Juan Torres: Economics has become the biggest intellectual fraud in history

PASCUAL SERRANO

We live in times when we constantly hear alarmist voices from the left about the rise of the far right, or even fascism. We see leaders fervently defending neoliberal economic policies, from Milei with his chainsaw to Trump with his tariffs. Therefore, finding a book that attempts to analyze this rigorously, without remaining superficial, is a welcome relief. That book is... How to survive Trumpism and the chainsaw economyAnd it has been written by an economist we can trust, Juan Torres, PhD in Economics and Business Administration, who has been a professor and chair of Applied Economics at the universities of Granada, Malaga and Seville for 48 years.

But perhaps what we appreciate most about Torres is his constant pedagogy in his popular works that allow us to understand the economy from the perspective of the left to laypeople.

We wanted him to tell us something about the content of his book in this interview. From the economic policies of Trump and Milei to such forceful statements as that economics has become the biggest intellectual fraud in history.

The first question that arises for me regarding Trump's policies, especially his tariffs, is that they represent an attack on the model of economic globalization. They themselves label progressive sectors as globalists. However, thirty years ago, it was the left that championed anti-globalization, and neoliberalism that advocated it. Do you remember Subcomandante Marcos and the World Social Forums? Why has all that changed?

Neoliberal globalization has ceased to be a suitable and desirable scenario for thousands of companies because it was conceived as a mere profit-maximization strategy. Consequently, thousands of companies did not invest enough in security or prevention, and the system's persistent instability has made them overly vulnerable. Furthermore, cheap labor is no longer sufficient to compete effectively. Factors such as energy and proximity to markets have become paramount. This has led to a genuine process of deglobalization and relocation. Add to this the fact that the decline of industry in the United States (in favor of finance) ultimately generates problems and conflict among elites, which also fuels this process.

You say that the chainsaw economy is the strategy of the global far right. But I think that the chainsaw, as a policy of cutting the state and its services, has long been part of the right wing; it didn't take any Milei or Trump to come along.

Indeed, the austerity policies that economists call deflationary have been a constant underpinning of neoliberal policies. I believe the far right is necessary in this era to implement them for two complementary reasons: these policies must be implemented more aggressively, and the legitimizing processes that sustained early neoliberalism are no longer effective. Dispossession is undeniable, and a populist, neo-fascist policy is required.

There's a scene that blows many of our minds. It's Milei naming ministries like Health or Education and removing them from a board to everyone's applause. The question is inevitable: what had happened to make so many Argentinians applaud when their president tells them he's going to eliminate the Ministry of Health? I mean, something must have gone wrong with previous progressive governments if citizens had concluded that the Ministry of Health wasn't necessary.

People are desperate, they lack consistent role models, they know they've been robbed but it hasn't been properly explained to them because the left has abandoned class discourse to focus on cultural narratives that don't truly address the causes of dispossession. In many cases, they even obscure them. When a radical discourse confronts them, even if fraudulently as the far right does, and speaks directly about those who steal from people, desperate people believe it. The far right talks about the problems that truly affect people's lives. The left has been preoccupied with other matters.

Environmental policies are also becoming a battleground. It's true that the far-right's denialism is a great danger, but they may also be taking advantage of the fact that the left's environmental policies are being placed on the shoulders of working-class people. Even much of the state aid meant for the planet is now going to the wealthy. For example, those who can afford an electric car for €40.000 are receiving €10,000 in subsidies, while those stuck with an old diesel car are paying more taxes because of their pollution. Don't these situations create fertile ground for Trump's far right?

That's what I was just referring to. When someone can't afford to heat their home, they're not going to be very receptive to environmentalist rhetoric, and they might even readily believe someone who tells them it's the fault of environmentalists. When your children can't afford housing or don't have jobs, and someone tells you it's because of immigrants, it won't be hard for many people to believe it. What I think creates this breeding ground isn't environmental demands themselves, but rather separating them from social issues, failing to present them in an educational way, and assuming that people make decisions and define their positions based on intellectual arguments.

I would like you to elaborate on some of your points in a few lines, although the real analysis is in the book. Why doesn't conventional economic theory provide solutions to societies' economic problems?

Basically, because it's based on flawed assumptions, uses incorrect models, and has biases designed to favor income distribution in favor of capital and the wealthiest. It provides solutions that enable this, but the enormous concentration of income is precisely one of the primary causes of the problems of our time.

And why do you say that economics has become the biggest intellectual fraud in history?

Because all that I just pointed out continues to be done by upholding hypotheses, theories, and formulations of economic policy whose falsity has been empirically and materially demonstrated for decades.

If those two statements, which I have cited in the previous questions, are true, then in reality, the arrival of Milei, his chainsaw or Trump does not represent any relevant change; we were already being scammed.

Milei's anarcho-capitalist discourse (somewhat different from Trump's) is a civil religion. It is the intellectual fraud of conventional economics taken to its extreme. It is a set of ideas that have never been corroborated (or, rather, whose falsity is evident) that are put into practice in ways contrary to what is preached (such as, for example, when the State is used with extraordinary intensity) and accompanied by the totalitarianism inherent in all religions, a brutal contempt for those who dissent, and a formal rudeness that is appalling.

Another paradox I see is that, on the one hand, the dominant structures try to make us believe there is no alternative to the prevailing economic model, but on the other hand, the far right is gaining ground because it presents itself as the alternative, the uprising, the rebellion. How do we interpret that? Why has the left lost the banner of rebellion, and why has the far right seized it?

The left has lost its ability to persuade, while the right has retained it. I think it was Anthony Giddens said that the right became revolutionary and the left conservative. I analyzed that phenomenon in my previous book. So that there can be a futureIt has been a complex process: it lost its vision for the future, fragmented ideologically and politically, and failed to build a social subject; it renounced generating counterpower, becoming focused on the present and dedicated to defending minority causes… Its rebellion, if anything, was tribal, incapable of mobilizing majorities because it renounced generating common sense

You've spoken and written extensively about how the Western economy has shifted towards financialization rather than a productive economy. Just look at how the United States or Europe calculates their GDP compared to how China or Russia calculates it. Can you explain these differences and why using this metric to compare these economies is misleading?

What has happened in capitalism is that finance has become hypertrophied because it has been easier to profit from speculation than from creating goods and services. In economies like Russia's or China's, while the former hasn't disappeared, productive activity has been preserved to a much greater extent. Since GDP includes everything with monetary value, you're counting the value of a factory that produces chips, vehicles, or solar panels the same as the value of legal services, insurance, or financial intermediation, which, in reality, don't produce anything. That's why it's sometimes surprising that an economy like Russia's, with a comparatively small GDP, can have such great strength.