"Are you interested in economics?", he asked. I had time only for a quick answer.
"Yes. But I'm especially interested in the limitations of contemporary economic thinking and the ways that they might lead us astray as we think about the future."
"What do you mean?"
"Two key assumptions in particular: that humans are individual utility maximizers, and that the economy is a self-contained and self-perpetuating growing system. The first assumption makes it difficult to talk about community, and the second makes it difficult to talk about limits. But perhaps those two are exactly the things we need to be talking about now."
I went on to quote Herman Daly: "The economy is a wholly-owned subsidiary of the ecosystem". And not a small subsidiary any more. Take a look at the article A safe operating space for humanity in Nature, maybe the world's premier scientific journal, a couple of years back. The diagram at the beginning of the article symbolizes their assessment of humanity's impact on the Earth in a number of different categories.
To learn more about Daly's and related thought, visit the web site of the Center for the Advancement of the Steady State Economy.
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In this article, Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University, and formerly chief economist at the IMF, asks, "Is modern capitalism sustainable?" According to him, modern capitalist economies "fail to price public goods effectively", produce "extraordinary levels of inequality", "systematically undervalue the welfare of unborn generations", and market mechanisms fail when applied to healthcare and create repeated financial crises. Quite an indictment. Nonetheless, he asserts, "The truth of the matter is that, for now at least, the only serious alternatives to today's dominant Anglo-American paradigm are other forms of capitalism."
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