Economics is so much a focus of world wide urgent concern that good thinking is being published, and the pace of real events is even faster. The result is, what appeared to be radical has become common sense.
Rethinking economics is hard because there are two major paths forward. First is to repair and enhance the current state of economics and the economy it more or less drives at times, describes at times, and lends legitimacy to at times. But the counter is increasingly energized and popular: change the economy in fundamental ways because mere repair and enhancements keeps the negative aspects that concentrate wealth and ruin the environment left in place. Further, that to change the economy in fundamental ways means the political economy has to be further broken, usually said to include some form of popular uprising or military coup.
Economics should, either as social policy or as science, reflect the best in social, technical and humanistic thinking, but current economics, driving to appear universal, ignores too much. There is no economics which is not a narrative based in a particular society. There is no universal economics. As society changes the old economic story will be shown to poorly fit and a new narrative necessary, with a very different basic vocabulary. The shift from the physiocrats with the land based economy, to the industrialists with the industrial based, and now financial capitalism with its digital computer based economy, all shifted vocabulary and sensitivity.. What is next? Or do we have “early lock-in” and are stuck in this system for the remainder of civilization?
The particular society we are part of is capitalist and capitalism is tolerable under some conditions and not under others. Economics does not provide any light on capitalism, nor alternatives. It would be nice to move capitalism into the realm of the discussable and to demythologize its history. Almost everything important in economics happened before Adam Smith. Capitalism can work for society but capitalists are always, says the same Adam Smith, out for their own privileged monopoly position. Continual vigilance is necessary while economists often are trying to help the capitalists and not society. Earlier thinkers on whom economists often lean, Hobbes and Locke, were clear on the need for the state to monitor the actions of capital.
Capitalism is the chosen means for society to meet its needs: it is creative, absorbs talent and ambition, creates a culture of apparent interest in others, and is fairly efficient. But it is always looking for a deal, a privatizing the commons, and often shifts into corruption and crime. Capitalism should best be part of society whose needs it meets, not a game unto itself where serious destruction for society, in the search for profits, can be allowed. The task is political and never satisfactory and each generation has an obligation to remain vigilant.
The future for humanity must include technology, democracy, science, biology, human history, personal life, culture, civilization and a theory of governance. It has to do with putting the ambiguous “human” together with the ambiguous “nature. The issue here is, how can economics help, if it can.
Rapid change is a problem for main stream economics which represents a belief system of equilibrium, not of change. That belief system is in turn aligned with that peculiar mix of corporate capitalism and representative democracy that is failing us because, as it us practiced, the results are a danger to the species. For economists the problem is that majority opinion is shifting away from the mainstream view, and that creates stress points as economists try to hold on. The mainstream view of the market and its dynamics as the full, or at least adequate description of pragmatic society, is giving way to crisis thinking and yearning for new leadership with new proposals strong enough that the old “Things must change in order to remain the same,” is no longer sufficient. Then what?
To discuss economics independent of its context in empire, colonialism, slavery, and the shape of power is a fool’s errand. Yet that is what economics tries to do, and gets away with it. I have just readthe abstracts if all the presented papers in the 2015 AEA meeting in san francisco, and reference to political and historical was minimal.
The drama of humanity will continue. The context is shifting. We know that people are happier through better relationships than just more stuff, but the way we are offered security stresses the stuff. Consumerism is important but not the whole of life. Will economics be a party to the drama, or as it has been doing, prefer the security and prestige of the aesthetics of formalism? The assumption of this book is that we should work to help make economics relevant and helpful to the struggles ahead if we are thinking social policy, and more interested in phenomena if we want economics to be more scientific. Perhaps rethinking economics, given the massive ongoing changes in the world, is beside the point, but to continue…..