The Evolution of Economics
CHANGE LEADERSHIP PERSPECTIVES
Understanding the Limits of Conventional Economics
So crucial and so...fuzzy
Economics holds a unique position: Its so impactful and crucial and yet most leaders are so fuzzy about it. The economic decisions that we make - and the mental models that govern those decisions - impact on people and their well-being.
Unfortunately Economics is not how things work, but rather how those in control want you to think things work. As Yanis Varoufakis notes in Economics is Irredeemably Sexist, the central theory of economics, "Homo Economicus", is a fiction invented and perpetuated by 19th century privileged white males steeped in power, privilege and a colonialist world view.
From this "rational actor" trope flow a stream of distortions and myths we carry around in our heads, reinforced by messaging from government and corporations. Collectively they perpetuate a sense of helplessness in the face of urgent and ultimately solvable issues facing your customers and communities.
To enable healthier wealthier communities, we must rethink the things we've been taught about wealth and economics. If you have ever faced individuals or companies who were resisting necessary change under the guise of financial necessity, this is the learning path for you.
The diagnosis
Economics as we know it today is largely the product of well positioned and privileged people - a groupthink catechism of how privileged people prefer to think the world works, and how they want everyone else to believe the world works.
If inclusion, social justice, equity, are goals we hold dear, we must recognize that our own economic thinking has been shaped by the assumptions and teachings of privileged individuals who in many cases did not share such goals.
This point troubles conscientious leaders who want to their work and decisions to support beneficial outcomes.
How do we make sure that we're making decisions that lead to the outcomes we say we want, instead of just perpetuating the same old harms?
We all say we want better financial access, better equity and equality, better health and wealth for everyone. How do we make sure that we aren't working against these things?
- What specific points require us to relearn or rethink certain parts that we’ve always assumed what assumptions do we have to overturn?
- Is there someway of learning or adopting a new framework that helps me see things differently, and make better decisions without getting lost in a whole bunch of politically polarized, jargon and falling into extremes on either side?
- When we’re making decisions, what kind of considerations do we bring into the picture so we make decisions that allow our organization to thrive but also move towards the kinds of outcomes we say we want?
- How do we do our part to help drive financial innovation and better economic outcomes for a communities and customers?
- Is there something actionable, practical and constructive that can be done?
The good news is that - while these questions don't have neat little textbook answers - there is a path forward. A learning path that helps us deepen our understanding and raise the awareness of others. It starts with learning how to