Welcome to the age of diminishing returns

Wednesday, November 16, 2011

Technocrats

On the left, Marion King Hubbert (1903-1989), originator of the "Hubbert Model" of oil production. On the right, Mario Monti (1943-), prime minister of the Italian government. They seem to share a certain style and both of them have been defined as "technocrats". 


Marion King Hubbert had foreseen many things correctly in his career, mainly about oil production. But he had also joined a group called the "technocrats" who proposed that technical experts should run governments. Maybe he was right also in this prediction, as the recent events in Italy may indicate.

Professor Mario Monti has been appointed by the President of the Republic as the new head of the Italian Government, replacing the democratically elected, but disastrous, Silvio Berlusconi. I am not sure of whether Mr. Monti likes to be defined as a "technocrat,"  but the term fits his present job very well. Is this the start of a new trend? It is too early to say but, who knows?


Big Gav has an interesting post on "peak Energy" about the rise of Mario Monti in Italy .

20 comments:

  1. i dont think the 'technical expertise' they refer to is the same....

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  2. The orginal technocrats were economist that proposed that the economy was based on energy back in the 30'.

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  3. Well, I don't know what the original technocrats had in mind at the time of Hubbert. I just noted that technocrats came.

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  4. Current common usage of the word "technocrat" is completely misleading. The Technocracy Movement was against common economic dogmas and practices. Yvan Dutil has it right when he writes "[they] proposed that the economy was based on energy" (better: a resource based economy). He has it almost wrong when he writes that they where economists: for the most part they were scientists, engineers, architects, ... with the notable exception of Thorstein Veblen, an economist and sociologist which we can call "unorthodox" in retrospect. Mario Monti instead is a traditional economist, which is connected to all vested interests that have big responsabilities in this global economic crisis. So no, he is not a "technocrat" in the original sense.

    Some references:
    * http://en.wikipedia.org/wiki/Technocracy_movement
    * http://en.wikipedia.org/wiki/Technocracy
    * http://en.wikipedia.org/wiki/Thorstein_Veblen
    * http://www.technocracy.org/
    * http://www.technocracyinc.org/
    [Not sure which of these two last sites really represents the original movement.]

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  5. Yes, in a sense. But also, no, in another. I think that the original "technocracy" movement had in mind something like "government by scientists". Surely, that doesn't apply to Mr. Monti. But, in a broader sense, "technocracy" also means government by people who are chosen by their technical qualifications and not for their ability to convince the electorate with promises that they know they won't maintain.

    I think this point - choosing people on the basis of their qualifications - stands at the basis of the technocracy idea, independently of whether the technocrats are engineers or traditional economists. It is nothing new, after all. The Chinese imperial examination system was based on this concept. In this sense, we may say that Mr. Monti is a technocrat and his appointment as prime minister is a big change in the way governments are created in the Western World. That, of course, doesn't mean it is a change in the right direction.

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  6. Yes, I understood what you meant Ugo but I disagree on a specific point. I contend that the term "technocracy" was of relatively recent invention (early decades of 20th century) and it entailed a very different connotation by what is now understood, that is an elitist, undemocratic form of government with the aggravating factor of making the interests of a few.
    The term was initially associated with the industrial democracy movement (see for example the "Technocracy" article on Wikipedia) and then the technocracy movement, where it assumed the current denotation of "government by technical decision making".
    But - and this, I think, is the most misunderstood aspect of the technocracy movement and more recent rehashes of it (like Zeitgeist Movement and Venus Project) - technical decision making dictates "how" to reach a goal, not necessarily "what" goals to reach. The "what" part can be the subject of a real democratic decision process, informed by real data on available resources and technological capacity.
    From what I read, the term was initially understood in this positive connotation: the technocracy movement had as principal objective the betterment of humankind, not the promotion of yet another ruling class (see Veblen's critic of ruling classes in "The Theory of the Leisure Class" - here I'm not saying that Veblen's critic is always accurate, but nonetheless it can be understood as an harsh critic of both ruling classes in general and of consumerism).
    The more recent attempt to such setting in real life was the Chilean project Cybersyn, lead by operations research scientist and cybernetician Stafford Beer under the Allende government. But it was very short-lived. After the coup d'état of Pinochet in 1973, the goverment in charge ordered to destroy the system with the charge of being an instrument of "sovietization" of Chilean economy. Beer recounted a very different story regarding the democratic pedigree of Allende.

