic about the outlook for the global economy. Debts and falling productivity levels in the US, Europe and Japan will cause the global economy to slow over the next quarter of a century. "But now", he asks, "who really believes in a future anymore? At best the world has come to a standstill; at worst, it is going to reverse".

Businesses are no longer responsible long-term stakeholders in society. "The great entrepreneur of the past - proud to create a massive enterprise and jobs for thousands of people - does not exist anymore . . . today's wealthy earn their money through speculation in financial instruments diverting funds out of the productive part of the economy . . ." If business is now part of the problem, the current political system is no better: it "has lost its connection to the people, failing to come up with solutions to problems that citizens most care about".

While both business and government are afflicted by dysfunctionalities, society itself is "dehumanised" and "denaturalised". The explosion of impersonal mass communications and digitalisation may create groups of like-minded exclusivist communities within and across nation-states rather than promote diversity and tolerance. And, with urbanisation, "the majority of human beings have lost contact with nature and do not understand such simple processes as the seasons and natural cycles".

While deeply pessimistic, the author does offer the prospect that "humanity has the means to move forward to a new age, characterised by instant communications and less materialistic consumption". In the transition to the new age, politicians will "grasp the swing towards values instead of economics as the driver of voter preferences"; citizens will select political leaders based on "values as the central criterion"; and rules and regulations in a globalised world economy "will need to be applied on a global level".

To achieve the transition, the world needs a "fundamental paradigm shift". Traditional economics analysis is "outmoded" to the problems facing the world today such as the increasing inequality arising from globalisation; the rise of nationalism and populism as defensive reflexes to globalisation and digitalisation; the increasing scarcity of natural resources; and the geo-political shift away from the industrialised countries towards rapidly growing parts of the developing world such as China and India.

The author offers a sweeping indictment of economics as an intellectual tool which is "no longer sufficient to analyse events and offer solutions to problems, due to the field's neglect of the realities of basic human behaviour". Thus he calls for social science research to become more inter-disciplinary and holistic.

To be sure, the ideas expressed in this provocative and wide-ranging book are not new. Many of its themes have illustrious pedigrees. For instance, the concern with "dehumanisation" of modern life compared to an idealised village-mode of living when people had a "relationship with nature" recollect some the writings of Mahatma Gandhi and Rousseau.

OLD THEME

The theme of over-exploiting natural resources harks back to the writings of Malthus and the (much later) Club of Rome's report on the "limits to growth" published in 1972. The potentially adverse impacts of rapid technological change on social relationships were popularised in Alvin Toffler's Future Shock published in 1970. The constant refrain of a myopic, short term-oriented focus on profits by businesses in the industrialised countries will remind many readers of popular books during the 1980s when Japan - then famed for its alleged focus on the long term in both government and corporate planning - was going to be "number one".

As one may expect, these themes have more than their fair share of detractors among academics. For practicing economists employed in the natural resource sector - like this reviewer - for example, the supply glut and low prices for oil and natural gas today (partly a function of rapid developments in extractive technology) have a greater potential impact on the world economy than an impending Malthusian doomsday scenario. While professional economists may hold views on such lofty issues as materialist culture and dehumanisation, these nonetheless remain personal views. Economics - or for that matter any discipline - cannot claim any special authority to define what social preferences ought to be.

The calls for interdisciplinary research and the incorporation of complexity into analysis have long been made. To cite one example, the explicitly interdisciplinary Santa Fe Institute founded in 1984 has published many well cited studies in behavioural systems and complexity theory. But sweeping "traditional economics" off the map because it is no more relevant to understanding human behaviour strikes this reviewer as akin to throwing the baby out with the bathwater.

What about all those people in the bottom third of the world population, still struggling for daily survival in parts of Africa, Asia and Latin America? For those billions of people "still lagging far behind and have a genuine need for materialistic consumption and infrastructure", the author believes that ". . . there is only one way ahead, and that is a massive transfer of income from rich people to poor people - though not necessarily from rich to poor nation-states".

In the transition to the new age, the author sees a key challenge "for people, in industrialised and emerging markets and developing economies (EMDEs) alike, to acquiesce to the movement away from mass consumption and materialistic consumption to a values-based economy - in which societies, groups and communities overturn the individual and corporate drive for profit".

When most industrial economies are struggling with constrained budgets and already high tax levels, the likelihood of reaching international agreement on global governance and "a massive transfer of resources" as a way out of global poverty seems far-fetched. The doubts cast by the intelligentsia in the affluent countries on the value of economic growth - a process which is seen as too costly in terms of increasing pollution, the danger of running out of resources, and the destruction of aesthetic and spiritual values - seem particularly misplaced. For the hundreds of millions of citizens that have newly emerged from poverty in recent decades and are beginning to enjoy the fruits of economic growth and technological progress across Asia, Africa and Latin America - among the greatest achievements in human history - the author's Rousseau-esque angst over modern life may seem indulgent, if not churlish. Most would agree with the author that the challenges facing the global economy and its competing, constituent nation-states are many and profound and should not be lightly dismissed. Yet for many of us fortunate enough to live in the rapidly developing parts of Asia, it is Wordsworth's words that ring truer:

Bliss was it in that dawn to be alive, But to be young was very heaven!