April 2013        

The state of bourgeois political economy

Much like our political elite, the global elite of economic thinkers are living on a different planet. The list of recent winners of the Nobel Prize for Economics—and, more importantly, the reasons why they were given the award—are so far removed from the economic troubles of the day that it is barely believable.
     It would appear that the prize for economics is as politically biased as the prize for peace, which recently went to such notable warmongers as Obama and the European Union. Reading the list would make you say, Crisis? What crisis? Which is probably the point.
     Amidst the greatest crisis of capitalism since the Great Depression, and with a growing popular understanding of the changed dynamics of the system towards an even more unstable financialised, monopolised and unequal society, such topics as “for their analysis of markets with search frictions” are winning the award.
     For completeness’ sake, here is the list of winners since the systemic crisis burst onto the scene:
     2008: Elinor Ostrom, “for her analysis of economic governance, especially the commons.”
     2009: Oliver Williamson, “for his analysis of economic governance, especially the boundaries of the firm.”
     2010: Peter A. Diamond, Dale Mortensen, and Christopher Pissarides, “for their analysis of markets with search frictions.”
     2011: Thomas J. Sargent and Christopher Sims, “for their empirical research on cause and effect in the macro-economy.”
     2012: Alvin E. Roth and Lloyd Shapley, “for the theory of stable allocations and the practice of market design.”
     As if to emphasise just how big an apologist for the system bourgeois political economy has become, Williamson’s work applauds the role played by larger monopolies in internalising transaction costs, which can pass savings on to consumers and reduce risk and instability in the system—this in a world where a pair of runners is made for about $1.50 but sold for about $150, and where the hoarding of commodities creates massive costs in spikes and artificial inflation of prices.
     Or the latest winners, Roth and Shapley, for their work on showing how supply-and-demand markets can be successfully “modelled” to match up anything from organ donors to single men and women, and presumably the world’s resources and produce. Almost a sick joke when you consider the mess “supply and demand” has made of housing allocation in this country.
     And just to show how much the Nobel prize committee have their finger on the pulse of reality, when asked to comment on the debt crisis Alvin Roth simply replied, “That’s not the kind of economist I am.”
     So why leave the economy to economists!

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