STARTUPS ARE FUNDAMENTAL TO THE HEALTH OF AN ECONOMY
BUT MOST OF US DON’T UNDERSTAND NEARLY AS MUCH ABOUT THEM AS WE NEED TO.
I am increasingly of the view that, where fostering an economy is concerned, the answers are largely out there. This should scarcely be a surprise because the world is one vast ongoing economic experiment—and, by and large, the outcomes are recorded sufficiently accurately and comprehensively to analyze and learn from.
Yes, there is a great deal of shoddy data collection also—but enough is accurate enough for us to learn a great deal from it. I’m not after perfection here—just better.
Yet, do we learn as much as we could?
No, it is very clear that we don’t. If we did, the Great Recession wouldn’t have happened—or certainly would not have been as devastating.
And, as far are as all too many are concerned, it hasn’t ended—and some of the consequences will be with all of us for decades.
We had plenty of warning, and we knew what to do—but we ignored the warnings, and failed to implement the necessary remedial actions adequately. We still haven’t.
The general thrust was directed towards saving a series of deeply flawed economic systems rather than remedying the defects in the various economies as a whole.
The interests of the ultra-rich, and the financial institutions they control, were put ahead of the wellbeing of anything else—even though the financial institutions had caused the Great Recession in the first place.
To put not too fine a point on it, the criminals were rewarded for their crimes—and massively at that.
Greed and politics trumped economic pragmatism—and always will—unless we think all of this through rather more thoroughly.
So, why aren’t we learning?
Well, the over-arching reason is that powerful vested interests, in the form of the ultra-rich and their followers, are more than happy with the status quo—and have no interest at all in learning anything. Better a corrupt economic system that makes them ever richer, than an improved economic system that works in the best interests of the majority.
That apart, I can but theorize about the answer.
- There is something wrong with either the analytical capability of the economics profession—or its moral courage. That is a serious charge, but look at the evidence. Virtually no economist forecast the Great Recession—despite a positive mountain of indicative evidence. So, what is going on here? Either most economists are incompetent or gutless. Or both.
- Economists are being used to do the wrong things. By and large, corporate economists focus on forecasting rather than pragmatically trying to determine what works. Economists are lousy forecasters (as are most forecasters of any discipline) but that isn’t to say they don’t know what to do when things start going wrong.
- Ideology, based on nothing but prejudices, neutralizes an alarming amount of solid, evidence-based, economic data. This all stems from the anti-science policies of the Republican party where it is now fashionable to select only evidence that fits Right Wing ideology. A fact is only a fact if it fits one’s prejudices. This is so foolish that it is hard to know what to say, or how to react. It is wrong in more ways than I have space to name. Yet such people are consistently elected to Congress—and, not infrequently, attain high office. Given enough money, you can, indeed, get a bunch of jackasses elected (though reasonable people do sometimes slip through).
- Greed neutralizes a great deal of the rest. Ideology is used as an excuse even when people don’t believe in it.
- All too many politicians—who are of fundamental import as far as implementing the right economic policies are concerned—are clueless (particularly where economics are concerned).