Capitalism Is Too Good a Name to Describe Neo-Liberal Ideology

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http://www.commondreams.org/view/2013/12/29-1



In science, a theory is abandoned or substantially modified if it does not concur with the emerging facts, fails to predict important events, or is contradicted by experiments. That, alas, does not seem to apply to economic theories.

Many of the leading lights of free-market (neo-liberal) capitalism were asserting before the crash that the market had correctly valued property, shares, derivatives and other exotic products that the “moneymen” were engaged in trading in. They failed spectacularly to predict the 2008 crash, the second largest economic crisis in history, after the great depression.

You would think, wouldn’t you, that those high priests of neo-liberal economics would now be contrite, admit that their models of the market and human behaviour are wrong, or at least are in need of serious modification. Not a bit of it, they just carry on regardless, as if the crash never happened.

This kind of tunnel thinking has even infected economics departments in universities, the very places where openness and intellectual objectivity should be their guiding principles.The Guardian, in an article entitled “Economic students aim to tear up free-market syllabus”, reports that economics undergraduates at the University of Manchester are so disappointed with their courses that they have formed a “post-crash Society”, and have established links with other universities, with the aim of forcing academics to explore other economic models outside the free-market brand that dominates their economics courses. The students are critical, rightly, that their courses have failed to explain the causes of the crash, and why the free-market model failed to predict it.