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GDP's Ontology Stack
Mind Matters is a newsletter written by Oshan Jarow, exploring post-neoliberal economic possibilities, contemplative philosophy, consciousness, & some bountiful absurdities of being alive. If you’re reading this but aren’t subscribed, you can join here:
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Ok, in we go.
GDP’s “Ontology Stack”
Why, despite widespread criticism, do we still cling to GDP as primary metric for economic vitality? In the same 1934 report where Simon Kuznets first introduced the concept of GDP, he cautioned:
“Economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income…”
The GDP question is a metaphor for our economy on the whole: why, despite glaring and well-documented failings, do we carry on using the same system and methods that are causing the failures?
To explain, Eric Beinhocker - professor and director of Oxford’s Institute for New Economic Thinking - introduces ontology stacks.
GDP is not just a metric, just as the present economy is not just an economic system. GDP is the top-most, visible portion of a coherent ontology stack:
At the base of GDP’s ontology stack is a particular conception of the human condition: hedonism. As per Hobbes and Bentham, human are creatures that seek to maximize pleasure via utilitarian calculus (philosophical, psychological, and behavioral layers of the stack). This view of human beings is formalized into a series of mathematical assumptions and inserted into a model of the world that sees the economy as an equilibrium system (economic systems theory). From this basis you get a particular set of welfare theorems, that is, ideological frameworks about what welfare is and how it can be achieved via economics (normative framework).
Finally, you get GDP - the metric that allows us to keep track of how we’re doing, according to the ideological basis it rests upon. Beinhocker sums this all up:
“…one under-appreciated strength of GDP is a kind of ontological coherence that most proposed alternatives do not have. One can draw a historical and intellectual line from Thomas Hobbes’s proposition that humans seek to maximize pleasure, to Jeremy Bentham’s utilitarian calculus, to the development of utility theory as both a positive and normative decision theory in economics, to the welfare theorems of Kenneth Arrow and Gérard Debreu, to the notion that maximizing GDP is good for society.”
To meaningfully and enduringly replace GDP, we have to dive to the bottom of the stack. We have to replace the philosophical tradition of hedonism - the idea that humans are pleasure-maximizing beings - with something else. That will ripple up the stack, causing new categories to emerge and adapt to the ground shifting beneath them.
Beinhocker: “…to date no challenger has developed an alternative ontological stack with the coherence of the existing one.”
The point of Beinhocker’s article is to review just such a challenger to the existing ontological stack - the SAGE framework. I’m not going to summarize it all here, you can read the article if interested. In short:
The crucial starting point is that SAGE’s ontological stack starts out from Aristotle, rather than Hobbes & Bentham. Human’s are not conceived as pleasure-maximizers, but as eudemonic beings. Beings that want life-satisfaction and meaning.
Beinhocker then traces how this ripples up the stack. Notably, his bread and butter is tracing the systems theory shift from general equilibrium models to complex adaptive systems:
“If humans were hedonically motivated, rational, utility maximizing creatures, if utility was generated primarily through consumption, and if the economy in fact settled into states of general equilibrium, then GDP would be a justifiable proxy for well-being. But as KLMDS [the authors of SAGE] recognize, the real world is one of multi-motivated human beings, interacting in constantly evolving webs of cooperation, social relations, and complex institutions, creating emergent patterns of system behavior (e.g. growth, inequality, carbon emissions). This is more appropriately and realistically described and understood as a complex adaptive system.”
In the higher tier of welfare theory, moving from the utilitarian tradition to the eudemonic implies a shift from neoclassical welfare economics - which conceives of welfare and freedom as negative freedom, or the absence of explicit coercion - to something like Amartya Sen & Martha Nussbaum’s capabilities approach.
The capabilities approach recognizes that welfare is not only freedom from restraint, but “the freedom to pursue one’s notion of the good life and fulfill one’s human potential.” This introduces a positive role for welfare:
“…such positive freedoms are only meaningful if one has the capabilities to pursue them. Thus, true agency depends on the capabilities provided by factors such as healthcare, nutrition, education, and political rights.”
And so on up the stack, presumably to a dashboard of metrics rather than unidimensional GDP.
