We had a server outage, and we're rebuilding the site. Most of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

The Silence of Economists

by Tarik Ahmia Friday, Dec. 17, 2010 at 3:27 PM
mbatko@yahoo.com

In 1936 Keynes was the first established economist who explained how a free enterprise system in no way realized a state of balance by itself. The state must take an active role in crisis times to prevent an economic downswing ending in a catastrophe.

THE SILENCE OF ECONOMISTS

The Neoliberal Guild is Helpless and Clueless about the Way Forward

By Tarik Ahmia

[This article published in: Die Tagesanzeiger 12/19/2008 is translated from the German on the Internet, http://www.taz.de.]



For months the term “economic program” seemed to be on the blacklist of the German government. Its hesitation and half-hearted impulses for an economic-political intervention show it is frightened by active economic policy. This is clear in the guild of economists advising the government. For years guild spokespersons preached to the public: growth can only be assured if the state keeps away from the economy, social benefits are cut, labor markets deregulated and businesses relieved. However these market liberals have become strangely silent in the wake of the global crisis.

Tarik Ahmia was born in Algiers in 1966 and is editor of the economics and environment section of taz. As an economist, he has a critical view of economic researchers who think they have an objective doctrine.

Their problem is that they have no practical prescriptions against the worldwide economic collapse that are consistent with their worldview. For the moment, they can only offer empty protests. “Some time or other the crisis will end. We only do not know when and how,” the “economic wise man of the German government, Wolfgang Franz, proclaimed in the media all over the country.

As the sloganeer of the German government, the mainstream of German economists just won’t learn. The mainstream is stuck in an ideological crisis as to state support of economic development. That the German government after long hesitation now follows the global trend to active economic policy is a sacrilege in their eyes. For want of an alternative, their lips are sealed. They remain silent or warn, like Franz, of state incursions and “short-term straw fires or flashes in the pan.”

The helplessness of the economic wise men has a system. Franz and his neoclassical colleagues are caught in their own intellectual systems. The world of neoclassical economics peculiarly uncoupled from reality has dominated the economics mainstream in Germany for years. It tries to grasp the real processes of a national economy in an extremely abstract and reduced economic model. The result may shine through the elegance of formal-mathematical unity. However it suffers in that it systematically fades out fundamental factors of economic reality. The original goal of describing real economic actions of people almost inevitably falls by the wayside. At the same time this paradigm can be interpreted so that crucial political-economic questions like optimal social redistribution cannot be answered.

This model claims to be “free of any value judgments” and socio-politically neutral. It can only explain in what way scarce resources can be used most efficiently. However the economy of neoclassicism is a world where all plans of economic subjects are known and there is no uncertainty about the future. This ultimately does not correspond to any real market form any more and fades out all forms of social reality and human stories. No expectations of market actors can influence the economic course. In this perfect world of “total competition,” the4 market economy is more stable the more freely one can act.

This is also the reason why neoclassicists generally regard state interventions as breaches of a taboo because in their worldview they falsify or slow down market developments. The economist Eberhard Feess-Doer describes this method as follows: “Neoclassical theory consciously assumes counter-factual assumptions to come to a politically desired result demonstrating the optimality of an unregulated market economy.”

As an economic theory, neoclassicism is a classic example that lay persons should counter all economic theory that operates with absolutist advice and fades out social reality with skepticism. One should not overlook whose picture of society implicitly undergirds an economic theory. The history of the economy is full of examples in which supposedly independent researchers acted as intellectual smooth talkers of their respective ruling class whose “economic theories” were no longer corroborated by the prevailing conditions. Thus the French Physiocrats in their economic theory in the second half of the 18th century granted an indispensable role to the feudal lords of their time as classe distributive. The English philosopher Edmund Burke gave a central role to the “ruling class” in his theory of society because it promoted the general well-being “through the wisdom of their exercise of political power.” Therefore this historical and social function of neoclassicism does not go beyond a justification of capitalism. The literal interpretation of this theory proved tragic. During the first worldwide economic crisis of 1929, its spokespersons had to declare their intellectual bankruptcy. At that time none of their models would explain what happened or how the economic collapse could be stopped.

The intellectual Big Bang of the British economist John Maynard Keynes was needed. In 1936 Keynes was the first established economist who plausibly explained how a free enterprise system in no way realizes a state of balance by itself. He explained how the state must take an active role in crisis times to prevent an economic downswing ending in a catastrophe. With his findings, Keynes was the Galileo of economics. Economic policy held in the tight corset of the neoclassical school is like the attempt to pursue physics today on the assumption that the earth is a disc.

Nevertheless neoclassical thinking survives. Economic-political pragmatism is emphasized. The German government must be freed from its worldview, the strait-jacket of neoclassicism, and accept the international common sense of the economy. Therefore it is encouraging when Merkel & Co. now promotes a real economic package. To be effective, 40 billion Euros must be made available for public investments and not consist mainly of bubble accounting as in the first “economic package.” … Other alternatives for countering the spreading economic crisis are not in sight.

Report this post as:

Local News

Woolsey Fire: Worst News of 2018? J01 12:18AM

Oppose Environmentally-Harmful Development D10 4:03AM

Oppose Environmentally-Harmful Development D10 3:58AM

OUR HOUSE Grief Support Center Presents Night for Hope O30 5:38PM

Marshall Tuck’s racist dog whistle O27 5:01AM

Marshall Tuck’s ethnocentrism contradicts Californian values O27 4:32AM

Contra Costa-Hawkins O25 3:48AM

Debunking Some Anti-Prop 10 Propaganda O12 6:56AM

Why Should California Choose De Leon Over Feinstein? O10 9:55PM

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

More Local News...

Other/Breaking News

FAKE NEWS J19 2:31PM

MACROTHSCHILD.2 J19 11:03AM

Judge Delays Ruling on Puerto Rico Debt Deal White House Opposes Island's Food Assistance J18 6:04PM

BATACLOWNS J18 9:28AM

FALSAS VICTIMAS J18 9:22AM

Paraphysique de proxémie guerrière J18 7:59AM

MACROTHSCHILD J17 9:38PM

FARCELONA 8.17.2017 J17 3:23PM

DEAD MAN LIVING J17 10:46AM

DIARY OF A CON MAN J16 10:40PM

PR Debt Cancel, Judge Reviews Cofina Debt J16 9:04PM

Réseautage, fragmentation du capital J16 4:20PM

Paraphysique de manipulation mentale et sociale J15 9:51AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

Markets as a Fetish, Globalization, and Dissent Management J14 1:03PM

State Debts - The Primal German Fear J13 5:09PM

Sans liberté, sans égalité, sans fraternité J13 8:09AM

From Progressive Neoliberalism to Trump - and Beyond J12 9:22PM

Copper Cures Cancer J11 1:42PM

Steven Taylor, Investor who Evicts J11 9:24AM

Du sectarisme, des sectes, des clans J11 8:10AM

“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen J10 6:34PM

Patrick Kilpatrick discusses and signs Dying for Living J09 11:51PM

SexActs vs Sexuality USA 2018 Invitations to Power Marriages without Affection J09 8:36PM

Changer de mentalité, changer de société J09 9:17AM

Teacher Strike? Time for Labor Studies J09 6:26AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy