by Geoff Davies
In the tropical forests of Central America are great stone temples and monuments, remnants of the Mayan civilisation that collapsed over a thousand years ago. We can never know exactly why the Mayan civilisation collapsed, but some of the main factors were probably shifting climate, over-exploitation of natural resources, warfare and internal rivalries. However a telling observation is that the grandest temples were built just before the final collapse. It is not uncommon that the grandest accomplishments of a past society came just before a precipitous decline. This pattern indicates the society was busy, right to the end, doing what it had always done, doing the things by which it achieved greatness, oblivious to imminent peril.
A grand monument does not have a practical use. It does not help a society to make its living. If it is a temple it will have a spiritual purpose, but a monument also has a political purpose. It proclaims the wealth and power of the builders, who are so powerful they can afford to expend resources on a grand demonstration of wealth. Its political role is to inspire citizens and intimidate rivals. Evidently this strategy has often worked, because recorded history is pervaded by examples of kingdoms and empires that rose to power by force and intimidation, and whose grand buildings proclaim their one-time wealth. So long as the wealth underpinning the society continues to flow, the society can persist. However if the flow of wealth should falter, or fail to keep up with the ambitions of the society, the society must change its strategy. Otherwise it risks the fate of Ozymandias, of Shelley’s poem. Ozymandias’s once-grand statue lay fallen in a desert: “And on the pedestal these words appear: ‘My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!’ Nothing beside remains. Round the decay Of that colossal wreck, boundless and bare The lone and level sands stretch far away”.
The subtitle of Jared Diamond’s book Collapse is “How societies choose to fail or succeed”1. Some societies recognised an imminent crisis, chose a different strategy and survived. The necessary first step is to recognise the approaching crisis. To do this it is necessary to break out of old habits of thought and old conceptions of the world, which commonly are deeply entrenched in a society’s culture. A new vision and a new strategy must be conceived, and they must be conveyed to some who are powerful enough to effect change, who can convey the new vision and implement the new strategy.
Presumably there were some people in past societies who recognised the approaching danger, but typically they would not be among the power elite. They would more likely be peasants or merchants seeing water supplies dwindle and harvests fail. The power elite is typically pre-occupied with internal and external power struggles, and they have learned their craft in the old paradigm. Therefore it is not only difficult to get their attention, they are also likely to be resistant to changing the status quo, within which they gained their success. If the rulers do persist with their old ways, then we may say they are operating within a delusion: their perception of the world does not match the actual state of the world. Delusion may occur in degrees. We can only guess at the state of obsession of the last Easter Islanders, desperately building their great stone statues as their island ecology collapsed around them.
It is of course much easier to recognise others’ delusions than our own. In order to function we must build up a picture of the world around us, a world view, otherwise we would be paralysed in confusion and indecision. This is as true of societies as of individuals. The challenge is to recognise when the world no longer conforms to our world view. Not uncommonly the evidence of inconsistency has to become quite blatant, to hit us in the face, before we are willing to let go of our old world view. This is even more true of societies than of individuals. Psychologically this is because it is quite threatening to let go of a world view, because we think we will be directionless and vulnerable. To some degree we are correct in this, because we will rapidly have to learn new ways. However it is also typically true that the confusion and vulnerability pass more quickly than we fear. We may look back and wonder why we were so afraid.
This book argues that our modern industrial societies are in the grip of a delusion. It is not a small delusion. It is a grand delusion, and a multi-faceted one. It is deeply entrenched in our culture, though it is perpetuated most particularly by a group known loosely as economists. Not all economists are in the thrall of the delusion, but the great majority is. The core of the delusion was devised over a hundred years ago by a few economists who developed a theory of how economies might work. Since then many subsidiary practices and beliefs, old and new, have been incorporated into the general delusion, and economists who believe the delusion have become very powerful.
Delusion is a strong word, but I use it advisedly, as I will argue. Nor am I the only one to use it: there is an increasing number of non-mainstream economists who vigorously dispute the mainstream paradigm. Some of these were recognised by the Revere Award of the Real World Economics Review2, for warning most cogently of the approach of the financial crisis that broke in 2007. The reason for inaugurating the Award is stated as “The general failure to warn of the approaching Global Financial Collapse demonstrated that within the economics profession today the general level of competence at real-world economics is grievously less than what society requires. Worse, the economics establishment has attempted to evade all responsibility for the Global Financial Collapse by calling it an unpredictable, ‘Black Swan’ event.”3
The Global Financial Crisis (GFC) that began in 2007, also known as the Great Recession, is the biggest economic malfunction since the Great Depression of the 1930s. You might think that those in charge when it happened, and those who designed the economic system within which it occurred, would have been chastened and purged, to be replaced by those who saw the crash coming, and those who warned that the design of the economic system was prone to such failures.
