How Did the Economists Take Over?
My old Economics teacher always had a joke or two about the subject, which he loved, even knowing its deficiencies; one of my favourites is ‘that you could lay every economist on earth end to end and still not reach a conclusion.’ If Economics was a person, he’d say, it was probably a mythical one, Sisyphus. You know, that dude condemned to eternal futility and not sure why.
I really liked my old Economics teacher. I’m not a fan of Economics though.
The question is: when did ECONOMICS become the only thing that seems to matter?
It is, after all, not even a real science, just a social one? Somehow, though, it’s become not just the way we understand THE ECONOMY, but also our dominant social science. It’s the only way – we’re told – we can understand… well, life, the universe, and everything. The only certainties, you know, are death and taxes. And Economics has got the last one covered.
Economics is perhaps the most significant subject of social/media discourse. The economy is so weighty a matter that it’s not just the subject of social discourse, whether in the media, social or not, but also provides much of its language. We spend our time, and are told we should value it; we are told to think of the costs. Many of our metaphors are mercantile (think of counting your pennies, or insisting the buck – and that’s not a deer – stop with someone of responsibility); we take accounts of things, and we assess the worth of things – many of them environmental biomes like wetlands – in dollars and cents. We budget time, we allocate resources. On the news, day after day, we hear (and see, usually with the aid of graphs) about stock movements, the rise and fall of markets, and talk of bears and bulls. We get told how to budget for hard times—and times are nearly always tough. And, apparently, we need financial planners in our lives. Think of politics—if you must; the government (and its opposition) talk to us about just about any and all stuff with a weather eye on the Economy as the primary consideration. We know our Treasurer’s name, and probably can dredge up the Finance Minister’s too. We hear (and see, usually with the aid of graphs) about the costs (ever ballooning) of doing anything, and someone or other must tell us how so and so is (or is not) a good economic manager. The big ticket item at present in the English-speaking world, which is the one I am culturally forced to listen to
(my French is rudimentary, my German and Spanish non-existent and I only speak a smattering of Street bahasa) is the ‘Cost of Living’. Not living, you’ll note, but its cost.
Richard Denniss, the Australia Institute's chief economist, has written a book entitled ‘Econobabble’. ‘We hear [ECONOBABBLE],’ he writes, ‘every day, when politicians and commentators use incomprehensible economic jargon to dress up their self-interest as national interest.’ It is, you’ll observe, our NATIONAL interest they dress self-interest up as. As far as I can tell, every nation does the same thing – use ECONOBABBLE; after all, virtually every nation on earth is a practising Capitalist one of some sort. That’s another reason it’s ‘econobabble’, the multitude of languages it’s proselytised in. Economics is the modern world’s real Tower of Babel, one still with biblical significance. And thus we need websites designed to help people make sense of the babble, such as ‘A Reader’s Guide to Economic Headlines.’
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If you type ‘when did ECONOMICS, allegedly how we understand The Economy, become the only thing that seems to matter?’ into a search engine – almost UNDENIABLY GOOGLE – you’ll mostly discover lots of stuff on the history of economic thought… but that wasn’t the
point, was it, and doesn’t really answer my question.
And I realise I’ve asked the wrong question. I probably actually want to know WHY it’s the ECONOMY that is seemingly the only thing that matters? Typing this revised question (‘why’ is such a powerful little word) doesn’t, however, really improve my responses – most of the results now offer up articles on scarcity. I do find this little gem. Entitled ‘What if the single most important idea in Economics no longer works?’
Note these bits particularly:
The phenomenon Smith had his eye on is the mysterious order that seems to emerge from free exchange in a market. No-one
tells bakers what to do, or helps them coordinate with their suppliers, or forecasts how many loaves of bread they should make. And yet bakers get up damned early, and work damned hard, and make a decent fist of judging the baguettes and the braids and the rounds.
Smith’s explanation for these outcomes is that the market acts as a coordinating mechanism. As prices are set and as consumers
make choices, this reveals underlying information about what people want, and it incentivises other people to meet those wants.
The market thereby aggregates self-interested preferences into an output that looks, on the face of it, selfless. It’s a form of emergent intelligence that led Smith to his most famous metaphor: the invisible hand.
What Smith wasn’t claiming, contrary to what many on the left and right like to think, is that markets are perfect, or that they can self-regulate, or that there’s no need for the state. As Jesse Norman shows in his biography of Smith, the idea of the invisible hand is both narrower and more contingent than it’s often claimed to be.
Smith saw, for example, that markets can create harmful byproducts. Our baker might, in their blinkered focus on bread, throw
their litter into the street. Smith also acknowledged the risk of collusion, warning that, whenever company bosses meet, the conversation is likely to end “in a conspiracy against the public.”
Smith even saw that people are prone to irrational behaviour[1], a strand of thinking that later matured into behavioural economics. This all means there’s a role for the state: banning or taxing ‘bads’ like pollution, breaking up monopolies and cartels, and protecting people from exploitation.
Behind all of this, however, lies that central conviction: that a baker’s ambition is aligned to a customer’s appetite. The baker’s route
to a good life is to make the customer’s life good. And it’s because of this lucky alignment that markets — if we can contain all those byproducts — lead to a prosperous social order and drive progress over time.
Though the article didn’t really answer my question in a simple, straightforward way so that I could go to bed, it did prompt some more reading, thinking, and wondering. The article’s key idea, coincidentally, is:
‘The idea that markets align the interests of producers of consumers… went on to become one of the most important in all of economics, framing how we conceive of the relationship between the market and the state.’
That is the idea that the article suggests does not work – or apply – anymore. And that’s because of the dominance of large and technofeudalist - to use Yanis Varoufakis’s term - TECH FIRMS, such as Google and Amazon etc.
That’s an argument we’ll come back to later.
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So why is the economy the only thing that matters? How is it that the ECONOMISTS took over? And, in another question derived from my research, how has the INTERNET affected all this? And that’s prompted a few other questions/thoughts
Has the Economy replaced God in our culture[s]? (This brings me to thoughts of how rapacious many religious fundamentalists and cults
seem; the purpose of preaching is the making of money (a.k.a. monetisation, one of those words I hate). But has money, or the Economy, also replaced god with THE ECONOMY as the key ways in which societies are and should be organised, which translates as money and POWER. Has the INVISIBLE HAND, of Smith’s imagination, become in fact the will of god?
So, in this new universe, of Money or The Economy as God, is Man, once crafted by god as a creature become wilful because he picked from the Tree of Knowledge of Good and Evil, now acting as Homo economicus – a creature not wise but driven by a need to accumulate wealth, whose rational decisions are all only about competitive edge and making more money?
Social discourse is frequently Economic discourse
And that will do for now.