ABOUT JNE
The Journal of New Economics (JNE) is a Real-World Interdisciplinary Journal, launched principally to focus on the key global challenges facing the Economics Discipline and Profession at the critical crossroads of 21st Century.
At the backdrop of ‘old economics’ failing repeatedly in reversing crises, “New Ideas’ would matter much in Economics to better serve humanity and protect the planet. The rigorous study of Wealth and Welfare of People stands now at the core of current economic concern, thus world development. The publication of JNE inaugural Issue in January 2021 indeed resonates Adam Smith Champion Andrew Skinner’s valued emphasis on search for ‘an encompassing economics paradigm’ and a likely ‘new economics’ journal, even despite it might not deter but heal the bruises and cracks from crises at times.
Launching Background
The Assembly of Real-World Economists held on 6th December 2013 at the University of Glasgow, to Mark Remembrance in Honour of Duo Towering Figures - Andrew Skinner (1935-2011) and Norman Macrae (1923-2010), attracted over 100 germane Academic Scholars and Researchers, and Young Social Scientists from across Scotland.
Indeed, the Passing Away news of the 20th Century’s Visionary Decent Human Nelson Mandela (1919-2013) on 5th December, instantly persuaded the organizers of The Centre for Development (CfD) and Global Institute for New Economics (GIfNE) to stand in tribute to Mandela who was in great belief, to quote - “Innovative Ideas Matter - it is paramount that policy and politics change along with it. Like Slavery and Apartheid, Poverty is Not Natural: It is man-made and can be eradicated by the actions of human-beings.”
Indeed, the Event was organized in appreciation of the continuing relevance of Adam Smith's thought to the understanding of which Andrew Skinner, widely revered as the Doyen of Adam Smith Scholars, contributed enormously. With great skill and dedication, Professor Skinner co-edited the internationally acclaimed Glasgow Edition of The Works and Correspondence of Adam Smith in 7-Volumes in 1976-1987. He is best known for his superb editing of The Wealth of Nations in 1976. Researchers, analysts and readers would find Skinner’s vast amount of works on A System of Social Science: Papers Relating to Adam Smith and The Mercantile System (1996), as examples of fine scholarly work. Indeed, he set a high bar for all those who want to emulate him. Precisely, his outstanding works have made him an authority on Adam Smith. He died on 22 November 2011.
Norman Macrae was widely considered as the world’s most prudent economics futurist. He died on 10 June 2010 in London. In obituary, the Economist Magazine which he served for 41 years (19 years as Deputy Chief Editor) valued him as the Unacknowledged Giant. Was he a Giant indeed: Not only predicted in 1983 the collapse of communism in 1989 (Berlin Wall fallen on 09 November), expounded ‘The Next Capitalism’ a la ‘The Coming Entrepreneurial Revolution’ (as mapped in the Xmas 1976 Edition of The Economist), and the Japanese Miracle a la ‘Consider Japan’ 1963 (wrote this ‘reality piece’ a time when many in the Western World had forgotten the country existed). Even he predicted the rise of the internet as early as 1984.
Norman Macrae - an undying optimist – upheld values of free markets and advancing technology because he felt that they held the keys to individual freedom - markets liberated people from incompetent bureaucrats while technology empowered people to shape their own destinies. Remarkably, his 1984 – “The 2025 Report: A Concise History of the Future: 1975-2025” optimized about a new technological phenomenon that would link people and organisations worldwide using personal computers; he was equally concerned with mankind's productivity levels and the strain it puts on the planet.
In a Seminal piece on ‘A More Encompassing Economics Paradigm’, Real-World Economist Zasheem Ahmed illustrates, even after 5 years (as of today 06 December 2013) since the worst financial crisis shook the world on 15 September 2008, the jolt still continues to reverberate in economies, communities and households across the world. To quote, the influential Contrarian Economist Steve Keen, “the Financial Crash that convulsed the world in 2008 had cataclysmic effects on global economy and took conventional economists completely by surprise.” The crisis has indeed led to the demise of economists’ unwavering belief in market efficiency that had guided economic policy for decades.
