Wren-Lewis/Mirowski/Syll on neoliberalism

29 May, 2016 at 18:45 | Posted in Economics | 2 Comments

Oxford professor Simon Wren-Lewis had a post up some time ago commenting on traction gaining ‘attacks on mainstream economics’:

One frequent accusation … often repeated by heterodox economists, is that mainstream economics and neoliberal ideas are inextricably linked. Of course economics is used to support neoliberalism. Yet I find mainstream economics full of ideas and analysis that permits a wide ranging and deep critique of these same positions. The idea that the two live and die together is just silly.

Hmmm …

And now he’s back again defending the mainstream economics establishment against critique waged against it from Phil Mirowski:

Mirowski overestimates the extent to which neoliberal ideas have become “embedded in economic theory”, and underestimates the power that economic theory and evidence can have over even those academic economists who might have a neoliberal disposition. If the tide of neoliberal thought is going to be turned back, economics is going to be important in making that happen.

Wren-Lewis admits that ‘Philip Mirowski is a historian who has written a great deal about both the history of economics as a discipline and about neoliberalism’ and that Mirowski ‘knows much more about the history of both subjects than I [W-L] do’. Fair enough, but there are simple remedies for the lack of knowledge.

Start take a look at this video:

Or maybe read this essay, where yours truly try to further analyze — much inspired by the works of Amartya Sen — what kind of philosophical-ideological-political-economic doctrine neoliberalism is, and why it so often comes natural for mainstream economists to embrace neoliberal ideals.

den-dystra-vetenskapen[Or maybe — if you know some Swedish — you could take part of this book-length argumentation (Atlas 2001) for why there has been such a deep and long-standing connection between the dismal science and different varieties of neoliberalism.]

2 Comments »

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  1. The economic problem is defined as limited resources and unlimited wants. That from the beginning elevates the market. It is a cynical view of both individuals and society. It is inherently anti-social. A whole subject is built around the notion of constrained optimisation. No justification is really given for the adoption of this key philosophical foundation. Generations of economists have been told that free trade, capital and labour flows are good without really asking serious questions about them. Power relations are pretty much ignored. The subject is positivist and rational choice based ( a common factor with neo-liberalism in political science – where it is just one school of thought, and neo-classicism in economics – upon it is considered that all analysis should be standardised). There is a strong suggestion that the economy follows natural laws that have no proper basis in history or scientific observation. One is that there is a natural rate of unemployment – very useful for constraining the state in dealing with social problems which could achieve full employment but would change the relationship between capital and labour. Large scale immigration – particularly of cheap labour – and free capital flows are considered all-good and the social implications of these policies (marginalisation, community frictions and again a change in the relationship of capital to labour – are played down). Models show returns to stationary states in the long run – again historical fiction. Implied is that the state is either fighting these universal natural laws or is called in to places where this apparatus which ‘should’ optimally allocate resources – by laws of nature -occasionally works suboptimally. What is disturbing is a lack of philosophical context to the elevation of the market to the centre state of macroeconomic analysis – even though an economy is a social system – or the contraptions that are used as analysis – models seem to be considered sufficient intellectual devices to deem well developed theories and proper deliberative discussion unnecessary.

  2. One interesting linkage (that is full of contradictions) is the relationship between the European project and the neo-liberal/neo-classical establishment. Here Varoufakis, who favours UK remaining with in the Union dismisses projections made the UK Treasury and similar forecasts, polls and signed letters made by economists of economic armageddon following a UK withdrawal as tosh:

    Interesting discussions at the beginning and the end of the programme.


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