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Commentary :: Labor
The Economic Fall
13 Nov 2013
The economy should be a part of life, not a steamroller crushing self-determination and creativity. Crisis and chance are represented by the same Chinese letter. The financial markets should be tamed, not soothed, shriveled, not inflated. The state debt crisis is really a crisis of the myths of deregulation and the self-healing market.

By Ulrich Thielemann

[The criticism of the economic ethicist Ulrich Thielemann shakes the foundations of economics. This article published on 4/17/2012 is translated from the German on the Internet, The economy is criticized. The discipline is too market-fundamentalist, too dogmatic and too imperialistic. A new beginning is expected after the economic crisis. How do experts tackle these criticisms?]

[Ulrich Thielemann is director of the MeM think tank for economic ethics and lecturer at the University of St. Galen. From 2001 to 2010 he was co-director of the Institute for Economic Ethics at the University of St. Galen.]

Everyone occupied professionally with economics today, whether as a leader in a business or as an advisor of economic policy, passes through a course of economic studies. Certain messages are taught about true economics. A whole worldview is communicated. The study of economics is a school of economizing of thinking and ultimately of the world.


In the study of economics, one learns that benefit-maximization is rational. Every deviation from that and every refusal to gain whatever can be gained must be regarded as irrational. “Whatever profits is rational,” as Max Frisch sarcastically characterized this message. In the study of economics, one only learns prescriptions about maximizing profits. Everything that opposes that must be eliminated.

These are really pseudo-profits or excessive risks, not high profits. The higher the profits, the more the success. Consequently investors to whom the profits flow are “principals” who have all prerogatives. An investor is an “agent” of this principal or of capital. Since are persons are rational when they strive unrestrainedly for their own advantages, the agents stimulate the management through bonuses and give the highest possible profits to investors.

That all this is legitimate is confirmed in the economics lectures. There one learns a marvelous whole arises out of the interplay of the Homines oeconomici intent on their own advantage, apart from exceptions. The prosperity of everyone will be constantly increased. This is then called “efficiency.”


Economics is a normative ethical theory, a theory justifying the market logic. “Economists” who speak as a group of like-minded “are the most consistent advocates of the market.” So the Konstanz economist Friedrich Breger formulated just before the outbreak of the financial crisis.

That these advocates for market logic are normative and ethically very dubious does not even occur to most economists. They believe they are carrying out a purely empirical, “positive” or “value-neutral” discipline. In this way, they relieve themselves of awkward questions that could cause the whole system of theories to collapse. As Breyer explains, practically all economists are convinced of the – supposed! – “soothing effect of the market.” But “the rest of the population” sees this rather skeptically.

Why is this? The rest of the population feels the competitive pressure and the economizing of living conditions the hard way from experience. The people are confronted with an increasingly radical management that is still paid lavishly for their unscrupulousness in raising shareholder value. They must watch how the agents and principals of the banks take them hostage as taxpayers and make average citizens serve capital in ever new dimensions. This happens indirectly through the neoliberal austerity programs now implemented everywhere. All over Europe “drastic cures” are now imperative.


Economism likes to play the card that there can only be “the market” or no market. That is the real fall from grace of economics. Any idea of moderation and relativization is absent in economism. It is so simple: the market must be embedded in social meaning and fairness. Otherwise the right of the stronger is in effect, the right of the more solvent and competitive. This is both an individual challenge and an overarching political challenge. This is the task of a globally-coordinated world policy since the democratic sovereign in the course of globalization has largely lost political freedom – everything turns only around “competitiveness” of societies degraded to locations.

Then we could raise two questions that are very relevant for economic and social policy. Is the stress worthwhile in producing growing competitive pressure? Are the market-conditions fair? The first question, the question about the good life – and good work – cannot be answered individually because capital has the say in the global competition. Those who try end up on the losing side. Economists like to refer triumphantly to the discussions about the supposed necessity of neoliberal reforms. This is also ultimately a justice- or fairness question. This does not immediately press on citizens because the “perpetrators” of the growing competitive pressure – all of us even if to a different extent – hide behind the invisible hand of the complex power relations.


We need an economics not biased from the start against the market principle, which does not plead for the market in all life situations. A false economics likes to gloss over everything as “liberalization” although a loss of freedom occurs. Ensuring competitiveness – whether of individuals, businesses or whole states – is uppermost. Ethically illumining the complex ways that people act through market and competition is one of the challenges of such an economics.

Presumably a gigantic capital bubble has formed. Serving that capital bubble overstrains the rest of the population. That’s the reason it is a bubble. The income statistics for the super-rich are revealing. This bubble is the result of the market-fundamentalist “courting” (Hans-Werner Sinn) of capital.

The world must transition from courting to taming capital. The key question is: how can the bubble be removed without ending in a catastrophe? Answering this question requires economic competence and a turning away from economist biases against the market principle.


Mark Blyth, “Austerity: The History of a Dangerous Idea,” March 2013

Ulrich Thielemann, The Case against the Business Case and the Idea of “Earned Reputation,” 62pp, 2008

Ulrich Thielemann, “Studying Economics Today is Like Brainwashng,” April 2012
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