From Poverty to Power Green, Oxfam 2008 - weman

3 POVERTY AND WEALTH A TWENTY-FIRST CENTURY ECONOMICSorganise, they can use their increased scale and bargaining power toreduce costs, negotiate better prices or wages, and expand their sales.When they are organised, people can also convince authorities toalter the structure and rules governing markets to ensure that they geta fair deal. To marshal the power of markets to meet the grand challengesof this century will require action by both states and citizens,and a new approach to the main tool used to understand markets: economics.Time is short: the global economy needs to move rapidly to a‘smart’ course of pro-poor, sustainable growth, or else climate changeand natural resource constraints will become increasingly disruptive,undermining growth and exacerbating poverty and inequality.ECONOMICSEconomics is a broad but divided discipline, comprising dozens ofschools of thought covering almost every aspect of human existenceand spanning the political and philosophical spectrum. However, thisrich diversity of analysis and insight is seldom visible in the economicdebates at the centres of power.For much of the twentieth century, two such schools, the neoclassicaland the Keynesian, battled for intellectual supremacy and forthe ear of decision-makers. In recent decades, the neoclassical schoolhas been in the ascendant. Within the neoclassical school, there havebeen many thoughtful efforts to engage with the deep nuance andcomplexity of development, but in practice, economic policy makingis often dominated by a much cruder, ‘dumbed-down’ version thatargues for simplistic solutions to complex problems (liberalise, privatise,avoid a fiscal deficit at all costs). While some economists undoubtedlypander to this need for simple messages, others squirm. TheInternational Monetary Fund’s disastrous response to the Asianfinancial crisis of the late 1990s drove an exasperated Joseph Stiglitz(Nobel laureate turned World Bank chief economist) to lament the‘third-rank students from first-rate universities’ who were runningthe Fund. 2The dominance of this version of the neoclassical school rests notsolely on the frequently inquisitorial attitude it takes toward otherapproaches, but also on the simple, compelling, yet deeply flawed109