CRISIS, ECONOMICS AND THE EMPEROR’S CLOTHES
Why economics fails to deal with society’s economic, environmental and social problems, and what to do about it
Crisis, Economics and the Emperor’s Clothes elaborates in detail on economics being a faith rather than science. It also points out that the adherents to that faith – economists, politicians, journalists or other opinion makers who consider themselves economically literate – promote a range of policies that serve the interests of well-established private groups but run counter to the interests of society as a whole. The book outlines what a new economics should look like, and how such a new economics would contribute to addressing society’s environmental, economic and social challenges.
Economics and the 2008 crisis
The financial and economic crisis that erupted in 2008 is more than a temporary setback in global economic development. It is the outcome of fundamental economic imbalances, enhanced by economic dogma.
The faults of economics
Standard economics is based on faulty theory and method, leading to a poorly conceived representation of reality and faulty policy prescriptions. Today’s economic policies are based on theory and assumptions that have been proven wrong time and again, yet continue to form the basis for policy making. Economics’ core model continues to be considered as universal and timeless truth, making economics faith rather than science.
Constraints resulting from economic faith
The dogmas of economic faith led to the 2008 crisis, inhibit a sustainable recovery and lay the basis for future crises. In addition to restraining society in dealing with its economic problems economic dogma is also the main obstacle to addressing its social and environmental challenges. What is considered responsible economic, financial and fiscal policy puts society in an economic straightjacket that prevents it from fully developing and using its productive potential.
A new economics for sustainable development
Crisis, Economics and the Emperors Clothes proposes a new economics: a social science the application of which can help create a dynamic, socially equitable and environmentally sustainable society. This new economics will provide real insight into economic processes and help unlock the productive potential of society to meet society’s environmental, social and economic challenges. Activating potential production capacity will create the jobs, business opportunities and economic development needed by the global economy.
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Comments on Crisis, Economics and the Emperor’s Clothes, by emeritus professor of economics Bob Goudzwaard, emeritus professor of economics Hans Opschoor, and emeritus professor of sociology and environment Egbert Tellegen, can be downloaded here (for now only available in Dutch). This download also contains a review of Crisis, Economics and the Emperor’s Clothes by institutional economist and jurist Dr. Cock Hazeu, for the on-line magazine Civis Mundi.
The main points of book and manifesto are summarized in fourteen propositions.