Recently, Jean Tirole, Nobel Laureate in Economics, was interviewed regarding the poor reputation of economists1, and indicated that it seems to be mostly because of their inability to predict the Global Financial Crisis of 20082. This may be true for some people, but I suggest that this mistrust is more because of the reasons expressed by Murray Dobbin, that the profession of economics ‘is simply a self-satisfied apologia for the plunder of society’s wealth by the greedy and ruthless 1% — the “masters of mankind”3.
Economics used to be called the dismal science, because it was in part driven by ideology. However, since the late 1970s it has become almost a neoliberal religion, whose high priests will do anything “to make the dogma of neoliberalism impervious to its disastrous outcomes”3,4. If it was a science the data available would long ago have shown the hypothesis of neoliberalism to be as ludicrous as the ‘flat earth’ hypothesis. Indeed, in some spheres, it is termed ‘flat-earth economics’. This is because it has led to dramatically increased inequality4, which, as historians will tell you, is dangerous for any society.
The current system manipulates people to buy stuff, but the same system then suppresses their incomes so they cannot do so, without going into debt3. This is in part why household debt in Australia is at record levels, and is currently at about 100% of Gross Domestic Product (GDP), whereas in other advanced economies it is about two-thirds that level. It is also part of the reason for the sluggish or stagnant consumer spending5. This household debt level will be disastrous if there is another global financial crisis like that of 20086. If that happens, and the current government continues with neoliberal austerity policies, the current disaffection with politics will be exceedingly mild by comparison. As I have said elsewhere, disaffection may become insurrection.
If economists are ever to regain a semblance of trust from the general populace, they will have to reverse the trend of inequality which they have so enthusiastically embraced as they pandered to the wealthiest 1%.