Economics: a social science allegedly studying the production, distribution and consumption of goods and services. Source: ‘What is Good? What is Bad? The Value of All Values across Time, Place and Theories’ by John McMurtry, Philosophy and World Problems, Volume I-III, UNESCO in partnership with Encyclopedia of Life Support Systems: Oxford, 2004-11.
Applying network science concepts and methods to economic systems is not a new idea. In the last few decades, however, advances in non-equilibrium thermodynamics (i.e., self-organizing, open, dissipative, far-from-equilibrium systems), and nonlinear dynamics, network science, information theory, and other mathematical approaches to complex systems have produced a new set of concepts and methods, which are powerful for understanding and predicting behavior in socio-economic systems. In several previous papers, for example, we used research from the new Energy Network Science (ENS) to show how and why systemic ecological and economic health requires a balance of efficiency and resilience be maintained within a particular a “window of vitality”. The current paper outlines the logic behind 10 principles of systemic, socio-economic health and the quantitative measures that go with them. Our particular focus is on “regenerative aspects”, i.e., the self-feeding, self-renewal, and adaptive learning processes that natural systems use to nourish their capacity to thrive for long periods of time. In socio-economic systems, we demonstrate how regenerative economics requires regular investment in human, social, natural, and physical capital. Taken as a whole, we propose these 10 metrics represent a new capacity to understand, and set better policy for solving, the entangled systemic suite of social, environmental, and economic problems now faced in industrial cultures.
Regenerative economics | Resilience | Economic networks | Self-organization | Autocatalysis | Socio-ecological systems | Network analysis
The state of planet Earth is widely recognised as in jeopardy due to a range of environmental problems relating to a dominant economic system that extracts resources and uses energy on an unprecedented scale in human history. A long-running claim amongst mainstream economists, defenders of unregulated capitalism and those favouring a regulated productivist economy has been that human ingenuity can find substitutes for all resources and technology can solve all problems allowing humanity to change and adapt to anything. These arguments are made in almost total ignorance of how the economy interacts with ecosystems and impacts their structure and functioning, how dependent economies are on the flow of low entropy materials and energy and what are the basic limits to humans as biological animals. Indeed even ignorance itself is ignored and reduced down to risk and probabilities.
Yet, that economies must change is no longer in question. That they will change is also no longer even an issue. The question is what responses materialise as resources, energy supplies and functioning of ecosystems do change? The options being put forward are numerous, but most aim to preserve some form of high-technology, capital accumulating, growth economy embedded in price-making markets, including: green economy, climate economy, low carbon economy, circular economy, knowledge economy, bioeconomy. Yet, none of these addresses the causal mechanisms of the current crises, or structural issues facing social ecological transformation; they are concerned only with controlling for impacts and adapting to consequences, not with the bio-physical relations of the economy with non-human nature.
This article provides an overview of the relationships between economic systems and the environment, human society and non-human nature, ecology and economy. It brings together various literatures with the aim of introducing the reader to the importance of biophysical reality for the operation of real economies, and therefore also for economics. In the next section, we explain the problems facing standard economic approaches if they are to address environmental problems, but more generally their inability to even understand the social ecological crises due to a limited scope and direction. This is followed by outlining the place of economies in the context of their social and bio-physical structural relations, a basic general ontology. More specific detail is then added on the lessons that can be drawn from ecological understanding in terms of ecosystems, materials and energy. The final section draws out the implications of this understanding for social ecological transformation of the currently dominant economic systems and the type of economics required to help achieve that transformation.
- Design has a role to play in facilitating heterodox economic transitions.
- Climate change makes ecologically engaged economics and design an imperative.
- Visualizations are tools to conceptualize and reconceptualize economic ideas, models, and more.
- Economies are complex systems that can be mapped using visual strategies.
- Redirected, distributed, regenerative economies are viable alternatives.
