The econocracy

The perils of leaving economics to the experts

Joe Earle
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Cahal Moran
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Zach Ward-Perkins
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One hundred years ago the idea of ‘the economy’ didn’t exist. Now, improving ‘the economy’ has come to be seen as one of the most important tasks facing modern societies. Politics and policymaking are increasingly conducted in the language of economics and economic logic increasingly frames how political problems are defined and addressed. The result is that crucial societal functions are outsourced to economic experts. The econocracy is about how this particular way of thinking about economies and economics has come to dominate many modern societies and its damaging consequences. We have put experts in charge but those experts are not fit for purpose.

A growing movement is arguing that we should redefine the relationship between society and economics. Across the world, students, the economists of the future, are rebelling against their education. From three members of this movement comes a book that tries to open up the black box of economic decision making to public scrutiny. We show how a particular form of economics has come to dominate in universities across the UK and has thus shaped our understanding of the economy. We document the weaknesses of this form of economics and how it has failed to address many important issues such as financial stability, environmental sustainability and inequality; and we set out a vision for how we can bring economic discussion and decision making back into the public sphere to ensure the societies of the future can flourish.

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‘…an interesting volume for anyone who wants to rethink their approach to the economical language.'
Market Plus, the Swiss Financial Channel
April 2017

‘Like Walt Whitman, The Econocracy contains multitudes.'
Martin Sandbu
The Financial Times
February 2017

‘The high priests of economics still hold power, but they no longer have legitimacy. In proving so resistant to serious reform, they have sent the message to a sceptical public that they are unreformable. Which makes The Econocracy a case study for the question we should all be asking since the crash: how, after all that, have the elites – in Westminster, in the City, in economics – stayed in charge?'
The Guardian Book of the Day
February 2017

‘This book is for the many students who want to study economics because they want to help society solve its problems: a critical introduction to contemporary economics, written by a new, post-2008 generation of economists. Aspiring economists will need to read this book early, in time to protect themselves from indoctrination into a neoclassical economics firmly associated with an economistic political-ideological worldview. To understand the real world, and not just what standard economics calls 'the economy', future economists must learn to see through and escape from a conceptual construction destined to replace democracy with “econocracy”, turning government over to a publicly unaccountable technocratic elite. There is no better vaccination against the economistic disease than this immensely readable book.'
Wolfgang Streeck, Emeritus Director at the Max Planck Institute for the Study of Societies and Author of Buying Time: The Delayed Crisis of Democratic Capitalism

‘This is an impressive book of admirable scope and ambition.'
International Review of Economics Education

‘This slim book manages to pack in a concise and well-researched critique of modern economics and how it is taught in universities as well as the broader issue of public engagement with economics as part of the democratic process. Written in the wake of the Brexit referendum but before the surprising success of Donald Trump, this book is a timely warning of what can happen when economists, policymakers and the public can't find common ground.'
Maxine Montaigne
LSE Review of books

‘A rousing wake-up call to the economics profession to re-think its mission in society, from a collective of dissident graduate students. Their double argument is that the 'econocracy' of economists and economic institutions which has taken charge of our future is not fit for purpose, and, in any case, it contradicts the idea of democratic control. So the problem has to be tackled at both ends: creating a different kind of economics, and restoring the accountability of the experts to the citizens. The huge nature of the challenge does not daunt this enterprising group, whose technically assured, well-argued, and informative book must be read as a manifesto of what they hope will grow into a new social reform movement.'
Lord Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and Fellow of the British Academy in History and Economics

‘According to Sir Nicholas Macpherson, outgoing Permanent Secretary of the UK Treasury, economists were guilty of a 'monumental collective intellectual error' in failing to predict, or prevent the Great Financial Crisis of 2007–9 (FT 15 April 2016). The profession's repeated failures contrasts with the achievements of e.g. aerospace engineers and scientists, that have on the whole managed to protect society from aircraft failure. For the sake of our future economic security, it is vital to open up the economics profession to both new, but also old, untried economic theories and policies. That is why this book is so welcome. It will play a vital part in expanding pluralism in economics in our universities, and hopefully regenerate the profession from within.'
Ann Pettifor, Economist and Director of Policy Research in Macroeconomics (PRIME)

