When Clinton said “aren’t you all better off than eight years ago?”, she was ignoring the data that says 85% of the population are worse off. She and her supporters were blinded by The economic analysis which ignored those on the margin or outside the benefits of the economy .
Too many of us acted as if The economy was doing fine while the people were doing badly.
Economists wants clean hands by using antiseptic models. To listen to most economists talk, or read what they write, you never get a sense of urgency or pain or even a confession of confusion. Economist treat the economic world as a part of nature, while the political world is seen as irrational, driven by conflict and false imagination. But it is this avoidance of the political (class, don’t touch it) that has gotten us into serious problems with inequality, war, climate and automation.
One path to reframing the task of descriptive economics is to see that the political regime is the major output of the economy.
The economy is the major governing infrastructure of the world and economics provides its concepts. People are much more aware of their place in economy than in politics. We know more about interest rates, banks and bailouts than about the difference between democracies and republics.
But society needs governance.
What if the governing world cannot absorb the changes needed in the factors that lead to inequality, and climate problems? What if the realities of governance suggest leaving the economy pretty much as it is?
But that world faces collapse.
We live in the shadow of unresolved issues from the French Revolution. the nature of property, wealth, capital, innovation , the meaning of freedom, individual, community desperately need to be rethought. Is economics up to that task? Or is it better off remaining as the plumbers of the economy without interest in who owns the pipes?
From the Treaty of Westphalia through the French Revolution to WW 1/2 to now – there is a strong continuity of unresolved issues. “What is society for and for whom, and how achieved, how managed, and how educated?”
Perhaps economics has been a way out of the complexities of civilized life. Yes. it is a religion. It is a source of meaning. Capital replaces God as the prime mover through the intermediary of the invisible hand. We believed in equilibrium as an unseen force with its inherent conservatism.
All of which is to say, the task ahead is larger than we thought, more is at stake than we thought.
OK, Now what?