MIKE P. MCKEEVER:
About narrowness of traditional economics, the world large problems, Russia and moral concerns

Money and resources are concentrated in too few hands, which leaves too many people desperately poor. This is an intolerable situation. Unless addressed, this situation will lead to more wars and misery.

Today we publish an interview with Mr. Mike P. McKeever, the head of the Institute of Economic Policy Analysis (MIEPA), who looks for truth in economic studies.

— Mr. McKeever, You are a head of the Institute of Economic Policy Analysis (MIEPA). What is the idea of this Institute and of Your activities?

— For many years I have been concerned about traditional economic thought as it is taught in Western Universities and practiced in many Western government policies. This body of ideas has a variety of names: Neo Con, Neo Liberal, Free Market, Chicago School, etc., etc.

The overriding theme of traditional economic thought has been, and continues to be, the idea that only money matters in economics. That is to say, the proper study of economics is the study of monetary transactions. What the effects of those transaction may be on the environment, on families, on justice or on any other value or group is not the proper study of economics. Traditional economics leaves those considerations to politicians or to society as a whole. Therefore, economics is a very narrow discipline.

When economists approach the problem of effects for real people, they usually begin with the idea of market equilibrium or the Adam Smith maxim [misquoted] ’Each party whether buyer or seller acting in his own self interest will secure the greatest good for the greatest number of people.’ Unfortunately, this idea is like a hothouse orchid that can survive only in the restricted space of a closely supervised environment but dies when exposed to the real world of frost and heat.

However, the effects of economic actions have huge consequences on real people. My goal in starting the McKeever Institute of Econonomic Policy Analysis, or MIEPA, [mkeever.com], is to focus attention on the real world effects of economic policies enacted by governments. By policy I mean a government rule or action that has economic effects. For example, a tariff or tax on imported goods is a government policy that has real world effects on real people.

Government policies are shaped by many factors, of course, and economic theory is but one of those factors. Still, frequently there is a common theoretical thread behind many government policies. I am sure you can identify many government policies which are consistent with the Neo Liberal or Chicago School of economic theory in many governments, especially including Western governments. My goal is creating the Institute is to focus on the real world effects of those policies. Then, perhaps, economists can develop theories which create better results.

— One can see that a big portion of interest in Your web-site is dedicated to Moral Economics. How would You explain this word combination and why it is important for the mission of Your Institute?

— The underlying theme of my website is that the best method of deciding which economic policies are good for people is to focus on the policies’ effects on those people. This is in opposition to the traditional approach of creating policies which conform to theory and leaving real world effects to politicians. So, in some regards my website is outside of the mainstream of economic thought.

Of course, examining the real world effects of economic policies raises the immediate question: what are good effects and what are bad effects? That is a very complicated philosophical and moral question. I do not consider myself wise enough to provide definitive answers to that question. But, that is the question that needs to be answered. Consequently I was very impressed when I read POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, published by the World Faiths Development Council in 1999 and written by Roger Riddel with the help of many.

In it, Mr Riddel attempted to establish common grounds among the world’s major religions on what constituted morality in economic development. He concentrated on the real world effects of economic policies. My goal in writing the essay MORAL ECONOMICS was to encourage discussion of policy effects by comparing economic theory to the moral concerns raised by Mr. Riddel’s essay. To restate that: I want there to be a lively debate on whether economic policies are moral or not. I do not presume to be the final authority on that question. My hope is that there will be many, many discussion on that question.

— What can You say about the present situation on our planet?

— From a moral and economic perspective, IMHO the world faces two large problems. First, there is an environmental crisis today. Unless we as a species adjust our actions, we doom our grandchildren to live in unpleasant conditions. Second, there is an income and wealth distribution problem. Money and resources are concentrated in too few hands, which leaves too many people desperately poor. This is an intolerable situation. Unless addressed, this situation will lead to more wars and misery. The poor income and wealth distribution issue is made worse by the Free Market economic theory which creates or exacerbates income differentials when government policies which follow that theory are introduced, also IMHO.

— How do You see the present situation with and the perspectives of Russia?

— As you know I am a United States citizen who lives in California who does not speak or read Russian. I have studied Russian economic affairs for many years, but from an outside perspective only. That said, I have some opinions on Russia. Russia now is taking many steps to overcome the complete breakdown of the Soviet system. Of necessity it is a work in progress. The two major challenges at this time seem to me to be to create many businesses which can compete on world markets and to create a stable and effective legal system which provides property protection and controls corruption, It appears to me that the government is taking steps in both those areas and that bodes well for the future. But, it will take time to reach a good status in these two areas.

Interviewed Marat Kunaev

© Copyright July 2010 by Mike P. McKeever, all rights reserved