In the English speaking world, the term "political economy" is rarely used. It is as if the economy actually exists in the real world, imposing its assumptions, mathematical abstractions, and calculations so popular with mainstream economists upon an unsuspecting public regardless of the context of the particular cultural matrix in which they are used. Indeed, real world deviations from the "laws" of supply and demand and market equilibrium are most often ignored. Essentially, this conceptual construct is reified to take on a life of its own to then become the central focus of political debate: how to increase economic growth, how to lower unemployment -- and my favorite -- "let's not do anything that would harm the economy", completely forgetting that what is referred to as THE ECONOMY is nothing more than an aggregation of statistics, often jigged to give a much better picture of what is really happening in the households of real people.
The French have a wonderful expression for this manner of constructing a social reality, la pensee unique, in other words, the one and only way of thinking. And although there is disagreement within the economic discourse in English-speaking countries on how to manipulate the macroeconomic levers of interest rates, the value of the currency, taxation, and the level of government intervention into the economic affairs of the nation, there is a overwhelming consensus that the greatest societal good is to promote robust economic growth. As long as the economy is growing, it's all good.
In my mind, this way of thinking in the English-speaking world is nothing more, nothing less, than the politics of greed.
First and foremost, the complexity of human behavior is reduced to the bizarre conception of homo economicus or "econs" for short. Econs exist in a world of perfect information happily leading their lives in the pursuit of the rational maximization of self interest, a worldview common and fortunately limited to sociopaths and neoclassical economists. It always amazes me that hundreds of millions of English speakers allow their societies be dominated by such a paltry conception of human nature.
But there is a reason to explain its ironclad grip on how politics functions in the English-speaking world. If humans are simply conceived as being rational and obeying the prime directive of maximizing their self interest, the moral consequences of choice is almost completely eliminated from examination, thereby absolving the few who engage in fraudulent practices at the expense of the many.
In the immortal words of Gordon Gekko, one of the main characters in Oliver Stone's award winning film, Wall Street, "Greed is good", an affirmation of faith that I would push even further by saying that "Greed is God" in America.
However, the politics of greed are about to bring a second global economic crisis within a decade. Simply put, although financial markets are at record highs as are the capital valuations of Corporate America, the real economy is still in recession: the median income in the US is still 6% lower than it was in 2000! This time around the size of the crash will beyond the capacity of the world's central bankers to counteract.
Six years of massive government stimulus and investment in the automobile sector, near zero interest rates, quantitative easing, and record corporate profits have failed to revive the comatose patient. North America is already in recession and it is only a question of time before this cold hearted reality wreaks carnage once again in the financial markets.
Who is holding the bad debt? In a manner of months we will find out. Moreover, the huge write down that pension funds will incur will call into question their continued solvability in their present form.
And that's when the shit will hit the fan!!!
Indebted Millennials, having seen their once bright future flushed away, along with tapped out Boomers, struggling to survive on reduced pension benefits, will finally wake up to the fact that most of the cash that could have been used for productive investment has been hoovered up by the top .01% and now resides offshore beyond their reach.
Money can influence electoral results only as long as the electorate is apathetic. Fear and anger are great motivators to get ordinary people marching again, and the fallout from the second great crash will do just that. One hundred years later, a second progressive movement is about to arise in North America, but it will take really tough times to bring it about.
Once it begins to swell, the political discourse will change, not only in the English-speaking countries but globally as well. Then, at long last, we will be able to speak about the political economy in North America as an important concept, not simply to be dismissed outright as a strange way of thinking.