John Kay’s “The Truth about Markets” and “Other Peoples’ Money” I read as entertaining eye openers about real business, finance and government. His realist observations made for a wittily scathing critique of many of the ills now bundled into neoliberalism.
Colliers and Kay’s bete noir is Market Fundamentalism : enabled by the misguided, complacent and self indulgent politics of a controlling state , its three evil sisters are alchemistic financialisation, the American Business Model and the DSGE Academy
Here is a taster from “Greed is Dead” :
“The practical workhorse of market fundamentalism was Economic Man, an unappealing mammal who responded only to financial incentives. Greedy, selfish and potentially lazy, he exemplified possessive individualism. And smart: he knew all that was knowable. In the key phrase used by some economists, he ‘knew the model’ that described how the world worked. And the model showed that individual greed could be harnessed through the miracle of the market to maximize the potential of the economy. …
Of course, most of the advocates of market fundamentalism had not reached this conclusion by careful perusal of the complex mathematics of theoretical economists and the wordy treatises of legal scholars. They had simply recognized the potential benefits to themselves of the application of the market fundamentalist doctrine.
Yet the academic economic community – or parts of it – drew closer to the business and financial community than ever before. Perhaps for the first time, a group of rich men understood that the promotion of academic research, some of it quite esoteric in nature, could be deployed to their advantage. They financed new think tanks, entities which had historically mostly been identified with the political left. The Institute of Economic Affairs was a pioneer in the UK in promoting free-market ideas, followed in the US by institutions such as the American Enterprise Institute and the Heritage Foundation.
Increasingly well funded, these economists pressed on, making fresh insights. Not only were humans supposedly selfish in their economic behaviour; selfishness was presumed to pervade all aspects of their lives. For Gary Becker, ‘human behavior can be regarded as involving participants who maximize their utility from a stable set of preferences and accumulate an optimal amount of information and other inputs in a variety of markets. If this argument is correct, the economic approach provides a unified framework for understanding behavior that has long been sought by and eluded Bentham, Comte, Marx, and others.’
This was indeed an ambitious claim. Extending the analysis to all aspects of human life generated some astounding insights, such as this analysis of the exchange of gifts at Christmas: since the gifts typically cost the buyer more than what their recipients would have been willing to pay for them, gift-giving at Christmas is a utility-reducing anachronism. In 1992 Becker would receive the Nobel Prize ‘for having extended the domain of microeconomic analysis to a wide range of human behaviour and interaction’. …
There were still a few things that money could not buy, and this became a battleground. Body parts? An omission from the marketplace that was questioned by some market fundamentalist purists. What of the existence of a market in favours from government? … ” read more at amazon
Is this a coming out manifesto of two closet Marxists?
No, assures us TheTimes’ Christina Patterson :
“If you think this is going to be a sub-Corbynista, anticapitalist rant, think again. Paul Collier is professor of economics and public policy at Oxford University’s Blavatnik School of Government. He has written a string of books about building healthy markets and has a knighthood and a CBE. John Kay was dean at Oxford’s Saïd Business School.” read whole Times review here
So what’s going on here?
I had always wondered where exactly Kay was coming from in his all round critiques. Given his anti mainstream economic stance and broadly progressive tendencies I had placed him among the Post Keynesians. They are a diverse hetero cohort of all sorts but if there is one academic they might all respect beyond the master himself it would probably be Joan Robinson?
So why would John Kay call Joan Robinson a Marxist?
Not in this book but elsewhere.
Elsewhere is also where I would go for a first read of either author. “Greed is Dead” is not for me. Probably. I confess I never read more than the free chapters. I couldn’t get myself to pay for the whole book. Apparently the marginal utility of 0.97 of “Greed is Dead” was less than that of 2.4 books by Jacqueline Wilson. (my daughter shares the kindle account)
Scroll down for videos, reviews and more on “Greed is Dead” and its authors.
I also got distracted by the discovery of J.Nitzan & S. Bichler’s Capital as Power.
That’s about macro theory, the mainstream’s dead man walking. Not talking.
Macro theory brings us back to : why would John Kay call Joan Robinson a Marxist?
Because she ended up a Maoist?
Because she suffers from mathiness?
Because she was on the wrong side of Solow?
Because he misunderstands the Cambridge controversy?
Because he is a communitarian economist?
Because … ?
… just follow the money!
