Economics: Starting from Scratch

As the 21st century unfolds, it is clear that the major societal issues we face – climate change, energy and food security, poverty, the environment – are all interconnected and are incapable of solution in a discrete way. Barry Commoner’s First law of Ecology that Everything is Connected to Everything Else is patently obvious to even the most unobservant of us.

All these issues are threaded together in many ways but one thing that connects them is their economic implications. Indeed, there is no aspect of our lives that is untouched by this subject, yet for many of us it is shrouded in complexity, misunderstanding and, perhaps, even mystery. Leon MacLaren, the founder of this School, delivered a lecture in London in 1952 and asked the question: Is any subject simpler than economics? He went on to say that a child could grasp it save for the fact that the difficulties arise from the superstitions and prejudices with which we surround it.
To dispel some of these superstitions and prejudices, we offer this inaugural post in what will be a regular offering on matters economic. It is not intended to follow any particular format or line of inquiry, although that may evolve with the passage of time. However, it will be informed by the underlying theme of our program of workshops ‘A Fresh Look at The Economy’.
The challenge in taking a fresh look at something necessarily requires dropping all the ideas one may have about that subject and approaching it as if for the first time.

This is not so easy with something that has become extraordinarily complex and where the experts, having seemingly agreed on a diagnosis of the patient’s condition, are completely at odds with how to remedy that condition. Part of the problem, of course, is that economics is strongly influenced by political considerations.
Taking this approach also involves leaving aside any ideas about whether capitalism or socialism or some other form of economic arrangement is the appropriate or only way to go. Nevertheless, despite the obstacles it is possible to chart a way forward. This involves appreciating that an economic system arises naturally to meet a series of needs and is a function of time and place as well as other key factors including culture and civilization. It also recognizes that there are underlying principles that govern economic activity.
In looking afresh, we will find that some key aspects about how things are need to be completely reappraised. For example, the idea of full employment: why are we content with an economic system that is incapable of delivering a meaningful and dignified job for everyone that wants one? Why should full employment be acceptable when it incorporates x% who are permanently unemployed? Why are we content to allow the privatization of profits and the socialization of losses in the business arena? Why should value created by the community not accrue to the community rather than remain in private hands?

It is easy to come up with the questions, but the answers are another matter – hence the need to look at the subject anew.
It is reasonably clear that tinkering around the edges of our current system will not cut it. It is going to need to radical changes. We are not advocating revolution except in the sense of the way we think about the subject. No doubt lots of oxen will get gored and noses will be disjointed but if we are to seek out a world where there is Economics with Justice, those will likely be byproducts.– Chris Wood is the Head of Economic Studies for the School of Practical Philosophy, New York.


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