ANTIECONOMY, ECONOMY CRISIS AND CRISIS OF ECONOMICS

Povilas Gylys

doi:10.15388/ekon.2011.0.927

Abstract

The gist of this article is the idea that the orthodox theory of economic crisis unduly reduces its subject to business crisis and that it is the outcome of the narrowness and limitedness of the individualistic economic approach to the problem, employed mostly by neoliberals and libertarians. As individualists (the individualistic camp) explicitly or implicitly identify economy with market, their perception of an economic crisis is reduced to business crisis, crisis of the production of private goods. However, the concept of economy is broader than that of the market; thus, an economic crisis cannot be reduced to a business crisis. In addition, the theory of economic crisis could be enriched by the concept of anti-economy, which does not fit the individualistic economic paradigm. Therefore, a correction of the theory of economic crisis is needed, and this correction should be done in a holistic cognitive framework. Holism opens the possibility (which doesn’t automatically guarantee cognitive success) to look at the economic crisis through a wider lens, to perceive it as a whole. The shift from individualistic reductionism to holism allows us to see a correlation between cognitive crisis and crisis in real economy, and to introduce the concept of systemic crisis.

Highlights

IntroductionTraditionalists reduce economy to the market and, economic crisis to business crisis
Traditionalists reduce economy to the market and, economic crisis to business crisis. This fits the logic of methodological individualism, but, in our view, contradicts the content and essence of economic reality
Several years ago we conceptualized the phenomenon of anti-economy, defining it as a negative aspect of reality, which reflects the production of economic bads and a waste of scarce resources

Summary

Introduction

Traditionalists reduce economy to the market and, economic crisis to business crisis This fits the logic of methodological individualism, but, in our view, contradicts the content and essence of economic reality. One of the fundamental reasons for economic crisis is cognitive blunders, i.e. misconception of the very economy and the diversity of its regimes This gross misconception of economy through regimes of reflexivity (Soros, 1999) leads to inadequate actions and policies in the sphere of real economy and, to huge economic losses irreducible to a material and financial waste of resources and unattained material or financial benefits. Traditionalists are very hesitant about or averse to the issue of the regimes of governance, putting an emphasis on spontaneous, self-regulating regimes in economy This is the expression and result of individualistic thinking which, if used consistently, presupposes abstraction from any non-market and supra-individual phenomena. The chances are higher when the holistic approach in dealing with the problem is applied

Individualistic versus holistic perception of economy

Holistic concept of economic crisis

When economic crisis is systemic

Conclusions