Greed is dead: politics after individualism – Paul Collier, John Kay & Charles Godfray Oxford Martin School
“Throughout history, successful societies have created institutions which channel both competition and co-operation to achieve complex goals of general benefit. These institutions make the difference between societies that thrive and those paralysed by discord, the difference between prosperous and poor economies. In their 2020 book, Greed is Dead, the leading economists Paul Collier and John Kay argue that extreme individualism has today weakened co-operation and polarised our politics, and call for a reaffirmation of the values of mutuality across the social, political and business spheres.
In conversation with Charles Godfray, the authors will develop this argument and explore how the experience of the global pandemic may affect how societies and policymakers view the balance between individualism and mutuality.”
LSE Online Event – Professor Paul Collier Professor John Kay Baroness Cavendish Professor Andrés Velasco
theTimes 26/7/ 2020 Greed Is Dead by Paul Collier and John Kay review — it’s time to end selfishness We need more altruism, argue two respected commentators by Christina Patterson
“Greed is dead. That’s the central argument as well as the title of this thoughtful polemic completed towards the beginning of lockdown and rushed out now. The title, clearly, is a provocation. But greed, the authors argue, is “no longer intellectually tenable”. Humans, they say, “have become successful not by being selfish and smart, but by being social”. If you think this is going to be a sub-Corbynista, anticapitalist rant, think again …” read whole Times review here
irishtimes greed-is-dead-gekko-got-it-wrong- Paschal Donohoe on a rigorous book that posits a way beyond self-interest
“This vision may not be visionary enough for some. Some of the policy suggestions may appear too conventional and not, well, new enough. Their familiarity, though, should not be a cause for instant dismissal. There is much that is also familiar in this book to readers of Kay and Collier. As a timely summary of their common beliefs, this book is recommended. But it does lack the easy accessibility associated with their individual writings; their collaboration occasionally yields a density of reference and argument.” read whole review at irishtimes
telegraph.co.uk Greed is Dead by Paul Collier and John Kay, review: hyper-individualism must be stopped! 4/5 This pair of economists’ polemic against self-interest takes swipes at everything from NHS managers to identity politics By Clement Knox
“In his infamous 1714 tract The Fable of the Bees, the Anglo-Dutch philosopher Bernard de Mandeville praised greed as “that noble sin” which lay at the root of modern prosperity. The miracle of the economy, Mandeville claimed, was that selfish individuals pursuing their own interests unintentionally created a flexible system that met the material needs of the collective. “Thus every part was full of vice,” he concluded, “yet the whole mass a paradise.” …” read more at the telegraph
timesliterarysupplement 26/7/2020 It’s a money thing – How to reset Economic Man – By Rebecca Spang
“… Fast-paced to the point of surrealist collage – there are squirrels and Twitter in one paragraph, LIBOR (the London Interbank Offered Rate) and Collier’s cat Grissou (the book’s most memorable character) in another – the book asserts that if one caricatured version of economics is responsible for what ails society today, another can put things right.
And so it’s out with selfish, rootless “Economic Man”, and in with community-focused “Socially Responsible Man”. Or to put it another way: it’s no to maximizing personal gain at the cost of others, and yes to maximizing personal gain while enriching family, friends and fellow humans.
Collier and Kay are not the first to arrive with such claims. Months before the pandemic, the Financial Times had called for capitalism itself to be “reset”, lest climate change, grotesque inequality and polarized politics were to bring the world crashing down around our heads. The Business Roundtable (comprising the CEOs of leading US companies) and World Economic Forum (often referred to simply as “Davos”) have made similar noises in recent years. After four decades of yuppies, Thatcherism and Gordon Gekko, the cultural tides are clearly shifting.
Greed Is Dead recognizes fundamental social problems resulting from and exacerbating inequality – homelessness, failing state schools, mass incarceration – but it has little to offer in terms of concrete solutions. Arguing that existing governments are too big (the NHS is the third largest employer in the world, the Chinese military the first), Collier and Kay have equally little patience for the staunchest critics of those governments.
Instead, they chastise the right for heartlessness and the left for embracing (they say) a politics of performative emotion comparable to neo-fascism (with something too much like glee, they lump the xenophobic, anti-Muslim Pegida party in Germany with trans-rights activists in Britain as single-issue, hence “greedy”, movements).
In the view of Collier and Kay, centralized government bureaucracies are overgrown and clumsy, while individuals are selfish and petty, or lonely and lost. What we need, they claim, are units of meaning, production and analysis that fall somewhere in between: organizations and institutions, in other words … ” read whole review at tls
Financial Times 13/8/2020 Delphine Strauss
“How did we get here? From income stagnation to inequality and social dislocation: there are many culprits for the increase in populism across the developed world. But for economists Paul Collier and John Kay, there is a deeper cause: the rise of an extreme individualism at the expense of community, of which narcissistic politicians such as Donald Trump are simply the “apotheosis”.
