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Article Summary: The kernel meaning of the economic aspect is value, which couples with respect, limits, future-orientation and sustainability. This implies a norm of frugality.
(The ideas in this article are still under development, so discussion is welcomed. The ideas should sometime be written as an academic paper. )
Here we discuss the kernel norm and meaningfulness that the economic aspect brings to Reality.
Summary: Dooyeweerd argued that the kernel norm of the economic aspect is frugality, but missed other things.
Dooyeweerd's main discussion of the economic aspect is led by the question "What does it mean to be economical?" which is a question about the kernel norm of the economic aspect rather than its kernel meaning. In everyday life, to be economical means to be frugal. This is what Dooyeweerd argues:
"Another example of the analogical modal use of a scientific term is supplied by the word 'economy'. Its foundational (non-analogical) scientific meaning is the sparing or frugal mode of administering scarce goods, implying an alternative choice of their destination with regard to the satisfaction of different human needs. The adjectives 'sparing' and 'frugal' do not have the limited sense of the economical term 'saving' (said of money for instance). They are only the correlatives of 'scarce' and refer to our awareness that an excessive or wasteful satisfaction of a particular need at the expense of other more urgent needs is uneconomical1."Economy demands the balancing of needs according to a plan, and the distribution of the scarce means at our disposal according to such a plan. In this fundamental sense the term is used in the science of economics, in which the word economy requires no further modal qualification." [NC, II, 66]
Notice three things: that Dooyeweerd is trying to reach the meaning of "economy" that "requires no further modal qualification", that Dooyeweerd mentions inter-aspect dependence (on the formative aspect: "Economy demands ..." - there will be others that he does not mention) and that, in this passage, his purpose was not to offer a comprehensive definition, but merely to illustrate the process of discussing kernel norms. So it may be no surprise to find what he said is incomplete, and so we question Dooyeweerd's belief in several ways.
First, we notice that Dooyeweerd seems to have accepted Robbins' view of economics without question and without justification, without input from other thinkers then extant in the field. As discussed in Chapter 4, Robbins' view is flawed and must be considered incomplete. Sadly, some thinkers [e.g. de la Sienra [===]] use the Robbins part of Dooyeweerd's statement almost as 'holy writ' to mount a defence of neo-classical economics, especially against other Dooyeweerdian thinkers who take a wider view [e.g. Goudzwaard ===]. We take a wider view still, though not necessarily that of Goudzwaard.
Second, maybe because of that, Dooyeweerd's view seems not very helpful in understanding macroeconomics.
Third, we may ask, "Should not the kernel norm of the economic aspect be prosperity or plenty instead of frugality?" (as many seem to assume, especially in the current political climate in which "austerity" is a 'dirty word'). Experience supports frugality as closer to its norm, in that when we act frugally, things go well in the long run, whereas if we make things like prosperity paramount, we find them transitory and shallow, and also damaging, detracting from rather than contributing to, Multi-aspectual Overall Good. This is seen in the following examples.
Example: When the Spanish discovered an abundance of silver in South America, they thought it would bring prosperity, but the opposite occurred, both in South America, where the indigenous population were enslaved to work the silver mines and in Europe, where the abundance of silver wrecked the economy. What this reveals is something of the aspects of mindset and attitude, discussed below.
Example: When the North Sea was opened up for oil exploration, most was divided between Norway and the UK. Whereas the UK maximized its extraction rate in order to spend it on various projects, Norway treated it frugally, and built up an enormous Sovereign Wealth Fund, which now puts Norway in a much better situation than the UK is, including in economics.
So we stick with frugality as the main norm of economics. (Some RLDG participants felt the core should be efficiency rather than frugality. However, Dooyeweerd explicitly argues against this a page later [p.67], that efficiency is of the formative aspect because it is governed by the laws of that aspect rather than the economic. [Note: Frugality])
Fourth, we also ask whether frugality is merely a response to scarcity as Dooyeweerd seems to imply, and would be meaningless in situations of plenty. Is that restriction both necessary and wise? It may be unnecessary because frugality is good even during plenty, when resources do not seem scarce. Frugality is a good "habit of the heart" to develop, in its guise as self-control, as long as it does not become infected with meanness. (x Christians will know it as part of the fruit of the Holy Spirit. x) One reason why people save is to help them maintain some frugality, by removing the temptation to spend on non-essentials. [Note: Saving and Frugality]
To restrict the goodness of frugality to scarcity may be unwise because what seems unlimited at one time proves later to be scarce or limited. For example, earlier generations presumed the Earth on which we live is effectively unlimited in its capacity to offer materials and to absorb pollution, but now we find this is not so [Note: Ecological Footprints]. Would it have been wiser for previous generations to have been more sparing in their demands on it? The presupposition of plenty that they held to is proving very hard to reverse.
