Manifesto of the appalled economists (Extracts)

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(...) The neoliberal paradigm is still the only one that is acknowledged as legitimate, despite its obvious failures. Based on the assumption of efficient capital markets, it advocates reducing government spending, privatizing public services, flexibilising the labour market, liberalizing trade, financial services and capital markets, increase competition at all times and in all places... As economists, we are appalled to see that these policies are still on the agenda, and that their theoretical foundations are not reconsidered. The arguments which have been used during thirty years in order to guide European economic policy choices have been undermined by the facts. The crisis has laid bare the dogmatic and unfounded nature of the alleged “obvious facts” repeated ad nauseam by policy makers and their advisers. Whether it is the efficiency and rationality of financial markets, or the need to cut spending to reduce debt or to strengthen the “stability pact”, these “obvious facts” have to be examined, and the plurality of choices of economic policies must be shown. Other choices are possible and desirable, provided that the financial industry’s noose on public policies is loosened. We offer below a critical presentation of ten premises that still inspire decisions of public authorities all over Europe every day, despite the fierce denial brought by the financial crisis and its aftermath. These are pseudo “obvious facts” which are in fact unfair and ineffective measures, against which we propose twenty-two counterproposals that we would like to bring into the debate. Each of the proposals is not necessarily unanimously supported by all the people who have signed this manifesto, but they have to be considered seriously if we want to drive Europe out of the current dead end.

10 PSEUDO “OBVIOUS FACTS”

(Arguments against those “obvious facts” and proposals on : htttp://www.assoeconomiepolitique.org/spip.php?article205)

1 : FINANCIAL MARKETS ARE EFFICIENT

2 : FINANCIAL MARKETS CONTRIBUTE TO ECONOMIC GROWTH

3 : MARKETS ASSESS CORRECTLY THE SOLVENCY OF STATES.

4 : THE SOAR IN PUBLIC DEBTS RESULTS FROM EXCESSIVE SPENDING

6 : PUBLIC DEBT SHIFTS THE BURDEN OF OUR EXCESSES ON OUR GRANDCHILDREN

7 : WE MUST REASSURE FINANCIAL MARKETS IN ORDER TO FUND THE PUBLIC DEBT

8 : THE EUROPEAN UNION PROTECTS THE EUROPEAN SOCIAL MODEL

9 : THE EURO IS A SHIELD AGAINST THE CRISIS

10 : THE GREEK CRISIS WAS A SPRINGBOARD TOWARDS AN ECONOMIC GOVERNMENT OF EUROPE AND EFFECTIVE EUROPEAN SOLIDARITY

CONCLUSION : DEBATING ECONOMIC POLICY, CREATING PATHS TO RESHAPE THE EUROPEAN UNION

Europe has been built for three decades on a technocratic basis which has excluded populations from economic policy debates. The neoliberal doctrine, which rests on the now indefensible assumption of the efficiency of financial markets, should be abandoned. (...) Social struggles and political changes will occur at different times in different countries. Some national governments will take innovative measures. Those who will desire to do so will adopt enhanced co-operations to take bold steps in the realms of financial regulation, and fiscal and social policy. Through specific measures these countries will hold out their hands to other peoples, so that they can join the movement. As a consequence, it seems important to outline and to debate right now the broad orientations of alternative economic policies that will make the reshaping of the European construction possible.