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The problem that academic, orthodox economics faces in the aftermath of the global economic crisis is how to overcome being brought face to face with a realization, a moment of essentialist cognitive dissonance. This moment was the revelation that (following Baudrillard) orthodox economics is: “A hyperreal henceforth sheltered from the imaginary, and from any distinction between the real and the imaginary, leaving room only for the orbital recurrence of models and the simulated generation of difference.” Contemporary orthodox economics, based on the classical economics of the 19th century, has always been desperate to fulfil its ‘science envy’ whilst continually being denied that hallowed status by the messiness, complexity and uncontrollability of the situations for which it seeks to find logic and structure. Classical economic theorization was based on the post-hoc-ergo-propter-hoc premise that because there was capitalism, therefore it must be functional and neo-classical economics re-assumed that mantle in the post-war period. In other words, just as classical economics developed (in the same way as geography) as an explanans for imperial and colonial reality, so neo-classical economics developed increasingly as an explanans for the massive growth and overwhelming dominance of northern market-based economies, post-WWII. In this way classical/neo-classical economic orthodoxies follow the order of simulacrum image phases outlined by Baudrillard. Firstly, economic theory began to develop around nascent capitalisms in the 18th century as a heavily subjective ‘reflection of a basic reality’ - the ideas of Colbert, Ricardo, Hume, Colbert, Malthus, Smith (and critics of capitalism such as Marx and Engels) etc. were ineluctably set within the theistic, occido-centric and socially Darwinian intellectual precepts of the socio-economic processes and problems of their time. In this socio-cultural location, the origins of economic theorization inevitably ‘masks and perverts a basic reality’ and combines with a Judaeo-Christian supremacist world-view under the guise of a nomothetic, objective rationality. But 20th and 21st century capitalisms, ‘lived-reality capitalisms’, have shown themselves increasingly to be chaotic dynamic systems with a growing propensity for instability and volatility and an inevitable tendency towards monopolization and crisis. Furthermore (in perhaps one of the greatest ironies) capitalisms have been shown to be increasingly unsustainable without central stabilizers-of-last resort, initially nation-states and central banks, then trading bloc authorities and more recently supranational institutions and globally-coordinated bail-outs, as the crises have increased in intensity and frequency. In this reading, a la Foucault, ‘free markets’ cannot be ‘free’ without the structures of the state/regulator to limit and control them… Orthodox economics, even with the brief interlude constituted by Keynesianism (which is a different view of system processes and mechanics, without challenging the functional integrity of the system itself) can be viewed as a dialectical take on human society designed to reinforce a Foucauldesque, capitalistic regime-of-truth. Looked at this way orthodox economics developed in the post-war period to initiate phase 3 of the simulacrum development, that of masking the chaotic dynamics of capitalisms, ‘the absence of a basic reality’. This phase produced, for example, so-called development economics, in which the simplistic dualist models of Lewis, Todaro etc were produced out of a hat, not so much with the aim of producing a realistic pathway by which the poor south might become the rich north but (as Rostow at least admitted with his Take-off model) as a theoretical gloss over basic global social and economic inequality which at once held out promise for the future and tried to prevent the spread of communism. Phase 4 of this particular simulacrum began with the development of complex derivative instruments from the early 1970s and the rapid development of power within financial services actants thereafter, which received a massive boost with the collapse of the socialist bloc in 1989. If the development of complex derivatives provided an important weapon, the collapse of the socialist bloc gave what I refer to elsewhere as ultracapital a degree of political freedom which rapidly eroded regulatory boundaries and enabled the rapid incorporation of state/authority actants within ultracapital. What is occasionally referred to with disapproval as ‘revolving-door government’ is now the norm and ultracapital achieved a strategic victory by internalizing and making a virtue out of conflict-of-interest. Thus having become simultaneously the state and that-which-is-regulated-by-the-state, ultracapital now ‘bears no relation to any reality whatever: it is its own pure simulacrum.’ The list of putative scapegoats for the current economic crisis is unending and selective according to ideology; Fannie Mae, Freddie Mac, NINJA loans, Alan Greenspan, Larry Summers and Robert Rubin, the Fed, profligate lenders, profligate borrowers, AIG, Bank of America, Lehman brothers, CDOs, John Paulson, Goldman Sachs and, last but not least, the discipline of economics. Economics is a fair inclusion in some respects because, as Steve Keen said in The Naked Emperor of the Social Sciences: “Virtually every aspect of conventional economic theory is intellectually unsound; virtually every economic policy recommendation is just as likely to do harm as it is to lead to the general good. Far from holding the intellectual high ground, economics rests on foundations of quicksand. If economics were truly a science, then the dominant school of thought in economics would long ago have disappeared from view (Keen, 2001, p. 4).” Looked at from another point-of-view, however, this is a bit unfair. Including economics in that list is to blame it for something that it was not designed to do – be a functional, descriptive and predictive discipline capable of producing practical and socially progressive policy. Economics should be seen for what it is, which is the high priest of a regime of truth, a Janus simulacrum, a two-faced gatekeeper seeking both to describe its own unreal simulacrum and, having described it, seeking to construct a logical framework from which such a hyperreal could have arisen. -- Dr Jon Cloke Lecturer Geography Department Loughborough University Loughborough LE11 3TU E-mail: [log in to unmask] Tel: 00 44 07984 813681