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The blind trust in efficient markets must be replaced and bankers given a new understanding. Profit making is different than profit maximization. Banking should be a public function not a casino and the real economy and the environment not abandoned. Economics should be a pluralist discipline, open and welcoming to alternatives and critical perspectives.
“STUDYING ECONOMICS TODAY IS LIKE BRAINWASHING”
Interview with Ulrich Thielemann. Economic ethicist urges a re-definition of economics
[This interview on Germany radio published on 4/5/2012 is translated from the German on the Internet, http://www.dradio.de/dlf/sendungen/interview_dlf/1723559. MeM stands for “Human Market Economy,” a think tank for economic ethics in Berlin.]
As a general accounting, economics over decades has withdrawn into its shell or shut itself off from the world and pushed the economization of all living conditions, the economic ethicist Ulrich Thielemann believes. Economists of all camps had always courted capital instead of taming it.
dradio: The financial crisis and the crisis of the Euro show the failure of traditional economics. Therefore a group of professors in a memorandum demand a replacement of economics. One of the initiators, Ulrich Thielemann, is a director of MeM – the abbreviation stands for “Human Market Economy” – a think tank for economic ethics. I welcome him on the telephone. Good day, Mr. Thielemann!
Ulrich Thielemann: Good day, Mr. Breker!
dradio: Was the concrete market economy inhuman in the past?
Thielemann: Good question, but I would not answer with Yes. I would say keeping the market economy human is a constant challenge. When the market economy is spoken of with one voice by economists, that is an inhuman market economy. We obviously find that in praxis. With theories in their heads, economic students later set out in praxis as managers, entrepreneurs and advisors of economic policy.
dradio: Do you see shortcomings in traditional economics? What are the concrete deficiencies and which disturb you most?
Thielemann: This memorandum is really very concise and aims at a deficient scholarliness of the economic discipline. We say a discipline or science is unscientific when it paradigmatically shuts itself off or encapsulates itself, when it only allows one opinion and ignores opposing views.
Two things should be emphasized. Economists largely see themselves as the most consistent advocates of the markets and market logic. This is ethically very dubious in two keywords rationality and efficiency. Something very specific, ethical and normative is meant here. What is circulated is ethically very questionable. For economists, rationality means striving for one’s own interests. That is rational. The name homo oeconomicus stands for that and is classified as rational. Whoever does not consistently pursue his self-interest is then regarded as irrational. That is a false message. Some say, studying economics today is like brainwashing.
dradio: You want to connect economics and social science. Is that possible? Isn’t that mixing fire and water?
Thielemann: Yes, people can see it that way at the moment. First of all, the economics discipline is a social science. What else could it be? The challenges are enormous because I and the co-signers believe a malformation has crept in over many many years. Thus every criticism of this degenerate economizing of all living conditions and above all the economizing of thinking is important. Every criticism is first ignored, one could say. It is not observed but repressed and has no chance. One doesn’t have a whisper of a chance if one thinks critically, holds business as usual to be wrong and wishes to publish in a recognized journal. The discipline has encapsulated and shut itself off and that is an unbearable state.
dradio: Isn’t the financial crisis an example of that? We witness politics chasing after the markets. This is called the economization of politics and our life together visible everywhere.
Thielemann: Yes, this is manifest everywhere. The question is how can it be restrained? Economists, speaking in a sweeping way as though economists were very uniform, speak of this economization of living conditions including politics. However this is not so very clear with the financial crisis… Economists no longer speak so much with one voice because of the conflict between those who say capital may not be reduced and those who say we may not ensure those who lose capital on the market. A certain conflict takes place there. Economists of all camps including Keynesians have courted capital. Ultimately this courting of capital led to building gigant6ic asset bubbles that prove illusionary. Politics now strives to not really understand the connections. We the people who normally are not profiteers or receivers of capital income are called to gain these profits. The austerity programs symbolize this development. This is the wrong policy. Capital must be tamed, not courted. How this can happen is a difficult problem.
dradio: Yes, tame capital. Since the outbreak of the crisis, people have urged regulating the financial markets. But nothing has happened.
Thielemann: Yes, exactly. The opposite has actually occurred: capital is courted in another form. On one side, it is courted by the guarantees that we must give. I think Steinbruck (German economics minister) has looked at the abyss. Otherwise there would be a worldwide economic crisis. The early 1930s and the end of the 1920s should be recalled. Capital is courted today by the policy of the European Central Bank that gives billions to the banks. What follows from this is unclear. People do not understand and are not ready to ask profoundly how capital actually works. Capital, I argue, acts like a whip on the real economy. It does not serve the real economy but exerts pressure on the real economy, on us economic actors – whether as employees or entrepreneurs. In freedom, we must ask ourselves if we want more of this pressure.
dradio: What would be different if your kind of economics were applied?
Thielemann: An ethically reflected economy would be a revolution of ways of thinking. The economy includes theory, our view of economics and the real economy. A moderate and embedded market economy would arise. Market as principle would not govern. We would have a distanced and sober relation to this strange and hardly comprehensible logic of market and competition. This logic would not determine all of life. Rather we would determine how far we would support this market logic and how far we would limit it.
Pepe Escobar, The birth of the `de-Americanized’ world, October 15, 2013
Peter Koslowski, Ulrich Thielemann, The Ethics of Banking: Conclusions from the Financial Crisis
Ulrich Theielemann, “Crazy Relationships,” 2012
Peter Ulrich, Integrative Economic Ethics