Sunday, July 8, 2018

A comment on the Raworth-Milanovic debate

A friendly critique of Kate Raworth's book Doughtnut Economics by Branko Milanovic on the Brave New Europe blog has locked the two in a heated debate. One point of contention, has the two in a war of art references, Giotto's "St. Francis" versus Rodin's "Gates of Hell." This rhetorical sticking point appears to be a debate over nature versus nurture. While Raworth appears to regard such a debate sufficient to prove her point, Milanovic appears to take a more structural view. However, in his rejoinder to Raworth's reply, Milanovic plays to Raworth's critique on the question of human nature rather than reasserting his own.

The question Milanovic seems to be getting at, less forcefully in his rejoinder than in his original critique by my reading, is that irrespective of experiments demonstrating the human ability to cooperate when a game calls for it, capitalism, as a game, is simply not set up to foster cooperation at the point of profit. In capitalism, profit and its reinvestment ultimately determines the fate of any enterprise (in non-profits, these are called "retained earnings" or "net income" with imposed restrictions on their dispersal, not their incentive for accumulation).

Whereas Raworth appears to call for tapping into the unawakened ability to cooperate, Milanovic asserts two counterpoints. First, cooperation is already fairly embedded into the system as the corporate form, the university, etc. would indicate. Such institutions could not exist without widescale cooperation, but are nonetheless driven by profit (or retained earnings). What both authors fail to investigate is how such institutions are constituted. Externally, they must serve the interests of profit; however, internally, as intentional communities, worker collectives, etc. attest, institutions can be driven by horizontalism.

The key here is that this does not require a mere change in mindset or even individual practice. It requires building a particular form of rapport between people. To put it in terms of game theory, the Shapley value for cooperation should exceed that of competition (or non-participation). This requires the creation of what we might call 'meta-incentives' - incentives into a particular incentive structure as opposed to others. This has been the historical function of unions, community organizations, etc. What this conversation between Raworth and Milanovic is lacking, in my opinion, is a discussion of community organizing.