It is verily alleged that rapid expansion of private rather than public debt and runaway increase in lending (mortgage loans) sparked the Meltdown. Remarkably, standard macroeconomic models did not even incorporate adequate analyses of banks, take into account of short-sighted behaviour of managers with excessive risk-taking emanating from perverse incentives.
What triggered the crisis in US was the asset bubble, raising house prices sharply and touched the peak in 2005. The Federal Reserve Bank’s response to the crisis using monetary policy with ease in rates had been ineffective in last few years (when interest rates were kept at near zero level since 2008). When the house market bubble burst, house prices declined even sharply than the incline seen previously. Sharp decline in interest rates and predatory lending to sub-prime borrowers founded the beginning of the crisis.
At the peak of economic crisis in 2008/2009, economists were arguing over the best set of policy alternatives to recover from the current crisis. As Nobel Laureate Paul Krugman elucidates, “Nor is the nature of the disaster mysterious. In the Great Depression leaders had an excuse: nobody really understood what was happening or how to fix it. Today’s leaders don’t have that excuse. We have both the knowledge and the tools to end this suffering. … What we need for a rapid, powerful recovery is precisely what we’ve needed in crises past – a burst of government spending to jump-start the economy.” Fiscal stimulus, in initial, was the answer indeed.
At the Conference @held 04/2009 at Glasgow University, Nobel Laureate Amartya Sen argued, while making his case on Adam Smith’s Theory of Moral Sentiments (TMS) even after 250 years, “the ongoing crisis was indeed not of economics, rather of the economic world. Economists haven’t generated the crisis because it’s not the economists who have been running the agencies for international development, the banks and the insurance companies. Undeniably, it’s true that economists didn’t do terribly well in explaining things. I think there are many things in Smith’s writings which have made the present crisis easier to understand, including the destructive role of those whom we call ‘prodigals’ and ‘projectors’; who have plans in pursuing their own gains in destructive way. They can lead to a crisis and waste a lot of capital – Smith was concerned with that. He would have also thought that it was very important to restraint the search for profit, productive though it is in general, because it can become problematic. He wasn’t against regulation.”
In similar vein, pointing to Financial Crash of 2008, Eminent Smithian Andrew Skinner opined that the gravity of TMS was curbed at the hands of ‘prodigals’, ‘imprudent risk-takers’ and ‘projectors’, since ‘Bubbles’ resulted from Bank Loans and Credit made available to them. Notably, the problems that have surfaced since the late 1970s in American and world economies can be traced precisely to the same category of individuals identified by Adam Smith in 1776 in the Wealth of Nations as prodigals, the imprudent risk-takers and projectors, which, by the way, is quite a good identification of the so-called entrepreneurs of subprime mortgages over the recent past. These types of individual were described by John Maynard Keynes (1883-1946) as ‘Wall Street speculators’ and ‘rentiers’ in General Theory (1936), Thorstein Veblen (1857-1929) called them ‘c aptains of finance’, and Karl Marx (1818-1883) categorized them ‘bourgeoisie’.
‘Today’, at the peak of worst recession since the Great Depression of 1930s, as Nobel Laureate Joseph Stiglitz contends, ‘not only is our economy in a shambles but so too is the economic paradigm that predominated in the years before the crisis’ - the economic models that gave comfort to regulators that markets could be self-regulated; that they were efficient and self-correcting a la the notion that market prices fully revealed all the relevant information. Via worth-doing efforts to add complexities and refinements to the standard paradigm, the resulting models may surely be an improvement and policies based on them may do better, but they too are likely to fail. A paradigm shift would thus be demanding!
Elegant economic theories have little or no relevance to real-life. Nobel Peace Laureate Muhammad Yunus in his 2007 book – Creating a World Without Poverty, refers to the current inability of modern economies to solve critical societal problems, “things are going wrong not because of market failures. The problem is much deeper than that. Mainstream free-market theory suffers from a conceptualization failure, a failure to capture the essence of what it is to be human.” Obviously, bringing social concern issues and ideas into the realm of economics would allow economists to better capture the human dimension of innovative and creative activities. In similar vein, as Economic Historian John Komlos clarifies, free markets are far from perfect and, indeed, do not exist in the vast majority of the modern economy. Instead of fetishizing economic efficiency, economics should focus on creating a better society and helping all of us live more fulfilling lives. The trauma of 2008 and the eventual Great Recession induced him elevate the need for a paradigm switch in economics along the lines of the human-centred principles of real-world economics, which culminated in the publication of Foundations of Real-World Economics (2019).
