January 17, 2021

Carolina Cristina Alves

Brazilian. Economist, Joan Robinson Research Fellow in Heterodox Economics at the University of Cambridge, Girton College

1. Why does economics matter?

So why does economic matters? Well, I’m just going to take us a little bit back on the definition of the discipline itself, because I think that helps us to understand why it’s important. So economics is this area of study, is a discipline, that emerged when moral philosophers or historians were kind of concerned about how we live, about our production, about our consumption and how we were organizing all this, you know, the necessary structure for our lives.

And if you go back to the Arab scholar in the 14th century called Ibn - Ibn Khaldun - he’s the first scholar or the first thinker who we can say was establishing what we call economics. Because he’s basically trying to understand or he’s saying that: OK, we should have a way to investigate human social organization. And it’s interesting because he said, if you want to do that, we should have this kind of a sound yardstick helping us to analyze society.

So, with this in mind, the idea that economics becomes important because it’s basically about our lives - despite different ways of putting it - is one that I have no doubt that every single economist would agree with: that economics is about improving the material conditions of society. So our goal as economists is to use the knowledge, the tools, the training that we have, to try to achieve some good.

Let’s just say it in that way. Obviously, the issue is to have agreement on the kind of tools and training that is ideal for that, and also agreement on what that “good” is. So, there are some issues there. But overall, yes, economics does matter. If we like it or not, economics has as its objective analyzing the society and the economy. We try as economists try to elaborate policy, to improve society.

We know that the economics profession has a huge influence nowadays. Economists are demanded for almost every area of public policy, as well as in the private sector. So, it is a very important discipline.

2. What are the differences between economic science (academic economics) and economic engineering (policymaking)?

I think, probably I will going to have a longer answer for this. Let me start with academic economics first. So academic economics has a very interesting framework because we try to analyze a phenomenon or phenomena with the help of mathematical deductions or laws or informatives. Right. So this is our, let’s say, our tools and our framework. And, here the market is the economy and society is understood through the lenses of market.

Another aspect here is that all the market processes ought to have a certain objectivity, a certain regularity, so that changes in the market can be, let’s say, traceable and can show uniformity in doing so. You know, this market is not really subject to, let’s say, arbitrary caprice, for example. And this is a kind of scientism that economists are looking for. And when they’re heading to have this kind of framework, they argue that we are looking into things as they are, but not as they should be. And that’s the question of objectivity here, attempts of achieving a certain idea of truth. So obviously there are many problems with this approach. If anything, for example, as social scientists, we know that any idea of truth, any idea of objectivity, is basically an unachievable goal in our field. But I think the most important point here is to highlight how this market field can be very problematic for practitioners and policymakers because we make their lives very difficult.

When we sacrifice this realism. When have this kind of framework that sacrifices this realism. We kind of stop ourselves to understand that economics, or economic situations, they are unique, right? They have a very unique way of being that stops this idea of having a tractability or a generalization about certain events or certain economic things. So when economists accept this sacrifice of realism, let’s say, we set ourselves with the task of continuing to look towards the exception in our framework.

Right? So we keep asking, “what’s our case that are somehow departing from the norm”. And that norm is what gives all this entire coherence to our framework. And why this makes life of practitioners and policymakers very difficult? Because basically we have two options here. One is to keep testing economists, to keep testing a range of hypotheses. Right? Trying to cover the complexity of society, which is time consuming. Of course, you can say now we have computers, etc., but it is still problematic. And, the other point is - the other option is - that economists try to safely place all these disturbing factors in the economy in this kind of, let’s say, a prism of Ceteris Paribus (i.e., everything remaining equal). So both options, to keep trying hypotheses, to kind of grasp the complexity of society, always deviating from the norm or this prism of Ceteris Paribus is a problem for policymakers. It’s a problem for, let’s say, practitioners. So this is academic economics. And as you can see, there are problems here. So what happens is that economic engineering in a way is much more pragmatic. It wants to get things done, let’s say, like this.

