Table Of ContentUneconomic Economics and the Crisis
of the Model World
DOI: 10.1057/9781137385499.0001
Building a Sustainable Political Economy: SPERI Research & Policy
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Titles include:
Matthew Watson
UNECONOMIC ECONOMICS AND THE CRISIS OF THE MODEL WORLD
Colin Hay
THE FAILURE OF ANGLO-LIBERAL CAPITALISM
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DOI: 10.1057/9781137385499.0001
Uneconomic Economics
and the Crisis of the
Model World
Matthew Watson
Professor of Political Economy, University of
Warwick, UK
ESRC Professorial Fellow, 2013–2016
DOI: 10.1057/9781137385499.0001
© Matthew Watson 2014
Softcover reprint of the hardcover 1st edition 2014 978-1-137-38548-2
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First published 2014 by
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ISBN: 978–1–137–38549–9 PDF
ISBN: 978-1-349-48126-2
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www.palgrave.com/pivot
doi: 10.1057/9781137385499
To my new nephew, Nathan. Welcome to the family.
DOI: 10.1057/9781137385499.0001
Contents
Acknowledgements viii
List of Abbreviations x
1 Setting the Scene: From a Crisis of Economics
to a Crisis of the State 1
Introduction 2
Competing crisis narratives of symptom
and disease 3
The rehabilitation of economic theory 8
The crisis and the economics curriculum 12
Structure of the book 17
2 The Collapse of the Model World: From Faith in
Equations to Unsustainable Asset Bubbles 20
Introduction 21
The growth of increasingly complex
secondary mortgage markets 25
The uneconomic economics of asset-price
valuation techniques 30
Performativity and counter-performativity
in financial markets 36
Conclusion 41
3 The Creation of the Model World: From
Formalist Techniques to the Triumph of
Uneconomic Economics 45
Introduction 46
The return of the policy ineffectiveness
proposition 49
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Contents vii
The quest for a fully specified general equilibrium
framework 55
Formalist technique and the logic of market
self-regulation 59
Conclusion 65
4 Looking Ahead: From Uneconomic Economics to
a Different Future 68
Introduction 69
The definition of good economics 70
The significance of historicised method 75
Final words 80
References 84
Index 102
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Acknowledgements
This book had its genesis through a very fortunate coinci-
dence of events. In the same week that I was asked to review
the application for the SPERI Palgrave Pivot Series, Building
a Sustainable Political Economy, I was in London attending
an interview for an ESRC Professorial Fellowship. The con-
versation turned at the instigation of the interviewers to
whether it might be possible to use the underlying insights
from my proposed ‘Rethinking the Market’ project to join
the now voluminous debate about the implications of the
global financial crisis. This struck me as being a very good
idea whether or not I was awarded the Fellowship, and I
determined at once to look into the possibility of writing
a book from this perspective for the SPERI Palgrave Pivot
Series. The result of the subsequent endeavours is what
appears in the pages ahead.
Luckily for me, the story has a double happy ending in
that I was awarded the Fellowship to pursue my project:
www.warwick.ac.uk/rethinkingthemarket. I would like to
thank the Economic and Social Research Council for its
continuing support of my research, as well as for all the
opportunities for continued publishing that have opened
up from the award of a three-year Professorial Fellowship.
This, then, will be the first of a number of books on related
themes to appear over the next few years.
In itself, it represents where my thinking has currently
evolved to since I first began to explore the relationship
between economists’ purely abstract use of a device
they call the ‘market’ and the actual markets that can be
encountered in everyday life. I suspect that in continued
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Acknowledgements ix
conversations about this issue I will find plentiful reasons to allow my
thinking to move on even further in the future. I certainly know how
much it has benefited from similar conversations in the past. These have
been too numerous for me to identify people by name without running
the risk of a series of very important omissions from the ensuing list. For
that reason I hope that colleagues past and present from Warwick and
beyond, peers and friends within the profession and, perhaps above all,
successive cohorts of my PhD students will forgive me if I consequently
offer a generic ‘thank you’ for all that everyone has done to shape the
research which appears here. It is by no means a less heartfelt gesture of
appreciation for appearing in this form.
DOI: 10.1057/9781137385499.0002