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  7. Moreover my point is that "mainstream economics" can be hardly considered a scientific discipline, dispite its use and abuse (more the latter) of mathematics and statistics which gives it such aura. It's based on questionable (when not blatantly wrong) assumptions about economic agents (example: the kind and extent of human rationality) and systemic properties (ex.: non-zero-sum game, which I think is the culprit of this fantasy of perpetual growth).
    So I do not consider them "technically qualified", their field is more akin to numerology than to whatever "technical" field. I consider them more sorcerer's apprentices than technicians (many of them in absolute bad faith - just see who over time pays their salaries).
    That is more in line with your sarcastic comments about the economists in a (I don't remember which) conference. There is some hope in some peripheral developments like neuroeconomics, behavioral economics, ecological economics and so on (note that they are all transdisciplinary fields of research).
    But by the time they might become "actionable knowledge" there is the risk that the concept and manifestation of "academia" will be extinct (not to mention what can happen to our civilization).

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  8. @Massimo
    Also went through your opinion regarding "economics"(and still have it more or less), but now I've changed a bit, I would say that most current economics principles make sense, if you accept that the matter being studied is "how to destroy the world as quickly as possible", or in other words that the "as soon as possible" is used as the main "better criteria" throughout economics.
    And the "tragedy" around that is that maybe the only available option around it is "how to slow this machine" (by constraints based on making raw material more expensive, and redistribution principles basically), but the fact remain that indeed current economics principles lead to the most "efficient" stuff.

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  9. @yvesT: It is not so much my opinion as a disenchanted look on the discipline by some economists themselves (see Post-Autistic Economics Movement cited below).
    I think most of them do not really have a clue of why their economic recipes do not give the expected outcomes. Certainly they see what disasters they caused and still cause (since it's from the 1990s I keep reading about the real effects of their economic policies upon ample strata of population in countries of Latin America, Africa, Asia and even USA), but they refuse to be accountable - they always dump the blame on politicians who do not have properly applied their recipes - and as such I consider them in bad faith.
    How this group became dominant in economics? We have at least an explaination from inside the discipline itself, by non-mainstream economists. Citing from

    "A Brief History of the Post-Autistic Economics Movement":
    http://www.paecon.net/HistoryPAE.htm

    "[...] Because it has been so successful at sidelining other approaches, it also is called “mainstream economics”.

    From the 1960s onward, neoclassical economists have increasingly managed to block the employment of non-neoclassical economists in university economics departments and to deny them opportunities to publish in professional journals. They also have narrowed the economics curriculum that universities offer students. At the same time they have increasingly formalized their theory, making it progressively irrelevant to understanding economic reality. And now they are even banishing economic history and the history of economic thought from the curriculum, these being places where the student might be exposed to non-neoclassical ideas. [...]"

    Also from the same article, supporting my point that they don't have a clue:

    "[...] Consequently neoclassical economics sheds light on an ever-smaller proportion of economic reality, leaving more and more of it in the dark for students permitted only the neoclassical viewpoint. This makes the neoclassical monopoly more outrageous and costly every year, requiring of it ever more desperate measures of defense, like eliminating economic history and history of economics from the curriculum."

    That few of them know exactly what they are doing and that they do it on purpose it's my working hypothesis but I haven't yet enough convincing elements to substantiate it, so I'll refrain to discuss it in the open.

