Behind the Veil of Zest — Economics Is Prone to Religious Abuse

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Not long ago, I used to laugh at the below. My academic education inclined me to believe in the neoliberal message of a self-regulating free market order with its purported ability to autopilot itself to best results on all fronts.

There are a number of reason why I let myself be convinced by that view. One of the grounds, probably the most important one, is that I was never properly introduced into the framework of assumptions underlying mainstream economics (ME), nor did I ever bother to look into them by my own initiative.

I had heard of the dubious nature of these assumptions by way of critical summary. Why I persuaded myself to override these criticisms by a number of auxiliary workarounds I do not know. However, I have some conjectures: it may have been a mixture of at least three factors: (1) my (then) recent, deep and final disappointment with Marxism (and somehow I seem to have associated policy controlled capitalism, like Hayek in The Road to Serfdom, with an inevitable tendency toward socialism), (2) the promises of ME that an irrefutable proof of the neoliberal market order can be found in the advanced economic literature (notably Arrow-Debreu, when in reality, their findings represent the ultimate refutation of the theory of free markets, and (3) a zestful delight in the surprising circumstance that by the end of my academic studies I was sought after by employers who were offering very high salaries and excellent career prospects and appeared that more palatable when you believed in capitalism.

This is why I consider it very important to treat the study and the criticism of economics as a unity, look carefully into the underlying assumptions and relentlessly test how these stand up against the empirical evidence. See also (in German) here, here, and here. And The Bad Conscience of an Economist.

Writes Steve Keen:

Left to itself, capitalism will devour itself and the system under performs which means we all get poorer. But not only have neoclassical economists under played the role of banking in the economy, they also believe that maximizing profits is always best for companies and the economy, even if it means in the long term there is under investment. China is doing the opposite and leaving us behind.

After a few years of high profits, at the expense of the long term health of the company, CEO's can retire early because they have made a fortune, and with a great pension. The profit incentive is all wrong. Traditional conservatives would have understood this, who were always very prudent about money, delaying gratification today while saving their money for a rainy day and investing it for long term future. But the conservative 'greed is good ' neoliberal thugs have taken over.

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