Better Economics

By: Bikal Dhungel

There is an international movement to ban Economics. It was accused to be against the egalitarian principle as the main intention of economics is to serve the rich, which is not true. Economics is a way of thinking. It is a science that has a certain purpose to guide policy making, be it in health, finance, agriculture or international development. Some of the arguments that opponents of economics make are true for example when they say ' If economists knew better, how come we have frequent crisis ? How come they are unable to address inequality or poverty or sustainable development ?'. These are legitimate questions but financial crisis are not quite related to economics itself. It is the policy that is bad. When financial sector is so deregulated, which sometimes goes against the principle of economics, crisis will follow. This was what happened in the US. Similarly, when nation states solely finance their expenses with debt without a robust economical base, sooner or later, crisis will follow, a Greek story. Crisis elsewhere has some origin, it can be in public finance system, wealth concentration, undisciplined financial sector and so on. How to deal with such problems has been the main concentration nowadays.

There is also a wide outcry that the world is not fair because we have more inequality than ever, because the payment system is not ethical as the CEOs get paid over proportionally, student debt issue is serious, poverty is rampant worldwide, trade deals are not necessarily pro labours, lack of healthcare for everybody etc. Again these are genuine claims. Hence, the group of intellectuals have published a report called „ Rewriting the rules of American Economy: An agenda for growth and shared prosperity „. The proposed reforms can be generalised in many other advanced economies. The aim of this article is to summarize these proposals and they are:

• Regulate shadow banking
• Make the financial sector more transparent
  
• Improve competition for credit and debit card providors
  
• Impose stricter rules for corporations and companies that break the rules
  
• Improve governance in central banking
  
• Increase transparency in CEO payment
  
• Bring financial transaction tax for short term trading and incentivize long term investment
  
• Restore balanced intellectual property rights in order to encourage innovation and entrepreneurship
  
• Increase transparency in global trade agreements.
  
• Include environmental and labour protection in trade agreements
  
• Provide healthcare cost controlling mechanisms
  
• Raise top marginal rate of tax
  
• Increase tax on capital and dividend gains
  
• Reform monetary policy and target full employment
  
• More public investment for long term growth
  
• More investment in innovation
  
• Investment in public transportation to promote access to jobs and opportunity
  
• Stricter law enforcement for violators of labour standards
  
• Raise nationwide minimum wage
  
• Reform sick leave
  
• Subsidize child care benefits
  
• Promote pay equities
  
• Protect women's access to reproductive health services
  
• Increase access to higher education by relaxing financial burdens
  
• Introduce a universal healthcare for all
  
• Expand banking services
  
• Expand social security system