This document critiques modern neoclassical economics and argues for reforming the field. It asserts that economists are asked for commentary in media not because their views are true, but because they are seen as experts. It also notes the anniversary of the fall of the Berlin Wall and triumph of capitalism. The document discusses how neoclassical economics acts as a dominant narrative and "regime of truth" that uses "veto economics" to reject new ideas. It argues the field produces "technically competent barbarians" and relies on public silence and compliance. It critiques the myths and ideologies perpetuated by modern economics, such as scarcity and growth, and calls for rethinking economics and imagining alternatives beyond orthodox growth models

1. ECONOMICS AS MYTH, ECONOMICS
AS POWER: WHY MODERN ECONOMICS
HAS FAILED AND HOW TO FIX IT
Dr. John Barry
Queen’s University Belfast

2. Setting out....
Economists are asked to comment in the media not
because what they say about economics or the
economy is true or even plausible.
Economists are asked to comment ....because they
are asked.
Today, 9th November is anniversary of the fall of
the Berlin wall in 1989, and triumph of capitalism
over communism....
....so far..

3. The new common sense...
Modern neo-classical economics as:
the dominant meta-narrative
‘regime of truth’
‘planetary vulgate’
power/knowledge

4. The veto power of
commonsense economics...
“assertions about economics are used as a kind
of veto to rule out new ideas and proposals
without further discussion… veto economics
rejects ideas and proposals with just one
word, offering no further explanation.
Favourite veto words include
‘inefficient’, ‘irrational’ and ‘anti-
competitive…as a last resort there is always
the plain but vacuous condemnation
‘uneconomic’”
(Aldred, 2008: 3-4).

5. Technically Competent
Barbarians?
Renowned holocaust scholar and former director of the
International Research Institute at Yad Vashem, Yehud
Bauer in an address to the German Bundestag, mused on
the reasons how the evils of the Nazi regime gained
intellectual and cultural acceptance within Germany.
“The major role in this was played by the universities, the
academics. I keep returning to the question of whether we
have indeed learnt anything, whether we do not still keep
producing technically competent barbarians in our
universities” (Bauer, 1998; emphasis added).
The ‘barbaric’ logic of modern neo-classical economics is
destroying people and planet.

6. Ideology, silence, eloquence
and contentment
Dominant ideology does not need to speak
If it does speak, it does not have to be either rational or
eloquent (Hayek’s insight...and that of populist ideologues
throughout recent history)
Equally, the liberal dictum of ‘silence equates to contentment’
has been fully exploited under the modern regime of truth
In the sense of people being satisfied and silence (i.e. not
politically active, interested) once ‘economic
growth’, consumerism etc. were being delivered.

7. “there are no more ideologies in the authentic
sense of false consciousness, only
advertisements for the world through its
duplication and the provocative lie which does
not seek belief but commands silence’”
(Adorno, 1981: 34; emphasis added).
Silence and compliance are more important to
supporting this view of the economy, since like in
the story of the ‘Emperor’s new clothes’, it is
uncritical silence which allows the fiction to
exist, for the ‘lie’ to be real and the fiction to be
real.

8. Hegemony and public silence
about economics...
One of the main achievements of the dominance of
neo-classical economics is public silence (and
hence compliance, lack of debate) about
economics
Economics is reduced to a ‘technical’ exercise in
which only experts can participate
Best seen in the movement of departments of
economics into ‘management schools’ in our
universities.

9. Myths to live (and die)
by...
In naturalising the economy and fetishising the market, neo-classical
economics commands silence where there should be
robust, public debate.
In its naturalising impulses is revealed the essential mythic status of
modern economics – rendering a human construction into a
more than human almost ‘natural process’, and in so doing
removing human agency from anything more than minor
tinkering with the totem of the God-like ‘market’.
How different is the advice of mainstream economists in their
‘predictions’ of what ‘the markets will bear’ from the advice of
shamans and priests of old about what ‘the Gods need’?
How different are budgets in all their public symbolism, theatre and
predictable scripts from ancient propriation rites?
Or talk of the ‘fundamentals being sound’, being that much different
from ‘the gods are happy’?

10. ‘Toxic Textbooks’ campaign

11. “For Adorno and Horkheimer even the most
modern forms of thinking are closer to
mythical doctrines than such forms can
admit. Present-day economics, for
instance, embraces the calculus of
rationality...Behind this calculus lurks the
‘barren wisdom’ of the mythical” (Short, 2011:
260)

12. The necessity of scarcity
and insecurity
The mythic or cultural-psychological ‘fact’ of
scarcity, and associated notions of insecurity
(job, body image, status) and ‘status anxiety’
(amongst others), are necessary features for the
modern growth economy.
There is never ‘enough’, only constant gratification
without satiation
Hence we have ‘perpetual scarcity’ in the midst of
affluence and plenty
Scarcity as a master concept for neo-classical
economics – how to organise human life
between infinite wants and scarce means.

