- Written by: Kamran Mofid
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My views on what has gone wrong with the so-called modern economics and the economists who have brought shame to their profession are well documented.
For example see:
I am now pleased that the real-world economics review has identified the top ten mad ones, including two in two-pairs. They have brought us indeed a very bad harvest and have destroyed economics as a wise subject for years to come.
Please see below for more and try to vote to see who the guiltiest of them is! This is very important, as the real-world economics review has noted:
"It is accepted fact that the economics profession through its teachings, pronouncements and policy recommendations facilitated the GFC (Global Financial Collapse). We also know that danger signs became visible long before the event and that some economists (those with their eyes on the real-world) gave public warnings which if acted upon would have averted the human disaster.
With other learned professions entrusted with public confidence, such as medicine and engineering, it is inconceivable that their professional bodies would not at the very least censure members who had successfully persuaded governments and public opinion to ignore elementary safety measures, so causing epidemics and widespread building collapses.
To date, however, the world’s major economics associations have declined to censure the major facilitators of the GFC or even to publicly identify them. This silence, this indifference to causing human suffering, constitutes grave moral failure. It also gives license to economists to continue to indulge in axiom-happy behaviour. Nor has the economics establishment offered recognition to those economists who were not taken in by fads and fashion and whose competence, if listened to, would have prevented the collapse.
These two silences reveal a continuing moral crisis within the economics profession. The Ignoble and Noble Prizes for Economics are being offered as small first steps towards a cure. Voting is now open for the Ignoble Prize for Economics The Ignoble Prize for Economics is to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC)
Voting is ultra quick and easy. Click here and you will see the ballot. Click on your three choices and then the big yellow “vote” button.
22 economists were nominated for the prize. Through consultation with contributors to the Real-World Economics Review Blog, the following short list of ten, including two pairs of economists, has been selected for the ballot.
Dossiers of short-listed of nominees for the Ignoble Prize for Economics
Fischer Black and Myron Scholes
They jointly developed the Black-Scholes model which led to the explosive growth of financial derivatives. The importance given to their hypothetical calculation of derivative prices was baneful not just because it was bogus, but also because it meant that relevant and often urgent real-world economic research was widely neglected by the profession. Eugene Fama His “efficient market theory” provided the moral umbrella for all sorts of greed, predatory behaviour and incompetent corporate management. It also provided the rationale for deregulation. And his theory’s widespread acceptance meant that “discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse.” In these three ways Fama’s work created the environment which made possible the GFC.
He propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of the financial theories with unrealistic assumptions that facilitated the GFC. In short, he opened the door for everyone subsequently to theorize without fear of having to be attached to reality.
As Chairman of the Federal Reserve System from 1987 to 2006, he both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation. Before a Congressional committee on 28 October 2008 Greenspan confessed that his theoretical beliefs of 40 years were now proven to be without foundation, hence his total confusion and failure at his job.
By working to make the Riksbank Prize in Economic Sciences (“Nobel Prize in Economics”) almost exclusively a prize for neoclassical economists, this Swedish economist has contributed significantly to the conversion of the economics profession and of world public opinion to market fundamentalism.
His development of the rational expectations hypothesis, which defined rationality as the capacity to accurately predict the future, both served to maintain Friedman's proposition that monetary factors do not affect the real economy and, in the name of “rigor”, distanced economics even further from reality than Friedman had thought possible.
As Secretary-General of the Royal Economic Society from 1992-2008, he helped suppress worries expressed by non-mainstream economists about developments in the financial sector. In 2007 he wrote a Report for the Icelandic Chamber of Commerce giving a clean bill of health to Icelandic banks only a few months before they collapsed. When investigators called attention to the real state of Icelandic banking, he wrote a series of letters to the Financial Times defending the soundness of Icelandic banks and imputing professional incompetence to those who doubted it.
Edward Prescott and Finn Kydland
For jointly developing and popularizing “Real Business Cycle” theory, which by omitting the role of credit greatly diminished the economics profession’s understanding of dynamic macroeconomic processes.