And in that case, economic engineering actually emerged as a field where engineers are trying to look for knowledge of economics, to inform their decision so they would be able to have a better decision, to be more efficient. So they want to solve problems and they want to apply economic principle to solving these problems. And, this sounds very right, very interesting, very cool. But we have to be very careful, because the economic principles that these kind of economic engineering are relying on, are very much linked to that market logic I just described above, with all the weaknesses and shortcomings I also mentioned. So for some decision making process, fine, this may work, especially for the private sector. If you’re looking at costs, depreciation risk and so on, this is actually an interesting framework. However, if you’re looking at thinking in terms of the economy more broadly or even if you’re looking at the policy making from the perspective of central banks or the state itself, I’m very skeptical about this approach.

And, we know since the 1970s in UK, or Europe since the 1980s, if you go to regions such as Latin America from the 1990s, we know that we have this turn in policy towards market precepts and axioms that have influenced the way policymakers are acting. What we call the new public management paradigm in public policy, which brings the reliance on market mechanisms or even the question of the rational choice theory. So what happens there with this influence of the new public management, which is related little bit with economic engineering that way? What I see is that we have, what we are facing nowadays, is a conflict between efficiency versus resiliency. Because on one side, all these market precepts, these axioms leading us to a concept of economic system that’s largely reinstated towards profit making and cost minimization. But, on the other side, for example, we’re going to have a poor monetary motivation for essential workers, for example, such as nurses, or we’re going to have a kind of just in time, or lean work, as they call procedures that kind of justify systematic underestimating planning and in stage capacity, which, by the way, has impaired our capacity to deal with the pandemic right now.

So I think we should be very careful how we approach the economy itself? The private sector has some kind of more pragmatic way to deal with that. Another thing is the economy more broadly. And that’s why I’m very skeptical about this kind of economic engineering. I think here as well is something I mentioned before about the question of what is that “good” that economists are trying to achieve? Because, in economics, you know, apart from economic methodologists or philosophers of economics, we don’t really deal seriously enough with question of ethics and morals.

So we really don’t have, let’s say, a moral code that can guide the way we’re doing economics, right? But it’s interesting because while we don’t have an ethical code, we do have a kind of assessment and judgment that we are looking to a behavior that’s assumed to be the rational or the commendable one. And this kind of behavior indicates efforts that are directed to no other goal then the equilibrium within this market. So, in this economic theory, that’s based on certain assumptions, the interaction of supply and demand in the context of scarcity (or resources). So, in a way, we do have implicit kind of economic norm, but we don’t discuss it. And, so there is a conflict there. So, in my view, the difference is not much about economic engineering or academic economics, but is more about how economists can actually deal with concerns. These are concerns regarding human fears and hopes and desires and needs and loves and lives; things that actually are not very used to being quantified, but they’re very important in that context as well.

I think the important question is the kind of framework that allow us to include these concerns, but also to move a little bit away from understanding of the economy just as a market environment. Perhaps there is something else there that doesn’t need to go through the market. So there was a long answer, but that is how I see it.

3. What role does economics play in society? Does it serve the common good?

Well, I think somehow I have been touching some of these points before. I do think the role of economics and the role of our economists is to try and achieve this good, and that’s why we need to discuss what “that good” is. But I want to bring into the discussion an economist, a female economist, that is actually very under-recognized. She was a brilliant economist in the 1930s, but we don’t study her and her ideas as much as we should. In fact, she played an important role theorizing the welfare state in England, in the UK together with Keynes and William Beveridge. But we don’t really get to listen to her ideas very much. Her name is Barbara Wootton and she’s writing in the 1930s. And I like that she stated very clear that economics should be useful and thus concerned with social betterment. So, of course, the social betterment is difficult because it’s beyond the intellectual argument and it depends on values, depends on morals, depends on beliefs.

But she’s very clear that economics should not be undertaken in a spirit of indifference regarding its practical utility as a means of improving conditions of human life. You have to have that goal. So, she is very interesting in that sense. She’s very clear that the purpose of economics is to assist the solving of social problems. And I like a phrase she uses, and I will try to paraphrase here because she said: “if anything of substantial utility is to come out of economists’ work, this economist should be allowed to poke his/ her nose into questions of the quality of social aims and the quality of means by which these aims are formulated.

