During the 2010 election campaign I heard the Sun columnist Kelvin Mackenzie talking about economics.
“Economics is very complicated,” he said. “You have to be a genius to understand economics.”
This is not true. Economics is easy to understand. Wealth comes from human beings. It’s as simple as that. It comes from human beings engaging with nature in an intelligent and productive way in order to make all of the things we want and need. It is work that makes wealth.
This is so obvious an observation that it hardly needs commenting upon. All of the classical economists understood it: Adam Smith and John Stuart Mill, as well asKarl Marx.
The reason that modern economics has become so complex is that it has attempted to obscure this simple fact behind a fog of distraction in order to hide the processes by which a very few people have become more and more obscenely wealthy, while the rest of us are being squeezed to the point of desperation.
We do the work. Someone else takes the wealth.
We’ve been living under an illusion for the last 30 years or so. The illusion goes under the collective name of “Monetarism”. It is also sometimes known as “Thatcherism” or “Neoliberalism”. In the US it went under the name “Reaganomics”.
It is the idea that the market knows best, that everything in the public sector is bad, and everything in the private sector is good, that the private sector only needs to be deregulated for it to provide wealth for everyone. Take away the fetters and wealth will expand, it says. If the rich get rich, we all get rich as a consequence.
The idea was that the rich are “wealth creators” and the wealth they generate will eventually “trickle down” to the masses.
Do you remember being told that?
Actually it turns out that none of this is true. The rich aren’t “wealth creators” at all, they are wealth extractors. The world hasn’t been becoming richer, it has been becoming poorer. The wealth hasn’t “trickled down”, it has been siphoned up. The rich have accumulated even more wealth while the poor have been shafted.
Do you ever get the feeling that we’ve been ever-so slightly conned?
3 Comments
The article started good but then its get complicated. I believe work is the start of the creation of wealth. That is the basic economics if you don't work, you don't eat. But today in the US there are so many people that are so dependents on welfare, they are abusing the system and makes a lot of burden on the working class. Right now people on welfare are living a better life than the people who are working. .. . How do you explain that?
There is so much wealth in the world that if distributed correctly things like famine,hunger and poverty will no longer exist. But the world as we know it is in the hands of a few wealthy people who dictate the state of affairs in every nation. And as long as a few people dictate how nations should behave we have no power to change the situation as it is. Nations simply have to do their bidding if they are even going to be able give welfare their own people. Perhaps this is why economics is complicated.