“Economics” is a term which is often misused, most particularly by those on the right-wing of politics.
“Economics” is not a religion. “Economics” does not sit on a throne and dictate how humans must arrange their lives. Economics is only lots of models and measures which different people in different contexts have applied to things they were studying.
A good/useful economist behaves like a scientist. They adapt their models and add new measures and methods in a never-ending drive to improve their understanding. The good economist recognises there is no final truth in economics.
Bad/useless economists behave differently. They use meaningless phrases like “economics says”. They nod at each other and quote Margaret Thatcher: “There is no other way”. They prioritise the imperfect economic tools over the perfectly-human people who use tools.
In the 1970s a group of economists at the University of Chicago reworked a few of the classical economic models – and ignored the rest – and decided they had hit on a new truth about the role of government in the economy (or, more accurately, a belief that government has no role in the economy). Effectively the “Chicago School” economists founded a religion.
This might have been just academic if it weren’t for the likes of Thatcher in the UK, Ronald Reagan in the USA – and Roger Douglas and Ruth Richardson and certain Treasury officials right here in New Zealand in the 1980s and 1990s.
Those politicians became true disciples. But, just like the Chicago School, they only picked and chose those small bits from the economics field which matched their existing prejudices. To use an economics analogy they loved Adam Smith’s The Wealth of Nations but never made the time to read The Theory of Moral Sentiments – let alone Keynes’ General Theory or John Rawls’ A Theory of Justice.
Today The Herald carried an excellent piece from Peter Lyons. Peter teaches economics and he’s been following the often dramatic changes in New Zealand’s economy for more than 30 years. He clearly understands the Chicago religion, but he’s weighed up the evidence and – quite properly my opinion – he doesn’t buy into it.
Unfortunately for ordinary New Zealand families the ministers who are driving economic and finance policies in the National Government do.
In the dogmatic world of John Key, Bill English and Steven Joyce there are no lessons to be learned from the Global Financial Crisis. They appear not to care that their obviously failed policies have seen thousands upon thousands of New Zealanders lose their jobs, their livelihoods and their hope of making a future in New Zealand. They maintain their ‘not my responsibility’ passive government approach when the soaring and over-speculated dollar is killing manufacturing, killing exports, killing the regions and killing hope. It seems it doesn’t even matter to them that Kiwi children are going to school without food because their parents can’t afford to provide it.
While the USA, the UK and the New Zealand people have moved on, all the National Government does is preach failed ideologies.
Because, for New Zealand’s sake, we must get rid of this ideological and destructive National government as soon as we can.