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Political Economy?

from Peter Radford

“American economics harbors fierce political debates over theory, methodology, and policy.  In practice and in comparative perspective, however, the main trend over the course of the twentieth century has been the standardization of training as well as a homogenization of evaluation criteria that has marginalized nonorthodox approaches.  After institutionalism was dethroned by the rise of mathematical economics and more politically challenging forms of intellectual heresy (such as Marxism) were relegated to peripheral institutions and sometimes to other disciplines, American economists installed themselves confidently within the neoclassical paradigm.  It is within this paradigm that the major intellectual debates have taken place. … In other words, the dominant conversations within the discipline have centered around which hypotheses in the neoclassical framework may be modified or tweaked to account for observed empirical patterns.  But American economists implicitly agree to keep disturbances to a minimum; as a result the framework is almost never questioned as a whole.”

That’s a long quote from Marion Fourcade’s excellent study of the discipline of economics “Economists and Societies” published in 2009.  I think it helps us wrap our minds around why it has taken so long for any discernible change in the profession’s thinking to have seeped into the open.

The discipline of economics is a closed society with unwritten but deeply rooted rules.  It is easy to be cast out.  If you are, you cannot easily find your way back in.  And, given the excessive prominence of economics in policy making during the middle and later years of the twentieth century, the profession placed an acute premium on not breaking ranks.

That prominence was ill-founded, economists don’t really have a good grasp of actual economies — the complexity of the subject matter and its infernal intertwining with society as a whole make the supposed rigor of what became the mainstream an illusion.  But it was a convenient illusion.  It fit well with the appeal of rational construction of policy.  It was a short skip from such appeal to the imposter of rational decision-making that supports the edifice of market superiority over other forms of resource allocation and distribution.  Instead of accepting that all forms of human activity are equally flawed and/or rational, economists mistakenly imagined people to be rational within the hallowed halls of a market, but insufferably irrational everywhere else.

One of the dominant themes of the last century was this general assumption that human activities can be studied through an ever increasingly rational lens.  That may be, but economists then went too far: they projected rationality into the subject of study.  Instead of using the tools of reason to tease out regularities of interest, they made the subject matter itself entirely rational.  So the regularities they thought they saw were simply echoes, or mirrors, of their own thought processes.  People in markets suddenly became economists, which made studying them more easy.  The entire enterprise became a massive “if only” exercise.  If only people behaved like economists it would so much easier for economists to study them!  So that’s what happened.  Entire Nobel winning careers were built around what was nothing more than a gigantic bout of self-absorption.

No wonder the discipline rapidly became so sterile.

And irrelevant.

Now, however, there are feint signs of hope.

A younger generation is breaking free of the constraints of  theory dependent upon rational behavior within market spaces entirely cut off from the rest of society.  The messiness of life is slowly being recognized as a real thing worthy of attention.

I am happy about this.  I am even hopeful that we might eventually arrive at a day when beginning economics is based upon the realities of asymmetries of information, uncertainty, path dependencies, inequality, power relationships, institutional and cultural limitations, and even geography, rather than having all these sorts of things introduced as “imperfections” later on.

The way in which economics came to be taught was backwards.  The perfect alternative was posited and described before the imperfect reality was introduced.  The problem being that most students never got to that real part.   They left with a false image.  Which was the ideological intent of some of the founders of the modern discipline.  The homogeneity that Forucade refers to above meant that even those who were not ideologically inclined were trapped into spreading the ideas of those who were.  They became unwitting propagandists for what was, essentially, an anti-government political agenda.

But times are changing.  Here we are a decade after the enormous embarrassment of the discipline caused by its blindness to the possibility of the Great Recession, and books are appearing that suggest markets are not quite what was once thought, that governments are important if not essential, and that all sorts of things muddy the pristine waters of the neoclassical world.  Some of these books have the temerity to ponder the effects of distribution and question whether markets are very good at it.  Especially since markets can be infected with diseases such as power relations and so on.