Fifth, the above passage is only about the kernel norm of the economic aspect (frugality) not the meaning-kernel from which the norm emerges; it cannot explain why frugality is Good or important in reality.
So, while we accept Dooyeweerd's norm of frugality, we believe we need to go further. We are still left with the question, "What Good does the economic aspect contribute?"
Summary: The Good that the economic aspect enables is argued to be sustainability, a notion that is future-oriented and respects the object and its limits.
What Good does the economic aspect enable, which other aspects do not? What is it that the norm of frugality aims to achieve and which obeying it should achieve (if indeed frugality is a valid norm)?
The definitions of economics outlined in Chapter 4 speak of satisfying needs; this is what they implicitly presuppose as the Good that economics can bring. But that is meagre, and does not allow for what most economics has been about since World War II, something above needs. Adam Smith, in the first sentence of his Wealth of Nations, is a little wiser, in allowing for "conveniences of life" as well as the "necessaries". The idea of prosperity also goes beyond both, but it opens the gate to harmful excess and superfluity that destroys people and planet, and which Smith disdains as "trinkets and baubles", (as we will discuss in Chapter 7).
Notice that needs, conveniences and prosperity are all multi-aspectual, gaining their meaning, not primarily from the economic aspect as such but only by reference to other aspects: biotic, psychological and social needs, formative and aesthetic conveniences, and so on.
If we try to limit these to the economic aspect, prosperity is in danger of being reduced to hoards of money, even though the hoarder is miserable, ill and lacks meaning in life: is that what we really want to call "prosperity"? (c.f. Happiness economics) Real "prosperity" is wider and deeper, a combination of the Good offered by every aspect - which may be synonymous with wellbeing, flourishing, Shalom, Salaam, etc. (c.f. the section on Multi-aspectual Good).
What enables needs to be satisfied, convenience to occur, or prosperity to increase is resource, and much of 'the economy' is dedicated to producing and consuming resource (goods, services). At first sight, that also helps us little because resource is likewise multi-aspectual, merely as (prior) objects that we use to function in any aspect: food in biotic functioning, components in formative functioning, springs in Housmann's aesthetic functioning. To a railway planner, signal sections ('paths') are a limited resource. The following table lists some example things as understood from their qualifying aspect, and as resource when they are seen through the lens of the economic aspect.
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In treating any such things as resource, we are functioning in response to the laws of the economic aspect. This might open up a new understanding.
Summary: We broaden the norm for the economic aspect from frugality to respect for objects as objects with value.
What is common to all these? It is the value these objects bring in enabling functioning that generates extra Good. In recognising the value of objects we afford them some dignity as objects that help us contribute to Multi-aspectual Overall Good. In earlier aspects, we just 'use' them, and our recognition of their value is implicit, but from the perspective of the economic aspect, it becomes explicit. The economic aspect is the first that enables us to respect objects.
Of course, much has been written on value and theories of value, which we discuss elsewhere, but here we note two things. One is its multi-aspectual variety. The other is that the value of something arises not from its scarcity (as in Robbins), nor from the price a market is willing to pay (which reduces value to arbitrary subjectivity), not even from the labour needed to produce something (because 'natural' things also exhibit real value) but from its potential contribution to extra Good.
This sounds like intrinsic value, but the value is not intrinsic to the object as such but it lies in its meaningfulness in various aspects and ability to contribute to Multi-aspectual Good. This requires us to value unpaid household activity and environmental 'resources' like twigs for birds nests (do not make your garden over-tidy!), as well as Housmann's springs, just as much as those we pay for.
