Economics — An Ontological Enterprise

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We are witnessing riots in France, whose "king" is a former investment banker steeped in a world view according to which society is best shaped by the natural evolution of markets. His is a philosophy of repressing the most important champion that ordinary people have: government. His is an agenda of restructuring government into an agency geared toward special interests — in large measure corporate interests, but not only, for not all fringe interests like the green faction of deindustrialisers are clever enough to turn their political power into profits, though most do — and a fortiori so — the deeper the roots of their privileges at the "royal" court grow and the longer they prevail.

During a recent conference (in late October/ early November), I noticed a green politician (a German) suddenly displaying uncharacteristic euphoria — he was praising the French "king" as the best that had happened to the green movement in a long time.

He was openly attacking democracy. Like the "king" and other lobbyists, he had his own urgent agenda and no time for oppositional forces.

Economics is an ontological enterprise, a powerful instrument to shape the perception of reality, interfering profoundly with our psyche and our social life.

Writes the heteconomist:

The purpose of the euro is to subject national governments to the demands of the market. If a government in deficit attempts to pursue any policy at odds with corporate interests, market participants can demand a higher rate of interest on its debt. To the extent the decision to shackle European populations to the euro was not made out of blind stupidity, it was an attempt to reduce governments to the status of all other market participants. It means that if the market disapproves of worker-friendly policies, welfare-state measures or much needed expansionary fiscal policy, the government can, by design, cry poor [claim to be too poor to oblige, IGTU].

For member nations of the Eurozone, there is no sustainable way forward until either they free themselves of the euro or, which seems unlikely, they erect a democratically accountable fiscal authority at the head of the Eurozone, forming in the process something akin to a United States of Europe. For those of us in the rest of the world, however, any sense of powerlessness that we project to the level of society as a whole is largely due to a misconception. We have fallen for the lie that our governments are revenue constrained even though they have, for now at least, retained their currency sovereignty. Neoliberal politicians tell this lie either out of ignorance or because they want to deceive us into believing that responsible and equitable economic policymaking is “unaffordable”. But the lie is just that: a lie.

Once the fiscal capacity of a currency-issuing government is recognized, the feasibility of not-for-profit activity becomes clear. It becomes equally clear that government can implement appropriate regulation of for-profit activity, to the extent we want such activity to occur, irrespective of how such regulation might be perceived in the corporate sector. And it becomes obvious that unemployment is a government policy choice; one that is costly in terms of forgone output and, more importantly, unjust.

Needless to say, the neoliberal position is that government involvement in the economy of this kind is undesirable. The whole rationale for pretending that governments are financially constrained like households and firms – or, in the case of the Eurozone, actually making it so – is because neoliberals believe the government should be so constrained.