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Economics: Do we want a quick fix, cosmetic makeover or a new paradigm? – Wayne McMillan

Since the 2008-09 Global Financial Crisis we have been getting some discussion in the regular press about the Capitalist system and how its performing, surprise surprise !!! Ideas about new economic theories, Minsky moments and changes to orthodox theory abound. Very few have yet figured out that we need to think way outside the mere socio-economic to solve our problems. Is the capitalist system some homogeneous amorphous blob like creature that never changes? I don’t think so! We haven’t even began  to understand this evolutionary phenomenon until we realise there are different types of capitalisms, just like there are different types of species, although they may appear and act in similar ways. Anglo-American capitalism is certainly different to Nordic capitalism and both differ from continental capitalism and all three are different to New Zealand capitalism and Australian capitalism.

Economics hasn’t fashioned the tools just yet to come to grips with this, but maybe at first glance looking at economic history, archaeology, anthropology, psychology, sociology and biology they can help us get a clearer picture of what we are dealing with. Societies create either consciously or unconsciously what they believe they want or need as influenced by media, religion, philosophers, politicians, spin doctors, academics, corporate business, special interest groups and current and out-dated myths. Therefore the economic systems we have developed come out of this ever changing mish-mash, this melting pot of influences, mores, conventions, ideas, beliefs and myths. We have created ferocious resource eating international, economic systems that spew out environmental pollution, creates inequalities of power, wealth and income and makes some nations rich and keep others poor.

The clever, innovative thinkers are turning to ecology, climate science, biology, physics, neuroscience and the cognitive behavioural fields of research and even spirituality to reformulate new approaches that move beyond thinking just about mere economic growth. We have massive environmental problems to overcome, all connected to sustainable resource use and recycling.  We don’t understand fully how the financial system interacts with, affects and impacts on, the production of goods and services. We don’t understand fully how humans make economic decisions, although behavioural economics has made some headway.

To continue to create static, mathematised models that are only an approximation to reality would also be retrograde. Whatever economists decide on it must take on some form of modelling that captures the organic, dynamic nature of economies.

What we measure in our national accounts is also important. Unpaid work or volunteer work isn’t accounted for in our Gross Domestic Product (GDP). We don’t have indexes for measuring the multiple effects of unemployment and inequality which are the hidden costs for societies. We don’t have a wealth index. We don’t have a credible pollution index or measure for different resource uses and their costs. We don’t have an accurate and broad measure for health and illth. There are so many things not measured that add up to human well-being or create human misery that are not measured. Hidden social costs and benefits should be measured by an intelligent and caring society.

So WE HAVE THE POWER TO CHANGE this current evolving dominant economic monster called “the economy” and create something entirely new, if we are seriously concerned about our world. Yes WE have the power to change things, the question is do we want to change it for the good of humanity?