However few of those responsible have been purged, and few seem to have felt chastened. Rather, they claim that no-one could have seen the crash coming. If that were true, what exactly has the economics profession been doing for the past eighty years? Everyone knows there was a Great Depression. Would it not be a top priority to figure out how it happened, so we might see the next one coming, or better still avoid the conditions that would trigger a depression? One might think so, but that is not how the great bulk of the profession has spent the past eighty years.
The result is they didn’t see the GFC coming, and the reason they didn’t see it coming was they were looking in the wrong place. They were like the drunk looking for his car keys under the street light. He knows he dropped them out in the dark, but he thinks there’s no point in looking where it’s dark, so he looks under the light. However a few economists did venture away from the street light. They carried a torch of curiosity. They even located the keys. But no-one would listen.
To those who were looking in the wrong place the GFC is indeed inexplicable. It may as well have been an act of the gods, or an act of nature, and their language implies as much. Indeed their language has long implied that the boom and bust of the so-called “business cycle”, of which the GFC was an extreme swing, is just part of the natural order of things. However the GFC was not the result of some external calamity, like a tsunami, that disrupted the economic system. The GFC was an internal malfunction of the economic system. We should look within the economic system for the cause.
The cause of the GFC is not hard to locate, nor to describe. So much debt was accumulated that it could not be paid back. When some people started defaulting on their debt a chain reaction was triggered in which the more some people defaulted the more others could not pay their debts, so they defaulted, and so on. The economy had boomed as long as more money was being borrowed and spent. Then, when many people lost their money, and others were forced to pay down their debt rather than buy more stuff, the economy crashed.
There are different ways in which excessive debt can accumulate. The particular way it happened in the United States was that mortgage loans were given to people who could not possibly repay them. These were called “subprime” mortgages. The logic used was that house prices always rise, so soon the house would be worth more than the loan plus any interest due. It could be sold at a profit. Even if a person failed to make repayments on the mortgage, the bank could sell the house and take the profit itself. The fault in that logic was that there is no law of the universe that house prices should always rise. Worse, the practice itself caused house prices to fall.
Subprime mortgages were given to so many people who could not even pay the interest, including people who had no job, that many did default. The banks moved to sell those houses, but there were then so many houses on the market that prices levelled, and then started to fall. Once prices started to fall the whole scheme fell apart, because there was no profit for anyone. In the US, if you can’t repay your mortgage you can just return the keys to the bank and walk away. The bank incurs the loss. Prices went into free fall and bank losses mounted dramatically. Many legitimate borrowers, just trying to buy their family home, found they were “under water”: their homes were worth less than their mortgage. Many of those lost their jobs as the economy suddenly slowed, then they lost their homes as well.
The story was complicated and aggravated by the clever “instruments” invented by the financial markets to magnify the scam. Subprime mortgages were packaged into bundles, then mixed with regular mortgages in ways that were supposed to reduce or eliminate the risks from defaults. The resulting packages were then sold to other “investors” (read gamblers and speculators) who had no way of knowing exactly what was in the packages, because the bundling was done by complex computer programs. This disconnected the mortgage pushers from the consequences of their actions. In other words they off-loaded the risk. This is a fundamental breakdown of market mechanisms.
The financial industry invented many other clever instruments with funny names and acronyms. A prominent one was the credit-default swap (CDS). Basically, someone figured out you could insure an investment against potential loss and thereby eliminate any risk: you would be guaranteed a profit. This was hailed as a great advance for civilisation. The only catch was you had to find an insurance company (or someone) that would insure your investment. While this practice was new and uncommon, some convinced themselves the risk was reasonable. Unfortunately the practice spread rapidly (why wouldn’t it, it was virtually free money) until it distorted the market and the risks were much bigger than predicted by the clever formulas underlying the CDSs.
If the practice sounds dubious, it is. It was realised by a few that risk was not being reduced, it was merely being spread around and diluted. It could thus grow much bigger than it would have if a few smaller companies had failed and revealed the falsity of the arguments. Rather the risk grew until it was big enough to bring down the biggest operators, and the whole financial system. That is why a trillion dollars or so of taxpayers’ money was handed to Wall Street bankers, who recovered and have gone on to make even bigger profits.
