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Impoverishing economics

from David Ruccio

I cringe when I listen to or watch these interviews. But here it is, with the Real News Network.

The interview was based on my recent blog post, “Economics of poverty, or the poverty of economics.”

I also want to recommend a recent piece by Ingrid Harvold Kvangraven [ht: ms], who argues that

The interventions considered by the Nobel laureates tend to be removed from analyses of power and wider social change. In fact, the Nobel committee specifically gave it to Banerjee, Duflo and Kremer for addressing “smaller, more manageable questions,” rather than big ideas. While such small interventions might generate positive results at the micro-level, they do little to challenge the systems that produce the problems.

For example, rather than challenging the cuts to the school systems that are forced by austerity, the focus of the randomistas directs our attention to absenteeism of teachers, the effects of school meals and the number of teachers in the classroom on learning. Meanwhile, their lack of challenge to the existing economic order is perhaps also precisely one of the secrets to media and donor appeal, and ultimately also their success.

Exactly!

It’s the revenge of neoclassical economics, as reflected in this year’s prize in economics, which focuses attention on poor people’s “bad” decisions and away from the structural causes of poverty.

As I argued the other day on Twitter, it’s like saying the climate crisis will be solved by individuals turning off lights and recycling their garbage. Not bad things to do, certainly. But, together, all those individual efforts make up only 1-2 percent of the solution. The climate crisis cannot be solved unless and until we direct attention to the real, structural causes. Here, I’m thinking not only of the fossil fuel industry, but also the way the rest of contemporary capitalist economies are organized around the use of fossil fuels—in the production of goods and services, cars as well as digital information. Such a system generates enormous profits, which flow to a tiny group at the top, and continues to destroy the commons, where most of us live and work.

It’s that system that needs to be radically transformed. And as long as economists are lauded for focusing on technical issues around the margins and not on the real causes—of Third World poverty, global warming, and much else—the discipline of economics will continue to be impoverished.

  1. Jamie Morgan
    October 21, 2019 at 10:22 pm

    Hello David, Barry and I make this Climate case in some detail in:

    https://www.tandfonline.com/doi/pdf/10.1080/14747731.2019.1669915?needAccess=true

    As does Jason Hickel and Giorgos Kallis in New Political Economy recently

    https://www.tandfonline.com/doi/abs/10.1080/13563467.2019.1598964?src=recsys&journalCode=cnpe20

    Best wishes, Jamie

  2. ghholtham
    October 22, 2019 at 11:40 am

    When I read the words “the system” I know I am in for a dose of woolly thinking.

    You can’t solve all problems at once. If someone addresses a specific issue and makes some progress it is not usually constructive to point to all the other evils in the world and say “what about..” If you can say what you mean by “the system” and you have proposals that stand a chance of solving big problems, fine. We’re all listening.

    • October 22, 2019 at 2:38 pm

      I can say what I mean by ‘system’, and I have made my proposal (if inadequately in blog format), but no-one seems to be listening.

      Those who “believe that making things as bad as possible is a precondition for ‘real’ change: a classic [Marxian] revolutionist argument, but one that has resulted a immense suffering for any good it has done”, have forgotten the other type of revolution: a Copernican revolution, a revolution in (often an inversion of) ideas. However, perhaps they have not heard of it, or not understood its practical significance.

  3. ghholtham
    October 22, 2019 at 12:06 pm

    Let me pose a question: is it always unworthy to accept political constraints when making policy proposals? Suppose a government is well established and is politically strong but serves dominant economic interests. Resource allocation is inferior and the poor are neglected. We can all agree that It is right to point that out and argue that human flourishing would be served if the government were different. But within the political constraints there may well be policies, acceptable to the powers that be, that would improve the lot of the poor, Is it wrong to point that out and argue for those policies? You can only argue it is wrong if you believe that making things as bad as possible is a precondition for “real” change. A classic revolutionist argument but one that has resulted a immense suffering for any good it has done.

    It is fine to point out the limitations of the experimental approach. These would be acknowledged, I am sure, by the practitioners themselves. It is unfair and unreasonable to accuse them of bad faith or trying to distract attention from other issues. We are all condemned to live in the world as it is and to do the best we can. There is a role for the prophet crying woe, woe but there is also a role for the modest improver. The former group are certainly well represented on this blog.

