Real damage to our thinking happens when we allow errors to go unnoticed. It’s not dissimilar from a technical flaw that a musician or sportsperson might develop. For a while, the flaw is easily absorbed and they can function at a high level. But after a while a ceiling is reached and it becomes obvious that in order to make progress it is necessary to make alterations at a fundamental level. The bad habits are so ingrained that it is very difficult to make the adjustment required, as it can leave the agent feeling no longer capable of performing the simplest skills of their profession.
Notions of “utility” in economics, the supply/demand “curve”, are so ingrained in most economics students’ thinking that it’s hard to think what the study amounts to if these concepts cannot be counted on[1]. But in relation to the eight errors highlighted in the paper below, I want to hold a spotlight to a common psychological problem. That problem is allowing certain terms to act as proxies for more fundamental concepts using the tacit assumption that the proxy implies the latter.
That famous old (reportedly) Cree Indian saying: “Only when the last tree has been cut down, the last fish been caught, and the last stream poisoned, will we realize we cannot eat money” hints at what I am getting at here. When the term “money” is allowed to go proxy for “wealth” (and “wealth” itself is denied its semantic independence from “money”) we set ourselves up for this kind of fall. Because, if we worship gold rather than what gold buys we will be utterly dumbfounded when the day comes that gold buys nothing.
So, if we conduct our economic, political and social discourse using these proxies we will, sure as eggs is eggs, come to the wrong conclusions. If we pursue economic growth because that brings money and that means wealth and us all feeling good well then…er, no, it won’t work. Because the proxies we are using do not have the connotations guaranteed, and without these connotations the whole connecting logic breaks down.
And that, in a nutshell, is why we need to stop everything and start again. To build an economic system from first principles that is rooted in ecology and psychology. To only use proxies in discourse where this rooting is transparent and uncontroversial.
Orthodox economic thinking: a cultural delusion
[1] I’m not going to critique these in depth here, as there are countless voices who can do that better than me. If you are unfamiliar with the arguments, a good place to start is Kate Raworth’s “Doughnut Economics” About Doughnut Economics