Thursday, September 27, 2018

Amanda Novello - WHY LEFT ECONOMICS IS MARGINALIZED



The powers that be pump money into mainstream economics to make it look like there is no alternative.

The role of government
The left believes the government has a role to play in the economy beyond simply correcting “market failures.” Prominent leftist economists like Stephanie Kelton and Mariana Mazzucato, argue for a government role in economic equity and shared prosperity through policies like guaranteed public employment and investment in innovation. The government shouldn’t merely mitigate product market failures but should use its power to end poverty.
On the other hand, mainstream economics teaches that government crowds out private investment (research shows this isn’t true), raising the wage would reduce employment (wrong) and that putting money in the hands of capital leads to more economic growth (also no). As we have seen post-Trump-cuts, tax cuts lead to the further enrichment of the already deeply unequal, equilibrium.

Limitations to left economics: public awareness and lack of resources
History and historically entrenched power determine both final outcomes but also the range of outcomes that are deemed acceptable. Structural inequalities have been ushered in by policies ranging from predatory international development (“free trade”) to domestic financial deregulation, meanwhile poverty caused by these policies is blamed on the poor.
Policy is masked by theory or beliefs (eg. about free trade), but the theory seems to be created to support opportunistic outcomes for those who hold power to decide them. The purely rational agent-based theories that undergird deregulation have been strongly advocated for by particular (mostly conservative) groups such as the Koch Network which have spent loads of money to have specific theoretical foundations taught in schools, preached in churches and legitimized by think tanks.

Economic Questions

1 comment:

Andrew Anderson said...

Prominent leftist economists like Stephanie Kelton and Mariana Mazzucato, argue for a government role in economic equity and shared prosperity through policies like guaranteed public employment KV

If Kelton agrees with Warren Mosler then it's to be:
a) Continued welfare for the banks and by extension for the rich, the most so-called "credit worthy" of what is then, in essence, the public's credit but for private gain.
b) Continued wage slavery for the non-rich to either the private sector or government till death, disability or if lucky a decent retirement.

If that's the Left, then spare me from Moderates or the Right!

And it's ironic that people use the word "equity" and "share" when, except for government privileges for private credit creation, companies would have had to share equity (i.e. common stock issuance) much more than they've had to share equity.