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Book review: I spend therefore I am: the true cost of economics

Do students see a degree as just a box to be ticked? Picture: Phil Wilkinson

Do students see a degree as just a box to be ticked? Picture: Phil Wilkinson

A thought-provoking critique argues that we base too many decisions on economics, says David Robinson

In The Prisoner, that completely weird and therefore cultish TV show from the late 1960s, Patrick McGoohan was forever trying to escape his mysterious controllers. “I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered,” he raged. “I am not a number, I am a free man.”

Philip Roscoe – who teaches management at the University of St Andrews – might not be old enough to remember The Prisoner, but I’m sure he would sympathise with McGoohan’s outburst. Because being stamped, indexed, briefed and numbered is something all of us have grown accustomed to. It’s a large part of the way we live, and is becoming ever more so as the values of economics permeate ever deeper into our lives.

If you want to measure how comprehensively that has happened, let’s go back to the Sixties and look at something other than The Prisoner. Back then, for example, a house was a home and not an investment opportunity, a university education was worth pursuing for its own sake, love was something that might happen without the help of a dating website’s algorithms, and bank managers and not computers approved mortgages. In all these areas – to say nothing of the NHS – the values of the market still hadn’t penetrated.

They have now. Today’s Patrick McGoohan might rage that he isn’t a number, but he is. One of his numbers is his credit rating. These started with a firm in rural California in the late 1950s which came to be known as FICO. Before long your FICO score was used to determine whether or not you were given a mortgage. In July 1995, the US-backed mortgage lender Freddie Mac set the level at a FICO score of 660. Anything below that was called “sub-prime”. We all learnt what that meant when the US housing market crashed just a dozen years later.

Roscoe’s book isn’t an attack on economics per se, but it is a critique of the way in which economics alone is used to interpret human behaviour. Right from the start, it never was. Adam Smith, for example, believed that once merchants had made enough money to meet all their own needs, they would give away the surplus to the poor. Today, because the values of economics are so dominant – rather than, say, professional pride, comradeship or public spiritedness – we seem to believe the opposite: that the only thing that can motivate an already rich person is the incentivisation of yet more money. Once that happens, it becomes a self-fulfilling prophecy – let’s call it bankers’ bonus syndrome – that distorts our society by underlining the importance we place on greed and self-interest.

Roscoe’s book offers an elegant intellectual history of how economics reached its present pre-eminence, but surely just as important is the way in which so many more things became measurable, and we could start creating league tables for things we once would never have dreamed of rating.

And so we become still more numbers. A low Qaly – the unit health economists use for quality- adjusted life years – will mean we won’t get treated (if we have Alzheimer’s, say) with palliative medicines. A low place in the league table for our school or university may mean we lose out to students from higher ranking institutions when decisions are made about which undergraduates and post-graduates to take on. As for the university itself, the commodification of education is doubtless already affecting the whole range of courses it offers. “If one of the leading rankings of universities incorporated the score for neon signage,” Roscoe points out, “campuses would resemble Las Vegas within a week.”

Roscoe’s point is that economics forever makes the world it describes. Put a premium on hitting turnover targets rather than improving nursing care and you can end up with a health scandal like the one that happened at mid-Staffordshire. Cut out the bank manager who knows you personally and you end up with mortgages being granted to people who can’t pay and – since the human element of the transaction has been minimised – can’t see that it matters anyway. Accept the values of the market and university lecturers will be forever boosting their “h-index” (the times their publications were cited by others) instead of giving a damn about their students, universities will play safe with appointments, and students will be encouraged just to look at education as little more than a succession of different boxes to tick.

This is a fascinating book on so many levels, but is weaker on offering solutions to the problem it describes. Maybe we are indeed wrong to put too much emphasis on a QALY score, for example, but how else can NHS managers work out how to allocate scarce resources? And although computer dating agencies – which Roscoe seems to have researched in depth – might seem to be extending the values of the marketplace further into affairs of the heart, where’s the harm, provided that their clients are happy with them? Even Roscoe has to grace to admit that marriages brought about with the help of dating agencies last longer than ones that happened the old-fashioned way.

All the same, this is a timely and important book, if only because it reminds us how much economics increasingly affects our decision-making. As the day I finished his book I read a survey that said we’d vote for Scottish independence if it made us £1.37 a day (or £500 a year) better off, I think he’s probably right.

 

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