The Quest for Academic Credibility

This may, I know, be a futile quest. But I am impressed by the way the post-war pro-market ideologues came to control the world through controlling the economic ideas that dominated it. Much of this strategy was focused on systems of power, and particularly the media, but they also dominated academic economics, and that struggle to reverse that sorry tale of misinformation and deception of so many young people is an important one.

For this reason I would like to give a small plug to an article of mine that came out yesterday in the Cambridge Journal of Economics. This is the best of the economics journals, since it reflects the way economists at that university still have some freedom to question the neoclassical paradigm. Building on my book, Green Economics, I seek in the article to carve out a specific space within academia for an approach to economics that arises from reverence to nature and a fundamental commitement to social justice.

In the article I identify four characteristics of green economics:

'Its pluralism is inherent, and is evidenced by the repeated call for a wider range of perspectives on economic problems than those that currently dominate academic and policy discussions. This leads naturally to a commitment to global equity and to giving equal importance to the needs of the majority world to decisions about the allocation of global resources. Equity is also a concern at the domestic level, a concern that arises necessarily from the closing of the planetary frontier. Schumacher’s catchphrase ‘small is beautiful’ is influential, but has been developed into a call for strengthened local economies and an opposition to the globalisation and displacement that have typified economic ‘progress’ during the past century. And, finally, the call for a steady-state economy and the replacement of the growth dynamic that is central to the capitalist economy is a fundamental tenet of green economics.'

As part of a strategy of changing what economists do, and particularly how economics is taught to future citizens, I hope the paper will make a contribution.

PS In response to a comment about the fact that this article is copyright controlled, I forgot to include in the article the important information that academics often make a pre-publication version of their articles available via the Social Science Research Network. If you wish to read this article please email me direct (molly@gaianeconomics.org) and I will send you an electronic copy.
. Tweet

I Can't Get No Satisfaction

You may have noticed a similarity between the last few posts, which are focusing on the failure of aggregate demand in our economy, and strategies for addressing this. Last time around the strategies focused on throwing money into the economy, reducing the quality of products, and, perhaps the strategy that has been most successful, changing the social hierarchy so that it relies on consumption rather than moral quality or personal charm.

The origins and techniques of the advertising industry as it developed in the US from the 1920s onwards is entertainingly discussed in Adam Curtis's TV series The Century of the Self. The critique began much earlier, with the publication in 1957 of Vance Packard's book The Hidden Persuaders. Packard blew the whistle on how scientific developments in psychology were being used to manipulate US citizens to undertake mass consumption. What he called the ‘depth approach’ to advertising was based on insights from social psychology. It was, as he described it, ‘impelled by the difficulties the marketers kept encountering in trying to persuade people to buy all the products their companies could fabricate’ (p. 17).

Packard expressed horror at what he called the marketing to ‘eight hidden needs’ which he identified as emotional security, reassurance of worth, ego-gratification, creative outlets, love objects, a sense of power, a sense of roots, and immortality. Although his work is now more than 50 years old, the routes advertising finds to exploit our psychological needs appear not to be. This use of scientific methods to uncover our inner needs and then to design products to meet them resulted in what Packard referred to as ‘the packaged soul’.

The focus of this activity was not the satisfaction of citizen-consumers; quite the reverse. To maintain levels of demand sufficient to avoid a slump it was essential that people consumed things they didn't need, and that what they bought rather than satisfying them, created desires for further purchasing. This helps to explain the paradox of growth as explored by Richard Douthwaite: that once societies reach a certain level of human development further growth can reduce rather than increasing happiness.
. Tweet

Easing Eurozone pressures

Richard Douthwaite, of the Dublin-based think-tank FEASTA, has produced a useful paper offering solutions to the Eurozone crisis from an Irish perspective. The solution, which he terms 'deficit easing', is similar to that proposed by the more radical proponents of the Green New Deal, i.e. that money is created by governments to be invested in the transition to a low-carbon economy. This will support economies otherwise facing depression, while making our basic support systems resilient to climate-related weather shocks.

Since, as shown in the graphic, all the countries of the Eurozone are in debt, and therefore engaging in austerity measures, any policy designed to grow or trade our way out of the economic decline cannot be effective. The second graphic shows how all the debt, both public and private, is interconnected. So a collective solution is the only hope of success.

Richard's paper has the clarity and conviction that would be expected from one of the world's leading alternative economists. I would be inclined to add two small additional points. The first is the political point made by Robert Peston, who fished around in a lengthy and probably extremely tedious report from the Bank of England to find the nugget of data: in 2009 public support for the banking sector amounted to £100bn. This is more than half the so-called 'structural deficit' and indicates the cost to all of us of not finding a structural solution to the banking crisis.

Second, Richard's paper surprisingly makes no references to the link between financial expansion and resource exploitation. He has argued this elsewhere and would I'm sure be in agreement but it is important that all radical economists keep this planetary perspective in mind - and continue to draw attention to it - when proposing our monetary solutions.
. Tweet