There is only one best economic system and it’s the one we have now.

“There is only one best economic system and it’s the one we have now.” This is a belief that many people have. There are other versions of this basic idea. This belief and others are obstacles to changing people’s minds. And that is their purpose — to be an obstacle that has to be removed, to keep other ideas out of peoples’ minds. It is a characteristic of cults to have such obstacle ideas as part of their belief system. Thus a well-functioning cult will have two sets of ideas, information, and beliefs. The first set consists of ideas, information, beliefs, and some knowledge about some aspects of the real world. The second set will have some ideas, information, and beliefs about their whole system of ideas and beliefs. The above example illustrates this. It is not about the real world. Rather it is about economic systems of thought. It says there is only one economic system and it is the best one. The purpose of this statement is to keep believers in the system from considering alternatives, to keep their minds closed to any ideas from outside the cult, the present economic system. Such statements don’t have to be logically consistent and coherent or true; they need only to be believed. A well-functioning cult will have many such ideas. They want a wall around their cult’s ideas. They want to keep outside ideas out. This is all to protect and preserve the cult. Cults do not rely only on the truth of their ideas — and cults may have some true and useful ideas — but they also rely on their walls, their obstacles, their cult protecting ideas and beliefs, to keep the cult going as long as possible.

Some other cult protecting ideas of economics: 1) It is science. (Very little of economics is based on fact or experiments; theories are not verified against reality.) 2) It is based on authorities. (Keynes vs Samuelson vs Friedman etc. The authorities are glorified almost into saints. So there are sub-cults in economics.) 3) It is claimed that economics is “special” in that it doesn’t have to operate like other sciences. For example Friedman’s infamous statement that assumptions don’t matter. 4) Economists promote the idea that economics is very difficult, specialized, dependent on high-powered mathematics, and that only highly trained (indoctrinated) economists can validly comment on economics. (Economics is indeed often difficult to understand because it is often inconsistent, incoherent, the assumptions are unrealistic, much of the mathematics is presented through simplified diagrams that obscure illogic, and in general the arguments and reasoning are sloppy. No wonder outsiders have a hard time understanding it. But economists don’t understand it either. They just believe.)

Cults in general often present incoherent, inconsistent, illogical arguments to their followers. The followers are told that these arguments are important, that they must understand and accept them. When the followers cannot understand arguments that are impossible to understand, they may conclude that they are ignorant (or this may be suggested to them by the leaders), and so they accept the beliefs the authorities claim follow from the impossible arguments. The followers have now been trained to just accept what the authorities say. There is a simple phrase that captures this process: Conned by bullshit.

OK, so how do we overcome the obstacle that many people have in their minds — that our present system is the only one possible? We must discredit most economists and most economic thinking as we have known it. How do we do this? First point out all the flaws, mistakes, illogical thinking that we can find in economic thinking.

Second point out all the failures of our present actual systems which were supposedly guided by the economists and their theories. There are many of these: Booms and crashes in general and the latest one in particular; no present system provides 100% employment; the present system is decreasing education; wars continue; unjust laws are enforced; excessive prison populations; grotesque wealth of the 1%; scarcity of human necessities among the poor of the world; environmental destruction, waste of human resources, etc.

Third counter the cult insulating ideas in the minds of the cult leaders (the economists) and in the minds of their most important followers (the 1% and their enablers — the politicians, the functionaries, the business leaders, lawyers, other professionals, and in everyone else we can.

Point out some simple truths like: We have not always had the present economic system. Therefore others are possible. And actually our systems are always changing, evolving, through accidents, technological changes, and deliberate changes through new laws.

Much of the above has already begun through the writings of some economists (e. g. Steve Keen) and blogs like Naked Capitalism and blogs it links to. This is significant because the ideas expressed in these books and blogs are spreading somewhat into the mass media. Remember there are no 100% barriers to ideas. Information leaks, always. No cult can keep out all new ideas. No newspapers, TV, other media, and journalists bought and paid for by the 1% can keep out all new ideas. Ideas will seep, then trickle, then flow, and maybe flood in.

We can do our part by: Learning and understanding as much as we can about how our systems work and how they might be changed, and about all the ways we can help people change their minds, and then spread the word and repeat, repeat, repeat, analyze, investigate, expose, discredit, ridicule, counter misinformation, patiently, calmly, civilly, coolly, thoroughly.

And when the revolution gets more organized we can implement more formal educational programs first in our own revolutionary organizations such as people’s assemblies, and later maybe in other schools, colleges and universities.

