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Deep strategisation: the schlock of the new

By Nicholas Gruen - posted Thursday, 28 June 2018

The OECD recently published this OECD report on inclusive growth. It's certainly a Good Thing that the OECD regards alleviating inequality in the light of various things including:

  • Sharply rising inequality within many countries – even though global inequality is falling with poorer countries incomes growing much faster than richer countries.
  • The equivocal support of the discipline of economics since its turn towards scientism.

The report is certainly worth a good look. There's lots of good information in it. But, like so many similar documents, it's full of strategisation. When I coined the expression, I described it as a practice which somehow embodies "the primacy of rhetoric (you know all that stuff about 'our narrative') over thought". You'll often see statements to the effect that "because citizens are more and more demanding and governments have limited resources, therefore governments should become more productive".


That's strategisation. Because, if you think about the statement, governments should take any opportunities they can to become more productive whether or not they happen to be in a specific situation, and more to the point, what opportunities governments have to improve their productivity is strictly governed by the facts on the ground, not by some strategic context. If it would be totally great if government improved its productivity, if it would enable the government to provide 'leadership' by doing so, if the Prime Minister promised to do it in his policy speech, it makes no difference. Governments should improve their productivity by as much as they can always and irrespective of the circumstances.

I've called this phenomenon 'deep strategisation' because something similar is going on. We're making strategic something that is more mundane than that. Since the rise of modernity, a core function of all governments has been tackling inequality – this is nearly as true of the 'free market' US as it is of 'social democratic' Sweden as embodied in their progressive tax and payments arrangements. But now we're packaging this central function up under a name.

Selling the equity agenda by another name

What's the significance of calling a policy concern with equity the new name 'inclusive growth'? The fairly clear benefit is that you get to label something, make it sound contemporary and all that, which can be important if you're trying to interest or 'sell' an agenda to people or (as we say these days), if you're trying to get 'traction' for a 'narrative'. But beyond this, the possible gains for the OECD come with likely hazards for clearly thinking through the policy issues and the directness with which we can move on the issue.

Calling it 'inclusive growth' means you can kind of start all over again. You can 'position' (as we say these days) the whole agenda as a timely reaction to contemporary developments. You can have a new Inclusive Growth Initiative in the OECD, a new topic code in the academic literature and on and on.

But here's the rub – or one of them. The topic of equity is an old one in economics, going back at least to Adam Smith's moral philosophy:

This disposition to admire, and almost to worship, the rich and the powerful, though necessary to maintain the order of society, is, at the same time, the most universal cause of corruption of our moral sentiments.


That's quite a statement from the father of modern economic liberalism. In any event, equity started becoming formalised with the formalisation of economics in the half-century or so after 1870. By the end of that period, it was a mainstream underpinning in British economics that, just as Lance Armstrong assures us that 'It's not about the Bike', (even if we didn't know how right that was at the time) so economics wasn't about the money.

Money was important, but in the final analysis it was an input, the basic output being 'utility', which some of the economists proposed would be accounted for in 'utils'. This was at a time when economics was seen as just one part of our make-up. But in today's more conceptually freewheeling, not to say louche world, we call it 'wellbeing' or 'happiness'.

The fact is that, whatever metaphysical entity you're in pursuit of, it's commonsensical that, other things being equal, a dollar to the poor will buy you more of it than a dollar to the rich. But there's no mention of these disciplinary underpinnings that I can see – or find using word searches for "Marshall, Pigou or Pareto". So all this deep intellectual and cultural background is sloughed off. And we find ourselves back in the eternal present.

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This article was first published on The Mandarin.

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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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