Why do economists never mention power?

29 Mar, 2021 at 22:49 | Posted in Economics | 8 Comments

Trumpian trickle down | LARS P. SYLLThe intransigence of Econ 101 points to a dark side of economics — namely that the absence of power-speak is by design. Could it be that economics describes the world in a way that purposely keeps the workings of power opaque? History suggests that this idea is not so far-fetched …

The key to wielding power successfully is to make control appear legitimate. That requires ideology. Before capitalism, rulers legitimised their power by tying it to divine right. In modern secular societies, however, that’s no longer an option. So rather than brag of their God-like power, modern corporate rulers use a different tactic; they turn to economics — an ideology that simply ignores the realities of power. Safe in this ideological obscurity, corporate rulers wield power that rivals, or even surpasses, the kings of old.

Are economists cognisant of this game? Some may be. Most economists, however, are likely just clever people who are willing to delve into the intricacies of neoclassical theory without ever questioning its core tenets. Meanwhile, with every student who gets hoodwinked by Econ 101, the Rockefellers of the world happily reap the benefits.

Blair Fix

8 Comments

  1. Interesting article here where thow UK Labour party are now questioning the ideology behind New Labour’s (late 1990s/2000s) pro-market, pro-globalisation policies.

    https://www.independent.co.uk/news/uk/politics/lisa-nandy-tony-blair-globalisation-labour-b1824989.html

    People, however, need to understand that this ideology was imported lock, stock and barrel, from neo-classical economics. Economists were powerful during this time, and politicians were happy to have them on side. There were many who saw the dangers of these policies been taken to the level they were – but they were effectively ostracised. Lars had a good post recently with a video featuring the Krugman’s treatment of Hirsch, which is an example of how this was done.

  2. Many from outside the discipline, including historians and philosophers, must look at neo-classical theory and see that when it comes down to it, it is there to ensure there is minimal change in order to keep things basically the same. Insiders call this ‘progressive’. Why on earth does a discipline even entertain the idea that macro must be micro-founded when no valid reason has been made about why that theory, which should be considered highly controversial at the very least (perhaps more accurately, downright dangerously wrong) should apply in any case? What kind of discipline defines a society as comprising constrained optimising individuals?

    One that ultimately serves capital and prevents any one else asking real questions.

  3. Nice post. Another worrisome question is heterodox economists inclusion of power in their analysis. Many in the heterodox camps pick and choose the facets of power they include in their analyses, but are rarely explicit about those power relations that are not part of their models. Where mainstream economists seek to disguise power, the heterodox have to indicate what types of power they are not considering, and why.

    • Well said.
      I recommend that power be framed and operated in a democratically accountable and transparent way.
      Since establishment politics in Canada is opaque, as you rightly state, we have a long way to go if economics is going to serve rather than dominate.

      Supposed ‘pro-democracy’ proponents fall short when the power dynamics are not accurately addressed in political economic reform. The strength of pro-democracy proponents is a firm commitment to public, transparent, freedom of information on which to base discussions for reform. Since establishment parties have demonstrated their intransigence to reform, we are faced with an uphill battle to educate and motivate for democratic change.

  4. Fully agree that economics is about power. The power to irresponsibly reduce politics into mere arbitrary economics. The power to use this propaganda as an ideology, largely unexamined and fully resistant to dispassionate, democratic criticism and renovation. The autocratic power of economics to coerce and direct society. The power to deceive about the dynamics of ‘democratic’ nations where governance has been captured by these extremist ideologues who are satisfied to sacrifice the common good to elite, minority profit control. The power to deceptively capture governments and political discourse. Economics as politics is all about secretive power. Normalized autocracy is dressed up as democracy.

    Democracy is about human values. Until the democracy is birthed that requires economics to serve actual democratic politics (absent at present), human beings will continue to be commodified, pro-human values of fairness and equality will be trampled upon and ignored, and the established parties will continue misrepresenting their pivotal, essential roles in enabling what they claim to ‘democratically’ direct. The population, overwhelmed with confusion, blocked from accurate information and controlled by economic coercions, fails to recognize its own harm by mistaking an income and ‘centrist politics’ for a just and fair democratic society.

  5. Mainstream economics is dedicated to proving prices cannot be arbitrary for ideological reasons as arbitrary as believing planets must orbit in circles.
    .
    Once you admit power into models, you cannot escape arbitrary pricing. Inflation becomes a power play, not a constraint on government spending. Bond vigilantes and inflation mongers are both exercising power.
    .
    None of the critics of the mainstream are brave enough to say inflation is really about power, however. Except me, and maybe Fischer Black …
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    More explicitly, the assumption that prices are determined by supply and demand is like believing celestial bodies must move in circles. Understanding that paper markets really determine prices, and how much power is concentrated in paper market makers, is like realizing ellipses around the sun are a much better model of planetary movement …

      • “The hero of Atlas Shrugged is John Galt, a supremely self-confident inventor. He has figured out a way to turn static electricity into an inexhaustible source of clean energy.”
        .
        To be clear, I differ from Ayn Rand because my policy solution is to print an inflation-proofed basic income so non-supremely confident inventors can develop and share technologies without requiring markets.
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        Imagine if Wozniak had continued sharing his designs, rather than coming under the sway of the confident marketer Jobs …


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