Time to Dethrone Economics: By Hazel Henderson

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Economy versus ecology


Now is the time for action

©Hazel Henderson

The bankruptcy of economics and the negligence and malfeasance of the economics profession is now evident, as I have charged since the 1960s and in my “Economists versus Ecologists”, New York Times, October 24, 1971. The generational task of metaphysical reconstruction is almost complete, as we see all the policy and market failures around us: from climate change and pandemics to crises in our global food systems and the proliferation of space junk on our planet’s low Earth orbits, of which I also warned over 30 years ago. As Greta Thunberg tells us, the time now is for action. We know what is needed and no intellectual obfuscation or cognitive biases need to stand in our way. We must call out the cognitive biases of theory-induced blindness, described by Daniel Kahneman in his Thinking Fast and Slow (2011).

Green campaigner Jonathon Porritt in his Hope in Hell (2021) agrees. He sees leadership now from Greta Thunberg, Jane Fonda, and others in the global non-violent civil disobedience (NVCD) movements as the only hope for changing humanity’s course of self-destruction. Contrast this with the blizzard of well-compensated justifications by brahmin economist Partha Dasgupta, who rationalizes his profession’s 30 years of negligence, climate denial and enabling corporate and financial vandalism of ecosystems and human exploitation in his The Economics of Biodiversity: The Dasgupta Review, Feb 2021.

Transcending the conceptual prison of economics textbooks confirms that the powerful economics profession was never a science. Money and markets have been useful tools of human societies and our multiple interactions, as described by anthropologists and political economist Karl Polanyi in his Ancient and Modern Economies (1968), in his study of Polynesian tribes and their canoe trips between islands across the Pacific, trading with each other and using shells as money. Both markets and money existed worldwide in small communities, village markets and among indigenous peoples, using shells, salt, cattle, wampum, tally sticks and knotted string to facilitate exchange beyond simple barter.

These tools: markets and money, were weaponized and turned into means of control of people and natural resources. Yet, as I discovered while covering local currencies and barter systems in many countries, local money and markets are always based on trust, community, transparency and local accountability. Trust and these principles of the Golden Rule do not scale easily. Yet they survive in all countries larger unpaid, mutual aid communities, sectors that always underpin the official market and money-denominated sectors. These traditional social, community-based sectors must remain as the basis of today’s interdependent societies seeking cooperative living, surviving and thriving on our small planet endangered by greed and ignorance. We now are learning how to delimit the use of both markets and money, and only apply these tools carefully at an appropriate scale for specific forms of productive activities. When sharing all common resources, we need to use the other form of human interaction: cooperation guided by the Golden Rule on how these common resources must be shared. When we ignore these limits, we create the massive market failures we see today in our climate, food and pandemic crises, as well as the daily loss of biodiversity in this 6th Extinction of today’s Anthropocene Age.

I remember biologist Garrett Hardin inviting me to lecture in his course at the University of California at Santa Barbara after his “Tragedy of the Commons” paper was published in Science in 1968. He was led off course by his reliance on too many economists, with their theories that only if commons were privatized, could they be protected from selfish humans. I knew that humans, especially women, often behaved differently and all humans also enjoy giving, sharing commons and cooperating. Political scientist and sociologist, Elinor Ostrom described how many societies created viable rules for sharing and cooperating in her Governing the Commons, (2015) challenging economists’ false theories. I learned from my experience growing up in a typical patriarchal family in Bristol, a port of the slave trade in Britain, that women were trained to be the givers and men were trained to be the dominant takers. My mother was kept penniless by my father, a powerful business executive, and he forced her to grovel for money to pay our grocery bills. I and my siblings were in constant fear of violence in our home. When we asked our beloved mother if we could all run away, she would say: “We can’t my dears, because I have no money”.

Thus, all my research in my nine books has covered the role of money and markets misused as tools of power and oppression, summarized in my Fixing the Money Meme. I wrote of “The Love Economy” and the other half of all production in all societies that were unpaid. I helped the UN Development Programme estimate the value of this unpaid work, in their 1995 Human Development Report and Index (HDI), which found the $16 trillion of this unpaid production ($11 trillion by women and $5 trillion by men) was simply missing from that year’s GDP of $24 trillion. If this had been added, this GDP would have been $40 trillion. Our TV show, The Money Fix seen on Public Broadcasting, PBS, stations in the USA, covers the politics of money-creation and credit-allocation free on-demand.

We see horrific effects of industrial societies’ economists fetishizing macroeconomic metrics and using GDP, as if flying at 60,000 feet in their illusions of abstraction, to overlook the real-world lives of millions. All those left out of these over-aggregated statistics were left behind in “rust belts” in “flyover country”. This was why I insisted the European Commission in its “Beyond GDP” conference in 2007, on which I was an advisor, conducted a global survey to see if there was any public understanding of these colossal errors. My company, Ethical Markets Media, a Certified B. Corporation which takes no advertising and is funded with royalties from our TV programs, books, lectures and reports, joined with GlobeScan, a preeminent global polling firm in conducting a survey in 12 countries. We found large majorities in these countries, favor expanding money-based GDP, including scientific statistics on health, education and environment. I presented this survey at the European Parliament in 2007 and we repeated these surveys in 2009, 2013 and in 2020 with similar results. The people have been ahead of economists and politicians for decades (Ethical marketsBeyond GDP)!