The essence of all these fancy schemes is that they were pyramid schemes. One of the few financiers who was jailed for fraud was Bernie Madoff. He was silly enough to run a naked pyramid scheme. He persuaded people to invest in his scheme, promising big payouts. He didn’t actually make much money. Instead he used new “investments” to make handsome payouts to previous investors. You can sustain this practice for as long as the number of investors is increasing. However when you can’t recruit investors fast enough, the scheme collapses and everyone still in it loses their money. Pyramid schemes have long been recognised as fraudulent, and are illegal in most places. Another famous practitioner was Charles Ponzi, who operated in the 1920s, and such schemes are also known as Ponzi schemes.
The subprime mortgage scheme and its associated complex financial instruments amount to a Ponzi scheme. It depended on rising housing prices, which depended on more and more mortgage loans being granted. However once the supply of mortgagees slowed the scheme collapsed and those caught by it lost money. No prosecutions for fraud have taken place. One can think of several reasons why this might be, for example that the scheme involved complex instruments whose precise functioning is hard to pinpoint, or that a very large number of people was involved, or that many of those people are in government, or sponsor government, and don’t want any prosecutions.
If such practices are known to involve high risk, and perhaps to be fraudulent, why were they allowed to continue? Where were the economic managers? Where were the academic economists? Well, many of the economic managers are drawn from financial market players, on the grounds that they understand how the financial markets work, and unfortunately such people usually share the collective delusion that financial markets are self-correcting and serving an important and positive role in the economy. Academic economists, one might think, would be more disinterested, but there seems to have been a century-long selection in the field for those who think the rich and powerful automatically serve an important and positive role in society. Courtiers usually find their necks are safer if they flatter the King rather than contradict him.
Our discussion of the economic systems can become mired in confusion if we are not careful with the names we use. The more centralised forms of socialism, including communism, are fairly well identified by those names, and there is fairly widespread agreement on the meaning of the names, and of the inadequacy of those systems.
On the other hand it is not so easy to name the other system. Capitalism has been applied to a variety of forms of market economy, which have changed considerably, and several times, through the nineteenth and twentieth centuries. Capitalism is also such an emotionally charged term that it can get in the way of rational discussion. Capitalism is not even an accurate term for modern economies, because they run as much on debt as on accumulated capital. Nor is there anything intrinsically wrong with accumulating capital (meaning wealth or savings), the problem is that it tends to aggregate to only a few people. Thus the problems are neither with markets nor with capital (savings), the problems are with unfettered markets and with concentrated ownership and control. There are various other names for the current regime. In Australia it has been called economic rationalism, in Britain Thatcherism, and in America neoconservatism, though there is little that is conservative about it. I will follow the economics profession and refer to it as neoliberalism.
So we come to the question of how the economy actually works. The GFC is an example of a dramatic malfunction of our present economic system, and the preceding account gives a taste of how self-interest, denial, wilful blindness and delusion have been involved in one dramatic economic episode. However there are many aspects of the present economic system and its management that are foolish, simplistic, deluded and distorted by self interest. This claim might sound a little hyperbolic, but I will present a long series of follies for your edification, and you can judge for yourself. Nor am I alone in making very strong criticisms. Economist Edward Fullbrook refers to mainstream economics as “human error propagated by a virulent ideology skilfully camouflaged as science.”4 James Galbraith refers to “a Politburo for correct economic thinking”, comprising “leading active members of today’s economics profession”5. Dissenting voices are generally marginalised and not easy to hear.
However most other dissenters do not attempt such a fundamental and comprehensive reckoning as I present here. I am a scientist, not an economist. This means I do not have to unlearn a lot of basic misconceptions. I am more willing to recognise fundamental errors, and blunter in my description of them. I also bring a clearer view of what an economic theory, or any theory, is for. Yet another misconception of mainstream economics is that mathematical sophistication and rigour ensures that their subject is scientific. The purpose of a theory is to provide a useful guide to how the world works. Some very useful theories use only rather simple mathematics. Though economic theories often come packaged in very sophisticated mathematics, they are still only useful if they bear some resemblance to real economies. If, as is often true, the theoretical behaviour bears no significant resemblance to the real world, then the theory is useless and the application of it is pseudo-science. Even the dissenting economists usually do not go so far as to call mainstream economics pseudo-scientific, or perhaps pre-scientific.
