How will we know an economy of mana if we see it? Papakura māmā vs rational economic man – By Tania Pouwhare

Despite its best attempts to legitimise itself as a hard science, the philosophy of economics has its fair share of presumptions and ‘laws’ that simply aren’t borne out by the evidence, are flat out disproven, are insufficient or fly in the face of social norms.(1)

From the: “fickle, partial and superficial” measure of GDP growth; the bias toward capital over labour; fiduciary duty; privatisation and the so-called tragedy of the commons; that the economy is values-neutral; or that the market is democratic because it ‘votes’ with the dollar (patently false if you have no agency in the market) – the list of tired (and failed) ideas goes on and on and on.(2)

Another of those deficient assumptions is that of homo economicus, or ‘rational economic man’; an absurd and perverse caricature of the worst of humanity. Ever logical and with perfect knowledge, the theory goes, he makes decisions based only on maximising personal satisfaction and utility. But as economist Kate Raworth describes him, he is “solitary, calculating, competing and insatiable…. standing alone, money in hand, calculator in head and ego in heart”.(3)

But why does this matter? It matters because the theory of homo economicus is pernicious; it has seeped into the bedrock and the nooks and crannies of the economy – admired, encouraged, enabled or even mandated in commerce, finance, regulation and elsewhere – and is an important keystone in classical and neo-liberal economic theory.

Rational economic man plays out in plain sight in the fiduciary duty of business – to extract maximum profit for shareholders regardless of the negative externalities to people and the planet (even, unashamedly, after being massively bailed out by public funds, as was the financial sector which gambled on what was essentially a giant ponzi-scheme, causing the 2008 global financial crisis – the epitome of rational economic man).(4)

Along with the USA and UK, as part of the trio of extreme free market experiments, Aotearoa New Zealand embraced the idea of self-interest.

In 1987, in what Emeritus Professor Jane Kelsey describes as “an extraordinary excursion by a government economic agency into the realms of ideology”, rational economic man was re-presented by Treasury as “rational ethical human position”.(5)  But this renaming of homo economicus (as “ethical” and “human”, even) was simply a cynical attempt to gut the welfare state. Treasury embraced public choice theory where social and health needs would be met by the market mechanism; agency and choice expressed only through individual consumerism of market products and services.

The cornerstone of the social contract formed out of the Great Depression, the Social Security Act of 1938, was rocked to its foundations:

“There was no room for putting altruism ahead of self-interest, compassion ahead of efficiency, or mutual obligations and collective identity ahead of individual benefit. Nor was there any doubt about the intrinsic superiority of the market-place”.(6)

Treasury’s 1987 briefing to the incoming government was more than just theory, they intended to use it as a “basis for policy decisions in the real world”, and so they did.(7) But it did more than structurally change fiscal policy which is still evident today, the ideology of rational economic man pervades how ordinary people relate and behave to one another, such as the pejorative view of beneficiaries or refugees; changing the very nature of our culture.

Rational economic man encourages us to believe the worst of others and reduces our capacity to “heed our nobler instincts” such as compassion, empathy, solidarity, sharing, giving and helping.(8) It weakens the economy’s precious social fabric; undermining the very social capital that enables our society, and therefore economy, to function effectively and cohesively.

Most of us wouldn’t tolerate someone like rational economic man in our private lives or social settings, so why do we accept him in our economy?

The antidote, as we’ve discovered, is to privilege collective altruistic action. When manaaki prevails over self-interest great things are possible – in other words, when we intentionally take care with and care for the mana of others through active and sincere generosity, support, mutual aid, solidarity and nurturing.

Ko Huiamano, a project of Kootuitui-ki-Papakura and supported by The Southern Initiative, was a whānau-led initiative to make homes in Papakura warm, dry and healthy. Armed with knowledge of making homes healthy and safe and partnerships with housing experts like Habitat for Humanity and Beacon Pathway, a group of local mums and a dad developed a peer-to-peer model to reduce moisture and increase warmth.

The result? For $200 worth of basic (and reusable) materials, like the humble bubble wrap, they could make a home much warmer and drier.(9) Hundreds of whānau were helped. People’s health improved. It encouraged whānau to do other things in their home life. But more than that, it built the agency of whānau living in the double bind of poor housing in one of Auckland’s poorest areas. Unlike homo economicus, their collective motivation wasn’t profiteering, ego or self-interest, but the simple pleasure of seeing their neighbours, families and friends flourish:

“Being part of the journey is the most vital part for me. Our work is helping to maintain health, home, relationships and whaanau in the community. Sharing the power of knowledge brings smiles to the community. You see the positive impact our work has on tamariki.”(10)

The secret to Ko Huiamano was in the principles of its design and execution; whānau-centric and using a tikanga framework that reflected Māori mores from the beginning and throughout the process:

  • Privileging whānau, community and indigenous knowledge, decisions, values and control, rather than that of social service, expert-driven or market-led methods. The approach was strengths-based, as opposed to traditional deficit-based interventions, which enabled the project to iterate prototypes based on whānau and community aspirations, resourcefulness and protective factors. Technocratic bureaucratisation is the flip side of marketisation of services and neither are creative enough to solve complex social problems. If we want efficient redress to enduring social problems, those in positions of power, authority and with access to resources must share, or even give way, in decision-making in the spirit of participatory democracy.