The Economist reported, April 24th 2021, that young mathematician Isiah Andrews1, using alternative assumptions, now shows that economic models’ results often ignore the role of pure chance!

I learned as a founder of Citizens for Clean Air in New York City in the 1960s, that economics was simply politics in disguise. Fighting City Hall, corporations and their public relations executives, I countered economists and their academic courses in most US universities. I soon realized that this powerful economics discipline was not a science, but an influential and lucrative profession. Economists were similar to lawyers, advocating the political views and corporate policies of their clients, just as they did in Britain and European countries I had encountered. Satish Kumar, the founder of Schumacher College, had sent me a paper on Buddhist Economics by E. F Schumacher, and asked me to help publicize his book, Small Is Beautiful (1973) in the USA. I and Robert Swann, co-founder of the local currency “Berkshares” with Susan Witt who still leads the Schumacher Society in Great Barrington, Massachusetts, joined in setting up Schumacher’s first book tour for Small Is Beautiful in the USA.

I began documenting my experiences challenging economists and exposing the errors in economic textbooks, such as their assertion that human nature was selfish and that volunteering was irrational, while unpaid community work, caring for children and households was “uneconomic”. I was thrilled to read in the public relations journal of that time that I was “the most dangerous woman in America”! Students invited me to their campuses instead of The Talking Heads, The Clash and other rock bands. They made my first book, Creating Alternative Futures: The End of Economics (1978) Foreword by E. F. Schumacher, an underground best-seller (now re-published by the University of Florida Press in 2014, now also a free download here).

Why am I recounting this ancient history? Because all the efforts over 2 centuries to expose economic theorizing has been suppressed, as I documented in The Politics of the Solar Age (1981). These truths were also overlooked as Ronald Reagan became US president and removed the solar panels that President Jimmy Carter had installed on the roof of the White House. Almost 50 years later in 2014, Britain’s Journal of the Chartered Accountants of England and Wales and Tomorrow’s Company published the research I assembled in anthropology, ecology, biology, physics, thermodynamics and psychology, to show that all the main theories in economics were invalidated and irrelevant in my 56-page monograph, Mapping The Global Transition to the Solar Age: From Economism to Earth Systems Science, with a Foreword by NASA Chief Scientist Dennis Bushnell.

Clearly, economics has always been about power, control over others and natural resources, influencing human relationships, culture, politics and laws in most societies. It has produced the narrow globalization of markets and today’s global financial casino still inflicting daily damage on global ecosystems and local communities. Economic theories see efficient societies as those where market completion means almost every human transaction is conducted in money and tracked by macroeconomic statistics. This is almost as insane as communist goals of having governments own all the means of production! It’s time to get beyond the last century’s Cold War between capitalism, communism, socialism, libertarianism and all these over-simplifying ideologies of “left” and “right”.

Economists largely serve the powerful and libertarian oligarchs these descendants of fortunes gained from generations of resource exploitation in the “Gilded Age” of industrialism. They led in funding of laissez-faire, libertarian economics courses in most universities, and think tanks and lobbying groups to capture politicians and buy mass media. Their constant libertarian economic themes emphasized distrusting government while lauding markets, profits, money-making, individual liberties and gun ownership. This rhetoric helped in lobbying Congress, shaping governments budgets and steering the US Supreme Court into its pro-corporate stance and excessive interpretation of the First Amendment’s Freedom of speech in its 2010 “Citizens United” decision that equated money as speech, as well as reinterpreting the Second Amendment to extending the right to bear arms. Economists still focus on individuals’ responsibilities, while often avoiding the need for collective action, governance and enforcing public ethical standards, as for example, does Partha Dasgupta in his conclusion that individuals, rather than economists, must be educated about biodiversity!

Philosopher Kenneth Boulding exposed economists’ “intellectual scandal” of Sweden’s Central Bank lobbying the Nobel Committee, to accept its Riksbank Prize in Economic Science (sic) in Memory of Alfred Nobel, to legitimate economics as if it were a science. I joined with Alfred Nobel’s descendent, lawyer Peter Nobel in co-authoring several articles to expose this fraudulent prize, which elevated economists, including Milton Friedman to the highest levels of government. Nassim Nicholas Taleb, author of The Black Swan (2007) told me that he tried to raise this concern with Sweden’s king at his Summer garden party… to no avail. Even today, many economists who have won this Bank of Sweden Prize, still parade as “Nobel laureates” to the disgust of the Nobel family who recently dissociated from this Riksbank prize! (Find out more).

The UN’s Sustainable Development Goals, ratified in 2015 are moving the metrics from GDP to these SDGs as a more holistic basis for steering our further evolution of human knowledge and global citizenship. Now understand that there is no need for humans to mine the Earth, but to learn from plants and their technology of photosynthesis in capturing all those free photons now powering our new Age of Light: The Solar Age.

1 Young mathematician, Isiah Andrews won the 2021 John Bates Clark Award for his work.

Hazel Henderson
Hazel Henderson, Author of “Mapping the Global Transition to the Solar Age” and other books in 800 libraries worldwide in over 20 languages, is CEO of Ethical Markets Media Certified B. Corporation , producer of “Transforming Finance” TV series and publishers of the Green Transition Scoreboard.