Macroeconomics—Is It Still Helpful in an Age of Scarcity? - Economics and Ecology: United for a Sustainable World - page 105

money supply, interest rates, and terms of credit (monetary policy). The cur-
rent bailout efforts and stimulus packages are cases in point.
Immediately, this made macroeconomics controversial, because there was
little or no historic precedent for activist government involvement in the
private economy. Both the established, behavioral norms of the laissez-faire
ideology and the notion of a self-regulating (microeconomic-dominated)
economy were powerful forces in support of business as usual.
As a personal note, when I (RB) began learning conventional economics
in the late 1950s, I was told these ideas of Keynes were still viewed by many
in the field as “left-wing socialist.” Nevertheless, as these ideas, which pre-
figured macroeconomics, worked their way into the mainstream of eco-
nomic thought, they did so under the banner of the “Harvard School,”
championed by the likes of Paul Samuelson and John Kenneth Galbraith.
But, established ways always create powerful resistance to change. Thus,
it comes as no surprise that formal opposition to this activist approach
to economic policy flourished within the more conservative “Chicago
School,” represented primarily by Milton Friedman. Even though colleges
with an economic curriculum have long taught both microeconomics and
macroeconomics, most major universities have gradually developed a per-
sonality and a reputation that fall generally in line with one of these two
schools of thought.
These developments are more than mere academic trivia of interest only
to those in the profession. They have dramatically affected our lives and our
politics. When Ronald Reagan became president in 1981, for instance, Milton
Friedman became an influential advisor. It is no accident that the neo-conserva-
tive movement promotes thinly disguised attempts to remove any remaining
vestiges of the New Deal, including weakening or privatizing Social Security,
opposing welfare and government public-works projects, as well as criticiz-
ing such programs as Medicare. (A neo-conservative is part of a U.S.-based
political movement rooted in the aliberal, anticommunist movement of the
Cold War, and is a backlash to the social liberation movements of the 1960s
and 1970s. These liberals, who drifted toward the conservative right, are neo-
conservatives, from the Greek neos or “new.” They not only favor an aggres-
sive, unilateral use of economic and military power as foreign policy but also
generally believe that the social elite protects democracy from mob rule.) 1
The ideas of Milton Friedman are even cited as the philosophy underly-
ing the development efforts in many foreign countries (e.g., Chile). The
implementation of Friedman's philosophy has led to international debt,
which usually originated through the corporate-dominated World Bank or
International Monetary Fund. In turn, these debts have led to the impover-
ishment of indigenous peoples and the privatization and corporate takeover
of valuable natural resources through bogus patents in numerous, nonin-
dustrialized countries. 2 Certainly, the influences of globalization are increas-
ingly pervasive since the early 1980s as a result of the prominent influence
of this line of thinking. (See, in particular, Naomi Klein's The Shock Doctrine: