RETHINKING OF ECONOMICS :RANDOM THOUGHTS

 Eminent econòmists who shaped Economics theories and policy initially were listed as Adam Smith, Alfred Marshall, J.M. Keynes and Karl Marx .Despite  many writers who had  expressed isolated economic ideas before 1776 it was Adam Smith's " An inquiry Into the nature and causes of WEALTH OF NATIONS " published  248 years ago had laid the foundations of the Economics subject. He examined  the factors that determine the growth and volume of production. The emphasis on production and expansion of wealth became the subject matter of Economics in his approach. According to Alfred Marshall Economics is the study of man in the ordinary business of life. It examines individual and social actions connected with material requisites of wellbeing. A.C.Pigou  along with Marshall were  responsible for developing the branch of welfare Economics which deals with the structure of the economy and  the markets to achieve efficient allocation of goods and resources in the society so as to achieve overall well-being of the society.Keyne's General Theory of Employment Interest and Money got significant popularity in developed liberal economies following  the great depression and second world war especially with Roosevelt's New Deal policy in USA where strong industrial production was backed by strong unions and government support. Karl Marx's as a social theorist economiist and philosopher put forward theories about capitalism, socialism and communism.According to Marx due to inherent exploitation of workers under capitalsm and chaotic nature of free market competition and extraction of surplus labour value he predicted that capitalism would eventually get destroyed .and proletariats or workers will eventually take over. In any case based on Marxian ideology history had witnessed the establishment of a good number of Socialist/ Communist states across the world.They have made  suitable modifications in the degree of applications of Marxian ideologies implemented in a number of countries both Socialist and commmunists  including Soviet Union (USSR) and Peoples Republic of China. Even though Marxist theory suggested industrial societies most suitable places for social revolution in reality communism became more successful in poverty striken undeveloped countries such as Russiia and China. By 1985 one third of global population lived under a Marxist- Leninist system of government in one form or other. However late 1980s and early 1990s witnessed sharp decline of communism including the dissolution of Soviet Union in 1991.

     Experience of many centuries indicated that despite the development of  substatial numbers of rare economic models both theoretical and policy models  the outcome turned out to be   inadequate to address challenges of poverty,unemployment,marginalization, social and economic inequality, climate change, Artificial Intelligence, demographic change and geopolitical conflicts .Amartya Sen's study  of poverty focused on entitlement and depriviation as the main determinant of poverty. Emerging Artificial Intelligence AI  technolog appears to be more effective in health care monitoring and diagnosis ,transportation, traffic management, education, agriculture, and finance.However the sudden withdrawal of money accelerated by digital technology resulted in the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in USA and  Credit Suisse in Switzerland in 2023.Even though the future inmpact of AI and tech innovations in financial sector is uncertain and the frequency of bank runs is likely to increase further.  Inorder to avoid  the  grave misuse of AI  a well coordinated approach against malpractices in fintech products among AI  using countries  are inevitable. early 2000s itself Prof Joseph E Stiglitz warned about the discontents of globalisation. According to Prof Jayati Ghosh The global economy was already limping and fragile before the covid19 pandemic; the subsequent recovery has exposed deep and worsening inequalities ,not just in incomes and assets but in access to basic human needs as well. The resulting socio political tensions and geopolitical conflicts are creating societies that may soon be dysfunctional to the point of being unlivable.She expresses concerns about the efficiency of financial markets without regulation, the macro economic and distributive implications of fiscal policies and labour market and wage deregulation on both employment and underemployment. Similarly how international trade,investment, policy incentives and subsidies for private investment,global value  chains ,climate change, inventions and innovations and tighter intellectual property rights etc do impact patterns of production consumption and investment. In fact the greater power of capital compared with workers;unsustainable exploitation of environment; differential treatment of workers through social labour market segmentation; the private abuse of market power and rent-seeking behaviour ; use of political power to push private economic interest within and between nations; and the distributive impacts of fiscal and monetary policies are individually and collectively responsible for the existing power structures and imbalances. 

Angus Deaton observed that our emphasis on the virtues of free competitive markets and exogenous technical change distracted us from the importance of power in setting prices and wages and direction of technology and influencing politics to change rules of the game. Very often when economists are focusing on efficiency leaving equity to others efficiency comes with upward  redistribution- frequently economist's recommendations become little more a license to plunder by corporate world .Transnational companies have today much power over working conditions, wages and the decisions about artificial Intelligence. A well functioning financial sector would channel the financial surpluses towards productive investments like social and economic infrastructure and developing technology .In short as economists we can contribute to the design of institutions to better align private incentives for the pace and direction of innovation with human and environmental needs.Diane Coyle wondered how should economists analyze the highly nonlinear,  interdependent,intangible global economy with its concentration of economic power and emerging inequalities.Instead she advocated reeboting of welfare Economics measures like cost benefit analysis  for achieving economic growth and higher standard of living. Lessons from inflation control suggests that central banks alone do not entirely control inflation it also requires systematic fiscal intervention. Economists can also contribute to the design of institutions to better align private incentives for the pace and direction of innovation with human and environmental needs and also efficient regulatory compliance. Let us hope that  the search  for rigorous productive research and attempts to develop suitable models  for emerging economic scenarios would continue and become successful.