“I was taught a series of beliefs that formed the ‘theology’ of economics based on neoclassical economic theorems. I was taught to accept, without question, a set of theorems and beliefs in which human beings are reduced to income-constrained, rational consumers and utility maximizers operating within an economy where prices for goods and services and income distribution are determined through the dynamics of supply and demand. The central belief within neoclassical economics is that “growth is good”, that there are no limits to growth and that the key measure of progress is the Gross Domestic Product (GDP).
I then recognized the flaws and inconsistencies in the theology of neoclassical economics. What if all individuals are not motivated by utility maximization and materialism? Does the model fall apart if people act with compassion and altruism and choose not to consume but would rather live a life of simplicity? What is utility anyway? Is a “util” a unit of happiness? Can happiness be measured and monetized? I realized that markets were never perfect and were often ignorant or blind to the conditions of real assets such as natural capital and ecosystem services. There was no accounting by nations or corporations for the value of natural assets in their system. There was no accounting of risks to the environment from unsustainable economic growth or the damaging effects of industry on the environment.
Moreover, I learned that all nations and governments around the world operate without a full inventory of their human, social, natural and built assets: governments were operating without a balance sheet.
I realized that the reason economists and politicians kept calling for “more economic growth” as the path to sustained and improved wellbeing was because more GDP (more consumption and output of goods and services by business) was required to help manage the growing and unsustainable mountain of debt.
Part of the shift necessary in moving from the current economy of consumption, materialism and eternal economic growth will require increasing awareness among all people about how this “matrix” actually operates and the underlying belief system that sustains the system. In many ways, we are all complicit in keeping this economic matrix alive by our collective state of ignorance. Moreover, we believe in the lie of scarcity and the myth of money.
Economics may ultimately return to a discipline that concerns itself with evaluating the conditions of wellbeing of households in relationship with natural systems, as I imagine Aristotle originally envisioned in Greece“.