Wealth of Nations Revisited

“Leadership in thought that leads to action” is the phrase Harlan Cleveland, President of the Academy from 1991 to 2000, adopted to characterize the mission of the Academy. We — and the world — need it now, more than ever.

We need innovative and truly fresh ideas, ideas that can open up new directions in the evolution of Earth and humanity. We need ideas that will enable us to better understand our own cultures within a global context, ideas that will inspire and motivate people and lead us to concrete actions. The changes that we need are much more profound that any revolution of the past. Our world is for the first time truly global — its people, societies, economies and ecosystems interlinked as never before, as Walt Anderson, Academy President from 2000 to 2008 so aptly brought out in his 2001 book All Connected Now: Life in the First Global Civilization. This was also the view that united the founders of the Academy, one of the first globally-oriented nongovernmental organizations to emerge in the post-World War II years: among the list of the 40 charter members are the names of five Nobel laureates, a co-founder of UNESCO, and the first directors-general of the Food and Agriculture Organization (FAO) and the World Health Organization (WHO).

Their achievements say something about the commitments of the founders of the Academy, the emerging global consciousness that they anticipated. The globalization process is still underway and accelerating, altering the conditions of all our lives. In today’s hyperconnected world we are faced with new opportunities for cooperation and also new pressures that sometimes lead to violent conflict. These are the two faces of the global information society, in which more people possess knowledge and skills than ever before and are faced with a greater array of choices and challenges than people have ever confronted before: intertwined economic, ecological, social, political and moral opportunities and crises superimposed on soaring human aspirations and energy demands, climate change and demographic transition. In recognition of the need for new thought to support more effective action, the Academy’s founders set out to “explore the social consequences and policy implications of knowledge” — to advance the astonishing innovative capacities of technology and science, and simultaneously to assess the dangers and inequities that new knowledge so often brings.

These large-scale visions and concerns were central to the first work undertaken by the new Academy in the 1960s, and they continue to be addressed in its recent General Assemblies — The Governance of Diversity (1994), The Global Century (1998), The Future of Knowledge (2005), and The Anthropocene Challenge (2008) — and in many articles and books by Fellows of the Academy; and also in special editions of journals such as Futures, Peace and Policy, and The Annals of the New York Academy of Sciences.

Four decades ago in a report to the Club of Rome, Limits to Growth projected a startling perspective that challenged conventional thinking and compelled the whole world to reevaluate both our thought and our actions. Controversial at the time of its initial publication, it still provokes lively and sometimes heated debate about fundamental issues of global development and the methodology of systems-dynamics research. Lofty goals and calls for action will remain unfulfilled unless the concepts on which the world is presently based change as well. The ideas we need to address today’s challenges must transcend limited, partial perspectives, so often the source of disastrous consequences for the ascending progression of knowledge seeks to ever more fully reconcile, integrate and unify apparently divergent perspectives.

We are faced now with intertwined economic, ecological, social, political and moral crises superimposed on increasing energy demands, climate change and demographic transition. Simultaneously any form of war, violence, even armaments, is a threat to humanity. Though we know more and we are more capable than ever, our world is more vulnerable than ever, and the rapid changes we generate form impressions of uncertainties, often more frightening than real uncertainties. We do, indeed, live on a planet with limited natural resources. However, our ideas and our imagination are limitless. Knowledge is an inexhaustible resource. There is no limit to learning, and no limit to our creativity. The Industrial Revolution was based on the efficacy of money and machines. For two centuries financial capital was deemed the most essential ingredient for human progress. In recent decades, the growing awareness of the unlimited potential for human resourcefulness has compelled us to evolve a wider concept of both resources and development focusing centrally on their social and human dimensions. Changes in thought have led to changes in action.

