Economyths: 11 Ways That Economics Gets it Wrong

Economyths: 11 Ways That Economics Gets it Wrong

by David Orrell

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Overview

When Economyths was first published by Wiley in 2010, David Orrell showed how mainstream economics is based on key myths such as fair competition, rational behaviour, stability and eternal growth – and how these myths lead paradoxically to their opposites: inequality, an irrational economy, financial instability and a collision with nature’s limits.

Since then, we’ve had Occupy, political upheaval, flash crashes in financial markets, the warmest few years in recorded history – and a growing chorus demanding fundamental reform. So how has economics responded?

In this revised and expanded edition, Orrell shows how the ten myths still dominate economics. He reveals their roots in thought that goes back to the ancient Greeks, making them hard to dislodge. And he uncovers, demolishes and develops an alternative to the greatest economyth of all – the one that will lead to the collapse of orthodox economics.

Product Details

ISBN-13: 9781785782299
Publisher: Icon Books, Ltd. UK
Publication date: 09/12/2017
Edition description: Reprint
Pages: 448
Sales rank: 929,803
Product dimensions: 5.10(w) x 7.70(h) x 1.20(d)

About the Author

David Orrell studied mathematics at the University of Alberta, and obtained his doctorate from Oxford University on the prediction of nonlinear systems. His work in applied mathematics and complex systems research has since led him to diverse areas such as weather forecasting, economics, and cancer biology. His work has been featured in the New Scientist, the Financial Times and on BBC Radio.

Preface

Economyths, like a host of other books, was born from the financial crisis. I first started working on it in 2009, a few months after Lehman Brothers went bankrupt, and the first edition was published in 2010. In a way it was a reaction to events at the time; but it was also about broader questions that I had been working on for a while, such as how we use numbers and mathematical models to simulate and understand the world, and how this was being affected by new approaches such as complexity science.

Since the book first came out, a lot has happened. In March 2011 the Canadian magazine Adbusters printed an extract from Chapter 10 urging students of economics to take a chance on ‘speaking up, questioning your teachers, being open to disruptive ideas and generally acting as an agent of change’. The publisher Kalle Lasn added: ‘Ten years from now, as the blowback from the externalities of their way of doing business repeatedly hammers us and global warming kicks in with a vengeance, we’ll look back [at neoclassical economists] and wonder what it was about these logic freaks and their money narratives that so mesmerized us.’

A few months later, Lasn wrote a blog post calling for a peaceful occupation of Wall Street, beginning on 17 September (his mother’s birthday), to protest against issues such as wealth disparity and the involvement of financial companies in politics. Quite a few people turned up to the event, which became known as Occupy Wall Street. It grew into a movement that soon spread around the world.

The same Economyths extract, which was reprinted in the November issue of Adbusters, as well as their book Meme Wars: The Creative Destruction of Neoclassical Economics, had noted that elite institutions including Harvard University were grooming students for work in the financial sector. It was therefore cheering when that month, as part of what was by then the global Occupy movement, Harvard students staged a walk-out from Gregory Mankiw’s Economics 10 class. According to Gabriel Bayard, one of the organisers, ‘Ec 10 is a symbol of the larger economic ideology that created the 2008 collapse’. (I am not claiming the book played any role in all of this, but it certainly came out at a receptive time.)

One of the students’ complaints was that the course offered ‘very little access to alternative approaches to economics’. A similar concern motivated the founding of the World Economics Association in May of that year. Its manifesto called for an emphasis on attributes such as a plurality of approaches, diversity in membership, relevance to the real world, and ethics. More than 3,600 people from 110 countries joined in the first ten days.

In the UK, Manchester University economics students started the Post-Crash Economics Society, posting a petition to revise the economics syllabus in November 2013 (with what was then the second edition of Economyths on its list of recommended reading). The following year, students from Quebec – part of the International Student Initiative for Pluralist Economics – wrote a petition noting that the field leaves ‘little room for ethical, epistemological, philosophical, political and historical reflection, which would allow the discipline to reflect on itself and renew continuously’. The umbrella organisation known as Rethinking Economics soon represented over 40 groups around the world.

Students and others had made similar calls for reform in the past, most famously perhaps in the ‘post-autistic economics’ movement initiated at the École Normale Supérieure in Paris in 2000; but the financial crisis had now added a much greater impetus. In May 2014, Cambridge University economists Ha-Joon Chang and Jonathan Aldred noted that their subject ‘is the only academic discipline in which a significant and increasing number of students are in an open revolt against the content of their degree courses’.

The number of people protesting about economics, and proposing or calling for new ideas and approaches, did not therefore quietly decline as the economy slowly healed – instead it continued to explode. Economics, it seemed, had finally passed the tipping point. The field would never look the same again.

Unless, of course, you were an economist.

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