Analysing Singapore as a Pragmatic State
In this paper, I will argue that the government is hoping to move towards an ideal state that it thinks is objectively beneficial to the country on a macroscopic level, using common economic indicators such as standard of living, GDP per capita and equity. They have often referred to this style of governance as ‘pragmatism’. For the most part, this style of governance has brought forth a lot of economic prosperity- at the cost of individual freedom. This line of thinking may lead to a divergence between the government’s plan and the people’s desires.
Singapore is clearly a cohesive-capitalist state since our government plays a huge role in directing our resources for maximum output. The government mapped out our industrialization in the sixties and continues to direct the economy till today. Moreover, government-linked corporations (GLCs) today account for 60% of all growth, making the state somewhat neo-patrimonial since the distinction between private and public resources can be significantly blurred. This isn’t coincidental; many of these GLCs have directors and board members instated by the government, and thus the government has a large stake in the decision making process. However, it is also important to note that the government understands the line between public and private resources, as evidenced from the potential transition of SMRT back to government ownership, as opposed to leaving it as a private institution. This makes it wrong to say that the Singapore is completely neo-patrimonial, since Kohli clearly states that neo-patrimonial states ‘intervene heavily in the economy but with disastrous results’ or a ‘weak private sector’. In Singapore’s case, the government is deeply embedded in the private sector and it is clearly flourishing. This makes ‘cohesive-capitalist’ a better description of the Singapore state.
There has been some subtle changes in the structure of power in Singapore. The Singaporean government was a lot more autonomous under Lee Kuan Yew (LKY), but has transitioned to a more embedded and inclusive under his successors, Goh Chok Tong (GCT) and Lee Hsien Loong (LHL). LKY sought to bring about rapid and radical changes to the state, and many times, this was met with soft rebellion. Besides the obvious political turmoil among the elites during Operation Coldstore and Spectrum, there was a lot of anger surrounding his and Dr. Goh Keng Swee’s decision to choose trade with multinational corporations over home-grown SMEs. The relation of the government to the people was in line with Weber’s bureaucracy, somewhat insulated from what people wanted and hence free of the rent-seeking usually associated with a neo-utilitarian model. However this has changed with his successors, with GCT often being described as ‘consultive’ with the people, and LHL going further with establishing continuity with the people. LHL’s administration has backtracked on the Population White Paper (although the importing of high skilled foreign workers is increasing). Moreover, the restrictions for speech at the Speakers’ Corner have been loosened. This is in line with Evan’s embedded autonomy, where members of parliament are interacting more with the public and “embedded in a concrete set of social ties.” The PAP still retains a lot of autonomy, but it listens to the public, or at least pretends to, to ensure maximum effectiveness of its policies. This, however, does not necessarily mean that the PAP can better empathize with the public. (My professor said that this was a good observation)
While it is a given that the government will act within socially custodian capacity like most states worldwide, it primarily plays the role of husbandry with regards to the economy. The government has to have some form of control simply because we cannot afford to be a free market in international trade. As a country without natural resources, the early PAP government recognised that we weren’t a sustainable economy in autarky, and that certain rules had to be implemented if we were to avoid exploitation from bigger countries in trade. It combines this husbandry with some level of midwifery. While it may not have played a heavy midwifery role in its inception, today it has pumped significant resources into the IT and biotechnology sectors to help keep our economy relevant. It can be tempting to say the state has been demiurgic, especially given its past, but the state has been very libertarian toward the private market. Somewhat paradoxically, we are ranked amongst the freest markets in the world, because of the ease of starting a business in the country today. The problem isn’t that the PAP currently discourages entrepreneurship, but that risk-aversion is ingrained into the public psyche through the education and meritocratic system. Perhaps it could also be the discouragement of SMEs in our earlier development. The paper chase is evidence that Singaporeans rarely look for an alternative path to (financial) success besides getting a degree. As such, it would be a fallacy to call the state demiurgic. The government has been actively encouraging alternative career paths and has been accommodating to new businesses.