I expect our libertarian friends will mount a stout rearguard action and belabor the importance of individual liberties in the construction of modern highly productive economies.  I would agree with them were they then to acknowledge the reality of the inequalities that unfettered liberty always produces.  We need a balance which implies something more than just markets to be involved in the economy.

In this regard one of the most important books written in recent years about inequality talks about exactly this.  Walter Scheidel’s “The Great Leveler” is a glittering tour through history with one simple message: inequality is the norm, not the exception.  More to the point history tells us that elites will always capture economies and create what economists call rents.  To rely on markets to provide equitable distributions is foolhardy.

The problem is well known to economists, so they say, but in their effort to eliminate the taint of politics from economics they had to pretend otherwise.  So we ended up with a ridiculously lopsided and unreal version of economics purged of politics unable to explain reality where politics is everyday.

Economics with politics is a real thing.  Economics swithout politics is not.

A resurgence of political economy?

An emphasis on policy rather than sterile internecine spats over theory?

Progress is possible after all these years.

Congratulations to all these who kept the fires of plurality burning through the dark ages of neoclassical dominance.  Now is the time to switch gears to writing the new political economy.

Well, I can hope can’t I?

  1. January 24, 2020 at 4:31 pm

    Why no mention of MMT? Does not the author know about it[unlikely] but chooses not to throw light on the deep morass of classical /mainstream nonsense that passes for economics, well deliniated in the article.

  2. Craig
    January 24, 2020 at 6:34 pm

    “An emphasis on policy rather than sterile internecine spats over theory?”

    Wisdom is the integration of the truths in opposites and the logical alignment of policy with its mental insights.

  3. Helge Nome
    January 25, 2020 at 6:20 am

    Most people, including “economists” find that living in silos is a lot more comfortable than life in the great outdoors.

  4. Robert Locke
    January 25, 2020 at 6:20 am

    How is it that economics has been horns-waggled into the senario depicted here. I wrote my first piece in the 1970s on educational institutions and how they affected industrialization in France and Germany in the 1970s, (Robert Locke, “Industrialisierung und Erziehungssystme in Frankreich und Deutschland vor dem 1. Weltkrieg, Historische Zeitschrift 225 (1977), pp. 265-96. Also see, Locke & M. Meuleau,(1988) “”France et Allemagne, , Deux approahes de l’enseRheroricignement de la gestion” Revue francaise de gestion: Les racines de l’entreprise. 70, 186-2020) These works appeared contextually within a great debate among historians carried on in the 1970s about the New Economic History, shaped under the influence of neoclassical economics and econometrics, in which the NEH clearly lost the battle (see, D. McCloskey,(1983) “The Rhetoric of Economics,” Journal of Economics Lierature 21, 481-517)

    This discussion took place when the visible hand replaced the invisibile hand. See, Williamson, Oliver E. “(1980) “Emegence of the Visible Hand: Implications for Industrial Organizatiion,” .and the copious material on the subject that emerged in US business history over forty years ago. Economists were involvred: I met them in the many conferences evoked by the Chandlerian school. There isn’t a trace of any of this here. I suppose it is just bad history.

  5. Craig
    January 25, 2020 at 8:22 am

    If you get caught up in only the complexities of a study you’re liable to never discover the single integrative concept that creates a new pattern. At best you’ll reform this or that, at least for a while.

    I’ve got nothing against complexities per se, but a telescope has two ends to view from. After a while it pays to look through the other end.

  6. Robert Locke
    January 25, 2020 at 10:42 am


    • Craig
      January 25, 2020 at 4:57 pm

      In the first place the necessary new paradigm is in money and finance. This blog hasn’t even isolated that fact, that rather obvious fact, despite the fact that supposed contributors here like Steve Keen, Michael Hudson, Edward Fullbrook, Warren Mosler and Randall Wray etc. have shown that Minsky’s FINANCIAL Instability Hypothesis, FINANCIAL Parasitism and Modern MONETARY Theory are the major and most relevant aspects of the ECONOMIC problem.

