sustainability: saving us from ourselves

David Leonhardt’s piece in the NY Times on reforming health care caught my attention today. As I’ve come to expect from him, it’s well written and makes an important point. But for the moment, I’m more interested in its implied critique of the economy. Specifically, I have been wondering whether we are seeing a shift away from critiques which emphasizes fairness and equity and toward ones built around sustainability and I think his article helps articulate what this might mean.

The last time health care was seriously debated in the 1990s, the rhetoric centered on the 40 million uninsured: How could the richest country in the world allow that many people to go unprotected? This time around, the framing has shifted. As Leonhardt lays it out, disparities in distribution are inevitable; some people will get less out of the system than others as a matter of course. But the way we use the system is unsustainable and it threatens to bring low the rest of the economy.  And that justifies getting the government involved.

This is a big shift. The argument for health care in the 90s was based, primarily, on an ideology of fairness. Leonhardt is arguing from a perspective which I see as fundamentally based on an ideology of sustainability: the health care system is so deeply intertwined with other aspects of our society that failing to act presents a fundamental challenge to the rest of society (and, by extension, the economy).

Similarly, look at the proposals for reforming the financial system which were released today. While there was a brief puff of smoke earlier this year about the excessive income of CEOs (and there is at least a token effort in this reform package at addressing that) its motivations have little to do with fairness. They are all about preserving and sustaining society. Banking—this argument goes—is integral to the functioning of just about everything we do. But it is threatened by the baser impulses of individuals acting in their own self-interest. So the government needs to act.

That, to me, is about sustainability. It is apparently what led Ken Lewis, then Chairman and CEO of Bank of America, to advocate in favor of accepting government intervention when his and other big banks were confronted with it by Hank Paulson last year:

I basically finally said: “We are so intertwined with the U.S. that it’s hard to separate what’s good for the United States and what’s good for Bank of America. So don’t do it on the basis of us being told; do it on the basis that things could get a lot worse in America and therefore for us. And they’re almost one and the same…. [W]e thought we were doing somebody a favor, or the country a favor for that matter.

What kind of regulatory policy does this lead to? Here is Columbia Business School Dean R. Glenn Hubbard reacting to the crisis last fall (before becoming one of the advisors to the Administration on the regulatory brief released today):

The financial meltdown that engulfed Lehman and the uncomfortable responses of policymakers… highlight[s] the need for regulatory reform. The problem is actually not too little regulation — both lightly and heavily regulated institutions are in trouble. And some regulations encouraged the growth of high-risk mortgage lending. We do need smarter regulation: a key step is to broaden capital and liquidity requirements and increase them during financial booms to lean against excessive risk-taking.

In other words, there came a point at which failure to act became morally repugnant—first on the part of Ken Lewis and then on the part of regulators—because doing so would undermine the broader social system. But on what basis? It is not out of an impulse toward fairness or even personal gain. Fundamentally, it is rooted in the impulse to maintain the long term stability and viability of society.

What’s going on here? The idea I’d like to explore (at some length, sorry) is whether this is evidence of a shift in mainstream critiques of the economy.

Traditionally, the left’s critique has been that the economy is really about power. Those who have more power within the market extract rents from those who do not. But at some point, the disparities between haves and have nots becomes so morally repugnant that some force—generally the government, but for a brief period of time in the 20th century, unions—is needed level to the playing field. In the end, the ideological justification for this is fairness or the value of equality. Institutions are temporary settlements which emerge out of power-laden battles over conflicting interests.

The right, on the other hand, traditionally aimed to conserve (conserve being the root of conservative) the institutions, principles and values passed down through history. Institutions embody principles which have been vetted and have withstood the test of time. Classical—Burkean—conservatism is part-in-parcel of Selznick’s insightful comment that “institutionalization constrains conduct… by making it hostage to its own history.” Ideologically, conservatism trusts that history—embodied in institutions—is smarter, in the long run, than one individual or group of individuals acting in their own interests. So policy makers should be weary of undermining the wisdom of history. As a matter of principle, institutional change should be a slow process in which human agency should be as limited as possible.

