Chapter 2. A Brief Overview of Recent and Conventional Thinking in Economics

Summary: This chapter summarises a range of insights from recent thinkers, and perhaps also some conventional ideas from both left and right of economics. It ends with the need for an integrated picture and a way to detect other issues not yet widely discussed.

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Most of the recent thinkers offer important insights into how economics must change, so their insights are important. Though sometimes gathered under the term "heterodox economics", they are disparate and difficult to draw together, and it is not certain that any of them has expressed the very heart of economics. In this chapter we look briefly at this plethora of recent ideas, and the range of problems they try to address, to identify their main insights, but also we then look at some of the insights afforded by mainstream economics of left and right. We might also look at ideas from history. Then suggest a way forward.

2-1. Overview of Recent Ideas

Summary: Recent ideas on the economy and many and disparate, yet each contains important insights.

See systematic Overview of Approaches to Economics, on which the following draws.

This section presents a summary of the concerns that various recent thinkers have over conventional economics ("recent" including a few from half a century ago, but mostly since 2000). Most are concerned that were raised during RLDG discussions, starting with Carney but gradually bringing in others. These concerns show why understanding of the economy and all economic activity needs widening in several ways.

We start with Mark Carney but otherwise follow no particular order.

Mark Carney's Value(s) wants economic value, e.g. as measured by money, to more adequately reflect the values we hold as a society; he mentions "responsibility, fairness, integrity, dynamism, solidarity and resilience" [Carney 2021, 519]. In explaining why, he cites three major crises of this century: the Credit Crisis of 2008, the Covid Crisis of 2020 and the present-and-worsening Climate Crisis to argue what is wrong in economic theory and practice and why values-driven economics is necessary. Sadly, Carney does not argue for those values nor discuss them in any depth (they appear in his final chapter), and we do not know whether he missed any values that are important. Happiness is a value used for some decades in the Kingdom of Bhutan to steer their economy, and measured by a Gross Happiness Index; should it join Carney's list? There are problems with what Skidelsky & Skidelsky [2012] call Happiness Economics, especially concerning measurement and what happiness actually refers to. The Human Development Index defines a wider set of values. Some values or issues are hidden, as set out in Levitt & Dubner's Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, which argues how the economic aspect applies to all life. In response, this Rethink takes an 'everyday' and multi-valued perspective (see Chapter 3 and Chapter 5).

As a specific example, Partha Dasgupta wants to bring biodiversity into the calculations used by the UK Treasury, so that national economic policy will begin to take biodivesity into account, and no longer treat it as a free unlimited resource that may be drained. He argues for natural capital to be included alongside economic and social capital when measuring value, and that, unless to look after natural capital, the economy will suffer. The SNA2025 exercise goes further, trying to find ways of including, in national accounts, not only biodiversity, but climate, wellbeing more generally, digitalization and globalization, all of which have not been adequately addressed. These laudable efforts, however, are restricted to trying to quantify these values (see Chapter 5, 4.

Wellbeing economics is discussed by many, such as Goodwin [2023], ===others, as wanting the goal of economics to be the increase of wellbeing, such that a healthy economy is one that meets that. Goodwin [2023] for example includes "physical needs", security, happiness, realizing one's potential, sense of meaning, fairness, freedom, participation, good social relations and ecological balance as elements of wellbeing, and discusses what it takes to move towards fulfilling those.

Sebag's Natural Order of Money asks "Why do we in our modern society expect food as if it were a given?" We are embedded in nature; the "vital importance of the farmer and the food". With this question, he introduces the idea of mindset that pervades society and especially economics (Chapter 4 5), and the need to reconceive money as relating to food and nature: "the intrinsic relationship between people, money, and nature" (c.f. Chapter 8 3). But we need to extend the discussion beyond food. Others are also concerned about this, for example about how farmers, who should be stewarding the land they are responsible for, for growing food and maintaining ecology, use it for non-food money-making such as horses or sports or even sell land for housing.

David Graeber (Bullshit Jobs) is motivated by the irrationality of the current economic system, in that maybe 40% of jobs in capitalist economies are unproductive and meaningless. Marianna Mazzucato (The Value of Everything) is similarly concerned about unproductive "takers" rather than productive "makers" and the "renter" economy. In her Mission Economy, she wants economic policy and practice to be driven and motivated by high purpose, similar to the 1960s moonshot mission; economics should have motivation and purpose (meaningfulness) (what we call meaning and mandate. Government and 'industry' should partner better. Both authors raise the important issue of what we call "useless" economic activity in Chapter 7, but both authors are still influenced by the presuppositions of conventional economics and hence miss some important things; see our critical appreciation of Mazzucato.

