| Here's the extended version of my three sense of "renormalization":
(1) In mathematical physics, renormalization is a process of getting rid of infinite quantities that would make various equations physically non-sensical. Inifinite growth on a finite planet is very definition of "physically non-sensical."
In the current edition of Adbusters magazine, Nobel Prize-winner Joseph Stiglitz says:
On sustainability
I think what we've realized is the world cannot afford an extension of our lifestyle to the rest of the world. The problem is that India and China are on the way to trying to imitate our lifestyle. These are two countries with 2.4 billion people. Growth in China has been unbelievable, growing close to ten percent for 30 years. China is already the second largest producer of automobiles, and if it continues on that path, the planet is really at risk. But we say, "Oh you can't do this. It's alright for us to have this profligate lifestyle but you can't, because you might damage the planet." What we have to say is we are changing our lifestyle and there has to be a global compact, a social compact, that we all have to have a lifestyle that treats the planet with the respect that it needs.
A healthy economy involves using our time efficiently and getting enjoyment out of our time. Spending two hours commuting is not a good use of anybody's time. There are many ways in which we are very inefficient. We have not thought through efficient land management. I was in a meeting recently in France where in the central city they were talking about how to redesign the whole city to make it environmentally more efficient, to make sure there is less waste, that the energy that is put out is captured and used and reused. So there are lots of things we can do to increase our overall efficiency.
It's interesting, I think, that conservatives are always lecturing us about how there must be limits, there must be restraints. We can't have gay people getting married! That would destroy everything! Even though they can't for the life of them explain how. And 40-50 years ago it was breaking down segregation that would destroy us all-and if not that, then surely letting women out into the workplace would doom us all! But here's a clear case where anyone with half a brain can see that there really do have to be limits-we can't just order up another planet full of resources where we're done with this one-and conservatives will have none of it!
Of course we know the reason for this: restraints for thee, but not for me! Still, it's funny in a slapstick metaphysics sort of way.
(2) "Norms" also refer to values. "Renormalizing" economics in this sense means putting values back into the equation.
In the same issue of Adbusters, one of the two other economists who shared the 2001 Nobel Prize with Stiglitz, George Akerlof said:
We need to once again base our models on, as Keynes put it, "our knowledge of human nature and ... the detailed facts of experience." We now know that people often do not behave rationally. What we need to include in economic models are the norms and motivations that guide human behavior. People have very firm notions about how they and other people should behave, although they often don't know exactly where these notions come from. Economics has eschewed this kind of motivation and, as a result, it's more solemn than it should be, and it's also a lot less fun. There are many issues in which economics could offer more powerful analysis, and there are many issues in which it gets the wrong answer. It claims that it has insights, but these insights are wrong.
If you go back 40 or so years, norms and motivations would have been part of economists' analyses. Then an intellectual movement which said we should be much more scientific and derive everything from principles of maximization arose. For some reason or other, the notion that people actually care about how we should or shouldn't behave got left out of the methodology....
Economists have to start adding norms and motivations back into their models. People have some kind of view as to how they should be behaving. What makes us happy is largely whether we feel we live up to that view. The way economics is sometimes taught suggests the path to well-being is maximizing consumption opportunities, creating opportunities for the economy to grow so consumers can consume more. But this model has shortcomings. Economists have contributed to the shortcomings by missing the inclusion of norms and motivations. Once you've met some basic needs, what makes you happy is having a view of what you should be doing ... and doing it.
This takes us back Abraham Maslow's hierarchy of needs. Once you've taken care of all the basic needs-what Maslow called the "deficiency needs," because not meeting them made you sick they way a vitamin deficiency does-then you get to what life's really all about-meeting what he called "being needs". The first needs have to met in order to live, the second needs are the reason that you want to live. At a bare minimum, a successful economy is one that enables all its members to meet their basic needs, and have some time and resources left over to meet at least some of being needs as well.
(3) In a third sense, "renormalizing" simply means "getting back to normal"-whatever that is! And I'd suggest that it's at least a 3-fold thing. First, it means getting back to an economic order that's not based primarily on plundering, one in which prosperity is broadly shared, not hoarded by the few. That's one level of normal. Get rid of all the piratization going on. That would take us back to New Deal economic order, which continued up through the early 1970s.
At second level, it means getting back to where the market economy was seen as the servant of society, not the master. That's what the market signified to early market theorists like Adam Smith and Condorcet, who saw it in opposition to the existing, monopolistic system of mercantilism. Today, the so-called "free market system" is nothing but a disguise for the very system it was supposed to oppose.
At a third level, it means getting back to where we live in a sustainable relationship with our environment. The original model for this was our 50,000 years or so of primarily nomadic existence as hunter-gatherers. As soon as we started settling down and inventing agriculture, we began exhausting our resources-building empires and watching them fall once they'd exhausted their resource basis. We've been doing the same damn thing over and over again ever since, and you'd think by now we might have figured out that it just doesn't work.
I'm not advocating going back to the Stone Age in terms of our technology. I wrote my first computer code back in 1973, and I'm happy as a clam to live in a time when there's so much technological development. No, what's normal about the Stone Age is that our technology then served us, and we could maintain it without destroying the environment on which we depended. If we can't be smart enough to figure out how to do that again, then we really don't deserve to be calling ourselves Homo sapiens sapiens.
It's just that simple. |
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