The Revolution Will Begin With a Textbook

Posted by admin on November 15, 2008; This entry is filed under Alternative Ed, New Economics.
Tags: , , ,

Some highlights from Tom Green’s article The Revolution Will Begin With a Textbook  From Adbusters, (Print Edition) Jan-Feb 2007

When the founding assumptions of economic theory are all wrong, do we really have a chance? Is it any wonder that we’re having a financial melt-down, that Detroit is imploding, that the Republican’s official battle cheer is Drill, Baby, Drill! ?

Introductory microeconomic theory rests on the idea that individuals are perfectly rational and seek to maximize their “utility.” Samuelson admits that utility is a construct that has no basis in psychology; although he uses the terms ‘consumer’ and ‘individual,’ his model is built around a fictional character that critics have dubbed Homo economicus. This economic man (yes, he is male) never had a childhood, never has children, has never depended upon a caregiver and does not have anyone he provides care for. He only experiences well-being by consuming. He is rational, selfish, a psychopath. Tom Green

“He is rational, selfish, a psychopath.”

The weakness for basing models on unrealistic assumptions could be a harmless intellectual pastime, equivalent to solving Sudoku puzzles. But these flimsy models are used by economists to formulate policies believed indispensable to solving society’s economic woes. These policies are then flogged to politicians and corporate leaders. Rarely mentioned are the original assumptions that might limit the application of these policies in the real world. Tom Green

The message of most introductory textbooks being used today is that…

…societies must promote economic growth now and for all time. With growth, we are all better off. Without growth, we cannot afford to help the poor or to clean up the environment. We must get richer by pumping more oil, mining more ore, chopping more trees, consuming more widgets, so that we have new wealth to tackle climate change from burning more oil, to restore habitat damaged by logging, to help people displaced and poisoned by mining, to dispose of broken widgets. Welcome to the growth treadmill. Tom Green

Current educational warnings seem to rely on this canon, believing growth and the ability to outcompete others shall set us free. Fortunately, there are some new texts that are starting to offer some different views for homo economicus to ponder.

This one is a start: Microeconomics in Context

Text Cover

Product Description
Microeconomics in Context provides a thorough introduction to the principles of microeconomics, updated and broadened to reflect the economic realities of the 21st century. The text builds upon the strengths of standard, neoclassical economics, but takes into account environmental, institutional, political, psychological, ethical, and social issues often neglected in other introductory Principles textbooks. The authors introduce students to the standard topics and tools taught in most introductory courses, and to a broader and richer set of topics and tools. (from Amazon.com)

And it gets better: Ecological Economics: Principles and Practices by renowned economist Herman Daly, one of the most enlightened practitioners of the dismal science when it comes to understanding the limits of growth.

Text Cover

Product Description
Ecological Economics is an introductory-level textbook for an emerging paradigm that addresses this flaw in much economic thought. The book defines a revolutionary “transdiscipline” that incorporates insights from the biological, physical, and social sciences, and it offers a pedagogically complete examination of this exciting new field. The book provides students with a foundation in traditional neoclassical economic thought, but places that foundation within a new interdisciplinary framework that embraces the linkages among economic growth, environmental degradation, and social inequity. (from Amazon.com)

“Many former students will regret that this was not the required text the first day they sat down in Econ 101″ Tom Green

 

  • Share/Save/Bookmark
  • Jason: Thanks for your comments. I think one of the issues that needs to be addressed, is how the idea of how growth is defined. Generally, it's seen as a good thing by both economists and politicians. The problem is, however, that we live on a finite planet. Growth of the kind economists and politicians strive for, simply cannot go on forever--yet the system is predicated on it. The kind and rate of growth we continue on today, will lead to eventual collapse, creating poverty and misery for all.
    In current rich countries, we're finding that growth beyond a certain level (reached in many countries already), does not lead to better living standards. The pursuit of unfettered growth, actually lowers well-being--for everyone on the planet. An important issue to consider has to do with distribution and why some areas have grown so much compared to others. (Often has to do with the zero-summing of poor countries' resources.)

