10 Economic Myths We Need to Junk
By Dinyar Godrej / newint.org

Never underestimate the power of cherished ideas. They are clung to ever tighter when we are suffering reality’s harshest knocks.

When it comes to economics, today’s over-riding article of faith is of the rule of the market. If only it were completely free and global, with notions of governance and workers’ rights out of the way, then the good capitalists would usher in an era of plenty with pickings for everyone, from top to bottom. Regulation, social provision, public ownership are all getting in the way, believers claim. Down with the public good, up with individual responsibility. You get what you deserve.

This economic orthodoxy is called neoliberalism – ‘neo’ because it is a 20th/21st-century revival of the 18th-century school of liberal economics which called for the abolition of government intervention in manufacturing and trade.

It finds particular favour when elites govern. But it has no solutions for the economic crashes we have seen in recent years.

We need a more social, ‘real world’ vision of the economic sphere. Demands for this change are on the street and also in the academy with students protesting against the orthodoxy they are taught. It’s in this spirit that we present 10 of the most damaging economic myths that we urgently need to ditch.

Click on each title to open the full New Internationalist article in a new window.

Myth 1: Austerity will lead to 'jobs and growth'

It's wrong to sell austerity as a cure for economic woes, says Dinyar Godrej.

Myth 2: Deficit reduction is the only way out of a slump

Don't rely on those who caused the crash to resolve it, argues David Ransom.

Myth 3: Taxing the rich scares off investors and stalls economic performance

Taxation creates prosperity just as much as private enterprise, says David Ransom.

Myth 4: Economic migrants are a drain on rich world economies

Migration follows a demand for labour - and benefits the receiving country, writes Dinyar Godrej.

Myth 5: The private sector is more efficient than the public sector

There is no evidence of greater efficiency, explains Dinyar Godrej.

Myth 6: Fossil fuels are more economically viable than renewables

Not if you look at the environmental costs, says Dinyar Godrej.

Myth 7: Financial regulation will destroy a profitable banking sector

Why should financial markets be accountable only to themselves? asks David Ransom.

Myth 8: Organized labour is regressive

David Ransom argues that the opposite is actually true.

Myth 9: Everyone has to pay their debts

We need debt management not reduction, says Dinyar Godrej.

Myth 10: Growth is the only way

Dinyar Godrej explains why we need to find another way, fast.

 

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10 Economic Myths We Need to Junk