Home > Uncategorized > Weekend read – Economics 999

Weekend read – Economics 999

from Edward Fullbrook and current issue of RWER

“The world will not be destroyed by those who do evil, but by those who
watch them without doing anything” – Albert Einstein.

Falsification

Science tells us that humankind is now in a state far more perilous than any it has ever known, perhaps ever imagined, and that its cause is the impact that the economy has come to have on planet Earth. Meanwhile the daily news tells us that around the world there is rapid acceleration – at least as rapid as in the 1930s – of tyranny, racism and anti-democracy linked to the economy’s forty-year upward redistribution of wealth and income. 

We also know that the economy that has come to have these colossal negativities has been engineered, steered, and rationalized by the beliefs, policies, and teachings of an economics variously called “neoclassical”, “mainstream”, “orthodox” and “neoliberal”.  But it was never economics’ intention to lead humanity to the cliff’s edge. Quite the opposite: it was expected to lead humans towards better and better lives forever more. But for some time now science has been telling us that the opposite will soon happen, that the economy is now an existential threat to civilization.  In other words, never has a theoretical system been so thoroughly falsified as neoliberal economics.

How this falsification came about resembles major falsifications that have occurred in astronomy and physics over the centuries.  It was, for example, when Newtonian physics was applied to a much larger scale of physical phenomena that the falsity of its most fundamental principles was discovered. Similarly, it is our observing the effects of the hugely increased scale of the economy and of its corporate and financial entities that has falsified traditional economics. But in economics, conceptual foundations are by tradition tied to an ideology, a system of belief, rather than conceived purely as a means of understanding reality.  Whereas the conceptual foundations of physics were in the 20th century changed radically and more than once, the conceptual foundations of today’s mainstream economics are little changed from those of the 19th century. 

In physics, falsifications are not a problem. To the contrary, they are something for physicists to celebrate because they mean they have come closer to understanding the physical world, and this satisfies the truth-seeking ethos that rules their profession.  But, except on its fringes, the ethos that governs economics is quite different. So different that today many economists are dedicated to covering up the falsification of traditional economics, and many more to covering up the degree of its falsification, for example blanking the non-linearity and irreversibility of ecological change, referring to “climate change” or “global warming” but never to ecological collapse or extinction. And it is this latter group that is the most dangerous to humanity because there is a strong chance that they will succeed in stalling radical recreation of the economy until global tipping points are passed and it is too late to save humanity and its civilization.   

We know that the economy has created these colossal negativities under the guidance of a variety of economics whose underlying theoretical system:

  1. regards the economy’s and the Earth’s life support system as functioning independently of the economy,
  2. conceptualizes cause and effect in the economy as functioning in the universal time of the natural world rather than in historical time,
  3. assumes quantitative change to be linear and reversible,
  4. treats market-value as an absolute quantitative order, rather than a relative one, and thereby fundamentally misunderstands its favorite indicator, GDP,
  5. holds that an economy left to itself tends toward equilibriums and that it distributes with fairness its rewards to humanity,
  6. conceptualizes humanity as consisting of autonomous units analogous to the atoms of classical mechanics, and thereby excludes society, as it does the biosphere, from its basic ontology,
  7. denies the power relations that in today’s economy are the main determinants of market outcomes,
  8. denies that there is an upper limit to economic growth,
  9. leaves unexplained the huge upward redistribution of wealth and income of the last forty years.
  10. hides downward redistribution of wealth and income as an alternative to economic growth.

Never has a set of beliefs about the real world been more comprehensively falsified nor more of a danger to humankind than neoliberal economics. But it remains the dominate intellectual force directing the global economy and continues to control the education/miseducation of the young with regards to the economy. Every year Economics 101 is used to covertly indoctrinate millions of university students into the neoliberal ideology, and thereby further reduce our chance of avoiding civilizational breakdown, population collapse and possible extinction.

This historical situation puts economists who are not post-science in a peculiar position. The foremost problem we face today is not discovering new truths about the economy, but of overcoming the censorship in our classrooms and communications with the public of what we, thanks to the natural sciences and the daily news, already know about the economy. 

How can we overcome this censorship?

