Neoliberalism, Austerity and Economic Populism

History of Political Economy, 2007

2004

The Palgrave Handbook of Populism, 2022

Popular among economists, pundits and policymakers, the theory of economic populism is used to criticize expansionist policies purportedly enacted by fiscally irresponsible populist governments. Introduced by Jeffrey Sachs, Rüdiger Dornbusch and Sebastian Edwards in 1989, the theory maintains that such policies put into motion a cycle of economic devastation where populists register initial successes but soon face bottlenecks and other market failures that lead to hyperinflation and balance-of-payments problems, ending with regime change and the restoration of orthodox policies. On their part, political scientists have strongly resisted economically deterministic interpretations of populism, submitting adequate evidence that populist phenomena are not associated with particular economic policies. However, the popularity of economic populism remains intact. This article opens a new and expanded line of criticism by exposing the normative historical foundations of the theory of economic populism, while highlighting an array of conceptual, methodological and empirical flaws that render it unfit for scientific purposes. The insistence on its use despite obvious analytical shortcomings is explained as an artifact of economic populism’s ideologically weaponized nature.

2018

This paper traces the ascent of liberal economic ideas in the macroeconomic establishment in Denmark from the 1970s to the 2000s. Based on a systematic analysis of documents from the Danish government and the Economic Council published between 1970 and 2004, this paper demonstrates that Denmark experienced a marked shift in paradigms during this period. Full employment Keynesianism dominated the 1970s and neoclassical liberalism became dominant from the late 1980s and early 1990s. The paper argues that the nature of this paradigm shift is more uneven and gradual than the literature traditionally suggests. Furthermore, the adoption of new strict monetary and fiscal policies was already in place from the early 1980s, before the intellectual tools of the new paradigm were dominant and developed. This suggests that it was not the intellectual dominance of liberal ideas that caused the initial adoption of neoliberal policies. It is argued instead that the central role of economic theory is rather in legitimating and justifying policy, and that the stability of economic strategy, despite changes in government, points towards a situation where neoclassical liberalism has taken the form of common sense in the policy elite. This may in turn restrain the scope of legitimate public debate and policy action.

2008

Course Description A comparison of capitalism, socialism and communism, emphasizing the ideas and ideologies that are struggling today across the world. Special attention will be given to selected European and American political, economic, and cultural theorists. In many ways, this course builds on GOVT 490, which focuses on the close reading of texts (Dialectic). This course continues in the same vein but also adds the last dimension of the Trivium, Rhetoric, in which the focus shifts to independent research, presentation, and writing as well as collaborative efforts that involve critical evaluation and the discussion of readings and papers. A more appropriate title for the course would be Ideas Have Consequences, the title of one of the founding works of American conservatism by Richard M. Weaver. II.

SOFT POWER – Euro-American Journal of Historical and Theoretical Studies of Politics and Law, Issue 11 ( 6,1) – January-June 2019, 2019

New Political Economy, 2008

The approaches and opinions of economists often dominate public policy discussion. Economists have gained this privileged position partly (or perhaps mainly) because of the obvious relevance of their subject matter, but also because of the unified methodology (neo-classical economics) that the vast majority of modern economists bring to their analysis of policy problems and proposed solutions. The idea of Pareto efficiency and its potential trade-off with equity is a central idea that is understood by all economists and this common language provides the economics profession with a powerful voice in public affairs. The purpose of this paper is to review and reflect upon the way in which economists find themselves analysing and providing suggestions for social improvements and how this role has changed over roughly the last 60 years. We focus on the fundamental split in the public economics tradition between those that adhere to public finance and those that adhere to public choice. A pure public finance perspective views failures in society as failures of the market. The solutions are technical, as might be enacted by a benevolent dictator. The pure public choice view accepts (sometimes grudgingly) that markets may fail, but so, it insists, does politics. This signals institutional reforms to constrain the potential for political failure. Certain policy recommendations may be viewed as compatible with both traditions, but other policy proposals will be the opposite of that proposed within the other tradition. In recent years a political economics synthesis emerged. This accepts that institutions are very important and governments require constraints, but that some degree of benevolence on the part of policy makers should not be assumed non-existent. The implications for public policy from this approach are, however, much less clear and perhaps more piecemeal. We also discuss analyses of systematic failure, not so much on the part of markets or politicians, but by voters. Most clearly this could lead to populism and relaxing the idea that voters necessarily choose their interests. The implications for public policy are addressed. Throughout the paper we will relate the discussion to the experience of UK government policy-making.

1992

This paper relates economic theorising and policy making in a context of people's changing behaviour, which makes economy to work in a different way. As economic theory is not adapting to these changes, it produces false predictions. Also institutional factors and their changes are not usually taken into account. Disagreements among economists play a vital role to this. They mainly arise from the existence of value judgements. Although usually exaggerated, disagreements can be minimised if value judgements are formed by using the whole set of the available information about the function and needs of the society. And this can be done only if economists can have a global view of the other social disciplines. * Many of the ideas developed here, can be also found in Vliamos, 1991. However, here they are developed in a different context.