sanity, humanity and science
Global
Financial Crisis 2008
An analysis by the
Real-World Economic Review
Formerly the post-autistic economics review
.( Post-autistic economics network
).
Big banks are failing, bailouts measured in hundreds of billions of
dollars are not nearly enough, jobs are vanishing, mortgages and
retirement savings are turning to dust. Didn’t economic theory promise
us that markets would behave better than this? Even the most ardent
defenders of private enterprise are embarrassed by recent events: in
the words of arch-conservative columnist William Kristol,
There’s nothing conservative about letting free markets degenerate into
something close to Karl Marx’s vision of an atomizing, irresponsible
and self-devouring capitalism.2
So what does the current wreckage of the global financial system tell
us about the theoretical virtues of the market economy?
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post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
"The
global economy bubble equilibrium"
Many
of the greatest deficiencies of neoclassical economics follow,
logically enough, from its central concept: equilibrium. Attacks on its
single-equilibrium assumptions in favor of multiple equilibria, most
notably in New Trade Theory, are one response to this. Another is the
growing realization23 that, in Keynes’s words, “markets can remain
irrational longer than you can remain solvent,” an obvious practical
fact that has resisted embodiment in theory. Neoclassical accounts of
market irrationality tend to treat this irrationality as mere noise,
whose systematic mechanisms are at best artifacts of behavioral
psychology. But in truth, the mechanisms by which markets can remain
out of equilibrium are as profound as those by which they find
equilibrium, and the present global economy is a case in point.
post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
Frederic Lordon [Centre National de la Recherche Scientifique, France]
- 2007
"High
finance -- a game of risk: Subprimes, ninja loans, derivatives and
other financial fantasies" -
Two
centuries after Hegel deplored the chronic failure of states to learn
the lessons of history, financial capital seems to be caught in a
similar loop, condemned to repeat the same errors, trapped in a
recurring crisis. The instruments involved may be new but the current
crisis on the credit markets has enormous potential for disaster, and
offers another reason to re-examine the “benefits” of capital market
liberalisation.
There is something of a religious cult about finance. It sees itself as
reality and insists that businesses justify themselves according to the
standards of financial reporting, by their quarterly results and
longer-term performances. Yet it remains stupidly ignorant of what its
own recent history teaches.
post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
James Angresano - 2007
"Orthodox
economic education, ideology and commercial interests: Relationships"
post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
Robert Pollin and Heidi Garrett - 2007
"The
employment effects of military and domestic spending priorities"
post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
Dani Rodrik - 2007
"World too complex for one-size-fits-all models"
Development “big think” has always been dominated by comprehensive
visions about transforming poor societies. From the so-called “Big
Push” to “Balanced Growth”, from the “Washington Consensus” to “Second
Generation Reforms”, the emphasis has been on wholesale change. Today’s
fashion in development is no different. The prevailing obsession with
the “governance” agenda entails a broad-based effort to remould
institutions in developing societies as a prerequisite for economic
growth. The United Nations Millennium Project involves a large-scale,
co-ordinated push of investment in human capital, public infrastructure
and agricultural technologies.
But there have also been iconoclastic dissenters from such
comprehensive approaches, among whom Albert Hirschman was without doubt
the most distinguished. Indeed, Hirschman’s seminal contributions have
now been recognised by the US Social Science Research Council, which
this year established a prize in his honour. When Hirschman was still
involved in development debates, he would frequently remind his
contemporaries that any country that had the capacity to undertake
comprehensive programmes would not be underdeveloped to begin with.
post-autistic economics review, issue no. 44
Ian Fletcher [USA] - 2007
Margaret Legum, economist, author and anti-apartheid activist 1933--2007
"What
is the right size?"
Popes are not necessarily the clearest communicators; but they can be
worth the effort. Take Pope Pius XII: ‘It is an injustice, and at the
same time a grave evil and disturbance of right order, to assign to a
greater and higher association what lesser and subordinate
organisations can do.’
That principle of ‘subsidiarity’ – that everything is best decided and
effected closest to the people who will be affected – is widely
accepted in politics: it is central to the EU principle.
The New Economic Foundation in London has a series of research
documents around the appropriate size for different kinds of economic
activity and sector. They make startlingly good reading – perfectly
obvious in some ways and counter-culture in those where mega-size is
assumed to be best. ‘Return to Scale’ is followed by ‘Public Spending
for Public Benefit’ and ‘Who’se the Entrepreneur?’ about social
entrepreneurship in local economic development. All offer practical,
implementable tools for supplementing or replacing the global scale,
based on markets that serve humanity rather than oppressing us. (Ref:
www.neweconomics.org)
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How should the collapse of the world financial system affect economics?
