Beyond disappointment

I'm sitting in a coffee shop opposite Haymarket Station in Edinburgh. Just up the road, the Institute for New Economic Thinking (INET) is holding its conference. I'm supposed to be there, as I was yesterday and the day before. But I am not at all sure I want to go. The last two days have left a very bitter taste.

This conference, grandly entitled "Reawakening", is supposed to be a showcase for the "new economic thinking" of INET's name. I hoped to hear new voices and exciting ideas. At the very least, I expected serious discussion of, inter alia, radical reform of the financial system, digital ledger technology and cryptocurrencies, universal basic income (recently cautiously endorsed by the IMF), wealth taxation (also recently endorsed by the IMF), robots and the future of work. And I looked forward to the contributions not only from the speakers, but from the young, intelligent and highly educated attendees.

Not a bit of it. In the last two days we have had panel after panel of old white men discussing economic theories developed by old white men, many of them dead. Economic beliefs that I thought had been comprehensively debunked have reappeared, dressed up as "new thinking".

It started to go wrong in the very first panel. Six white men and a token woman (this has been the general form of panels throughout the conference) discussing the economic stagnation of the last decade. Steven Fazzari and Adair Turner made some interesting comments, but the rest of the panel was terminally unoriginal. I lost interest quite quickly, turned to Twitter for light relief and got involved in a far more interesting discussion about whether or not banks earn seigniorage from lending, how we could measure this and whether it constitutes a hidden subsidy that should be removed. That discussion on Twitter sparked an even more interesting debate in the foyer of the Edinburgh International Conference Centre about banking reform. As a result, I now have some serious reading, thinking and writing to do, because I really do think banks need radical reform and it seems to have dropped off the agenda. But it didn't come from the INET conference. It came from Twitter.

Things didn't get any better at lunchtime, which featured a session about Adam Smith and the Scottish Enlightenment. Adam Smith was a great man, but the old, white, male presenters didn't say anything we didn't already know. The only person who made an original contribution was the token woman on the panel, a young INET researcher who did a wonderful analysis of the relationship of Adam Smith and the Romantic poets, especially Wordsworth - who appears to have had little time for Smith's view of the world. Her presentation stopped me from losing the will to live.

But my reprieve didn't last long. Next up, a discussion on the future of the Eurozone, by old white male Europeans - oh and two women, not that they diverted from the party line. One of the old white males (I forget which one, they all looked the same to me) said that the approach to sovereign debt in the Eurozone should not change, because governments need fiscal discipline. The others nodded in agreement. But I despaired. "Fiscal discipline" in the Eurozone has created seven years of stagnation with no end in sight. And don't shout "recovery" at me. "Fiscal discipline" will soon squash that, mark my words.

Fortunately, the rest of the afternoon was taken up with the aforementioned interesting discussion about banking reform, though I did take a brief break to listen to Guy Standing talking about the precariat.  But then there was the dinner. Oh dear. Bill Janeway presenting on technology......I thought I had accidentally gone through a time warp into a McKinsey presentation circa 1990. Dear Bill, we were doing data mining and algorithmic searches back then. You don't seem to have moved on, at all. And good though Adair Turner is, this is not his subject. Yet just up the road from the conference centre is one of the foremost technological research institutes for automation and robotics. Why didn't they bring in someone from there, instead of giving the floor to two old white males?

My table lost interest in the Bill & Adair show quite quickly and headed for the pub. Thank goodness. I hoped things would be better the next day.

The morning of the second day started better. The amazing Shannon Monnat was the token women on a panel of old white males discussing "Populist revolts: economics, culture, race, gender?" (seriously, there was one woman and no person of colour on a panel discussing race and gender...). She knew what she was talking about. They didn't. She wiped the floor with them.

