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Economics Beyond Market Fundamentalism


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In the Boston Review, economists Suresh Naidu, Dani Rodrik, and Gabriel Zucman examine what they term a “creative ferment” within academic economics that is nudging the field toward empirical research and away from “market fundamentalism.” Providing a refreshing take on a discipline that has been all too content with gross inequality, the authors outline a vision of economics that serves egalitarian, democratic ends. Here’s an excerpt:

Economics is in a state of creative ferment that is often invisible to outsiders. While the sociology of the profession—career incentives, norms, socialization patterns—often militates against engagement with the policy world, especially by younger academic economists, a sense of public responsibility is bringing people into the fray.

The tools of economics are critical to developing a policy framework for what we call “inclusive prosperity.” While prosperity is the traditional concern of economists, the “inclusive” modifier demands both that we consider the whole distribution of outcomes, not simply the average (the “middle class”), and that we consider human prosperity broadly, including non-pecuniary sources of well-being, from health to climate change to political rights. To improve the quality of public discussion around inclusive prosperity, we have organized a group of economists—the Economics for Inclusive Prosperity (EfIP) network—to make policy recommendations across a wide range of topics, including labor markets, public finance, international trade, and finance. The purpose of this nascent collective effort is not simply to offer a list of prescriptions for different domains of policy, but to provide an overall vision for economic policy that stands as a genuine alternative to the market fundamentalism that is often—and wrongly—identified with economics.

Image via Boston Review.