this was written in 1996 or 97 for my grade eleven economics class. i noticed a bit of blatent plaigerism from adbusters, so i shouldn't take credit for most of the ideas. however, it was my idea to compare economics to the title of a ween album.

Economics is Wrong

I've learned that economics is treated like a science: there are laws of supply and demand, all sorts of graphs and charts, and it uses mathematics, the scientific language. There's even a Nobel prize for economics. This bothers me because economics is not a science. In any other science course, all variables are accounted for and a law is something that is undisputed. None of this is true in economics. You've said yourself that most of what we learned occurs in "perfect world" scenarios. This frightens me because this logic shapes our lives, jobs, and government, but we don't live in a perfect world.

CHOCOLATE AND CHEESE

Our current, dominant economic policy makers are the expansionists, also known as the neoclassical economists. They see growth as a solution, and are blind to ecological constraints on economic activity. They ignore the long-term affects of polluting the environment and depleting natural resources.

I refer to this form of economics as chocolate because in the short term, it will satisfy us, but in the long run we know it's not good for us.

Economists that see expansion leading to an ecological nightmare are known as bioeconomists, or ecological economists. They accuse expansionists of "liquidating" the earth's natural resources for short-term gain, and they maintain that future generations will bear the costs of our current system living off the death of nature.
I refer to them as cheese because cheese is healthier than chocolate.

The solution to removing the threat on our survival is to pursue sustainability. For ecological economists this is done by a paradigm shift in our values, lifestyles, agendas, and institutions.

The expansionists' solution is to create as much wealth as possible by privatizing government services, eliminating barriers to trade, and freezing up markets. They think that this will result in a new round of economic expansion and that the wealth we need to tackle environmental degradation, poverty and other economic woes will be produced.
But they haven't developed a way to measure this economic growth. The Gross Domestic Product (GDP) is their chief measure of growth and it sucks. What does the Exon Valdez oil spill, car accidents, cancer patients, and the Gulf War have in common? They all contribute to America's GDP going up. The country becomes healthier when bad things happen.
When someone walks instead of driving a car, uses a train instead of an airplane, wears an extra sweater instead of turning up the thermostat, raising kids by staying home instead of going to work the GDP goes down. (Also, the GDP doesn't recognize unpaid, volunteer workers or housewives. It's as if they don't exist.)

Ecological economists developed their own, more realistic measures of economic welfare. The ISEW (Index of Sustainable Economic Welfare), shows an accurate measure of economic progress. When pollution, depletion of non-renewable resources and car exhaust-related health costs are factored in, a dramatically different picture of the economy emerges compared to the GDP. The GDP's of the US, UK, and Germany appear to be heading upward from 1955 through the 1980's. However, the ISEW shows no improvements in economic welfare since the 1970's. It actually levels off and falls dramatically in each country.

The ISEW shows how expansionists are pseudo-scientists, urging the world ahead without knowing themselves what to expect. They don't acknowledge the effects of their policies on real people (what they refer to as "human capital").

THE GLOBAL PYRAMID SCHEME

In Albania close to 90% of the population put their money in simple pyramid schemes without knowing what they were investing in. They were promised cars, tropical vacations, and triple their money back in three months. "Albanian money is the cleanest in the world," President Sali Berisha reassured. The Albanians sold their homes and livestock because the government supported these schemes. Eventually new investors dried up and the funds started to fail. They'd collectively lost a billion dollars.

We trust our financial advisors, our expansionist economics, and our political leaders as blindly as Albanians trusted theirs. Our money's not in the bank we left it in. They injected it in the global market. Three trillion dollars moves through the global market everyday and collects at certain hot spots. After a Canadian company announced that it found the world's biggest gold deposit in the Indonesian rainforest, the penny stock soared to nearly $300 a share - until fraud allegations surfaced. Billions of investor's dollars were lost, including hundreds of millions invested through pension funds.

We sink billions of dollars into retirement plans and mutual funds, which are supposed to be secure investments, not knowing what's in these funds. Some of the money may be bolstering genocidal regimes like Indonesia's.

We've given up control of our money. Investments are being held together with our faith. And so is the global economy. Is there enough economic progress to keep the whole thing going?

Pyramid schemes rely on a continuous supply of early contributors being paid from the pockets of later ones ( the dupes). These schemes collapse when no new contributors can be found. In the expansionist model of the global economy, future generations are the dupes. As our natural resources grow scarce and as climactic instability escalates, we eventually reach a point where one generation is unable to buy into the scheme.

THE CIRCULAR FLOW OF FUNDS

The circular flow diagram presents the economic process as a circular flow from businesses to households and back again with out any inlets of outlets. This is not a good framework for studying production and consumption. In the circular flow maintenance and replenishment seem to be accomplished internally, recquiring no dependence on an environment. This is another example of economics pretending to be a science. If a biology textbook proposed to study an animal only in terms of its circulatory system, without mentioning the digestive tract. Unlike this imaginary, perpetual motion machine, real animals are connected to their environment at both ends. They continuously take in low-entropy matter/energy and give back high-entropy matter/energy.

In economics there only is the circulatory system. Nicholas Georgescu-Roegen provided the concept of "entropic flow": the one-way flow beginning with resources and ending with waste. This is more descriptive of the real world than the circular flow discussed in our text book. The entropic flow of matter/energy is more basic than the circular flow. No economy can conceivably exist without the entropic flow, while it is easy to conceive of an economy with no circular flow e.g., a barter economy.

THE SHIFT

When a new form of music, rock and roll, arised many years ago it was met with much resistance from a generation of racists and fans of Lawrence Welk. Over the years more people became open to artists like Chuck Berry and Little Richard because they liked the music. By the time Nirvana came on the scene there was little or no resistance to rock music. It has come to the point where it's almost the only type of music. When an idea gains a critical mass of supporters, it ignites behavior change on a large scale. The values of a few are adopted by most everyone. Wars end and revolutions begin this way.

It's been a few years now since a minority of people warned us of the dangers of overconsumption. These people set an example by speaking out and taking action. A lot of people started taking these messages to heart. Consumption itself has become often a topic in mainstream press. Corporations are trying to promote an environment-conscious approach to their advertising. Sustainable consumption is becoming a reality.

Maybe 30 years from now Greenpeace will be the cultural icon to future economists that the Beatles are to music fans.