We seem to live in a time of tearing things up (or down depending on your viewpoint). While we are about to start dismantling our 40-year old membership of the European Community, across the Atlantic, Donald Trump seems to have torn up a fundamental pillar of US and hence global society with every day he has been in office. We desperately need fresh thinking.
Less well covered by our parochial media, Modi in India has been tearing apart the delicate and difficult relationship between Hindus and Muslims since he became prime minister in 2014. Meanwhile communist China announced in Davos last year that it would be the new global champion of free trade and globalisation. It is as if in a polite dinner party, a majority of the guests started swearing foully while the one who you expected to be rude turns to you with a charming smile, which of course you don’t trust for a moment.
So what is going on and where is it taking us to? Can we do anything to avoid catastrophe? The Mint has been set up to start a conversation with its readers to find some answers to these questions with a focus on what is happening in the economy.
We know that many find economics both tedious and filled with impenetrable jargon. It does not have to be like that. The Mint will strive to avoid building walls of words that exclude and marginalise. We, like Ha-Joon Chang, believe that economics is too important to be left to economists. It needs to be discussed in a manner that does not exclude. The Mint gives you economics, but not as you have known it.
Economists are well known for disagreeing about everything to do with the state and future of the economy. However they are rigidly certain that the only thing better than free trade and free markets is more of the same.
The main popular economics magazine globally today was set up in the 19th century precisely to champion free markets and free trade and its viewpoint has not wavered. Economists seem to base their authority on rigorous mathematical models and jargon to ensure no-one questions them. Taking them on their word, or at least on their theories of market efficiency, governments have privitised and outsourced public services around the world and promoted globalisation as both great for everyone and inevitable. There is no alternative has been the mantra.
But the currency of economics seems to be sinking along with the pound. The first signs came with established economists’ deep embarrassment over not seeing it [the Crash] coming in 2008.
More recently economists’ Michael Fish moment came when they forecast immediate disaster following the Brexit vote which then didn’t materialise. Tellingly many people took no notice of them anyway.
The Mint believes that we do need to tear up many of the economic theories that have been used to guide our economic policies for the last 30 years. Or at least recognise, that they have limited relevance to the real world, particularly in the current circumstances.
Economic theory based on the fundamental assumption that the state of the economy generally reflects relatively minor displacements from an eternal equilibrium seems particularly inadequate when we view these turbulent times. We are not alone in this.
The chief economist of the Bank of England, the chief executive and economits of the OECD and the World Bank chief economist are all suggesting that we need new thinking.
So where should we look for new thinking? Especially since most economists in universities, consultancies, businesses and government departments, have never learnt or read anything else other than the established take.
Luckily there have those in economics who have bucked the trend and however marginalised and ignored by the mainstream, have managed to survive and develop new thinking. Actually one of the leading areas of new thinking, complexity economics, was invented in a research centre, the Santa Fe Institute, set up in the 70s by a hero of mainstream economics, Arrow, who thought there was a need for new thinking even then.
There are institutional, behavioural, feminist, post-Keynesian, ecological and even Marxist economists, that all have something to offer. This magazine intends to draw on the insights from all these fields where they seem to offer something useful and relevant, to bring a fresh take on how the economy works. Or doesn’t.
We have faith that people living and working in the economy have a valid view. Experts do not have a monopoly on insight.