Wednesday, March 31, 2010

Reforms, Progress and Modernisation

The Brownshirt Hanns Johst remarked: 'Wenn ich Kultur höre … entsichere ich meinen Browning.' Personally, I actually rejoice at the word “culture”, but there are three words that make me reach for my Kalashnikov: the words “reforms”, especially in “structural reforms”; and the related words “progress” and “modernization”. They are not only under-defined, hold-all, ambiguous, weasel words; they are invariably used to mislead, con and manipulate. [Another such word is “priorities”].

"Reform" is used to represent a change for the better, a re-shaping or re-structuring of something (respectively its outside shape or its inner structure) to eliminate at least some if not all of its defects and drawbacks. But it means nothing and lends itself to mislead until the defects and drawbacks are specified, together with the direction and the extent of the changes that are being contemplated, their speed and the costs associated with those changes. And as long as there is a general recognition and acceptance of the defects and drawbacks as such, and of the desirability of those changes and their extent, pace and cost. This is most rarely the case. When in Italy a convicted criminal in government, who has gone unpunished thanks to laws ad personam legislated by and for himself and his accomplices, a corruptor of judges, of witnesses and minors, calls for justice reforms unspecified but designed to extend his impunity, not unnaturally hair stands on end. And, invariably, structural reforms are by definition changes that involve the transfer of large chunks of power and cash from the public purse or the general public or in particular from the weak, the old, and the deserving poor, to small groups of undeserving monopolists, speculators, rentiers and other unsavoury characters. As in frequent recent radical reforms – worldwide – of the taxation system, of pensions, and of any form of state regulation.

“Progress” is simply a change – whether due to a reform or to exogenous factors, like technical change – which is positively judged by whoever refers to it. Except that progress, like any other change, may have a cost, or side effects, whose total evaluation may be positive for some people but not for others. The invention and diffusion of motorcars was undoubtedly progress in many ways, at first, but it also has had adverse effects. Progress by definition enhances performance in some direction, but unless a change (for instance a technical change) is absolutely superior to the previous situation in all respects, true progress happens only when the change is “optimal” in the sense of reaching a higher level of “utility”/”satisfaction”/”welfare” as measured with reference to the “welfare function” of the population should there be one such function and we knew it, or to the “objective function” of a democratic government, if they have one and will tell us it if and when we ask.

“Modernisation” is the implementation of the latest manifestations of apparent progress, but here, again, the latest technology or institution are not, ipso facto, necessarily absolutely superior and therefore desirable unconditionally. What is most appropriate to one country, or situation, may be inappropriate or even counterproductive in another country or situation. The depletion, or gradual exhaustion of readily accessible natural resources may well make old-fashioned and apparently obsolete products and techniques optimal at some point in the near future, in preference to more “modern” products and techniques. Modernity is often absolutely superior, of course, but not necessarily always.

Confronted with reforms, progress and modernization, you don’t have to praise Marx and pass the ammunition, but you should read the fine print before signing on the dotted line or placing your cross on the ballot paper.

To paraphrase: 'When I hear the word "reforms", I reach for my culture'.


Anonymous said...

Worse still is when certain words come in combination. In the 1990s, whenever one heard the phrase "young, energetic reformer," in the context of all kinds of assorted characters milling about on the East European and post-Soviet landscape, one's fingers started going down one's throat!


D. Mario Nuti said...

Yes, Ashok. In the old Soviet days the direction of "reforms" could only be that of economic de-centralisation and political democratisation, though that left un-determined the extent, mode and pace of change.

Post-Soviet reforms included inefficient and unfair private appropriation of public assets, brutal deflation, populism, the spreading of corruption, state capture, instant and total unilateral liberalisation of trade, instant convertibility of the currency at the cost of drastic devaluation, inordinately large real rates of interest, capital flight, etcetera.

Jack said...

Does your hostility extend to reformers?

D. Mario Nuti said...

A reformer is someone who supports moderate and gradual change by legal means, as opposed to either a supporter of the complete status quo (in Italian an immobilista) or a revolutionary striving to change radically the entire system regardless of means and costs.

I am not at all hostile to reforms and reformers, my attitude depends on what it is that they propose to reform, how far and how.

Ron said...

I thought the quote was from Goebbels?

D. Mario Nuti said...

So did I, until I checked on the Oxford Dictionary of Quotations. It does not matter anyway, it's the thought that counts.