      Only when the new tool/new insight that resolves the problematic areas in the old/current paradigm is discovered, honestly confronted and accepted will that new single concept ….clearly be the change necessary in economics.

      The inverse of the old buddhist saying still applies: The 5000 year old journey ends with the CORRECT final step.

      • Robert Locke
        January 25, 2020 at 8:52 pm

        1. Following, L. E. Mitchell (2007), The Speculative Economy: How Finance Triumphed Over Industry, San Francisco. I never considered the financialization of the US economy as more than a peculiarity of Anglo-American capitalism, writ large because of a unique historical circumstance, the world hegemony of he us in 1950. That hegemony was only made intellectual because of the control the US exercises in the thought world. That’s not a paradigm, but an historical incident.I found that out when I learned about economies other than anglo-saxion.

      • Meta Capitalism
        January 26, 2020 at 12:59 am

        The finacialization of first the US and then its virus like infection of the global economy is in my view one of the core parasites sucking the life out of the real economy. Literature-Only Economics and it’s the empty-headed theoretical economists (who reference Ponzi scheme as though they tell us something meaningful that we already don’t know about human nature) who accept this parasite as normative that are killing the host (middle class family wage earners).

      • Meta Capitalism
        January 26, 2020 at 1:42 am

        Thanks Robert, looks like a good book:

        The formative era of American corporate capitalism took place between 1897 and 1919. The American industrial landscape of the late nineteenth century had been characterized by independent factories. No matter what their size, they typically were owned by entrepreneur industrialists, their families and often a few business associates. Almost overnight American business transformed into a vista of giant combinations of industrial plants owned directly and indirectly by widely dispersed shareholders. Business reasons sometimes justified these combinations. But they might never have come into being if financiers and promoters had not discovered that they could be used to create and sell massive amounts of stock for their own gain. The result was a form of capitalism in which a speculative stock market dominated the policies of American business. The result was the speculation economy.


        Mitchell, Lawrence E (2008-10-09T22:58:59). The Speculation Economy: How Finance Triumphed Over Industry (Kindle Locations 31-37). Berrett-Koehler Publishers. Kindle Edition.

  7. Craig
    January 25, 2020 at 10:14 pm

    You never thought that the EU and ECB granting Greece loans so that those funds could virtually immediately go back to German banks was a demonstration of the dominance of finance and its monopolistic paradigm of Debt Only???

    • Robert Locke
      January 26, 2020 at 9:16 am

      real-world economics review, issue no. 68
      subscribe for free
      Financialization, income distribution, and social
      justice: recent German and American experience
      Robert R. Locke1 [Germany/USA]
      Copyright: Robert R. Locke, 2014
      You can learn something if you read the rwer. German finance resists anglo=us/ It is not debt ridden.

      • Meta Capitalism
        January 26, 2020 at 9:20 am

        Thanks, will read.

      • Craig
        January 26, 2020 at 7:03 pm

        Proves nothing. Every nation and everyone is dominated by a paradigm/pattern.

        Germany is an export platform economy which is the “brilliant” idea of finance to internationalize the paradigm of Debt Only. Germany dominates the EU, the US dominates whatever it can dominate and China will try to dominate Asia.

        Wake up to the new monetary and financial paradigm or commit your grandchildren to the resource wars inevitable under the paradigm of Debt Only and looming global warming.

  8. Helen Sakho
    January 25, 2020 at 11:08 pm

    Political economy is the only SCIENCE that is worth remembering, teaching and writing about, despite its weaknesses. For when it comes to dealing with society, there are always pitfalls. But it is the best framework we have. I, for one, learned this decades ago. And banks are always bailed out by the poor, often secretly. And yes, finance capital has been ruling the world properly and openly for decades now. The only difference now is that it is done openly and without any remorse whatsoever.

    • Craig
      January 26, 2020 at 12:03 am

      Correct. Paradigms, once they are recognized, generally foster orthodoxy and unconsciousness albeit beneficially so until new emergent problems develop and accumulate. The socio-pathic remorselessness hardens because of the TINA factor.