Mainstream economics is such an incoherent grab-bag of arcane theories, archaic practices and simplistic misconceptions that it is not easy to present a critique that has some logical flow. To help find our way through the confusion I have used plenty of sign posts, in the form of section titles and chapter titles. In some chapters there are headings and subheadings. They are there to help you to keep track of where you have come from and where you are going. I have stayed in narrative style as much as possible, but sometimes there are so many strands to disentangle that I have resorted to headings.
There are such basic things wrong with mainstream economics it is not even obvious where to begin. For example the way economic accounting is done amounts to entering all transactions on the credit side of the ledger, whether they are an income or a cost, adding them up and claiming that a bigger total means we are better off. Or one can examine the performance of the past few decades (prior to the GFC), and show it was mediocre at best. Then again the way banks are run and money is supplied to the economy maximises debt, promotes instability, pumps money to the already-wealthy and fosters parasitic speculation. Despite the resulting heavy load of debt we carry, the elaborate economic computer models used to justify economic policies do not include money or debt in their calculations. Rather, the models assume we still use the primitive system of barter. Many times in my learning about economics I have thought “Surely that can’t be right?” But many times it has turned out to be so.
However there is one problem with mainstream economics that is fundamental, and that is the claim that free markets will automatically yield the best outcome. The neoliberal ideology is essentially a statement of faith in individual action, and in the economic arena this translates to a belief in the goodness of unrestrained markets. The claim derives from a theory, and the theory uses a series of assumptions about the world that amply illustrate my claims of folly and delusion, as will be shown in a later chapter.
Mainstream economists think the economy is like a pendulum, always tending to swing back to the centre line, never getting too far to the side. If something knocks the pendulum it may swing wider, but it will soon settle back towards the centre, the equilibrium point. The free-market theory says the economy always tends to settle towards a general equilibrium in which all supplies balance all demands. The general equilibrium is the nirvana, a blessed state in which the economy functions at its greatest conceivable efficiency. This nirvana occurs in a highly idealised theoretical world. The question is whether this ideal world bears any useful resemblance to the real world.
If the general equilibrium theory described the real economy then the only time the economy would suddenly change would be when something external disturbed it, like a natural disaster or a war. However the economy has repeatedly changed suddenly when nothing in particular was happening in the real world. In 1987 stock prices dropped 30-40 per cent in one day, though 30 per cent of the world’s factories had not been bombed overnight. In 1997 there was the Asian currency meltdown, during which a global financial freeze-up was narrowly averted. Earlier this century we had the bursting of the Japanese property bubble and the American dot-com bubble.
These events straightforwardly demonstrate that economies have often been far from equilibrium. It is not hard to argue, as will be done in this book, that modern economies are always far from equilibrium. In that case the mainstream theory has nothing useful to say about how economies behave. It is an irrelevant abstraction. Furthermore, we can expect the behaviour of a far-from-equilibrium economy to be radically different from that predicted by the mainstream theory, as different as wild horses from a pendulum. The mainstream theory is not just useless, it is highly misleading.
Neoliberalism has promoted competition, selfishness, conflict, inequality, and a decline in family and community cohesion. It has required us to be subservient to the economic machine, and thus to the economic warlords who run it. Despite all this, it is still failing in its primary role to provide for everyone’s material needs, now and into the future.
On the other hand the communist version of socialism also required subservience to an economic machine. It promoted social uniformity that stifled spontaneity and creativity, and it seems to have been even less able to provide for material needs.
Looking back at the twentieth century, we can see two world views that may each have had some useful ideas to contribute, but that were taken to extremes that turned destructive. One extreme relied on competition and excluded cooperation, while the other extreme relied on cooperation and excluded competition. Neither extreme has worked well, and the political contest between them nearly terminated civilisation in a nuclear holocaust.
Each of these two world views fundamentally mis-identified the nature of economic systems. Indeed they each reflect a deeper misconception of life and how it is lived. Neoliberals adopted the mainstream economics view that economies are near-equilibrium systems that self regulate to stay near equilibrium. Communists adopted Marx’s implicit view that an economy is a predictable machine that can be managed by a bureaucratic five-year plan. Neither of these pictures comes close to identifying the nature of modern industrial economies. Readily available evidence shows economies are full of instabilities, and thus are very far from equilibrium. The internal instabilities render them unpredictable in detail, and thus impossible to manage with a five-year plan.
We need a better way to organise our economies. It will help if we step back and ask some basic questions. What is an economy? My answer is that it is the way a society makes its living. What is an economy for? It is to provide the material needs of a society. Its purpose is also, I will argue, to support the way a society chooses to organise itself. I gave a two-part answer to the second question because the way we organise our economy can have a large effect on the organisation of our society.
