The Time for a New Economics is Now! (by Joe Ament)

In the days since Donald Trump was elected President, opinion pieces have become ubiquitous. Race and economics have taken center stage—as they should—but what is missing is a paradigm-transcending discussion of the type of economics that is needed in the twenty-first century.

‘Make America Great Again’ means resource extraction and destructive economic growth. ‘Forward’ implies continuing down the destructive path we have travelled for a century. Implicit even in Bernie Sanders’ optimistic vision was an unsustainable growth rate that is dependent upon resource depletion and consumption intensity.

This election, for all its hate rhetoric and divisive blustering, was about economics. Donald Trump appealed to those left behind and Hillary Clinton did not. But considering a new economics means considering a new economics, not simply looking at the old economics in a new way.

We need a new economics that sets the scale of our economy based upon the goals of well-being for humans and resiliency for the planet. That system would then distribute the resulting resources justly. And then—and only then—decide how to efficiently allocate the remaining resources to generate a healthy, stable economy.

Economists on the left and right have—in their mathematical approach to problems ill-suited to mathematics—failed to pragmatically consider the problems we face. Whether arguing for more regulation or less, carbon prices or caps, or social spending or austerity, economists of all stripes are still beholden to the litany of flawed assumptions built into their theories and the very real problem that equations do not adequately represent complex global systems.

This can be seen clearly in the left’s adherence to Keynes and Marx, and the right’s adherence to Friedman and Hayek. The world in which we live is not that of any of those thinkers. In a world of deforestation, climate change, species loss, and ocean acidification, right or left interpretations of Walras and Pareto are worthless.

We need good paying jobs for everyone. But that doesn’t mean we need a larger fossil fuel sector. We need to repair our infrastructure. But that doesn’t mean we need more highways, tunnels, and bridges. And we need a massive redistribution of wealth, but that doesn’t mean public ownership of the profit-seeking means of production.

To address the problems of a broken economic system, we must think strategically about our goals. If our goal is to create a powerful economy, we might succeed in spite of those who are left out of that economy. If our goal is to create a society that ensures the well-being of all individuals while treading lightly upon our shared home, a healthy economy will follow.

Goals and ethics thus become the starting point of a new economics—not tinkering around the edges of the flawed neoclassical theory. Never once in this election cycle was population, consumption, or stewardship mentioned. Trump railed against offshoring while Clinton ran as Obama 3.0. But bringing jobs back from China fails to consider the environmental impact of those industries, while Obama’s economic policies were largely overseen by a Larry Summers who thinks that Africa is not optimally polluted due to the lower value of an African life.

Beyond all the bombast of the last year, this election was about economics. But the discourse surrounding economics was embedded within a flawed model that has no place in our modern world. Neither Trump nor Clinton (nor even Bernie Sanders, really) pushed the envelope of economic thinking beyond the rational actor model of homo economicus.

And that is a shame. On a finite planet with an exponentially increasing population that consumes evermore stuff, the solution to our problems is cooperation. What we were given from both candidates was competition and individualism, markets and price signals, and isolationism.

So while Clinton failed to address economics as a problem—at least at any scale that matters—Trump failed to look beyond a dualistic, reductionist vision of economic thinking. The time for a new economics is now. Across the aisle, citizens must rise up to the failed economics to which both sides have been beholden and demand something new. Something for all of us. Something that lies “in right relationship” “for the common good.” Only then will we provide sufficiently for all without driving the planet into disaster.


Joe Ament is interested in how asset valuation and monetary systems affect social justice and environmental degradation; and how an ecologically resilient civilization will use money and finance.


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3 replies »

  1. This is a very interesting post. I agree; today, no field of human life can be viewed in isolation. Neither can we follow the ideas of those who lived centuries ago. The time for economic revamp is definitely NOW.
    Do you have any suggestions of how this can be done? For instance, how can infrastructure be improved with the degradation of environment? I’ll be very interested to know the possible ways, it’s a topic I’ve been wanting to cover in my blog as well.

    • The answer to your questions are unfortunately not easy to swallow. We need to drastically change how we live. We need to live closer to where we work. We need to eat closer to where we grow. And we need to vacate closer to where we live. We need less crap in our houses and more love in our hearts. All of this means, however, that we need to accept certain losses. We won’t be able to go to Paris on a whim. A trip to see your family across the country might be more costly, or take longer. I certainly agree with the idea of a high speed rail system to replace many of our highways. But this needs to be done in a smart way and IN CONCERT with the ethic of “living with less.” If we simply replace cars with railways and don’t change how we live and what we expect out of life, we will be in the same predicament in one hundred years.

      This is how EE comes into play. We need to set the scale of our society. Then distribute our resources. And then, decide how to allocate what is available. If a rail system fits in that, so be it. If not, we don’t do it. The same applies to everything.

      It all boils down to getting on with less stuff and fewer conveniences. The irony in this, however, is that we’ll likely live much more full lives. If we cook our own meals each day, we will have time with our families and the connection that comes with cooking and dining. If we walk to work, we will have time in nature instead of stuck in traffic. It’s a values shift that must come, and we’re fortunate that a values shift will enhance our lives.

      • That is one of the most logical answers I’ve come across for this question. “Live with less” summarizes the economic change completely. How can we convince the world to do this though? Even right now, 95% of the population is working their backsides off to reach the means that the other 5% have. Those means include flying to Paris on a whim. A change of this magnitude needs to come from within. Can it be inspired in the masses?

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