Tag Archives: financial crisis

Sack the Economists now available

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SackCoverMy ebook Sack the Economists and Disband their Departments is now available.

Mainstream economists completely failed to anticipate the financial market crash of 2007-8.  They then called it an unforeseeable event.  This is a clear admission that they don’t understand how economies work.  Yet many non-mainstream, marginalised economists gave clear warning of the approaching crash.  This book shows how mainstream economics has not one but many fundamental flaws.  It is not a science, it is pseudo-science.  It lacks scholarly rigour and integrity.  Once you understand this, it is not a mystery why the mainstreamers missed the approaching crash, nor why wealth is so unequally distributed, why we are so materialistic and unfulfilled, and why the planet is being destroyed.  But modern knowledge and systems ideas reveal market economies to be self-organising systems, and they can be managed to support dignified livelihoods in equitable societies that can survive into the indefinite future, with nature thriving along with them.

See more at the book’s web site, including how to purchase your copy.

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Sack the Economists

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… and disband their departments

The honourable Alan Greenspan testifies before...

The honourable Alan Greenspan testifies before the House Financial Services Committee. (Photo credit: Wikipedia)

[My silence for some time here has been mainly because I was focussed on re-packaging my economic ideas in a form that might gain more traction.  So, there is a new book manuscript of the above title.  It will help to promote it (to publishers) if I have readers’ reactions.  Therefore, if you will undertake to give me feedback, I will supply you with the draft MS (120 pages, 2.2 Mb pdf).  You don’t have to be expert, it’s for a general audience and so I want feedback from that audience.  Most helpful to me will be comments on its readability and interest.  Of course any discussion of its arguments are also welcome.]

Here is the first part of the introductory chapter.  I will post more in a few days.

Chapter 1.  Economists Don’t Know What They’re Talking About

In 1994 Paul Ormerod published a book called The Death of Economics1.  He argued economists don’t know what they’re talking about.  In 2001 Steve Keen published a book called Debunking Economics: the naked emperor of the social sciences2, with a second edition in 2011 subtitled The naked emperor dethroned?3.  Keen also argued economists don’t know what they’re talking about.

Neither of these books, nor quite a few others, has had the desired effect.  Mainstream economics has sailed serenely on its way, declaiming, advising, berating, sternly lecturing, deciding, teaching, pontificating.  Meanwhile half of Europe and many regions and groups in the United States are in depression, and fascism is making a comeback.  The last big depression spawned Hitler.  This one is promoting Golden Dawn in Greece and similar extremist movements elsewhere.  In the anglophone world a fundamentalist right-wing ideology is enforcing an increasingly narrow political correctness centred on “free” markets and the right of the rich to do and say whatever they like.  “Freedom”, but only for some and without responsibility.

Evidently Ormerod and Keen were too subtle.  It’s true their books also get a bit technical at times, especially Keen’s, but then they were addressing the profession, trying to bring it to its senses, to reform it from the inside.  That seems to have been their other mistake.  They produced example after example of how mainstream ideas fail, but still they had no effect.  I think the message was addressed to the wrong audience, and was just too subtle.  Economics is naked and dead, but never mind the stink, just prop up the corpse and carry on.

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A Dramatic Shift to the Right

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Part 1 of 3 on Independent Australia.  These three pieces are taken from my long essay The Rise and Failure of the Radical Right:

DitchTheWitch

“In the first of a three part series, Dr Geoff Davies considers the worldwide shift to the political Right since the 1980s, and how traditional conservatives have now become radicals.”

 

 

Finding a Framework for a New Economics

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[In preparing a pitch to some possibly supportive people, I realised I have not spelt out in brief form the argument that economies are complex self-organising systems.  There is a straightforward logic, it is not simply a preference pulled out of the air, or the depths of my psyche.]

Many economists, and more non-economists, agree that economics needs new ideas, given the comprehensive failure of the mainstream to foresee the Global Financial Crisis and its continuing failure to lift the US and Europe out of deep recession or depression.  Yet few seem to know where to start, and there seems to be little agreement on how much the subject needs to change.  When proposals appear that might begin to address fundamental problems, many economists seem to recoil, and others seem simply to fail to recognise that the proposals have any relevance.

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BoE Economist: Economies are Wild Horses, not Rocking Chairs

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[After a break for family business and time out, here is a bit of vindication.]

Olaf Storbeck is the International Economics Correspondent with Handelsblatt, Germany’s business daily. Based in London, he is writing about current economic research.  Here he interviews Andrew Haldane.

Andrew Haldane is the Bank of England’s Executive Director for Financial Stability. I recently talked to him about the crisis of contemporary economics and the way forward.

You are vocal critic of mainstream macro economics. How does this square with the tradition of central banks who historically have been very conservative institutions.

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The political correctness of the radical Right

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[Just published on ABC’s The Drum Unleashed.  It is distilled from The Rise and Failure of the Radical Right.]

What currently passes for political commentary includes excited discussions about whether the Leftist Labor dog is being wagged by a“toxic” Greens tail; why right-wing Labor is in dire straits; whether centrist Labor is resurgent; and whether the extremist Greens are doomed.

Balance, in political commentary, is supposed to lie somewhere between Labor and Tony Abbott, who often seems to be regarded as just a somewhat aggro conservative.

Such commentary reflects remarkably limited perspectives that fail to take into account two major developments over the past five decades. The first is the rise of the radical Right. The second is the manifest failure of radical Right policies.

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The Rise and Failure of the Radical Right

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[For some time I have been frustrated by the very limited perspective of mainstream political commentary in Australia, and by the difficulty of establishing a longer perspective in the standard 800-word commentary piece.  So I decided just to write until the case was made.  Hence this 6000-word essay.  It refers to the Australian context, but there are parallel stories in other countries.]

The political spectrum is traditionally characterised in terms of Left and Right, but the way these terms are used has changed so much they have become quite misleading.  Today they are more about tribal identification, and their use is more of an epithet than a description.

The main reason for these changes is that the Right has shifted to quite extreme positions, compared with a generation or two ago.  The modern Right not only espouses free-market fundamentalism, it promotes an extreme individualism that overlooks or dismisses the importance of social relationships and even denies the existence of society.  There seems to be no standard of factual basis, sense or consistency required for its claims, so any opinion, however uninformed or misinformed, apparently is to be accorded as much validity in the public domain as any other.

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Eight Elementary Errors of Economics (slightly revised)

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The long, and slightly modified, version of Eight Elementary Errors of Economics is now on SteveKeen’s Debtwatch.  Reblogged on Business Spectator, 22 June and The Bull 23 June.  I consolidated two of the previous points and added what is now the final point on emergent wealth of land. See also on Real World Economics Review Blog, 7 June, with long discussion.

Post edited 4 July:  the full modified version now follows, so it’s all consolidated here.

The Global Financial Crisis, the extreme inequality of wealth world-wide, the materialism of modern life and the dire state of the planet are not accidents, nor just unavoidable consequences of the nature of things.  They are the result of the modern practice of economics, which makes elementary errors of accounting, evidence, perception and theory.

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Eight Elementary Errors of Economics

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[This is my most recent attempt to encapsulate the deep flaws in mainstream economics, and the sensible alternative struggling for recognition.  Posted 7 June at Real World Economics Review blog, with a lively discussion following.]

The Global Financial Crisis, the extreme inequality of wealth world-wide, the materialism of modern life and the dire state of the planet are not accidents, nor just unavoidable consequences of the nature of things.  They are the result of the modern practice of economics, which makes elementary errors of accounting, evidence, perception and theory.

Continue reading →