Old economics is based on false ‘laws of physics’, but new economics can save us, says Kate Haworth in a recent Guardian article that begins:
“Things are not going well in the world’s richest economies. Most OECD countries are facing their highest levels of income inequality in 30 years, while generating ecological footprints of a size that would require four, five or six planet Earths if every country were to follow suit. These economies have, in essence, become divisive and degenerative by default. Mainstream economic theory long promised that the solution starts with growth – but why does that theory seem so ill-equipped to deal with the social and ecological fallout of its own prescriptions? The answer can be traced back to a severe case of physics envy. In the 1870s, a handful of aspiring economists hoped to make economics a science as reputable as physics. Awed by Newton’s insights on the physical laws of motion – laws that so elegantly describe the trajectory of falling apples and orbiting moons – they sought to create an economic theory that matched his legacy. And so pioneering economists such as William Stanley Jevons and Léon Walras drew their diagrams in clear imitation of Newton’s style and, inspired by the way that gravity pulls a falling object to rest, wrote enthusiastically of the role played by market forces and mechanisms in pulling an economy into equilibrium. Their mechanical metaphor sounds authoritative, but it was ill-chosen from the start – a fact that has been widely acknowledged since the astonishing fragility and contagion of global financial markets was exposed by the 2008 crash. The most pernicious legacy of this fake physics has been to entice generations of economists into a misguided search for economic laws of motion that dictate the path of development. People and money are not as obedient as gravity, so no such laws exist. Yet their false discoveries have been used to justify growth-first policymaking. …”
You can read more of this here.
“… every one of us can have a hand in shaping the economy’s evolution. Not just in how we shop, eat and travel, but in how we volunteer, invest and protest. In how we set up new businesses, save for our pensions, license our inventions, and power our homes. Who knows, we could just turn out to be butterflies that stir up powerful winds of change.”
Given the nature of our economy, all this has to be true, but not everything can be done by individuals (or individual families) on their own. Some of what’s needed requires collective action, working with others, joining in to make that difference.