Time for a Visible Hand

"This book is the best account of what we now know to be true but still refuse to learn after the 2008 economic crisis. It is written by three of the most interesting and maverick economists alive. What they are proposing isn’t post-recession conventional wisdom but something truly radical, and yet viable and realistic. They want to move away from the economic dogma that has dominated the entire world during the last three decades – the idea that we should leave economic matters to a so-called ‘invisible hand’. As they suggest, this notion assumes that the market is self-healing and self-controlling, and that ‘failures’ are often external to the actual operations of the market, due to foreign factors like lack of proper regulation (or, more often, too much regulation) or alleged characteristics of human nature such as greed. That assumption is wrong. Not just because it throws us back to some pre-Keynesian conception of economics. But also, as one of the protagonists of my book, Raul Prebisch, demonstrated long ago (he was Latin America’s answer to J M Keynes), because it disavows the embedded nature of economic systems in time and space. In doing so, this view ends up caring little or nothing about the long-term or the specificity of place. It assumes that the future will be just the same (which is why mathematical models have no place for ‘outliers’) and that place is irrelevant. The history of trade-relations is of little relevance in this view, as well as the memory of peoples and their expectations about the future. This is why it is dogmatic. But the authors argue against that. They want a completely different system, a transformation of capitalism that we are witnessing but that many still reject. Get the weekly Five Books newsletter It is based on the simple idea that over-exploitation and eternal indebtedness cannot continue to be the way we access common goods such as housing, education or health. Instead, we’re coming to see that we can access those things as a common social right. In the latest part of my book I take inspiration from them and others, and tell the story of the economic tradition which grew out of the experiences of the United States and of Latin America after the 1930s recession but also the way in which the world financial meltdown has shattered into pieces the apparently sophisticated but, in fact, conceptually hollow premises upon which ‘self-regulated’ markets have been built."