If two economies are to be compared, there has to be some measuring. But what is to be measured? As technology progresses, more and more data is collected about the economic affairs of individuals, companies, corporations and government organizations. But how should this be distilled down to a few simple, easy-to-explain numbers that tell us which economic system is better?
The word better, when defined in some very specific and quantitative terms, can have literally hundreds of precise, actionable meanings. There is little need to cite examples, but for the record, one can compute the total economic transactions made, the amount of energy consumed, the amount of food produced, the number of vehicles on the roads, the average square footage of the dwellings of the individuals, the ratio of the top quintile’s average earnings to the lowest quintile’s, the amount of taxes collected by the highest echelon of government, and on and on and on. One could also write justifications for many of these measures, going around and around without settling on anything. Perhaps this could become a parlor game, in which everyone has a chance to define their preferred economic measure and then there is a secret vote on the best.
Why not have ten different measures? Then different systems could be compared, and one might be better at measure one and another at measures two and six, while yet another is great at measure nine. If we want to make a recommendation of a system, or define some details of a chosen system, there has to be a decision as to which measure, or weighted sum of measures, is to be used to make the call. Having ten measures get us no nearer to recommending an economic system than having none.
If we ask for preferences for different measures of an economy, every intelligent person might come up with a different one. A person who grew up hungry might have strong feelings that food production per capita or food consumption per capita might be the best measure, although that is a measure, which if used for an economy, would push the population towards obesity. Mean square footage of dwellings is a measure for someone who grew up in a cramped and crowded dwelling, but not for someone who grew up in a large and lonely mansion. Someone with military experience and an appreciation for its need might think that the level of spending on armies and navies that can be afforded is the best and safest measure, while someone who grew up with a parent who was excessively sympathetic to the poor would thing some income parity measure is the best. One can go on and on about this as well, as there are so many possible experiences that can be the subconscious or conscious background for a preference for a measure. Maybe the idea of having some vote on what is best would be good, except that would not please those who believe in monarchy or oligarchy, unless the vote were restricted to the royal family or those who were in the top 0.1% of the economic food chain.
Is there any measure possible that does not depend on the feelings and even the whims of the particular economist who is being consulted on the issue? Many could certainly proclaim that some simple or complex measure had this measure, but when dredging up the basis for it, it comes down to emotion or self-interest, or perhaps the self-interest of some group. What therefore is the point of trying to figure out an improved economic system, if there cannot be any agreement on what constitutes ‘best’ or ‘better’ or even ‘good enough’?
What alternative exists for defining an economic system and recommending it for adoption? One could simply ask an individual to design it, without bothering about any qualitative measures to validate that it is somehow, in some way, the best one. Who could be asked? Those who already control the economy? The current system, with some modifications to solidify this control and sweep even more wealth, income and power into their hands, and make their acquisitions permanent and irrevocable, and also inheritable, might be the obvious answer. Another possibility is to discover the god of economics, and find a bit later on those who can get messages from this god inside their minds. They could write down the messages and the information could be fitted together to make up an economic system. Or some other group might be asked, like the top generals. What might their response be?
Defining ‘bad’ isn’t nearly so difficult. If people are dying from starvation, something is wrong, and the system failed. If population is being drained by migration to other lands, again, something is wrong, if the motivations for the population decline are based in economics. Then things get fuzzy. If people are chafing about having to spend time in commuter congestion everyday because of the price of housing near work, perhaps the economic system is bad in how it zones land. If there are long lines for obtaining the necessities of life, even though they are available, possibly the part of the economic system relating to distribution is faulty. Universal complaints are an indication of an error in economic system design, unless the constraints are so tight that one complaint cannot be satisfied without creating another, potentially worse, one.
There could be very many economic arrangements that do not give rise to universal complaints, meaning that the set of ‘good enough’ economic system might be quite large. This means that if we use popular outcry as a measure of the goodness of an economic system, the bin of acceptable systems could be quite full. And the willingness of a population to object to some aspect of their economic system might vary quite a lot, with some more stoical populations willing to put up with situations that a more clamorous one would take to the streets with. Here, media has its effects as well. Where media plays a large role in people’s lives, in other words, occupies a great deal of their time, the advice of those who control the media, filtered through the various message-giving instruments a media system has, might make a difference in what is acceptable and what is not. Again, somewhat murky.
This brings us back to the same point made elsewhere. Culture plays a large role in defining what is desirable and what is acceptable in economic systems. Take corruption as an example. There are many different kinds of corruption, and it can be overt and obvious to everyone or concealed behind all manner of legal constructions and privacy rules. One population, of a homogeneous culture, might regard petty corruption as just a part of life, something everyone knows about and everyone participates in, while a second population, also homogeneous, might find it horrendous and seek to expunge every single instance of it. The second population might regard legal corruption, where laws are written to allow many kinds of payoffs to politicians without any law being violated, as ignorable, while a third population might see legal corruption as no different than illegal corruption as it was based on the same thing: politicians selling their vote for some sort of benefit to them or their relatives or some affinity group or former colleagues, or whatever. Thus, culture plays a large role in public outcry and in defining the bin of acceptable economic systems.
Popular culture does not simply appear in a puff of smoke and be learned and wholly accepted by a population. It is something accumulated over time, but more importantly, passed on from generation to generation through the means of training and education of the younger generation by the older. This means there might be populations without any culture at all, where they might be homogeneous or heterogeneous, but they simply do not pass on values, opinions, motivations, heritage, and other bases to the next generation, but allow the young to pick up what they can from wherever they can. If this is the state of a population, almost anything can fit into the bin of acceptable economic systems. It also means that any individuals who want to be able to structure the economic system to fit their definition of good, better, best, can do so most easily if they can convince a population to stop transmitting their culture from generation to generation, and leave it in the hands of some specialists. And as a last step, the specialists have to be willing to climb aboard the support train for the economic system preferred by those who have the means to disrupt intergenerational transmission of culture.
It is certainly possible to devise an economic system that has some laudable attributes, and perhaps one which can be shown to meet a variety of measures of goodness, but as long as the culture is determined by those who prefer another system, good to them and perhaps not so good for the large majority of the population, there is little need to work too hard to define its details. Unless, of course, there is some means by which such a better economic system can gain the attention of the population – an unlikely event.