The Programming Approach and the Demise of Economics by Franco Archibugi

Author:Franco Archibugi
Language: eng
Format: epub
ISBN: 9783319780603
Publisher: Springer International Publishing

He continues:The global capitalist system is supported by an ideology rooted in the theory of perfect competition. According to this theory, markets tend toward equilibrium and the equilibrium position represents the most efficient allocation of resources. Any constraints on free competition interfere with the efficiency of the market me therefore they should be resisted. In previous discussions, I described this as the laissez faire ideology but market fundamentalism is a better term. This phrase is better because fundamentalism implies a certain kind of belief that is easily carried to extremes. It is a belief in perfection, a belief in absolutes, a belief that every problem must have a solution. It posits an authority that is endowed with perfect knowledge even if that knowledge is not readily accessible to ordinary mortals. God is such an authority and in modem times science has become an acceptable substitute. Marxism claimed to have a scientific basis; so does market fundamentalism. The scientific basis of both ideologies was established in the nineteenth century when science still promised to deliver the ultimate truth. We have learned a great deal since then both about the limitations of scientific method and the imperfections of the market mechanism. Both Marxist and laissez faire ideologies have been thoroughly discredited. The laissez faire ideology was the first to be dismissed, as a consequence of the Great Depression and the rise of Keynesian economics. Marxism lingered on in spite of the excesses of Stalin’s rule but, following the collapse of the Soviet system, it is now in almost total eclipse. (Soros, pp. 126–127)

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