Financial Daily from THE HINDU group of publications
Wednesday, Jan 07, 2004
Shakespeare plays with economics
The ingredients of drama are in every economic problem, if the drama is meant, as in the great tragedies of the theatre, the confrontation of opposing forces," says Prof. R. A. Mundell and small wonder it has been abundantly reflected in Shakespeare's work. Prof. Turner only tosses and turns Shakespeare's universe of economics in a typical Mundellian spirit, when he says: "Shakespeare made us see the business company as like a theatre company, a troupe of actors whose interactions generate the plot of the play".
"Life with others is not necessarily a zero sum game but an arena where all may profit and competition increases the pay off for every one," he adds.
Shakespeare's economics appears to be a simple plain vanilla Smithian economics of 1776, which got much discredited in the wake of the Great Depression of the 1930s and the subsequent onslaught by Keynesian Revolution, but eventually got resurrected in the 1980s and the 1990s the era of globalisation and marketisation.
Being a poet and theorist of links between the sciences and humanities, Prof Turner has remarkably displayed his linguistic/scholarly skills, by judiciously blending it with his academic inventiveness. His dexterity and skill in making infinite interpretations of Shakespeare's language is truly amazing.
Like any other classic work, Shakespeare's poems, plays and sonnets can be interpreted in a variety of ways depending upon the wealth of information at the command of the reviewer. Prof Turner's work is an exceptionally astounding one as it not only attempts to paint a rosy Smithian Economics on the canvas of Shakespeare literary plays, but also faults with his critics for their gross neglect of the positive contributions of Shakespeare. To what extent Shakespeare himself would have conceived a kind of interpretations attributed to him is a moot point.
Shakespeare economics in Mundellian spirit
The main contention of Prof Turner is that "Shakespeare was a key figure in creating that Renaissance system of meanings, values and implicit rules which eventually gave rise to the modern world market, and which still underline it."
But, unfortunately, laments Prof Turner, Shakespeare's seminal contribution towards business and economics has largely gone unnoticed and unacknowledged, as his critics and interpreters both gentlemen and Leftists including university intellectuals continued to despise the market and its values and denounce money and other related matters.
Prof Turner's work is, therefore, an attempt to break this "embarrassed silence" on the positive contribution of Shakespeare and provide a better understanding of his economics language implicitly built into the language of small, cold wet island England.
Shakespeare's core insight on value
Prof. Turner begins well by posing the core questions of economics: What value is and how it is created and ends the paper by showering praises on the benevolent role of market which emerges as an essential precondition for successful experiment with democracy. The answers to the questions surrounding value have remained elusive and inconclusive, as they cannot be explained by rigid mathematical methods. Prof. Turner contends that exhausted by their supplies of fact and tested theory, professional economists and business people must turn back to poets for fresh insights into the realm of value, as poets invariably spend their lives making value out of combination of words that have no economic worth in themselves, being common property, infinitely reproducible and devoid of rarity value.
A lengthy passage extracted from The Winter's Tale, involving a lively exchange of words between shepherdess Perdita and disguised king Polixenes, takes one to an altogether different world of genetic engineering, human tinkering with natural genetic process, clone technology, their ethical and health implications, taming or altering nature for human survival, environmental concern and so on. Prof Turner not merely allows his fertile imagination to run riot, but packs it with solid intellectual stuff. Like an environmental purist, when "Perdita is suspicious of artificial intervention into nature", and questions, Polixenes replies how man as a tool using animal cannot escape from tinkering with nature and thus add value.
A timely reminder to the West on institution called marriage
Even searching for a healthy, kind, intelligent, attractive and honest mate for reproduction purpose is couched in economic terms and Shakespeare rightly and realistically reminds the need for marriage as an investment that earns compound interest in the form of children. A good reminder to the affluent North or West or select East undergoing an adverse demographic profile not having an adequate young working force.
The best policy is to be a rentier, to invest one's genetic beauty into others to marry a woman and have children, preserve thus the inner genetic structure and reproduce into another generation; at each new birth a unique recombination of genes emanate.Unravelling the mystery of value from environment to marriage takes him to the world of poetry itself. When death and decay ultimately take away the individuality of loved human being, the only way to eternalise his/her beauty is not by erecting marble or gilded monuments, but by poetry "the lines of life, that life repair" which is treated as a higher form of natural reproduction.
Towards gardening economics and... the edge of Chaos
Just as `DNA' spells out words and sentences of genes, the long thread of letters that make up a poem which is apparently fragile, intangible but nevertheless more spiritual eventually preserve all the generic and unconscious elements that we wish to preserve. Thus, poetry is treated as the purest form of manufacture churning out the most valueless raw material of all, breath into a valuable good, which eventually help capture and preserve the mind and individuality of an organism. This type of treatment of the subject of value brings us to gardening economics meaning a "technique of growing value rather than extracting existing stores of it embodied in raw materials or the metabolic capital of the labourer".
To drive home this point, Prof Turner makes recourse to science of thermodynamics, catalytic chemistry, the chaotic mixing process, and the wonder child, the silicon chip. The 19th century Industrial Revolution was wrought by a framework fashioned in thermodynamic terms more akin to foetal bird in the egg drawing sustenance and energy from steam generated by fossil fuels, high grade ores, possibly ably assisted by peoples who had accumulated cultural discipline moral/aesthetic tradition.
Relying on Shakespeare's reasoning of tweaking and re-adaptation of natural process, Prof Turner says that modern industry no longer needs a stockpile of free energy which will dissipate into irretrievable form of waste heat, like a full-fledgling bird, it will live off the land rather than the fat of our thermodynamic egg.