Through his textbook Economics: An Introductory Analysis (19 English language editions and translated into 40 languages), he popularized neoclassical economics, contributing more than any other economist to its diffusion and thereby to the deregulation of financial markets which made possible the GFC.
As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), he worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives.
- Written by: Kamran Mofid
- Hits: 7369
Announcing the 9th Annual International Conference
Call for Presentations
“In Search of the Virtuous Economy: A Plea for Dialogue, Wisdom, and the Common Good”
6-10 June 2010
California Lutheran University
Thousand Oaks, California
Globalization for the Common Good: An Interfaith Perspective
Ninth Annual Conference
California Lutheran University is delighted to announce that it will host
the ninth annual conference of Globalization for the Common Good
The Event will be a featured part of California Lutheran University’s
2010 celebration of 50 years as a university
The conference will also be the ninth in the annual international series, under the auspices of Globalization for the Common Good – An Interfaith Perspective
(founded by Dr. Kamran Mofid)
This major global conference is being convened by Dr. Kamran Mofid, Founder, Globalisation for the Common Good and Dr. Jamshid Damooei, Co-director, Center for Leadership and Values, School of Business, California Lutheran University.
Previous conferences have been held in Oxford (2002), St. Petersburg (2003), Dubai (2004), Kericho, Kenya (2005), Honolulu (2006), Istanbul (2007), Melbourne (2008), and Chicago (2009).
For background information on the initiative and details of previous conferences, visit: http://www.globalisationforthecommongood.info/.
California Lutheran University: http://www.callutheran.edu/
Center for Leadership and Values, School of Business, California Lutheran University: http://www.callutheran.edu/CLV/
Globalisation for the Common Good, Chicago 2009: http://www.gcgchicago2009.info
To access the online Journal of Globalization for the Common Good, visit http://www.commongoodjournal.com/.
Call for Presentations
Similar to previous conferences, the 2010 event promises to be especially significant and timely. Today, when global conditions can only be described as “complex and perplexing”, a combined effort and collective thinking is needed to find ways to overcome the challenge brought about by the global socio/economic and political crises.
Today, our world is challenged by a changing climate, financial and banking crisis, sleaze and lack of transparency in private and public life, hunger and pandemic disease, war and terrorism, armaments and unprecedented violence and insecurity, amongst others.
What can make a difference? Good ideas, Creativity, Passion, Innovation, Wisdom, Prudence, Fortitude, Temperance, Justice, and notably knowing and serving the Common Good.
It is our task to ensure that people everywhere know that there are serious alternatives to the world’s present failing policies, rules and institutions, and that there are likeminded global citizens who share a vision of hope and the common good that can lift them out of the deep sense of powerlessness and despair that is now affecting so many parts of the world.
Moreover, while the central focus is on solutions to the global economic and financial crisis, we should keep in mind the deeper questions that rarely find their way into political debate or public discourse, matters that are deeply ethical and spiritual: What is the source of true happiness and well-being? What is the purpose of economic life? What is the good life? What does it mean to be a human being living on a spaceship with finite resources?
The Conference main theme and focus is on our search of the virtuous economy, leading by wisdom, doing well by doing good, creating a world that works for all. Other thematic areas will also be addressed. They include (but are not limited to) the following:
- The meaning and Practice of wisdom, virtues and Service as the basis of a Trustful and affective Leadership.
- Various religions and spiritual philosophies on economy, globalisation, environment, peace and justice.
- Causes and Solutions of the Global Financial Crisis.
- Global Repercussions of the Financial Crisis.
- Fundamental Defects of the Free Market System.
- The Impact of the Financial Crisis on Developing Countries.
- Accounting & Financial Regulations.
- The US Domestic Financial System and the Need for Reform.
- Government and/or Private Sector Response to the Financial Crisis.
- Gender Equity.
- Human Health and Well-being.
- Environmental Stewardship.
- Rural Development.
- Cultural Diversity.
- Interreligious Dialogue.
- Human Security.
- Sustainable Urbanisation.
- Hunger, Poverty, Pandemic Disease.
