The impression given by the media and politicians, is that there is a large degree of consensus on economics, but there isn’t.
There are many different forms of economic theory, and if you ever find a cross section of economists arguing you will see they disagree significantly. They are also notoriously unable to predict crashes or other economic events. Large numbers of mainstream economists claimed that business and finance had solved the problem of crashes just before the last big crash. Few warned against it, or were taken notice of, if they did.
Given there is this level of disagreement and that economics frequently fails to be useful, why are non-economists given the impression that there is unity and truth in that unity?
The Orthodoxy
This is where the politics comes in. Probably, because of the power arrangements common throughout the world, in which wealth elites dominate and structure the economy in ways which they think benefit them, voters have to be persuaded that:
- We have a free market economy, or things would be even better if we had a really free market in which governments, or people, had no control of the wealthy.
- We don’t need to regulate, or interfere in business, because The Market, represents the invisible hand of God, and does everything close to perfectly.
- Free markets work for everyone.
- Free markets bring liberty.
- People who rise to the top in a free market have special talents which others do not have, and which benefit all.
- There is no need for a minimum wage people can live on, because if people deserve to live, and work hard, they will be ok.
- If you are low paid or unemployed, it’s your own fault, and you just need to work harder, because The Market is good at distributing benefits.
- We need to protect business, and listen to it, before anyone else, as business is the really important important part of society.
- Wealthy people and corporations need more in tax cuts because that will lead to more business.
- Business rarely does anything wrong collectively, and if the economy fails it is because of ‘the government’, even if the government is owned by business.
- Booms, busts and bubbles are aberrations, or the consequence of avoidable human folly.
- Crony capitalism is an aberration, easily rectified by less government intervention.
- Everything is going as well as it possibly could, without imposing dreadful impingements on your liberty.
This persuasion is the main feature of mainstream neo-classical and popular economics. They may not say any of this directly but that is what mainstream economics comes down to.
This is generally what we might call “right wing economics” – or economics which supports existing relations of power and wealth.
Non-mainstream economics
Many other economists might disagree with all of these kinds of propositions, but you won’t hear that much from them, and what you do hear is probably distorted to help support mainstream economics. I’m not an economist, so there is much I am missing out here but some simple examples include the ideas that:
- Economies cannot continue to grow, in a finite ecology, without running against the limits of the world and permanently damaging themselves and the Earth.
- There are limits to possible pollution without producing disastrous change and we are hitting them.
- Capitalism constantly destabilizes itself. Booms, bubbles and crashes are part of its normal workings.
- Business is pretty obviously wrecking society and the natural world, as part of its normal activity. It brings goods and harms.
- Capitalism is not just trade, but a form of class warfare.
- Mainstream economics is a form of politics and about supporting power as much as it is about trade.
- Capitalism tends to produce monopoly and diminish competition.
- In capitalism, crony capitalism and plutocracy are the norm, and to be expected.
- Capitalism always exists with a State, and uses the State to maintain its functioning.
- Capitalism destroys the ability of most people to be self-supporting outside of waged labour. It rewards obedience to a boss and dependency.
- When business controls the spread of information, information is geared towards markets (what appears to sell the news to people), propaganda (what appears to preserve the system or increase the power of some favoured players) and commercial hype (what produces more sales of ‘our’ commodities) rather than accuracy. Almost everyone in such a market has little idea about what is going on, and the markets will likely collapse.
- Strong unions increase the relative power of workers and increases their share of profit.
- If people live in capitalism they need protection from the cycles of the economy, and unemployment.
- Distributing money to the poorer classes stimulates the economy, as they spend the money. Distributing money to the wealthy takes energy from the economy.
- Human beings exist best and with the most freedom in a ‘gift economy’, rather than an ‘accumulation economy’.
These opinions tend to be less visible in the media, or distorted by the media and politicians.
Conclusions
I’m not trying to convince you of the truth of any proposition here. The main point is to know that there is a lot of variation of economic theory, and little consensus about the right thing to do, despite the confidence with which politicians and media people speak in favour of orthodoxy.
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