What is missing in the ‘33 Theses for an Economics Reformation’

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Andrew Simms (New Weather Institute), Sally Svenlen (RE student), Larry Elliott (Guardian), Steve Keen (Debunking Economics) and Kate Raworth (Doughnut Economics) symbolically nail the “33 Theses” to the door of the London School of Economics in December 2017. rethinkeconomics.org.

By Erik Reinert (Talinn University of Technology) and Andrea Saltelli (Universitat Oberta de Catalunya)

On the occasion of the 500th anniversary of Martin Luther’s Reformation, 33 Theses for an Economics Reformation were formulated by Rethinking Economics and the New Weather Institute. The document was symbolically nailed to the door of the London School of Economics In December 2017 and endorsed in The Guardian, and was supported by an impressive list of over 60 leading academics and policy experts. The initiative offers a rare and most welcome refreshing message from the House of Economics.

Several elements in the theses are long overdue – for example, the existence of planetary limits, the superiority of political deliberation over economic logic, the appreciation of the role of uncertainty in economic predictions, the non-independence of facts and values when economic thoughts are formulated, the warning against over-reliance on modelling, econometrics and formal methods. Also important is the indication that both growth and innovation need to be conceived with a desirable end in sight, one which can be associated with material and spiritual progress – rather than with misery, inequity and inequality. It is finally all important that in the teaching of economics itself the history and philosophy of economics should be taught, together with all economic theories: not just the family tree of mainstream economics.Read More »

Unanswered Questions on Financialisation in Developing Economies

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The discussions of the processes behind the growing importance of finance, financial transactions and financial motives, as well as the sustainability of the financial systems, have been located in the critical political economy debate of financialisation and neoliberalism (Crotty, 2003; Epstein, 2005; Fine, 2013; Lapavitsas, 2013; Palley, 2016; Sawyer, 2013; Stockhammer, 2004).

The analysis of financialisation in developing and emerging economies (DEEs) is relatively novel (Bonizzi, 2013). It is rooted in earlier discussions about the risks of financial globalisation and liberalisation (Akyuz & Boratav, 2005; Barbosa-Filho, 2005; Crotty & Lee, 2005; Frenkel & Rapetti, 2009; Grabel, 2003; O’Connell, 2005; Palma, 1998; Taylor, 1998), including the Latin American Structuralist literature on the hegemonic role of the US dollar and its financial and monetary implications for DEEs (Belluzzo, 1997; Braga, 1997; Fiori, 1997; Miranda, 1997; Tavares, 1997); the debate on capital account liberalisation and capital market integration (Cohen, 1996; Rodrik, 1998; Stiglitz & Ocampo, 2008; Strange, 1994); and the Minsky-inspired currency and boom bust dynamics of financial crisis in developing economies (Arestis & Glickman, 2002; de Paula & Alves, 2000; Dymski, 1999; Kregel, 1998; Schroeder, 2002).Read More »

Pitfalls of the Developmental State: The Fate of the Sudanese Economic Model

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I have lately been grappling with the question of how African states came into being, not just as political, but especially economic territorial units. Connected to this are questions of how experts, especially economists came to influence and account for what became national economies. At the center of the state, economy and society are critical question of development and welfare. How did independent African countries make sense of their inheritance and what mechanisms did they deploy to transform themselves into coherent nations of multiple but entangled identities with disparate circumstance but common material goals united by the logic of a national economy? As I grappled with these issues, a great new monograph informed by an impressive historiography has arrived. The author grounds his work in an archivally based history of the transformation of the Sudan into an economic unit between the 1940s and the 1960s. Alden Young’s new book: Transforming the Sudan: Decolonization, Economic Development, and State Formation (Cambridge: Cambridge University Press, 2017) is centred on addressing these question using the history of a territory that transformed from being an Anglo-Egyptian Sudan condominium into the independent state of Sudan.Read More »

Towards a better understanding of convergence and divergence: or, how the present EU strategy – at the expense of the economic periphery – neglects the theories that once made Europe successful

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This new working paper attempts to address some of the main problems of the European Union today. The main thesis is that the Weltanschauung and the economic narrative on which the European project has been based have changed radically since the inception of the European Project, from one conducive to convergence and cohesion to another which is conducive to divergence and, in the last instance – I shall argue – to a form of internal colonialism towards the economic periphery.

The field of Science and Technology employs the term sociotechnical imaginary [1] about the collective narratives and visions of social futures and of the common good. I shall argue that the European Union has moved away from the sociotechnical imaginary, or narrative, that dominated after World War II. I shall argue that this post WW II Marshall Plan Narrative (MPN) gave way to an equilibrium-based Neo-Classical Economics Narrative with an added innovation rhetoric, which I shall argue is based on a fairly shallow understanding of innovation (which I shall call NC+I).Read More »