Home > Uncategorized > New York stops the revolution in economics too?

New York stops the revolution in economics too?

from Peter Radford

Yesterday’s election result in New York State effectively ended Bernie Sander’s tilt at the Democratic windmill. Here’s what I wrote to a friend who was intent on parsing the numbers:

And, the point is?

We can analyze all we want. It doesn’t alter the result. It provides nice fodder for coffee shop talk, but doesn’t help anyone.

It’s time to move on. Bernie will keep going. Clinton will become even more annoyingly patronizing. Her surrogates [like Krugman] will gloat. She will likely win in November. And America will struggle on regardless.

Clearly 2016 is not the year of change. It is a year of upheaval on the right, complacency in the center, and only the beginnings of rebirth on the left.

I never imagined that the Democrats would be the party of centrist corporate establishment thought. Or that it would be the Democrats enforcing the wishes of big business over and above those of the working people. But that’s where we are.

I suppose none of this is a surprise. The total dominance of social/cultural issues as a defining line in politics has obscured the equally powerful dominance of right wing economics across the board. Neoliberalism is the monotone ideology of both parties.

The revolution will have to wait.

Buried in there is my attitude towards economics. By enabling neoliberal ideology, and following the lead of Hayek and Friedman, economics debases the role of liberal democracy and representative government. This casts a long dark shadow across the subject.

Never has it been more clear to me that, notwithstanding the professed personal positions of individual economists, contemporary economics has become a profoundly anti-democratic project.

This is ironic only with respect to longer history.

The 1930’s were critical in the demise of the democratic tradition within economics. The setting into concrete of its severe limitation as a subject dealing primarily with the mathematics of choice and allocation was masked only temporarily by the superficial victory of Keynesian macroeconomics. The intellectual catastrophe of the 1970’s and 1980’s, which saw the emergence to superiority of the formalized ideologically anti-democratic version of economics that now dominates, was merely a logical extension of the 1930’s limitation.

The subject finally emerged as a tool for performative reconstruction of society. Its methods were exported to ensure the elimination of alternative viewpoints. Its dogma was translated and accepted into the prevailing faith for business strategy, economic policy, and many other aspects of socio-economic life.

Even the supposed schism between various flavors of macroeconomics which gives great life to the academic elite and provides large numbers of hand-wringing articles about the state of the discipline is trivial when set beside the socio-political stranglehold neoliberalism has on our society.

When the major debate about ‘what went wrong’ is being conducted by the same people who led us into error; when that debate is conducted entirely in the same theoretical framework as that of the error itself; when the policy outcomes are only relatively modified; and when the entire discussion seems so unrelated to the day-to-day actors who populate – or are supposed to populate – the markets and economies that economics is meant to understand we know that nothing will change.

Don’t we?

Until economics rids itself of the fantasies of equilibrium, maximization, and the pursuit of an efficiency that cannot be located in an uncertain world, it cannot be much more than an narrow academic pursuit. Right now, by convincing itself of the efficacy of its method, and by the unethical exportation of that method into subject matter where the simplicity of economics has no relevance, economics has managed to make itself into nothing more than a technology for the exact opposite of its original intent: it is no longer trying to understand economies. It trying to invent them.

It is social engineering.

And like a lot of twentieth century social engineering it has become a very sinister undertaking.

Let’s take it back.

  1. April 21, 2016 at 12:37 pm

    The delegimization of neoliberal economics has to be taken outside academia before it can get a real grip. Sanders and Occupy and others can point out social problems but the broad middle don’t yet believe that neoliberalism is as flawed as it is or that the mainstream economics profession has no more evidence for its postulates or rigour in its methods than medieval alchemists. It starts in lecture 1 of Econ 101 when a specious argument is presented claiming that there is a competitive equilibrium. http://www.johnmlegge.com/blog/maths-of-competitive-equilibrium/

  2. Lori
    April 21, 2016 at 7:47 pm

    It doesn’t have to start there….I teach Principles. I tell my students that perfect competition doesn’t exist, we go through the assumptions one by one and I ask if they ever see that happen in real life…..then I tell them that the rest of the course including the other three market structures usually taught are all instances of market failure that need intervention…..you can twist that story…..so I am at a small liberal arts school and I only teach a few business students each year but still…….someday

  3. anmayhew
    April 21, 2016 at 9:27 pm

    The phrase “market failure” implies something unusual, something that is not ordinary. The student or reader is left with the impression that markets are designed to “succeed” but sometimes “fail.” What does this mean? Markets are socially created organizations devised by humans to organize socioeconomic behavior. We humans can organize them to accomplish many different things. To get anywhere with recreating a study of economies (as opposed to a study of economics) we need to talk not of market failures but rather to talk of and discover how markets are structured by a variety of interests to accomplish a variety of goals, some of which conflict. A quick example: pharmaceutical markets are structured by powerful firms to guarantee high rates of return in part through use of government enabled restrictions on intellectual rights to knowledge; they are also structured by insurance companies to provide access to drugs but to do so in a way that ensures an excess of revenues over payouts; they are also structured by doctors and hospitals who want to keep people alive but also want economic security; they are also structured by both private and private funding to researchers who work at universities and who have an interest in contributing to cures for ailments but who also want tenure and high salaries and who work in universities that want lots of research dollars coming in. And, etc. and etc. Success? Failure? We need a better way of talking about what goes on. A simplified set of market structures designed to provide a spectrum between perfect competition and monopoly as conceived in Marshallian economics will not provide that better way of talking. Sorry, but it just won’t.

    • Lori
      April 21, 2016 at 9:50 pm

      Yes, I understand the world is much more complicated but until I get a textbook or something that helps me to teach this in a different way to students who are forced to take the course…….I make a first step. That the market as thought about by most politicians and other neoliberals does not exist

  4. April 22, 2016 at 1:27 pm

    Deficit budget support has yoked modern economists to a totalitarian harness.

    Spending imaginary debt money avoids democracy by deferring taxes for living voters and making them numb to the transfer of their wealth to the oligarchy by inflation.

    Economists who support deficit government spending are premeditated opponents of democracy.

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