The economic activity of our society is destroying the viability of life on earth and enabling a minute minority to accumulate vast wealth and power while much of the population struggles with poverty or insecurity. We have an inhumane economic system which is rooted in ideas propagated either by those who stand to gain from the system or by well-meaning people who have been persuaded that the current system represents centuries of evolutionary progress.  There is nothing inevitable about the way a society chooses to organize its economy. Our economic system is an expression of our culture. It is not divinely mandated or the product of inevitable evolution. It is a matter of human choice. The moral arc of history does not bend towards justice unless we are pulling in the right direction with all our might.

Mainstream economic theory, both as it is taught in academia and employed in government or business, is based on the idea that economic theory is a science like physics or chemistry. Many of its assumptions are so ingrained in our culture as to seem like basic common sense. We seem to think it is just a description of “the way the world works,” and any policy or practice that does not conform to it is doomed to failure. The assumptions underlying our economic system, however, are really just dogma which needs to be reexamined. Economic theory, like political theory, is a branch of moral philosophy.

Mainstream economics conflates the creation of surplus goods through technology with the accrual of profits to individuals or corporations. It assumes growth is necessary for prosperity, and it measures growth in a way that has little to do with the actual health of the society. It assumes financial markets are necessary to channel savings into the investment necessary for growth and prosperity. It fails to see that money itself should not be a commodity with a price determined by supply and demand and that the only thing achieved by financial markets is the concentration of money and power in the hands of a few along with an unending series of crises that destroy lives. It justifies all this with a simplistic model of human interaction and the pretense of being a science based on mathematical models. Society is conceived as a marketplace where autonomous individuals compete in the exchange goods and services as a way of satisfying individuals’ desires.The roots of these ideas run very deep. Ultimately they feed on the cult of individualism that has been strengthening its hold on our culture for several centuries and is tied to ideas about liberty and freedom.

Rarely do economists question the assumptions underlying their analysis of what are considered economic issues. Since the financial crisis of 2007-2008 there has certainly been increase in the criticism of certain aspects of our economy. The growing dependence on financial products and markets has been questioned and labeled “financialization.” Environmentalists have question the need for perpetual growth. Globalization and policies of austerity are debated. The efficacy of markets has been questioned. Increasing inequality has been analyzed. Most of these discussions, however, do not really question the framework within which economics operates. (A rare exception to this is the work of Massimo Amato and Luca Fantacci.) As a result economic theory functions like a weirdly self-fulfilling prophecy. It describes the way the world works in a way that causes the world to work that way. Economics proceeds to focus on the current system, and any suggestion that it might work differently is dismissed as unrealistic or utopian fantasy. It has been left to sociology and anthropology analyze or speculate about other systems.

Nonetheless if one picks a fruitful point of entry, it is possible to unravel all the tangled assumptions of economic theory and see that it could be possible to have a market economy without financial markets or interest-bearing loans in which banks functioned as public utilities and investment in infrastructure as well as research and development was achieved with credit (i.e. the creation of money). Perhaps the most accessible starting point is to examine how we think about money. [ see Money ]