    • Robert Locke
      October 22, 2019 at 12:46 pm

      The problem is that one cannot do even modest improvement with the experimental approach, because the experimental approach followed on this blog is intellectually dishonest in that it plays rare attention to nonanglosaxon literature and methods. I wrote a book called the collapse of the american managewment mystique; I was told by the president of the American Management Associatiion that there hasn’t been a collapse of the american management mystique. That is being intellectually dishonest.

    • Rob
      October 23, 2019 at 7:03 am

      Let me pose a question: Is it always unworthy to accept political constraints when making policy proposals? Suppose a government is well established and is politically strong but serves dominant economic interests. Resource allocation is inferior and the poor are neglected. We can all agree that It is right to point that out and argue that human flourishing would be served if the government were different. But within the political constraints there may well be policies, acceptable to the powers that be, that would improve the lot of the poor, Is it wrong to point that out and argue for those policies? You can only argue it is wrong if you believe that making things as bad as possible is a precondition for “real” change. A classic revolutionist argument but one that has resulted a immense suffering for any good it has done.
      .
      It is fine to point out the limitations of the experimental approach. These would be acknowledged, I am sure, by the practitioners themselves. It is unfair and unreasonable to accuse them of bad faith or trying to distract attention from other issues. We are all condemned to live in the world as it is and to do the best we can. There is a role for the prophet crying woe, woe but there is also a role for the modest improver. The former group are certainly well represented on this blog. (Gerry Holtham’s False Dichotomy and False Narrative, RWER, Impoverishing economics, 10/22/2019)

      .
      Gerry Holtham engages in classic sophistry that ignores the core issue, sets up straw men arguments based upon false dichotomies, and engages in false narrative that it puts words, meanings, and intentions into David Ruccio’s mouth that were never spoken, written, or intended, but rather lie solely in the mind of the one making such a disingenuous argument. It is easily seen through for exactly what it is.
      .
      The root of the problem lies in an economic system based upon class and power structures that maintain the existing status quo and define the meaning of economics in such a manner that the root problems cannot be addressed because of systemic institutional and social norms that maintain inequality and exclusion as the norm. He admits this is pseudo-question (mere rhetoric meant to imply he is being reasonable):
      .

      Suppose a government is well established and is politically strong but serves dominant economic interests. Resource allocation is inferior and the poor are neglected. ~ Gerry Holtham’s Own Admission, Which I Doubt He Believes

      .
      Does he really believe this? Probably not, but it makes a good ploy to setup his false narrative that David Ruccio cannot chew gum and walk at the same time, or in other words if one points out the root of the problem and calls into question the failure of stop-gap measures to solve the root problem one desires instead to deny any effort at all until things become as “bad as possible is a precondition for ‘real’ change.” Of course, this is a false narrative; a form of falsehood mongering and sophistry.
      .
      Which “group,” then, I am lead to ask, does Gerry Holtham belong to?

  4. October 22, 2019 at 5:05 pm

    Respect to the author. Poverty in the third world is only due to its inability to form an economic system. But how can it be formed if everyone who talks about economic problems and those living in these economic systems is deprived of her understanding. Economists spending budgets on the study of their pseudoscience comparable to the annual budgets of most third world countries remain blind guides.

  5. Ken Zimmerman
    October 23, 2019 at 11:41 am

    I’ve interviewed “ordinary” people for over 30 years regarding their opinions and attitudes about economists and their work. The general conclusion is these folks have negative views of economists, when they think about them at all. And about 90% are certain economists are bought and paid for tools of banks, equity firms, etc. Economists may be high profile in board rooms and policy institutes, and the like, but not for the everyday person in the street.

    • EDWARD K ROSS
      October 24, 2019 at 6:45 am

      I think Ken Zimmerman October 23, 2019 @11:41am
      suggests that if we talk about changing economic policy to a fairer more equitable system for all. Then we have to ask why in spite of the exhalent work done by some of the contributors to the RWER, then why is not any significant evidence of change in the economic system that continues to favour the elite at the expense of the disadvantaged happened. Because of this perception, I have often commented, I believe there is a need to motivate, inform and empower the general public, so that they are confident enough to voice their opinion.

