In December 2017, a group of economists prepared 33 theses on economic reformation. It marks an important and thought provoking statement on what is wrong with economics. The launch event was occasioned with these words:
Economics is broken. From climate change to inequality, mainstream (neoclassical) economics has not provided the solutions to the problems we face and yet it is still dominant in government, the Bank of England, academia and other economic institutions. It is time for a new economics.
The 33 Theses, produced by students, economists, and academics convened by Rethinking Economics and the New Weather Institute, endorsed by top economists and political leaders such as Caroline Lucas MP, outlines a detailed critique of mainstream economics.
The ideas resonate with me, and with anyone who has criticized “neo-liberalism”. The theses section on inequality reads as:
17. In a market economy, people with the same abilities, preferences and endowments do not tend to end up with the same level of wealth, subject only to some random variation. The effects of small differences in luck or circumstances can drive vastly different outcomes for similar people.
18. Markets often show a tendency towards increasing inequality. In turn, unequal societies fare worse across a range of social welfare indicators. Mainstream economic theory could do much better in understanding how and why this happens, and how it may be avoided.
19. The proposition that as a country gets richer, inequality must inevitably rise before it falls, has been shown to be false. Any combination of GDP growth and inequality is possible.
This initiative provides something important to the debate on inequality and alternatives.