Economic Narratives

Joseph Stiglitz (2003) provided a detailed description and interpretation of the economic history of the 1990s in his book on the roaring nineties. As a member of the Clinton Administration serving as a Chairman of the Council of economic advisers, he had first hand access to the information, debates about interpretations and conclusions drawn during the period. In the preface (2003, p.XII) he provides some of the lessons this work has provided him. “Today, the challenge is to get the balance right, between the state and the market, between collective action at the local, national, and global levels, and between government and non-governmental action. As economic circumstances change, the balance has to be redrawn. Government needs to take on new activities, and shed old ones. We have entered into an era of globalization in which the countries and peoples of the world are more closely integrated than ever before. But globalization itself means that we have to change that balance: we need more collective action at the international level, and we cannot escape issues of democracy and social justice in the global arena.”  The surprising approach by Stiglitz, as a winner of the Sveriges Riksbank Prize, to present no data in tables or figures demonstrates the need for telling convincing stories beyond throwing images and shuffled data at your audience. However, this is probably only feasible once you won a quasi-Nobel prize to not lose credibility among economists. Nevertheless, the issue is larger. Stiglitz manages to address the much larger audience of non-economists who construct or constructed their own “collective memory” of the legacy of the nineties as the “global 90s”.
The narrative of the 1990s grossly neglected the value of the biosphere. Asymmetric information (his shared prize winning issue) was and is still used in the market of natural resources to keep polluting the planet and push ahead with careless deforestation. The Exxon case is just one piece in the puzzle of asymmetric information and misinformation. Misguiding economic narratives play a powerful role. Maybe we need to write more about the “roaring failures” of economics and public policies across several decades in the 20th century. (red dots = forests lost on our planet A early 2000s, and there is no planet B)