A comment on “Beyond Growth: Toward a New Economic Approach”
James Galbraith This is a document of unusual clarity and importance. It states the main challenges of our existence, the
failings of the dominant theories, and the need for a new synthesis that encompasses inequality,
resilience and sustainability within a framework alert to financial instability and informed by Post
Keynesian macroeconomics and by institutionalist and evolutionary economics. To publish this work
under the rubric of the OECD, even as an unofficial document, is an act of courage.
The report states that “no single synthetic theory... has emerged” so far. Yet the basis for such a theory,
incorporating resource costs and constraints, has been laid down in the institutionalist literature by
economists seeking to align the field with physical and biological universals1
. This work is linked to the
traditions of Veblen, Commons, J.K. Galbraith and to the biophysics of Georgescu-Roegen among
others. The empirical relationship between inequality and financial mis-rule has been demonstrated in
extensive recent work on the global macroeconomics of inequality.2
The integration of finance into
macroeconomics is well advanced under the rubric of “modern monetary theory,” building on Keynes,
Lerner and Minsky. An institutional analysis of financial fraud and its contribution to instability has
emerged, closely allied to the new monetary economics. From the experience of Greece and other
countries, we have ample material on the consequences of applying neoliberal orthodoxy to fragile
societies and vulnerable nation-states.
The challenges and critical issues are exceptionally well defined here. A key step going forward is to
broaden the debate by bringing the many voices from the margins and backwaters of economics and
related fields into the center of the discussion. The job will not be done by those whose work, however
critical, merely orbits around the sterile and worn out “mainstream.” Indeed the test of a new synthesis
is whether it will be possible to give the many economists – and those in related fields, such as law –
who have worked outside of the mainstream, in many cases paying a steep professional price, the
leading roles. Revolutions are, after all, made by revolutionaries.
1 Chen, Jing and James Galbraith, “A Common Framework for Evolutionary and Institutional
Economics, Journal of Economic Issues, Vol XLVI No. 2, June 2012, 419-428. DOI 10.2753/JEI0021-
3624460217. See also Chen, Jing and James Galbraith “Austerity and Fraud under Different Structures
of Technology and Resource Abundance,” Cambridge Journal of Economics, Volume 36 Issue 1
January 2012, 335-343. DOI:10.1093/cje/ber027
2 Galbraith, James K., Inequality and Instability: A study of the world economy just before the great
crisis. New York: Oxford University Press, 2012. Updates at http://utip.lbj.utexas.edu |
