Surviving Capitalism (Not) : The human element in the new economics: a 60 - year refresh for economic thinking and teaching

We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Monday, September 8, 2014

The human element in the new economics: a 60 - year refresh for economic thinking and teaching

Click here to access article (PDF document) by Neva Goodwin published in the recent journal Real-World Economics Review.

This important paper, published in what appears to be an alternative economics journal, challenges the basic tenets of traditional economics textbooks used in institutions of higher learning in the US. From my cursory reading of the article this morning, I think what the author couches in diplomatic language of academia is really an indictment of economics teaching as mostly propaganda serving the interests of the ruling capitalist class.

According to Goodwin:

This started in the 1890s, when Alfred Marshall wrote the first edition of his text, called Principles of Economics. It went through 8 editions, the last being published in 1920. For a large part of the English-speaking world Marshall’s textbook continued to define the field (especially the microeconomics basics) until the middle of the 20th century, when it was replaced by Paul Samuelson’s Economics (first published in 1948). That set the standard for about the next 60 years.

I believe that this development corresponds perfectly with what I regard as the consolidation of power by the US plutocracy in the 1890s when they defeated all opponents which included radical labor organizers and the agrarian Populist Movement. This was a period in which the major capitalists such as Carnegie, Rockefeller, and Morgan, known widely by the people as robber barons, rose to prominence. (read The Lords of Creation by Frederick L. Allen)

Then following the near collapse of the economy in 1907 by their reckless gambles, in order to assure the public that this would never happen again, they constructed the Federal Reserve under their domination to take control of the money supply. Thereafter, this class has remained supreme.

They likewise gained control of every institution in society, not the least of which was education. They saw the urgency of teaching economics to add legitimacy to the system which was the goose that laid their golden eggs of power and wealth. This paper tells that story.

However, don't be reassured that now everything will be fixed with regard to the teaching of economics. It's just that the failures of the capitalist system is becoming so outrageously apparent that they need to come up with better teachings to explain these failures while preserving the legitimacy of the system.