Ladies, Protect Yourself from Econsplaining!
Take Back Economics
This is a call to arms, to take back economics. If you haven’t felt invited into the dialogue about national and global economics, I urge you to crash the party! There is nothing about economics that warrants excluding so much of our population. In this time of crisis, it’s more important than ever to include everyone in this conversation.
At school you took a class in home economics, which strangely had nothing to do with economics. I learned to bake one meal and sew a pair of sweatpants. So how can you, how dare you, jump into a conversation about our national and global future?
Take the advice of Joan Robinson, a paradigm-changing economist who graduated from Cambridge in 1925 and later taught there (if you have never heard her name mentioned, it’s not your fault): “The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” This problem of deception is not new, but it is urgent.
Who are the econsplainers?
Mainstream economists. Especially those that pontificate about large-scale economics. Any economist who claims to know the future is delusional. Economists lose sight of the limitations of their field when they view macroeconomics as a natural science, not a social science. Scientists who study biology, physics, and chemistry can test hypotheses in labs and verify them. This is only remotely possible for microeconomists, who study how individuals, households, and businesses make purchasing decisions. For a macroeconomist to be sure about a hypothesis, they would have to test it out on a country or the whole world. Only those in power get to test their hypotheses, and they can never repeat the same experiment twice. At the macro level, observation and reasoning are the only available tools.
Governments’ money-creating responses to the current pandemic are proof that the rules supposedly governing the economy can be broken. Wars provoke similar actions. In World War II, an immediate investment was needed to stop Nazis from ruling the world, and countries managed to mobilize the needed resources. A science that changes its laws according to circumstances is not science, it’s a set of man made rules designed, not dictated by nature.
Studying countries who issue their own currencies, who print their own money, is not the same as studying those who use another nation’s currency. Economist Stephanie Kelton’s upcoming book The Deficit Myth “empowers readers to break free of the broken thinking and fictitious restraints that have been holding our nation back.” She says, “Deficits can help us fight a myriad of problems that plague our economy–inequality, poverty and unemployment, climate change, housing, health care, and more.” In other words, for Kelton and others who are challenging assumptions, Modern Monetary Theory (MMT) offers hope for an economy that is not based on artificial scarcity and does not only favour the super-wealthy. She says, “Deficits can help us fight a myriad of problems that plague our economy–inequality, poverty and unemployment, climate change, housing, health care, and more. But we can’t use deficits to solve problems if we continue to think of the deficit itself as a problem.” Facing today’s problems requires new ways of thinking.
The current pandemic is a tragic situation that is emphasizing the weaknesses of our current systems. Citizens like you are concerned about how we will pay for the many things our countries and our people need, but Kelton says “We are getting a beautiful example right now.” The same leaders who said it was impossible are creating money now and throwing it into the system. It is no longer possible to argue that nations cannot create money when they need to. In reality, we are limited only by the amount of resources — how many people are available to work and our natural resources.
How do they econsplain?
Macroeconomists econsplain when they make assumptions about how money and the economy works. They econsplain when, as Alexandria Ocasio-Cortes said, “they deny that “we have been building an economy on a sugar rush,” with wages not increasing in 30 years, and that we are passing bills designed for an economy that existed 30 years ago.
They also econsplain when they assume that everyone has the same definition of economics. What is even meant by the economy?There are a variety of spoken and unspoken definitions, but I rarely hear a speaker clarify which one they are using. We are just supposed to know.
The word economy comes from Greek and means “household management.” Back to home economics class! But if the Coronavirus has shown us anything, it is that we are all connected. It’s impossible to manage your own household in a broken macroeconomic system.
The first definition, straight from the Oxford Dictionary is “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.” But perhaps we should be using the second definition: “careful management of available resources.”
Take Back Economics!
In a democracy, it’s imperative that everyone be invited into this conversation. Some things are too important to leave to the experts. Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, recently made a video where she quotes Milton Friedman: “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” She responds, “But whose ideas?” Those with vested interests are working systematically to make sure their ideas are assumed to be the truth, and they have no qualms about using fear tactics and excluding us from the conversation.