He makes a particular reference to the increasing leverage provided by nature to harness immense natural forces and the complex intercommunicating feedback system at the edge of Chaos generating new forms of organisation.
To explain Chaos theory, the cleanest example that comes to a mind of a non-expert is that beating of a butterfly does not influence weather conditions immediately but it does affect weather thousands of miles away, far into the distant future. Monitoring the movement of each butterfly and predicting weather conditions will, therefore, be a surprise; knowledge of industrial chemistry and Chaos theory amply prove that "only a small change of temperature, light, chemistry or pressure can produce large results... The raw materials of new technology are plentiful and easy to extract: Carbon, sand to make silicon chips, air and water. Biotechnology may one day develop perennial cereal crops that will not need tractors to plough them or, even perhaps, petrochemical fertilisers and pesticides. It took a huge expense of coal and oil and iron ore to develop cybernetic control systems that now require only a few ounces of silicon and a tiny flow of current to maintain and which are, in turn, radically diminishing our need for fossil fuels and ores."
Market: Creative destruction or seductive power?
In Shakespeare's conceptualisation, the market is treated as the drama of concrete human interaction, the theatre of the world, wherein a highly turbulent non-linear changes, especially human/moral relations define both short- and long-term economic changes.
His linguistic anatomy of the word `market', presents a wide spectrum of meaning, highlighting all its brutal and pleasant sides. From the French root, merci (thanks), Latin merces (servant/God's compassion), other linguistic root, such as mercenary, merchant mercantile and commerce are examined, leading to the association of the word with `Mercury,' the God of travel and thieves, who conduct the soul of the dead to their final destination.
"Merchants `the middle men' of human exchange and often the carrier of news, information, new science and socially disruptive ideas and diseases take Mercury to be their leader. The marketplace is where both goods and ideas are exchanged and, thus, bears the God's name. Naturally, all the illegitimate and cheating forms or communication and exchange lying and stealing are also under his aegis. Mercy is kin to thievery, both are unjust".
Mercury is the possessor of the Cadricens, the snake entwined rod, the ancient and modern symbol of life and its transformative powers. Like the serpent of Eden, it is the breaker of the status quo, the opener of new perspectives, the originator of new levels of being and consciousness. To champions of globalisation, this will be music to their ears.
Inspiration from von Hayek and a link with Paul M. Romer
Prof. Turner, therefore, argues that the mercy of the market is real. Those who, in the Marxist tradition of seeing the market as impersonal and merciless, are comparing it by interpretation with the intimate world of uncounted cost and unquestioned trust that they believe exists in the family, in a friendship, in a traditional tribal village, or in a non-profit organisation dedicated to some higher voluntary purpose or liberal art.
Perhaps, the market is less forgiving than such communities, though anthropologist, sociologists and novelists have charted the often ruthless politics and unyielding cruelty of families, villages and universities. But communities of this kind are not alternative to the market nor has the market shown any sign of putting an end to then they flourish still as they always did, and their sphere in society is proportionately no smaller in relation to the market than it ever was.
The author's ardent love for market pervades through the paper and Prof. F. A. Hayek the champion of market-led economic order seems to have provided the necessary inputs to extract the output called economics from Shakespearean theatre. Prof. Turner has put his scholarly stamp so much so that 16th Century poet could never redeem his debt to him. In the universe of market economics Washington Consensus and Milton Freudman's Golden Straight Jacket, Prof. Turner will be remembered with all reverence and adoration.
A digression on the treatment of interest. Usuary is a term best defined as interest higher than normal or just, one would like to pay. It is a term not difficult to dislike and despise by gentlemen, Leftist critics, including true Islamic traditionalists. Shylock character in the Merchant of Venice is a typical Jewish money-lending capitalist, the tribe of which was engaged in banking, jewellery, commodities, currency exchange and related money industries during Shakespeare's time. Shakespeare himself was a large investor in financial market and, hence, he did not approve of those who despised market and values, and failed to understand the creative and valuable role played by interest rate, which was treated as the foundation of Venetian prosperity. The author's glorification of high interest by the statement that Shylock is punished at the end for not taking the exorbitant interest he was offered on his bond, but insisting on the worthless pledge of the pound of flesh, puzzles one. Again his famous words ``neither a borrower nor a lender be," transmitted through ``the wretched rash intruding fool'' namely Polonius (in Hamlet), getting stabbed while spying on private conversation, are cited as demonstrable evidence that Shakespeare was the very opposite of his anti-business critics.
The prevalence of relatively high lending rate in India its stickiness and inflexibility downward, under the so-called soft interest rate regime, perhaps captures Shakespearean better understanding of its rationale in a capital-scarce country? How is it that global financial market integration has not brought down interest rate in emerging markets to any significant degree? That is the way market economy would behave and Shakespeare has the answer.
Shakespeare's conceptualisation of value, as conceived by Prof. Turner, has a great deal of correspondence with Paul M. Romer's revelation many years ago that ideas, among others such as technology that can be codified in a chemical formula, or in a better way to organise an assembly line, or embodied in a piece of computer software, and so on, will be the propelling forces of growth.
He argues that ideas and knowledge are abundant, they build on each other and they can be reproduced cheaply or at no cost all. In essence, they do not obey the law of diminishing returns. What Paul M. Romer or Shakespeare, through Prof. Turner, says is simple abundant commonsense, and that is precisely economics, made difficult by professors in classrooms.
(The author is on the faculty of School of International Studies, Pondicherry University.)
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