In the latter half of the twentieth century new insights from diverse fields like engineering, biology, physics, ecology and neuroscience converged to form a new field called systems science. Systems science is about the behaviour of collections of interacting components. The components might be computer parts, or grains of sand, or cloud droplets, or ants, or neurons. The realisation has been that unexpectedly complicated behaviour can result when large numbers of relatively simple components are interacting. The foraging strategy of a colony of communicating ants is quite different from, and more sophisticated than, the foraging strategy that an isolated ant would follow. Such new behaviours are said to emerge from the interactions within the system.
Systems that develop emergent behaviours are called self-organising systems. Some self-organising systems have relatively simple behaviour. For example, sand grains blowing across a dune self-organise into a series of ripples on the surface of the dune. Other systems develop very complicated behaviour, and they are called complex self-organising systems. In some systems the behaviour becomes so complicated it cannot be distinguished from randomness, and they are called chaotic systems. The global weather system is chaotic in this technical sense. There is thus a range of behaviours of self-organising systems, from fairly simple through increasingly complex to chaotic.
In the light of this new knowledge, we can identify modern economies as complex self-organising systems, or complex systems for short. This identification leads to a wealth of new insights. For example, the behaviour of complex (and chaotic) systems is not predictable in detail; a complex system can exist in many possible states; and typically a complex system will sit in one such state and be relatively steady for a time, but then make a relatively quick transition to another state. Each of these characteristics is quite different from the gentle, predictable oscillations about a unique state claimed by mainstream economics. They offer a glimpse of why I said earlier that the behaviour of modern economies is radically different from the predictions of mainstream theory.
Living systems are also complex systems, so our recognition of economies as complex systems identifies them as relatives of living systems. It may in fact be better to think of economies as living systems. This is not meant to be a fanciful new-age metaphor, it is meant literally. Many components of economies are living, most obviously the people in the economy but also the domestic plants and animals and the many parts of wild nature that we exploit or depend upon.
Like living systems, economies are unpredictable in detail but they can have identifiable characters, in the same way that we can recognise the dog-character of a dog, and distinguish it from cat character. A dog or a horse is not as easy to manage as a machine, but we know we can train a dog or a horse by working with its innate character, so it becomes much easier to manage. In the same way we can perceive the character of an economy and, by working with its innate tendencies, learn to manage it.
We have failed to recognise that a modern market economy, left to itself, is like a team of wild horses. The neoliberal approach has been simply to harness our wagon to the wild horses and let them go. After a lot of kicking, bucking and pulling in different directions our progress has been erratic and our wagon is breaking up and threatening to tip into a ditch. The communist approach, on the other hand, was to shackle the wild horses so thoroughly they could hardly move. If we study the behaviour of our wild-horse economies more carefully, and learn to tame them before we harness them to our wagon, we might find we progress more quickly, with much less fuss, and in the direction we really want to go, instead of into the ditch — or over a precipice.
Most people recognise that a healthy life requires balance. We need to balance work, family life and sleep. We need a balanced diet. We need to balance the demands of our families with our own need to be healthy and fulfilled. Children need a balance of freedom to be themselves and restraint to keep them safe and to guide them into healthy lifestyles. Every society needs to balance cohesion with the individual needs of its members. Cohesion requires cooperation. Individuality may involve competition. There is a place for both, and a healthy balance will keep the society vigorous.
The need for a balance between competition and cooperation is not unique to human societies, it pervades all living systems. The old conception of nature red in tooth and claw tells only part of the story. Cooperation also pervades nature, in many degrees and many forms. All mammals form social groups, and within each group each individual must balance its own needs with the needs of the group, upon which its survival also depends. This has been a very successful survival strategy for mammals. More elaborate forms of cooperation can be found among ants, another highly successful group. Extreme forms of cooperation occur among the trillions of cells that comprise your body, and in symbiosis, which is the actual merging of organisms and is fairly common. On the other hand some organisms practice minimal cooperation, examples being reptiles and many free-living bacteria. The point is not to extol cooperation over competition, or vice versa, but to recognise that both are present pervasively in the living world.
The great mistake of both of the dominant twentieth century political world views was to imagine that human beings can live at one extreme or the other, either in total cooperation or in total competition. Each is unhealthy and each system sickened and died, or is dying.