Systems thinkers like Kenneth Boulding argue for a Circular Economy of recycle-make-use-reuse-remake-recycle, in contrast to the conventional linear economy of take-make-use-dispose-pollute. It is motivated by a concern that we cannot just plunder natural resources, but instead must recycle and reuse, so that we minimize demand for non-renewable resources. However, it is not the whole answer, with several drawbacks. Though early contributing to environmental thinking, its sole focus was resource depletion, an economic and engineering focus, so that unintended harm occurs as e.g. injustices. Paradoxically, it has been found to increase, not decrease, production [Zink & Geyer 2017], which is excused as "Oh well it will be recycled."

Felber Economy for the Common Good (ECG) wants to "Change Everything" in order to reduce inequalities. So have many others, throughout the past century, such as Martins' Cambridge Economic Tradition. Andrew Hartropp (God's Good Economy) takes a similar concern from a Christian perspective: injustices that can result from economic activity, especially poverty. Too often, however, inequality is reduced to its economic aspect, especially income. Abhijit Banerjee's Poor Economics addresses poverty more widely, bringing economics into conjunction with many other fields. A key idea is to listen to what the poor themselves have to say, which often goes against standard thinking (c.f. our idea of everyday life). "Avoid Ignorance, Ideology and Inertia" is a useful slogan but does not provide a full understanding of economics, including the valid roles of belief and history, so we take it as a problem of mindset and attitude.

Rutger Bregman's [2017] Utopia for Realists is similar and tries to show that universal basic income, a 15-hour workweek and no borders would work economically. The problem he sees is "Dangerously dysfunctional long before the 2007-08 financial crisis, modern capitalism is making us depressed, indebted and spiritually bereft. "

"A culture that encourages us to spend money we don't have on stuff we don't need, in order to impress people we can't stand. Then we go and cry on a therapist shoulder. That's the dystopia we live in today."

Though this might work in terms of the global economy, it is not clear that Bregman takes sufficient account of climate and environmental responsibility.

Oloi Laurent (New Environmental Economics) is motivated by unsustainability (economics does not do justice to the environment) and an "inequality crisis" (economics benefits the few). He wants to link economics, physics and justice/ethics in a "just transition" that minimises the use of natural resources. Again, we find a call for economics to understand its embeddedness among other spheres of life.

Garrett Hardin's early Tragedy of the Commons was concerned that common goods, including environmental, get plundered because the presupposition of the self-interested rational economic actor in conventional theories of economics. Franklin Obeng-Odoom brings this more up-to-date in The Commons in an Age of Uncertainty, which calls for "decolonization of nature, economy and society". In reality, however, human beings often help each other and voluntarily limit their demands [===]; we must take both views into account.

Many thinkers have criticised the world's adherence to economic growth as their main goal. Tim Jackson's Prosperity without Growth, along with related Post-Growth ideas, argues that real prosperity is possible without economic growth. Hickel argues for De-growth, reducing the size of economies, at least among affluent nations, and especially to de-grow harmful sectors. Less-affluent economies can be allowed to grow. Somewhat earlier, Bob Goudzwaard offered the metaphor of the Blossoming Economy: A tree grows, and should grow, when it is young but when mature, it stops growing and devotes its energy to blossoming and bearing fruit. Economies of the affluent nations should do likewise. Diane Coyle's Economics of Enough and Katherine Trebeck and Jeremy Williams' Economics of Arrival give a similar message. The latter uses the different metaphor of arriving at a summit (the affluent economies have 'arrived' and should focus on making themselves at home rather than continuing to tread upwards). They perhaps work it out in more detail, adding that economies that have not yet 'arrived' can perhaps find an easier route (they cite routes less environmentally damaging). These are very useful macro-insights.

Perhaps the best-developed of these is Kate Raworth (Doughnut Economics), which contributes a similar idea but in more detail, but with a less dynamic metaphor of the doughnut. She wants to recognise environmental limits ("ecological ceiling") without bringing poverty, ensuring a decent standard of living for all ("social floor"). Economic growth is allowed between those two limits. She objects to defining economic growth as increasing GDP; the "21st century economist" needs to "think differently":

Doughnut Economics is one of the most developed frameworks we have found that incorporates other spheres of life. Yet it (of course) has limitations or flaws, most of which are found in other recent thought too. The first four are practical, the other three more theoretical; see our discussion of Doughnut Economics.