    Two quotes come to mind:

    "...growth and progress are measured in money, and money does not give us information about ecological systems, it only gives information about financial systems." Paul Hawken

    "In spite of what such signals as the GDP or the Dow Jones Industrial Average indicate, it is ultimately the capacity of the photosynthetic world and its nutrient flows that determine the quality and quantity of life on earth." Natural Capitalism p. 149
  • First of all, in response to Pete, Mr. "population bomb" who comments above... I wonder where your statistics on population growth for the US come from. A quick google search confirms that both US birth rates and fertility rates have consistently declined for decades! (http://usgovinfo.about.com/cs/censusstatistic/a...) US population growth is attributable to two things only, increased life expectancy and immigration.

    If increased life expectancy is something to fear, then I wonder what the purpose of economic development is in the first place. Immigration, rather than pointing to economic decline, is an indication of America's economic vitality. Labor allocates itself to where it is in the greatest demand. Immigrants come to the US for a reason, because that's where the jobs are. Jobs = healthy economy (current credit crunch and macroeconomic slowdown acknowledged)

    I sympathize with Green's indictment of economics as a flawed science, but let's remember, when a journalist from the rich world criticizes the growth objectives of all countries, it must be taken with a grain of salt. The freedom to criticize the economists' pursuit of growth is a luxury enjoyed only by those lucky enough to have been born in a country that has enjoyed growth's benefits for generations. I suspect that if Mr. Green had been born a poor Bangladeshi or Malawian, he would not be sitting smugly behind his Mac Book reminiscing on the evils of economic growth.
  • Rampant population growth threatens our economy and quality of life. I'm not talking just about the obvious problems that we see in the news - growing dependence on foreign oil, carbon emissions, soaring commodity prices, environmental degradation, etc. I'm talking about the effect upon rising unemployment and poverty in America.

    I should introduce myself. I am the author of a book titled "Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America." To make a long story short, my theory is that, as population density rises beyond some optimum level, per capita consumption of products begins to decline out of the need to conserve space. People who live in crowded conditions simply don’t have enough space to use and store many products. This declining per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.

    This theory has huge implications for U.S. policy toward population management. Our policies that encourage high rates of population growth are rooted in the belief of economists that population growth is a good thing, fueling economic growth. Through most of human history, the interests of the common good and business (corporations) were both well-served by continuing population growth. For the common good, we needed more workers to man our factories, producing the goods needed for a high standard of living. This population growth translated into sales volume growth for corporations. Both were happy.

    But, once an optimum population density is breached, their interests diverge. It is in the best interest of the common good to stabilize the population, avoiding an erosion of our quality of life through high unemployment and poverty. However, it is still in the interest of corporations to fuel population growth because, even though per capita consumption goes into decline, total consumption still increases. We now find ourselves in the position of having corporations and economists influencing public policy in a direction that is not in the best interest of the common good.

    The U.N. ranks the U.S. with eight other countries - India, Pakistan, Nigeria, Democratic Republic of Congo, Bangladesh, Uganda, Ethiopia and China - as accounting for fully half of the world’s population growth by 2050. The U.S. is the only developed country still experiencing third world-like population growth.

    If you’re interested in learning more about this important new economic theory, I invite you to visit my web site at OpenWindowPublishingCo.com where you can read the preface, join in my blog discussion and, of course, purchase the book if you like. (It's also available at Amazon.com.)

    Please forgive the somewhat spammish nature of the previous paragraph. I just don't know how else to inject this new perspective into the overpopulation debate without drawing attention to the book that explains the theory.

    Pete Murphy
    Author, "Five Short Blasts"
  • @ Bill
    We are looking at reworking our current curriculum in our economics class around theories of economics that promote social justice and sustainability. As a private Catholic school these theories are more in lint with Catholic economic thought as well. Thanks for sharing these resources. Our committee will definitely be giving these texts a look. Thanks for sharing.
blog comments powered by Disqus