Seeing a World Unshackled from Neoclassical Economics

Photo Credit: Caesar Alexzander

Most mainstream media pundits, party elders, and gatekeepers of the halls of power, whether they are liberals or conservatives, Democrats or Republicans, atheists or non-atheists, pro-science or anti-science, have one sincerely held “religious” belief that their entire reasoning and sense-making-apparatuses hinge upon. It is so pervasive that it is usually unspoken and unthought, but it looms over all: neoclassical economics. 

Neoclassical economics can be understood as the idea that “the only things that are valuable are things that have a price.” In classical economics, value determines price; in neoclassical economics, price determines value. Price sometimes rightfully reflects value, such as the recent negative crude oil price. However, using price as the main determinant of value justifies the status quo and helps incumbent capturing the society, often perpetuates fatal systemic flaws and profound injustice. Neoclassical economics’ reductionistic emphasis has the effect of obscuring more important considerations/determinants beyond value or price, such as business models, incentive structures, and social network power dynamics. While economics is a subject to which people pay much attention and lip service, economic theories are often afterthoughts: the general public and many well-meaning public figures have been misled by four decades of neoliberal revolution into unquestioningly accepting neoclassical economic theories. 

Neoclassical economics is empirically destructive; other economic theories can offer humane alternatives. Embedded in a society built around neoclassical economics, some people reflexively perceive Bernie Sanders’ substantive criticisms of the current form of capitalism to be unhelpful/unrealistic rhetoric. One of the major triumphs of Milton Friedman’s neoliberalism is that it has created a simple, cohesive (if false) worldview that is portable and appealing. One of the weaknesses of the anti-establishment forces is that we have yet to build a consensus based on a worldview that can simply explain the wrongs of neoliberal world order (including neoclassical economics), and advocate its replacement with something that is understandable by -- and appealing to -- the general public. 

While we focus on the crises of COVID-19, climate catastrophe, looming recession/depression, widespread poverty, and establishment/mainstream media hijacking of politics, it is necessary to keep in mind that these multifaceted challenges are accelerated, if not caused, by neoclassical economics. This economic system is the soil giving sustenance to the poisoned undergrowth of neoliberalism’s garden; its fruits accrue privately to the lucky few, its miseries are distributed to the suffering majority. How does one clear space for alternative gardens? By training organizers and activists to fluently unmask the failings of neoclassical economics, and by clearly describing alternative systems, such as Modern Monetary Theory. What does unmasking the failing neoclassical economics look like in practice? Unlikely activist and Silicon Valley Billionaire Chamath Palihapitiya’s viral CNBC interview, persuasively inveighing against the present corporatocracy, is the type of argument that can unite Americans across classes and political ideologies. 

Let us start an explicit anti-neoclassical economics, anti-corporatocracy movement. Let us tailor a campaign to shift the Hallin’s spheres pertaining to the purpose and the incentive design of economic systems. Since this has not hitherto been a major focus of the anti-establishment forces -- the mainstream media pundits and gate-keepers of ideas will be defenseless here. Let us do it now, and in this pivotal moment, let us thereby show that “another world is possible.”