Speakers at a conference I attended last week at the Lisbon School of Economics and Management talked repeatedly about the need for new economic theories. Economics is the queen of the social sciences, they said proudly, but she is badly in need of a rethink. Inequalities are growing, poverty remains widespread and, according to distinguished Brazilian professor Joanilio Teixeira, environmental sustainability is simply a ‘blind spot’ in economic thinking.
Unfortunately, Professor Teixeira is wrong.
Environmental sustainability is not a blind spot. It is a gaping hole at the heart of economics. It is as if physicists ignored the fact that the earth goes round the sun. If sustainability is not at the centre of economic thinking, the subject is not fit for purpose.
For centuries, much of the world was dominated by religion. God and The Church had all the answers. Today, it is economists who tell us what it best and right. They tell us that science and research should provide a financial payback. They say that education should lead to a job. They are the ones who explain that the market should be lightly regulated, and that government influence should be minimised. It is the economists who have persuaded us that economic growth is something to worship.
For many decades before the European Enlightenment it had become clear that religion did not have all the answers. And it is the same with economics today. Rather than providing humanity with meaning, purpose and direction, our economic system is failing the majority, ravaging the planet and widening divisions. Just as before, the discipline’s high-priests are completely out of touch. Their world is dominated by obscure mathematical justifications for policies that have little relation to people or the planet. Environmental destruction is ignored. Scarce resources are endless. Nature is an externality.
The era of modern economics is thankfully waning and it is time for us all to look ahead, to discover something better.
Just as the end of the religious era led to a flowering of new ideas, so can the end of this one. In the last Enlightenment, biology, science, physics and many new forms of philosophy and art flourished, and so did humanity.
We need the same change today – so that intellectual democracy can once again bloom. We need a new way to run the world, one that includes not just the market and economic development, but elements of history, sociology, biology, the environment, human well-being, philosophy and a host of other subjects too.
The Club of Rome invites your input on how to achieve the transition, to help us discover a balanced system of human development.
Picture with thanks to Bea Serendipity