Complex systems have their own version of balance. The range of behaviour displayed by a self-organising system, whether it is simple, complicated or chaotic, is determined by the nature of its internal interactions. Complexity only arises when interactions among components are appropriately balanced. If the interactions with neighbouring components are limited and weak, the system may be repetitive, boring, mechanical and effectively dead. If the interactions are more pervasive and/or too strong, the system may become chaotic. Complex systems have intermediate levels of interaction, and their behaviour is neither chaotic nor dully repetitive. There is order, as components coordinate, but the order is continually shifting in small ways, and occasionally there is a large shift. There is change but it is episodic rather than continuous and chaotic, and the system is reasonably predictable much of the time. In a complex system the components are neither drifting loosely nor locked into a rigid structure
Living systems are identified as complex systems par excellence. An organism needs substantial continuity so it can function and live. It also needs a degree of flexibility so it can adapt to changing circumstances. Thus living systems balance order with change.
Perhaps the clearest recognition of the need for balance in life is to be found in Taoist philosophy. Yang qualities, such as action, masculinity, light, reason, resistance and order need to be balanced by Yin qualities, such as contemplation, femininity, darkness, intuition, yielding and creativity. The most fully realised people “by their stillness become sages, by their movement kings”. Taoism arose from the close observation of nature and people. It distills a higher wisdom than either of the crude world views that dominated the twentieth century. We can aspire to create economies that transcend the crude and unhealthy economic systems that arose from those twentieth century world views, and that provide for and nurture a healthy balance in the lives of people and societies.
We need to move beyond the false dichotomy of socialism versus “capitalism”, one over-emphasising cooperation and the other over-emphasising competition. We can even move beyond the conception of the post-war social democracies, in which the worst excesses of capitalism were countered by direct government action to redistribute some wealth and to provide some services to the poor. If we recognise that a tension between competition and cooperation is natural and healthy, we can aspire to find productive balances between them. Instead of just trying to ameliorate the results of minimally-regulated markets, we can recognise that markets might be managed by adjusting the internal interactions that control their behaviour. This can be done using financial incentives and disincentives, and some regulation. We can thus aspire to manage markets so they don’t produce excessive concentrations of power and wealth, and so they deliver quality of life for everyone, rather than just delivering more and more stuff, inequitably distributed. We can conceive of a managed-market economy that is intrinsically more stable, less inequitable and more democratic than previous systems.
The need for a healthier conception of economies is not just a matter of improving human welfare and social justice, important as those goals are. Our global industrial market system is rapidly degrading the planetary environment, to the point that the survival of industrial civilisation is threatened. We need economies that nurture not only healthy people and healthy societies, but a healthy environment as well. This will require us to recognise that a healthy environment is not an expensive luxury, it is a necessity for survival. All of our food, all of our clean water and our very breath is provided for us by the rest of the biosphere, and none of our clever technologies has changed those basic facts. The environment’s health is our health. As it degrades so do we. If it dies, we die.
Economies that will sustain us indefinitely and provide for our health and fulfilment are well within reach. To get there, we need to choose a new strategy. We need to shift some of our attitudes, some of our habits of thought and the way we organise ourselves. There are many existing inventions and ideas that reduce our heavy footprint on the Earth, so we need to promote their widespread adoption. The change does not require grand new technologies nor increases in authoritarian control. Change will be resisted by those who find any change threatening, and by those who profit from the present order. They will be overcome not by force, which will only feed their resistance, but by persuasion and by the resolve of the majority that wants a better future.
1 Diamond, J., Collapse: How Societies Choose to Fail or Succeed. 2005, New York: Viking.
2 Real-World Economics Review Blog. Revere Award in Economics, 2010. rwer.wordpress.com.
3 Taleb, N.N., The Black Swan. Second ed. 2010: Random House. 480 pp.
4 Fullbrook, E., “Part IV: Eleven ways to think like a post-crash economist.” Real-World Economics Review Blog, 2011. Posted 10 Nov 2011, http://rwer.wordpress.com/2011/11/10/part-iv-eleven-ways-to-think-like-a-post-crash-economist.
5 Galbraith, J.K., “Some economists got it right.” Twill, 2011. Vol. (14), doi: http://www.twill.info/issues/twill-14/index.html.
[Thank you Geoff for suggesting using the first chapter of your forthcoming book here]
The writer is a scientist, commentator, and author of Economia: New Economic Systems to Empower People and Support the Living World. He is a Visiting Fellow in geophysics at the Australian National University. He blogs at http://betternature.wordpress.com
This is the introductory chapter of a draft book The Nature of the Beast: How economists mistook wild horses for a pendulum (in the book it is entitled “Escaping economists’ delusion”). For more information: nature of the beast.