Economist in social context

Browsing through Financial Times, I came across to an article by John Kay, an economist. This is the second time. I felt curious and visited his website.

His writing looks pretty wide ranging, including, but not confined to, issues on economic trends, business strategy, and their relation to society. He seems to be well equipped with analytical (often academic like) language; and although I hardly know anything about these subjects, his view is clearly difined. For example, in his introductory remark, he briefly contends that success/failure of a company must be analyzed according to what he calls the capability as a corporate body. By doing so, he rejects conventional assumptions that either key figures in a firm or shareholders can be seen as the single decisive factor of explanation. For John Kay, therefore, designs and influence of CEOs and shareholders are not equal to the company they represent or patronize.

This is a part of his more general committment that the age of grand designs (or sanguine modernism) has gone. In the sphere of corporate governance, it means that any designs of CEOs or shareholders cannot adequately explain the fate of their firms. The same applies, he contends, to global economic system as well. There is no sigle standerd by which economic policies of all contries ought to be governed. Hence his critisim of the 'Washington consensus' and his emphasis on the notion of 'embeddedness'. Thus, both capability of a firm and the market must be seen in conjunction with local contexts. This looks similar to a recent sociological trend. Using the notions like 'embeddedness' and 'governance', they are deconstructing the conventional dyads of libertarian market vs state, market vs tradition etc. Of course, I am not in a position to judge whether this theoretical trend actually owes anything to Kay.

Meanwhile, as a cultural historian, I feel that what they mean by local contexts is crucial for this trend: is it implied that there is a single identifiable 'local context' according to which all companies and economic issues can be understood? This may be an implausible position. Yet more crucially, understanding any given local contexts is not equal to judging what is desirable in each context: description and prescription can be overlapping, but cannot be one and the same. What is, then, a role of economists like John Kay?? What are they doing when they are analyzing firms and economics in terms of social contexts in which they were embedded? Are they objectively depicting what is a relevant social contexts; or, are they - be it willingly or unwillingly - involved in value judgement (and thus political acts) of any kinds?

I will leave this as an open question for us to think about. We should watch out how social contexts come in to play in Kay's and others analyses. If the task of economists should inevitably involve not only analysis of, but also value judgement upon, a given society, then such a task would conjure up a whole branch of social science and humanities, ranging from sociology, philosophy, history, and perhaps even literature. This is not simply to say that economists now have to appreciate socio-cultural issues. This even suggests that disciplines supposedly separate from business and economics have much to discuss with someone like John Kay (and by implication, the society at large). By declaring the end of modernism, therefore, John Kay is also declaring the dissolving of the disciplinary boundaries, which itself is a product of the modernity. In so doing, he is perhaps marking the beginning of the age in which not only knowledge of economists, financial analysists, and politicians, but also that of sociologists, historians, and literary critics should play cooperative role in making sense of specific and technical issues in contemporary society.