Syndicate content

Institutional Economics

The Great Gatsby government discourse — carelessness and its consequences

Brian Levy's picture

This is a three-part series from Brian Levy on the manner in which the media, activists and politicians talk about the role of government. This post focuses on the importance of engaged democratic debate and the rhetorical traps that can derail political discussions.

morning dressI’ve been thinking a lot in recent months about how we talk about government. So, spurred on in part by the truly appalling tone of discourse in the Republican Party’s nomination contest, I’ve decided to write a few United States-centric blog posts on the subject (though I’ll stay away entirely from chauvinistic slurs, or comments about ‘walls’ or ‘roads to serfdom’).

Somehow, in the area of governance, our usual ways of measuring (and honoring) human endeavor don’t seem to  apply. Ordinarily, working and playing in teams teaches us how to master the challenges of  co-operative, collective achievement — which can be way, way harder than striving alone. Governing is a quintessentially collective endeavor, especially in democracies.  Yet all too often  the discourse (and not only by nameless plutocrat presidential candidates…..)  is resonant  of   F. Scott Fitzgerald’s description of Tom and Daisy in The Great Gatsby:

“They were careless people…..  They smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”

In a series of complementary blog posts — on Washington’s Metro on Obamacare;, and on South Africa’s public sector — I explore some consequences of our carelessness in the way we speak about the public sector.  Here I focus on the underlying logic of the conversation. A good place to begin is with the analysis of institutions.

The great institutional economist, Douglass North, defined institutions formally as “humanly devised constraints which govern human interaction”. (‘Rules of the game’ is his classic, informal definition.) Another Nobel-prize-winning economist, Oliver Williamson, built on North’s definition. “Governance”, Williamson suggested, “is an effort to craft order, thereby to mitigate conflict and realize mutual gains”.   Crafting governance arrangements for the public sector is hard – much harder, Williamson emphasizes, than governing a private firm. Yet, somehow, seduced by high-sounding bromides, we  trivialize the challenge. We gloss over the complexities, imply that what is extraordinarily difficult should be straightforward, and end up fueling disappointment and despair. The result is the pervasive distrust of government evident across much of the industrialized world.

Quote of the Week: Ha-Joon Chang

Sina Odugbemi's picture

“We have been led to believe that the market is some kind of natural phenomenon. But in the end, the market is a political construct.”

- Ha-Joon Chang, a leading heterodox economist and institutional economist who specialises in development economics. Chang has written several widely-discussed books on policy, including Kicking Away the Ladder: Development Strategy in Historical Perspective (2002).  Prospect Magazine ranked him as one of the top World Thinkers in 2013.