  9. January 28, 2020 at 8:29 pm

    First a typo: You mean ‘faint’, not ‘feint’.

    I began reading this and preparing to share, as it described the self delusions of ‘economists” and their models; but, it proceeds with the realisation that the writer is trapped in a bigger delusion, that allowing for imperfections in flesh and blood human behaviour, would qualify economists to imagine they were now in the real world.

    A successful economy is not one that can boast of producing an exponentially increasing supply of consumer products faster than any other: a successful economy is one that provides, sustainably, all the necessities of life to all members of the population to whom it belongs.

    ‘Economics’ as generally understood, is a fundamentally delusional exercise, that is more akin to the study of ‘form’ as a service to gamblers who favour the turf over the stock market. Likewise, what passes in the media, as ‘News’, is largely another service to these very same gamblers: events in the real physical world that is literally being rendered uninhabitable as a result of this deadly ‘economic’ paradigm, rarely come in for more than passing mention–‘if time permits’, or it’s a slack ‘News’ day.

    ‘Winter’ is coming.
    But it’s going to be Hot.

    • Meta Capitalism
      January 29, 2020 at 2:15 am

      Thank for this comment. It cuts through the delusional rhetoric and goes to the heart of the issue. The rhetoric (often further obscured in mathematical gave meant to give it a “scientific” appearance) misdirects the focus from reality of human experience to a pseudo-reality divorced from real human beings real human social contexts.

      • Meta Capitalism
        January 29, 2020 at 2:16 am

        mathematical garb …

  10. Ken Zimmerman
    February 6, 2020 at 1:42 pm

    There seems a fundamental misunderstanding of current and most recent economists and economics in the US. American economists do not and do not intend to study economic actions or institutions as created and used by people outside of economics. Rather, American economists study neoliberal theories, attempting to consolidate the versions into an unchangeable structure not only to set the path of developments in economics but also almost every area of local, regional, and national policies. It’s an imperialist agenda that would excite German Nazis and Japanese fascists at their high point during the 1930’s and 1940s. And today’s right wing in most of Europe and North and South America. It’s an octopus that’s been spreading for over 50 years. At this point it may be unstoppable.

    • Robert Locke
      February 6, 2020 at 9:24 pm

      I agree.

    • Craig
      February 6, 2020 at 9:36 pm

      If we want to end neo-liberal economics, instead of just talk about changing it we need to change the monetary and financial paradigm. Finance capitalism didn’t come to dominate the world without the primary power factor of its logically aligned name.

  11. Yoshinori Shiozawa
    February 7, 2020 at 3:27 am

    [T]oday’s right wing in most of Europe and North and South America. It’s an octopus that’s been spreading for over 50 years. At this point it may be unstoppable.

    This is a sad fact. But think that this is not a pure ideological question. This is the point where economics matters. I do not support Trump and his acts and speeches as president of USA but that there are economic reasons that produced President Trump.

    From the time of Ricardo, economics had only theories of international trade which assume away unemployment. Such theories only suggested that free trade makes everybody better off. Here comes the free trade ideology. However, this is not a unique possibility for economics. My theory on international trade, or the new theory of international values (See also its working paper) is a theory that admits unemployment by the introduction or liberalization of international trade. We should have developed this kind of theory much earlier. Because we could not, most of economists neglected unemployment question and did not advised to take cautious measures to prevent too big and too long unemployment from trade liberalization and globalization.

    Of course, the solution is not easy. Trade liberalization has its merits. We have to build a policy system by which benefit receivers from trade liberalization compensate those who lose their jobs, but this is not an easy to implement.