So it’s a very interesting way, it seems obvious, but we economists, right now, our framework is so concerned about choices of the market and the question of price and interaction just in terms of prices, that we don’t realize how actually important it is that we need to focus on this social betterment.

And does Economics it serve the common good?

Yeah, I mean, again, just put together some points I made before. Is debatable if it is serving the common good or not. As you know, there is a contrast, in my view, between the efficiency and this focus on the market, and something else that I’m not sure economists are discussing as much as they should: regarding our system of provision, for example, regarding whether society has capacity to deal with situations such as a pandemic with a robust welfare state, a robust public health system, And, also, whether we have a framework that questions, or challenges a little bit, how we understand, for example, remuneration of workers. You can see, again, in this pandemic workers that are key for our society, that are in front line and yet they are the ones that are very often very poorly paid. So which kind of economic theory you’re having here to be in that situation right now? So I think we do need to think if economics is actually looking to the common good, or if it’s providing enough ideas, enough insights for us.

I think you follow off from everything I’ve been saying, in a way. I think in the short answer for that is a view of society or to an understanding of society that’s based on maximization of profit, maximization opportunity driven by self-interest, is certainly problematic. And, it’s likely to be inconsistent with finite resources or climate change concerns. But I think we can expand this question in two points. The first one is - and again I’m going back to the kind of framework that economic analysis relies on - because the first point in economics is not mainly an empirical science. And, we should be very concerned about how economists use empirical evidence to support this theory.

So what I mean here is that our current economic theory has a very limited view about what the economy is, what society is. So economists, they need to be capable of seeing the economy as more than just markets. The economy is embedded in society, and therefore our profession should stop treating the economy as a separate entity and should start situating the economy within broader issues such as nature, environment, ethics, as I mentioned before, and power, etc. So just to exemplify that, to make a little bit more concrete, if you look again to bring the discussion around the pandemic again, economists are saying this pandemic is an external shock. Why it is an external shock? And this is in itself revealing because it shows the reflection of their view of the economy as separate from the rest of society. So, the external aspect is an external shock, the pandemic is in line with the view of externalities in economics, which are conceived ahistorically - the historical context is dropped. And, so all these externalities are the result of a technological or educational problem, or any other problem that’s just stopping markets from functioning effectively. So within this framework, it doesn’t really matter how much my profession, or myself as economist, how much we care about the environment, about nature, because my methods, my methodology is almost a straitjacket for my analysis, in a way. Because, I’m not really helping, in the sense of my analysis, to address the question of environment.

So economists, they need to forge a better link between economics as a discipline and the social. That is not really so far fetched the way it’s now. And I think what I mean here is that the economic principles we have in our theory cannot just be applied in social sphere to different problems. When you have a problem of ethics, let’s have economic principles here, if it is market logic. When you look at the state, let’s again use the axiom of market. Again environment, let’s just see how the market principles can guide us here. I think this is complicated.

But, if we situate the economy in society in a much broader way, for example -and there are economists that are trying to do that, but they’re a little bit the excluded voice in the profession. So if you have that, you can emphasize, for example, that capitalist production is entwined with nature, cannot be separated. So we are going really to discuss the question of limited resources and the question of exploitation of nature and degradation of nature. So, in this case, if you have this broader concept, economists would able to properly assess, for example, this finite resources and ecological limits of our planet. Which is not the same than adding a price tag on every kind of environmental issue we have.

So, for example, this broader understanding of the food system, researchers and ecological economists, economists been exploring how production affects food and ecological system. For these authors, the pandemic wasn’t unexpected. They didn’t see the pandemic as external shock. It wasn’t a surprise. It wasn’t something that their theory was considering. Quite the opposite. But we’re not listening to these economists that are a little bit the marginal voice, also scientists that were theorizing things in that way. So that’s the first problem. Sorry, it is a big challenge here. How we conceptualize society and, again, a critique to how we are stuck in his view of market and equilibrium and so on.

