Recession Economic Growth Inequality Peter Werkman/Flickr

Fanatics, Charlatans, and Economists

Throughout the world, economics has been placed on a pedestal and enshrined in politically independent institutions like central banks and competition authorities, leaving politics confined to tinkering at the margins of market allocations. The results have been disastrous.

DAVOS – Throughout the world, it seems, crisis is gripping national politics. In election after election, voter turnout has hit historic lows. Politicians are universally reviled. Mainstream parties, desperate to remain relevant, are caught in a vice, forced to choose between pandering to extremism and the risk of being overwhelmed by populist, anti-establishment movements.

Meanwhile, not since the end of World War II has money played such an important role in politics, trumping the power of ideas. In the United States, for example, the sound of billions of dollars flowing into election-campaign coffers is drowning out the voices of individual voters. In parts of the world where the rule of law is weak, criminal networks and corruption displace democratic processes. In short, the pursuit of the collective good looks sadly quaint.

The trouble began at the end of the Cold War, when the collapse of a bankrupt communist ideology was complacently interpreted as the triumph of the market. As communism was discarded, so was the concept of the state as an agent around which our collective interests and ambitions could be organized.

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