Natural Economics 18- Ideology and Economics
Why We Have Never Had An Objective Economics.
Economics and Ideology : How Objectivity Was Lost
Economics has always been deeply interwoven with ideology. From Adam Smith’s classical liberalism in the eighteenth century to the neoliberal reforms of the twentieth century, economics has functioned as both a guide to policy-making and as a reflection of ideological beliefs. Over time, prominent economists—among them John Kenneth Galbraith, Joseph Stiglitz, Thomas Piketty, and Ha-Joon Chang—have underscored the inescapable role of ideology in shaping economic systems. Natural Economics raises the possibility of a new chapter in objective economic design.
Economics as Ideological Terrain
Economics often projects an image of itself as a value-free science, driven by data and equations rather than sentiment or politics. In reality, even the choice of which data to collect or which mathematical model to use reflects certain assumptions about how the world works or ought to work. From the onset of the discipline, key thinkers such as Adam Smith, David Ricardo, and Karl Marx posited theories rooted in broader worldviews. Smith’s famous “invisible hand” metaphor championed self-interest in the market as a key mechanism of social welfare, while Marx’s dialectical materialism offered a critique of capitalist structures that he believed would inevitably evolve into socialism. Thus, the very foundations of economics were laid upon competing moral and political visions of the future.
The transformative periods in modern history—such as the Great Depression of the 1930s and the stagflation of the 1970s—have been similarly influenced by ideological debates. John Maynard Keynes’s ideas about government intervention to counter cyclical unemployment gained traction in response to the Depression, while Milton Friedman’s monetarist approach rose to prominence amid the inflationary crises of the 1970s. In each case, ideological leanings shaped how economists and policymakers interpreted data and then championed policies.
John Kenneth Galbraith: A Skeptic of Economic Orthodoxy
One of the most recognizable American economists of the twentieth century, John Kenneth Galbraith challenged the orthodoxy of free-market economics in several influential works. In “Money: Whence It Came, Where It Went”, Galbraith observed that “The process by which banks create money is so simple that the mind is repelled” (Galbraith, 1975, p. 29). Behind his somewhat wry tone lay a serious critique: the institutional and political arrangements that govern money and credit are founded on deeply held yet often unspoken beliefs about the role of private finance and the need (or lack thereof) for robust public oversight.
Galbraith also stressed the power of large corporations and the dangers of unrestrained private enterprise when left to its own devices. In “The New Industrial State” (1967), he argued that giant corporate entities, in collusion with government, set the parameters of economic activities, thereby shaping prices, consumption patterns, and social priorities. Contrary to the myth of a self-correcting market, Galbraith argued that powerful organizations strategically wielded influence to secure favorable outcomes. This insight underscores how ideology—not merely supply and demand—can dominate the landscape, shaping economic development according to the interests of the powerful rather than the public at large.
Joseph Stiglitz: Markets, Government, and Ideological Battles
Another towering figure in contemporary economics is Joseph Stiglitz, a Nobel laureate who has consistently critiqued the inefficiencies of unregulated markets. In “Globalization and Its Discontents” (2002), Stiglitz explored how institutions like the International Monetary Fund, driven by a market-fundamentalist ideology, often imposed austerity measures and privatization programs that exacerbated inequality rather than spurring growth. According to Stiglitz:
The arguments used by market fundamentalists have been largely discredited, but they live on in part because of the enormous lobbying power of those who benefit from these arguments.”
Stiglitz, 2002,
From his perspective, the very nature of public policy decisions—from taxation to social welfare—hinges upon ideological commitments to either limit or expand the role of government. In “The Price of Inequality” (2012), Stiglitz went further by critiquing the phenomenon of “rent-seeking,” in which private actors capture government policies for their benefit. By demonstrating how market distortions lead to real human costs—such as unemployment and social alienation—Stiglitz argues that economics is not merely a technical field but also a moral one, inevitably shaped by ideological beliefs about fairness and justice.
Thomas Piketty: Inequality as an Ideological Dilemma
Perhaps the most talked-about economist of the early twenty-first century, Thomas Piketty rose to international prominence with his work “Capital in the Twenty-First Century” (2014). In a sweeping historical and empirical study of wealth distribution, Piketty demonstrates that:
When the rate of return on capital significantly exceeds the rate of growth of output and income, capitalism automatically generates arbitrary and unsustainable inequalities that undermine the meritocratic values on which democratic societies are based.
