Economics of the 1%

This book, an eclectic polemical skewering of everybody's least favourite social science, is another that I'm writing a proper review for on the Rethinking Economics blog. I've just finished reading it in a mad splurge, having realised that this review was due about three weeks ago (fortunately they haven't noticed its absence yet). John Weeks, the author, is unsurprisingly a big fan of the student movement to 'rethink economics' (oh hey yeh that's why it's called that) - hence his bestowing upon us this copy for free. He's scrawled "CHANGE THE PROFESSION!" inside the front cover, which I love; it's lent the book purpose in the context of my involvement with leftyism generally and RE specifically. Anyway, I'm currently away on RE's nation-wide campaign planning weekend in Edale - everyone else is arriving in a couple of hours but I had nothing to do all day so I got an early train with the intent of going for a walk in the hills but it's been chucking it down, so I slinked off to a pub where I read the last few chapters of this punchy little book, begged for the wifi code, and am now writing up a rudimentary explanatory post on my phone over a pint. Don't worry, I'll write up a proper review for the RE blog when I get back to Sheffield, and will insert the address into
THIS LINK TO THE FULL REVIEW

[Edit November 2016: it appears that during a recent re-vamp of Rethinking Economics' website, the entire blog has been lost into the Error 404 ether - so pasted below is my review's text.]

Mainstream economics, as communicated to the masses by private media, is a series of pseudo-scientific explanations for neoclassical theory that prop up a status quo in which the rich prosper at the expense of everyone else. If this sounds like quite a hard-core Marxian take on the dismal science’s place in modern capitalist society – well, it is. This is John Weeks’ central point. If this review comes across as aggressively leftist, I assure you it’s only because I’m emulating the book.

   Unabashedly polemical, Weeks writes with an indefatigable fire (sometimes even spilling over into sardonic jokes about ‘fakeconomists’ or our corporate overlords) that would get quickly tiresome were it not for the sheer quantity and quality of compelling arguments he makes for his case. With a Ha-Joon Chang-like humour and clarity, he applies real-world pluralism and common-sense against the abstract tenets of neoclassical ‘fakeconomics’. It’s readable, it’s illuminating, and if you’re a generally-left-wing reader you may find yourself (as I did) swept into a deeper critical suspicion of mainstream economics than you ever thought possible.

   In the majority of the book’s chapters, he tackles a major myth propagated by the mainstream, exposes its flaws and fallacies, and deconstructs it to show how these ideas are constructed as ‘truths’ because of how they benefit the rich and powerful. He thus engages the finance sector, free trade, resource scarcity, unemployment and competition, government intervention, deficits and debt, inflation, and more. At the core of making all these chapters work are his ongoing threads elucidating upon the facts that all markets have socio-political origins and structures, and that some people have more power within these structures than others. That is; firstly that everything a capitalist society flourishes upon from its economic activity is dependent on structures being in place to allow fair and free market activity; and secondly that some individuals may be better placed to privilege from these structures in ways that others aren’t. These arguments seem so vaguely agreeable that they are hard to deny – sure, we can define ‘fair’ or ‘free’ or ‘better placed to privilege’ in a variety of ways, but ultimately, if we accept these reasonable points, then vast swathes of plutocratic propaganda (i.e. mainstream economics) go out the window. We reopen arguments within economic theory to political critiques, which have always been more sympathetic to the real world than economic theory itself.

   These chapters are bookended well. The first chapter lays out an idea of what good (or at least realistic) economics is, as opposed to the ‘fakeconomics’ purported by the mainstream, and which is far more susceptible to hijacking by vested interests. The penultimate chapter, following the thrust of the book as discussed above, is a focused study of austerity – a perfect example of policy that makes the poor poorer, the rich richer, and has almost no grounding in sensible well-thought-out economic theory. Once one understands the basic Keynesian principle of managing aggregate demand, then the rationale for the slow painful ‘paths to recovery’ via cuts to public services and the sale of public assets completely dissolves and these policies are seen for what they are: barely-concealed power-grabs by wealthy corporate actors. Western austerity is a bleak testament to the relentless grip the 1% holds and moulds their populations’ opinions in.

   In the final chapter, Weeks lays out some rough ideas about what an economics for the 99% would look like. His propositions are grounded in an approach that, while broadly pluralistic, bears its primarily-Marxian heritage proudly, and I think constitute some familiar and important pointers for where economics as a subject needs to be taken – chiefly, democratised, politicised, and opened to plurality and interdisciplinarity of debate. Robert Cox, a political economist, wrote “theory is always for someone and for some purpose”: in any social science we should maintain a somewhat-critical lens, as the theories we seek to apply can’t be neatly abstracted away from the social phenomena we’re applying them to, nor from the moral or normative implications of engaging with real people’s issues. Cox argued for political economy as Weeks does for economics that we should strive to reform the disciplines into emancipatory efforts, not explaining away structures that support those with wealth and power but constantly intellectually challenging the status quo so as to yield pragmatic outcomes that benefit, rather than exploit, as many people as possible.

   One of the key next-steps for economics then is to widen public understanding and participation in the subject. Neoliberal hegemony was able to take root, and maintain its legitimacy, by providing ‘economic explanations’ for its actions, which Weeks has argued are in large part patently false, but democratic society allowed these a free pass because they were also clad in the impenetrable mathematical jargon of neoclassical economic theory. We need to challenge the preconception that because something is widely-taught and respected by journals it is right: we need to push for critical discussion and pluralism within economics. And more importantly, we need to dismantle the ‘far-too-difficult-for-normal-people’ label attached to understanding of socioeconomic topics, to produce and disseminate accessible resources to empower non-economists to engage in these debates. Self-education is not just something Post-Crash societies do – it’s something everyone needs to do, to understand how the society we’re part of works so we can best act as political individuals within it. Just as Weeks highlights in his introduction, erasing public ignorance of economic reality is crucial if we want democratic societies to be steered by the educated masses rather than a manipulative handful.

   Hopefully the relevance of this book to the Rethinking Economics movement will be evident. Our aims are to demystify, diversify and reinvigorate economics: politicising the subject as much as John Weeks proposes will certainly do the third; the implied necessities of public understanding and pluralism tick off the first and second too. While this book is altogether more radical than RE (which I should restate is non-political), if you’re curious I would argue that a reasonable and realistic economics would find itself far more closely aligned to such strong-left positions than it would to the current neoliberal orthodoxy. And I’m not going to argue this point here, because John’s written a whole book full of brilliant points as to why.