 

Censorship is an institutional problem

There has long been no shortage of new paradigms proposed for economics.  In this issue, for example, there are three. However – and this also is in this issue – “In order to become reality, paradigm shifts need to be institutionalized” (Bäuerle, p. 92).

It has been naive of people like me to think that merely bringing into wider professional view the fundamental ineptitude of traditional economics for understanding and guiding today’s world would significantly change the paradigm situation. After a quarter century of effort, except for the occasional paragraph and ad hoc chapter, the basic message and conceptual framework in the Economics 101 textbook is unchanged.[1]  At the present rate of reform it would take another 500 years before students would be taught to see the economy in a way suitable for this century.

But now with time rapidly running out, it is absolutely essential that we find a way of quickly reversing economics’ role in humanity’s greatest ever crisis. To do so it is imperative that post-neoliberal (PNL) economists immediately find a way to come together to create for economics a broad empirical-based paradigm, and deliver it to a large influential audience. 

I see a possible way of doing this. I call it Economics 999.  Although the content of Economics 101 has only changed superficially, the security of its institutional position is greatly reduced from what it was only a few years ago. Its vulnerability has come about through four recent historical developments: the growth of digital technology, the current pandemic, the growing public awareness of the “Climate Emergency” and, most strategic, the now emerging world-wide growth of student activism.

I will first offer a rough outline of Economics 999’s operational structure, and then explain how it could be fully created and delivered world-wide in the space of a few years.

 

Operational structure of 999

Textbook

  • An independently published textbook of a length roughly the same as the standard Economics 101 textbook.
  • Its digital edition will be free and its paperback edition low-priced.
  • It will have a team of 10 to 30 authors (including at least one natural scientist) and several editors.
  • The first edition will appear within a year, followed by new editions each year as post-neoliberal economics develops its paradigm. 

Lectures

  • Open-access online lectures corresponding to the textbook’s chapters and subchapters will be available in English and other languages.
  • In-person lectures will be available at some universities, especially leading ones.

Academic Credit for Economics 999 will gradually become available at universities, especially in the United States.

Public Visibility

  • Students around the world will campaign loudly for their university to offer credit and lecture hall space, not just for Economics 101, but also for Economics 999.
  • Faculty, especially in the natural sciences, will provide public support for Economics 999.
  • Because initially the student campaign’s requests will be rejected, there will be numerous on-campus protests, and with some universities deploying violence against the 999 supporters.
  • These ongoing happenings will bring Economics 999 and post-neoliberal economics lots of attention from both mass and social media, including explanations of the differences between 101 and 999 economics.
  • These ongoing happenings will also lead millions of Economics 101 students to question what they are being taught.

Creating 999

The creation of the Economics 999 movement requires no special funding.[2]  But it does require post-neoliberal economists to work together in a way we are not accustomed to doing.  By tradition we  usually work within small, isolated groups defined by alternative approaches to specific sections and dimensions of traditional economics.  But because these groups and their achievements remain disconnected, usually both conceptually and terminologically, they lack worldly import and pose no threat to economics’ traditional paradigm.  Today’s historical situation, however, both requires and enables us to bring these alternative approaches together under an overarching conceptual framework, in other words, to create a new paradigm for economics generally and immediately begin to institutionalize it. 

The first step in creating the Economics 999 textbook could be to form a digital discussion group consisting of a representative cross-section of post-neoliberal economists who will:

  1. Create a working outline of the book,
  2. Compile a list of possible authors of the chapters, and
  3. Select a small team of editors.

With input from blog comments, this could be done in a month.  It would then be up to the editors to:

  1. refine the book’s outline,
  2. agree on a broad terminological framework,
  3. sketch the book’s introduction, which will summarize the new paradigm,
  4. decide who to invite as authors,
  5. send them invitations that have a submission deadline and that emphasize the importance of writing their chapters in the context of both the new paradigm and our historical time.

After several months of editing and formatting (the WEA could do the latter), the paperback edition could be published on Amazon’s KDP and the digital edition published probably as a PDF.

As publication of the textbook nears, people need to be recruited and filmed for the textbook’s video lecture series.  Finding volunteers should not be difficult, and the textbook’s chapter authors are a natural place to start.