(Piketty, 2014)
Piketty’s thesis—that wealth grows faster for those who already have it than for those living off wages—poses a fundamental challenge to ideologies that celebrate free markets as engines of meritocracy and opportunity. By offering a data-rich narrative of how inequality has evolved since the eighteenth century, Piketty illustrates how the rules of the game—from tax policies to inheritance laws—embody ideological commitments that either mitigate or exacerbate economic disparities. His work underscores that inequality is not a side-effect of an otherwise neutral system; rather, it is a product of specific legal, political, and societal choices that reflect deeper beliefs about wealth, property, and fairness.
Ha-Joon Chang: The Illusions of Free Trade and the Real Lessons of History
While Stiglitz and Piketty focus heavily on issues of inequality and government intervention, Ha-Joon Chang offers another angle: the historical context of economic development. In “Kicking Away the Ladder” (2002), Chang provides a compelling critique of the modern push for free trade by explaining that:
History shows that rich countries did not develop on the basis of free trade; rather, they used tariffs, subsidies, and other forms of state intervention to protect and nurture their economies.
( Chang, 2002 )
Chang argues that wealthy nations—particularly in Western Europe and North America—embraced protectionist policies during their formative industrial years, only to later prescribe market liberalization for developing countries. Such prescriptions often come couched in ideological language extolling the benefits of free markets. Yet, according to Chang, they conveniently “kick away the ladder” for poorer nations seeking to emulate the very pathways that made today’s rich countries prosperous.
In works such as “Bad Samaritans” (2008), Chang criticizes the ideological biases within institutions like the World Bank and the International Monetary Fund, suggesting that such biases ignore the historical reality of economic growth. By emphasizing the gap between what rich countries did in their early development and what they now preach, Chang reveals how ideology and power can conspire to lock poorer nations into suboptimal growth trajectories.
Ideology as a Driver of Policy—and Its Consequences
Taking these diverse perspectives together, one finds a recurring theme: ideology is a key determinant of economic policy and performance. Whether it is Galbraith’s critique of corporate power, Stiglitz’s dissection of market fundamentalism, Piketty’s focus on growing inequality, or Chang’s analysis of historical hypocrisy, all highlight the ways in which ideology shapes economic outcomes.
Policy Formulation: Governments do not merely respond to economic data; they interpret this data through an ideological lens. A liberal government might respond to unemployment by increasing public spending, whereas a neoliberal government might champion tax cuts for corporations, assuming job creation will follow.
Institutional Dynamics: Central banks, regulatory agencies, and trade organizations are ostensibly “technical” bodies, yet they often behave according to ideological predispositions—favoring tight money to curb inflation or strict austerity to reduce deficits, for example.
Distributional Effects: The question “Who benefits?” from a particular policy is not just technical but also ideological. Tax policies, welfare programs, and labor protections reflect social beliefs about justice, fairness, and the role of the state.
Public Acceptance: In democracies, voters also absorb ideological messages, influencing electoral outcomes and thereby reinforcing or overturning existing policy frameworks.
In essence, ideology in economics can be likened to the lens of a camera. The same economic scene—recession, growth, or inequality—can look vastly different depending on the ideological focus. Over time, economies evolve not merely in response to neutral forces but through conscious (and often contested) decisions about how societies should function.
I think this has to end.
How Does Natural Economics Avoid Ideology?
Our Natural Economics system is an alternative to ideologically based economic systems
Technical Foundations
Natural Economics proposes a decentralized, energy backed, wealth creating economy. However, unlike most blockchain systems that have emerged from libertarian or anarcho-capitalist ideologies—Bitcoin being the prime example—the Natural Economics Qota/Qoin system maintains a value anchor that is not subject to speculation. Each Qoin unit is “minted” or “allocated” based on wealth generation.
Natural Economics Immunity to Ideology
Because the issuance and distribution of Qoin are determined by transparent, consensus-based protocols, the currency is free from political manipulation. Central banks and governments cannot alter the monetary supply to serve political ends, nor can private banks expand credit in ways that unfairly redistribute wealth. Qota/Qoin’s governance model is designed to be immune to ideological influences via:
Algorithmic Transparency: The core rules are embedded in publicly auditable code. This transparency removes behind-the-scenes political lobbying or corporate influence.
Collective Decision-Making: Qota/Qoin employs a form of direct democratic input, in which community stakeholders vote on adjustments to the system’s parameters.
A Critical Examination of Natural Economics
Yet one should be cautious before concluding that any monetary system, can completely transcend ideology. As Galbraith, Stiglitz, Piketty, and Chang might point out, the design of any system—however technical—reflects certain assumptions about human behavior, fairness, and the public interest. Questions arise:
Who sets the initial distribution of Qoin? Even if the algorithm is transparent, the baseline conditions must not favor certain participants over others, there can be no ideological choices of any form
How are dissenting voices addressed? If the system relies on majority voting, minority perspectives might be marginalized, potentially reproducing ideological battles within the code-based governance process.