Though we are children of this Earth, we may not be able to survive unless we travel and colonize even more than our Solar system, as S. Hawking emphasized. We do need much more energy and solar power plants positioned in space for terrestrial electricity could be the first step. Curiosity, imagination and creativity are basic features characterizing our evolution. The last two centuries were extremely rich, bursting, exploding with profound paradigmatic ideas always generating technological, economic and social changes. The names of Faraday and Maxwell, Planck, Einstein, Curie, Bohr, Schrödinger, Heisenberg and Dirac, of Darwin, Mendel, Watson and Crick, of Freud, Adler and Jung, of von Neumann, Pauling, Tesla, Fermi, Oppenheimer, Turing and Venter mark scientific and technological revolutions initiating nuclear and synthetic biology eras, ICT and brain-cognitive research. It is as if all scientific disciplines are bubbling with ideas and the gap between humanity and sciences discussed by C.P. Snow could be overcome by consilience as emphasized by E. Wilson. Even more profoundly, business, governance and scientific research meaningfully merge and unite in this common endeavor of generating leadership in thought leading to effective action and giving, as so brilliantly demonstrated by successful billionaires as B. Gates, W. Buffet and many others who continuously give, and by G. Soros’ Open Society.

We need imaginative new work in every field of science, the humanities, and the arts. We also need work that transcends all limited perspectives, that is not only interdisciplinary but transdisciplinary, that harmonizes intellectual integrity with social responsibility. Only then can it effectively address the 21st century’s challenges. This need for fresh perspectives is illustrated by a paper in this volume on “The Wealth of Nations Revisited,” which calls for the integration of economic, political, social and psychological thought regarding human welfare and well-being. This process of unification needs to encompass not only physical fact and scientific principle, but also to be in harmony with the highest values and greatest good for humanity.

The world is aswarm with ideas that warn us of perils on all sides. Negative commandments are powerful in highlighting the dangers and compelling us to address our problems, but they often conceal undreamt, revolutionary opportunities, as the perceived dangers of the Cold War concealed the unimaginable vistas of the Internet. What the world most needs today are positively creative ideas that will enable us to fashion a better future — ideas such as the visionary dream of European unity which has transformed a continent plagued by centuries of rivalry and warfare into a place where war between states has become unthinkable.

The Academy was founded 50 years ago as a fellowship of engaged artists, scientists, scholars, and leaders in public and private organizations. As we mark this anniversary, the South-East European Division has decided to commemorate the occasion by launching a journal under the motto “Leadership in Thought that Leads to Action”. Many ideas are required, from as many as possible. We initiate this endeavor on the subject of Wealth and Welfare, published in collaboration with European Papers on the New Welfare, established by and now led for over five years by Orio Giarini, Fellow of WAAS, Director of the Risk Institute, and Member of the Club of Rome.

The journal will be published annually/biannually in print and electronic form with the opportunity for active discussion afforded by websites of the SEED, WAAS and the journal’s own dedicated site www.seed-ideas.org. Articles will be published in English. Websites will be in English and in the language of the location of the website, thereby increasing the opportunities for reader and contributor participation.

We invite you to join us in this endeavor and to contribute to our coming issues.

For the South Eastern Europe Division (SEED), World Academy of Art & Science:

Ivo Šlaus, Chairman of Cadmus                                          Garry Jacobs, Managing Editor

Comments

Re: Comments on Wealth of Nations Revisited

by Staff - 09/28/2011 - 14:12

I found the content intriguing and I found very little to disagree with regarding the goals and agenda of work set forth.  Moreover, the paper took me back to thinking hard about some of the issues in social policy I have struggled with over the years.

I have three observations and some suggestions that I hope will be helpful to you.  I believe they are interconnected. 

  1. The paper blurs a distinction between a theory of economics, which has a limited scope of applicability in the minds of most people, and a theory of society, which has a comprehensive scope.
  1. The shift in theoretical scope is made necessary by the referencing societal level problems to justify program of work being undertaken.
  1. The paper implies that doing the work will be efficacious, that the work done on formulating a new economic theory will facilitate or cause the societal transformation envisioned.  Yet, there is no discussion of how this will happen.

Blurring of Economy and Society

The blurring of two different theoretical scopes begins in the second section, Theoretical Discontent.  Paragraph 4 contains this statement: "The very purpose of social theory is to … solve problems and optimize the well-being of the human race."  The term social theory replaces the term economic theory without explanation.  More importantly, the scope of the problem being addressed in the paper is expanded well beyond the scope of responsibility assigned to economic institutions and to economic theory. 

Sections 2 through 7 stick fairly closely to issues related concepts and premises generally considered within the domain of economics.  In the last paragraph on page 20, the paper even offers a statement that clearly limits the responsibility assigned to economics: "goal of economics is wealth creation".  Then, in sections 8 and 9 the scope of responsibility assigned to economics is again expanded to encompass responsibilities usually assigned to institutions other than economics. 