The second point - and this is I guess more in the macro economic kind of realm of economics - so I see that in economics we are trying to compartmentalize everything, right? So like little pieces of our analysis. But, when we are trying to bring them together, they don’t really fit so well. It’s not this kind of idea if you bring all the different theories so that analysts can see the entire system. Quite the opposite. You have gaps between these theories and sometimes there are actually incompatible.

A good example of this is when you look at market economists having one side this business cycle theory, where we look at fluctuations owing to random shocks, the question of technological change and so on. And, then on another side, we have theories of economic growth, where we are looking to inputs such as productivity of labor, energy sources, where GDP is from coming as well. So, we have two kind of branches of economics, which sometimes can be seen something like short term analysis and long term analysis. And they don’t come together, and the environment here is totally lost as well, right?

So we’re not really discussing, for example, how a business cycle theory could help to improve growth in the long run. We don’t bring them together to discuss the question of environment, the question of these resources. And, this in itself is problematic, because when you’re trying to bring these two theories together as we see limitation, and this limitation impacts how we understand the environment and the resources that we are relying on to understand development and economic growth.

So the way I see here is that - again it is a theoretical and methodological critique in a way - is that we don’t have an instinct for our analysis the question of, for example, the issue of overconsumption in these models, in both strands of theory, or the issue of global warming, or the issue of the limits of the natural resources. And, if you have one, it is model that’s exceptional, and again is deviating from the norm that I mentioned before.

And, an equally important issue here is that we don’t have that analysis. For example, the question of the difference between countries and the implications that some destructive colonial legacies will have in the context of when you’re thinking of a green new deal, for example, for developing countries. At this point here, I will just mention a Brazilian economist called Celso Furtado who was writing in 1973 a book called The Myth of Development. In my view, to the best of my knowledge obviously, he was the first economist that was looking to this issue of development of economic growth. But not only giving special attention to the environment or environmental concerns, that’s 1973, but he’s also taking into consideration the tendencies of capitalism, including its destructive tendencies. And, then he is trying to elaborate and theorize the options that are available to countries that are, in his view, subject to the kind of deformation because of this colonial legacy. He called it the deformation of underdevelopment. So our standard economic theory doesn’t even look into that. So I think there is this problem as well, how theories come together, what is in the center of these theories?

So to sum up here, in my view, economics has to be concerned with environmental constraints such as climate change. I think the question also mentioned the issue of a mass extinction of other species. I think, of course, we have to be concerned with that. And, there are economists and other social scientists really trying to do good research in terms of highlighting how our current system of production and consumption is unsustainable. But in my view, our analysis will carry on failing if we don’t face the limit itself of our methods and theory, which is the two points I was trying to jump back to.

So that was a long answer again.

5. As we live in an age of economics and economists – in which economic developments feature prominently in our lives and economists have major influence over a wide range of policy and people – should economists be held accountable for their advice?

OK, let’s make something very clear. I do think economists should be accountable for their advice. That’s one hundred percent sure. We economists are in a very privileged position and we learn tools that can help to solve social issues, economic issues. We can access these issues. So we do what’s missing and that goes back to many things I’ve been saying up to now. We need a training as well regarding how we deal with the consequences of the tools of these [economic] advisers. We don’t really look into the consequences because we we are stuck in that framework of objectivity, of neutrality, of science. And we think it will be right. But no, we do need to have a clear discussion about the social consequences of our advice when it comes to policy. And, for me, that goes back to the issues I mentioned before of this code of ethics that we need. I think this is even more important in the realm such as economics, which is a social science, we’re not going to be able to grasp the truth, the best theory ever. And yet we still have to advice politicians and policy makers. So I think more than ever, we need to know to have this kind of grounded ethical framework that helps us to do that, and be accountable for that.

So in terms of responsibilities, I think in this context, perhaps I would just mention two responsibilities that I think economists should have when dealing with human beings, with us. One of them I mentioned somehow, which is linked to economics we use for the concern of social betterment. And these imply, from my perspective, to avoid relying on methods that are underplaying inequalities. And the inequalities I’m talking here about are inequalities of income, gender, race, and among and between countries. And, I also think we should avoid relying on a framework that underplays some of the contradictions that you can see in that system of production and consumption. Contradictions, which, by the way, include the entire discussion of climate change, for example.

