Chang, who has written best sellers including Kicking Away the Ladder and 23 Things They Don’t Tell You About Economics, debunks the notion that politics and economics can be separated. The state and markets are inherently intertwined.The problem is, that while “there is no scientifically defined boundary of the market, economists have been convincing people that they know where the boundary should be,” Chang says.
Defining the boundaries of markets within economic systems is impossible because of the variety of the systems themselves, especially between nations. The American capitalist system is fundamentally different from other capitalist systems, Chang says. Each system is “propped up” by its own network of regulations, participants, and currencies. With such variety, it is impossible to define a true market boundary.
...political arguments are being passed off as objective truths....INET — The Institute Blog
Ha-Joon Chang and Mariana Mazzucato: Rethinking the State
Ha-Joon Chang, Reader in the Political Economy of Development at the University of Cambridge, and Mariana Mazzucato, RM Phillips Professor of Science and Technology at the University of Sussex
I think it is clearer to say that economics and law are inherently entwined rather than economics and the state. From a broader perspective, it is more correct to say that economies are inherently entwined with institutional arrangements of which government is a major one in that so many institutional arrangements are grounded in law and legal agreements, and carry legal implications.
Hi Tom,
ReplyDeleteI agree - my professor Katharina Pistor developed the legal theory of finance to make this exact point explicit.
See, e.g.:
http://clsbluesky.law.columbia.edu/2013/08/05/the-marketplace-of-ideas-concluding-remarks-on-the-legal-theory-of-finance-installment-ltf/
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2262936
There is new paradigm and a new spirit emerging. The whole edifice of neo-monetarism and New Keynsian establishment economics, an edifice build to keep the government out of direct participation in the economy, is starting to unravel. Neoliberalism's days are numbered.
ReplyDeleteThanks for the links, Rohan. This should be Econ 101, and Econ 101 should be Political Economy.
ReplyDeleteTom yes they are intertwined the term I believe is translated 'house-law'.... ie you can't take 'the law' out of 'economics'... rsp
ReplyDeleteLatin oeconomus, from ancient Greek oikonomikós: equivalent to oikonóm (os) 'steward' oîko (s) 'house' + nómos 'law, rule'. [Wiki]
ReplyDeleteTaken altogether and globally - stewardship of the household of the planet.
I hope you're right Dan, although I do find it hard to believe. Time and time again, the same nonsense keeps being brought back from the dead, I was reading the transcript from William Jennings Bryan's 'cross of gold' speech yesterday, I had never read the full speech, and even then he was talking about things which are still being pushed today by neoliberal's, this part alone jumps out, even then they were pushing trickle down economics.
ReplyDeleteThere are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.
http://historymatters.gmu.edu/d/5354/
Mazzucato has a long history of talking thru her rear end. I normally ignore her.
ReplyDeleteRalph: I'd be interested to know where you think Mazzucato gets it wrong.
ReplyDeleteIf it's true she's so incompetent, we must alert Randy Wray immediately:
http://ineteconomics.org/grants/financing-innovation