Beinhocker’s broad point is that “the search for alternatives to GDP requires not just new metrics, but a new way of thinking about human nature, social relations, the economy as a system, and that system’s interactions with the natural world.”
And there’s a lot of ongoing work on this front. Mariana Mazzucato wants us to revisit theories of value (rather than the presently reigning, [price = value] theory). Rutger Bregman’s recent book tries to rectify our anthropological understanding of human nature, countering the Hobbes-ian idea that we’re all self-interested savages with a more modest: in general, human beings are pretty decent. Kate Raworth’s work on doughnut economics is trying to help us re-conceptualize what the economy is, and how it interacts with the natural world. Etc.
We already have a number of proposed alternatives for GDP - even dashboard indicators. But Beinhocker finds them insufficient for various reasons. I don’t know if the SAGE framework will provide something that sticks, but I guess the point is, nothing will stick until we develop new ontological stacks with at least as much coherence as the incumbent.
Economic systems are tied to world-views. On one hand, this means economic change is a slow, long, difficult process. On the other, it means that when change is occurring, we’re changing much more than our management of scarce resources. We’re changing how humans live, and how they conceive of that life in the first place. It’s an exciting time to be alive.
New Ontologies, New Economies
Speaking of achieving new economic systems via new ontologies, I read a really wonderful essay by Jackie Wang recently: Oceanic Feeling and Communist Affect.
The “oceanic feeling” is either an infantile regression to the time when we floated in the womb, feeling “at one” with our mothers and thus the entire universe; or a mystical state of consciousness during which boundaries dissolve and we experience our true, underlying ‘oneness’ with the universe. It depends who you ask.
At first glance, it might sound a little too reminiscent of the human potential movement from the 1960’s, who believed that cultivating new forms of consciousness - higher degrees of human potential - would spillover to recreate the social world.
“I will take up the latter form of oceanic feeling in my essay for the purpose of elaborating a project of communist affect. In particular, I am interested in how the disintegration of the ego alters one’s orientation to the world and others. Given that the oceanic has the potential to unsettle subjectivity, I argue that the oceanic can be a point of departure for new socialities and political models that do not rely on discrete selves.”
But the essay does not fall into outdated fantasies. It’s a nuanced and fascinating look at the psychoanalysis of ego-dissolution, and the role ‘unsettled subjectivities’ might play in developing new social relations.
I particularly liked her quoting of Gérard de Nerval:
“Though some psychoanalytic thinkers have disavowed the oceanic, at its best, oceanic feeling can, as Gérard de Nerval says, illuminate the ‘transparent network that covers the world’ and sensitize us to the way that ‘everything lives, moves, everything corresponds’”.
She writes that, rather than seeing the oceanic is either panacea or regression, it can just offer another place. Another configuration of consciousness that helps generate contrast, and thus perspective, on the typical states of consciousness we inhabit. Having these alternate spaces that generate contrast allow us to move between them, to alternate between them and use each to enrich the other:
“Perhaps, rather than trying to purge, disavow, avoid, or control, the “traumatic excitation” of ocean feeling, it makes more sense to dwell in it, to silence the repulsive dread of maternal suffocation, to inhabit the feeling (getting filled-up and blissed-out) knowing full well that on the other side of the experience lies an opportunity to assimilate the gift (of direct knowledge of the space beyond and outside the ego) by processing and naming it (in psychoanalysis or through artistic creation and other acts of sublimation). Perhaps it would be possible to alternate between these divergent affective spaces and use them to enrich each other.”
Alternating between divergent ‘affective spaces’, or states of consciousness, helps us realize the contingency of any, and all, states of consciousness. By recognizing that no state of consciousness is fixed and eternal, we can begin inquiring into the mechanisms and forces that sculpt the particular states of consciousness we’ve come to know as “normal”.
Normality is a construct. Anything that is constructed can be deconstructed, and thus reconstructed with more intention and participation. Opening more spaces in our lives for the oceanic feeling is a potent way to reveal the contingency of constructed normality, and thus, invite us to recreate what normal feels like.
The God Gene
Some comic relief, from the wonderful John Cleese:
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