13. Neoliberal subjectivities
Emergence of ‘entrepreneurial subject’ under its new regime
of truth (Foucault).
Creation and recreation of new, willing neoliberal subjects
The emergence of a new self-sufficient subject, risk
manger, life viewed from the point of view of a project
manager,
Freedom = consumer choice; education = an investment;
creative labour = human capital
Competition both coordinates human behaviour
(MacDonlad, 2011: 321), but more importantly under
ne0liberalism conditions it.

14. Insecurity and economic
growth as a way of life
Economic growth as neoliberalism’s ‘one true
social policy’ (Foucault, 2008: 144). )
Undifferentiated orthodox economic growth
coupled with differentiated individual
consumption
Growth bypasses claims for greater
redistribution

15. The fincialisation of social
life...
From a Foucauldian perspective, neoliberal political economy
creates a social order which not only makes ‘greed
good’, ‘insecurity’ necessary, and ‘risk’ both individual and
natural, but also ‘scarcity’ ever present even amidst
affluence and plenty.
It is not just that capitalism represents a ‘disembedding’ of the
economy from society (Polanyi), but the insertion of
prevailing economic (especially financial) norms within
society and social relations themselves (Langley, 2008).
As Panitch and Konings point out in relation to
America, ‘neoliberalism....embedded financial forms and
principles more deeply in the fabric of American society’
(2009: 68).

16. Private banking
failure....public bailout
(or the house always wins?
Witness the successful, ideological and deliberately
managed ‘sleight of hand’, which has seen a crisis of
banking in the private sector become politically
transformed into a crisis of public debt under the
new ‘regime of austerity’ and welfare cuts.
How did that happen?
‘Bad capitalism driving out good capitalism’
(MacDonald, 2011: 326)
Or…capitalism without capital?

17. Another trick...
Securitising debt and thereby transforming
‘debt’ into an ‘asset’ on a massive scale is
surely the modern equivalent of turning dross
into gold.

18. Imagining an economics...and
life, beyond orthodox growth
“questioning growth is deemed to be the act of
lunatics, idealists and revolutionaries”
(Jackson, 2009: 14).
Criticising economic growth is tantamount to a
fundamental act of betrayal in modern
societies, a public act of disloyalty to the modern
political economic order.
....Almost as bad in terms of being a disloyal
citizen, as questioning Ireland plc’s corporate
commitment to low corporation tax regime

19. Rethinking economics – how not to do it...
British Academy’s letter to the Queen
‘A generation of bankers and financiers deceived themselves and those
who thought that they were the pace-making engineers of advanced
economies’ (British Academy, 2009: 2).
Not a generation of economists and their models
‘Given the forecasting failure at the heart of your enquiry, the British
Academy is giving some thought to how your Crown servants in the
Treasury, the Cabinet Office and the Department for
Business, Innovation & Skills, as well as the Bank of England and the
Financial Services Authority might develop a new, shared horizon-
scanning capability so that you never need to ask your question again’
(British Academy, 2009: 3; emphasis added).

20. Translation.....
We failed to predict this crisis, the bankers are to
blame, but don’t worry, we are supremely
confident that we are never again in this
position, and will and can develop models that will
predict all future economic crises. That the cause
of the crash and failure to predict it might have
something to do with the dominance of the
economics profession by one model and form of
economic thinking is
not, unsurprisingly, considered.
And thus we witness another missed opportunity for
the reform of orthodox economics.

21. The return to political
economy
‘Fixing’ economics must begin from accepting the
ideological/value and political character of ALL
forms of ‘economics’
Values matter and need to made explicit not smuggled
in as axioms which become ‘facts’ ‘the truth’ as is the
case with neo-classical economics
There is no ‘value-free’, objective, neutral account of
economics....
Pluralism and debate about what sort of economy and
economics we/the demos/people want for the type/s
of societies we wish to live in.
We live in societies with economies, not economies
with societies

22. From ‘Buildings, Banks and
Boutiques’ to ….?
Calls for the return to an economic model based around
‘buildings, banks and boutiques’ (Colin Hines) (i.e.
property, financial services and consumerism)
It is worth remembering that (orthodox) economists are
asked to answer questions, not because what they say is
‘true’ or even ‘scientific’ but simply because they are
asked.
We need to have a variety of ways of thinking about the
economy and see what answers they provide as part of a
discussion about different forms of political economy.
We don’t accept one way for the organisation of the polity
so why should it be any different with the economy?

23. To…Libraries, Laundromats and
Light rail?
Beyond ‘business as usual’ and preparing for ‘post-
growth’ economics?
Collectivisation of consumption (if not production)
If we’re socialising risk (bank bailouts etc) why not
socialise other aspects of the economy?
Transition to a sustainable, green economy will be
based on more shared forms of reduced
consumption
And possibly more planning…but planning not for
orthodox economic growth but for a different type
of economy and society characterised by
Low carbon, lower inequalities and maximising the
energy/resource efficiency of human
flourishing...with ‘in-build redundancy’ for resilience