It will then be time to begin to hook up Economics 999 with relevant student activist groups around the world.  (I have a recent graduate compiling a contact list.)  Experience tells me that the best and fasted (but rarely available) way to recruit large numbers of students to idealistic causes is to show how the cause relates directly to their on-campus experience.  Economics 999 would be an organizer’s dream, given that its on-campus promoters will ask that students who complete the course be given academic credit in the same way as are students who complete Economics 101.  They will also be seeking large-screen lecture space for its video lectures, and, as interest develops, space for discussion and in-person lectures.  Because of the radical changes in university teaching methods caused by the pandemic, the Economics 999’s initial online setup will be seen as ordinary.  

Once Economics 999 is launched, it is difficult to predict what exactly will happen, but it is even more difficult to see, given what it means to the young, how the Economics 101 faithful could make it disappear.  Meanwhile, never has intergenerational generosity been so needed.

 

1] There have been Economics 101 textbooks published that go some way toward serious reform, but rarely adopted by higher education institutions.

[2] Because billionaires of all varieties will find Economics 999 threatening, it is likely they will try to subvert it in various ways, especially via donations.  It is extremely important that this is not allowed to happen.

Author contact: edward.fullbrook@btinternet.com  
___________________________
SUGGESTED CITATION: Fullbrook, Edward (2021) “Economics 999.” real-world economics review, issue no. 96, 22 July, pp. 256-260, http://www.paecon.net/PAEReview/issue96/Fullbrook96.pdf

  1. August 1, 2021 at 1:22 am

    The first step is to open up the discussion outside of “economics” and, perhaps outside of academia. Back in the 60’s-80’s there are many who could be critical inputs. After all there were many “non-economists” who contributed to the area of “heterodox” economics and ecological economics, and…. The Santa Fe Institute is an excellent example of interdisciplinary research, theory and practice. At the present time, economics is faced with the problems from the outside. Think Mont Pelerin and the “institutes” that it has spawned.

    It has been said that to change the paradigm one has to change the “frame” (Lakoff and others) The economic Noble prize has been awarded to a non-economist, Kahneman. In creating econ 999 as a replacement for econ 101 and beyond the issue is arguing within the same frame. Raworth’s “Doughnut” is a good attempt to argue within the frame.

    One of the problems is that thinking about economics as a “discipline” is placing it in the context of the larger arena, the “University” which binds the conversation at the start.

    At the present time, education in general and the “Academe in general is changing, at least from K-16. Graduate programs have another set of problems.

    econ 999 needs to step outside of the frame

    • macademicb
      August 1, 2021 at 9:35 am

      Spot- on, tabeles. My ecological analysis of the basic concepts of Economics, a thesis entitled ‘The Ecology of Economics’’, will be published in book-form, by September/October this year. Thank you for your analytical/methodological insight.

  2. August 1, 2021 at 4:37 am

    An eminently worthwhile and pragmatic proposal. I would be happy to be a part of this project. The first serious obstacle will be to create a consensus on contents of Econ 999. I suggest a problem-oriented approach. One chapter on Environment, Poverty, Inequality, Power Concentration, Corporations, Zero or Negative Growth, Consumerism, etc. Chapter should lay out the problem we face, and the tools available to solve the problem.

  3. Ken Zimmerman
    August 1, 2021 at 11:48 am

    Edward, I agree with the overall direction in which you’d like economics theory and assumptions to move. And more importantly economics research and policy development. Unfortunately, I first don’t believe what you suggest is possible and second even if it were I can’t see it having much impact on the problems you say need to be fixed. Economics as a discipline for achieving such ends is, excuse the pun a dead end. As are most of the other social and behavioral sciences. All are emerced in their narrow theoretical and research worlds. With agendas neatly layed out and hierarchies of status and funding firmly in place. Escaping these would simply be too time consuming with no guarantee the results we must have to begin dealing with the problems you lay out. The two disciplines not suffering these limitations, history and anthropology provide a better and likely more effective beginning point. Let’s begin with them while providing a shoulder on which other social scientists can cry. Time is of the essence.

  4. August 1, 2021 at 3:01 pm

    Ken’s insight is a rational analysis: “Economics as a discipline for achieving such ends is, excuse the pun a dead end.”