Respect for objects inherently implies frugality as a norm, even with those things that are not scarce.
So we may perhaps provisionally define economic activity as activity in which awareness of aspectual value of things as resource is important.
Summary: The Good that the economic aspect enables is argued to be sustainability, a notion that is future-oriented and respects the object and its limits.
Nearly all objects are limited in their availability and if we are not frugal (sparing, careful) in our use of them, they might become non-available, so the Good that comes from functioning with them is prevented. Even renewable resources might become non-available because time is required for them to renew. But if we treat them with respect and are frugal, not wasting them on what Chapter 7 calls "useless" activity, they are available for longer. "Economic" therefore seems to combine the idea of object with the norm of ensuring its continued availability. This can be expressed in the word "sustainability". This is an inherent Good that functioning well in the economic aspect brings about.
Sustainability is a future-oriented concept. This might make the economic aspect more future-oriented than some other aspects seem to be. For example our functioning in the formative aspect, of achieving ends, is quite ready to sacrifice the future in order to fulfil its norm (c.f. short-term, goal-driven decisions in both business and government). The very idea of Multi-aspectual Good implies some future Good to which we must reference all our activity. (x Responsibility for the future is strong in Christian, Jewish and other religious perspectives. x)
That they do not adequately refer to the future is another limitation of the definitions of economics in Chapter 4, and also of Dooyeweerd's treatment of the economic aspect.
The idea of sustainability and frugality challenges both capitalist and socialist economics, because both seem to lack an intrinsic respect for the future (though they might bolt it on), and both emphasise the subject (businesses, governments, owners, workers) rather than the objects. Might his be why many recent thinkers, especially in environmental economics, believe they do not really fit along the capitalist-socialist spectrum? (In the labour theory of value (in socialist economics, Marx, Adam Smith and Aquinas) there may be a modicum of respect for the object that is labour, in that we presuppose some dignity of humans.)
If we want a single notion that is central to all those it would be value. To treat something as valuable respects it. This is true whether something is limited or not (x especially if we take a Creational view of reality x), but limits increase the quantitative measure of the value. The utilitarian relevance of value is that it generates Good some time in the future. Sustainability requires treating all as of value.
These together give a reason why the kernel norm of the economic aspect is frugality, as a responsibility for the future. Since the future is unknown, frugality is a virtue that should be exercised even during apparent plenty. Following this can then lead to prosperity that is sustainable, and available to all, in a way that wastefulness does not. Thus we enrich rather than replace Dooyeweerd (and Robbins).
This makes clear certain flaws in Adam Smith's view of economics. Norman [2018, 186] sees Smith's genius "to have set out the field of political economy with markets at its centre", but this omits frugality, respect for the objects that are being exchanged, and sustainability, and makes the mechanism by which these norms are supposed to be achieved the very norm itself. We may, however, enrich rather than merely criticise Smith. Take Adam Smith's example of the baker selling bread (to a customer). Not only do they exchange value (bread for something, e.g. money), but, in doing so, each takes account of how much they already have (limits), what Good it will do (value) and how long their stocks will last (sustainability). Thus a truer picture of the apparently simple economic operation involves such components of the kernel meaning of the economic aspect.
Dooyeweerd used the metaphor of reality "avenging itself" on our stubborn stupidity [Note: Reality's Revenge]. Might environmental movements be seen as more fundamental than merely subjective human responses to undesirable contexts, as the economic aspect's concern for the future reasserting itself?
In economic crises over recent decades, is the economic aspect itself "avenging itself" by telling us "I do not work by self-interest nor greed"? Might it be the economic aspect itself that is now calling us back to our responsibility for the future and to respect the objects (resources) that we have presumed to squander? Might it be calling us back to ideas of thankfulness and care rather than self-interest and greed?
Might the economic aspect, in fact, be telling us that it does not work well unless in harmony with all other aspects? That widens the discussion, and is taken up as Chapter 4 continues.
This is part of a Rethink of Economics undertake by the RLDG, with the help of Dooyeweerd's philosophy.
Created: 4 June 2024, from material from r4-mmm; Last updated: 4 June 2024 edited, and links corrected. 5 June 2024 other aspects. 8 October 2024 value as central; summary.