So, yes, I think that this is the first responsibility that economies should have. What and why is our concern here? What is economics about? The other kind of responsibility, I would say, is a sense of systemic privilege that economists have and they should be aware of it. They should be self-critical of their own privilege that they have when advising, for example, governments and politicians.

I think they should have it in their mind, they should understand, that we should be concerned about different narratives about what’s happening in society. Different narratives about who we are. This should be kind of prerequisites for any researchers; there is no one truth, there are many. And you need to deal with that. And I’ve been arguing for a very long time now - but more recently I have been very emphatic about that - that economics as in other social theory, is immersed in this kind of pool of implicit, also explicit, debate over methodology, different narratives, the issue of structure versus agency.

So, when you look into these debates and the history of these debates in social science and in economics, we see this myriad of fields, interpretations and different perspectives. This goes back to my point that the truth about social reality is basically this unachievable goal. So, here we are dealing with different realities, different objective realities, different cultures, different ways to express them, different methods we set them. And this is not about to be subjective or ideological. So, economists, they should understand that. That’s my self critique and my point about economists being self-critical, vigilant, about this. They need to understand these elements, the elements shaping the knowledge they have. They should understand that there are forces shaping this knowledge. They should be realistic about how sometimes the narrative line may be just one perspective and may not be the right perspective or the perspective that impacts everybody in the same way. So we need to kind of permit, you know, the point on being self-critical, vigilant as a researcher, a key for economists.

So I see these two responsibilities, really: the social betterment and who we are as researchers. We don’t hold the truth. And we have to respect different views and approaches, and try our best with really contrasting different explanations, and so on.

6. Does economics explain Capitalism? How would you define Capitalism?

Oh, gosh. OK, how I would define capitalism. So economists don’t discuss capitalism itself. We just assume that capitalism is about this economic system where we’re dealing with actors, the question of private property or control of property. So there are interests and private actors and their property are operating in this context, the market context. You have the supply and demand setting prices and then we are interacting through these markets. I think this is how capitalism is superficially defined for every single economist. And I’m not even sure that economists would call this capitalism. They would say, oh, that’s just the market. I like a deeper discussion about capitalism because capitalism is one mode of production, it is one way to organize production. It hasn’t existed for a very long time. If you think of historical time, although there are debates when capitalism really assumed the full shape it has today - whether it was after the Industrial Revolution or before, and the question of commercial capitalism in the 17th, in the 16th century. But the question is very recent in history. And there were other modes of production. And then when I look into these debates regarding different modes of production and changes what I see is that a very particular way to organize production under capitalism is to have wage labor and to have the question of profit and how wage labor and profit relate with innovation. And so there is this idea that development just happens with innovation, and profit happens with innovation, and then we need to wage labor.

And, you know, the theory is trying to bring this together. And in the case of this standard of modern economics, in these discussion there isn’t really a critical approach to that, right? When you’re dealing with the question of distribution and economic theory, you have that factor of production is remunerated accordingly. We have the question of marginal productivity of labor, which is a problem regarding when it comes to understand inequality based on race in our framework. But that’s a different discussion.

So I think for me, capitalism implies this deep discussion about wage labor, profit, innovation, and very different ways we should understand that. Now, as economists we don’t discuss that. When you look into our discipline, the kind of thinking in terms of the evolution of the discipline itself has actually has led us to what we have now, which is the mainstream economics. During this process we have somehow watered down the historiographical discussion around capitalism. And, in doing that, the issues regarding the development of capitalism itself, which involve the question of classes, colonialism, imperialism, we just don’t study them. We just don’t look into that because we’re not studying the history of capitalism itself. So because of that, we also have the way to approach - or the diversity in the discipline regarding different approaches - is reduced because they’re not really bringing in or considering branches or different alternatives that we should do in economics that are actually considering either imperialism or colonialism and other key issues to understand capitalism.