The global crises - economic, food, energy and climate change - especially the financial meltdown of 2008, have exposed the perils of unfettered capitalism (void of morality) – high greenhouse-gas emitters, to pollute even more, some “greenwashing” - banks that talk about energy-efficient light bulbs as they lend money to coal-fired power plants), indeed dipped in self-inflicted crisis – public had to come in their rescue. Whatsoever, all these ludicrous circumstances induced economists to shape economic theories anew - systematically address things like uncertainty, irrationality and exuberance, define useful financial regulations and effectively prescribe for state assistance to the disadvantaged and vulnerable for preventing instability, inequity and injustice. Essentially, all these emphasize the need for a paradigm switch in economics.
Out of a high valued conversation by speakers, commonality as identified with the ‘trio giants’ - values millennials sustainability and end systems of extreme poverty, invests in learning for a living, youth opportunities and civic courage, and wields less greed but greater morality to overcome failures of capitalism. The Event was in agreement that global crises sourced however from the short of moral, social and material balance in the economic world – greed and reckless regulations were in lead. Indeed, unfettered capitalism lies at the source of multiple crises confronting our societies today whereas it itself in serious crisis for reality of ‘capital being socially produced’, and ‘returns privatized’, there’s the absence of a human-face - less greed and greater morality at its heart. Practically, ‘capitalism is broken’, a better balance of government, markets and civil society can command a functional capitalism. Nevertheless, challenges of sustainable development and environmentally friendly innovation remain crucial.
In response to overwhelming aspirations and interest expressed by the participants at the Event (6th December 2013), The Centre for Development (CfD), amid the presence of Professor Sir Rick Trainor (then Principal of King’s College London), Professor Chris Berry, University of Glasgow (Lead Author of The Oxford Handbook of Adam Smith, May 2013), Prof Sheila Dow (University of Stirling), and Prof Gavin Kennedy (Heriot-Watt University, Edinburgh), made announcement on the launch of the interdisciplinary journal – Journal of New Economics (JNE).
The publication of JNE inaugural Issue in January 2021 indeed resonates Adam Smith Champion Andrew Skinner’s valued emphasis on search for ‘an encompassing economics paradigm’ and a likely ‘new economics’ journal, even despite it might not deter but heal the bruises and cracks from crises at times.
JNE Home Location
The Centre for Development (CfD) is indeed a Non-Government initiative to promote multi-dimensional development nexus between Scotland and the World Nations in close association with Universities in Scotland since February 2006. Remarkably, connecting the University of Glasgow and Glasgow Caledonian University with Anti-Poverty Champion Muhammad Yunus and the Grameen Organizations in December 2008, followed by launch of the Journal of Social Business (JSB) on 04 July 2010, was the CfD’s significant endeavour in this direction.
Worthy of mention, Global Institute for New Economics (GIfNE), an off-shoot of the Centre for Development (CfD), was launched on 10th June 2012 as a ‘Real-World Policy Cistern Aiming to Pool Shared Experiences, Promote and Value Action Research Surrounding Social Innovations and New Economic Ideas’. GIfNE organized a Celebratory Event on 27 October 2012 in honour of Nobel Peace Laureate Prof Muhammad Yunus’ installation as Chancellor of Glasgow Caledonian University, Scotland.
The Inaugural Issue of the Journal of New Economics (JNE) was published in January 2021 and will continue being published from 2022 in both Printed and Electronic Format - January and July - from its Home Base below as localized.
Journal of New Economics (JNE)
Global Institute for New Economics (GIfNE)
Published by The Centre for Development (CfD)
Glasgow University Union Complex
32 University Avenue Glasgow G12 8LX, United Kingdom
Contact Email: info@jornalofneweconomics.com
Web Address: www.journalofneweconomics.com