Why is Economic Orthodoxy Regaining Control?

This is a link to an article by Paul Krugman in the New York Times yesterday. It is counter-view to the editorial in the Wall Street Journal today that ‘Ireland is a positive example’ of how to ‘inflict pain’.Whilst it does not refer explicitly to Ireland, the basic message is that slashing spending and ‘inflicting’ pain will not remotely support economic recovery. It will drive the economy into a double dip slump. For those economies without stimulus support (i.e. Ireland) pain without growth = depression.

Listening to Morning Ireland this morning I was irked by the uncritical vitriol of how the presenter covered the editorial in the Wall Street  (a conservative newspaper published by Dow Jones, a financial information company, and a division of Rupert Murdochs News Corp).  Annie Lawlor excitedly told the viewer that the ‘highly regarded’ and ‘respected’ Wall Street Journal is singing our praise without any recognition that the ‘highly regarded’ view is ideologically loaded.

This uncritical acceptance is reflective of the wider Irish public sphere that takes economic orthodoxy (neo-liberal monetarism or the more empirically accurate description: privatised Keynesianism) as the one and only technocratic response to the crisis. The very possibility that there are alternatives (basic social democratic Euro-Keynesianism) is never even entertained. Perhaps it is a lack of knowledge or lack of exposure but presenting economic orthodoxy as something to get excited about is, quite frankly, ignorant. I mean, at least  tell viewers that it is a newspaper produced by a company representing the interests of those with financial assets.

I was reminded of this quote by Paul Dorman during the week “economic orthodoxy is regaining control over policy because it reflects the outlook of those who occupy the upper reaches of government and business“. Governments bend to the wishes and interests of holders of financial assets not because they have better economic arguments but because they hold power. But, of course, in Ireland there is no such thing as a conflict of interest, and god forbid, speaking truth to power.

In a similar vein, the Financial Times journalist, Martin Wolf, describes the obsession with implementing immediate fiscal consolidations as “giving the markets what we think they may want in future — even though they show little sign of insisting on it now“. But, for the OECD and other orthodox commentators ‘pain’ is necessary because it will produce a positive response from financial markets. Again, who are these financial markets? They are not anonymous honest brokers  but  an ensemble of actors with money interests that are at odds with the interests of the real productive economy, the public sphere and those dependent upon social services.

The Wall Street Journal may celebrate Ireland as a country that can ‘take the pain’. But, somehow, I dont think this vitrole will be shared by those who feel the real effects of fiscal orthodoxy – the growing number of unemployed.

One response to “Why is Economic Orthodoxy Regaining Control?

  1. Bah. WSJ is pay-walled (I presume that’s to those of us, among other categories, outside academia). :(

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