Some thoughts on economics. From Peter Radford My instinctive entry point into economics is through business. What is called the “Theory of the Firm” plays a key role in shaping what I see, think, and try to explain. Business, of course, gets frequent mention throughout economics, with most varieties of general theory claiming to place it somewhere inside the theoretical constructs. But pick up almost any textbook and the treatment of business is at best a weak caricature and at worst a laughable display of ignorance.
Economics as it exists today in its mainstream form is of no use whatever to anyone seeking to understand the reality of business. Our extant theories of the firm are failures in that they attempt to see the world through a neoclassical lens whilst that lens obscures anything remotely real from view in an effort to retain the equilibrating perfection of the closed system envisaged by Walras. I am aware of the post-Coase tradition of ‘transaction costs’. Then again, learning seems paramount. The Making of the Modern World Economy. How evolution can reform economics – David Sloan Wilson. In 2008, as it was becoming clear that a once-in-a-generation financial crisis was upon us, a friend of mine who is a senior corporate executive asked me a peculiar question.
Might evolutionary theory have something to say about what caused the crisis? Those of us who labour away in the biological sciences are unaccustomed to fielding questions from corporate executives, but I had founded a think tank called the Evolution Institute and my friend was an early supporter. These were desperate times; the financial crisis had exposed grave weaknesses in our basic understanding of economic systems. The reigning theoretical paradigms in economics had run out of credibility, having, at best, failed to predict the crisis and, at worst, helped to exacerbate it.
Could evolutionary theory do better? Of course, economics has been crying out for interdisciplinary intervention since its inception. Some thought a formal mathematical theory could fill this yawning theoretical void. 4 July 2013 Comments. John Lanchester · Are we having fun yet?: The Biggest Scandal of All · LRB 4 July 2013. As anyone who’s been there recently can testify, the blame in Spain falls mainly on the banks – as it does in Ireland, in Greece, in the US, and pretty much everywhere else too.
Here in the UK, feelings were nicely summed up by the Parliamentary Commission on Banking Standards, which reported on 19 June that ‘the public have a sense that advantage has been taken of them, that bankers have received huge rewards, that some of those rewards have not been properly earned, and in some cases have been obtained through dishonesty, and that these huge rewards are excessive, bearing little or no relation to the work done.’ The report eye-catchingly called for senior bankers to face jail.[1]1 In the midst of this cacophony of largely justified accusations, the banks have had a strange kind of good fortune: the noise is now so loud that it’s become hard to hear specific complaints of wrongdoing.
That’s lucky for them, because there’s one particular scandal which really deserves to stand out. What’s the use of economics? The economic crisis has thrown the inadequacies of macroeconomics into stark relief. This column argues that the narrow conception of the macroeconomy as a system in equilibrium is problematic. Economists should abandon entrenched theories and understand the macroeconomy as self-organising. It offers detailed suggestions on what alternative ideas economists can teach their future students that better reflect empirical evidence. This column is a lead commentary in the VoxEU Debate "What's the use of economics? " The simple question that was raised during a recent conference organised by Diane Coyle at the Bank of England was to what extent has - or should - the teaching of economics be modified in the light of the current economic crisis?
The simple answer is that the economics profession is unlikely to change. In this column, I will briefly outline some of the problems the discipline of economics faces; problems that have been shown up in stark relief during the current crisis. Mark Blyth: Austerity - The History of a Dangerous Idea. The Questionable Record of Neoliberalism. Now, I suppose, is as appropriate a time as any to discuss the policies generally known as neoliberalism/free market economics: tax and spending cuts, union busting, deregulation, privatisation and free trade, and how they have fared in practice. Unsurprisingly, those on the right defend neoliberalism’s record. However, successes have been over exaggerated, while in cases of clear success, a closer look reveals policies which are anything but ‘neoliberal’.
I’ll take a brief look at some countries or sets of countries which are commonly purported to show the success of these policies: the US & UK, Chile, Hong Kong & Singapore, and Scandinavia. I believe that in none of these instances do we get a clear example of neoliberal policies succeeding economically. The USA/UK The US and UK had similar narratives during their transition to neoliberal policies. Economic growth under these two governments was decidedly average. Singapore & Hong Kong Chile Scandinavia. Oligarchy Exists Inside Our Democracy. By Ed Walker, who writes regularly for Firedoglake as masaccio Suddenly it looks like we are seeing political victories for progressives, on LGBT rights, on issues important to Hispanics, even occasionally on issues important to women. At the same time, we lose every single battle over economic issues.
How is it that when polls show that a huge majority oppose cuts to Social Security, Democratic politicians like President Obama and Senate Majority Leader Dick Durbin are all for it, as are the Republicans? How is it that when Obama gets elected on a pledge to hike taxes on incomes above $250K, with a huge majority and control of the Senate, and a legislative situation where all he has to do is nothing and it happens, and then it doesn’t? To answer that question, we have to get outside of normal discourse in the US, and take up a new work: oligarchy. We think of the US as the Shining City on the Hill of Democracy. It’s easy enough for an oligarchy to work inside a democracy. 1.
Health Care and Pursuit of Profit Make a Poor Mix.
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