    See also quotes of six winners of the Bank of Sweden Prize for Economics on the home page of the post-autistic economics network (I'm really surprised to see the name of Milton Friedman in this list):

    http://www.paecon.net/PAEmovementindex1.htm

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  10. Massimo
    Yes, basically I agree with you, was looking for a quote (in fact an answer in an interview of Milton Firedman about natural resources that was really caricatural in being outrageous but cannot find it back now).
    What I mean I guess is that to me economics is inherently linked to a political vision or ideology, and I don't expect any real science to come out of it in any way, but that the free market economy as an ideology, is for sure good to prop up new products and optimise their production, but that in itself is an ideology, basically :
    "There is one and only one responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game."
    Milton Friedman
    Which is of course totally rotten at the core, with respect especially to natural resources, and power relationship.
    But again, I don't expect much from economy in terms of "solution" that would be the right one because "scientific", and in the end the thing that is "fucking us up" is as much technology as economy in a "material sense", even if this technology growth is pushed by current economic thinking ..

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  11. Good discussion.
    Economics as a science?
    Ugo as a physicist can not change the laws of physics, nor can engineers when developing technology, whereas economists have caused the rules to be made-up as they go along.
    I suspect that 'believers' in 'enterprise' [profit] think that consumers, (we used to be called 'the public') get all the choice they should need within the market place.
    An excellent quote repeated in the latest TAE (by Ilargi): EC chief Herman Van Rompuy said it all in a few words this week in Florence: "We need reforms, not elections".

    That other new 'technocratic' appointee in Greece has similar cv; former vice president of the ECB, I think? These are the men coming from the same financial and economic orthodoxy that took 'growth', (exponential doubling time for 2.5% annual increase is about 28 years), via an explosion of yet more sophisticated financial instruments, to its present logical climacteric. I am reminded that the Governor of the Bank of England said two or three years ago "nobody saw this coming". Some excuse! He of course is still in his job.

    PS Vorstein Veblen sticks in my memory as the guy who wrote that the vestments of the traditional Christian Churches clearly owe their design to the garments worn by body-slaves to the Roman Aristocracy.

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  12. Hmmm.... Often I am the first one to play "economist bashing", but let me say at least something good about economics. One good thing of economists, is their reliance on data. Their theories may not be so good but, at least, they have the right attitude on the importance of real world data.

    Then, economics looks to me like Chemistry before people knew about atoms. They didn't have a good theory, but they had this reliance on experimental data. So, they went on and, eventually, the theory followed. I think such a destiny could be possible to economics; that is, if they were willing to use basic physics in their model. So far, though, "econophysics" is still considered a joke by most economists. So, they may be getting what they deserve, in the end.

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  13. However, with this post I didn't mean to center the discussion on the merits (or demerits) of economics as a science. I just wanted to point out that technocracy, intended as "government by craftsmen" (from the Greek meaning of "techné"). Now, of course Hubbert probably intended these craftsmen as scientists and engineers, but suppose that we were to appoint an engineer as prime minister, he or she would still have to solve the financial problems of the fringes of the Empire. Let's say, more correctly, try to solve.....

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  14. Ugo
    Points taken.
    I did not mean to imply that we do not absolutely need bankers and investment analysts and insurance companies etc. in the complex industrial trading world. We do. Period.
    That is is very scary.
    My point was that over the last 200 years, both the economic understanding and the financial trading institutions and their financial instruments have been constructed.

    'Money' in the broadest sense is comprised of a set of agreements, and relies further on a wider set of agreements. Reciprocally, governments have refined their understanding of what their role means in both constructing and living by such 'rule books' that allow the transactional world to function. The rule books though have been rewritten several times - there is a history of economics and financial theory. This then sounds like it is just a matter of 'technocratic understanding', but, OOPS! it isn't!

    Link http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625

    I found for example the above essay very educational on the theory of modern monetary systems, but I still can see no understanding of the Limits to Growth. I see no proper 'technocratic' understanding anywhere out here in the real wold of the ongoing financial crash. In fact, unless these modern magicians can find 'growth' again in the western economies, their technocratic promises will likely fade like Prospero's cloud-capped towers.

