Mainstream Economists Reject Economic Science

The “invisible hand” gives rise to a situation where it becomes natural and normal to conclude that no one knows how things work or what to expect. It renders the future unpredictable and unmanageable. Uncertainty and unpredictability become the norm because the economy as a whole is not under conscious human control. Different sectors and components of the economy do not work in harmony, free of crisis, because they are divided amongst competing owners of capital obsessed with their own narrow private interests. This inter-capitalist rivalry does not lend itself to the healthy balanced extended reproduction of society. It mainly damages the natural and social environment more. Everyone living in such a set-up is subject to constant chaos, anarchy, and violence in the economy and society. Stability, security, and peace are transient under such conditions. Thus, even in the 21st century with all the accumulated knowledge and experience of humanity, so-called “advanced” societies can turn upside down in no time at all; economic and social crises can hit at any time and leave society, the economy, and the people as a whole highly destabilized and damaged for months, years, even decades. On top of all this we are repeatedly told that there is no alternative to this outdated system. Apparently, this is the best humanity can do and no one should strive to replace existing arrangements with something better.

Last week, Jerome Powell, head of the U.S. Federal Reserve, which is not really part of the U.S. government, delivered his latest views and predictions on the economy and outlined what actions the Federal Reserve will be taking in the coming weeks and months. “Tapering” of fiat currency printing is expected to begin this month and continue for six more months, while interest rates will remain untouched for the foreseeable future. In reality, the Federal Reserve ran out of ammunition long ago and is trapped in the world of bad policy versus bad policy; there are no good options and no good endings here. Is it even possible to “taper” a Ponzi scheme? To be sure, the Federal Reserve has dug a deep hole. The system’s internal contradictions are too severe to “rescue” anything at this point.

One statement in particular by Powell speaks volumes about the state of economic science and human cognition in the final and highest stage of capitalism:

It’s difficult enough to just forecast the economy in normal times. When you’re talking about global supply chains in turmoil, it’s a whole different thing. And you’re talking about a pandemic that’s holding people out of the labor force for reasons that we can sample, but we don’t have a lot of experience with this, so it’s very difficult to forecast and not easy to set policy. (emphasis added,)

Powell casually and publicly admits that he and those who share his old world outlook reject economic science even “in normal times;” they do not believe in planning, control, science, human cognition, and predictability. “Forecasting” economic conditions and activities  even “in normal times” is far from precise and useful from the perspective of capitalist ideologues. The economy apparently cannot be controlled, known, or directed to serve the people and society. Powell openly creates the impression that fixing the economy is some sort of crapshoot, a mystery. Maybe things will work out, maybe not. Apparently, no one really knows how things are going to unfold or what impact neoliberal fiscal and monetary policies will have on the economy. Confusion and ignorance about the economy are so normal that the subtitle of a November 4, 2021 ABC News article reads: “If you find the current economy a bit confusing, don’t worry: So does the nation’s top economic official, Federal Reserve Chair Jerome Powell”. This is hardly a good way to inspire confidence in the people. It is a scandalous thing to admit. People need leaders who know what they are doing and can reliably deliver meaningful pro-social results and solutions. Why is meeting people’s basic needs such a mystery?

Most Americans already know that the economy is in bad shape. On November 7, 2021, the New York Times reported that, “In a Gallup poll in October, 68 percent of respondents said they thought economic conditions were getting worse”. The overwhelming majority are simply not hopeful about the future of the economy and it does not help that President Joe Biden’s poor approval rating keeps steadily falling. People from all walks of life feel overwhelmed and exhausted with the way the rich and their cartel political parties (Democrats and Republicans) are wrecking the entire fabric of society.

There is a growing need for a real alternative to existing arrangements. The current situation is untenable at all levels. More and more people are rejecting the rich and their cartel political parties and demanding real solutions to the problems confronting the economy and society. Acting in the old way simply won’t work and doesn’t work anymore. People are disgusted with irresponsible and unaccountable leaders who can’t solve any problems. People are also tired of being reduced to vote banks for the parties of the rich. Constantly begging politicians to do the most basic simple things is humiliating, exhausting, and a massive drain on social energy that could be harnessed to expedite human-centered arrangements.

As the massive divide between the rich and everyone else keeps growing, contradictions and problems in society will get sharper and more severe, giving rise to new dynamics and new realities to confront. In this situation working people must mobilize themselves and others to leverage openings to advance arrangements that favor the people. There is a need for fresh independent thinking and a new outlook of the world and the future. There is an alternative to the ruling class wrecking all known arrangements in its quest to maximize profits at all costs.

Shawgi Tell is author of the book Charter School Report Card. He can be reached at Read other articles by Shawgi.