The tension between the left’s interest in fairness and the right’s interest in conservation set up a tug-of-war which defined politics for much of the 20th century. The equity crowd agitated for government intervention with the goal of achieving more fairness in society. The conservation crowd argued for restraint. The resolution was a “social contract” in which careers unfolded inside large bureaucratic organizations and workers had the right to organize unions, all buffered by a sizable welfare state. All of this was ultimately acceptable to conservatives because it preserved social order. That contract broke down in the early 1980s. The reaction to the organizational state was the reassertion of the individual and individual freedom as a guiding ideological principle (see Jerry Davis’s new book or Chiapello and Boltanski’s take on this in their book, the New Spirit of Capitalism).

As we discussed before in the context of Jerry’s argument, an unchecked ideology of individualism holds less water than it used to. But it’s not entirely clear what has replaced it. The left—at least in the US—has largely abandoned fairness as its guiding principle and critique. And, outside of social issues, the right has abandoned the “conservationist” strain of conservatism. I wonder whether what we have seen in the last year or so with the financial crisis and, ultimately, with the election of Barak Obama is the emergence of a new orienting philosophy: sustainability.

Sustainability is related to the notion of conservation in the sense that it is interested, primarily, in the preservation of the social system. But it shifts the nature of that argument significantly. Rather than focusing on the maintenance of order and stability through systematization, sustainability focuses on interdependence. Its origins are in the environmentalist movement, but I would suggest that statements like Leonhardt’s and even Ken Lewis’s suggest that is has spread to form an ideological basis for government action outside of concerns about the environment.

The argument goes something like this: We live in a highly interconnected society which operates within a series of interconnected systems. Resources (physical, material, social, and political) are not only scarce, they are extinguishable. Institutions are needed, not so much to keep social order, but to ensure the reproduction of the resources needed to reproduce society over time. Undermining any of the systems on which society depends threatens to have ripple effects on others. But importantly, the biggest threat to the system comes not from external threats, but from individuals acting in their own self interest in ways that could undermine the delicate balance on which interdependencies of the system depends. Government action is needed, not to ensure fairness, but in order to save us from ourselves.

The shift from conservation to sustainability is one that the environmental movement made years ago. There was a time when being an environmentalist meant essentially preserving the beauty of nature for ourselves and future generations. But the movement took on much greater urgency as its justification shifted toward energy use and global warming. What had seemed like particularist concerns of a few nature lovers were shown to be intertwined with a general set of concerns about the sustainability of society and of the economy.

Politically, I think this is what explains the ability of erstwhile conservatives like Andrew Sullivan to embrace Obama’s “progressive” agenda. (It goes the other way too, allowing British Conservatives to lure voters away from Labour). Sustainability maintains an interest in the maintenance of the system; but it marries it with a justification and rationale for government action. In the US, it has allowed the left to co-opt and incorporate the notion that history is smarter than we are while rejecting the brand of conservatism which argues that any form of government intervention upsets the delicate natural balance among social systems. The environmentalism movement exposed the fundamental problem with this logic, succinctly captured by the tragedy of the commons: individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even though it is in everyone’s long term interest to prevent this. That idea, I would argue, has migrated to influence the way we think about a range of public policy issues well beyond the environment.

And that leads to some interesting implications for orgTheorists too: it is what underlies Kathleen Thelen’s call to shift emphasis within institutionalism from the particular distribution of rules, powers and outcomes associated with institutions to the mechanisms that reproduce the institution itself. Whereas much of sociology came to focus on stratification or the power-structure debate, attention shifts now toward movements and the collective action problems.  And, for social movements in particular, it suggests a basis for why movements seem to undergo a shift from arguments of fairness toward the “business case”; not because doing so fits them into a myth of rationality, but rather a myth of sustainability.