In its search for macroeconomic prosperity, it has often placed the state’s needs before the individuals. And to some extent, that may be a good thing. As explored in Durkheim’s Suicide; the individual is often asking for more than the optimal amount of resources he needs. In economics, we refer to this phenomenon as the tragedy of the commons, when individuals aren’t aware that their selfish desires come at the expense of others’, resulting in social inefficiency. Having an authoritarian government step in to dictate social actions can result in a more efficient allocation of resources, even if the individual doesn’t observe it. This has been the PAP’s go-to definition of ‘pragmatism’, since it firmly believes it knows better than the public. Having an embedded autonomy allows the PAP maximum efficiency in carrying out its policies, much faster than liberal governments in the West which often have to wrestle with lobbies, opposition parties or the electorate to carry out policies.
This form of government is not without its pitfalls, of course. With its relative isolation from the public, and hence its parochial view of the individual as a cog in the wheel, there are problems which the PAP may not recognise, like rising inequality (both social and economic). In other words, the government still has blind spots, since it believes it knows best and receives little to no criticism from the people. The PAP has to come forward and be more welcoming to ideas and concerns from the people. They have taken a few steps toward this, but the idea of obedience has still been largely ingrained into the people. Since the PAP has become technocratic, it bases itself on the idea that its members are the most competent in the country, even though this ‘meritocracy’ is usually based on formal academic qualifications or (superficial) military positions. On the flipside, I would like to put forth the further argument that the people have also become too dependent or fearful of the government. The restrictions on public protests and sedition laws make it seem like the government has banned criticism altogether, even though it has now allowed for constructive criticism. With people rarely contributing ideas and a government that plays a socially custodian role, there is a divide between what is observed among the elites and the common man. A good example of this is the PAP’s insistence of pricing and affordability (like buying a house on one grand a month, a staple of LHL’s annual National Day rally). With prices set to go up and rising inequality, this divide is going to be even bigger in the coming years, and I foresee some less than subtle changes within the PAP if it intends to continue remaining in power.
I wrote this for my SC3205 (Sociology of Power: Who Gets to Rule?) module. Professor gave me a B+, even though she said it was a good essay. Marked me down for not talking about the concept of embedded economy, which is frustrating because she gave a word limit of 1000 (which I have already exceeded by a bit here). I wrote another essay on Singapore as a bureaucratic state but I probably wouldn’t publish it here since I don’t think I wrote all too well on that one. I got marked down for supporting our government, HEH. I think this module was a bit of a game changer for me, not because it was a good module but because I ended up re-evaluating a lot of my political stances. At first, I wanted to write positively about our government, just out of spite of all the social justice warriors in my class (my professor included, to some extent). As some of you on Facebook would have realised, writing these essays eventually made me realise the government does a lot of things right. I wouldn’t say I have become a firm PAP supporter, but writing this has made me a lot more grateful for their contributions.
 Huck-ju Kwon, 2005, “Transforming the Developmental Welfare State in East Asia”, Palgrage Macmillan, Chapter 4 and 8
 Tan Siok Sun, 2007 , “Goh Keng Swee: A portrait”, Singapore: Editions Didier Millet, pp. 78, 93–95
 Reiner Heufer, 2013, International Society for Individual Liberty World Conference speech
 Chua Beng Huat, 2010, “Disrupting Hegemonic Liberalism in East Asia”, Duke University Press
 Christopher Tan, “LTA to buy $1b of SMRT assets under new rail financing framework “, Straits Times, 15 July 2016
 Atul Kohli. 2004. State Directed Development: Political Power and Industrialization in the Global Periphery. Cambridge University Press, pg 7
 Lee Kuan Yew, Straits Times, 20 April 1987
 Jones Matthew, 2008, “Creating Malaysia: Singapore Security, the Borneo Territories, and the Contours of British policy”, The Journal of Imperial and Commonwealth History
 “Govt acted to nip communist problem in the bud, says Dhana”, The Straits Times, 2 June 1987
 Bilveer Singh, 2012, “Government and Politics Of Singapore”, McGraw Hill 2nd Ed
 Bridget Welsh, 2009, “Impressions of the Goh Chok Tong years in Singapore”, NUS Press, pp 6-8
 Koh Buck Song, 2011, “Brand Singapore: How Nation Branding Built Asia’s Leading Global City”, page 152
 Kok Xing Hui , “Foreign companies need permit to sponsor, promote or participate in Speakers’ Corner events: MHA”, Straits Times, 21 October 2016
 Peter Evans, 1995, “Embedded Autonomy: States and Industrial Transformation”
 Francis Law, “Singapore must continue working towards more inclusive society: PM Lee”, Today, 2 December 2015
 Paul Krugman, 1987, “Is Free Trade Passé?”, The Journal of Economic Perspectives, Vol. 1, No. 2, (Autumn, 1987), pp. 131-144, American Economic Association
 Carolyn Khew & Lin Yangchen, “Singapore ‘could be global innovation hub’”, Straits Times, 10 January 2016
 Adrienne Selko, “Singapore’s Secret to Attracting Biotech Companies”, Industry Week, 10 April 2015
 Natalie Turner, “Risk-taking in S’pore: Progress made, but rethink may be needed”, Today, Singapore Press Holdings, March 28, 2014
 Emile Durkheim, 1951, “Suicide : a study in sociology”, The Free Press
 Christopher Tremewan, 1996, “The Political Economy of Social Control in Singapore (St. Anthony’s Series)”, Palgrave Macmillan. p. 105.
