I started studying Economics in 2014 at Hanken in Helsinki. Motivated to understand what it actually means when people say “money runs the world”, I hoped to learn about the economy in order to one day be able to affect it and use it to make the world a better place. But what is the economy really even trying to achieve? I was still a bit confused after 3 years of studying. Economics has an important role in our society, but the way it is taught to undergraduate students is too simplified and does not challenge them to think for themselves enough. I recently finished reading “Doughnut Economics”, a book that discusses other, more sustainable ways of organising our economy. I am still not sure I can ever understand all aspects of the global economy, but I really learned what economics could achieve from reading this book.
The Doughnut is an economy with two boundaries: a minimal social boundary that we hope everyone can be above, and an ecological boundary that we can not exceed without seriously harming ourselves long term. This is so self evident to me. Economics is all about making sure that people have a tolerable life, while making sure we do not overuse natural resources.
But studying economics, no one ever said this was the goal or purpose of economics. Instead, the goal was said to maximise “utility”. Micro economics assuming that people’s behaviour is driven by only a strive for “utility” left me not knowing whether I should laugh or cry, because it just seemed so absurd. Utility, things that are good only for oneself. Research show that people who have studied Economics tend to be more selfish than people who have not studied the discipline. More money and more things. Do we really want to teach young people that good behaviour is to be motivated only by money? I certainly don’t think we should. Therefore, whenever I hear a politician justify something by talking about economic theory, I instantly become very sceptical of whether they are just quoting 200 year old ideas of Adam Smith, without really reflecting on what kind of world she or he is advocating to create. There have been many really interesting economic theorists since Adam Smith but it seems like the stuff they teach at undergraduate is stuck in history. Milton Friedman and John Maynard Keynes are studied but really not much more, the discipline need more debate and more opinions.
My favourite Economics teacher at university said it very well “Economics is mathematics of social science”. Mathematics is great for understanding large concepts and simplifying is not always wrong but I think it is wrong to calculate based on false assumptions, assumptions that also teach people to behave in ways that can lead to inequality and environmental destruction. There has been ideas in my studies of Economics that I have found very interesting. The discipline has provided me with quite interesting tools to think about the world in. I however disagree with many of the values that underpin current economics taught at undergraduate level of university and repeated by 60-year old top-bankers. Most of all, the notion of eternal economic growth is just absurd. My first lesson in economics taught me that “economics is how to manage finite and scarce resources”. If resources are scarce, how on earth can the economy keep growing?
So I was thrilled when I finally discovered a book that offered an alternative to the current economics that is being misused by politicians. Raworth talks about why many economic theories that are taught to undergraduate students are just plain wrong. She envisions a future where economies are “growth agnostic”, where the goal of the economy is not growth. She talks about how different currencies, such as time banks, can promote a non-growth economy. She talks about how it is damaging to have a system that rewards people for being selfish and unsustainable.Inequality pushes for growth, because the poorest aspire to become more like the richest. If we share more, we don’t need growth to take care of the weakest in society. Finance does not have to be built to make the richest even richer.
She does not offer the perfect solution of how to get to this sustainable, equal dream-economy. But I think she does a lot more than most economic policy makers who are currently given a voice in media.