Paradigm shift: the great machine of capitalism starts to heave
It seems that our current economic approaches are collapsing under the weight of their own premises, a result of their failure to account for the finiteness of resources and the realization that “our human money economy is a sub- set of the Earth’s larger bio-economy rather than the other way around.” Interesting stuff – I wonder if anyone with the power to effect changes is listening.
There’s a tectonic mind shift going on in the science of economics right now, but you would not know it by tuning in to the likes of Martin Wolf, Paul Krugman, Andrew Sorkin, Lawrence Summers, Tim Geithner, Dominique Strauss-Kahn, Ben Bernanke or most of the professors teaching Economics 101 around the world. These old-school practitioners of neoclassicism are stuck in past, versed in only one language: the language of pure, unadulterated money.
As oil reserves dwindle and climate tipping points loom, they babble on endlessly about liquidity, stimulus, derivatives, bond markets, sovereign debt, AAA ratings and investment banker bonuses. They never say a word about melting glaciers, eroding coral reefs, rising sea levels, fizzing oceans or the methane that’s bubbling out of the arctic tundra. Like medieval theologians who argued endlessly about how many angels can dance on the head of a pin, today’s economists argue incessantly about how economic growth can be sustained forever on a finite planet. Ten years from now, as the blowback from the externalities of their way of doing business repeatedly hammers us and global warming kicks in with a vengeance, we’ll look back in shock and awe – and wonder what it was about these logic freaks and their money narratives that mesmerized us.
Five hundred years ago astronomers following Ptolemy’s geocentric model of the universe were tearing their hair out trying to make sense of all their calculations of the sun, moon and stars that appeared to be moving around above us in the night sky. It was only when Copernicus pointed out that we are not the centre of the universe – the sun does not revolve around the Earth but rather the other way around – that all their convoluted calculations began to make sense.
And today something eerily similar is happening in the science of economics: economists and lay people alike are realizing that our monetary economy is a subset of the Earth’s bio-economy rather than the other way around. Over the next few years, as this monumental shift of perspective kicks in, all of the economic, ecological and financial craziness of the industrial era will evaporate, and a new sustainable way of running our planetary household will fall magically into place.
Economics students, especially PhD students, in departments around the world have a crucial role to play in ushering in this new paradigm.
COMER journal, vol 30, no 6, 2018, p2
Kalle Lasn, integral-options, 15 Feb 2011 http://integral-options.blogspot.com/2011/02/ kalle-lasn-paradigm-shift-great-machine.html
Comment from COMER Editor (Élan):
This mind shift is indeed tectonic, reflecting an evolutionary leap in purpose and design. Today’s dominant economic model is purported, by its champions, to be a science like physics, whose immutable laws can be understood and implemented through the language of mathematics. It puts money at the centre of the universe, and dismisses as “externalities” all environmental and social consequences of economic policies. It depends on growth in a finite world, and is deaf to growing concerns about its cost/ benefits record. It fails to appreciate the inter-connectedness and the interdependence of related factors and downplays the political role in determining economic policies. The Oxford dictionary defines economics as “the branch of knowledge concerned with the production, consumption, and transfer of wealth.”
“These old-school practitioners of neo-classicism” would have us believe that the ‘market’ can be relied upon to regulate matters concerning these dimensions of economics. The shift is to a model that realises “that our human money economy is a subset of the earth’s larger bio-economy” and seeks to honour the priority of planetary welfare. That change of perspective prompts us to question many aspects of our current system. The following quotations from Thomas Piketty’s outstanding work, Capital In The Twenty-First Century, are highly pertinent to the subject of this paradigm shift.
“By patiently searching for facts and patterns and calmly analysing the economic, social, and political mechanisms that might explain them, it can inform democratic debate and focus attention on the right questions. It can help to redefine the terms of debate, unmask certain preconceived or fraudulent notions, and subject all positions to constant critical scrutiny” (p. 3).
“Economists of the nineteenth century deserve immense credit for placing the distributional question at the heart of economic analysis and for seeking to study long-term trends” (p. 16).
“It is long since past the time when we should have put the question of inequality back at the centre of economic analysis and begun asking questions first raised in the nineteenth century” (p. 16).
“The distribution of wealth is too important an issue to be left to economists, sociologists, historians, and philosophers. It is of interest to everyone and that is a good thing” (p. 2).
“There will always be a fundamentally subjective and psychological dimension to inequality, which inevitably gives rise to political conflict that no purportedly scientific analysis can alleviate. Democracy will never be supplanted by a republic of experts – and that is a very good thing” (p. 2).
“The history of inequality is shaped by the way economic, social, and political actors view what is just and what is not, as well as by the relative power of those actors and the collective choices that result. It is the joined product of relevant actors combined” (p. 20).
“The discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of
historical research and collaboration with the other social sciences. Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This
obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in…. The truth is that economics should never have sought to divorce itself from the other social sciences and can advance only in conjunction with them” (p. 32).