Sunday 3 February 2013

Economics – The Movie

Could Robert Reich’s new movie Inequality For All do for economics what Al Gore’s An Inconvenient Truth did for climate change?

That is the question posed by Carole Cadwalladr in an article in today’s Observer. She reports that, far from being dry and boring as you might expect of a documentary about economics, the film is witty and well-made, and picked up the special jury prize at the recent Sundance film festival.

Robert Reich’s books have always been worth reading – and so is his blog. You may recall that, in the 1990s, he took a break from academia to serve in President Clinton’s cabinet.

Reich’s message is that capitalism took a wrong turn at the end of the 1970s. Although the economy kept growing, wages didn’t. Median incomes declined while the top 1% took an increasing share. For a while, the middle classes compensated with various coping mechanisms. More women entered the workforce, creating dual-income families. Working hours rose. And increasing house prices enabled people to borrow. Then in 2007, people ran out of options and the economy crashed. The people who buy stuff could no longer afford to buy stuff.

It ought to be obvious by now that the economic orthodoxy of the past thirty years is like Monty Python’s dead parrot. It has expired and gone to meet its maker. It’s a stiff, bereft of life. It’s shuffled off its mortal coil, run down the curtain and joined the bleedin’ choir invisible.

True believers in ‘TINA’ (There Is No Alternative) are like the pet shop owner, stubbornly insisting that their economic dogma is not dead but merely resting. It’s tired and shagged out after a long squawk. It’s pining for the fjords. And even when you provide them with incontrovertible evidence that their orthodoxy is dead, they reply that it has “beautiful plumage”.

Let’s hope that Reich’s film will convince more people to give this dead economic orthodoxy a decent burial instead of trying to nail it to the perch.

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