Freedom from dogmas

Economics needs to throw some ideas into the dustbin of history
Time to read a different textbook

Time to read a different textbook

I have already ranted before about how I feel the meaning of democracy has been lost in the modern era but I feel even more needs to get off my chest. For the past three decades we have lived in a world that has essentially bastardized the idea that government is “for the people” and that it involves the “rule of the many”. Much of it has to do with the economization of politics; in other words, policies that result in economically efficient outcomes or that promote freedom of choice are necessarily those that deepen democracy. Even at the height of the financial crisis in 2008, George W. Bush summarized this belief best: “If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go.” How deep this belief was ingrained in mainstream thought that one of his advisers and also one of the most cited economists of our day, Gregory Mankiw, echoed these sentiments almost to the letter: “Free markets remain the best way to promote growth, create good jobs, and ensure rising living standards”.

For those of us who fortunately did not get brainwashed by free market fundamentalism, the unraveling of the Reagan-Thatcher consensus after the 2008-09 crisis has become an intellectual vindication served on a silver platter. Unfortunately, despite the overwhelming evidence that macroeconomic policymaking since the 1980s has been counterproductive to growth, we’re still far away from obtaining a consensus in believing that it has also fundamentally destroyed the way that democratic societies function. Why? Because too much of the population and too much of academia still believes in certain nonsense dogmas that have been passed on through generations of teachers and students, mentors and apprentices. Like a religion, there is an overwhelming sense of guilt at abandoning these dogmas; not least because in a society that frowns upon error (especially in academia), admitting you’ve been wrong all along is a one-way ticket to professional disgrace. Continue reading