COLERIDGE AT THE G20

COMMENTARY ARCHIVES, 22 Mar 2009

Richard Bronk

The Romantics have much to teach today’s leaders about the limits of rationalist economics

Among the briefing notes being prepared for G20 world leaders, I suspect very few are drawing attention to the lessons taught by Romantic poets and philosophers. This is a pity. For they have much to tell us about the limits of universal rationalist solutions, the perils of ungoverned emotions and the need for imaginative solutions to problems of uncertainty.

As Isaiah Berlin noted, Romanticism alerts us to the fact that there are seldom universally applicable answers to the ethical or practical problems of life. This is partly because in a world of value pluralism there is no single right answer to the question of how we ought to live our lives – what trade-offs we should make between values such as security and freedom or freedom and equality. It is also because we are embedded in distinctive social organisms, each with their own institutions, culture, logic of appropriateness and economic specialities.

This is relevant to the G20 debates. Gordon Brown – the improbable heir to Enlightenment rationalist fundamentalism – is arguing for global solutions to global problems. It is, of course, imperative in our interconnected world that countries co-ordinate their responses to ensure they neither damage each other’s economies nor lead to a perverse spiral of beggar thy neighbour protectionism. But the liberal version of Romantic organicism bequeathed by Herder, Burke and Coleridge reminds us why solutions to the pressing problems of the day should be largely national (or perhaps regional, at EU level).

This is not to encourage national isolation or selfish disregard for the welfare of others. Rather, national solutions are often necessary to ensure the continuous and spontaneous development of each nation’s specific cultural, political and economic life. For one thing, only nation states (and to some extent the EU) have the democratic legitimacy to make the value trade-offs central to most important policy decisions; and, for another, every country has its own distinct areas of specialisation and commercial interests. For instance, much of the world has no interest in policies to help New York or London regain their former glory as financial centres.

From a global point of view, we have seen the enormous dangers of economic monoculture. Just as relying on only one seed strain leaves agriculture at risk of catastrophic crop failure when new diseases emerge, the global internalisation in recent years of the monistic world view implied by the Washington consensus and neoclassical economics has left world economies exposed to simultaneous infection by the destabilising and unforeseen effects of financial innovation. The world economy was more stable in the post-second world war period when different economies agreed rules for economic interaction but retained radically diverse economic cultures.

The Romantics understood another peril of using only one set of models or metaphors: because the theories and models we use structure our vision and analysis, relying on only one is like depending on a single lantern to see in the dark, or using one set of cognitive spectacles to make sense of everything about the world. If different countries instead try out different imaginative approaches and internalise different models, there is more chance that some of them will see new problems emerging in time to warn the rest of us.

The great danger is that we exchange the market fundamentalism of recent years with a similarly hubristic conviction that the great policy brains of the world can devise a single "New Deal" that will solve all our problems. Not only does this fly in the face of the dangers of universal solutions, but in a world made uncertain by constant innovation and self-reinforcing emotional reactions to events, we also need to realise the limits of any such grand plan and, indeed, of reason itself.

Far better to learn from Keats the merits of "negative capability" – being willing to remain in uncertainties without "irritable reaching after fact and reason" – and stay imaginatively receptive to pointers as they emerge.

Coleridge described boom and bust as occurring when rational "circumspection" gives way to "emulous ambition", "incaution" and "a vortex of hopes and hazards, of blinding passions and blind practices". Crucially, though, he realised that economic rationality is the fragile product of a necessary balance between the "lust of lucre" and moral restraint.

He is right of course. Economists tend to view rationality as the inalienable right of all economic agents. Instead, as we have seen, it disappears into thin air when we lose our moral compass. Re-engineering a moral framework for markets is part of the solution to the current crisis. But only the church and Gordon Brown are likely to think that could be done at a global level.

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Richard Bronk is author of The Romantic Economist – Imagination in Economics

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