So we just exclude them because in our traditional account of the discipline, we just watered them down. There is a certain neutralization of capitalism. If you talk to many students of economics in Ivy League universities - or any university around the globe - you see that capitalism is that. That this idea is the best way of organizing society. But, you know, this is not as problematic because we’re not teaching our students the proper history of things. It is also because the history of capitalism itself is an endless object of dispute that we’re just ignoring. So there are persistent and polemical themes in that debate regarding, for example, the role of technological change, the role of the state, the role of classes and the dynamics of capitalism, the relationship between capitalism and European imperialism. How far capitalism is linked to this natural human behavior. All these questions we’re not dealing with. This is problematic and has consequences. Just to give one example, there are many consequences.

But one of them is this naturalization of capitalism imply to understand that the emergence of capitalism is linked to an idea which goes back to the Enlightenment, the beginning of modernity. This is linked to this period of rationality, the spirit of technological development. So we’re all very proud of ourselves. And who is not proud of the Enlightenment? And together with the Enlightenment you have, the peak of the British Empire, of the slave trade, the question of colonialism. That’s just, as they say, under the carpet, I guess. So these questions are ignored and neglected. So, right now, especially the events regarding the killing of the Afro-American George Floyd back in March last year, if you want economists to understand that, they just don’t have the tools. Because we are not dealing with the history of racism, because of these approaches, because of this naturalization of capitalism.

And I think another important consequence here is that the language of economics that emerged in that context, and that kind of pride about what becomes capitalism, is a language that’s neutral, that’s objective, which I mentioned before, and that the language conceals this power imbalance and these structural inequalities we have in society.

So we have this claim to objectivity that leads actually to these standardized economic laws that I mentioned before, the question of uniformity. And, we just use that for every single socio political historical context across the globe. So, obviously this is problematic. We exclude other voices, other interpretations. And, if you are aiming for a society that’s more inclusive, that’s fairer, so definitely we need to go back to the history of capitalism itself and try to understand key events, key categories, that are actually part of capitalism itself.

7. No human system to date has so far been able to endure indefinitely - not ancient Egypt or Rome, not Feudal China or Europe, not the USSR. What about global Capitalism: can it survive in its current form?

Well, I mean, this is getting to the realm of predictions, which is always complicated, especially if it is recorded. Well, I think that goes back to my previous answer. Capitalism is one way to organize production. If we’re trying to learn different modes of production, the history of these modes of production, a transition between feudalism to capitalism, another transition to different modes of production, then we understand that there is some basic aspect of human agency acting and changing the way we organize society. You know, capitalism is not like Fukuyama said, in the 1980s, the end of history: “Here we go, that’s the best way to organize society. And we will be fine.”

I think, it’s quite the opposite. Capitalism in the same way as other modes of production has shortcomings and weaknesses. The problem is we’re not assuming that, we’re not considering them. We’re not looking to these limitations, which, you know, in terms of endurance, goes back to the sustainability of the earth, the planet itself, but also the question of the inequality among countries, also among people in one country.

Right. So we have some, let’s call them contradictions within capitalism, within global capitalism right now. Our current framework is still dealing as something deviating from the norm, from what should be. Not actually dealing with these contradictions, as perhaps, they are the norms of capitalism! So, if we deal or if we try to understand or at least raise the question: are these contradictions the norm of capitalism? And then we going to face a serious discussion, we can perhaps move to understand that capitalism is one way to organize society.

And perhaps you can start thinking about different ways. We can look back in the past, we know how problematic socialism the last century was. But that doesn’t exclude that we can’t go back and view modes of organization that doesn’t rely mainly and solely on the market forces. I think, again, to go back to the kind of economics that has been excluded from the mainstream. Feminist economics, for example, is really highlighting a kind of a caring economy where you don’t really rely on profit motives.

There are social scientists theorizing about something called the foundational economy, which is related to a kind of minimum or proper living conditions for people. So, I think when these questions, someone can look into that in terms of tweaks are going to do to capitalism. But you can also look into that in a way that the system can’t survive in the way it is. Or, perhaps it can survive, but we just have to come up with something different.

