Economics is not just for the experts
Ethics have become a non-market good, argues Katherine Zobre, but we can reclaim it.
Each of us needs to re-evaluate what assets we can trade. It is easy to forget, especially in times of crisis, that economics is half description and half innovation and not just for the experts. A mythical or mystical creature did not invent economics. It is what we, as common people and kings alike, exchange, why and how we do so, and to what end. Economists need to adapt and re-evaluate what people have to exchange and how to properly valuate it.
The specialty training of economists, combined with understanding and experience of individuals and communities, provides all the groundwork for innovative solutions. However, after reading both Pouw’s1 and Krugman’s2 articles, I can’t help but agree that at least the loudest voices in the economics communities failed to serve their public purpose. In addition to Pouw’s poignant question of where the ethics in the banking communities have gone, Krugman proposed that the economic community has forgotten its history, making any move a step with eyes closed.
As global ecologies (social, environmental, political, etc.) evolve, change or are disrupted, so must the economics directing the finances. Krugman made a valid argument that to adapt to changing circumstances, such as high unemployment rates, economists need to first remember (or learn) the history of economics. Krugman suggested that the principle foundations of our current institutions should be rigorously questioned. He used banking as an example of where economists have forgotten their history: “what constitutes a ‘bank’” he asked.
While Krugman searched for the answer in existing models, Pouw demonstrated the need for new economic models. Edgar Cahn answers both Pouw’s and Krugman’s questions with the Time Bank where one trades hours of work not money3. Cahn argues that economists and citizens alike have systematically under-valued the resources and activities that allow the human race to survive and prosper (such as child-rearing and health care provided by parents). This is where the ethics have gone. They have become a non-market good, and thereby devalued by an increasingly market-dependent global citizenry.
As for what to do next, Cahn argued that we should re-invest in the ‘Core Economy’4 (non-market goods and services) and by strengthening the moral and physical health of individuals, families, communities we strengthen the productive capacity and thereby the economy. As Nass5 pointed out, individuals and communities experiencing global and local changes are in an excellent position to describe, if not innovate as well, exchangeable assets that can contribute to an economy. The answers to Pouw’s and Krugman’s questions, as alluded to by Nass, are among us already but it will take historically-minded economists and actively involved citizens.
- Nicky Pouw. (2011, September 16). “The gist of the matter is in the interconnections.” [Web log comment]. Retrieved from https://www.thebrokeronline.eu/Blogs/Bellagio-Initiative/The-gist-of-the-matter-is-in-the-interconnections
- Krugman, P. (2011). The Profession and the crisis. Eastern Economic Journal, 37. Retrieved from http://www.palgrave-journals.com/eej/journal/v37/n3/pdf/eej20118a.pdf
- Tina Rosenberg. (2011, September 15). Where all work is created equal.” The New York Times. Available from http://opinionator.blogs.nytimes.com/2011/09/15/where-all-work-is-created-equal/?scp=2&sq=time%20bank&st=cse
- Cahn, E. (2011). It’s the core economy stupid: An open letter to the non-profit community. Retrieved from http://timebanks.org/wp-content/uploads/2011/08/CoreEconomyOp-Ed_001.pdf
- Lucia Nass. (2011, September 20). Economics and social change sciences. Retrieved from https://www.thebrokeronline.eu/Blogs/Bellagio-Initiative/The-gist-of-the-matter-is-in-the-interconnections