"It is time to acknowledge an uncomfortable truth about the public status of economics as an expert discipline: it has grown to be far more powerful as a tool of political rhetoric, blame avoidance and elite strategy than for the empirical representation of economic life. This is damaging to politics, for it enables value judgements and political agendas to be endlessly presented in ‘factual’ terms. But it is equally damaging to economics, which is losing the authority to describe reality in a credible, disinterested, Enlightenment fashion."
Brilliant analysis in Open Democracy on the perverse power of economic technocrats on our democratic institutions.
This text is the first of a series of articles under the heading “Uneconomics” which aims to “challenge the dominance of orthodox economics in public debate, highlighting alternative perspectives on the economy and the benefits that they might bring to informing policy and raising public understanding of the current crisis.”
“Modern macroeconomics often seems to treat rapid and stable economic growth as the be-all and end-all of policy. But, while that is the message from graduate classrooms to central-bank boardrooms to newspapers’ front pages, is it true?”
Great article by Kenneth Rogoff at Project Syndicate.
When traditional economists like Rogoff follow in the footsteps of Stiglitz questioning our fundamentalist obsession with economic growth, that is something to feel positive about at the beginning of this new year.
"Chosen and pushed we are in a period of great transition hampered, mostly, by dead economic ideas still walking. It will best be shaped by those who are able to escape the trap spotted by John Maynard Keynes, to recognise the power of defunct economists, and be brave enough to exempt themselves from their influences. As a principle with which to re-examine our values and redesign our financial system we could well proclaim again, loudly, that real wealth is life, and finance must be its servant, not its master."
Great editorial comment in the Guardian by New Economics Foundation’s Andrew Simms.
This analysis on Vox EU by IMF chief economist Olivier Blanchard is symptomatic of the blindness of traditional economists to the real causes of our current Global Crisis.
Their denial of the new reality of "limits to growth" is becoming pathetic were it not that these guys are advising our political leaders on what to do to exit the crisis. What friends like this, who needs enemies?
On his Alternatives Economiques blog, French economy professor Jean Gadrey has an excellent overview of the real causes behind the current public debt crisis and provides ideas for short- and mid-term solutions.
Gadrey belongs to a group (“FAIR”) of French academics and intellectuals who are doing great work on redefining prosperity and economics.
"Forget the BRICs. The real economies that will shake up the world over the next few decades need a new acronym."
How Turkey, India, Mexico, Brazil, and Indonesia will be the next economic superstars. Very interesting article in Foreign Policy.
“Economics is at the start of a revolution that is traceable to an unexpected source: medical schools and their research facilities.“
Project Syndicate has this interesting article by Robert Shiller ("Animal Spirits") on the new wave in economic thinking. Maybe these neuroeconomists should first try to understand what is wrong with traditional economists’ brain to have such a distorted view of how the economy REALLY works?
The Stockholm Environment Institute (SEI) has just published one of the best studies on the strengths and weaknesses of the models and assumptions used in recent climate economics publications.
The SEI authors conclude that "climate economics tends to lag behind climate science" and make several interesting recommendations to improve this important economic analysis.
"When economists tackle small problems, they lose any vision about what the economic system should look like."
Economics professors Backhouse and Bateman make the case for a new breed of economists with a big-picture vision instead of a "dentristy" approach to economics.
"We clearly need a new, alternative vision of capitalism. But thanks to decades of academic training in the “dentistry” approach to economics, today’s Keynes or Friedman is nowhere to be found."
While I agree to a large extent with their analysis, the authors would do well to look at some of the work coming out of the new branch of economics called “biophysical economics”.
For a good introduction to the work by Charles Hall and others in this field, read this excellent introduction written by Kurt Cobb in the online magazine Scitizen.
Belgian banking and currency expert Bernard Lietaer and community developer Gwendolyn Hallsmith present some of their stimulating ideas on how to re-engineer our monetary systems for the sustainability revolution.
A bit technical and out-of-the-box but the kind of innovative thinking that we will ultimately need. Much more realistic than the mumbo-jumbo presented by EU leaders as the "historical" solution for Europe.
“The Terra system—built around a global business-to-business currency called the Terra— would provide a systemic solution to the foreign-exchange risks and simultaneously solve several other problems for society at large: (1) it would counteract the short-term thinking that is systemically introduced by the interest feature of conventional currencies; (2) it would reduce the compulsory growth imperative that interest generates; and (3) it would provide a countercyclical economic impulse that would contribute to stabilizing the world economy.”
Source: Solutions Magazine