PHM-Exch> New Blog Article: “The Failure of Economics in an Unequal World”

[David Woodward]

Thanks for your thoughts, Sam. I certainly agree that economics (quite rightly) has nothing to say about equity per se. The blog does, perhaps, rather over-simplify matters in saying that "economics" assumes that a dollar has equal value regardless of who receives it. Good economics indeed doesn't; but orthodox economics, which is what most people understand by "economics" and which underlies most mainstream economic policy and discussion, is built on this implicit assumption. Otherwise, we would care much less about growth (and much more about distribution), wouldn't presume that market-based interventions are optimal, etc, etc.

I certainly think that the tools and general approach of economics have a great deal to offer, and that we shouldn't throw the baby out with the bath-water; but I would also argue that orthodox economics gets it wrong on several different levels, and is long overdue for a comprehensive overhaul.

All the best

David

________________________________________
From: Sam Lanfranco [Lanfran at yorku.ca]
Sent: 19 March 2013 15:01
To: David Woodward
Cc: phm-exchange at phm.phmovement.org
Subject: Re: PHM-Exch> New Blog Article: “The Failure of Economics in an Unequal World”

While I agree with the intent of David Woodward's normative views on
inequity and income inequality, I do not agree that economics
believes or states that "..each extra dollar provides the same
increase in well-being at all levels of income" or that this
assumption "...is fundamental to economics".

Neither statement is contained within economics and we should be glad
about that. Economics can measure inequality but in terms of inequity
it has no more to say than any other body of though, and that is a
good thing. It means that we economists have no more authority to
talk about good or bad income distributions than any one else in
society. Inequity is a normative social justice issue and belongs in
a wider societal dialogue.

Many disciplines have evidence and analysis to contribute to that
dialogue. Economics can describe the extent of inequality. Other
social sciences can describe the social, and personal, consequences
of that inequality, such as the social determinants of health. This
is not to deny that some economists can be retained as "hired guns"
to push this or that position on behalf of vested interests. All
areas, including the sciences, religion, philosophy and culture, have
such fee-for-services hired guns.

It is important to recognize that there are risks in arguing that
economics has views that it does not. One is to think that economic
thought itself is the villain, to attack it, and fail to look for the
real sources of the problems. Another is to devalue the analytical
contributions of economics to the normative ethical social justice
issues at the core in inequity. The third is to overlook, or reduce
the status of, other sources of knowledge (science, religion,
philosophy, culture) about how to improve improve the human
condition.

Sam Lanfranco

----------------------------------------------
"It is a disgrace to be rich and honoured
 in an unjust state" -Confucius
----------------------------------------------
Dr Sam Lanfranco (Prof Emeritus & Senior Scholar)
Econ, York U., Toronto, Ontario, CANADA - M3J 1P3
email: Lanfran at Yorku.ca   Skype: slanfranco
blog:  http://samlanfranco.blogspot.com
Phone: 613 476-0429 cell: 416-816-2852

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