Wednesday, October 16, 2013

The Poverty of Economics

What is the purpose of economics? To explain and describe the production and distribution of goods & services? Perhaps it is simply that. Though what good is an understanding of how trade, production and currencies work if it is divorced from an understanding of the underlying goal of the system? The study of economics has and always will be an utterly value-laden discipline, though unfortunately it seems like it is often portrayed as a disinterested 'science', only concerned with the ways things are. In reality, economic analyses always bring with them unstated assumptions. Much of modern economic policy, disguised in the language of efficiency and individual freedom (see my post on Economic Nihilism) serves to benefit those who already wield vast economic power. To adopt the language of the occupy movement, who are economies built and maintained by and for? The 99% or the 1%?

These value-laden assumptions that underlie all of economics need to be brought out into the open and laid bare. I cannot take the discipline of economics seriously unless something of a dialectical approach is brought to the fore of the public discourse. Ethical justifications that take into consideration the real world implications of economic policy and the associated patterns of distribution need to be taken into account. Economics isn't simply about impersonal forces, it isn't physics—though some pretend it is— it's about people, and so often this seems to be ignored. What good is economic growth if large portions of the population are struggling to get by?

In a discussion I was involved in on a message board this week about living wages and government funding for education, a laissez-faire capitalist argued that tertiary education should be entirely user-pays. What was his justification for this? Simply that subsidised education is a "market distortion". No other justification was given initially. This extremely value-laden justification was simply offered as an a-priori truth. "Market distortions are bad." Understandably, as this discussion was taking place in a forum where some kind of evidence is considered necessary for claims he was asked to explain why market distortion was bad. His response was that it removes the education market from its optima.

The laissez-faire capitalist mentioned in the last post was no dunce either. He's well educated and certainly has reasons for why he believes what he does (what I think of those reasons is another matter entirely), but simply offering a-priori justifications for economic beliefs as if they are based on something other than value judgements seems standard faire in modern political economic discourse. As you probably gather, I reject this paradigm entirely. The neoliberal quagmire of so-called efficiency our discourse has become trapped in needs to be abolished in favour of a much more humanistic and ethically focussed one.

Admittedly I do not devote much of my spare time to studying mainstream economics, so while these ideas seem somewhat original to me, I realise that they may have been said many times before by people much more in touch with economics than I.

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