    • Ken Zimmerman
      February 8, 2020 at 3:44 pm

      All great points, Yoshinori. Supporting international trade does not need to assume away unemployment, economic inequality, etc. for the trade to flourish and provide widespread benefits. But you are correct that in most of economics today they are assumed away in just this manner. So there must be other reasons for these assumptions to be created and strongly defended by economists. There are. The assumptions are a religious defense against being forced to take not just a stand but action, including moral stances and actions to actively aid those impacted by these negative externalities of trade, In other words they’re excuses for moral and physical cowardice. In this sense, it’s not surprising that Republican Senators showed this same cowardice in refusing to provide impartial justice for President Trump in his impeachment trial. Something that juries of ordinary citizens do everyday in criminal courts across the nation. Republicans and economists are indeed special. But not in ways any parent should teach their children to emulate. That is, if the welfare of the children and survival of the nation are important to these parents

    • Meta Capitalism
      February 10, 2020 at 7:38 am

      American economists do not and do not intend to study economic actions or institutions as created and used by people outside of economics. ~ Ken Zimmerman

      Shiozawa is 100% correct; economics matters. So too is Ken 100% correct (and this applies to Shiozawa’s “theory first” rhetoric as well — although I don’t want him to take this personally, for I know he has a point; there is truth in the core of what he is saying; most human beings behave according to habit, like animals, they don’t think. There are far more ways of thinking than the stereotype of ‘slow’ and ‘fast’ and neuroscientists (both my daughters are in this field) know this as do many Buddhists, Christians, and other mystics who practice daily meditation. Habits come in many forms, including good ones; we don’t have to become habituated to stereotypes and habitually ignorant stimulus-response. We can learn to think critically and wisely. And wisdom grounded in compassion and love is real. Do unto others as one would have done to oneself is real. It has profound consequences in the behavior when this principle is wisely applied. So ‘slow’ and ‘fast’ thinking is not the whole story. And that is where Shiozawa’s most recent book fails.
      I have over the last few years read many books on economics and could cite a number that do address economics in real-world context, discussing social institutions, cultural issues, ideological underpinnings of certain attitudes, and on and on. Some are even on this blog. I could create a bibliography that would probably span a few pages at least. So there is a lot of information out there it seems. I read it, sift it, and then make sure my daughters get those works that cut through the BS and directly address the issues without hiding behind the false scientism of some who think they are somehow serving a higher purpose looking for so-called “general tendencies” in the data or just to “test the generality of the hypothesis” or to look for some “underlying pattern” or law while ignoring that Rome (the world) is burning and fascism is rising. Ask yourself what Trumpism will bring if he wins a second term? He has now been proven to be above the law and totally unleashed. What will it bring to the world when the last three superpowers are all run by dictators?
      I know for many around the world this is a question they cannot answer or simply do not understand. They simply do not know the history of the US or the gravity of the situation. How can I blame them; many Americans are blissfully ignorant of the same. I live in Japan and have met Japanese who don’t really get the gravity of the situation; and here in Japan I have met individuals from Africa, South America, and all over the world who don’t get the gravity of the situation.
      One in one hundred understand the history and gravity of the current world crisis we are in. Many of the discussions on this blog are a perfect example of discussing angels on the heads of pins; especially the comment section.
      A book I am currently reading is one of the few that goes to the numb of the issue:

