Democratizing the economic model

Real Economic Emancipation has not reached our classrooms

The economic model in the shape of neoclassical, or closely linked neoliberal, model, has been quite strictly guarded from other schools of thought like the institutional economics brand, for instance, has mostly remained at the margins. That protection generally originates from teaching of discipline in this neoclassical orthodoxy at leading universities globally in general, while the main global economic institutions, like the Bretton Woods institutions– like International Monetary Fund (IMF), and World Bank– are served by graduates from these universities mostly. 

Closely related to this neoliberal model, is the practice of austerity policies. This capitalist model of economy, which has been masked under the usually presented face of marked fundamentalism defined by the classical liberal principles of freedom, democracy, and choice, is anything but that. For instance, renowned political dissident, and father of modern linguistics, Noam Chomsky, saw the neoliberal model as neither new, nor liberal. 

Noted economist Clara E. Mattei called the austerity-based policies tools to preserve, perpetuate this ‘capital order’, about which she indicated in her 2022 book The capital order: how economists invented austerity and paved the way to fascism as follows: ‘But to the extent that we stop perceiving austerity as a sincere toolbox for managing an economy, and when we consider its history through the lens of class, it becomes clear that austerity preserves something foundational to our capitalist society. …economic growth presupposes a certain sociopolitical order, or capital order. Austerity, viewed as a set of fiscal, monetary, and industrial guardrails on an economy, ensures the sanctity of these social relations.’ 

Moreover, in her recently published book Escape from capitalism: an intervention she is rightly critical of virtually unfettered markets– pursued under the overall philosophical underpinnings of this capitalist model, with protections from mainstream politics, in general, that use these profits to perpetuate power for personal gains– as tools of exploitation of the masses. She pointed out in this regard as ‘Indeed, once we chose to organize the production and distribution of our material conditions through the competition of private producers that operate to increase profits and relate to one another via monetary transactions, the pressure to cut the costs of production took primacy over all else. The particular logic that governs our economic system and the forces that compel and restrain our behaviours are not inevitable. The capital order, held with such reverence by so many neoclassical economists and buoyed by the apparent rigour of mathematics, is actually the result of fragile political balances.’

Over time, the misgivings of this neoliberal, and austerity-based capitalist model has come under increasingly severe criticism, especially in the wake of the Global Financial Crisis 2007-2008. Among voices in the realm of the economics discipline criticizing the otherwise serious limitations of outlandish neoclassical assumptions, falling well short of giving needed direction in terms of stability, and growth, along with increasing resilience, there arose from initially humble beginnings, to now a large network of economists, social scientists, and policymakers globally, called ‘Rethinking Economics’ that challenged primarily the teaching side of this capitalist model orthodoxy. The underlying purpose at hand remains, of this, and other platforms like the ‘Forum for Real Economic Emancipation (Free)’ to make the discipline more democratically inclusive, so that the mould of orthodoxy currently dominating the scope of the economics discipline– on the lines indicated above  could be made more pluralistic. 

Sadly, this spirit of activism, and collaboration is not present in any significant way in Pakistan, where the neoclassical, and related neoliberal, and austerity-based models continue to dominate the teaching, and practice of economics. Although subjects of heterodox, and political economics nature are being offered to a limited extent, and as optional modules in general, yet the core continues to perpetuate the status quo in terms of the neoclassical orthodoxy.

In this regard, a February 10 Guardian-published article ‘Rethinking economics, the movement that changing how the subject is taught’ indicated ‘As the fallout from the 2008 global financial crash reverberated around the world, a group of students at Harvard University in the US walked out of their introductory economics class complaining it was teaching a “specific and limited view” that perpetuated “a problematic and inefficient system of economic inequality”. …These disparate strands came together in early 2013 at the London School of Economics with the inaugural meeting of Rethinking Economics– a student-led organisation that has gone on to challenge the way economics is taught at universities around the world. …[Ha-Joon] Chang, now a leading author and professor of economics at the School of Oriental and African Studies, said the launch came after decades when the neo-classical school of economics had come to dominate universities… “By demanding that economics education should be more pluralist, more ethically conscientious, more historically aware, and more oriented towards the real world, Rethinking Economics has exposed the staggering deficiency in the way economists are educated and induced some significant, albeit woefully insufficient changes in economics teaching around the world,” he said. Rethinking Economics has blossomed since the first meeting and now has thousands of members, including several eminent economists, across more than 40 countries.’

An important voice with regard to bringing much-needed greater democracy in the discipline of economics, the same article indicated thoughts of founder of ‘Free’ platform, as ‘Clara Mattei, a professor of economics at the University of Tulsa in the US and president of the Forum for Real Economic Emancipation (Free), said her group was collaborating with students from Rethinking Economics to “improve economic education and make it a useful tool for expanding economic agency among the general public. …“It is urgent that the economics discipline learn to understand these issues as systemic features of our capitalist economy rather than as the result of market imperfections or crony capitalism,” she said, adding that students such as those involved in Rethinking Economics were “pushing toward more courageous frameworks within the economic tradition … to prioritise the logic of need over the logic of profit”.’

Sadly, this spirit of activism, and collaboration is not present in any significant way in Pakistan, where the neoclassical, and related neoliberal, and austerity-based models continue to dominate the teaching, and practice of economics. Although subjects of heterodox, and political economics nature are being offered to a limited extent, and as optional modules in general, yet the core continues to perpetuate the status quo in terms of the neoclassical orthodoxy.