In Greed Is Dead, a brief but dense polemic, Collier and Kay contend that this individualist ethos is ‘no longer intellectually tenable’. They have two broad targets in their sights. The first is Economic Man — described as the ‘repellent’ invention of market fundamentalists who believe people act only to maximise their self-interest and must be monitored or bribed with bonus payments to serve the interests of their organisation. […] Their second target is the self-righteous activist who loudly asserts an ever-expanding set of individual entitlements and legal rights — whether to intellectual property, housing, tertiary education or gender determination. […]
The authors are democratic in their criticism: they are as scathing about the moral superiority of know-it-all academics or public sector workers (distinguished only by their better pensions) as they are about social media influencers […] They are also refreshingly apolitical. The rejection of Economic Man is not a rejection of the market or of business — Titus Salt, the 19th-century textile magnate who spent his fortune on housing his workers, is held up as a model of what business can achieve in a community. […] They are largely convincing — although many of their policy proposals are familiar, and do not depend on the intellectual framing they are given here.” excerpt source read whole review at the FT
amazon review Hande Z 5/5 12/9/2020 Human in place
It is conventional wisdom that authoritarian governments and communist ones oppress the individual by restricting his rights – his right to free speech and assembly, his right to own property, and his right to everything else that individuals enjoy in democratic countries. This book examines the place of the individual in modern times.” read whole review at amazon
amazon review Robert John 1/5 30/10/2020 Disappointing and irritating (the latter I suspect is the Collier half)
Someone at Leigh Day or Matrix Chambers sure has irritated this pair. The number of sideswipes at ‘human rights lawyers’’ is on a par with Priti Patel. Their legal sources are poor. They call Lord Sumption “the most distinguished British jurist of our time”. Oh dear. I doubt (hopefully correctly) that even he wouldn’t claim to be that. … ” read whole review at amazon
amazon review The Devon Mackem 2/5 2/11/2020 Short sighted and many years behind other authors
“They talk of individualism, which I agree is one of the neoliberal dogmas we should break free of (along with meritocracy, efficient markets, landlordism and so on), but they give very little mention to collective bargaining power via unions being a solution, which surprised me. They also mention very little about the environmental challenges we face. It feels like the authors are slowly and rather tediously waking up to some of the dogmas that are causing us problems in this day and age. They’re at least a decade behind many other great authors.”
goodreads review Stephen 16/10/2020 4/5 “I am starting to acquire a taste for the books written by these authors. I have known the work of John Kay for some years – he is quite visible as a columnist – but Paul Collier’s work is relatively new to me. It has acted as a breath of fresh air in a very stale world. I quite liked the book which I found to be well argued and easy to read.
The basic premise of the book is that we are suffering from an excess of individualism, both from the right and from the left. The excessive individualism of the right has become hardwired into the structure of economics, a discipline that no longer describes the real world. If economics is to progress, it needs to resolve that flaw. The excessive individualism of the left has become hardwired into the rights based identity politics that we currently experience. If society is to flourish, then we have to allow for responsibilities and obligations as well as rights. If we don’t, we will spin around in ever decreasing circles of selfishness. This analysis gives a clue to the antidote for excessive individualism – communitarianism. I am quite inclined in that direction. …” whole review at goodreads
goodreads review Igor Zurimendi 10/1/2021 1/5 “While there are some redeemable sections, the book fails at its stated mission – it’s nostalgic for an idealised version of the postwar period, and shallow in how it proposes to return us to it. Instead of having the confidence to critique the strongest proponents of individualism, by and large it merely attacks a straw men. This is mostly clearly illustrated how it misquotes Friedman on the social responsibility of business and does not even superficially engaging with his arguments on the subject. Collier and Kay’s own answer to the question is almost comically banal: “the social responsibility of business is to conduct business in a socially responsible way”.
Many other of their proposals are similarly trivial: “encouraging young people to get training and encouraging firms to bring in productive jobs are interdependent. The answer is not to ‘do neither’, but to ‘do both'”. And most damningly for a book that espouses a communitarian approach to politics, it seems to be anchored nowhere specific – you can’t really get away with saying “the regions need clusters of productive jobs” if you want to be taken seriously.”
excellent archive at johnkay.com/articles