Relational Economics of Schluter, Wieland and Bovenberg is concerned that economics ignores relationships of responsibility etc. among economic actors, and also perhaps that economics as a field should relate more to other fields - similarly to Carney's call for economic value to express all human values. Similar ideas are found in Economics of Mutuality by Roche et al. in their Completing capitalism: Heal business to heal the world (the mention of healing implies a clear idea that something is wrong), and Economy of Communion and 'Civil Economy' by Bruni et al. The Sharing Economy wants sharing rather than competition, and Gift Economy recognises the importance of giving rather than selling. These all bring in further values and aspects. Yet a mere emphasis on relationships and responsibility, while vitally important, needs more, including understanding what kinds of relationship and responsibility there are, the difference between good and evil (harm), and what the mandate of economics is. Some of these are presupposed rather than brought into discourse. In addition, some things cannot be seen as discrete relationships.

Too often economics and politics ignores the mundane and promotes only the exciting and iconic. Foundational Economics, of the Manchester Collective, is concerned that nearly half of all goods and services, and the labour paid to produce them, are ignored and their value is not appreciated. Such "mundane" economic activity provides a foundation that should be given more respect and attention. The Welsh government is adopting Foundational Economics. Mohammed Yunus' idea of Microfinance is a practical outworking of this, making tiny loans to people in Bangladesh to 'get on their feet' by establishing a business, which enables them to repay the loan. Jim Ouko's Participatory Market Systems Development (PMSD) wants to get markets to work well in rural situations in developing countries. "PMSD looks at the whole chain, everyione involved".

Heterodox Economics claims to be a collection of post-Keynsian, Marxist, Feminist, Institionalist, anti-austerity, and other economics opposed to "orthodox" economics. But it has not properly embraced environmental and wellbeing economics, nor Amartya Sen and others [Hodgson ===]. Though some are trying to include these, they are like squeezing a round peg into a square hole; these do not really fit unless important elements of them are shorn off [===]. When we ask what unites them, what is the common thread, we find little other than opposition, and, as Dequech [2007] suggests, "there are no significant ideas common to all heterodox approaches." This makes the term "heterodox economics" almost meaningless. Lee [2008===] tries to find a common thread in Heterodoxy being anti-capitalist and rejecting the scarcity concept and individualism. Hodgson [===] however finds these "flawed and imprecise". In a landmark paper, The Nature of Heterodox Economics, Lawson [2006] also sought a common thread, by discussing some characteristics of "orthodox" or "mainstream" economics to find out what is being opposed (individualism, rationality, equilibrium, selfishness, and mathematical ("formalistic-deductive") methods). Observing that in fact mainstream economics is no mere static caricature but is evolving, he expels all but mathematical modelling from his core thread and argues that this is inadequate for understanding and theorizing social reality. Economists require, Lawson suggests, "ontological awareness", i.e. awareness of the nature of social reality and how mathematics cannot model it. So he characterizes "consistent" heterodox economics as any economics that is opposed to mathematical modelling. To characterize Heterodox Economics only on the basis of its analytical methods of theorizing seems however to be rather weak, and even peripheral to economics as such. For one thing, it goes against the self-identification of some who employ mathematical modelling yet characterize themselves as heterodox on grounds of being, for example, anti-austerity [Slade-Cafferel 2019] or post-Keynesian [Hodgson ===]: Lawson [2017===] at best calls such "inconsistent heterodox". For another, this defines "heterodox" almost as widely and meaningless as defined merely by opposition. So does Hodgson's characterization of Heterodox Economics as "united more by (leftist) ideology than by analysis." The idea of Heterodox Economics is intuttively appealing as something beyond mere opposition, methods or ideologies, but nobody yet has offered a way to characterize it. We offer such a way, outlined later, based on kinds of meaningfulness rather than on any of these yet embracing them all, including ontological awareness, ideology, etc. - and even heterodox with orthodox - a way that even questions whether it is important to call oneself "heterodox".