- The Preservation and Replenishment of the Commons.
- Sustainable Production and Consumption.
- How to Harness Greed and How to Nurture the Common Good.
Instructions for Submission of Papers
We invite proposals from activists, organizers, officials, scholars, post-grad/ doctoral students, and others specializing in a range of disciplines, including, education, theology, philosophy, ethics, history, political science, international relations, conflict analysis and peace research, economics, business studies, law, sociology, media studies and journalism, psychology, health sciences and medicine, environmental studies and geography. Contributions are also invited from persons in government, civil society, diplomacy, law, the media, the health professions and business, as well as those involved in religious and Interreligious dialogue. Proposals that adopt an interdisciplinary, intercultural or Interreligious perspective are especially welcome.
Proposals should be received no later than Sunday, February 21st, 2010. Of course, the earlier your proposal is received, the better your chances for acceptance. We are receiving submissions now.
Proposals should include:
- Title of proposed presentation.
- A 250-word abstract, highlighting the proposal’s relevance to one or other of the key themes outlined above.
- Author’s name and institutional affiliation; as well as an up-to 50 words biographical note on the presenter. Please include your website, if available.
All proposals will be assessed by an inter-disciplinary panel appointed by the joint conveners, and applicants will be informed of the Organizing Committee’s decision in March 2010.
Successful applicants will be given two weeks to confirm their participation.
The Conference Organizing Committee must receive by May 1, 2010 any written papers (approximate length 3,000 to 5,000 words) or other presentation materials for distribution to Conference delegates. The Conference’s working language is English. It is planned to produce one or more international publications drawing on high quality papers selected by the joint conveners’ interdisciplinary panel.
Those selected to make a presentation will be required to pay the registration fee. Please note that travel arrangements and costs are the responsibility of participants or their sponsoring institutions. The Conference Conveners are not able to offer financial support. However, the overall costs will be subsidized, enabling many to attend.
- February 21st, 2010: Presentation proposals due. **Early submissions are very much welcomed.
- March 2010: Notification of accepted presentations. Final confirmation by presenters should be received within two weeks of notification of acceptance.
- May 1, 2010: Written papers to be received.
Please submit proposals, preferably as Word document, and any questions to:
Jamshid Damooei, PhD
Co-Convener, GCG 2010 Conference
Professor of Economics and Chair
Department of Economics, Finance, and Accounting
Co-director, Center for Leadership and Values
California Lutheran University
Ph: +1 805 493-3357
firstname.lastname@example.org and email@example.com
- Written by: Kamran Mofid
- Hits: 87835
Let me explain, as I strongly believe that unless you know the messenger well, first and foremost, then, his message would not make any sense at all.
To do this, the best I can do, is to quote you a passage from a book I wrote in 2005, well before the crash of September 2008 and very relevant to get to know the GCGI better:
“From 1980 onwards, for the next twenty years, I taught economics in universities, enthusiastically demonstrating how economic theories provided answers to problems of all sorts. I got quite carried away by the beauty, the sophisticated elegance, of complicated mathematical models and theories. But gradually I started to have an empty feeling.
‘I began to ask fundamental questions of myself. Why did I never talk to my students about compassion, dignity, comradeship, solidarity, happiness, spirituality – about the meaning of life? We never debated the biggest questions. Who are we? Where have we come from? Where are we going to?
‘I told them to create wealth, but I did not tell them for what reason. I told them about scarcity and competition, but not about abundance and co-operation. I told them about free trade, but not about fair trade; about GNP – Gross National Product – but not about GNH – Gross National Happiness. I told them about profit maximisation and cost minimisation, about the highest returns to the shareholders, but not about social consciousness, accountability to the community, sustainability and respect for creation and the creator. I did not tell them that, without humanity, economics is a house of cards built on shifting sands.
‘These conflicts caused me much frustration and alienation, leading to heartache and despair. I needed to rediscover myself and real-life economics. After a proud twenty-year or so academic career, I became a student all over again. I would study theology, philosophy and ethics, disciplines nobody had taught me when I was a student of economics and I did not teach my own students when I became a teacher of economics.
