Tuesday, June 26, 2012

Bill Mitchell — Neo-liberalism has failed but we still don’t get it

One of the puzzles that accompany this gruelling economic crisis is why neo-liberal economic thinking, which when applied caused the crisis and has delivered very little to so many, remains the dominant paradigm in economic policy making and has managed to turn a disaster for practitioners of that ideology into a triumph. How is it that the leading voices now are preaching exactly the same policies that caused the crisis as the solution to the crisis. Is there that much asymmetry? I noted a recent comment on my blog (Tom) that raised issues relating to the philosophy of science along the lines of how are we to judge whether the mainstream macroeconomics paradigm has failed. I understand the demarcation issues involved and the problems of “truth testing”. But we can take a more simple approach to the question. Here are two ways we know that the mainstream approach failed – they didn’t have a clue what was happening in the years leading up to the crisis and now they are scrambling in a stunned state to add banks and financial markets to their defective models. The problem is that they are just building more defective approaches. But the continued dominance demonstrates that their failures are not yet fully understood.
Read it at Bill Mitchell — billy blog
Neo-liberalism has failed but we still don’t get it
by Bill Mitchell

Bill incisively cuts to the core of a fundamental issue facing not only the global economy but humanity at a crossroads — neoliberalism as the basis of globalization, or not?


Jonf said...

He really lays it out there. A scourge of this generation is unemployment and employment at poverty level wages. In a previous blog he noted how real pay for men has not changed since the 70s. That is telling. The average working man is getting nowhere, year on year. So today we have twenty million plus who want jobs fifty million in poverty. That shitty health care law will likely be struck down in a few days and millions more who had some hope from medicaid and the other few good ideas will lose it. But who cares? The free market and the invisible hand will make it all right. I just want to find that hand once, just once, so I can chop it off.

Dan Lynch said...

Neo-liberalism has been a complete success -- for the ruling elites.