 Liyana Othman, 2016, “Social mobility ‘in trouble’ as social gaps widen: Tharman”, Today, 26 May 2016
 Ho Kong Weng, 2007, “Wage equality and intergenerational educational mobility may be in long-term decline in Singapore.”, Ethos — Issue 3, October 2007
 Michael Barr, 2009, “The ruling elite of Singapore: Networks of power and influence”
Business cycles are well understood. They are not a natural consequence of capitalism but instead from central bank manipulation of credit…. The next downturn, likewise, will be the fault of the Fed…. The silly notion that money can be created at will by a printing press or through computer entries is eagerly accepted by the majority as an easy road to riches, while ignoring any need for austerity, hard work, saving, and a truly free market economy…. But that’s a fallacy. There is always a cost. Artificially low interest rates prompt lower savings, over-capacity expansion, malinvestment, excessive borrowing, speculation, and price increases in various segments of the economy – Ron Paul
Reading an e-book entitled ‘Ron Paul vs. Paul Krugman: Austrian vs. Keynesian economics in the financial crisis’. Some interesting comparisons, found this particular quote interesting.
2. Compare Durkheim’s understanding of the human individual with Marx’s. In what ways do they conflict, and in what ways might they complement each other? Whose approach do you find more compelling, and why?
Durkheim and Marx are both similar in that they view the individual as part of a larger, single collective; society. Both of them adopted a structuralist approach to analyse society and its individuals. However, the similarities end there; while Durkheim saw the individual as a mere cell in an organism (mechanical or organic), Marx placed a lot of emphasis on the individual. Where Durkheim saw individuals acquiescing to social norms and society moving progressively as a collective whole, Marx saw a regression in humanity as society moves towards its inevitable class war. Thus, both sociologists came to very different conclusions despite starting off on relatively similar footing.
To understand the similarities in both thinkers, it would be easier to see what they stood against; the Cartesian self. Before the Industrial Revolution, French philosopher René Descartes saw the individual as a completely rational, transcendental figure that is not circumspect to external factors, a rhetoric he summarized in his line, “I think, therefore I am”. This was a sentiment that gained popularity in the age of Enlightenment and continued to influence people during the Industrial Revolution. On this front, both Marx and Durkheim are in complete agreement that the individual is not an autonomous figure, but rather a product of his society. Where Descartes saw introspection as a way of understanding the individual (though he would consequently conclude that self-understanding is impossible), Marx and Durkheim saw a way to understand the individual, by understanding the external environment around him. This approach is a structuralist one, and both see individuals a component of society, instead of a group of individuals bound together with little to no connection of each other’s consciousness. Durkheim saw the individual’s consciousness as part of the collective, and that social norms shape the individual’s thoughts. In fact, he saw the individual as a reflection of society’s progress. Similarly, Marx saw the individual as a “social being” in his natural state. Both studied the cumulative impact of society rather than individualistic theories to explore the individual’s role. This however, leads to their main differences.