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  15. Money has a purpose - it accelerates what thermodynamics commands. It is the trigger, the gas pedal, the red button. As such, it is extremely dangerous to neglect the role of money in our world. I am preparing a post on this point.

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  16. Just to be clear: I was not bashing economics in general but mainstream economics in particular. The post-Keynesian economist Steve Keen argued in his book "Debunking Economics" that "[...] neoclassical [mainstream] economics is a degenerative research program, not generating new knowledge but growing a belt of protective auxiliary hypotheses to shield its core beliefs from critique." (http://en.wikipedia.org/wiki/Steve_Keen#Debunking_Economics)

    Steve Keen is, as Alex Marsh wrote in his blog, "[...] one of the small number of unorthodox economists who in the early 2000s made a concrete prediction that a crash was coming." (http://www.alexsarchives.org/?p=2320)

    He is not the only one, in 2009 Paul Krugman - Nobel Prize in Economics in 2008 - in an interesting article (How Did Economists Get It So Wrong?) wrote (http://tinyurl.com/krugman20090906):


    "V. NOBODY COULD HAVE PREDICTED...

    In recent, rueful economics discussions, an all-purpose punch line has become “nobody could have predicted....” It’s what you say with regard to disasters that could have been predicted, should have been predicted and actually were predicted by a few economists who were scoffed at for their pains.

    Take, for example, the precipitous rise and fall of housing prices. Some economists, notably Robert Shiller, did identify the bubble and warn of painful consequences if it were to burst."

    So some schools of unorthodox economics has at least some predictive power, a clear sign that the discipline is not totally bankrupt, even if Steve Keen again argued in his book "Debunking Economics" that "None of these is at present strong enough or complete enough to declare itself a contender for the title of ‘the’ economic theory of the 21st century." (http://en.wikipedia.org/wiki/Steve_Keen#Debunking_Economics)

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  17. Ugo
    We look forward to that post when it arrives.
    I was surprised (see in the article I linked to above) just how different the money system is for example in the Eurozone (Italy!) compared with, say, the USA. And, similarly, how in the past (?)'gold standard' systems imposed very different relationships between government/creditors/debtors. At least as I read the explanation. Am still learning!
    best
    phil

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  18. Yes, I am learning a lot, too, about these matters!

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  19. The financial system is going to collapse and Marx has been right all along. Also much of the financial system is irrelevant. In fact it destroys value and is a vast 'skimming' operation to extract unearned value.

    Call Hubbert what you like (technocrat, etc) but his analysis was predicated around understanding systems. He clearly demonstrates that an infinite system (the global debt system underpinned and orchestrated by the banks) is totally incompatible with the natural world in which we all live as it is a finite and closed system. He predicted that outcome would be excessive resource extraction and population overshot (implied a collapse of the debt system also).

    Neither the right or left in terms of current economic theory has an answer to the problem we face as they are constrained by the system 'limits' that Hubbert pointed to. Neither the Keynesian school, or the austerity freaks have a clue and either of their actions will merely exacerbate what is a systemic problem.

    Mainstream economics is a bit of a joke and not underpinned by sound epistemological thinking. In fact Friedman seems to have made up the notion of 'instrumentalism'. This underpins all the rubbish monetarist thinking. In fact most decent philosophers can easily pick apart its absurdities. Monetarist thinking has been used to underpin the policies of the World Bank, IMF and many privatization programs which have been a cover for the wholesale stealing of the 'commons' and 'public goods'.

    Given the above it is obvious that government is complicit in this global seizure of the public domain. The appointment of the Italian is not 'technocratic' move but merely vested interests (the banks) having their man in place to manage events and I have no doubt to privatize the public assets of Italy as has already happened or is happening in Greece.

    The only way out of this mess is to step outside the current paradigm and look at the work of thinkers like Hubbert to construct institutions and policies frameworks that may prevent total collapse. I have little faith that this will happen though.

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