An Economics Fit for Purpose Now

Think about today’s mainstream economic theory. It tells us that people are all self-interested profit maximizers — interested in nothing but their own gain. How many of us actually believe that is true? One example. A friend’s wife is very ill and neither she nor her husband, who is her caretaker, have been able to work. Their large network of friends and supporters raised more than $50,000 in two days to help them out. Surely that generosity — for no gain — does not fit the mold of economic theory.

Furthermore, mainstream economics completely ignores environmental and social problems because it fails to recognize that either our human societies or the natural environment exist. Problems created by economic activity like pollution or destroyed ecosystems are, in mainstream views, simply “externalities.” Externalities are negative by-products foisted off onto communities, societies or nature. The problem is that the costs that such externalities create are paid somewhere in the system. Typically, we all end up paying for them in either degraded health or well-being or in monetary terms through taxes or restoration costs.