Durkheim viewed the individual with a hint of negativity, and was pessimistic about individualistic notions. This can be seen in his book, ‘Suicide’, where he insinuates that deviance from the norm is harmful for the individual. Durkheim thinks an individual is incapable of controlling his own desires, arguing that “our capacity for feeling is in itself an insatiable and bottomless abyss” and that “the more one has, the more one wants, since satisfactions received only stimulate instead of filling needs”. Durkheim insists that such desires are unhealthy and that an external force is required to step in to regulate this individual’s desires. In this case, the external force is society, as it is “the only moral power superior to the individual”. A lack of regulation from society may lead to ‘anomie’ or deviance from the norm, and Durkheim attributed this to one of the four types of suicide in his book. Durkheim places the society before the interests of the individual, and suggests that an individual will be selfish and greedy in the absence of a regulatory figure.
On the other hand, Marx saw the positivity in an individual shaped by his desire. Marx opined that human individuals are different from animals in that they “produce their [own] means of subsistence” and “indirectly producing their actual material life”. In other words, Marx, while acknowledging that the individual is not confined to his abstract self, insists that mankind is in the process of evolving, that he is ‘human becoming’. It is important to note that Marx saw individuals in two different parts; one as the architect of his existence, and one as part of a collective. Again, this is in contrast with Durkheim, because he suggested that the individual is built by the social collective alone. Marx asserts that “the nature of individuals thus depends on the material conditions determining their production”. He focuses on the tangible, material objects around the individual, instead of the ideals that Durkheim saw in the form of religion, laws and beliefs. In the language of Durkheim’s ‘Suicide’, Marx would have seen no issue in a society with little regulation or integration, as long as these are not needed for the individual to provide for his own subsistence. On the other side of the fence, Durkheim would think that an individual simply making his own material mark on the world without agreeing to collective thought was unhealthy for both the individual and the society. Marx saw the social collective as the root of the crisis in modern society, while Durkheim would argue that it’s the lack of integration or regulation, or a society with less than healthy relations that leads to general unhappiness in the modern world. To put it shortly, Marx believed that society would move towards conflict, whilst Durkheim believed that society would move towards consensus. This is why their views of the individual are polar opposites of each other despite agreeing that the individual is shaped by external factors.
Ironically, individualism has its place in Durkheim’s division of labour; as society moves towards a more complex division of labour, Durkheim is convinced that there will be increased interdependence and hence better integration within society. This would mean that more individuals are inspired to make their own mark on the world with their own products that are unique to them. The individual is hence integral to society even if he does not play a similar role to other members of society, because he is not easily replaceable. However, there exists a form of labour that is based on an individual’s economic or power status. This is an anomic division of labour, which he describes as “although very highly developed, result[s] in a very imperfect integration”, where workers are forced to do repetitive work without knowing or understanding their significance to the rest of society, thus separating them from society and reducing solidarity. This would also tie in to Marx’s concept of alienation, and Marx would also want for individuals to be able to make their own specialized products as opposed to homogenous products for multi-national corporations. When an individual is forced to do repetitive work, the “worker does not affirm himself in his work but denies himself, feels miserable and unhappy”. It can be said that Durkheim is directly referring to Marx himself on this front, and we see the marriage of both men’s ideologies briefly in anomic division of labour in relation to alienation. However, this isn’t necessarily a reconciliation, as Durkheim feels that in his ideal society, useless jobs would be abolished and if jobs still feel repetitive to the individual, the employer would simply have to tell the employee about his place in society, and why he is important. Marx would have seen this as suppression of class consciousness on the individual.
In any case, I find Marx’s view of the individual far more compelling than Durkheim’s. Marx’s interpretation of the individual transcends time and space and continues to stay relevant even in the post-modern world. This is because Marx saw the individual in relation to the material world as opposed to abstract ideals. Marx acknowledged the continued evolution of humanity through different periods, while Durkheim could only base his theories on a limited scope of historical data. Marx did not negate the consciousness of the individual, and correctly predicted the growing unhappiness and resentment in individuals as capitalism grew and supressed his desires and needs.