Necessity for Shifting the Theoretical Scope

The expansion of the domain of economic theory to the domain of societal theory is made necessary by the delineation of problems of economic justice and human welfare presented as the problems to be addressed by a new theory.  Problems of such scope would have to be addressed by institutional changes that reach well beyond the generally understood domain of economics.  Certainly, politics, government, and policy-making will have to be brought into the process of achieving the societal transformation envisioned.  Section nine explicitly recognizes this.

This issue links back to the first in that starting with economic theory as the scope of work, as was done in the introduction, was too limiting and had to be abandoned somewhere in the paper.

Efficacy of Putting Work into Formulating a New Economic Theory

I have been assuming that the primary audiences for the paper are economists who might contribute to the work of the project and funders who might be persuaded to finance it.  Members of both audiences will want to be persuaded that working on a new theory of economics/society is at least necessary to achieving the envisioned transformation of society. 

I don't see an argument in the paper that justifies putting time and money into the theory building project rather than, or even in addition to, putting time and money into theory building.  I believe that discussion is needed.

Suggested Changes to the Paper

  1. Add the following to the introduction:
    1. an explicit statement that the goal of the work is to make an important contribution to a program of global societal transformation,
    2. a brief description of the envisioned societal outcomes (points in Section 8 would seem to fit this part; others are here and there in other parts of the paper)

  2. Eliminate Section 8 by moving content to the introduction.

  3. It seems to me that moving the list of Essential Issues at the end Section 9 would work better at the end of what is now Section 3.

  4. Modify the introduction to align the theoretical scope of work being done with the scope of the problems being addressed.  One way to do this would be to add politics, government, and policy making to the discussion of economics in the introduction.  Then explicitly state that the required theoretical work is a theory of society. (Some text for this can probably be taken from Section 9)

    Making this change will force a decision about how to close the introduction and how to modify the rest of the paper:  either by saying the rest of the paper will be confined to delineating the shortcomings in economic theory that must be addressed or saying that the rest of the paper will delineate shortcomings in our theory of society and then making the appropriate changes in the paper.

    Reworking the bulk of the paper to encompass shortcomings in societal theory could be done by identifying a problematic concept or premise in our theory of society and then delineating how that concept/premise plays out as a shortcoming in one or more of our theories of economics, government, politics, and policy making.  This, of course, would require a major rewriting.

  1. Insert a new section before section 2 that explains why program of theoretical work is necessary to achieving the envisioned transformation. 

    I believe this discussion should reference a theory of societal change that explicitly formulates a significant role for ideas and/or communities of shared understanding in creating social and political forces for change.  (I offer some thoughts on a theory of change below.)

  2. Assuming that keeping the core of the paper limited to the domain of economic theory, an explicit transition back to the societal scope of the problems and the program of work being undertaken will be required to close out the paper.

Thoughts on a Theory of Societal Change

A debate that seems to be going on in economics is whether people are the rational economic actors that traditional economic theory of markets requires.  Defining the question in this way reflects a view of human behavior I don't share. 

As a sociologist, I believe rationality is situational, so people express and apply different rationales in different social situations.  Peoples' lives are organized into various situational niches by participation in ethnic communities, work groups, political groups, age groups, etc.  Those social situations or niches give rise to situational or niche rationalities (which can also be called theories).

Having this view of how society is organized seems to fit best with an ecological theory of how societal change is produced or happens.  The relationships within and among these situational niches are very dynamic.  Distributions of economic and political power among the situational niches that make up society necessarily change because of the dynamism of the relationships.  Coalitions of niches form and disintegrate; some coalitions are strong enough and last long enough to impose new goals, rules, and practices on the rest of society.

Certain theories of how the world works and how the world could work can play a very important role in the formation of coalitional forces for change because they offer a larger rationality that transcends the differences among a number of situational rationalities. Thus, if one wants to create a social force that can change the world, one must create a coalition of social niches, and that requires the formulation of a theoretical perspective that imparts the overarching coherence of understanding that situational theories tend to undermine.

Offering up such a theoretical perspective is ideal work for a community of academics and other intellectuals.

Again, I hope these comments are useful.  I enjoyed working on them.

Jim