The Fundamental Flaw in Economics
How ‘Homo economicus’ forgot what species he really is
5 min read
6 days ago
Last week, I got the joy of watching a dear friend defend his PhD dissertation. Now, like the mother of an honor’s student, I can proudly slap a bumper sticker on my van that reads, “My Old Roommate Is a Doctor of Philosophy in Ecological Economics.” You hear that? Doctor.
My friend is, of course, brilliant, but I must admit, his title is quite stupid. It’s not the Doctor part that bothers me; it’s the rest of it. A Doctor of Ecological Economics? That’s like being a Prince of Carbonized Carbon, a Prophet of Existential Existence. It’s like corn-on-the-cob. Mitch-all-together.
Economics is the study of how we use and distribute resources, how we turn those resources into goods and use those goods for services.
The resources, upon which the whole field of economics relies, can only ever come from ecosystems.
Housing markets can’t exist without the lumber to build houses, which comes from trees. The restaurant industry can’t exist without food, which is made of plants and animals. The screens we’re both looking at right now are made of glass, which is sand, soda ash and limestone. Even the Metaverse relies on natural resources.
The stupidity isn’t with ecological economics, but with the notion that economics needs to be qualified with that adjective, or more to the point, that there is any other kind of economics to begin with. As Mitch Hedberg might say, “Ecological economics? That’s how economics comes out of the ground, man!”
To any rational mind, there aren’t economics and ecological economics. There’s economics, and then there’s the delusion that such a thing as “non-ecological economics” could exist.
I took one whole economics class in college (my real interest came later), and all I really remember was our first lesson on supply and demand curves. These were the fundamental conditions of our economic world: there’s supply and there’s demand. Supply is the stuff. Demand is the wanting of it.
There was no mention that all supply emerges from a living, breathing planetary body with a set of laws that govern sustainable ecological behavior, nearly all of which we, in that…