The Big Ideas of 2008

A Will for Change

Fed up with destructive economic theories, a growing number of economists are forging a new path for our monetary future.

Every few years, the economic textbooks are updated. A few more years of data are added to graphs celebrating economic growth. Stories of "economics in the news" are revamped to make them relevant to new recruits. Theoretical dead ends, paraded five editions ago as the leading edge of the discipline, are quietly dropped. A new cover is slapped on, and students are required to fork out even more money for the new edition, despite the contents being 95 percent recycled.

Old professors retired to new pursuits are replaced by new professors pursuing old ideas. The new recruits were carefully screened for their orthodoxy. They studied at leading departments, where they demonstrated their commitment to markets, economic growth, free trade and learned to respect the consumer as king. They were not exposed to other disciplines and they will never read an article published in the natural sciences. Like their predecessors, they too will lecture while they draw graphs on blackboards, discouraging any questioning. The students who question, probe, explore contradictions and ask the big questions are weeded out. Those who conform are nurtured. And so the profession recreates itself and industrial society, relying on the economic priesthood for its guidance, merrily follows the same path, despite signs of trouble ahead.

But then, circa 2007, the unthinkable began to happen. The disciplinary straightjacket loosened; there were substantive debates in economic department corridors and the received wisdom was put under scrutiny. The conditions were ripe for change.

Economic theory had ossified to a remarkable degree, but the world it purported to explain had been changing dramatically. Leading economists were becoming embarrassed about how economics textbooks, which hearken back to 1948, retain so much deadwood and fail to incorporate even the modest insights accumulated over the last quarter century.

Milton Friedman, to whom we owe the global contagion of market fundamentalism, died in November 2006. He preached that self-interest is to be given free reign, because thanks to the magic of markets, an invisible hand will ensure the result is socially optimal. His simplistic theory will not survive him by much. As Nobel laureate Joseph Stiglitz wrote in a recent book, "today, the intellectual defense of market fundamentalism has largely disappeared... the reason that the invisible hand seems invisible is that it is not there."

In January 2007, another Nobel laureate, George Akerlof, took advantage of his position as president of the American Economics Association to make clear to the profession that existing macroeconomic models were simplistic and misleading because they failed to incorporate human motivations beyond self-interest. It was time for more realistic theory.

The conclusions of the British government's Stern Review on the Economics of Climate Change continued to reverberate throughout 2007. Not only did this report finally make it clear that strong action to reduce carbon emissions made economic sense, it also found that the problem of climate change stretched economics to its limits. The discipline would need rethinking.

Students, too, are beginning to ask probing questions in their economics classes. They want to debate the fundamental assumptions. They want to understand the sorry state of the planet, the linkage between the economy and climate change, between consumption and the fate of the Amazon. They have caught on to how the accepted textbooks fail to address the key issues of our era.

New economics textbooks are appearing on the market. They are no longer just recycled ideas on virgin paper, but new ideas on recycled paper. At universities and colleges where these books are being adopted, professors are reporting how their students are showing interest in economics not seen for decades.

There is a widely shared yearning for a new kind of economics. An economics that isn't surprised by global warming, an economics that isn't sexist, that understands humans in all their complexity, an economics that focuses on the economy as a vehicle to improve human wellbeing rather then humans as cogs to expand the economy ever further.

The stakes are high. Since economic thinking shapes the world, we can't then leave economists alone to putter with their theories. Too many of them hung up their thinking caps the moment they got their degree, and stopped looking out their windows.

They have to be prodded to learn from other disciplines, to acknowledge that economies exist on a fragile planet and recognize that the consumer bonanza is not serving human's wellbeing.

New economic ideas will mean new guidance for humanity on this beleaguered planet. It might be our best chance of making the urgently needed course correction.

_Tom Green is a Vancouver-based ecological economist who is currently working on his Ph.D. He is researching how the undergraduate economics curriculum can be reformed and textbooks rewritten to address sustainability.

22 comments on the article “A Will for Change”

Displaying 1 - 10 of 22

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Lukasz Falkowski

They are no longer just recycled ideas on virgin paper, but new ideas on recycled paper.
Beautiful sentence my friend.

KL

Econ as it has been taught is problematic and dangerous. I have an honors econ degree from a US big ten university. Although there were some progressive/radical profs in the department, all the major courses were, to one degree or another, teaching big capitalism as gospel. Decentralized, cooperative economics is the future.

citizen reader

The Shock Doctrine, by Naomi Klein, says all that needs saying about Milton Friedman's economics. It's a pretty good listen on CDs, too. Public libraries are Superb Economics!

ian hobbs

It is encouraging to see the opening up of dialogue within academic spaces. The whole foundation of captalist thinking needs examination and alignment to the needs of sustainability and a profound redefinition of notions of economic exchange and reward in the context of 'new environmentalism'. For too long power and economics has been in the hands of old economies whose self interest will be seen as an epoch of greed.

William Maynard

For more information on this refreshing trend, visit the postautistic economics movement at webs sites like http://www.autismeeconomie.org/ and http://www.paecon.net/

David H

A very thought provoking article. I am currently in a first year macroeconomics class, and I have to say I am rather taken aback by many of the foundational assumptions of economics. Although I have much more to learn before I can make an informed judgment, I can say that the lack of information in the textbook regarding how economics connects with problems like global warming, is alarming. As this article states, given how much students pay for textbooks, they should be getting information that makes connections and reflects the conditions of the real world.

Mario Pinheiro

Participatory Economics Parecon for short is a type of economy proposed as an alternative to contemporary capitalism. The underlying values are equity, solidarity, diversity, and participatory self management. The main institutions are workers and consumers councils utilizing self managed decision making, balanced job complexes, remuneration according to effort and sacrifice, and participatory planning. Znet
Parecon Life behind Capitalism is a book by Michael Alberts. Worth reading.
Cheers.

worl Quache

After reverse engineering , money/capitalism, utilizing logic as my thought process, I've come to the conclusion that, coupled with the ownership concept, we have caused nothing but our humans own destruction. We are a part of, not apart from, this ecosystem. Utilizing, resources for profit, instead of need is like the heart, selling the lungs to the spleen, so the spleen can use them to make some consumer product/profit. Before there was money, we traded. Who owned the first cow, to trade for a pig, or duck, or diamond? Who owned the part of the planet, once called The New World? Can we share the planet by growing what we need, like food, and building shelter? What happens after we have paved over the entire planet. Dug it up, extracted everything, gold, silver platinum, etc.? I've been told, we will find another planet and start the process all over again. Gas prices. The suns' energy is going to waste, do I really need the grid? This money system is human slavery, streamlined. Money only has power because humans believe it does. It is the reason for poverty. Like in the absence of water, there's little chance of a flood. Animals have no such concept. Hungry lion will eat the slowest runner, no matter how wealthy that slow runner is. I know you nice people for control purposes do not give out sources other that ones approved by the controlling entity, but here goes. If you would like to learn how to end poverty. Go to, www.myspace.com/worlQuache . There you can read the blog. Ending Poverty. Peace, always. worlQuache.

Ted Boyer

Truth rocks,,,I talk to my daughters about valuing other things besides money as often as I can, they roll their eyes but still they ponder the meaning. They're young and open to the truth still. I hope so anyhow.......I turned 50 recently and my generation is completely in control of our society and making alot of the important decisions and rules we all live by. I do wonder what happened to the old ideals and peaceful notions of the past, words of the songs and poems that meant so very much. Narcissism, ego, grandiosity....blah blah blah to blame makes no sense either, seek truth and find joy. Smile eat pie and tell your kids the truth, it's the least we old folks can do...dogma is foolish.

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