'The real science of political economy, which has yet to be distinguished from the bastard science, as medicine from witchcraft, and astronomy from astrology, is that which teaches nations to desire and labour for the things that lead to life; and which teaches them to scorn and destroy the things which lead to destruction.' John Ruskin- 'Unto This Last'
Bastard Economics, Neoliberalism and Peoples’ Tragedy
(Letter to the editor of the Times on 8 March 2011)
Sir, Around 1991 I offered the London School of Economics a grant of £1 million to set up a Chair in Business Ethics. John Ashworth, at that time the Director of the LSE, encouraged the idea but had to write to me to say, regretfully, that the faculty had rejected the offer as it saw no correlation between ethics and economics. Quite. Lord Kalms, House of Lords
And now, the first paragraph of a letter I wrote to Her Majesty Queen Elizabeth II on 27th November 2008, regarding her question at London School of Economics, when she asked: “Why did nobody notice?”
“I note, with much interest, Your Majesty’s recent visit to the London School of Economics. Given the current financial calamity, Your Majesty asked a very pertinent and important question: “Why did nobody notice?”
I firmly believe that the director of research and his colleagues present there, should have provided Your Majesty with truthful and honest answers. However, given what I have read in the press, I do not believe this was the case. Their failure to do so, clearly goes a long way to prove the detachment of economists and the modern neo-liberal economics from the real world. They have turned our profession and subject into a comedy of errors, a dismal science of irrelevance.
This is very sad indeed Your Majesty. An entire profession now appears to have suffered a collapse. Trust and confidence in my profession has all but been demolished, the “dismal science” at its worst.
Many mistakes have been made. Many economists have compromised themselves and their profession by remaining silent, not criticising the extremism and the neo-liberal fundamentalism present in their profession. Lessons should be learnt, someone should be held accountable. Otherwise the same mistakes will be repeated and nobody will believe what an economist says again. In other words, Your Majesty deserves a proper and honest answer…”
'On September 11, 1973—now referred to as the “other 9/11”—Augusto Pinochet staged a successful coup to oust Chile’s democratically elected president, Salvador Allende. Backed by the CIA, American business interests, and the blessings of Henry Kissinger, Pinochet, enlisting economists trained under Milton Friedman and the so-called “Chicago boys,” restructured the Chilean economy in the image of what has now come to be known as “neoliberalism,” that state apparatus which seeks to deregulate markets, privatize formerly public assets, minimize the power of unions, unleash all manner of austerity measures—in short, to ensure, in the name of freedom, an increasingly frictionless flow of capital across borders and into the bank accounts of those in power.’+
'Today the dominant narrative is that of market fundamentalism, widely known in Europe as neoliberalism. The story it tells is that the market can resolve almost all social, economic and political problems. The less the state regulates and taxes us, the better off we will be. Public services should be privatised, public spending should be cut and business should be freed from social control. In countries such as the UK and the US, this story has shaped our norms and values for around 35 years: since Thatcher and Reagan came to power.'