We need a new global economic model to explain our changing world.
We don't yet have a new unified field theory for the postneoliberal world. But that doesn't mean we shouldn't continue to question the old philosophy. |
 | | Illustration by Jordan Awan for The New York Times; photographs by Javier Zayas Photography and dikobraziy, via Getty Images |
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Economists like to think that reality can be captured in mathematical formulas. They use numbers to represent all sorts of exceedingly complicated and nuanced features of human experience — how we work, what we spend, where we live, when we may die — creating complex models to simulate our world. They crank the algorithmic engine on those models to churn out the policies that shape how we live. |
But economics isn't pure science, like physics. It's far more like sociology, or even anthropology — a messy, complex, all-too-human attempt to make sense of the world around us, one that is ever changing, far from rational. |
Since the 2008 financial crisis, the pandemic, the decoupling of the United States and China, and now the war in Ukraine, it's become clear that neoliberal economic models that assumed markets were perfect and globalization was inevitable were wrong. |
That's natural. Economic pendulums swing throughout history, as political theories rise and fall. The mercantilism of the 18th century gave way to 19th-century laissez-faire, which was replaced by the state power of the Keynesian era. Now the neoliberalism of the Reagan-Thatcher era, which was based on more private sector power and less government intervention, has outlived its time, too. |
While many mainstream economists are still pretending this isn't so, those of us with different life experiences know it to be the case. Growing up in rural Indiana in the 1970s, '80s and '90s, I knew wealth wasn't trickling down to my community. As agriculture monopolies grew, family farms were put on the chopping block and factories shuttered their doors as jobs left for Asia. I knew better than any model that prosperity wasn't coming back to my town. |
As my intellectual rabbi, the economist Joseph Stiglitz (who won the Nobel Prize for proving that markets aren't perfectly efficient), once told me, "All it took to see that markets weren't perfect was to grow up in Gary." My guest essay for Times Opinion this week, and the book it's based on, is my attempt to tell an alternative story about where neoliberalism has taken us and where we may now be going. |
| READ RANA'S FULL ESSAY HERE | | |
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