      Thus I support Ken Zimmerman’s explanation of the public perception that ” economists are bought and paid for tools of banks equity firms etc—But not for the everyday person in the street . On this basis it seems obvious to me that the challenge for economists making efforts to promote a fairer more equitable economic system , rests on winning the confidence of the public by listening to their concerns WITHOUT promoting fear and misguided anger.

      Therefore I support Lars request October 22, 2019 ” we need lucid inelegant conversations on all factors that contribute to solving such as aid and climate change.
      What we do not need is, vitriolic rhetoric that overemphasises one particular aspect of climate change, For example ignorant claims about massive increases in sea levels ignoring the science of the tectonic plate movement. No doubt this statement will encourage some to ridicule me as a climate denier, my response to that sort of comment is that genuine science of all the factors of climate change indicates that firstly climate change is a natural phenomena. Secondly I think understanding that factor is important for us to do something constructive to save the environment without condemning us to a life of primitive cavemen, who could not even use fire to cook their food or keep warm, as many demonstrators seem to be implying.

      Finally I like davetaylor October 22, 2019 where he dismisses the (Marxian revolutionist argument because in the process it harms a tremendous number of people in the process. then he states that he favours the Copernican form of revolution , obviously because it favours change without penalising the very people it should be protecting.
      Ted

      • Ken Zimmerman
        October 24, 2019 at 12:57 pm

        Edward, many of the hoi polloi are aware they are being cheated, manipulated, and robbed. But there is little they can do to change the situation. After all, all the resources they need to survive, their families need to survive — water, food, energy, housing, and clothing — are controlled by others who can deny any or all of these to anyone who protests. The simple message — play along or die. Or, if you displease us, play the game and still die. Democracy is being trodden under the feet of would be fascist American autocrats. I agree this emergency is bigger than climate change, since we can solve climate change problems only if we first save democracy. We in the US have faced this threat before. After the US Civil War. During the era of heavy industrialization in the late 19th century. During WWII. And now since the 1970s. It’s never been fully defeated, but neither has it ever fully achieved its goals. But the push for deregulation, to push government out of any role in society, to privatize all public goods and services, and to use public education, public media, and markets to propagandize Americans to accept autocracy as the norm is winning. It’s gone so far that at this stage it may be impossible to reverse course without bloodshed. I believe it’s naive to exclude revolution and bloodshed from the possible futures for North America and Europe.

        You are correct also that climate change has always been a part of the Earth’s history. But those changes don’t endanger the planet. Only the life on the planet, including humans. Mammals were able to evolve on the planet only because of favorable conditions in terms of temperature, atmospheric gases, sunlight, water, land productivity, etc. These conditions are sensitive to small changes in these variables. At least twice since 600 CE changes in sunlight, gas mixtures, and water have created climate changes lasting several centuries that killed many humans. These changes varied from one part of the planet to another. Some drier, some wetter, some colder, some hotter, some larger, some smaller storms. Climate change, like climate in general is non-linear. These earlier climate change events were the result of such factor as volcanic eruptions, changes in solar output, and the construction of the first larger cities on the planet. Current changes are the result of the same factors, but with the addition of huge injections of CO2 into the atmosphere from humans burning fossil fuels. No one is certain about the results of the changes in these factors, but they certainly won’t be any less destructive than the last two climate change events on the planet.

        So, current social changes and climate changes pose a simple question for our species, and all life on the planet. Do we want to survive?

      • October 25, 2019 at 9:21 am

        Ted, we seem to agree on a lot of things (and thank you for acknowledging my existence kindly), but not when you say “that genuine science of all the factors of climate change indicates that firstly climate change is a natural phenomena”.
        First in evolutionary time, perhaps, before man was around in sufficient numbers to affect anything, but not in order of significance at the present time. The evidence (and how it is acquired via radiation spectrum analysis etc is very much in my field of science) is very clear that (whether or not events like tectonic plate movements or dinosaur-destroying meteor impacts have caused climate change) its rate of change at the present time is both consistent with the rise in use of fossil fuels and physically explained by it.