That was followed by a very good panel discussing the "gains from trade". It was mostly old white men, again, with two women and one person of colour. But the discussion was infinitely better than anything I had heard so far, with the best contributions being Brad Delong's demolition of Ricardo's theory of comparative advantage, Pia Malaney's list of losses from free trade, and Arjun Jayadev's comparison of the US's trade representative to the Eye of Sauron. Admittedly, there was no opportunity for questions from the audience - indeed, lack of audience participation has been a feature of this conference throughout. But my hope rekindled.

I missed the keynote lunch and the first afternoon session, opting instead for a pub lunch with three university students - my two nieces and the boyfriend of one of them. Discussion ranged from the game theory of Brexit to the psychological drivers of America's opioid crisis and the problems of those who "lose the race" in the richest country in the world. Again, I am left with serious reading, thinking and writing to do - but it didn't come from the INET conference.

I returned for a panel on debt traps, public and private - and I despaired again. Seven white males and a token woman. Admittedly, one of the white males was Steve Keen, who is original, subversive and takes no prisoners. Adair Turner (again) was also good, not surprisingly since this is his subject. But the rest.....oh dear. It went from bad to worse.

Pontus Rendahl, for example, claimed that "banks don't create money" and explained that Barclays creates its own currency "pegged at par to the central bank currency", which apparently only works if the central bank "is complicit". The Bank of England debunked this nonsense back in 2014. Why is it still being presented now? Doesn't he know that the pre-crisis Eurodollar market, made up of shadow banks and European banks, created billions of faux US dollars without the explicit backing of the Fed but priced them as if they had Fed backing? When the Fed declined to back them, the whole thing crashed - and the Fed changed its mind pretty damn quick, providing copious liquidity to shadow banks and European banks alike, some of it via swap lines to the ECB and Bank of England. The international banking system is perfectly capable of creating things it treats as money and expects central banks to honour, even if central banks have never agreed to do so.

And far more importantly - I don't care whether Rendahl thinks the digital deposits Barclays (or HSBC, or RBS) create is money, as far as I am concerned it is what I have just used to buy my coffee and porridge in this coffee shop, and therefore it is money. I have never in my life been able to pay for coffee and porridge with bank reserves, and unless central banks introduce digital wallets for ordinary people I will not be able to do so in the future, either. Did he propose CB digital wallets for ordinary people? Did he even mention ordinary people and their financial needs at all, for that matter? No, he did not. This is not "new thinking", it is the same old elite economists' voodoo in different clothes.

This wasn't the only biased and disappointing panel discussion that afternoon. In another room, there was a discussion on "Identity norms and narratives". Composition of the panel? Yes, you guessed it. Four white males. And another discussion, "New developments in the economics of imperfect knowledge", was an All (White) Male Panel. Only white men have anything useful to contribute to economic theory that recognises that the future is radically uncertain, apparently. Immigration, too, is apparently an all-male concern, since the panel discussing it consisted of three men.

Torsten Bell and James Heckman discussing intergenerational issues redressed the balance somewhat, since Bell is a Millenial and Heckman an old white male. Both are privileged, of course, and I was left wondering where the voices of those who have fewer advantages in life were (plus the voices of women, of course). But Bell represents an organisation that does serious research into the effects of fiscal policy on women and the poor, and Heckman too concerns himself with policy impacts at all income levels. It was a good discussion, though I have heard both of them speak before and they said nothing new.

At the evening keynote over dinner, Winnie Byanyima's fiery speech livened up the room. And for the first time in the entire conference, there was an extensive Q&A with the audience. When a young female attendee pointed out that there were 84 white male speakers at the conference, 14 women and 9 people of colour, and called for INET to be more inclusive, the audience applauded. But the panel went quiet. Her comment was not even acknowledged.

I left the conference last night feeling completely dispirited. This is not a conference of "new economic thinking". It is a conference run by and for the elite - senior academics, rich businessmen, former public servants. Speakers are unrelentingly from the academic establishment: even those with controversial ideas, such as Steve Keen and Mariana Mazzucato, have academic positions. There are no heterodox voices at all. For example, both Ann Pettifor and I were in the audience for the "debt traps" panel. Someone asked why we weren't speaking. The answer is easy. We weren't invited, because we don't have academic positions. We are not important enough.