In contrast, Durkheim’s view of the individual was unrealistic, as seen in his assumption that “the division of labour produces solidarity only if it is spontaneous and in proportion as it is spontaneous”. His argument about individuals willing to work towards the collective good is flawed because he ignores the lack of means to subsistence on the workers’ end. In the real world, individuals have to do a job because they are forced into it and they would starve without the money. Durkheim incorrectly sees integration as a factor of social solidarity instead of economic predisposition. Durkheim’s dismissal of deviant behaviour as anomic is also tragically myopic, since ideals can change over time. Slavery and racism were seen as social norms in the past, but they are outlawed in the modern world, without necessarily tearing apart the solidarity of the country. It makes even less sense today, with the rise of the internet and social media drawing separate individuals from different countries and different time zones who may experience solidarity in their online presence. A group of homosexuals can experience this on an online chat group even if it’s deviant behaviour in their country or social setting. In comparing societies with one another, as opposed to intra-social classes as Marx did, Durkheim severely underestimates the importance of the individuals’ desires and needs and incorrectly assumes that society as a whole can bring about progress and positive change to the individual.
This is an essay I wrote for SC3101. I did this module as part of my minor in European Studies. Not too bad. Got an A- for this without much effort.
Thousands of years ago the first man discovered how to make fire. He was probably burned at the stake he had taught his brothers to light, but he left them a gift they had not conceived of, and he lifted darkness off the earth. Through out the centuries there were men who took first steps down new roads, armed with nothing but their own vision. The great creators, the thinkers, the artists, the scientists, the inventors, stood alone against the men of their time. Every new thought was opposed. Every new invention was denounced. But the men of unborrowed vision went ahead. They fought, they suffered, and they paid – but they won. No creator was prompted by a desire to please his brothers. His brothers hated the gift he offered. His truth was his only motive. His work was his only goal. His work, not those who used it, his creation, not the benefits others derived from it. The creation which gave form to his truth. He held his truth above all things, and against all men. He went ahead whether others agreed with him or not. With his integrity as his only banner. He served nothing, and no one. He lived for himself. And only by living for himself was he able to achieve the things which are the glory of mankind. Such is the nature of achievement. Man cannot survive except through his mind. He comes on earth unarmed. His brain is his only weapon. But the mind is an attribute of the individual, there is no such thing as a collective brain. The man who thinks must think and act on his own. The reasoning mind cannot work under any form of compulsion. It cannot not be subordinated to the needs, opinions, or wishes of others. It is not an object of sacrifice. The creator stands on his own judgment. The parasite follows the opinions of others. The creator thinks, the parasite copies. The creator produces, the parasite loots. The creator’s concern is the conquest of nature – the parasite’s concern is the conquest of men. The creator requires independence, he neither serves nor rules. He deals with men by free exchange and voluntary choice. The parasite seeks power, he wants to bind all men together in common action and common slavery. He claims that man is only a tool for the use of others. That he must think as they think, act as they act, and live is selfless, joyless servitude to any need but his own. Look at history. Everything thing we have, every great achievement has come from the independent work of some independent mind. Every horror and destruction came from attempts to force men into a herd of brainless, soulless robots. Without personal rights, without personal ambition, without will, hope, or dignity. It is an ancient conflict. It has another name: the individual against the collective. Our country, the noblest country in the history of men, was based on the principle of individualism. The principle of man’s inalienable rights. It was a country where a man was free to seek his own happiness, to gain and produce, not to give up and renounce. To prosper, not to starve. To achieve, not to plunder. To hold as his highest possession a sense of his personal value. And as his highest virtue, his self respect. Look at the results. That is what the collectivists are now asking you to destroy, as much of the earth has been destroyed. I am an architect. I know what is to come by the principle on which it is built. We are approaching a world in which I cannot permit myself to live. My ideas are my property. They were taken from me by force, by breach of contract. No appeal was left to me. It was believed that my work belonged to others, to do with as they pleased. They had a claim upon me without my consent. That is was my duty to serve them without choice or reward. Now you know why I dynamited Cortlandt. I designed Cortlandt, I made it possible, I destroyed it. I agreed to design it for the purpose of seeing it built as I wished. That was the price I set for my work. I was not paid. My building was disfigured at the whim of others who took all the benefits of my work and gave me nothing in return. I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy, nor to any achievement of mine. No matter who makes the claim. It had to be said. The world is perishing from an orgy of self-sacrificing. I came here to be heard. In the name of every man of independence still left in the world. I wanted to state my terms. I do not care to work or live on any others. My terms are a man’s right to exist for his own sake.
