Monthly Archives: April 2014

Economics, Education and Unlearning

There is a new movement afoot in the world of business, namely social finance, and  a new concurrency in the ethical, diverse and empathetic way that organisations with an appropriate mission are related to, funded and supported. Both from the world view of the consumer, but also the wholesale and retail social finance sector.

There is also a stirring of new thought and sensibility in the world of economics. How it is taught, how it is understood in terms of social impact and how diversity of viewpoint, model and perception should be just as important as rigid neo-classical dogma.

A challenge to the accepted order....
A challenge to the accepted order….

In the North West of England this new thought is well expressed by the internetIconMini University of Manchester Post-Crash Economics Society (PCES). Their paper Economics, Education and Unlearning is at once a polemic against the orthodoxy of their present academic tutorial staff and system, but is also a proxy for how a new generation of economics graduates will come to see this diversity and system choice in framing new concepts for the future.

Download a pdf copy hereIcon for Adobe PDF

Much of the PCES paper is a critique of the detailed processes of tutorials and curriculum delivery at the University. However, there is also much to be gained from a reading by those interested in economic thought in the wider context.

The students argue that the sole focus on the internetIconMini neo-classical mode of economic thought leaves all alternative theories and approaches in the void. The students argue in their paper that to be equipped as economists in a world of variety, choice and new model start-ups, then they should be able to abandon the…

elevated economic paradigm, often called neoclassical economics, as the sole object of study. Other schools of thought such as institutional, evolutionary, Austrian, post-Keynesian, Marxist, feminist and ecological economics are almost completely absent…

In the real world it is these shades or degrees of economic thought which so often temper the real aspirations of economic players, at the local, regional, national and now often, international level.

Interestingly, the forward to the paper is delivered by internetIconMini Andrew Haldane of the Bank of England. In it he describes how the internetIconMini Adam Smith concept of the ‘invisible hand’ in Smith’s 1776 book The Wealth of Nations gave us the prime mover of neo-classical economics. That the ‘…pursuit of self interest, at the level of the household or firm, resulted in aggregate outcomes which could be optimal for society as a whole’. The thesis that greed is good, that competition triumphs all.

Haldane’s argument is that for the 21st Century, for a social finance environment, built on an ethical and socially responsible framework, it is Smith’s earlier work, The Theory of Moral Sentiments, published in 1759 that should now become our principal text, ‘…it places centre stage concepts such as reciprocity and fairness, values rather than value’.

Whatever your originating position on economics, from neo-con to Marxist- feminist and all hues in between, we hope you can be persuaded that the students of Manchester, and other centres of learning, have marshalled a compelling set of arguments to amend and redirect the teaching of economics in the U.K. It bodes well, we would argue, to have a new generation of economic thinkers unafraid to mould theory and practice into a many headed fiscal hydra, in order to eat into the economic disenfranchisement and unfair distribution of so much of the world’s population.

We were uplifted.

Ethical business with a social dimension...
Ethical business with a social dimension…

Is the firm doing good?

Doing Good Cover Image
Doing good?

This policy research working paper, from The World Bank, is authored by Michael Klein and Sumeet Kaur. It provides a comprehensive current, working look at how businesses strive to reflect their efforts in the  internetIconMinitriple bottom line‘ analysis.

Icon for Adobe PDF  You can down load a pdf copy of this paper here…

Klein and Kaur argue that firms go through three stages on their journey to achieve social and environmental outcomes in their business activities. They call it a ‘staircase of results measurement‘.

  • A recognition of organisational readiness. That the embracing of social and environmental outcome is extant across the activity base, and that some process for measurement can be put in place.
  • The next step is the creation of a result. The recognition that something has been done, or achieved.
  • The third level for Klein and Kaur is the assessment of impact for the organisation.

The paper does look at the various ways in which impact assessment can be measured, but that this ‘patchwork’ of assessment frameworks can only really provide a range of ‘product characteristics’ for a companies output.

The authors argue that accounting for profit remains the only viable way of assessing costs and income as a framework for commercial performance. Klein and Kaur also argue that the current measurement of social and environmental impact indicators are ‘unrealistic’, and that companies should ‘re-focus’ on profit as the true impact measurer.

We would argue that this is a depressing scenario, one which only emphasises traditionalist thinking, taking a position on mainstream capital endeavour – perhaps only to be expected from The World Bank?

True, there is perhaps no fully integrated, aggregate data driven model to assess the triple bottom line, yet The Klein and Kaur position negates the real passion that individuals and communities have in support of their social and environmentally concerned businesses.

The social business, we would argue, fully recognises the need for surplus generation, in order to both survive as a legal entity, but also to resource and drive its social and environmental commitments, wherever they are on their individual journey.

The two aims are not inimical, they just haven’t been written up yet by the academic community! Read the paper and see what you think.

 A note about World Bank publications:

Mainstream economic documents from The World Bank are generally only available by subscription through learning institutions. Working papers, released for public notice, can be accessed from the internetIconMini World Bank eLibrary pages by individual on-line subscription.

Ethical business with a social dimension...
Ethical business with a social dimension…