      This is both a gloomy and a hopeful book. The subject itself is gloomy. A Dark Age is a culture’s dead end. We in North America and Western Europe, enjoying the many benefits of the culture conventionally known as the West, customarily think of a Dark Age as happening once, long ago, following the collapse of the Western Roman Empire. But in North America we live in a graveyard of lost aboriginal cultures, many of which were decisively finished off by mass amnesia in which even the memory of what was lost was also lost. Throughout the world Dark Ages have scrawled finis to successions of cultures receding far into the past. Whatever happened to the culture whose people produced the splendid Lascaux cave paintings some seventeen thousand years ago, in what is now southwestern France? Or the culture of the builders of ambitious stone and wood henges in Western Europe before the Celts arrived with their Iron Age technology and intricately knotted art? Mass amnesia, striking as it is and seemingly weird, is the least mysterious of Dark Age phenomena. We all understand the harsh principle Use it or lose it. A failing or conquered culture can spiral down into a long decline, as has happened in most empires after their relatively short heydays of astonishing success. But in extreme cases, failing or conquered cultures can be genuinely lost, never to emerge again as living ways of being. The salient mystery of Dark Ages sets the stage for mass amnesia. People living in vigorous cultures typically treasure those cultures and resist any threat to them. How and why can a people so totally discard a formerly vital culture that it becomes literally lost? This is a question that has practical importance for us here in North America, and possibly in Western Europe as well. Dark Ages are instructive, precisely because they are extreme examples of cultural collapse and thus more clear-cut and vivid than gradual decay. The purpose of this book is to help our culture avoid sliding into a dead end, by understanding how such a tragedy comes about, and thereby what can be done to ward it off and thus retain and further develop our living, functioning culture, which contains so much of value, so hard won by our forebears. We need this awareness because, as I plan to explain, we show signs of rushing headlong into a Dark Age. Surely, the threat of losing all we have achieved, everything that makes us the vigorous society we are, cannot apply to us! How could it possibly happen to us? We have books, magnificent storehouses of knowledge about our culture; we have pictures, both still and moving, and oceans of other cultural information that every day wash through the Internet, the daily press, scholarly journals, the careful catalogs of museum exhibitions, the reports compiled by government bureaucracies on every subject from judicial decisions to regulations for earthquake-resistant buildings, and, of course, time capsules. Dark Ages, surely, are pre-printing and pre–World Wide Web phenomena. Even the Roman classical world was skimpily documented in comparison with our times. With all our information, how could our culture be lost? Or even almost lost? Don’t we have it as well preserved as last season’s peach crop, ready to nourish our descendants if need be?

      Jacobs, Jane. Dark Age Ahead (Kindle Locations 47-71). Knopf Doubleday Publishing Group. Kindle Edition.

      • Meta Capitalism
        February 10, 2020 at 7:46 am

        Nub, not ‘numb’, how dumb ;-)

      • Meta Capitalism
        February 10, 2020 at 7:58 am

        We (the world) are in a value crisis, not a knowledge crisis. We have all the scientific knowledge we need to solve every problem we face. It is simply a matter of misplaced values that mask their real motives behind ideological sophistry.

      • Robert Locke
        February 10, 2020 at 11:24 am

        For an historian, most of this discussion is inaccurate, especlially for Europe. There never has been a successful republican movement in Europe, except in France. Until 1918 europe was dominated by autocratic-semi-autocratic monardhies; despite Wilson’s popularity, social democracy failed everywhere after 1918, rescued only by the dominance of the US in europe in 1945. Although history does not repeat itself, it has to the extent that europeans are turning their backs on social-democracy repeating the failures of europeans to follow the path Wilson laid out for them in 1919-20.

      • Steve Hawkins
        February 10, 2020 at 6:15 pm

        More interesting observations, thanks.

        I think the idea of ‘Dark Ages’ needs to be qualified by remembering what tends to get recorded as ‘history’, which is mainly about who slew who, and which king conquered the most and ‘built the most cities’ (these old kings seemed to all be dab hands with a trowel, and extremely fast workers! ;) ).

        Some of the current trend in popular UK archaeology programmes have looked into excavations on ‘Dark Age’ sites, and the general impression one gets is that, after the Romans left, people here just got on relatively peacefully and contentedly, until a new wave of ambitious ‘kings’ began to establish themselves, and then all the warring, city building, and lawmaking started up again, requiring ‘history’ to be written down, in order to keep track of who owned the rights to which pieces of land and resources.

        When everyone is content, and life proceeds smoothly and predictably, arts may flourish, but ‘history’ goes ‘dark’. The ‘saying’ may be apocryphal, but there is much truth in the curse: ‘May you live in interesting times’.

      • Robert Locke
        February 10, 2020 at 9:15 pm

        Steve, did you go to school?