‘It was at this difficult time that I came to understand that I needed to bring spirituality, compassion, ethics and morality back into economics itself, to make this dismal science once again relevant to and concerned with the common good.’
As an economist with a wide range of experience, I do appreciate the significance of economics, politics, trade, banking, insurance and commerce, and of globalisation. I understand the importance of wealth creation. But wealth must be created for the right reasons.
Value-led wealth creation for the purpose of value-led expenditure and investment is to be encouraged and valued. Blessed are those wealth creators who know “Why” and “How” wealth is produced and, more importantly, when wealth is created “What” it is going to be used for.
Today’s business leaders are in a unique position to influence what happens in society for years to come. With this power comes monumental responsibility. They can choose to ignore this responsibility, and thereby exacerbate problems such as economic inequality, environmental degradation and social depravation, but this will compromise their ability to do business in the long run. The world of good business needs a peaceful and just world in which to operate and prosper: A world that is truly for the common good.
However, in order to arrive at this peaceful and prosperous destination, we need to change the house of neo-classical economics, to make a fit home for the common good. After all, many of the issues that people struggle over, or their governments put forward, have ultimately economics at their core. As I mentioned before, the creation of a stable society in today’s global world is largely ignored in favour of economic considerations of minimising costs and maximising profits, while other equally important values are put aside and ignored.
Economics once again must find its heart, soul and spirit. Moreover, it should also reconnect itself with its original source, rooted in ethics and morality. Today’s huge controversy which surrounds much of the economic activity and the business world is because they do not adequately and appropriately address the needs of the global collective and the powerless, marginalised and excluded. This, surely, in the interest of all, has to change. The need for an explicit acknowledgement of true global values is the essential requirement in making economics work for the common good. Economics, as practiced today cannot claim to be for the common good. In short, a revolution in values is needed, which demands that economics and business must embrace both material and spiritual values.
It is my pleasure and honour to have put into practice these discoveries and values by founding the Globalisation for the Common Good Initiative in 2002.
The Story of the GCGI
Why Love, Trust, Respect and Gratitude Trumps Economics: Together for the Common Good
Kamran Mofid, Founder, Globalisation for the Common Good Initiative (GCGI)
(Written to Commemorate the 10th Anniversary of the GCGI)
Oxford 2002 to Oxford 2012
Portrait of a Great Journey for the Common Good
We live in difficult and troubling times, facing unprecedented global challenges in the areas of climate change and ecology, finance and economics, hunger and infectious disease, international relations and cooperation, peace and justice, terrorism and war, armaments and unprecedented violence. It is precisely in times like these – unstable and confusing though they may be – that people everywhere need to keep their eyes on the better side of human nature, the side of love and compassion, rather than hatred and injustice; the side of the common good, rather than selfishness, individualism and greed.
People need to see that there are serious alternatives to the world’s present failing policies, rules and institutions, and that there are likeminded global citizens who share a vision of hope and common values that can lift them out of the deep sense of powerlessness and despair that is now affecting so many parts of the world.
Guided by the principles of hard work, commitment, volunteerism and service; with a great passion for dialogue of cultures, civilisations, religions, ideas and visions, at an international conference in Oxford in 2002 the Globalisation for the Common Good Initiative (GCGI) and the GCGI Annual International Conference Series were founded.
The Globalisation for the Common Good Initiative Annual Conference series have ranged far across the world through Oxford, Saint Petersburg, Dubai, Nairobi/Kericho, Honolulu, Istanbul, Melbourne, Chicago and Thousand Oaks, California. The 10th Annual Conference, once again, is returning to Oxford in September 2012.
The GCGI conferences have created and continue to create an ever-widening international community of scholars, researchers and experts, forging links and establishing dialogues across national, cultural, religious, and academic boundaries, and putting into practice the movement’s core philosophy: that globalisation need not be defined merely in terms of impersonal market forces, but can be a power for good, building spiritual bonds that can unite humanity and bring different cultures, civilisations, faiths and academic disciplines closer together.