– Howard Roark
Now everything Zack Snyder says makes sense. Now a lot of things make sense.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists,” British economist Joan Robinson once piquantly remarked . She isn’t very far from the truth; a running joke among economists is that for every theory posited by one, there is an economist with the exact opposite argument. This is the implication of economists making normative statements; ones with personal value judgement , when developing theories to make sense of raw data. Economists tell a story with graph. Narratives are subtly used to invoke a claim, so that an economist can present his theoretical hypothesis. The two are inexorably intertwined, and in this paper I will show how narrative techniques are employed by economists to make their argument.
Firstly, there is a structure within most economic theories that resemble a narrative . A narrative has the following elements; characters, event, plot and conflict . Economists are in a sense like poets, using graphs as metaphors for events that take place in an economy and succinctly representing that in a pictorial form. Language here can be mathematical or graphical, but the intuition is always communicated via narrative. An economist has to establish his characters (be it a country, company or an individual), events (exogenous or endogenous shocks to an economy), plot (the sequence of events and consequentiality) and conflict (misallocation of resources). It’s hard to find any economic theory without the above elements, and these are structurally ingrained in economists when they try to form a rhetorical argument as to why their theory is correct .
The characters in an economic theory or story are very clearly stated, even if personal names are not given. For example, take the concept of asymmetric information, where one party has more information than the other in a transaction . The conflict has also been called the principal-agent problem, easily setting up both the protagonist and antagonist for an event. The principal is the director or CEO of a company, and the agent is one of the executives in the company. Since the principal is not always around to monitor his business, the agent has incentive to cheat, or misuse funds. For example, in the early days, when a merchant sends his assistant to a different village, he has no way to confirm if the assistant is being honest or pocketing the profits himself. This way, the assistant has more information than the merchant, since he is physically present with the funds and the goods, while the merchant in still at their home village. In this narrative, the protagonist is the principal, and the dishonest agent is the antagonist. These characters have motivations, usually to maximize profit, and face conflict when profits are hindered.
Events take place in economic theories all the time. The ‘events’ can be endogenous changes, meaning that they usually happen as a direct consequence of the character’s actions in an economic model . An endogenous change could arise from the fact that a goods seller chooses to increase his price of goods because there is a great demand for his goods. This is often demarcated by a movement of a point along the supply curve in a demand-supply curve. On the other hand, an exogenous change is a change that arises from variables that are not in the model. For instance, in a demand-supply graph for the price of labour (worker’s wages), an unexpected change in oil prices, or shocks, could indirectly increase the cost of operations for a company, and force them to suppress wages. This is shown with a shift of the whole supply curve to the left in the demand-supply graph (see appendix 1). Thus, the events have a temporal and consequential flow, like a plot.
If one were to use the three-constituent plot structure as a point of reference, the events in an economic theory usually have a rising action and a falling action, sometimes quite literally on the graph. Denouement, or the end point, in all economics narratives is usually a state of equilibrium . On a demand supply graph, a state of equilibrium is reached only after price and quantity have adjusted to the shocks or other events. In a very minimal plot, there is a rising action (a shift of the curve upwards due to a negative oil price shock), a conflict or climax (the state of non-equilibrium from having a misallocation of resources, since the price of wages have not adjusted for this change in price of oil) and a falling action (when the price of wages fall to accommodate this change in oil prices). Each event leads logically to the next, until it reaches the equilibrium, or when the economy reaches a stable allocation of resources. In a macro-economy, equilibrium can be reflected as peace and stability, perhaps after the country has survived economic turmoil either because of a natural disaster or political incompetence. The equilibrium is the idealistic ending of a theory as in a narrative. Economists are never happy without the closure of an equilibrium, and all theories are plotted towards the equilibrium.
While the misallocation is often a source of conflict in economics, there is another source of conflict that is more concerned with micro-economic agents; uncertainty, which deals with the fact that we can never be sure of the probability of an event occurring. An economic concept that deals with uncertainty is game theory, whereby a rational individual has to make a choice between all known possible outcomes . In this framework, an individual maps out all his possible actions; all his possible endings (see appendix 2). When he chooses one action, he has to completely forgo the other possible actions and hence the other possible outcomes (opportunity cost). The motivation of the character is his happiness, or as economists like to say, utility. Models assume that human beings are rational creatures that try to maximize their utility, and this resembles the basic motivations of most characters in a narrative. Utility hence becomes a measurement of how much an individual is willing to pay, or forsake, for his goal , and this can be interpreted as a plot device for this individual’s story. An individual calculates the risks that any action of his will bring, makes his decision, and advances the plot, hoping to reach his stable equilibrium in the end.
