The Many Theories of Economics

I have encountered a dilemma. Over a period of almost a month I have been writing about the suspicions I have about the recent economic reforms that have been announced. If you have been reading my posts then you would be well aware that I am questioning the real intent of these changes, the manner in which these changes have been introduced i.e. in my opinion in an undemocratic way. The more I think and write about it I find myself heading down the path of questioning the validity of the very theory of neo-liberalism which is the guiding principle for these reforms. I am not an expert in economic theories and political science to be able to authoritatively comment on the validity of this theory. Yet even with this impediment I cannot possibly sit silent on this issue because of the very injustice I saw in the implementation of this change recently in our country.

I can see the euphoria of the very vocal 'experts' and also the disdain for the very democratic opposition political parties in the mainstream media. The opposition is being termed as obstructionist. Yet I am perplexed as to why I have missed the entire debate on the merits and demerits of the policies in any meaningful way? Why for the last 20 years I have not heard what used to be an often repeated jargon describing India in the 1980's, the grand old concept of a 'Mixed Economy'. We hear all the new jargons from the globalization school of thought, and only those. Am I living in a world cutoff from this debate or has everyone in the general population been cutoff from this debate? Is it that the need for a debate is not required because the 'success' of the 1991 reforms imposed by IMF under neo-liberal framework have made any debate unnecessary?

Here in lies my dilemma. If I continue this path of writing about this issues I am faced with the impediment of my lack of in depth knowledge of the many theories of economics to be able to comment authoritatively on this subject, and yet if I sit silent on this then I am well aware that I am not hearing in the media from any expert who is currently vocal and making an argument of any other alternative, at least not in India. To break this dilemma I have to search what is the debate in the home countries of the neo-liberal school of thought.

When I embark upon my study of what is being argued in the west about these principals I find that there are a plethora of arguments being made on both sides of the debate. I am also made aware that these debates are not new. These are old debates that have gone on for several decades and are even today being carried out in the west, for instance on the back of occupy wall street protests that happened earlier this year. There is also a resurgence in the USA for a search for an alternative to the current model of economic development post the 2008 financial crisis. These debates are happening everywhere I am sure even in our country but not so visibly. Economists like Joseph Stiglitz, Paul Krugman or Amartya Sen for example do not fall in the neo liberal school of thought. There is even a resurgence of study of Marx and the use of cooperative model in agriculture. The difference for us is that these debates are not visible to us in our mainstream media.

These are hard subjects. It is not easy for a public opinion to be formed on these issues. It is difficult to engage in these debates with the masses being involved. They seem to require a certain level of knowledge and understanding, which unless we get someone like Amartya Sen explaining us, will remain limited to the elite circles. To write about these issues with any authority I will have to dive into the world of economics and political science and I will have to start with one of the many schools of thoughts and complete the full circle to be able to come to a conclusion on which theory appears most viable to me. A daunting task indeed for a layman to undertake.

There have been many economic policy thinkers in the western world who have influenced the government policies around the world, Adam Smith, Karl Marx and John Maynard Keynes are described as the most important. Since I had mentioned Kar Marx earlier let me start with Das Kapital(Capital). There is a resurgence of the study of Capital in the west. Prof. David Harvey from the City University of New York has been teaching Capital for the last 40 years. He has made his video lectures public and that was a good place for me to start. Prof. Harvey describes Capital as one of the great studies of capitalism. He also mentioned in one of his lectures that this was only an incomplete work of what Karl Marx actually wanted to do. Had he finished his work we would have been left with a body of work of epic proportions. But even the three volumes of Capital are a great source of understanding capitalism. I must set aside the fears of my capitalist friends that I am not a Marxist just as Karl Marx himself had said when questioned that he cannot be described a 'Marxist', as the meaning that word had become to be.

To a patient  reader who has followed me to this point in the article I would give an example of what I found was of relevance in Capital. A couple of views that I could immediately relate to and which you would also have come across as a criticism of some of the neo-liberal policies without necessarily being classified as 'Marxist' are following:

1) A thing can be a use value, without having value. This is the case whenever its utility to man is 
not due to labour. Such are air, virgin soil, natural meadows, &c
My Interpretation> Commoditization of water and some other natural resources which should be free is against this principal that not everything of use value should be treated as a commodity of capitalism. So the neo-liberal theory of privatize every thing including our water resources is fraught with danger. We should not set a price tag on everything some things are gift of nature.

2) The use values, coat, linen, &c.,  i.e., the bodies of commodities, are combinations of two 
elements – matter and labour. If we take away the useful labour expended upon them, a material 
substratum is always left, which is furnished by Nature without the help of man. The latter can 
work only as Nature does, that is by changing the form of matter.
Nay more, in this work of changing the form he is constantly helped by natural forces. We see, then, that labour is not the only source of material wealth, of use values produced by labour. As William Petty puts it, labour is its father and the earth its mother.
My Interpretation> One understanding of this can be the we sometimes justify the pollution and destruction of nature for economic progress(material wealth) but the fact is that without mother earth, material wealth cannot be created. Thus economic growth at the cost of global warming will ultimately lead to reduction of material wealth. There can be no child without the mother. So this is one issue, on which the scientists and the economists should be together, not against each other. The neo-liberal theory that requirement of environmental clearances from government are an impediment to growth and that we cannot take a hit on economic growth due to environmental concerns miss one of the basic premise of economics.

One can go on writing about these issues. But a single post can have only so much information so as to keep the reader involved. All I would like to leave the reader with is that economic policies which we are following under great corporate and foreign government influence, in this push for reforms, at the cost of due democratic process, are not the only policies that have been proposed by economic theorists. There is lot to learn even from a supposed anti capitalist like Karl Marx on how to run a capitalist economy. There isn't a case for us to blindly rush to seemingly transformation changes based on some of the economic policies pushed by the west, which are being questioned in the west itself. I meanwhile have the task of understanding economics as best I can, to come to a conclusion as to which policies I should support myself. Since the debate between experts on this subject is missing from the mainstream media, I have no other way of knowing.