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The perils of leaving economics to the experts

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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Joe Earle, Cahal Moran, and Zach Ward-Perkins

Chapter 1 Econocracy econocracy (e·con·oc·ra·cy) n. A society in which political goals are defined in terms of their effect on the economy, which is believed to be a distinct system with its own logic that requires experts to manage it. Living in an econocracy The existence of econocracy is apparent in everyday language. It is commonplace for the media to talk about ‘the economy’ as an entity in itself, and how something will be ‘good for the economy’ or ‘bad for the economy’. The economy can speed up, slow down, improve, decline, crash or recover, but no

in The econocracy
Joe Earle, Cahal Moran, and Zach Ward-Perkins

not alone. Speaking to students who are part of the movement to reform economics education, it is clear that many decided to study the subject for similar reasons. One talked of wanting to learn ‘the language spoken in the highest spheres of power today’. Another explained how he wanted ‘to understand how society as a whole functions’. With the rise of econocracy it has become increasingly apparent to many young people that to be able to follow, engage with and influence the great social debates of our time one must be able to speak the language of economics. These

in The econocracy
Joe Earle, Cahal Moran, and Zach Ward-Perkins

a technocratic system that marginalises citizens and restricts their ability to engage with economic issues. Econocracy is a system where some have access to economic knowledge and authority and others do not. While improving the quality of experts would undoubtedly be good for society, the wider system will still be incompatible with democracy and with some of our most deeply cherished political beliefs. Therefore, to finish we must return to the wider question of society and politics in order to show how we need more than just better experts; we need a new

in The econocracy
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Joe Earle, Cahal Moran, and Zach Ward-Perkins

appeared in the media giving opinions about the health of the economy and predicting how this event or that policy would affect it. These men (and it is mostly men) were confident and authoritative and their opinions were respected. They conversed with each other using jargon, graphs 2  The econocracy and statistics which made them difficult to understand. We felt that to understand and shape the world we needed to speak their language and that’s how we all ended up studying economics in the same year at the University of Manchester in 2011. After that it felt like we

in The econocracy
Joe Earle, Cahal Moran, and Zach Ward-Perkins

econocracy Exhibit 3.1  Economic perspectives ‘Old’ neoclassical ‘New’ neoclassical PostKeynesian Classical Marxist Humans… optimise narrow self-interest can optimise a variety of goals use rules of thumb act in their self-interest do not have a predetermined nature Humans act within… a vacuum a market context a macroeconomic context a class context a class and historical context The economy is… stable stable in the absence of frictions and shocks be built up from individual optimisation teach mostly models naturally volatile largely selfstabilising

in The econocracy
Joe Earle, Cahal Moran, and Zach Ward-Perkins

formulation of the purpose of a liberal education is given by the Association of American Colleges and Universities (AACU): An approach to college learning that empowers individuals and prepares them to deal with complexity, diversity, and change. This approach emphasizes broad knowledge of the wider world (e.g., science, culture, and society) as well as in-depth achievement in a specific field of interest. It helps students develop a sense of social responsibility; strong intellectual and practical skills that span all major fields of study, 124  The econocracy such as

in The econocracy
Joe Earle, Cahal Moran, and Zach Ward-Perkins

limited relevance to some of society’s most pressing problems, has not gone unnoticed. Consequently, the final section of this chapter documents how students are campaigning to persuade the discipline to renew itself. We recount the modern struggle for the soul of economics that is taking place in universities across the world. The struggle for the soul of economics  93 The rise of econocracy and the narrowing of economics as a discipline are not historically coincidental. By presenting economics as a single, unified theoretical framework that can provide unique

in The econocracy
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Aeron Davis

of digits: capitalism, financialisation, public accountability. There is another which sounds rather more mundane. We have them because leaders don't know how else to lead. If the liberal ideals of democracy don't really function in ‘actually existing democracies’, 1 if the grand theories of economics and business are too abstract, there are always numbers and targets instead. These become workable proxies for ideas and policies. They are the way leaders evaluate each other. They are how twenty-first-century econocracy 2 functions

in Reckless opportunists

The well-being of Europe’s citizens depends less on individual consumption and more on their social consumption of essential goods and services – from water and retail banking to schools and care homes – in what we call the foundational economy. Individual consumption depends on market income, while foundational consumption depends on social infrastructure and delivery systems of networks and branches, which are neither created nor renewed automatically, even as incomes increase. This historically created foundational economy has been wrecked in the last generation by privatisation, outsourcing, franchising and the widespread penetration of opportunistic and predatory business models. The distinctive, primary role of public policy should therefore be to secure the supply of basic services for all citizens (not a quantum of economic growth and jobs). Reconstructing the foundational has to start with a vision of citizenship that identifies foundational entitlements as the conditions for dignified human development, and likewise has to depend on treating the business enterprises central to the foundational economy as juridical persons with claims to entitlements but also with responsibilities and duties. If the aim is citizen well-being and flourishing for the many not the few, then European politics at regional, national and EU level needs to be refocused on foundational consumption and securing universal minimum access and quality. If/when government is unresponsive, the impetus for change has to come from engaging citizens locally and regionally in actions which break with the top down politics of ‘vote for us and we will do this for you’.