And of course, here you could ask me perhaps the following question would: well, you know, everybody wants the best, everybody should be happy and have everything, have shiny stuff or, you know, just kind of be able to eat and have shelter, and so on. So, what’s stopping us from having either a better system or addressing the weaknesses and shortcomings that we have in capitalism itself? And it’s difficult to point our finger on someone. Economists did this framework. So, economists are definitely someone who should to go back to accountability, that should be brought into the discussion.

But I think there’s also something that economics also is not dealing directly, which is the politics of knowledge, but also politics itself in society. Because, in our framework, we are really looking into individuals, individual behavior. The question of classes, social classes, conflict between classes, are not really something that economists are really concerned with; it is not part of their framework. So, this causes limitations in terms to understand if there is a social class that is gaining from capitalism.

Therefore, one thing is to keep it as it is, because we’re not really dealing with that. And social scientists and sociologists that are dealing with that, can easily be dismissed as just a bunch of left ideological scholars. So is this complicated? But I think to summarize, you know, capitalism is not the only system. We can definitely change it. I think the pandemic has re-exacerbated some of the contradictions that are inherent to capitalism. And it would be nice to start addressing these contradictions and then have a serious discussion with all the cards on the table about what we’re going to do next. Are we going to destroy the planet. Are we going live with inequality with people not having anything to eat, with children dying of malnutrition. Is that how we want to carry on?! I don’t think that’s the way to carry on, really.

8. Is Capitalism, or whatever we should call the current system, the best one to serve the needs of humanity, or can we imagine another one?

I think it goes back to what we’ve been discussing up to now. But I mean, as I would say personally, as an economist I definitely don’t think it is the best system to serve the needs of humanity. I really don’t think that poverty is failure of the system, is due to market failure or corruption, or whatever you want to blame. I think it is how societies organize. I do have a knowledge of the economy that’s based on classes that consider the question of trying to understand the question of profit distribution. The question of values, values created, how is distributed. It’s something that, again, economists are not really direct concerned anymore. It used to be before. So this question is actually as a research, really these questions make me think about the limitations of the system. How poverty can’t be eradicated just by policies; they should be eradicated by moving to a different system, more than anything else.

If you look back in history and gather elements from social democracy, from socialism, from the period of capitalism where labor and capital had a better friendship as they call under the kings, we should look back on all of this and gather what’s best. We have different moments in history when we were able to deal a bit more with inequalities in society in all countries. So I think we should go back to this review that we should also start to be more creative.

I think what has happened to economists right now is that we are so attached to these words of a position in objectivity, we are relying too much on mathematical, deductive reasoning and modeling. We just see ourselves as modelers. And I think we’re losing a little bit the poetry of all this. The question of being creative. I mean, we have to think about something else because it’s clear there are limitations here. So I think this also takes us back to many points I made before: how economists can be more creative with this current framework and methodology. I don’t think this is possible.

So if our tools are limited, are restricted in terms of how we can understand the contradictions, obviously our policy recommendations and our creativity are also going to be curbed somehow. It is not going to be enough to change society. So, I do wish to finish with Barbara Wootton, perhaps. I do think we economists should have a concern, a compromise, in terms of improving society. And, although I think any economist is denying that, the problem is they have to look into the framework and see the limitations of their framework in terms of having an economy or system that is providing to everybody, that is actually serving the needs of humanity as a whole.

So, yeah, so I think we need to change. The way things are, are definitely not good enough.

About Carolina Cristina Alves

Carolina is also the co-founder of initiative Diversifying and Decolonising Economics (DEcon) and co-editor of The Developing Economics blog. She is currently part of the Cambridge Social Ontology Group, and the Alternative Approaches to Economics Research Group – Faculty of Economics, Cambridge, and she sits on the Rebuilding Macroeconomics Advisory Board, the Progressive Economy Forum Council (PEF) and the Positive Money Advisory Panel. Learn more about Carolina at https://www.girton.cam.ac.uk/directory/alves-carolina/

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