I am very aware that the history of economic thought reminds us that the pursuit of ideologically “neutral” solutions has a long tradition—commonly associated with technocracy—but invariably yields policies that reflect a particular worldview about how decisions should be made and who should make them.
Natural Economics must ensure it is an objective as possible, avoiding all subjectivity.
A Parallel with Central Bank Independence
We must also keep aware that the claim that Natural Economics is immune to ideological pressure has an, in my view, an unfortunate resonace with the argument for central bank independence that gained momentum in the late twentieth century. Advocates of independent central banks believed that removing monetary policy from political cycles would ensure rational, non-inflationary decisions. This did limit some short-term political manipulations, but critics pointed out it also entrenched a specific macroeconomic stance—namely, prioritizing price stability over full employment. Stiglitz (2002) cautioned that, while independence might reduce political meddling, it also insulates key decision-makers from democratic accountability, reflecting an ideological assumption about which macroeconomic goals matter most. We need to ensure that all assumptions made about Natural Economics is challenged and thoroughly debated to ensure objectivity. This is particularly challenging to achieve because we can be blind to our own prejudices in our perspective on the world.
The Importance of Transparency and Debate
Regardless of whether one finds the Natural Economics model persuasive, its very proposal underscores an important lesson: no economic system operates in a vacuum, free from ideological considerations. If Natural Economics aims to succeed where traditional currencies or cryptocurrencies have faltered, it must grapple with the ongoing debates about inequality, corporate influence, and government intervention that have shaped modern economic history. Transparency in its algorithms, clarity about how decisions are made, and open channels for community feedback can mitigate the risks of “hidden” ideological biases.
In that sense, Natural Economics challenge may not be purely technical—building a stable, secure currency—but rather sociopolitical: can it maintain legitimacy and adaptability without succumbing to the very ideological tug-of-war that has shaped centuries of monetary policy? Striking a balance between neutrality and responsiveness could be the key to its broader acceptance or rejection.
Lessons from History, Caution for the Future
Lessons from Galbraith, Stiglitz, Piketty, and Chang teach us that no current economic system is entirely ideology-free:
Galbraith’s critique of corporate power suggests that any system with high barriers to entry or large, entrenched stakeholders risks reproducing power imbalances.
Stiglitz reminds us that markets without oversight and accountability can become vehicles for rent-seeking, despite the best intentions of designers.
Piketty underscores the importance of distribution: even the most technically efficient system can spawn enormous inequality if the ownership and allocation rules favor established wealth.
Chang calls attention to history, reminding us that the success of today’s economic powers came largely through selective protectionism and government intervention, casting doubt on claims that “pure” free markets—or purely algorithmic systems—offer a silver bullet for development.
I believe that Natural Economics has accounted for these lessons, but the real test is whether it can resist inevitable power struggles and remain adaptable to unforeseen circumstances without losing its foundational principles.
Conclusion
Economic history is marked by an ongoing clash of ideologies—liberal versus interventionist, nationalist versus globalist, market-centric versus government-centric, and countless variations in between. Far from a purely technical field, economics reflects competing visions of how society should be organized and who should benefit from its outputs. Galbraith, Stiglitz, Piketty, and Chang each highlight, in their own way, that economic policy is always embedded in a social and political matrix. Their works underscore how ideology—manifested in institutions, policy frameworks, and cultural assumptions—shapes the direction of economic development over time.
Against this backdrop, Natural Economics represents an attempt to achieve an economy that is inherently resistant to ideological manipulation. While its approach mitigates political interference, the system still needs to confront deeper questions about fairness, distribution, and accountability. As history teaches us, unless we are very careful even the most novel economic frameworks may not fully escape ideology.
Next week we will look into the legal hurdles that must be navigated to ensure the smooth transition to the Natural Economic’s system.Trust me, it is way more exciting than that sounds….
References
- Chang, H.-J. (2002). ‘Kicking Away the Ladder: Development Strategy in Historical Perspective.’' Anthem Press.
- Chang, H.-J. (2008). ‘Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism”. Bloomsbury Press.
- Galbraith, J. K. (1967). “The New Industrial State”. Houghton Mifflin.
- Galbraith, J. K. (1975). “Money: Whence It Came, Where It Went”. Houghton Mifflin.
- Piketty, T. (2014). “Capital in the Twenty-First Century”. Belknap Press of Harvard University Press.
- Stiglitz, J. E. (2002). “Globalization and Its Discontents”. W. W. Norton & Company.
- Stiglitz, J. E. (2012). “The Price of Inequality”. W. W. Norton & Company.