‘An interesting and highly pertinent book.'
Noam Chomsky

‘Economics has become the organising principle, the reigning ideology, and even the new religion of our time. And this body of knowledge is controlled by a selective priesthood trained in a very particular type of economics – that is, Neoclassical economics. In this penetrating analysis, based on very sophisticated theoretical reflections and highly original empirical work, the authors show how the rule by this priesthood and its disciples is strangling our economies and societies and how we can change this situation. It is a damning indictment for the economics profession that it has taken young people barely out of university to provide this analysis. Utterly compelling and sobering.'
Ha-Joon Chang, Reader in Political Economy of Development at the University of Cambridge and Author of Economics: The User's Guide

‘Economics is a subject of importance to all citizens, yet many economists have been unwilling to engage in the public debate made essential by the financial crisis and its consequences. This book is a provocative but welcome contribution to the democratic conversation that has to take place about the role of economics in public policy, and the need for the subject to be accessible to everyone. Many economists will not agree with all of the book's analysis but they certainly should not ignore it.'
Diane Coyle, Visiting Professor at the University of Manchester's Institute for Political and Economic Governance and Managing Director of Enlightenment Economics

‘Economics, as practiced in university economics departments, regurgitated by policy makers, and summarised in the mainstream media, has become a form of propaganda. This superb book explains how: dangerous ideology is hidden inside a mathematical wrapper; controversial policies are presented as 'proven' by the models of economic 'science'. This book is essential reading for anyone who wants to know about the con - that includes everyone concerned with the future of democracy.'
Jonathan Aldred, Author of The Sceptical Economist

‘Historians, one day, will study the mesmeric capacity of economic doctrine to override the public's faculty of rational judgement in favour of an unquestioning faith in the experts, in the face of the overwhelming evidence that they have got absolutely everything completely wrong. This research will engender the same sense of disbelief, I am convinced, that we feel today for the high mediaeval dogma that the sun must go around the earth because God ordained it so. This book will then be recognised as a turning point. It is an eloquent, quietly passionate, but above all knowledgeable statement of the simple fact that the emperor is naked, rounded off by a remarkably clear prescription for doing without tailors. Do not miss it.'
Alan Freeman, Visiting Professor at London Metropolitan University and Research Fellow of Queensland University of Technology, Australia

‘If war is too important to be left to the generals, so is the economy too important to be left to narrowly trained economists. Yet, as this book shows, such economists are precisely what we are getting from our leading universities. Given the role economists play in our society, we need them to be much more than adepts in manipulating equations based on unrealistic assumptions. This book demonstrates just why that matters and offers thought-provoking ideas on how to go about it.'
Martin Wolf, Associate Editor and Chief Economics Commentator at the Financial Times

‘In this challenging new book, Joe Earle, Cahal Moran and Zach Ward-Perkins argue, not against expertise as such, but in favour of a new kind of economic expert: one who is better able to engage both with real problems and with 'economic citizens'. As befits members of the international economics student movement Rethinking Economics, they set out an agenda for improved education of economics students, but also of economic citizens. Their arguments are backed up by new evidence of the current situation for economics students as well as by historical analysis of the discipline. The book itself is an exemplar of the kind of expertise they advocate, being problem-oriented and accessible to a wide audience, and drawing on careful informed argument. The book should be required reading for anyone concerned about the future of economics.'
Sheila Dow, Emeritus Professor of Economics at the University of Stirling

‘Is economics too important to be left to the economists? The authors marshal a powerful case against economics as it often is, and set out a positive vision of economics as it might be, a public interest economics which enables citizens to understand the economy better and participate more fully in the decisions which affect all our futures. An important and timely book.'
Andrew Gamble, Professor of Politics at the University of Cambridge and Joint Editor of New Political Economy and the Political Quarterly

‘It is a scandal that the enormously important subject of economics is usually taught in British universities around a rigid, narrow, orthodox syllabus which excludes counter-cultural thinking. The 2008 financial crisis was a wake-up call for the profession, which has been dismally slow to respond. This book is badly needed, looking at academic economics afresh: clear, well-written, well-researched, non-doctrinaire. It makes the case for 'pluralistic' economics to address such questions as financial instability and climate change. Every economist and citizen should get a copy.'
Vince Cable, Former Secretary of State for Business, Innovation and Skills