Part I
- After 1929 economics changed: Will economists wake up in 2009?
by Geoffrey M. Hodgson
- The economics of collapsing markets
By Frank Ackerman
- Economics needs a scientific revolution
By JP Bouchaud
The financial crisis Part III
- Reforming the world’s international money
By Paul Davidson
- How to deal with the US financial crisis
By Claude Hillinger
- The crisis and what to do about it
By George Soros
- On being "competitive": the evolution of a word
By David George
- The state of China’s economy 2009
By James Angresano
- Hedonic man: The new economics and the pursuit of happiness
By Alan Wolfe
Click here for full texts issue48
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| issue 47 issue 46 issue 45 |
Peter Dorman [Evergreen State College, USA] - 2008
What would
a scientific economics look like?
Sciences are loosely characterized by an agenda to describe the
mechanisms by which observable outcomes are brought about and the
privileging of propositions that have been demonstrated to have
negligible risk of Type I error. Economics, despite its pretensions,
does neither of these and should not be regarded as scientific in its
current form. Its subject matter, however, is no more recalcitrant to
scientific procedures than that of many other fields, like geology and
biology. The benefit of bringing economics into greater conformity with
other sciences in its content and method would be twofold: we would be
spared the embarrassment of unfounded dogma, and over time economics
could assemble an ever larger body of knowledge capable of being
accepted at a high level of confidence. A scientific economics would
take Type I error far more seriously, would study mechanisms rather
than a succession of states, would be more experimental and would
attach greater value to primary data collection.
Sen’s economic
philosophy: The revival of economics as a moral science
L. A. Duhs
New thinking on poverty
Paul Shaffer
The financial crisis
How far could the US
dollar fall?
Jacques Sapir
What’s in a number?
The importance of LIBOR
Donald MacKenzie
Progressive conditions
for a bailout Dean Baker
Comment
Editor’s note
The paper by Helen Johns and Paul Ormerod, “The unhappy thing about
happiness economics“, that appeared in the last issue of
this journal has attracted an uncommonly large number of readers.In
addition to downloads of the whole issue, Johns and Ormerod’s paper has
to date been downloaded over 12,000 times, more than twice the average
rate. Given this strength of interest and the paper’s strong and
consequential thesis, a dozen leading practitioners of happiness
economics have been approached, offering them a chance to reply. So far
none have ventured forth.If there is any economist out there who feels
capable of rebutting all or part of Johns and Ormerod’s arguments, then
a space awaits them in this journal.
“A XXI-century alternative to
XX-century peer review” by Grazia Ietto-Gillies in issue no. 45.
Donald W Braben, Roland Fox, Stevan Harnad, Marco Gillies, Paul
Ormerod, Menakhem Ben-Yami
Comments
Rejoinder: Grazia Ietto-Gillies
Regarding
articles by Margaret Legum and Jim Stanford: "Economic freedom is
negative liberty"
Joshua C. Hall, Robert A. Lawson and Will Luthermso
Rejoinder: “Economic freedom”
Jim Stanford
Opinion
If it ain’t broke, don’t fix it… Post autism and
political correctness
Benjamin H. Mitra-Kahn
Editor’s
Note
When the going gets tough, economists go very quiet
Simon Jenkins
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sanity, humanity and science
Post-autistic
economics review
Issue
no. 44 - 9 December 2007
You can download the whole issue as a 77 page pdf document by clicking here
download articles individually by clicking on their pdf link.
In this issue:
Frank Ackerman, "Economics for a warming world" - download
pdf
Jorge Buzaglo, "Climate change, global ethics and the market" -
download pdf
Issue
no. 27, 9 September 2004
In this
issue:
- G. C. Harcourt
What would Marx and Keynes have made of the
happenings of the past 30 years and more?
- Richard D. Wolff
The Riddle of Consumption
- M. Ben-Yami
Fisheries management: Hijacked by neoliberal
economics
- Deborah Campbell
Here’s what economics students in three countries
are doing to put their professors on the defensive
Read full
text of issues 44, 43, 42, 41, 40, 39, 38, 37, 36, 35, 34, 33, 32, 31, 30,
29,
28,
27,
26,
25,
24,
23,
22,
21,
20,
19,
18,
17,
16,
15,
14,
13,
12,
11,
10,
9, 8, 7, 6, 5, 4, 3, 2, 1.
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| What is post-colonial thinking?
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