  12. ghholtham
    February 10, 2020 at 11:20 am

    “American economists do not and do not intend to study economic actions or institutions as created and used by people outside of economics. Rather, American economists study neoliberal theories, attempting to consolidate the versions into an unchangeable structure not only to set the path of developments in economics but also almost every area of local, regional, and national policies. ”

    The word missing on the front of this sentence is “Many”. There are a clutch of journals on behavioural economics and the economics of organisations, many inspired by the work of HA Simon.. Economists like Richard Nelson and Sidney Winter have been ploughing that furrow for years; they published An evolutionary theory of economic change back in 1982. Oliver Williamson got the Nobel in 2009 for inter-disciplinary study of organisations and the respective roles of firms and markets.

    A lot of comments on this blog appear to come from people who have read an introductory economic text book by someone like Robert Barro and nothing else.The neo-classical school is not the whole of economics. Why not learn something about a subject before making wild generalisations?

    • Meta Capitalism
      February 10, 2020 at 12:47 pm


    • Ken Zimmerman
      February 10, 2020 at 1:18 pm

      Add the word many. No argument. But then we’ll have to work on figuring out who’s in and out of that many.

  13. ghholtham
    February 10, 2020 at 11:25 am

    It would be a lot more productive if people read and criticised the work of economists like Winter and Williamson. There is surely much wrong and much to criticise but they are trying to make economics more real. Continually battering Lucas and Sargent and DSGE models gets us nowhere. We are all violently agreeing about that. Move on.

    The striking thing about this blog on heterodox economics is that it doesn’t contain much heterodox economics

    • Ken Zimmerman
      February 10, 2020 at 1:26 pm

      I tend to focus on what shows up in policy and who gets first billing at conferences and department chairmanships. That appears to be mostly neoliberal

    • Yoshinori Shiozawa
      February 11, 2020 at 1:16 am

      Yes, we should focus on more constructive and productive discussion. Criticism of neoclassical economics is necessary only to go beyond it We should not forget the main aim of our discussion..

  14. Meta Capitalism
    February 10, 2020 at 12:47 pm


  15. Craig
    February 10, 2020 at 6:11 pm

    A lot of genuine and heartfelt commentary regarding the problems of present economics, and no actually new insights….because critiques are not insights and reforms lack the depth and focus that permanent changes from genuinely new insights have always historically reaped.

    A list of things to consider:

    1) It’s a monetary economy, not “a veil over barter.”

    2) Money has enormous facility and pattern inter-penetrative applicability.

    3) Money has various qualities, but its most basic character is its accountancy.

    4) Accounting is probably in the top five human inventions, but economists can get their Phd in economics without taking so much as an elementary course in accounting.

    5) The POINT of retail sale is the single genuinely aggregative point in the micro-economy. You would think therefore that it would get the attention of macro-economists. Consult #4. It is also the terminal summing, ending and relevant factor expression point for every good or service in the economy. Consult #2.

    6) Recognizing the potential reality inverting power of a price and monetary policy at the point of retail sale in a basic debit/credit accounting format is the insight equivalent of the discovery of agriculture and the invention of the telescope in the historical paradigm changes of Nomadic Hunting and Gathering to Agriculture, Homesteading and Urbanization and the Copernican Cosmological inversion of the positions of the earth and the sun.

    • Ken Zimmerman
      February 14, 2020 at 8:43 am


      1) Yes, ours is a monetary economy. But that’s a choice we can change.
      2) Money itself is not powerful. The cultural norms and expectations in which money is utilized can make money powerful. But the cultural configurations make the money, not the reverse.
      3) The most basic quality of money is it carries out one or more cultural necessities.
      4) In a monetary economy, particularly one using open access markets,accountancy is extremely important. In non-monetary economies, accountancy is unnecessary, unless we include moral accounting. In state-market economies (e.g., China) accountancy is useful but not vital.
      5) Right now, in terms of education and experience most economists in the west seem fitted to study only open-access market economies. At last check this includes less than half the world’s economies.
      6) Excellent suggestion. But it’s applicable for less than half of economies in the world. What do we do about the rest?

      • Craig
        February 14, 2020 at 5:10 pm

        1) It’s the smart and accountable choice. So why change it?

