by From Deniz Kellecioglu and the current issue of the RWER The academic field of economics has been under an intensified pressure after the Global Financial Crisis (GFC), which began in September 2007 (cf. Backhouse 2010). This pressure involved demands to refine, reform, or completely overhaul the field. The latter group viewed the GFC as another dismal outcome of a dominant economics that is significantly supportive of financial interests, while being hostile to states, peoples, and the environment; unless they functioned in the interest of the prevailing economic and power structures (cf. Dowd 2004, Chang 2014). More than a decade later, dominant economics has not changed much; whether in its theory, education, methodology, or policy (cf. Aigner et al 2018). This economics ascended
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from Deniz Kellecioglu and the current issue of the RWER
The academic field of economics has been under an intensified pressure after the Global Financial Crisis (GFC), which began in September 2007 (cf. Backhouse 2010). This pressure involved demands to refine, reform, or completely overhaul the field. The latter group viewed the GFC as another dismal outcome of a dominant economics that is significantly supportive of financial interests, while being hostile to states, peoples, and the environment; unless they functioned in the interest of the prevailing economic and power structures (cf. Dowd 2004, Chang 2014). More than a decade later, dominant economics has not changed much; whether in its theory, education, methodology, or policy (cf. Aigner et al 2018).
This economics ascended over the 1970s, achieving complete dominance in the Global West by the early-1980s, and almost anywhere else by the early-1990s. Its dominance is closely related to the emergence of a new kind of capitalism and power system, often referred to as ‘neoliberalism.’ After all, as concluded by Wolff and Resnick (2012: 311): “over the last one hundred and forty years or so, capitalism not only oscillated among its different forms, but economic theory focused on understanding capitalism also oscillated among alternative kinds of reasoning. Moreover, these two different kinds of oscillations are interconnected.” This paper examines such oscillations from the vantage point of economic theories, focusing on the transitional period of the 1970s. The objective with this ‘political economy of economics’ is to distil lessons to utilise in emancipatory efforts to transform economics today.
Although this history has been extensively reviewed, few studies are directly concerned with transformations in economics. This critical literature exhibits one common conclusion, however: external powers have significantly influenced the character of mainstream economics (cf. Chang 2014, Näring and Douglas 2012, Skidelsky 2013, Dowd 2004). However, this conclusion is often observational, suggestive, and part of a presumptive diagnosis – rarely proven in a systematic manner. This is surprising considering the importance of the issue and the weight of the allegations. read more