Theme: Political Economy | Content Type: Journal article

After Neoliberalism: Economic Theory and Policy in the Polycrisis

Michael Jacobs



| 1 min read

Mainstream economic theory and policy have struggled to address (and in some cases have made worse) the multiple economic crises since 2008—global financial crash, austerity, stalled productivity, wage stagnation, rising inequality, inflation, climate and environmental breakdown. At the root of this failure is the ‘ontological individualism’ which underpins neoclassical economic theory: the belief that individual households and firms are sovereign actors. It proposes in its place a premise of ‘ontological institutionism’—the view that economic behaviour is primarily influenced by the institutional structures and rules within which it occurs. Commonplace in other social sciences, this view radically changes economic analysis and policy prescription. Based on an explicit ethical definition of policy objectives, the article offers an ‘institutionally pluralist’ view proposing different kinds of institutions for five different spheres of economic life. Arguing that economic policy should be seen as a process of institutional design (not simply making markets more efficient), it offers some illustrative policy proposals in key fields, from climate change to business investment.

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    Michael Jacobs

    Michael Jacobs is Professor of Political Economy at the University of Sheffield. He was formerly a member of the Council of Economic Advisers at the Treasury, a special adviser to Gordon Brown in the No 10 Policy Unit, and Director of the IPPR Commission on Economic Justice.

    Articles by Michael Jacobs
Volume 95, Issue 2

Latest Journal Issue

Volume 95, Issue 2

Includes a collection edited by James Hampshire on Immigration and Asylum Policy After Brexit, exploring how recent immigration and asylum policies reflect the ambivalent, unstable and unresolved meanings of Brexit itself. There are a wide range of other articles including 'A Hundred Years of Labour Governments' by Ben Jackson; and 'The Good, the Not so Good, and Liz Truss: MPs’ Evaluations of Postwar Prime Ministers' by Royal Holloway Group PR3710. Reports and Surveys include 'Addressing Barriers to Women's Representation in Party Candidate Selections' by Sofia Collignon. Finally, there is a selection of book reviews such as Nick Pearce's review of When Nothing Works: From Cost of Living to Foundational Liveability, by Luca Calafati, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams; and Penelope J. Corfield's review of The Identity Trap: A Story of Ideas and Power in Our Time, by Yascha Mounk.

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