A word of explanation concerning my reasons for creating this blog is needed.
I already have a blog, with a significant number of readers. That is the Tax Research blog, and as its name suggests, it’s mainly about tax, and how to create tax justice for ordinary people in the UK and developing countries: justice they are denied at present because of the existence of tax havens and the abusive behaviour of multinational corporations and the lawyers, bankers and accountants who provide them with tax avoidance services.
This blog is about something different. It’s about economics: a new type of economics, and in particular a new economic theory. They audience may not be the same. And in any event, since this blog is about the production of a single idea, longitudinally over time, it needs to have space dedicated to it, and it alone.
The idea I want to explore is a simple one. It is that we humans need to give up the idea that we maximise our happiness, wealth or income, all of which ideas are implicit in the economics which governs behaviour in our society. I suggest that we need to practice the concept of having enough instead, but that in the process we will in fact be better off. If I could explain why in a sentence or two I would; it would save me a lot of time. The fact is that, at least as yet, I can’t. Hence this blog.
So why do this now? And why do I think it’s my job to do this? The questions are linked. The answer requires a little background information, but since I like to know who is putting ideas to me (which means I thoroughly dislike the anonymity which characterises much of the blogosphere), please excuse some personal explanations for a moment.
I am 51 when writing this. I trained as an economist at university. Except I’d read E F Schumacher’s ‘Small is Beautiful‘ before I went. And E J Mishan’s The Cost of Economic Growth. And quite a bit of Keynes. You could say I had a sad sixth form, but I’d disagree: I was a nascent green in the making. So university economics was a bit of a shock. Within a term I’d realised that it did not offer an explanation of what happened in the world. It was quite clear to me that people did not, and could not, behave in the ways described by those teaching economic theories to me. Very obviously this ‘positive economics’ I was being taught was in fact highly subjective, and sought to impose a system of behaviour, not describe one.
The result was a crisis: I switched to joint honours with accountancy but stuck to the course as a whole; it provided too many opportunities to be editor of the university newspaper, partake in politics and much more besides to forego. So I graduated as an economist with some accountancy on the side, and became a chartered accountant.
Then at 25 I had to decide, which was it to be: accountancy or creating a new economics? I registered for a PhD. I went to the first TOES – ‘The Other economic Summit’ progenitor of much that has happened in this area – and I started a firm of accountants at the age of 26. Accountancy won. I’m glad it did. My ideas simply weren’t good enough then. I needed real world experience to let them develop.
But I never ignored my interest in a new economics. I’ve been working on it for twenty five years now, off and on, but pretty much on the same course throughout. This blog will reflect, and I hope develop, that thinking.
But why now? Partly because I’m 51. Half a life time thinking about this is long enough. Now it is time to give this stuff an airing.
Partly because I’ve found that I have a voice: my work on tax has given me that.
Partly because it is very obvious that there is a need for a new theory of economics. As Tim Jackson said in his introduction to his report published in March 2009 for the Sustainable Development Commission :
What we still miss from this is a viable macroeconomic model in which these conditions can be achieved. There is no clear model for achieving economic stability without consumption growth. Nor do any of the existing models account fully for the dependency of the macro-economy on ecological variables such as resources and emissions. In short there is no macro-economics for sustainability and there is an urgent need for one.
Is what follows that model? I’m not the person to answer that. It’s just my contribution to debate, and as I’ve discovered from my work on tax justice, making such contributions can both be worthwhile, and can change things. If for the better then making the effort is worthwhile.
Mainly though I am writing this because I feel I have little option but do so. The choices I made, the life I have lived will not be available to my sons. James and Thomas are 8 and 6 (or nearly seven, as I am reminded, often). I was brought up in a world where most believed there were no constraints. They were wrong. Very wrong. We are very, very constrained. But we have still to work out how to react to that truth. That model of economics I was taught at university is the main impediment to that absolutely essential process of change. It still says that growth is good, and that there is no alternative.
I believe there is an alternative. I have to believe that. If I there is not then I can’t imagine the problems that might be faced by people around the world as my natural lifespan might draw to a close, and what inheritance I might leave to my sons, and all others of their age.
So this blog is really for James and Thomas, and all of their generation.
But as with just about everything I do in life it’s only possible because of the love, support and encouragement I receive from Jacqueline, my wife. So it’s for her too, with thanks.
And what is the aim? Simply this: to create a new economic model that can be taught as a system, that can replace the dire view of life that is presented in schools and on undergraduate university courses almost everywhere as if it were the truth about how people and businesses operate: that they really do profit maximise in a perfect and unconstrained world in which the gifts of nature are free and boundless. Let me assure you: I know that economists have tried to overcome the constraints these assumptions impose in higher level work. But that really does not matter. It is the basics that are taught in year one that people remember of their economics, and that is that life is all about profit and that unlimited growth is good. The aim of this blog is to help change that. It’s a big task. When I decide I’ve reached the end of the tale it will be for you to decide if I have succeeded. I can but try.
Downham Market, Norfolk, UK
June 2009
Enough Economics 
I’m delighted to find this blog.
As a Quaker and an advocate of Paddi Lund’s theories that happiness doesn’t necessarily come from maximising your wealth and possessions, it’s what I’ve been waiting to hear.
And also to hear that my view of business – small is not only beautiful but just as much a business as one that’s planning to grow – is not isolated, is great.
More power to your elbow Richard, I’m right behind you.
M
Richard,
For the good of thorough intellectual development on this new blog, I am periodically going to come along and play devil’s advocate.
Objection from the neoclasical school, #1:
“the dire view of life that is presented in schools and on undergraduate university courses almost everywhere as if it were the truth about how people and businesses operate: that they really do profit maximise in a perfect and unconstrained world in which the gifts of nature are free and boundless.”
– A basic starting premise of neoclassical economics is that resources are scarce, and wants are infinite. The gifts of nature are certainly *not* free and boundless, according to the neo-classical school: indeed, the entire neo-classical excercise could plausibly be described as an attempt to address the fundmanetal antagonism between infinite wants and finite resources.
So the neoclassical charge against you #1 is: you’ve misrepresented or misunderstood their basic premise. Therefore (they say) we won’t take you seriously.
Paul
I do think, despite your assertion that neoclassical economics says that the resources of nature are not free and are scarce that it then goes on to treat them as if they are. After all – what return is actually paid to them (as opposed to that human being who claims title to them – which is quite different?). Sine the answer is none the effect is that they are free.
That does not mean resources are not scarce – they are, for many – but that is not for this reason. Labour is scarce, for example but then it’s not a free gift of nature.
Second – who says wants are infinite?
And – let’s be clear – from this moment on I pretty much ignore existing models of economics, so the argument is pretty irrelevant to all that follows.
And they probably won’t take this seriously anyway: that’s not the point. Creating a new paradigm has never been deendent upon approval of the old one.
Richard
We have seen the failure of Keynesianism, unfettered monetarism, and everything in between.
In terms of economic modelling, the key in my view is that people’s natural behaviour as individuals is to try to maximise quality of life (QOL) which is rarely modelled because of its complexity and variability in that it is different for everyone.
For some it means accumulation of wealth and possessions. For others once they have enough, they are satisfied and then it is about the less tangible things in life, almost going back to the weighting of different levels in Maslow’s hierarchy of needs.
However when comparing this to companies whose goal is profit maximisation, as seen by the events of 2008 – there is little in the way to incentivise companies to do anything else – and indeed for all the claims of corporate responsibility they have no mandate from their shareholders to do so usually. The perfect illustration is Northern Rock.