A hero of one American movie often exclaimed how he was tired of turning out right constantly. I can’t even retell the plot of that movie, but I remember the key-note: the hero predicted some kind of troubles, but he fated never to be believed, while they were coming true with the same regularity.
Unfortunately, the research group of the Institute of Globalization and Social Movements found itself in the same situation. As ill luck would have it, the predictions are coming true. A year ago, while we were warning about oil price downturn to 40$ per barrel, the price toped out by reaching 147$ per barrel, and high-paid experts on the ground of immense information content, processing by highly professional employees, were foretelling with confidence the increase of oil prices up to 200$ per barrel in the nearest future. The prices, however, started to fall and came down just to the level we had predicted.
Leading experts in a real estate market were shooting us down in flames because of our warnings about pending real estate market crisis and arguments for decreasing sales and price-cutting. While we were calling for not being under a delusion about the growth of the Chinese economy and were foretelling a profound crisis with escalating tensions (which impend the dissipation of the Chinese state) owing to ethnic and interregional conflicts, we faced with a rejection of our predictions.
Earlier this year, when the forecasts of the Institute of Globalization and Social Movements came true, mass media which previously disregarded them, all at once started to give quite the same views. But their commentaries changed over again as soon as the situation became stable and oil prices went up. We ineffectively explained that the increase of oil price doesn’t relate to the economic growth (that even didn’t take place), that it has speculative nature: financial market is drawingbillions of government assistance, which once again didn’t reach the production and didn’t promote consumption. But no sooner than oil price went down, our prediction became essential.
Actually, all predictions about pending crisis and its duration were constantly accompanied by ironic comments and even sometimes by imputation of incompetence. I cannot but agree with the latter one: government or corporate giant experts are much more competent than we are. That is why they are wrong ever at all. And exactly this capability to make mistakes constantly insures them social status, respect, high salary and personal credit. They indeed commit mistakes in favor of their employer. It’s clear that the issue is not about a particular personality of the employer, who is probably frankly expecting to receive most reliable prediction and most exact information. But the issue is about shared ideology, that unifies experts and their employers, under which acknowledging and analyzing system antagonisms is prohibited. In other words, it’s impossible to study political economy as a profound basis of economic analysis. It’s quite the same as you were demanded of detailed description of several current physical processes, but on pain of the expulsion from your work status were prohibited studying pure physics and using its laws in your prediction. It’s clear that in some specific cases you would succeed in reliable predicting based on first-hand experience. Till the situation remains permanent and the processes right in front of you are repeating, you can succeed in predicting about what would happen the next time. That is to say, you predict the repeating of the current situation.
If the situation of stability takes place, experts usually predict everlasting stability. The same happens to changes or economic innovations.
All that can last as long as one or another tendency remains valid. According to such approach it’s impossible neither to foretell changes of trends, nor to imagine the situation if it happens. And even the mainstream itself is perceived in the order of things. So, in the early 1970s not only Soviet ideologists, but also the Western mainstream economists accepted the growing role of state regulation, whereas in 1990s the same analysts were absolutely sure that the whole economic history was a history of market liberation from government regulation and moving to the natural state of liberal economy.
To think within the bounds of Western ideological dominants, determined by the system, means to be efficient and competent within the frameworks of this system. But the problem is that the system has its limits. Furthermore, even surviving, it can’t stand still. The changeof technological cycles, exhaustion of resources and market saturation, class straggle and even growing of grassroots weariness of pressing propaganda regularly lead to changes, which are impossible to avoid even using sophisticated ideological know-how.
Therefore sooner or later demand for critical thinking becomes essential. It’s another matter that it keeps a short while – right till another stabilization.
Boris Kagarlitsky, a fellow of the Transnational Institute, is a Director of the Institute of Globalization and Social Movements, Moscow. His latest book is Empire of the Periphery: Russia and the World System (2008)
Source: Eurasian Home, 20 July 2009