As I write, I am missing a panel on "reversing dual economies" consisting of five white men and Mariana Mazzucato. I have no doubt Mazzucato is wiping the floor with the white men, but it doesn't change the fact that once again, this is a white male dominated panel with a token woman and no person of colour - and I can't get past that.

Nor can I forget that next up is a lunchtime session on Gender Economics. It has an all-woman panel. I don't want to go - though I will make myself go, for the free food if nothing else. What am I complaining about, you ask?

This is the only panel in the entire conference that has a majority of women - and it is on Gender Economics. It is the equivalent of handing a woman a dishcloth and telling her the kitchen sink is all hers. Women can discuss gender balance, while men discuss important things. This is insulting and demeaning to the many intelligent and highly educated women who have important contributions to make.

And it is followed by yet another Snow White panel - one woman and five white men - and THREE all-male panels where the average age is at least 60. Oh, and the timing indicates that there will be no repeat of the Q&A from last night. The young, intelligent, highly educated attendees are to listen respectfully to the old, white, male elite, not presume to make any contributions to the debate themselves.

For me, the ultimate insult came in the form of an announcement yesterday. INET is creating an Independent Commission on Global Economic Transformation. "Call for New Thinking and New Rules for the New World Economy; Final Report will Outline Solutions for Emerging and Developed Countries", says the announcement. Here's the remit of the new commission:

And here are the members of the Commission, so far:

Robert Johnson, President of INET and Former Chief Economist of the U.S. Senate Banking Committee;

Lord Adair Turner, Chairman of INET and former chairman of the UK Financial Services Authority;

Kaushik Basu, Professor of Economics at Cornell University and former Senior Vice-President and Chief Economist of the World Bank;

Peter Bofinger, Professor of Monetary and International Economics at Würzburg University and a member of the German Council of Economic Experts;

Winnie Byanyima, Oxfam International executive director; former member of the Ugandan Parliament, African Commission and Director of Gender and Development at the United Nations Development Program;

Mohamed El-Erian, Chief Economic Advisor, Allianz, and former chair of U.S. President Obama’s Global Development Council;

Dr Gaël Giraud, Economist and senior researcher at C.N.R.S. (French national center for scientific research); 

James Manyika, Director of the McKinsey Global Institute;

Rohinton Medhora, President of the Centre for International Governance Innovation (CIGI);

Danny Quah, Professor of Economics at the Lee Kuan Yew School of Public Policy, National University of Singapore;

Dani Rodrik, Professor of International Political Economy at Harvard’s John F. Kennedy School of Government, and President-Elect of the International Economic Association;

Eisuke Sakakibara, Professor of Economics at Keio University and former Japanese Vice Minister of Finance for International Affairs;

Beatrice Weder di Mauro, Professor of Economics, Chair of Economic Policy and International Macroeconomics at the University of Mainz, Germany and former member of the German Council of Economic Experts;

Yu Yongding, former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences; former member of the Monetary Policy Committee of the People’s Bank of China.

Now, there are some wonderful people on this list. But collectively, they represent the elite establishment that I mentioned before: senior academics, rich businessmen, former and current public servants and policymakers. There are no new voices here, no-one from the heterodox economic community, no-one who has their feet in the real world. Everyone is at the top of an establishment hierarchy. How dare these people presume to take to themselves the responsibility for creating a radically new economic paradigm, when they have benefited so enormously from the existing one?

This is not "new economic thinking". This is the establishment, reasserting itself at the behest of the elite, which fears the loss of its status and its privileges as the threat of populist revolt rises. The young crowd round the elite, hoping to be picked as their proteges: and the old scan the young to pick out the ones most like them. So the system perpetuates itself.  

And I, like the rest of the creatures outside, look "from pig to man, and from man to pig, and from pig to man again." But already it is hard to say which is which. 

Related reading:

Animal Farm - George Orwell (I have misappropriated his final line, of course) 

Image from Encinitas Undercover.