Ideological Degradation of Economics versus Changes in the Global Financial Markets

Abstract

The author presumes that the basic pre-causes of the world financial crisis
should be looked for in macroeconomics. In 1980s, its mainstream, embracing
classical liberalism modified by J.M. Keynes and – to certain degree – by
ordoliberalism (sometimes improperly included into the neoliberal path), was
pushed out and replaced by the Hayek-Friedman neoliberal doctrine. That
doctrine was transformed step by step into an ideology causing an essential
deformation of macroeconomics and neglecting the role of scientific premises
in shaping the world economy. The author argues that neoliberalism was
based on the false dogma of self-regulation and self-stabilizing capabilities
of not only individual free market but also inter-market links within any free
market economy as a whole. The economic policy based on that doctrine
led to harmful consequences, particularly on the financial markets taken out
from the system of proper regulations and empowered with the features of
supra-state bodies.
The mixture of the Austrian school anti-state vision and the Chicago
school’s hypothesis of rational expectations has brought about improper
interventionism as well as malfunctioning of the market mechanisms. The
results of that type opened a way for the most radical libertarian vision of
anarcho-capitalism, leading to a complete elimination of the state not only
from the economy but also from the political and social life of the nations.
According to the author, an implementation of this vision would mean
a catastrophe to individual countries but, first of all, to the European Union
as the organization integrating not only markets but also the state institutions
as their regulators. Under these circumstances the author advocates looking
for new systemic solutions and a new scientific doctrine for economic policy,
suggesting synergic liberalism, based on the permanent joint action of the
states and markets in order to achieve synergy effects going beyond the
results of their complementarities or typical interventionism.