ECONOMICS - January 21, 2010

We are having tons of troubles these days with Economics. For at least 50 years, this has been in the hands of professionals who flatter themselves under the caption of the Free Market. This lovely name comes to us out of the Enlightenment, when the change out of the traditional system of Feudal and Guild economics was a notable advancement, and catered to the sense of liberalism of 250 years ago when freedom was in its infancy as a way of dealing with economic reality. Yet even then many of the best thinkers recognized the enormous power of corporations. Even Adam Smith, who advanced the Free Market, was against the monopolistic power of companies like the East Indian and Hudson’s Bay corporations. That was kid stuff compared with the power of world-spanning companies like those we see today. And these corporations use the power of good jobs to tell the business schools what they expect their graduates to believe, and that trickles down to the Economics departments of universities, most of whose students are not genuinely interested in their subject, but are ready to study whatever they are asked as the price for admission to the executive suites of the wealthy corporations. The result is that the beliefs of Ayn Rand and Milton Friedman reach us through their acolytes, like Robert Rubin and Larry Sommerfeld, who are now the economic advisors steering Pres. Obama. It is true that they echo the majority view of the most prominent economists, so how can we expect anything else in a president with almost no economic thinking of his own? I have been unhappy with that subject since being exposed to it at the London School of Economics, and we must all live with it as long as it holds sway over the majority of that profession. I do not know how we will get out of it as long as the corporations continue to hold sway over what our schools are teaching as received science.