‘Just do it’ and forget economics!
Let’s just get on and do it! Economics has nothing to do with changing the world. I’ve never heard a bigger bunch of crap in my life.
I recently read a short article on why kids should learn philosophy and immediately thought the same about economics – but not for kids – but for all the grown ups currently working feverishly to do good and change the world through socially innovative entrepreneurial enterprises.
In fact it occurred to me that there was a business opportunity or gap in the market as they say, to have a whole semester or two added on economics to all MBA and equivalent courses that now exist for social entrepreneurs.
By now you’re yawning because as Richard Denis recalls in his article in The Monthly “I remember my first lesson in economics like it was yesterday. I’d never heard a bigger bunch of crap in my life. It made no sense. The assumptions were flawed. The examples were ridiculous and the conclusions worse.”
And that’s about where we leave economics – back in high school.
Not that we don’t hear a lot about ‘the economy’. But economics – no thanks!
Let’s just get on and do it! Economics has nothing to do with changing the world. The solution lies with new business models to challenge and solve social problems. Poverty and inequality – all solved with scaling up, volumes, price point, marketing, distribution points, strategic planning, supply chains, market segmentation and financial modeling, and more financial modeling.
In the meantime while we all learn about ‘good’ business (or is it ‘business for good’?) the economy runs on, adjusted from time to time by the invisible hand of the ‘market’.
And we know as much as we need to know about ‘the economy’ because everyday we are educated about ‘the economy’ by politicians and media to such an extent that we know all we need to about economics. Right?
Richard Denis calls this constant everyday education “econospeak” noting that “the primary purpose of the econospeak that fills our airwaves, most of which is complete nonsense, is to keep ordinary people out of the big debates about tax, fairness, climate change and the provision of essential services. Econospeak is a great way to limit the options on our democratic menu. Would you like a small tax cut and a small cut in services or a big tax cut and a big cut in services? What? You want to spend more money in health and education? You must be mad. Just imagine how “the markets” would react to such a suggestion.”
What’s really startling is that while we have all been learning about ‘good’ business to solve social challenges, we’ve taken our daily dose of econospeak and swallowed it hook, line and balanced budget. As Denis notes “the whole strategy has worked a treat for the past few decades”.
Swallowing econospeak allows us to live with myths like, it is the lifestyle of the poor that threaten the economy, or, that tax concessions to the super rich will create more jobs, or, that the great financial crisis was caused by governments spending recklessly on public services, and that business above all else is how all our problems will be solved. Ignorance produced by econospeak is a powerful tool – after all, how can you criticize economic policy when you don’t understand economics?
Perhaps that’s where education is needed.
What if all of us who want to change the world for the better took some time to educate ourselves beyond econospeak so we had some tools to use when we critically consider the economy we are part of? What if every aspiring social entrepreneur had to complete a year of study in economics before studying business tools? What if this education allowed us all to understand why even the best intentions to change the world informed by econospeak, actually just perpetuate the very challenges we want to solve?
So where to begin? Here’s a sample of some really good economic thinking – and if you don’t want to read the whole book, look for articles that discuss the thoughts of the authors – even Wikipedia is better than gulping down headfuls of econospeak. So have a look at:
John Maynard Keynes, The General Theory of Employment Interest and Money
Ha-Joon Chang, Economics: The User’s Guide
Joseph Stiglitz, The Great Divide
Thomas Picketty, Capital in the Twenty-First Century
Anthony Atkinson, Inequality: What can be done?
And after some reading, consider afresh Richard Denis’ final words: “you don’t need to be an economist to call out crap when you hear it. But unless people start calling it out and stop worrying about “what the markets think”, then one of the richest countries in the world, living at the richest point in world history, might continue to believe that we “can’t afford” to invest in a better health or education system . . . Economics doesn’t tell us that we need to cut taxes for the rich or cause climate change if we really want to help the poor. And “the markets” don’t tell us that either. Those are the sentiments of some wealthy people, and some politicians who represent them. But they say it in econospeak because it sounds so ridiculous in plain English.”