Who, then, narrates the story for an economic theory? The economist, as the author of his theory, assumes the role of a third person narrator, because he speaks from outside the setting in his story, telling us the characters’ motivations via exposition through economic language (utility, profits), and showing us how a series of events leads to an outcome that prove his theory or framework right. There have been multiple occurrences of economists using narratives to make their theories more compelling, the most famous (or infamous) being Karl Marx, who turns his communist theory into a rhetoric tale in The Communist Manifesto . In this tale, the setting is clearly established (the post-industrial dystopia of Europe). The characters are the bourgeoisie (owners of capital, the antagonists) and the proletariat (the labourers, the oppressed, and the protagonists). Marx clearly sympathizes with the labourers, and outlines a series of events that will lead to the disintegration of the two classes: the bourgeoisie suppress wages until they cannot be suppressed => the proletariat are forced to overthrow the bourgeoisie because of the unliveable financial conditions => there are no longer any bourgeoisie and everyone lives as individuals of an equal class. Each event leads consequentially to the other, and Marx addresses the reader (he passed this manifesto as a flyer to people on the streets) in second person, imperatively telling him to rise against the oppressor, inspiring him with the promise of a free tomorrow (denouement). The theory, thus becomes a vehicle of communication between the economist and the audience. We now know of course, that the concept could not reach an equilibrium, and that the theory failed in practice, even drawing the ire of author George Orwell in Animal Farm, but this illustration shows the rhetoric nature of economic theories, as opposed to rules set in stone.
Therefore, I am certain that narrative is a huge component of economic principles. I have clearly outlined how an economic theory is structured like a narrative, and how it incorporates the same elements such as characters, settings, events, plots and endings to tell a story. The purpose of this story is to show how an economist’s theory is executed, and the ending is always a point of equilibrium. This brings us back to the beginning on why economists are always arguing. They are in essence, challenging the endings, or equilibrium, because they have a different narrative. Different economists, have different notions of equilibriums in mind because they have different settings . Maybe their models accounts for an exogenous shock that the former economist failed to see, because his setting was limited. All economists tell stories with their graphs, some go further and tell it through literal narrations to make their arguments more compelling. The human element has always been ingrained in the science of economics, despite the rigidity of mathematical laws in calculations, and as long as there is a human element, there will always be a narrative element.
- An exogenous shift in supply curve on demand-supply graph.
- Joan Robinson, “Contributions to Modern Economics”, Academic Press, 1978
- Paul A. Samuelson & William D. Nordhaus. “Economics (18th Ed)”, Irwin/McGraw-Hill, 2004
- Ferdinand de Saussure, “Courses in General Linguistics”, Duckworth, 1983
- Seymour Chatman, “Story and Discourse”, Cornell University Press. 1978
- Donald N. McCloskey, “The Rhetoric of Economics”, American Economic Association, 1983
- Steven N. Durlauf, “ The New Palgrave Dictionary of Economics (2nd Ed)”, Palgrave Macmillan, 2008
- Jeffrey M. Wooldridge, “Introductory Econometrics (5th Ed)”, South-Western College Publications, 2012
- Donald N. McCloskey, “If You’re So Smart: The Narrative of Economic Expertise”, The University of Chicago Press, 1990
- Roger B. Myerson, “Game Theory: Analysis of Conflict”, Harvard University Press, 1991
- Alfred Marshall, “Principles of Economics. An introductory volume (8th ed.)”, Macmillan, 1920
- Karl Marx, Selected Writings, EBSCO Publishing, 1994
- McCloskey, “If You’re So Smart”, 1990
I wrote this paper for my GEK1049 Narrative module. Posting it here on the suggestion of a friend who read it. Got an A, a bit higher than what I thought I’d get. It’s dry, and felt weird for me to write since it’s effectively talking about how fictional my major is. Three years devoted to fiction. Ha.