No. 12

Economic ideologues lay an egg!

STONE the crows! What a great deal of gloating there is from political economists and their pals in the press. Here at murder HQ the books piled up for Easter reading are all about economics. No detective yarns about Swedish investigative journalists. No tautological tales by creative writing academics. And absolutely no soon to be a major motion picture about Twilight teen vampires in love.

No, a great many of the books that came to the Crows are about economics. But not the sort that are full of formulas proving the need for more research. These books are less about the way economic systems work than the way their authors wish they didn’t. And by blaming the global financial crisis on economics they resurrect the case government regulation rejected in the 1980s.

Instead of analyses of evidence there is now a fashion for “I told you so” tomes which argue greed, the internal contradictions of capitalism, ecologically unsustainable consumerism, (and did I mention greed?) caused the global financial crisis.

There were lots of books like this about before the crash, which were ignored. But now ideologues, recognising an opportunity when they see one, are churning them out. They have titles like Crash Tackled: How Wall Street Flattened All our Futures, Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism and Greed is Good (But only if You’re a Banker). Only one of these is real but we are so used to the genre I bet you battle to work out which.

And they all have the same sort of structure, along the lines of this all-purpose synopsis —

Introduction: how the global financial crisis demonstrates the folly of economics

Chapter I: Why the world went wrong when we de-regulated the economy

Chapter II: Why we need to spend more money on health and education, child care, aged care and assistance for everybody in between who is upset about anything

Chapter III: Why we need to stop big companies making too much money

Chapter IV: Why deregulation has not worked for ordinary people who only think they want all the consumer durables and bigger houses an expanding economy made possible

Chapter V: Why we need to cut our standards of living to allow the developing world to increase their’s (but not so much they will harm the environment)

Chapter VI: Why we need to stop obeying capitalists and their economist ideologues and return power to public servants

Conclusion: The world is warming, we are running out of resources, economics is all wrong and only something that looks suspiciously like a command economy, (but with a green name) can save us.

And so forth and so on.

But what all these books ignore is that capitalism as an economic system did not cause the crisis. Rather, the problem was acts of criminal cupidity – committed by people ripping unsustainable profits out of businesses.

And if anybody was implicated in the outrage it wasn’t economists, it was the regulators who did not watch what was going on; and ministers who kept spending on programs that people wanted but were not prepared to pay for through the tax system; believing that all would be well as long as nobody asked what would happen when the wheels fell off.

Equally important, it did not take the GFC to push Japan and the Europeans,   the US and UK into deficit – they were there before.

But the polemicists ignore all this. The market-bashing that followed the slump of 2008-09 has more to do with opportunism than economics.

The polemicists assume economics is optional, that we can have all the jobs and green energy, education and welfare programs we want without the economic growth that funds more services.

This sort of writing has much more to do with politics than the study of economics. Talk about the dismal science.

Maybe the Crows should read a Swedish who dunnit over the break, one in which the Easter bunny is the baddie.