The Rebel Economists

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By Ladislau Dowbor*

This is a new vision: economics is not something we have to “understand” in order to adapt, it is not about “forces of nature”. Economy is the set of “rules of the game” that we can transform and organize according to the society we want to be.

What is emerging with great force in the world of social sciences, and in economics in particular, is the search for new directions. The four decades, from the 1980s to 2020, brought a simplified vision and the corresponding narrative of reducing the role of the State, liberalizing corporate behavior and globalization of economic flows. As a result, we lost what little there was of governance and rationality during the “30 glorious years” of the post-war period, in which a reasonable balance between the State, companies and civil society organizations had been achieved.

The view that the loose economic world will magically find equilibrium, through natural “mechanisms”, has led us to the present dilemmas. Corporate MMA is generating a planetary environmental disaster. The mismatch between global economics and national policies leads to absurd contradictions. Financialization is generating inequality at aberrant levels. The set threw the planet into the political chaos that we observe today in all continents. Where a little while ago it was said "Theres no alternatives" Or "It's the end of the story"; Now we are trying to regain control. In this runaway world, rushing towards disaster, we are all looking for the reins.

Not long ago, the simplification we saw above still prevailed, with the unique discourse of the so-called “orthodox”. This is changing. There is a veritable explosion today of analyzes that come back to common sense. The immense success of Thomas Piketty is part of this planetary turnaround, and the book came when the world was already looking for new visions. With michael hudson we come to understand the financial dynamics that are generating the aberrant inequality we face today.

Ha Joon Chang pointed us to another vision of the economy, in particular regarding the world centered on new technologies. Mariana Mazzucato brought us a much more realistic view of the role of the “entrepreneurial state”. kate raworth presents a system of accounting for economic outcomes that makes sense well beyond GDP. And, suddenly, researchers marginalized in “heterodoxy”, visionaries like Kenneth Galbraith, François Chesnais or David Harvey appear as precursors who woke up before others.

Economics is not waking up from ideological simplifications and absurd narratives just from within your field. It is from the field of social psychology that Jonathan Haidt takes us away from the pathetic simplification of homo economicus and shows how we construct rationalizations for political absurdity. Frans deWaal, from anthropology, shows how we are easy prey to an irrationality that has deep genetic roots, it is not by chance that we are massacring each other, in violence and endless wars since forever: we still belong to a large extent to our primate ancestors. Wolfgang streeck brings us a very strong understanding of the interaction between the economy, culture and politics, concluding that it is not the end of capitalism, but the end of democratic capitalism. That is, the various areas of the social sciences end up putting the economy back in its rightful place: as a necessary but insufficient adjunct to the integrated analysis of social transformations.

With that, what we pretentiously call economic science, the economics in English, is finding its ways again, and its usefulness. The emerging worldview: how new progressivism is moving beyond neoliberalism, book organized by Felicia Wong, brings a range of emerging analyzes – covering the knowledge we have about ongoing disasters; and bringing economics, sociology, culture and politics closer together – to build a much more realistic vision, and to design new directions for the economy itself.

Within the framework of the Roosevelt Institute, which has been proving to be a mine of innovative reflection, Wong presents, in a short report of 56 pages, a systematization of the analyzes of about 150 researchers who seek to design new paths, rejecting the neoliberalism that they consider an aberration momentary. The report has 8 pages of bibliography, which allows us to visualize, indirectly, the amplitude that this movement is taking. It constitutes an excellent tool for all of us who seek to embrace this new vision that is taking shape on the horizon, and this time with common sense, that is, having the well-being of the population and the sustainability of the process at the center.

The starting point is that it is a question of reappropriating the rules of the game. The economy works according to pacts that society establishes for itself. When Finland decides that education works best as a public system with universal access, and that a primary school teacher needs to earn a salary equivalent to that of a lawyer or an engineer, there is no economic “law” for this; but the agreed common sense in order to make society work.

The economy is no longer seen as a wrestling ring, where the State only provides the ropes and a whistle. It is a new vision: the economy is not something we have to “understand” in order to adapt as well as possible, it is not about “forces of nature”. Economy is the set of “rules of the game” that we can transform and organize according to the society we want to be.

No wonder lately we have reports like New Rules for the 21st Century, from the Roosevelt Institute itself, the Change the Rules: new rules for the economy of the New Economics Foundation in London, the Alternatives Economiques of Paris, or himself The Emerging Worldview that we present here. I have already presented in another article the positions around the Economy of Francisco (https://aterraeredonda.com.br/a-economia-de-francisco-ii/), and important positions taken by various corporate groups. Here, with Felícia Wong, we have an attempt to synthesize all that is emerging.

As every position today requires an “ism”, here there is no escape: the analysis proposes New Progressivism, that is, we are progressive, but not like those of old. Something new is sought. What does that mean in political terms? I would call it civilized capitalism. But this is explicitly a vision of new structures to develop, not a return to some kind of more democratic capitalism. “The new progressivism understands that markets are governed by human choices. This means that politics, ideas and ideology matter. Who should markets serve, and who should they prioritise? For what purposes? These are decisions the public should make in the affirmative.” (p. 37). In other words, economics is once again called political economy.

In this mapping of the new scientific “landscape” that emerges, the document identifies four groups, whose analyzes converge to a new worldview (world view). One group comprises thenew structuralists”, which focus on the existing system and suggest rules of the game for the market, with tax reform, transparency of flows, control of tax havens and the like, such as the Piketty proposals.

A second group,public providers”, with Mariana Mazzucato for example, who focuses on the potential of the State as a direct provider of goods and services, particularly in the social areas, technological research, infrastructure: here the State can compete directly with the market.

A third group is called “economic transformers”: it is a State that defines long-term strategies, large-scale structuring policies, industrialization policies and the like.

The fourth group focuses oneconomic democracy”, in the institutional dimension, involving the decision-making process of society, seeking to rescue the democratic dimension of economic transformations, including the importance of local power.

There are four groups that present different identities, but that notably converge towards a structurally different vision. Felicia Wong considers that the most important common points are: (1) markets are not systems that are freely structured, but are structured by politics, choices and power; (2) these choices can guide even the biggest and most disruptive forces, such as technological change or greater global integration, towards better outcomes for the population; (3) values ​​matter. Post-neoliberal progressivism needs to define how we want the new economy to work and how we define success, based on a list of values ​​that answer the questions of an economy for what ends, and an economy for whom? (4) fixing the edges of policy reform is insufficient. A new political paradigm is needed, and it must be built on the foundation of transformative, structural change. (p. 9)

The general picture is that the free-for-all we call the market, which temporarily acquired a certain academic respectability under Milton Friedman, and acquired political teeth with the Washington Consensus, is fast on its way out. With almost 8 billion inhabitants, extremely powerful and aggressive technologies, and corporate giants totally detached from the realities that people live, we are facing a challenge of civilization, far beyond narrow economic theories.

A new vision of the world, with the rescue of the economy in its dimension of political economy, is emerging. Felicia Wong's text is very good, simple (no economese) and very well systematized. And the bibliography, as I mentioned, is an excellent tool, particularly for those like me who teach economics.

*Ladislau Dowbor He is an economist and full professor of graduate studies at the Pontifical Catholic University of São Paulo.

Article originally published on the website Other words.

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