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Re-enchanting Economics

Economics as we know it today is broken.  Unable to explain, to predict or to protect, it is need of root-and-branch replacement.  Or, to borrow from Alan Greenspan, it is fundamentally ‘flawed’.  But where do we look for inspiration in facilitating what is the mother of all paradigm shifts?  Interestingly enough, the most insightful and strikingly innovative ideas seem to be coming from all directions other than the economics profession. 

From ecology comes the insight that the economy is best understood as a complex adaptive system, more garden to be lovingly observed and tended than machine to be regulated by mathematically calculable formulae. 

From anthropology we learn that economy and society are inseparable and that markets and money are relatively recent arrivals, a thin veneer layered onto a much older history of cooperation, gift and reciprocity. 

Psychology and neuroscience reveal that we are more complex and multifaceted beings than the one-dimensional man of classical economic theory, motivated only by the selfish and individualistic acquisitiveness that miraculously guides the invisible hand: “In reality, man is much more like an anxious, moralising, herd-like, reciprocating, image-conscious, story-telling game theorist", as Rory Sutherland wrote in a recent issue of Wired magazine.

In short, the creation myths and assumptions underlying classical economics are revealed to be shallow, erroneous and unhelpful, products of the era in which the discipline of economics was forged and of the desire of its founding figures to claim the scientific muscle of the ‘hard’, natural sciences. 

The task, then, is to build a new kind of economic theory rooted in a contemporary understanding of who we are as a species and framed by the ecological limits of the beautiful blue planet that we call home.  Or rather, the imagining and articulation of such a theory is a key step in the real work of building economic models, norms and behaviours that can help us live well within our means.

This is the work that we are about here at Schumacher College.  We are now in the second year of our postgraduate programme, Economics for Transition: achieving low-carbon, high-wellbeing, resilient economies, designed and delivered in association with the new economics foundation and the Transition Network.

This is likely the world’s only economics postgraduate programme that begins with an immersion in whole-systems science – complexity and chaos theory, Gaian science, systems theory – locating economics from the outset as a sub-system of ecology.  Our core assumption is that ‘nature is mentor’.

The enquiries undertaken within the programme are as rich and varied as the students undertaking them:

  • deconstruction of our everyday language, deeply encoded as it is with the values and assumptions of the old paradigm we are trying to transcend, and the playful invention of a new vocabulary;
  • re-building the Commons as the creative and democratic heart of our economy and communities;
  • the emergence of dispersed, collaborative networks of economic actors as a rival to the centralized, hierarchical structures that dominated the twentieth century;
  • re-imaging and designing money systems that serve people and planet;
  • how best to facilitate the emergence of alternative meta-narratives to the busted flush of the neoliberal project (and the role of the arts in achieving this)………..

……..and many more besides.

All this is, of course, of the greatest significance for the Transition movement.  For what we are about in our various community-level initiatives goes far beyond tweaking the existing system through the introduction of incremental change.  We are part of a broader movement whose project is to transcend the dominant reductionist, mechanical story about the world and our place within it and to weave ourselves back into the web of life.  What we are about is the critical task of re-civilising and re-enchanting the grey science that is neoclassical economics.

Jonathan Dawson is the Chair of the Economics for Transition programme at Schumacher College, lived and taught at Findhorn, and has been in involved in development in work in Africa and Brazil.

 Images: students at the Craft Ed building; Change the Exchange student project in Totnes

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