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Most people think economics is a technical, confusing, and even mysterious subject. It’s a field best left to the experts: namely, the economists. But in reality, economics should be quite straightforward. After all, economics is simply about how we work. What we produce. And how we distribute and ultimately use what we have produced. Economics is about who does what, who gets what, and what they do with it. At that simplest, grass-roots level, we all know something about the economy. And so we should all have something to say about economics.
Moreover, because we interact, cooperate, and clash with each other in the economy (even Robinson Crusoe didn’t work alone – he had Friday around to help), economics is a social subject. It’s not just technical, concrete forces like technology and productivity that matter. It’s also the interactions and relationships between people that make the economy go around. So you don’t need to be an economist to know a lot about economics. Everyone experiences the economy. Everyone contributes to it, one way or another. Everyone has an interest in the economy: in how it functions, how well it functions, and in whose interests it functions. And everyone has a grass-roots sense of where they personally fit into the big economic picture, and how well they are doing (compared to others, compared to the past, and compared to their expectations). This is the stuff economics should be made of.
Unfortunately, in my view, most professional economists don’t think about economics in this common-sense, grass-roots context. To the contrary, they tend to adopt a rather superior attitude in their dealings with the untrained masses. They invoke complicated technical mumbo-jumbo – usually utterly unnecessary to their arguments – to make their case. They claim to know what’s good for the people, even better than the people themselves do. They take great pleasure in expounding theories that are counter-intuitive and puzzling to the rest of us. They present themselves as interpreters of a mysterious realm which average people cannot hope to comprehend. And since they study things that are measured in billions or even trillions of dollars, their sense of importance grows – in their own eyes, and in others’. That’s why we see economists on the television news every night. We almost never see anthropologists, biologists, social workers, nutritionists, or architects on the nightly news. Perhaps we should hear more from those other professions, and less from the economists. Their advice might actually be more important to our long-term economic well-being than that of the economists.
Nothing better exemplifies economists’ know-it-all attitude than debates over free trade. Conventionally trained economists take it as a proven fact that free trade between two countries always makes both sides better off. People who question or oppose free trade – unions, social activists, nationalists – must either be acting from ignorance, or else are pursuing some narrow vested interest that confl icts with the broader good. These troublesome people should be lectured to (and economists love nothing better than expounding their beautiful theory of COMPARATIVE ADVANTAGE*), or simply ignored. And that’s exactly what most governments do. (Ironically, even some conventional economists now recognize that traditional comparative advantage theory is wrong, for many reasons – some of which we’ll discuss in Part Four of this book. But that hasn’t affected the profession’s nearreligious devotion to the doctrine of free trade.) Worse yet, the arrogance of economists is not value-free. Outside the academic world, the vast majority of professional economists work for organizations with a deep vested interest in the status quo: banks, brokerages, corporations, industry associations, and governments.
Inside academia, meanwhile, most economists (though certainly not all) are wedded to aparticular, peculiar version of economics – called NEOCLASSICAL ECONOMICS. This kind of economics is as ideological as it is scientifi c. It was developed in the late nineteenth century to defend capitalism, not just explain it. And it still goes to great lengths to try to prove a whole portfolio of bizarre, politically loaded, and obviously untrue propositions: like claiming that merely owning fi nancial wealth is itself productive, or that everyone is paid according to their productivity, or that unemployment doesn’t even actually exist.
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