The reason the city should seriously consider Cary Moon is it has never had a mayor who really understands economics. And already I must make a few things clear before explaining why this is of great importance in our moment and this race.

What do I mean by economics? Unlike most economists, business journalists, and politicians, I distinguish economics from a branch of the subject called neo-classical economics. What's taught at higher education institutions like the University of Washington are the ideas of the neo-classical school, which is characterized by its emphasis on exchanges—what people bring to and take from the market. When exchanges are at the center of the economic picture, what matters is not what is exchanged or where it came from or how it was made, but reaching a state where all that is offered in a market has a buyer, or, to put it another way, reaching equilibrium. This is why in the neoclassical school, which is often confused with economics as a whole, believes there can be no involuntary unemployment. There is always a buyer for work if the market reaches a point of equilibrium—that point may be high (during a boom) or very low (during a bust). This is why, in this view of things, government intervention always makes matters worse; it disturbs or distorts the market. For example, remove the minimum wage law (which is imposed by the government), and the labor market will clear.

Neo-classical economists trans-code these market exchanges into models and mathematical formulas. In this way, market exchanges look scientific and not political. Gone from the formulas is the history of class tensions and struggles. Race also vanishes. All problems are found in and solved by the system of prices. And in this perfect state of things, money is neutral. It only facilitates exchanges. Another assumption of this school (and this should make most people laugh) is that the future is knowable and anyone who participates in the market can rationalize present decisions with calculations that make the past and future identical. This is called "the ergodic axiom." Data from the past is the same as data in a place and time that you actually have no access to: the future.

The reason why this idea became so prominent in academic institutions is because it made production, the limits of the environment and growth, the needs of workers, the greed of bosses, and the politics of housing unimportant. What mattered were efficient markets with rational actors—those who could look at the market's past and see its future. Before the crash of 2008, there were even models in Wall Street—quantitative models programmed by mathematicians—of trans-coded efficient markets and rational expectations that told investment bankers and their clients that the chances of a crash happening were so small, that it would "happen less than once in the entire history of the universe." This is no exaggeration. This is what is often called economics. It rules your life, even if you think it doesn't.

The good news is there are many other ways of thinking about how wealth is generated and distributed in a society, in a city, in a lifetime. And only one candidate in the current mayoral race has a grasp of this fact, knows about and carefully considers the economic ideas that have been banished from almost all prestigious economic institutions. That person is Cary Moon. She knows that economics is not economics, but neo-classical economics, and applies this understanding in her solutions to the housing crisis. It's not only what separates her from other candidates, but market urbanists, who have no idea that they are regurgitating a law, Says law, that's not only old but was dismantled by economists of the Great Depression, but returned in the form of the efficient market hypothesis—a key concept of neo-classical thought.

If the discernment of economics from neo-classical economics seems unimportant to you and your life, then all I ask is that you recall all of the noise made about the recent University of Washington study that concluded high wages in Seattle are hurting the poor. Many reporters and commentators told their viewers and readers that the findings of the report were scientifically sound, that its authors were disinterested and examined the data with the coldest eye possible. But those UW authors were taught and teach nothing but a form of neo-classical macroeconomics that dominates "freshwater schools" (mainly the University of Chicago, the University of Minnesota—academic institutions by the Great Lakes). The other branch of neo-classical macroeconomics is called the "saltwater schools" (Harvard University, Princeton University, and Berkeley—academic institutions by the oceans). What separates the two is how they view markets.

Freshwater schools believe that labor markets can reach a state of perfection—the equilibrium of full employment—if left alone, if the government does not interfere. Saltwater schools believe in market imperfections, such as sticky wages, that require government intervention if full employment is to be achieved. And so it's not surprising that economists who see the law requiring a sharp rise in the minimum wage as having a positive effect on our city are from one of the leading saltwater institutions, Berkeley. The question you have to ask is: Are the assumptions of market perfection as convincing as those of market imperfections? And what kind of person wants to believe in the perfection of markets and the purity of prices? And you have to look at the world you live in and ask: Is the future as knowable as the past? Another question you can ask is: Does class not matter? Really? True, saltwater economists are not heavy into class issues, but they do believe in the existence of workers as workers and not simply prices and costs in a market that can, if permitted (if government goes away), reach equilibrium. (And keep in mind that equilibrium is quantitative, not qualitative; but as everyone knows, in reality, low wages change the quality of life.)

Which study are you going to believe is closer to the truth? One that is completely neo-classical in its orientation or one that is partially neo-classical for the sake of realism? (By the way, saltwater economists are also called neo-Keynesians. Paul Krugman, for example, is this kind of economist, and so is Joseph Stiglitz, a scholar who, by the way, spent much of his academic career developing massive mathematical models that showed standard neo-classicals something that's obvious to anyone who goes into a store, or who buys a used car, or who tries to borrow money: namely, that information is never perfect, that information is always asymmetrical, that in any exchange there's going to be a person—let's say a buyer—who does not know something he/she needs to know, and another person—let's say a seller—who knows something the buyer needs to know and may not disclose this information.)

So, the debate about wages in our city had a much larger background, and if this background is not appreciated, you will not understand reports such as the one coming from UW and the one coming from Berkeley—reports that have policy implications. Policies that can change your life radically, that can determine whether you live in a house or on the street. Moon, as I have said, has knowledge of this background in a way the other candidates just don't. She is familiar with what is called heterodox economics. She knows the work of Ha-Joon Chang, Mariana Mazzucato, and Ann Pettifor, who is an economic adviser for the leader of the resurgent Labor Party in the UK (Jeremy Corbyn). Sadly, business writers only turn to these kinds of economists when the shit hits fan and neo-classical economists have no explanation.

My next post will be on why Bob Hasegawa's municipal bank is doomed to fail—the quick answer is: In his perception of things, the bank will be built on the foundations of economics, but in reality, it is built on shaky and crash-prone neo-classical economics—an economics school which believes money is neutral and so can ignore the dangers of fractional banking.