Most thinking in economics ignores religion and beliefs. Mueller's Redeeming Economics returns to Aquinas' Scholastic ideas to emphasise relationships and love as central to economics, which, he says, have been lost to economics since Adam Smith. A useful idea, but is Scholasticism, with its nature-supernature dichotomy, really a good foundation for understanding economics as a whole? Kathryn Tanner's Christianity and the New Spirit of Capitalism brings a welcome Christian perspective into the discourses in economics, with an antidote to Weber's Protestant Work Ethic, derived not from rejecting Christian ideas but from their very heart, especially its focus on "relationships with oneself and others" and its idea of a glorious future hope for all Creation. She discusses ways in which a person's commitment to God is related to the person's more mundane commitments. The weakness in her idea is that her motivation is negative, to counter Weber and Capitalism, rather than positive, to understand economics as a whole, including valid insights that might be found in Weber and Capitalism. In this Rethink, we prefer to welcome and incorporate insights from all thinkers and systems of ideas. McMullen's What Difference does Christianity Make to Economics? makes the useful contribution of trying to overcome the Capitalist-Socialist conflict using Christian principles.

The RLDG first looked at 'Christian Values' as a foundation for the Rethink, but found them insufficient on their own. For example, when considering debt, how does one balance the Christian value of grace with justice, or even the 'realities' of economic life? In fact, values alone do not offer an understanding of the specific nature, role and mandate of economics, as distinct from other aspects of life, nor of the concepts that are meaningful therein, like markets. Values provide norms to guide these, but offer little critical challenge to rethinking them.

Most of these thinkers are responding to various harms they see economic activity doing in the world. These include:

Table 2.1 summarises what interests each thinker and what gaps they leave. In each column, items to the left indicate what their explicit concerns, items to the right indicate implicit concerns. Bold text indicates their main concern.

Table 2.1. (old version) What each recent thinker focuses on
(draft, incomplete, still being developed: given here to illustrate. See Overview of Recent Ideas for more.)

What each thinker focuses on

(Click on table image to see it full size.)

What faces us is a confusing plethora of ideas from thinkers over the past half-century, some concerned about climate, some about biodiversity, some about non-renewable resources, some about health, some about happiness, some about justice and inequalities either within affluent economies or between these and non-affluent economies, some about faith and meaninglessness, some simply about absurdities in economics, and so on. Most thinkers focus on one or the other; few try to bring them all together, though Doughnut Economics and others have started to do this.

What we need is a conceptual framework for understanding and incorporating them all, in principle - which can also welcome new concerns in the future. Since each concern is meaningful in a different way, this must be philosophical rather than scientific or logical in nature, because it must cope with, and do justice to, a diversity of meaningfulness. We will introduce this in Chapter 3

In addition, we do not want to simply reject earlier, conventional, ideas in economics. We also want to incorporate insights from conventional ("orthodox") economics, of both left and right.

2-2. Insights from Conventional Economics

Summary: Conventional economics, both left- and right-wing, also offers value insights, though also many that are not valid. The valid insights contribute to understanding how the economic aspect of reality itself operates.

By "conventional economics" we mean the two main camps of left- and right-wing economics, socialism versus capitalism, and associated ideas like neo-classical and neo-liberal economics versus state-led economic control and Marxist ideas.

It has been suggested by members of the RLDG that Adam Smith's writings (which gave rise to economics as we know it today) contain insights that have been ignored, and it is ignoring of them that has brought about the parlous situation we have today. The RLDG wants to treat such insights, as well as those from others, with due respect and take them into account - and yet go deeper by questioning presuppositions on which they are based.

Over the years, many valid insights have emerged about things like:

(Notice how we mix micro- and macro-economic concerns together.) Understanding of such things must be incorporated along with insights from recent thinking, if we are to properly understand economics. Many of the recent thinkers, such as Mark Carney, who was once Governor of the Bank of England, do bring these into his 'heterodox' ideas, but not all do. We will try to, too.

Such insights are valid insofar as they account for how the economic aspect of reality itself operates, shorn of considerations from other aspects, except that of justice in left-wing economics.

Not all insights from conventional economics are valid, however, lying among the roots of most of the problems in which economics has been implicated. Among these we include:

These are problematic in conventional economics and some even still infiltrate much recent thought. Some of these are inherently problematic; others contain a modicum of validity. What the validity might be, and the reasons why they become problematic will be discussed in the chapters to follow.

Some of the problems arise from how economics is 'used' by politicians and others, yet it seems that there is something in economics itself that allows and even encourages such things to become problematic rather than healing. RLDG discussions of them revealed yet deeper roots of even these, of which this Rethink discusses five, one per main chapter in Part II. The RLDG's first attempt at a Rethink suggested five slightly different root issues: isolated economics, narrow economics, unconcerned economics, fragmented economics and competitive rational economic actor. Subsequent discussion developed these into the five in this version of the Rethink.

