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Why Walden Bello’s critique of economics is decades out of dateWhy Walden Bello’s critique of economics is decades out of date
[OPINION] The phantom menace of ‘neoliberalism’
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It brings me no pleasure to write this. Years ago, as an undergraduate at the University of the Philippines, I sat in Professor Walden Bello’s political sociology class. He was a captivating lecturer — provocative, rigorous, and genuinely engaged with the structural inequalities of the world.
The respect only deepens the disappointment of reading his recent piece in Rappler, The existential crisis of mainstream economics. It is a hollow piece of work, one that abandons the rigor I once admired in favor of tired ideological grandstanding.
Bello writes with the breathless urgency of a man exposing a grand conspiracy. The trouble is that the discipline he believes he is unmasking — a monolithic, free-market cult in servitude to corporate overlords — has not existed in top-tier academia for over 30 years. He is shadow-boxing with a ghost.
Bello’s piece is, in form, a review of Angus Deaton’s Economics in America. Here is the first of several ironies. Deaton is not some heterodox outsider lobbing bombs from the barricades; he is a former AEA president and Nobel laureate — every inch a member of the mainstream establishment whose “crisis” Bello is claiming to diagnose. To deploy Deaton as a witness for the prosecution, one must reckon with what his discipline has been doing. Bello, conspicuously, does not.
The most fundamental problem with Bello’s critique is empirical: it describes a profession that does not exist. Modern academic economics has spent three decades undergoing the “credibility revolution,” a wholesale shift away from sweeping theoretical conjecture and toward painstaking causal inference.
The 2021 Nobel in Economics was awarded precisely for this: to David Card, for empirically testing the claim that minimum wage increases destroy jobs, and to Joshua Angrist and Guido Imbens, for developing the statistical toolkit that makes such work possible.
If Bello were to stroll through the economics departments of MIT, Princeton, or Berkeley today, he would find researchers mapping barriers to intergenerational mobility, quantifying the lethal consequences of environmental deregulation, and running field experiments to find which anti-poverty interventions work. He would also find that the rise of monopsony in labor markets and the concentration of corporate power in product markets have become among the most active frontiers in the field.
Those frameworks now supply the legal ammunition for antitrust cases against the largest corporations on earth. The very predations Bello can only theorize about in sweeping terms, mainstream economists are now measuring with precision — and using to hold power to account in court.
Bello’s evidence of the profession’s venality is a list of economists who “deny or downplay the impact of climate change”: Bjorn Lomborg, Thomas Schelling, Robert Fogel, Douglass North, Jagdish Bhagwati, and Vernon Smith. It is a curious list. Schelling, Fogel, and North are dead. Including deceased scholars in a catalogue of contemporary malfeasance is, to put it charitably, an odd methodological choice.
More to the point, four of the six are Nobel laureates — which rather undermines the premise that contrarian positions are the calling card of second-rate hacks in the pay of industry. One may disagree vigorously with Lomborg’s cost–benefit framing of climate policy, as many economists do, but the response to a methodological argument is a methodological counter-argument, not a guilt-by-association smear.
The sociologist’s prescription
Perhaps the most bewildering passage is Bello’s prescription: economics needs to save itself by “learning to think like sociologists.” Modern sociology has experienced a genuine renaissance — but precisely because the credibility revolution spilled over into the broader social sciences. The most impactful sociological work now relies on causal inference and econometric tools pioneered by the economists Bello derides. The disciplines are not at war; they are converging.
The tragic irony is that the kind of sociology Bello practices in this essay: grand, data-light theorizing that leans on buzzwords like “neoliberalism” and “servitude to capital” rather than testable hypotheses—is precisely what modern quantitative sociology has been leaving behind. He is demanding that economics regress to a methodological standard that his own discipline’s leading scholars have already outgrown.
When the empirical argument runs thin, Bello falls back on impugning motives. The dysfunction of the American healthcare system, he argues, proves that economists are mercenaries for Big Pharma. This is factually backwards.
From Kenneth Arrow’s foundational 1963 paper on information asymmetries in medical markets to Jonathan Gruber’s modeling of health insurance mandates, health economists have spent six decades dissecting precisely the market failures and rent-seeking that produce the American system’s pathologies. Blaming them for the lobbying power of pharmaceutical companies is like blaming epidemiologists for the tobacco industry.
He makes a similar error on the minimum wage. Bello presents a tidy story: the evidence is clear, half the profession denies it, and the bankroller is Big Fast Food. But this misreads the literature. Card and Krueger did not settle the minimum wage debate; they reopened it.
The real disagreement is not whether to lie for McDonald’s, it is about how large a wage increase, in which local labor market, produces how much change in employment. That is a live empirical dispute. Calling it corruption requires engaging with the papers. There is no indication Bello has.
The meteor
It is the conclusion of Bello’s essay that most clearly reveals the moral logic of his worldview. Frustrated that the 2008 financial crisis did not usher in the collapse of mainstream economics, he writes that “no less than a much bigger meteor, like the Great Depression of the 1930s, is needed to cut economics from its servitude to capital.”
It is worth pausing on this sentence. The Great Depression destroyed the livelihoods of tens of millions of people, precipitated a global wave of political extremism, and set the conditions for the deadliest war in human history. To invoke it as a desirable corrective to disciplinary groupthink is to treat mass human suffering as an acceptable price for ideological vindication. A self-professed champion of the world’s poor, openly wishing for a mass extinction event to settle a faculty argument, is not a dissident. It is a caricature of one.
There is a further irony. Deaton’s book is precisely not a call for catastrophe. Its argument is that economics erred by fixating on aggregate GDP while neglecting who benefits and by how much—a diagnosis that calls for more rigorous empirical attention to human welfare, not less. Deaton’s critique is surgical; Bello’s appropriation of it is a sledgehammer.
The real problem
None of this is to say that mainstream economics is without sin. The pre-2008 consensus was genuinely complacent about systemic financial risk, and the profession still struggles to model the macro-structural dynamics of global capitalism. The revolving door between elite departments and financial institutions is a legitimate concern. Publication incentives do distort research agendas.
But the key word is informed. The most effective critics of economics have typically been economists: Daron Acemoglu on institutions and growth, Esther Duflo on development, Raj Chetty on inequality and opportunity, Emmanuel Saez and Gabriel Zucman on wealth concentration.
These scholars have done more to expose the machinery of inequality with a single regression table than Bello has managed in thirty years of invoking “neoliberalism” as both diagnosis and incantation. The economists’ critiques bite because they are built from within the methodology, not hurled at it from without.
Walden Bello has done genuinely important work: on structural adjustment, on Philippine political economy, on the human costs of corporate globalization. That work deserves to be taken seriously—which is precisely why his essay disappoints. It mistakes a caricature of the discipline for the discipline itself, deploys a partly deceased evidence base, attributes to the entire profession the sins of a subset, and caps with an aspiration for civilizational catastrophe.
The phantom Bello is hunting died in the 1980s. The actual discipline — driven forward by data, humility, and a relentless desire to identify causal truth — is very much alive, and busy doing the work its loudest critics, unfortunately, are not. – Rappler.com
Alfredo R. Paloyo is Professor of Economics at the University of Wollongong in Australia.
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