On a cool bright day in September 2008 the banks began to explode. In a chain reaction that spread from Northern Rock in the UK to Lehmann Brothers in the US, not a single bank was left unscathed. And no one saw it coming. The economists didn’t see it coming. The markets didn’t see it coming. The government didn’t see it coming. The Queen asked the Bank of England why they didn’t see it coming and they just shuffled and shrugged.
That was the beginning of the Dark Decade. In a panic to save the banking system governments steeped in neoliberal economic theory threw Friedman and Hayek out the window and spent trillions on the banks. Quantitative Easing was the technical name that was given to this fiscal dodge to protect the guilty and confuse the public. Undaunted by their inability to predict the crisis hardcore neoliberals warned that inflation would soar to dangerous heights due to QE and we should all be sore afraid, and many were. But inflation didn’t soar. It hasn’t to this day.
In the UK the Conservative government held fast to its neoliberal economic principles and austerity was tightened to reduce the deficit to manageable levels. It looked like this might work right up until the moment the deficit doubled. The Queen didn’t bother to ask why.
And now we have Covid running the world economy for us and governments are printing money as fast as they can to save society. And still inflation isn’t rising. And still no one knows why.
Mainstream Economics isn’t working. Everyone knows it, apart for some hard core neoliberals who polish their shiny models and declare the world got it wrong. Economics has failed on a scale that is difficult to measure, largely because the rulers we use are broken and we are not sure about the people who do the measuring. Economics is broken and we all, you and I especially, need to have a long hard think about how we fix it.
“But you are not an economist, what do you know about it?” the ghost of economics past complains.
You are right Milton, I am not an economist, but Adam Smith was a Moral Philosopher and Karl Marx studied Law and Philosophy. While we are on the subject of thinking v qualifications Einstein was a patent clerk and Sir Isaac Newton was an Alchemist. You, Milton my son, were a properly credited economist and you nearly brought the world to ruin.
But Milton is right, I am not an economist I am a designer by training. This means I think laterally rather than logically, although logic has its moments. I have the ability to create unique new things out of nothing but needs. I have developed mental tools for dealing with complex systems, and modern manufacture is highly complex, and I understand strategies for optimising change. These skills might come in handy, as will the typical designers galactic scale of self-belief.
But more important than that, to a designer every problem is an opportunity to create something new and new thinking about economics is precisely what we need right now. So I guarantee this blog will be lateral, I hope it will be strategic, and I am certain it will be complex. If nothing else, it will provide a fresh perspective on the problems we share and, with luck, provide one or two actionable solutions.
“The true test of any scholar’s work is not what his contemporaries say, but what happens to his work in the next 25 or 50 years. And the thing that I will really be proud of is if some of the work I have done is still cited in the text books long after I am gone.”
― Milton Friedman