The religion of capitalist economics

February 24, 2014

In earlier posts we mentioned the Oxfam report entitled “The cost of inequality: how wealth and income extremes hurt us all,” which outlined how the annual income of richest 100 people is enough to end global poverty four times over (i.e. while the annual net income of the world’s richest 100 billionaires is about $240 billion, the estimated cost of raising everyone worldwide above the $1.25 a day poverty line is about $66 billion).

Recently Oxfam released another report, “Working for the Few: Political capture and economic inequality,” which maps the the general distribution of wealth on a global level. Not surprisingly, the numbers reveal a startling picture.  Almost half of the world’s wealth is now owned by just one percent of the population, seven out of ten people live in countries where economic inequality has increased in the last 30 years, and the richest 85 people in the world possess the same amount of wealth as the poorest 3.5 billion.

To many, these numbers and figures are truly mind-boggling, and as we pointed out earlier (Inequality and Trolleyology), there is really only one reasonable conclusion to draw from them–that the prevailing and increasing inequality in wealth is morally wrong and should be changed. But of course not everyone will agree. Consider, for example, the following video clip of Kevin O’Leary‘s response:

O’Leary is a well-known TV personality, businessman, and investor who has made a name for himself by fiercely defending purist visions of capitalism. His behaviour invites two hypotheses: either he is lying and simply trying to maintain his pro-capitalist TV image, or he genuine believes what he says. But regardless of which hypothesis is true, there is no question that a great many people (among them many of the richest 1%) really do believe that wealth is a sign that someone is doing the right thing. One of the greatest champions of this view (perhaps after John Calvin) was Milton Friedman, who thought that money is the ideal expression of consumers’ approval and that free markets are merely the pathway for the expression of this approval. It is a perverse and mistaken vision, but those who believe it can make self-righteous statements like the one featured in the video above.

Capitalists, like theists, subscribe to quite radical doctrines and uncritically believe in their truth regardless of the evidence for or against them. The power of prayer, for example has been tested in multiple studies and conclusively proven to be unsubstantiated, but that doesn’t stop people from praying. Similarly, the upward mobility that O’Leary hailed in his brief statement is demonstrably false, but that doesn’t stop him from espousing and endorsing it. New-atheists have often pointed out that in order for a good person to do evil things, religion is required. Similarly, in order for one to believe that radical inequality is a good thing, neo-liberal economic theory is required.

It is time to move the debate on economics education one step further. Just as new atheists reinvigorated the debates over religion and challenged the taboo on criticizing religious faith, sane and conscious economists (like Steve Keen) should come out and identify themselves as non-believers in capitalism and opponents of the inequality it inevitably brings about.

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