10 YEARS HAVE PASSED since the Global Financial Crisis, however the mainstream economics education, practice and discourse has not significantly evolved. We need to understand the root causes of the problems we are creating as a society and how to address them. Money is power, financial markets are not self-regulatory, and the ‘free market’ is neither free nor a natural state.
On October 12th 2018 Rethinking Economics Norway launched a publication that will help us all understand more of what the financial sector is, and what it can be. The publication is freely available online through issuu.
The background for the publication is our event Rethinking Finance, which took place at BI Norwegian Business School April 12 – 13 2018. We have collected texts from some of our speakers at the conference.
The contributors are:
- Ann Pettifor, director of Policy Research in Macroeconomics (PRIME)
- Bjørn Skogstad Aamo, leader for The Financial Supervisory Authority of Norway from 1993 – 2011
- Sheila Dow, Emeritus Professor of Economics at the University of Stirling
- Rohan Grey, lawyer and president of Modern Money Network
- Daniela Gabor, associate professor in economics at UWE Bristol
- Jesper Jespersen, professor of economics at the Department of Society and Globalisation at the Roskilde University
- Ebba Boye, leader of Rethinking Economics Norway
- Benedikt Goodman, coordinator of Rethinking Economics NMBU
Scroll down to read the full editorial by Abel Crawford, Marie Storli and Liv Anna Lindman.
Editorial
BY LIV ANNA LINDMAN, MARIE STORLIE, ABEL CRAWFORD
IN APRIL 2018, Rethinking Economics Norway — true to its goals of pushing the boundaries of public debate — facilitated it’s third major conference, Rethinking Finance, seeking to shed light on how the financial sector could serve for the betterment of our societies. Finance, and in particular the importance of money, banking and debt, is sorely lacking the attention it deserves in the core economics curriculum. Additionally, the public is unaware of the significant role the financial sector plays in their lives. This publication seeks to communicate some of the main themes and concepts that were touched on during the conference, and empower you, the reader, to understand more of what is going on in the sphere of money, banking and finance.
THE DISCONNECT between the financial economy and the real economy has never been greater than at this point in history. During the past few decades, the growth of the financial industry has been unprecedented. A larger and larger proportion of the money supply is now given to speculative, financial purposes, rather than real investments that create wealth in the real economy. The fact that the financial economy is growing at a faster rate than the real economy, tells us that the finance industry primarily works to enrich itself, and that there is a deep division between the two spheres.
THIS DIVISION is one of the primary drivers of the financial crises that frequently destabilise the global economy, and the lives of people world-wide. These financial crises include the Latin American debt crisis in the late 1970s to early 1980s, the banking crises in Norway, Finland and Sweden in the early 1990s, the Asian Financial Crisis in 1997, the ‘dot-com’ crisis in 2000 – 01, and the Global Financial Crisis that followed the US real estate crisis in 2007 – 08. In Europe austerity was imposed, preventing national governments from utilising public spending to provide for the needs of its citizens, resulting in crushing poverty and despair. This has been a significant cause of the rise of the far-right movement across Europe. Ultimately, the financial sector has largely been a destabilising force in society.
10 YEARS HAVE PASSED since the Global Financial Crisis, however the mainstream economics education, practice and discourse has not significantly evolved. We need to understand the root causes of the problems we are creating as a society and how to address them. Money is power, financial markets are not self-regulatory, and the ‘free market’ is neither free nor a natural state.
WE CAN move towards the society we want, but this requires a rethinking of money, banking and finance.
Read and share
You can also read and share the articles as blogposts:
- Thinking like an economist, by Benedikt Goodman
- What is money? By Rohan Grey
- Can we blame the bankers? By Ann Pettifor
- Why regulate the financial system? By Sheila Dow
- The financial crisis and Norway, by Bjørn Skogstad Aamo
- Money is Power, by Jesper Jespersen
- Towards a theory of shadow money, article by Daniela Gabor and Jakob Vestergaard. The blog-version of this article was published at INET.
- Finansalderen, by Ebba Boye. Only the Norwegian version of this article is published as a blog post. Read the full publication for the english version.