        But the point of the science is your second point: what can we do about it? We can’t stop tectonic plate movements or meteor impacts but we can greatly reduce the use of fossil fuels and (with a bit of ingenuity with initial irregation) regenerate the greenery to recycle our wastes. The problem, though, is the rate of change: whether we have time. We thought we had ten years, but at the rate the ice caps are melting the methane stored in the arctic permafrosted bogs may be released and cause a thermal runaway that (as a recent BBC documentary about the conditions on the other planets showed) could in fairly short order leave Earth as dead as Venus. I’m mildly encouraged by learning that the point of current work on self-driving cars is to enable sharing of relatively few electric cars by having them come to us if we need one, but that doesn’t do the hard work of irrigating the deserts we have created and replanting trees. “Those who plant pears plant for their heirs”, so to make that possible we have to change the financial system so it credits them and careful spenders rather more than the producers and marketeers of unnecessary surplus.

  6. EDWARD K ROSS
    October 27, 2019 at 10:38 pm

    In reply to davetaylor October 25, 2019 at 9 21am
    Thank you for your comments, This encouraged me to do a lot of reading and thinking before replying and these days age and health slows the process down a little.

    All right you disagree with my suggestion that firstly climate change is a natural phenomena. The reason for that statement , even if I could have worded it differently, is that in my humble opinion, understanding what has happened in the past. For example the rise and fall of ice ages should encourage us to understand that if we take the right action to reduce carbon emissions and absorb some of the excess carbon. My concern here is that if we get panicky we have to be careful that we don’t jump out of the frying pan into the fire. My concern here is that I cannot deny that fossil fuels are a problem, but there is a big difference between how they have been used in the past. For example- putting inferior coal through poorly designed systems.. Where as the Japanese through modern technology, have bought good quality coal and designed modern generating systems with greatly reduced emissions. Surely this combined with taking serious steps to urgently undertake serious carbon carbon absorbing projects. Certainly there has been some comments about planting trees , but their has been very little conversation of selecting the best kind of tree’s, the best place to begin the afforestation and the importance of early care of the tree’s in re establishing those very important forests. Of course this takes money and political will globally, supported by the public.

    As for your reference on science, I respect your position as a scientist and a person who.is very concerned about global warming. Some of the reading I have done has been from ARCHAEOLOGY the methods and practice, by Colin Renfrew and Paul Bahn p195-207.
    In that section they explain how the use of deep sea and ice cores indicate “that about 18,000 years ago at the height of the last ice age the winter temperature was 6’C (43’F lower than now”. They make their claims by using a range of methods to make their claims , For example they have studied the changes experienced by Microscopic Fossils of the foraminiferan species Globorotalia truncatulinoides as well as studying the presence of oxygen isotopes and other methods. From these studies they have drawn graphs that run from 15,000 years to135,000 years indicating that there has been rising and falling temperature variations.

    Here what I am trying to say is that it is important to understand the past to better understand the present. Next I refer back to your post October 22, 2019 at 2:38pm,’ Those who “believe that making things as bad as possible is a precondition for real change : a classical [Marxian] revolutionist argument , but one that has resulted in in immense suffering for any good it has done,” have forgotten the other type of revolutions , a Copernican revolution, a revolution in (often an inversion of) ideas. however, perhaps they have-not herd of it, or not understood its practical significance. I also remember Francis Bacons insistence on all of the facts. Hence applying your preference to the climate change impending threat I think our future depends on avoiding a Marxist type o revolution and working on a Copernican type of revolution. Because from my observation radical claims such as general claims that many coastal establishments are threatened, with massive rises in the next few years. Regardless of the degree or falseness or truth in these statements these sort of statements, either cause people to ignore the threat of climate change, or to react irrationally and support bad decisions, that could be latter regretted..
    In closing although over the last ten days there has been some very good conversations on climate change the next question is to turn it into action, One suggestion is to begin at small community level where the whole community, could become involved in small reafforestation projects and involved in conversations in how it and other measures could reduce the looming climate change disaster. I could be wrong but I think at least this approach could unite and empower people to demand political support critical action. Ted

  7. EDWARD K ROSS
    October 27, 2019 at 10:59 pm

    TO the above from ted don’t forget from tiny seeds mighty oak trees grow.ted

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