Capitalist Causalities

N.B. I think I said in my last post that posts may not be as frequent any more - this one took two months to write.

So… I have an economics exam tomorrow, and doing all this revision really makes me think – everything around this subject is based on ‘motives’ which are all purely selfish. Obviously, the main one of these in microeconomics is the ‘profit motive’, which it is naturally assumed that all companies have, aside from other similar motives which ultimately will lead to the fulfilment of the profit motive; for instance, the motive to increase the firm’s market share.

It is also taught that government intervention is nearly always a bad thing, and exacerbates the problems of market failure. Maybe this is accurate for small government interventions, however, it seems to me that the more drastic a government’s actions are (aside from the obviously wrong – Zimbabwe, I’m looking at you), the more likely they are to work. For example, the introduction of the Rentenmark in Germany after the Great Depression (which affected Germany, which was already heavily in debt, worse than most countries) by Stresemann largely led to the solution to Germany’s economic problems at the time, albeit when combined with astute foreign policy.

However, there is one common problem for me with both of these being taught as fact – they both assume that our current semi-democratic economic and political system is the correct one to use. Now don’t get me wrong, I’m all for democracy, but the standard of political education in this country is dire – indeed, I have been unfortunate enough to encounter people who believe that Barack Obama is our Prime Minister – and to expect people who have little or no political awareness other than their parents’ views (or even worse, those of the tabloids!) to use their electoral responsibilities sensibly and appropriately is at best over optimistic and at worst simply naïve. This is why the media has such a strong stranglehold on politics, and why participation rates are so low.

However, I believe I’ve talked in the past about the desperate need for extra political education, so moving swiftly on, or indeed, not so swiftly, as I pick up this train of thought two months after it originally left King’s Cross, despite the general curriculum quite understandably following a middle-of-the-road political agenda, at the expense of coverage of the more extreme sections at either side, I am pleased that the curriculum gives scope for teaching of at least more than one viewpoint; however, although classicist economic schools of thought are taught pretty much mandatorily, the Keynesian school is somewhat overlooked.

Now, this may not appear to be such a harsh reality, but it is one that has particular poignancy whilst in our present situation – i.e. that of recession – as although the two schools agree that whilst a state is in economic wellbeing, a reduction in government spending will not have much effect (although the Keynesians argue that this reduction could endanger the economy’s productive capacity), the classicists believe that a reduction in spending can kickstart an economy out of a recession, whilst the Keynesians, to my mind, see logic and see it the other way around. Surely then, this bias of teaching gives bias to future economists or indeed voters’ minds, and is thus tantamount to indoctrination?