Concluding, we may see insights from conventional economics as in three clumps:

2-4. Ideas from History

Ideas that criticised and questioned economics theory as it was being developed as a distinct science. ===== to be collected and written. # Back to the land movement # Romanticism # Adam Smith, John Maynard Keynes, etc. # Gilbert White etc. John Muir.

2-5. Issues that Too Few Discuss

While some issues are well discussed (GDP, growth, poverty, wellbeing, environment, etc.), some receive hardly any attention, but are nevertheless important. Among them are:

2-6. A Way Forward

Summary: We seek a framework for understanding economics as such. Instead of just responding to the above insights, we consider five main issues drawn from philosophy.

These are provide insights about the way forward, and all are very welcome, but there are several challenges.

Instead of seeking to counter or rectify problems discussed above directly, we treat them as visible symptoms of deeper malaise. We seek to understand the economic aspect of reality and its relationship with other aspects (such as the biotic in the case of biodiversity), wherever they may be found, both in these recent thinkers and in conventional economics of both left and right.

We try to avoid taking sides, whether left versus right, or recent versus conventional. Nor do we seek 'balance', nor compromise. Rather, we seek foundational understanding, both of the nature of economics itself, and the ways it can go wrong. We do not accept without question the standard answers to these, but employ philosophy, because philosophy is the "Discipline of Disciplines" [Strauss 2009].

We treat conventional and recent thought somewhat differently. Because conventional ideas have been worked out much more elaborately, they have more layers of problematic accretion from society's presuppositions, attitudes, aspirations and expectations, so there is more to cut away - to criticise - in conventional economics before the valuable insights can be reached. That is why, in this Rethink, there might appear to be more criticism of conventional economics (of both left and right) and more acceptance of recent thinkers.

We regard recent thinkers as drawing attention to issues that conventional economics has overlooked. Each of those thinkers suggests that economics needs to be reformed, rethought, reframed in certain ways, to take account of things it currently does not - climate change, biodiversity, justice, human living, health, the mundane, values and even religion and theology. However, since much recent thinking has arisen by reaction, we are by no means uncritical thereof.

Instead of reacting, We adopt the LACE approach, to Listen to both recent and conventional thought, Affirm and Critique them, and enrich the Entire field of economics.

We could just try to address the issues discussed by recent thinkers directly, but that would not work well, for four reasons. 1. Bolting disparate concerns together rarely finds integration. 2. We want a basis to respond to issues that have not yet been made widely matters of concern. 3. We also want to incorporate harmoniously insights from conventional economics. 4. RLDG discussions included the issues these thinkers discuss - climate and environmental responsibility was frequently mentioned, along with poverty, and the way the markets operate. Yet other issues were also mentioned, and we might expect further issues to arise in future.

So, while specific issues are mentioned here, the approach we take is to generalise beyond them, in a way that can allow for issues whose importance is not yet recognised. Instead, we seek a paradigm for economics, a framework for understanding it, that naturally leads us to embrace the insights in recent thinking, and is likely to be able to accommodate concerns yet to arise.

The RLDG framework includes the following five main elements, drawn from major themes in Dooyeweerd's philosophy tailored to economics.

Those five set a direction for rethinking economics and give some examples of how this may be followed. But they need research, discussion and refinement. So we add two more chapters, to work out some of the examples in more detail:

2-7. Conclusion

There is a huge plethora of ideas about what is wrong in economics and how to address its problems, but the discourse as a whole is fragmented and piecemeal. We address the challenge of providing a basis for philosophically sound yet practical integration. The next chapter sets out and discusses half a dozen perspectives we consciously adopt that allows us to develop this.

Created: 27 March 2023, from text of xn.rething, and some collected bits. Last updated: 29 March 2023 filled in more thinkers; merging stuff. 30 March 2023 edits. 31 March 2023 edits to recent, convl, way ahead - uploaded. 5 May 2023 Bregman. 13 May 2023 corrected headings. 3 June 2023 history section. 5 June 2023 hdgs. 2 September 2023 small rw re problems. 2 October 2023 Heterodox Ecx. 9 November 2023 plethora. 1 December 2023 farmers misusing land; new intro. 5 December 2023 Circ flaws. 20 December 2023 Goodwin. 25 January 2024 Ecx of Enough. 10 April 2024 Less-discussed ideas; rw chapter lists; concl.