    It articulates a major fear of Fullbrook:
    “Because billionaires of all varieties will find Economics 999 threatening, it is likely they will try to subvert it in various ways, especially via donations. It is extremely important that this is not allowed to happen.”

    Asad’s suggestion (seemingly in response to the above) is an attempt to recapture what has been lost over a number of years, to the growing number of individuals outside of economics that finally have a voice at the table that has been dominated by neoclassical/neoliberal theory.

    The current and increasing concern around the Environmental Crisis; both the bio/physical and socioeconomic voices are being heard. Fullbrook’s concern about the billionaires is real in that there is even an organization of such who are becoming increasingly committed to stepping outside of the approaches well identified by both Fullbrook and Zaman.

    Econ 999 is not a “course” but a clarion call for Economics education and hence Economics as an academic discipline to admit that its seat at the head of the table has been successfully challenged and in danger of being deposed.

  5. Jorge Buzaglo
    August 1, 2021 at 6:53 pm

    Another possible alternative or “plan B” could be to present already existent and relatively established schools such as e.g. the post-Keynesian, post-Marxian, feminist, structuralist, ecological schools. The editors may try to look into ways of synthesis of these “Frontiers of paradigm change in economics,” and to discuss existent, useful applied methods and techniques compatible with the emerging new paradigm.

  6. August 2, 2021 at 3:35 am

    I think Edward’s idea is an intriguing and worthwhile approach. Many students are looking for something better (that’s how this organisation began). A course like this would provide a focus for efforts to establish alternative, sensible economics and ultimately to displace the neoclassical malignancy.

    First a few comments on comments. Ken if you think economics is a dead end then you are still too channelled by old thinking. I will elaborate what economics can be in a following comment. Likewise wanting to be ‘outside of economics’ (tabeles). Certainly sensible economics would link with many other branches of knowledge – about people, living systems, history, evolution, and so on. It would also link with practical knowledge, if that is what “outside of academia” (tabeles) means. Ken there are many more disciplines than history and anthropology whose knowledge can be drawn on – find the parts of other disciplines that illuminate the workings of an economy.

    There seem to be two “frames” referred to here. Frame 1 is old economics, especially neoclassical: the optimal allocation of scarce resources – a very limited and limiting view of an economy.

    Frame 2 is academia: “narrow theoretical and research worlds, with agendas neatly layed out and hierarchies of status and funding firmly in place” (Ken). Yes, you also need to step outside all that inertia, so Edward’s proposal for a new beginning serves that end. Harness the energy of students – and the many others in the world who know we need a new framework for managing ‘the economy’.

    Asad’s problem-oriented approach could be useful, but not very coherent, therefore more vulnerable to dismissal. It would be better if some framework can be established within which to address problems. Likewise “relatively established schools” – how to bring any coherence? I think there is some coherence, as I’ll explain below.

  7. August 2, 2021 at 4:12 am

    An economy is an integral part of a society. It cannot be disconnected, but it can be identified even if its boundaries are fuzzy. Both are intimately connected with the biosphere as well. So, always remembering the connections, here is a conception of an economy.

    “An economy is the set of activities through which a society provides for its material needs. An economy emerges from the exchanges of goods and services in which the society’s members engage. A society, in turn, emerges from the social interactions of a sufficiently large group of people.
    The purpose of an economy is to provide sufficient goods and services for the society and its members to survive and thrive indefinitely into the future. Thus not only should individuals be able to survive and thrive, but the society should also be able to continue in a form that is acceptable to its members.”

    It is important to identify the purpose, as well as the nature of an economy.

    You can then, from observation, identify ‘the economy’ as a self-organising system. It has two primary internal signalling mechanisms: social interaction and money (bizarrely, *both* are excluded from neoclassical). You may, through observation, recognise that instabilities exist in a modern economy; at this point you move beyond neoclassical. You may conclude that the system is far from equilibrium all the time, and it can then be identified as a *complex* self-organising system. Much is known about such systems, for example that they commonly exhibit meta-stability alternating with transitions into new states. You might look at feedbacks, and how they can promote stability or instability, and thus begin a study of the *dynamics* of an economy (as distinct from the static or quasi-static neoclassical conception). And so on.