        2) Money IS empowering, especially to the individual. From an abstract cultural anthropological standpoint you are correct. From a conscious temporal individual standpoint it’s empowering and freeing. Debt is enslaving when its monopolistic paradigm for the creation and distribution of money and credit of Debt Only is compulsively enforced, and monetary gifting is the solution to that problem.

        3) That’s its most basic USE, and its present paradigm prevents the best facility thereof.

        4) Yes, that’s China’s mal-investment problem. They’re stuck half way between the old and the new paradigm. We can rationalize and apply real and honest ethics to the flow of investment with a government that is both sovereign and benevolent, and by aligning that government’s thinking and acting with the integrative/unitary concept of grace.

        5) Doesn’t really matter, and here’s why:

        6) Historically, everything adapts, even if imperfectly, to a new paradigm, and not the other way around.

      • Ken Zimmerman
        February 15, 2020 at 12:38 pm


        1) Half of work in advanced economies is not “accounted for” today. Makes it a 50/50 decision which direction we go.
        2) Persons are empowered by the cultural pathways provided for empowerment. Today, one of those pathways is money. No reason to consider this inevitable, or even necessary.
        3) The basic use of money is to meet cultural requirements, to the extent it can.
        4) Still doesn’t change the fact that China, and many other nations do not employ open-access markets. Others use various versions of closed markets. Money in these markets finds its value through other means than buyer-seller interactions.
        5) and 6) Yes, everything adapts. Two things remain uncertain, however. The pathway adaptation will follow. The result of all the adaptations together.

      • Craig
        February 15, 2020 at 6:11 pm

        1 & 2) If that is true, then the best remedy of that is the excellent and facile tool of money. No need to change or deny that, just recognize it as the new paradigm. Part of the reason we haven’t banded together a couple hundred years ago to rectify the situation is because we so love our abstractions that we fail to actually act. The financial elites know this and are happy to see us debate, or not even debate, using money, as they do…to force their cultural aspirations on the 99%.

        3) Correct. Consult 1 & 2 above.

        4) The efficacy of the new paradigm WILL change those countries. If not completely, then partially. If we implement Monetary Gifting, no longer have to worry about inflation, unemployment and poverty and hence can re-industrialize the nation in the most advanced, efficient and prosperous way possible we won’t have to rely on the ex[port platform of China. You don’t think that will make them change? Sure the Chinese control their media etc., but the word will get out. They can’t totally restrict travel etc. If the Chinese or whomever want to bastardize Monetary Gifting…so be it. It will be such a permanently progressive phenomenon, even a squirrely version of it will be better.

        5) Already answered above, and how many times have I said on here that there is no end to history….but paradigm changes ARE permanent progressive phenomena….otherwise they wouldn’t be paradigm changes.

  16. ghholtham
    February 10, 2020 at 11:47 pm

    Ken, up to a point, though Trump’s policy of protectionism and large budget deficits are hardly neoliberal. I accept that new- or neoclassicisim is over represented in US universities but it does depend on the university and there is a bit more pluralism in Europe. I think my point is it’s better to criticise constructively the people who might effect an improvement since that should make them better and help build an alternative. Criticising the guys who are never going to change themselves or the subject has a lower payoff – especially on this blog. . Fullbrook’s book “Market Value” explains the predominance of the neo-classical school very well on p.6. He then proposes a different route. We are better employed discussing and critiquing that than repetitively attacking economists who aren’t listening. The idea is to evolve something better.

    • Ken Zimmerman
      February 14, 2020 at 10:45 am

      ghholtham, well said. And generally I agree. But consider this. I can use evolutionary theory to say that “all species evolve.” Useful to know but to understand its results we need to study the evolution of one, or better still several species to map what evolution is in practice. And use this information to refine the theory of evolution. Otherwise, we soon end up discussing the same “basics of evolution” with which we began our work. In other words, we are soon fixed in place. Going over the same basics again and again. Applying them uni-directionally to explain but never to be explained. Great for people who find their comfort in never changing the fairy tales they learned as a child. Bad for the rest of us who want to figure out what the hell is happening.

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