Economics is a field under fierce contestation. In response to the intersecting challenges of the Anthropocene, scholars who take a broader and more critical view of current economic models have described the shortcomings of orthodox economic theory along with the severe consequences of its systemic discounting of the environment. Heterodox economists describe how the logic of neoclassical and neoliberal economics disregards the interests and needs of the natural world, women, workers, and other historically disadvantaged groups. Explorations of the household, the state, and the commons as alternative economies open space at the intersection of economics and design for incorporating and valuing the provisioning services provided by the ecological context and the undervalued work provided by certain groups of people. Design theorists, economists, social and cultural theorists, and anthropologists describe the relationship between value and values in ways that reveal how sustainable and socially just futures depend on the priorities (notions of value) embedded in the systems that determine what is designed. With these ideas, design can contribute to economic transitions with conceptualizing, modeling, mapping, framing, and other future making practices. Ecologically engaged, heterodox economics is a basis for societal responses to climate change on a scale that can make a difference.
Anthropocene, Climate change, Heterodox economics, Ecological economics, Value and values, Design transitions for sustainability
Liberating contemporary economic analysis from the straitjacket of mainstream neoclassical theory is the animating theme of the essays assembled in this special number of the Real-World Economics Review (RWER). The authors of the works assembled here are all committed to the idea that what is regarded by traditional economic theory as a set of exogenous forces framed and deployed from outside the market mechanisms that are the focus of the discipline – namely, the public sector – is in fact an integral agent that directly affects the very issues and phenomena neoclassical theory claims to explain. Indeed, it is the very failure of traditional economic thinking to account for the “public economy” in any systematic and meaningful fashion that prevents it from explaining how societies actually produce goods and services and, in compensation, constructs inapt and futile framings, such as “market failures,” to explain why governments exist.
In contradistinction to prevailing doctrine, the following articles strive to reconstruct a public economics by embedding the public sector intrinsically within economic models. Rather than separate the “public sector” from economics, understanding collective action as something distinct from the economy, a public economics views the entire economic system – the “macroeconomy” as a whole – as comprised of multiple economic systems: of markets, of public activities, and of domestic interactions. Read More
We have many problems – poverty, unemployment, environmental destruction, climate change, financial instability, etc. – but only one solution for everything, namely economic growth. We believe that growth is the costless, win-win solution to all problems, or at least the necessary precondition for any solution. This is growthism. It now creates more problems than it solves.
Bill Mitchell Published on Mar 7, 2017 This video captures the audio of a presentation by Professor William Mitchell at Maastricht University as part of the Third Annual Joan Muysken Lecture Series, March 7, 2017. This lecture was delivered to academic staff and students at the University which discusses how the mainstream macroeconomics is equivalent… Read More
The conclusion will be that macroeconomic policy proposals should be informed by stock-flow consistent modern monetary theory; that a job guarantee, or employer of last resort scheme, is a proposal which is affordable and potentially able to stabilise an unstable economy; that the elimination of involuntary underemployment can raise the subjective well-being of millions of people and promote social inclusion; and that the framing of this and other policy proposals is of vital importance, and should not be neglected by economists and the politicians they advise.
The whole focus of classical economics is to tax wealth not income, and obviously, the tax burden was going to fall on the wealthy, on the landlords first and foremost, then on the bankers and then on the monopolists. That was what socialism was, the idea of creating an economy with a circular flow that the taxes would be paid by the wealthy and the government would use this tax revenue to spend on infrastructure, schools, productive credit to help the economy and to make economies more competitive. It seems that in that sense socialism was going to be the most efficient capitalist economy.
I’m Bonnie Faulkner. Today on Guns and Butter, Dr. Michael Hudson. Today’s show: The Vocabulary of Economic Deception. Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trend, a Wall Street financial analyst and distinguished Research Professor of Economics at the University of Missouri, Kansas City. His 1972 book Super-Imperialism: The Economic Strategy of American Empire is a critique of how the United States exploited foreign economies through the IMF and World Bank. His latest books are, Killing the Host: How Financial Parasites and Debt Destroy the Global Economy and J Is for Junk Economics – A Guide to Reality in an Age of Deception. Today we discuss J is for Junk Economics, an A to Z guide that describes how the world economy really works, and who the winners and losers really are. We cover contemporary terms that are misleading or poorly understood, as well as many important concepts that have been abandoned – many on purpose – from the long history of political economy.
INET President Rob Johnson talks with Michael Sandel about the limits of a life driven by self-interest, gambling and Wall Street, and why the consumer model of economics has failed to explain the human experience.