  • Peer-to-peer transmission of knowledge and skills (mutual aid), rather than whānau as passive consumers of social or market services (if they can be reached at all, especially with whānau who actively avoid the state). It was the peer-to-peer sharing of knowledge and the freely given practical assistance, time and aroha that made the difference. This enabled the model to replicate like a popular meme, and the ‘how-to’ information became part of the knowledge commons, accessible to anyone in the community. In the spirit of reciprocity, feedback from the lived experience of whānau involved in Ko Huiamano helped housing experts to test some of their theories.

  • Investing in social capital – that undervalued and overlooked domain of the economy – was essential. The pressure to deliver results is part of public sector life and, with this stress, comes the temptation to jump straight to delivery and downplay the need for whakawhanaungatanga. But the initiative wouldn’t have worked without spending time in building trust and relationships. And herein lies an important lesson – valuing deep work not transactions. The result was a more efficient, effective and faster system response that built both the human capital of adults and social capital across the community.

“Some whaanau are excited to have a home assessment and can’t wait, others might feel a bit whakama because of the state of their house. By the time we get there, whaanau are relaxed because they feel familiar with us and know something good is happening.”(11)

This is what the economy of mana looks like.

In contrast to homo economicus, who seeks only financial return for self or shareholders, Ko Huiamano is “a movement of change that is galvanising interest in creative, community-led responses to complex social problems”.(12) It mobilised talent, skills, connections and lived experiences of the very people excluded by the economy by positioning them as the protagonists at the outset.

The material difference made to people’s homes demonstrates multiple positive externalities (over and above the obvious savings to the health system), utility, productivity and increasing returns – all prized maxims in economic theory. All of this was derived from the largest (and most invisible and undervalued) labour market in the country, women’s unpaid work, and an inherent pro-social desire to act on “nobler instincts” – to make all houses healthy homes, for all kids.(12)

This is how we grow an economy of mana.

We cannot take our social capital for granted; it needs to be vigilantly tended to as a fundamentally economic issue. We are seeing the failure to do so playing out in developed economies across the world with political and ethnic polarisation, mis/disinformation, social grid lock and failures in democratic systems and government institutions. The economy is critical to creating thickly woven social fabric and if we are to bring the Living Standards Framework to life, it cannot be the poor cousin to human, natural, financial or physical capital.

Fortunately, it’s not that hard to build all capitals at the same time and build new market and social norms; the promise of the future economy lies in mana enhancing interactions that are tika and pono, and privileging values-laden models, as Ko Huiamano does.

The extractive, ‘I’m-alright-Jack’ mentality has no place in a just and inclusive economy – it’s a relic of those “tired set of ideas” referenced by the Minister of Finance in his 2020 Covid budget speech as the country began to countenance how to grapple with the many uncertainties brought on by the pandemic.(13) But regardless of the pandemic, those ideas were still “tired” anyway. The time of rational economic man is surely up and the era of the economy of mana must be ushered in.

 

Read the Ko Huiamano report: Changing lives one home at a time.

 

(1) Raworth, Kate (2017) Doughnut Economic. Seven Ways to Think Like a 21st-Century Economist. Pengiun Random House UK.

(2) See Raworth (2017). p.60; Kelly, Marjorie and Ted Howard (2019) The Making of a Democratic Economy. Building Prosperity for the Many, Not Just the Few. Berret-Koehler Publishers Inc.; and Klein, Naomi (2019) On Fire. The Burning Case for a Green New Deal. Allen Lane.

(3) Raworth (2017) pp. 95-96.

(4) And, as economist Anne Pettifor notes, these financial institutions were not subjected to the discipline of the market nor the state. ‘Business as usual’ endured with financial services too big to “fail or jail”. Ann Pettifor in a 2019 #NovaraFM interview Paying for the Planet? Ann Pettifor on the Green New Deal.

(5) Kelsey, Jane (1993) Rolling Back the State. Privatisation of Power in Aotearoa/New Zealand. Bridget Williams Books Limited. p.77.

(6) Ibid. p.79.

(7) Ibid. p.77.

(8) Robert Frank quoted in Raworth (2017). p.100.

(9) Watch here for Deanna Howard-Afeaki’s story about how the temperature in her home was raised from 12°C to 23°C and here for kaumātua Peter and Leila MacIntosh’s story about the Ko Huiamano initiative.

(10) Whānau member Millie Moerua quoted in Papakura Kootuitui Trust and The Southern Initiative (2019) Changing lives one home at a time. p11.

(11) Papakura Kootuitui Trust and The Southern Initiative (2019). p.12.

(12) Ibid, p.15.

(13) Waring, Marilyn (2018) Still Counting. Wellbeing, Women’s Work and Policy-making. Bridget Williams Books.

(14) Hon Grant Robertson, Minister of Finance (2020) Budget speech. New Zealand Government. p.13.