Why We Need a New Economics

Jim Cross graduated at the top of his applied computer science class.  But he hasn’t found a job in the prosperous California Silicon Valley, once the golden Mecca for high-wage technology jobs. While sales and profits in the region have been skyrocketing again – an average of more than 500 percent over three years – employment has actually declined.

In Nigeria, Marian Mfunde has just buried her second baby. Like her first son – and millions of African children every year – her five-month old daughter died of hunger.  Marian herself is sick with HIV, which she contracted from her husband before he left to seek work in the capital, and was never heard from again.

In Rio de Janeiro, nine-year old Rosario Menen sleeps on the street.  She lives in terror of rats, rapists, and the police squads that periodically evict and brutalize street children. Like thousands of Brazilian girls and boys, Rosario has no place to go and no one to care for her.

In Riyadh, eighteen-year old Ahmad Haman just joined a fundamentalist terrorist cell. In his native Saudi Arabia, his financial prospects are dim. Population in the Middle East has tripled in the last fifty years, to 380 million in 2000 from 100 million in 1950 –  and today close to two-thirds of those 380 million Middle Easterners are under age 25 and jobs are scarce. Even in his oil-rich nation, Ahmad finds the promise of a heavenly afterlife with seventy virgins if he blows himself up in a suicide bombing more promising than his earthly future.

In the midst of all this runaway dislocation, misery, and insanity, economists argue endlessly about free markets vs. government regulations, privatization vs. central economic planning.  They talk about corporate profits, international trade agreements, job outsourcing, employment figures, interest rates, inflation, and gross national product. That’s what’s discussed on the news, in business schools, and in thousands of economic treatises –  usually in a jargon most people find frustratingly out of touch with their real needs.

Of course, it’s not that economists are unaware of people’s real-life needs. Some, like Nobel laureates Amartya Sen and Joseph Stiglitz, vigorously criticize practices that cause hunger, ill health, and environmental destruction and pollution.

A few, like MacArthur fellows Nancy Folbre and Heidi Hartmann, also note that even in the rich United States working parents are stressed because they have too little time to care for their children, and even well-to-do people find it hard to juggle work and family. But even now, when globalization is creating increasing stress for many families, most mainstream economic writings don’t pay much attention to how economic models impact our day-to-day lives.

Generally economists don’t write about people’s daily lives – except as employers, employees, and consumers. And when they address our environmental and social problems, they’re usually still caught in the free markets/privatization vs. central planning/government regulation debate that framed the conflict between capitalism and communism.

These discussions ignore the fact that neither capitalist nor communist systems have been able to solve chronic problems such as environmental degradation, poverty, and the violence of war and terrorism that diverts and destroys economic resources and blights so many lives.  Indeed, many of these problems have been the result of both capitalist and communist economic policies.

To effectively address our problems, we need a different way of looking at economics. In our time of rapidly changing technological and social conditions, we have to go much deeper, to matters that conventional economic analyses and theories have ignored.

There’s a common denominator underlying our mounting personal, social, and environmental problems: lack of caring. We need an economic system that takes us beyond communism, capitalism, and other old isms. We need economic models, rules, and policies that support caring for ourselves, others, and our Mother Earth.

An economics based on caring may seem unrealistic to some people.  Actually, it’s much more realistic than the old economic models. Our old models strangely ignore some of the most basic facts about human existence –  beginning with the crucial importance of caring and caregiving for all economic activities.

Consider that without caring and caregiving none of us would be here. There would be no households, no workforce, no economy, nothing. Yet most current economic discussions don’t even mention caring and caregiving. This too is odd, since economics comes from oikonomia, which is the Greek word for managing the household –  and a core component of households is caring and caregiving.

Excerpted from The Real Wealth of Nations: Creating a Caring Economics (2007) by Riane Eisler