The economic activity of our society is destroying the viability of life on earth and enabling a minute minority to accumulate vast wealth and power while much of the population struggles with poverty or insecurity. We have an inhumane economic system which is rooted in ideas propagated either by those who stand to gain from the system or by well-meaning people who have been persuaded that the current system represents centuries of evolutionary progress. There is nothing inevitable about the way a society chooses to organize its economy. We need to free our minds from the prison cell of dogma to which we have consigned ourselves so that we can reform our economy before it is too late. This book is the fruit of a journey into the wonderland of economics and finance which began after the financial crisis of 2008. It explores the assumptions behind mainstream economic theory both as it is taught in academia and as it is practiced in government and business. It is rooted in the conviction that economic theory, like political theory, is a branch of moral philosophy rather than a science like physics or chemistry. It refuses to throw common sense out the window, but it examines beliefs that are accepted as common sense to see what they really mean.
Patterson, like many of the philosophers, economists, and other heavyweight thinkers he cites, is a long-term thinker facing a world of finance dominated by short-term interests. As he notes in his clarifying discussion of the broad-based mortgage collapse now known as The Big Short, economies are subject to the will of many whose relatively quick grab for profits and/or power tend to help a few get rich at the expense of the many. Rethinking Money and Finance calls for recognizing this as a human choice rather than a natural law of markets.
In his sharp-elbowed, well-researched considerations of Modern Monetary Theory, “the fetish of liquidity,” the messages peddled by “financial ‘news,’” globalization trends, and more, he argues, with persuasive power, that substantive reform can only come after establishing a vision, a clear and shared sense of what economies themselves should do. That’s the vital societal step to change, Patterson argues, and his thorough examination of economic terms, policy, crises, and above all else assumptions proves both pained and heartening.
Takeaway: Sharply argued case for economics not being a science at all.
Comparable Titles: Nicky Pouw’s Wellbeing Economics, Robert Skidelsky’s What’s Wrong with Economics?.
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