Note — Mar 10, 2019

Economics After Neoliberalism

Seen in → No.70

Source →

Very interesting article presenting some of the research by a group of economists, the Economics for Inclusive Prosperity (EfIP) network. There are a number of policy briefs to dig through on their website but the article itself is worth a read for a revisiting of the basics of economics, what the field is supposed to represent and research, and advocating for a more inclusive, less “markets-fix-everything” mindset. The gist: lets walk back from extreme market views, and rethink economics to be studied and used in a more systemic, holistic view, including the human aspects. The article closes by presenting the policy briefs quickly and outlining some of the ideas they propose.

The participants—historians, political scientists, sociologists, legal scholars, and economists—agreed that the prevailing neoliberal policy framework had failed society, resulting in monumental and growing inequality. […]

The discipline’s focus on markets and incentives, methodological individualism, and mathematical formalism all seem to stand in the way of meaningful, larger-scale economic and social reform. In short, neoliberalism appears to be just another name for economics. […]

Neoliberalism—or market fetishism—is not the consistent application of modern economics, but its primitive, simplistic perversion. […]

To be useful in discussions of real policies, economists have to evaluate those policies in the totality of the context in which they will be implemented and consider the robustness of policies to many possible institutional configurations and political contingencies. […]

The abstraction with which economists perceive complex bundles of institutions also gives practitioners tools to help design large scale alternatives—from precision tweaks to the tax code to full-blown visions of post-capitalist societies. […]

We need to design policies and institutions that make inclusive prosperity possible and globalization sustainable—politically and economically. With a powerful theoretical machinery that allows them to think in abstract terms about such matters, economists’ imagination is crucial to the task. […]

These proposals all show a willingness to subordinate textbook economic efficiency to other values such as democratic rule and egalitarian relationships among citizens.