Today the GCGI is considered a leading progressive think tank, producing cutting-edge research and innovative policy ideas for a just, democratic and sustainable world. For the last 10 years, GCGI has helped shape the progressive thinking that is now the political centre ground. Independent and radical, we are committed to combating inequality, empowering citizens, promoting social responsibility, creating a sustainable economy and revitalising democracy. Best known for our influential work on Globalisation for the Common Good, Business Ethics and Corporate Social Responsibility, Value-led Economics and Business Education, Ecology, Environment& Sustainable Development, Interfaith Dialogue and more, we now have significant cooperative projects with a number of universities, think tanks and civil societies in many countries around the world. GCGI’s media programme and its influential online Journal, Journal of Globalisation for the Common Good, hosted at Purdue University, has since its inception in 2005 made significant contribution in furthering progressive goals in education and media policy.
What the GCGI seeks to offer- through its scholarly and research programme, as well as its outreach and dialogue projects- is a vision that positions the quest for economic and social justice, peace and ecological sustainability within the framework of a spiritual consciousness and a practice of open-heartedness, generosity and caring for others, by encouraging us all to know and to serve the common good.
The GCGI is a non-profit making initiative with no formal income, capital, seed money, or endowment. It has no bank account, cheque book, team of fund-raisers and accountants. This self-sustaining funding mechanism has been a key lynch pin of our independence and integrity. At no point in our history has the GCGI been so reliant on external sources that if external funding is removed, the GCGI cannot continue.
The most precious capital that the GCGI has had is the calibre of its friends and supporters, including the universities that have hosted its annual conferences, and more, which with their love, trust and goodwill have committed themselves as partners in shared vision, to support the GCGI in a spirit of moral, spiritual and intellectual collaboration to further its work.
Reflecting on our shared journey for the common good, it is amazing to me that ten years have gone by so quickly. What began as a simple idea to share the practical wisdom of the common good, dialogue, love, generosity, kindness, and more has blossomed into an internationally recognized non-profit organization that has become a leading resource “inspiring people to do great things for the common good”.
From the very beginning, I knew that we will succeed, if we can reach-out to everybody around the world and be an all volunteer network of individuals, while approaching our growth organically and focusing on our vision and mission.
As you might imagine, in the initial days when we began sharing our vision of doing things for the common good, we were met with a great deal of scepticism, apprehension, and thankfully, some warm embraces and love. We were energized by all of those early experiences and continued to find ways to build ideas, programmes and initiatives around our main message and theme of Globalisation for the Common Good.
Perhaps our greatest accomplishment has been our ability to bring Globalisation for the Common Good into the common vocabulary and awareness of a greater population along with initiating the necessary discussion as to its meaning and potential in our personal and collective lives.
In the last ten years and so, similar to all those who have taken a similar value-based-journeys of self-discovery, I, too, have also realized that, “From the great oceans, vast plains and highest mountains that sustain our fragile and vital ecosystem, to our village friends and city dwellers that bring meaning to our common journey, we are quickly realizing that everyone and everything is interconnected and interdependent.
With each passing day, it is also increasingly evident in every corner of our world that great change is upon us and that by standing together in mutual respect, honour and dignity for one another, we will answer this call with creative, viable and sustainable solutions.
We must take the necessary steps now to reach out to our fellow humans and extend our hand in forgiveness, acceptance and genuine friendship. Our choices shall be made from compassion while embracing the richness of our amazing diversity. The love and acceptance we have for ourselves will be the source of our strength to assist others. Together we can and will make a difference through love.
These necessary changes may challenge us to the depths of our courage and test the very essence of our personal character, yet with each ensuing breath we shall remain in love and this love will be the very basis of a new era of peace and abundance, equality and goodwill for all”.
In short, at Globalisation for the Common Good Initiative we are grateful to be contributing to that vision of a better world, given the goals and objectives that we have been championing since 2002. For that we are most grateful to all our friends and supporters that have made this possible.
Therefore, yes, it is true: “Love, Trust, Respect and Gratitude Trumps Economics”.