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New ways forward for the world's economies

Feb 02 2017 05:01
Edward Ingram and Riekie Cloete*

MY ECONOMIST friend Riekie Cloete and I have joined forces to re-write economics. Riekie says that the 'Ingram way of thinking' needs to have a name.

It is a school of thought like many others. It follows very well understood pricing principles which other schools have either overlooked or ignored. The result of ignoring these has been an amazing amount of damage done to families and businesses all over the world.

We are not alone. There are other economists with great ideas too. I will also be writing about those here for Fin24 and they will become a part of the course.

Many of the world's policy-makers are carrying out experiments on their own economies in complete ignorance of what really needs to be done. The rest of us pay the price. Learning lessons in that way could take decades, and has already led to a huge amount of unrest throughout the world.

THE INGRAM SCHOOL

With that in mind, demonstrating the difference between our school of thought and the other schools the policy-makers are following may get their attention.

Here is an illustration which shows some of the main schools of thought. It was sent to me by the Re-thinking Economics Group, origin unknown - they did not reply to my request for that information.

The following script is to be a part of Module 1 of the course which we are preparing on macro-economic design and management which is, if you like, the Ingram School.

The Ingram School's thinking is encapsulated in the following sentences:

'Safer' is simpler, less costly, more competitive, builds confidence, and significantly boosts investment, employment, and economic output.

Another way of saying this is:

Play with market forces at your peril.

Messing with market forces is exactly what is causing almost all of the economic and financial instability and much of the wealth re-distribution away from people to speculators, which we see today. I know - I was paid to speculate for my clients. It was called 'investment management'. I had to understand what was going on; understanding the causes and consequences of the instability was a part of my job.

THE WAY FORWARD

The Universities I am planning to partner with in providing this course online agree with me when I tell them: "We cannot leave the world in the kind of mess it is in today.

"We cannot go on having people and businesses ruined through no fault of their own, just because the financial contracts offered to them, and the unsafe economic environment in which they are forced to exist, are all unstable and unsafe. Those people and businesses are not the experts in coping with the risks involved.

"It is for us at the helm, the experts in finance and economics and in economic reforms, who must be called to arms and fight the good fight on their behalf.

"It starts with a good understanding of the problems and a good educational programme to provide that."

This is the way forward.

-----------------

THE COMING TEXT BOOK

Writing the book may also work. Courses need text books. One is being written for the course in macro-economic design and management. But it will not be the same book which gets published. What I have found from writing text as opposed to having discussions about text is reflected in what Margaret Thatcher once said: "You have to be very careful what you say."

The reason is simple - people out there have huge prejudices. Many have invested a whole career studying and learning to understand their jobs, teaching jobs included. Like everyone else, including myself, when you first hear something which sounds slightly threatening, you don't hear the meaning of what is said.

The first time you hear it, or read it, you hear or see what you fear most. This is what will happen during the course. It will be dealt with in the course. The texts presented to the students will be changed to get rid of all of the ambiguity which inadvertently allows readers to stray off course. Then the text book will be published.

For more about macro-economic design and management, here are some links:

Peer reviews and background

Course website

Main research website

General equations for lending

* Edward Ingram is a leading thinker on the world stage of  macro-economic designand has written a series of essays for Fin24. Views expressed are his own. His course in Macro-economic Design and Management is revolutionary. The first module is free to the public and can be found here. The main research website which predated that can be found here.

* Riekie Cloete is an economic consultant and teacher of economics, whose current projects include work for the Swaziland Economic Policy Analysis and Research Centre and the International Labour Organisation. She writes in her personal capacity and expresses her own independent views.

edward ingram  |  macro-economics
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