    You also need to clearly identify the nature of money. It is an agreement (between the holder of money and her society), a promise to supply something in the future. Keynes recognised that, by linking the (unknowable) future to the present, money becomes a powerful influence on the *dynamics* of an economy, especially as it is one of the fundamental signalling mechanisms within the system. Money introduces uncertainty and risk into the foundation of an economy. Steve Keen’s work is demonstrating the power of approaching the economy through money.

    This is a very general framework. It can accommodate institutional, ecological, evolutionary, post-Keynesian, feminist and other “schools”, though it does exclude neoclassical. I’m not sure how much Austrian and Marxian might be included, I’ll leave that to experts. It also can accommodate the “problems” identified by Asad, but with potentially more powerful insight.

    (The above is a quote and a paraphrasing of the early parts of my book Economy, Society, Nature – see right-hand column here.)

  8. Edward Ross
    August 4, 2021 at 2:36 am

    Letts get started ted

  9. Ikonoclast
    September 17, 2021 at 2:43 am

    I agree with Edward Fullbrooks’s proposal. It makes sense in theoretical, practical and pragmatic terms. First, I would like to try to deal with general objections above which criticize the proposed framework, its feasibility and its chances of success.

    It seems to me that some suggest we must step entirely out of the frame of economics and out of the frame of academia. If this is what is meant then I cannot agree, albeit I have caveats. We can and must step out of the frame of narrow neoliberal economics. This is the whole point of economics 999. We can and must step INTO the frames of political economy and environmental economics, biophysics and/or thermoeconomics. Again, this is the whole point of economics 999.

    Also, we don’t need to step out of the frame of academia but rather to have one foot or footprint in academia and another foot or footprint in broader society (student movements, worker movements, women’s rights movements, minorities rights movements and so on).

    As to chances of success for Economics 999, they may be slim or not slim but to assay no attempt at all absolutely ensures failure and abandons the entire theoretical and institutional field to neoliberalism. If you don’t marshal forces and take the field you cannot win. I refer to intellectual and moral forces here. Of course, this doesn’t always mean you always assemble a conventional force only. You may also assemble unconventional, asymmetric forces. Indeed, both are useful when you are under occupation. Neoliberalism IS an occupation of our society and it oppresses the people.

    Economics 999 looks like a proposed conventional force intellectually, pedagogically and institutionally speaking. This is so even though it is using unconventional (and quite frankly much more empirically supportable) theories and arguments. The assemblage of a conventional force does not preclude the multiple assemblages of smaller irregular forces as well. A conventional force can engage frontally and directly. It can pin the main enemy forces committing all their attention and forces to the main front as it were.

    Other groups (student movements, worker movements, women’s rights movements, minorities rights movements etc.) can be coordinated, with their agreement, to fight in irregular fashion and sometimes to open other fronts, these being direct action fronts. There is no reason not to see the overall struggle in this larger organic or holistic form. Each ought to fight, intellectually, socially, morally, industrially etc. after his own/her own starting position and fashion. There are many strategies and tactics available while maintaining a peaceful struggle.

    Let us not forget, the mind theorizes and proposes actions. Then we must act and continue acting. There is not necessarily one great act. There are many small, accumulative, additive and finally multiplicative acts. This is how masses act. Only then can real change emerge and overthrow an ossified system. There can be no doubt that this system is ossified. That is why it can never change its prescriptions and never flexibly adapt to new facts on the ground and in the air (like climate change, sea level rise, mass extinctions etc.

    Intellectually, neoliberalism is an ossified fortress. Ossification can be strong but it is inflexible and finally brittle. It lacks movement, suppleness and agility. Neoliberalism is committed to the complete denialism of all real empirical facts with respect to economics. That’s not a good place to be caught when the facts on the ground are changing rapidly. Keep telling the truth about the facts on the ground. Await the empirical demonstrations of nature which confirm your case and bring people to your cause, which is their cause. Watch the intelligent and the caring come to your cause. Watch the indoctrinated and the callous double-down on denialism and oppression, holing up in their fortress of denial even while the earthquakes of global phsyical and social change engender a liquefaction of their entire foundations. Eventually they will throw down their intellectual arms and plead to be saved from their own collapse. We won’t be cruel but we might laugh a bit.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.