William Mitchell — IMF demonstrates mainstream economics has ossified but remains dominant

Last week (April 11, 2023), the IMF released their half-yearly update – World Economic Outlook: A Rocky Recovery, April 2023 – which excited the headlines in the media with predictions of gloom and calls for fiscal austerity and more interest rate hikes. The only good thing about these reports every six months is the accompanying datasets, which allows for fairly quick comparative analysis across nations. Other than that, the textual narratives are pure mainstream economics Groupthink and demonstrate how if one starts from a particular and flawed set of principles, everything else that follows undermines the stated goal. This is a recurring story – we have seen this with these multilateral agencies over and over again. The point to understand is not to try to interpret these IMF reports as being knowledge-based or compiled as if they are pursuing knowledge. They are parts of the ideological weaponry that seeks to sustain and advance neoliberalism and the power relations inherent in that ideology while purporting to be expert commentary.…

The assumptions frame the debate. If the assumptions are stipulated as epistemological absolutes, or in the terminology of conventional economics, "settled," then deduction determines the outcome accordingly.

Perhaps the problem is not elite ignorance but class-based cognitive bias, or maybe even just propaganda. Since this phenomenon is widespread, it is likely the result of a combination of these.

Then there is Upton Sinclair's famous quote:  "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" — I, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109. It is not just the job description, however, although that is also fundamental. It is also class-status and access. Once a person is living in the bubble, leaving it seems like exile to the netherworld. So no one in the bubble is willing to rock the boat enough to get pitched out.

William Mitchell — Modern Monetary Theory
IMF demonstrates mainstream economics has ossified but remains dominant
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

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