We welcome Kurt Bayer’s Commentary as a befriended website of GSIS. Economist Kurt Bayer served as expert at our Utopia(s) Reloaded talks in 2023. Find here his interview on “How can climate justice be executed?” (https://vimeo.com/896184065). Kurt maintains a blog in which he addresses topics that concern critical developments in Austria, the EU and internationally and that are controversially discussed by politicians, the public and experts. He adopts heterodox positions and can draw on a wealth of experience that he has accumulated over decades of work. Just glance at his vita:

Kurt Bayer is a self-employed economics consultant, having last worked as a Board Director at the European Bank for Reconstruction and Development (EBRD) in London and on the supervisory board of the Austrian Development Bank. In former incarnations, he was an economics researcher at the Austrian Institute of Economic Research in Vienna, a board director at the World Bank, an economist at the Austrian Ministry of Finance and a public employee dealing with economic policy and International Financial Institutions.

https://kurtbayer.wordpress.com/about/

He says about his commentaries that they represent his “own opinion and do not implicate anybody else”. They are worth reading at a time like ours when a critical view of the social, ecological and technological challenges is urgently needed. Thus, we are happy to be able to refer to his blog.

Let’s take over his comment from 27 January 2025, to start with:

Does Trump Give Us Still Room for a New Economic Paradigm?

During the past few years there were signs that among academic economists and some economic policy makers the recognition had taken hold that our dominant neoclassical economic model was no longer fit for purpose and needed to be changed. Since Thomas Kuhn and Karl Polanyi at the latest we know that paradigm changes take time and much effort. So far, to my knowledge, no complete, consistent alternative model exists, but a number of steps have been made.

Multiple signs of failure have occurred: the financial crisis of 2008 which nearly brought the global economy down, the weak and incomplete „answers“ to the Covid crisis, the energy crisis and the cost-of-living (aka „inflation“) crisis have come on top of the two immanent „systemic“ crises of our way to run the economy, namely the climate/environmental crisis and the socio-political crisis which threatens to destroy social cohesiveness and leads to polarisation of societies and the rise of right-wing demagoguery. While the energy crisis, the wars, and inflation are to some extent „external“, the financial crisis, climate warming and the drift towards right-wing authoritarianism can be shown to be direct results of the existing economic „model“ and its practice.

We have both a deep crisis of content and procedure: profit maximazation as major goal and policymaking by the strongest lobbying groups have brought us to the sorry present state. The economy must once again be directed to people welfare (we need not – as Angela Merkel famously remarked – a „market-conforming democracy“, but the reverse „democracy-based markets“). In addition, policy-making must involve much much more participation by citizen groups, both in its design and implementation. So far, only individual steps towards such a change have been achieved, much more is needed. And: it is not only the development of a new paradigm, but a long-term heavy struggle against those with political influence who profit from the existing model. They will not easily give up their privileges.

Donald Trump’s election to the 47th President of the United States seems to make all these efforts obsolete. His MAGA „philosophy“ wants to do away with all „over-regulation“, popular catchword for all the rules in the „old“ economy which aim to protect consumers, households, public health, the environment, the transformation towards sustainability, in order to promote the interests of US big business. His open threats against imports (see the most recent example of subduing Colombia into accepting deported immigrants), his use of „beautiful“ tariffs as an effective weapon against any country „exploiting“ the USA by sending imports – all these go towards a new paradigm, but contrary to what is needed, towards a modern form of mercantilism, executed by the strongest, a law of the jungle where the stronger eats the weaker.

John Kenneth Galbraith talked about „countervailing power“ as a principle of a functioning market economy, where excesses were checked (to some extent) by institutionalized forces. Trump seems to sweep anything out of the way which reeks of „countervailing“. It was illustrative to see Trump’s (partially incoherent) speech to the Davos Forum a few days agao, and especially the cowed „questions“ by big-time businessmen to him. The so-called panelists only asked leading questions letting Trump expound on his ideas, not a single question was critical: they all bowed to his might – as had been the previously libertarian platform moguls who had contributed hundreds of millions of dollars to his „inauguration fund“ and sunned themselves in the first rows durng this event. The EC President Ursula von der Leyen has already promised (pre-emptively) to buy more gas from the US, other „statesmen“ have fallen over themselves to congratulate the man. No more „woke“, no more regulation, but „render unto Cesar that which is Cesar’s“ – Christ does not exist any longer.

But we should not despair. Despite all this nonsense, all this posturing, all this blatant threats, all this damage that will be done to populations and nature – people will begin to defend themselves. People are not only confronted by Trump himself, but also by their own cowed politicians who seem to be ready to destroy the very basics on which their (Eruopean) values have been built. The struggle ahead must go beyond the restitution of „woke“ regulations, because this would only re-instate the „old“ neo-liberal system. As mentioned in the introduction to this note, it must go towards creating an economic and social system which has the people at its center and maintains/improves our environmental/natural situation. „Never Again“ pertains not only to the horrors of Nazi-Fascism, but also to the socio-economic system. Its pernicious tendencies have already started, we all are called upon to fight against it.

https://kurtbayer.wordpress.com/2025/01/27/does-trump-give-us-still-room-for-a-new-economic-paradigm/