‘Since the financial crisis of 2007–8, there has been an extraordinary amount of soul-searching by the economics profession. Many macroeconomists admit that their view of the world was flawed, that ignoring the financial sector was a fatal error and that the profession has become over-reliant on certain types of mathematical model. But too often, their solutions amount to tweaking the existing paradigm in the hopes that this will somehow make it work. In this book, an enterprising group of students expose the deep flaws in mainstream economic theory that have brought us to this pass. They show how the teaching of economics in universities reinforces the existing paradigm, discouraging challenge and innovation. And they propose a new approach to the teaching and learning of economics which would encourage independence of thought and be accessible to a wider group of people. From the current chaos and confusion, a new economic paradigm will eventually emerge. The young people now studying economics, or about to do so, will determine the shape of this new paradigm. Their studies need to equip them to develop the economics of the future, rather than reinforcing the ideas of the past. This book should be required reading for teachers and students of economics, and for anyone contemplating a career in economic policymaking.'
Frances Coppola, finance, banking and economics commentator

‘The econocracy explains, supported by excellent research, how one branch of economics has captured the academy and excluded the public from debate about how the economy is organised, leaving this branch almost the only source of policy advice. It is written by British members of Rethinking Economics, the international organisation of students and recent graduates dissatisfied with their curriculum. They have produced a work of high quality and national importance. Read this book.'
Victoria Chick, Economist and Co-Founder of the Post Keynesian Economics Study Group

‘The econocracy offers an antidote to a tragic state of affairs in social science. Over the last century, economics has increasingly abandoned its roots as a rich science of human action in order to become an esoteric discipline with little relevance to the real world. The global financial crisis of 2008 revealed this deeper crisis in the economics profession, which is especially evident in economics teaching. Yet while understanding economics has never been more important, in some ways the barriers to economics education have never been higher. This book provides students with an accessible discussion of the problems that face economics teaching, and the perils of allowing economics to be transformed from a vital source of knowledge about human society into an obscure, technocratic field reserved for a select few. It not only calls for a reassessment of contemporary economics education, but also for a fresh look at the relationship between economists and the public. It is thus a valuable first step toward encouraging a more realistic and relevant economics. Students and professors alike will find much to discuss and debate here.'
Matthew McCaffrey, Lecturer in Enterprise at The University of Manchester and Recipient of the 2010 Lawrence W. Fertig Prize in Austrian Economics

‘The economics profession has failed disastrously in recent decades, first by failing to warn of the dangers of a bloated and poorly regulated financial sector and then through an obsession with mathematically refined, but practically useless, modelling exercises. Yet neither the confidence with which economists make pronouncements about 'the economy', nor the way in which economics is taught in universities has undergone any significant change. This book addresses these questions with a call for an economics addressed to citizens and a pluralist approach to economics education. It should be read not only by those seeking to understand how policies driven by the alleged needs of 'the economy' have failed, but also by economists who want to understand why their pronouncements are increasingly regarded with distrust and disdain.'
John Quiggin, Australian Laureate Fellow in Economics at the University of Queensland

‘The economics profession is in crisis, as crucial flaws in its core ideas have been exposed by the financial crisis of 2008, and by the deep economic malaise which has followed. While most economists remain in denial about the need for change, a global movement among graduate students has taken up the challenge of making economics relevant again for the real world. Importantly, these students aren't just complaining, but actively developing better ideas, collaborating widely with scientists in other fields, and engaging with politicians, business leaders and ordinary citizens to make economics less esoteric and ideological, and more practically useful in building a better society. The econocracy is their call to arms. Beautifully written and packed with wisdom, it is a book for anyone who cares about the future of our societies, beginning, I hope, with professional economists themselves. This may be the most important economics book of the decade.'
Mark Buchanan, physicist, former editor of Nature and New Scientist and author of Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us about Economics

‘This superbly written and scholarly work makes a strong case for wresting control of economic and political dialogue back from the pseudo-profession of academic economists and returning it to the body politic. Its authors are student economists who, writing after the financial crisis that mainstream economists didn't see coming, have approached their topic with refreshing scepticism, and a wisdom far beyond their years. This is an excellent read that I strongly recommend.'
Steve Keen, Head of the School Of Economics, History & Politics at Kingston University, London

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