Is Economic Valuation a “Neoliberal Road to Ruin”? A Response to George Monbiot

George Monbiot is actually an environmental journalist I esteem highly. But I do not agree with his aggressive criticism of what he calls a “neoliberal road to ruin”, which I would prefer calling economic valuation of environmental goods and services [the linked article is a transcript of Monbiot’s talk, which you can see below]. While he does make important points, I see his criticism as mistaken in many respects. In what follows, I would like to respond to some of the points he made. Continue reading

Paradigms Lost?

I would like to recommend you “Paradigms Lost? Cowboys and Indians in the Battle over Economic Ideas” posted by Mark Blyth at TripleCrisis. It provides a powerful analysis of why neoliberalism is still the state of the art in economics on the one, and hope that we can change it, on the other hand. Here an excerpt:

You might then think that given such large losses and red faces we really should now be living in a post-neoclassical world. Yet we are not. Here are two reasons why this is the case: one that I don’t buy and one that I do buy.

“There is (still) no Alternative” – There is No New Paradigm.

This is a very odd but powerful form of argument. Odd, when you consider that this blog, INET, and hundreds of other sources are actively building one. Powerful, in that by saying that ‘unless you replace one complete integrated mathematically perfect theory with another one you should stick with the one you have got.’

I have always been suspicious of this form of argument […]

Trade Should Not Be Free as a Matter of Dogmatism

In the mainstream economic thought there is hardly any place for constructive criticism of free trade. But, while the idea of free trade is not wrong in itself, it has become a dogma – no matter what it looks like in reality, in the eyes of many free trade is of unquestionable benefit. It was not always so. John Maynard Keynes once made a highly interesting remark that, regrettably, seems almost forgotten:

I sympathize therefore, with those who would minimize, rather than those who would maximize, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national. Continue reading

New Developmentalism

On September 29, 2010 a group of development economists primarily from Latin America signed the 10 Theses on New Developmentalism. It was a Keynesian and structuralist reaction after the failure of the Washington Consensus (the neoliberal development dogma)  as well as the unfolding of the global financial crisis. Here are the theses in short (I compressed them – some highlighting also is mine -, for a detailed listing see the link above): Continue reading