Here is my proposal for a new course to be taught in every economics department in the world: “Economics as a Cult and How to Dismantle It.”

Why No Theory?

Why do we want to construct a new economic system outside the framework of any grand economic theory. There are several reasons. First two of the grand economic theories — Capitalism and Communism have already been tried and each failed. Each failed to provide a just distribution of the human necessities. Secondly, all these grand theories are built upon some conception of a fixed human nature. Human nature is not fixed. We are not genetically determined. Human behavior depends on culture as much as it depends on genetics. Human behavior, and thus human nature, is variable over cultures. If a grand theory, based on some assumptions of a fixed human nature, were a true description of human economic behavior, then every culture would have that same economic system. They clearly do not. So any grand theory based on assumptions of a fixed human nature cannot be a true description, an accurate model, of any economy.

So, not only are the individual grand theories wrong, but the whole framework on which they are based — a fixed human nature — is wrong. For example capitalism is based on an assumption that humans base all their economic decisions on a kind of greed — always trying to maximize their individual welfare, their individual utility. There are huge numbers of people in the world today who think this way, or try to. For them almost every decision is about money. But not everybody does this. And even those who think they can make economic decisions this way in many cases they do not. In many cases they are not greedy — they actually want to be generous, be helpful toward other people, and often they do want to avoid harming other people. So the fundamental premise about human nature even for those who believe that everyone is greedy, or should be greedy, is wrong. Beyond this people cannot behave, in many, many situations as the theory postulates. The theory of maximizing your individual utility — called utility theory — is impossible to actually follow in many circumstances. In many situations we do not know, we cannot calculate what our individual utility is. So we surely can’t maximize it. It has been well-known that utility theory is impossible in practice for more than 150 years. Some of the contradictions and absurdities of utility theory have been demonstrated experimentally and described in Daniel Kahneman’s book “Thinking, Fast and Slow”.

Furthermore these theories are not clear as to what their goals are. Each theory presumably describes a complex of human behaviors, human interactions, human communication pathways — a system — that results in the production and distribution of goods and services by people for people. The theories were created on the assumption that the system already existed (at least for capitalism) and it was the job of the theory to describe the already existing system accurately, even scientifically, and/or mathematically, so that the theory could make accurate predictions. The idea of a goal or purpose of the system didn’t even come up. It was just assumed that there was one, and only one, system existing that had to be described, characterized, modeled, mathematisized, etc. It was not as if anyone had a choice. It was in a kind of afterthought that Adam Smith added the idea that in the capitalist system he described an “invisible hand” would ensure that the results of the operation of this system would be good for everybody. Well, they weren’t and they aren’t.

In reality the goals, the purpose of the capitalistic system is to allow and encourage all individuals to try to get as much money, property, and influence as they possibly can for themselves with almost no concern for what happens to anyone else. This is the main goal of the capitalist systems, their real purpose.

Well, now we know there is not just one such system. There are many variations of capitalism. Every capitalist country has its own version with some socialism mixed in. Communism came and went in less than one hundred years. And of course capitalism has evolved as all human institutions do. The theory has not kept up with the real evolving systems because, for one thing, it was wrong in the first place. It is so quaint to talk about shoemakers and bakers and a pin factory when there are corporations larger than countries and collateralized debt obligations squared.

Our economic and political systems evolve. We change them with every new law adopted. We change them almost every day. Why do we change our laws so much? Right now it is often done to accommodate special interests — to give tax breaks, reduce regulation, give special favors to individuals and corporations who contribute large amounts of money to political parties and candidates. So we change our laws to give favors to a limited class of people — mostly the 1%. Sometimes a law will be passed that has the goal of providing some benefits to some larger class such as the poor, or the middle class, or in very rare cases laws may be passed with the goal of making the whole system work better for everyone. Sometimes laws are passed with the goal of making the system better conform to some economic theory. So we change the system in ways that are haphazard, quasi-random, biased toward helping special groups (especially now to helping the rich get richer and the poor and middle class, the 99%, get poorer).

So what is the obvious change we need? We need to change the goals of all our system changes, of all the new laws we propose and pass. Every law should have the goal of moving our system in the direction of providing a just distribution of human necessities to all people.

It should not matter what such a system is called. To try to categorize the new systems into one or another of the dying grand theories is a waste of time and energy, and worse it just leads to confusion and needless arguments. (See for example the recent discussions about Libertarianism at Naked Capitalism.) If the new systems build on bits and pieces, old ideas, from some of the old grand theories, that’s fine as long as they move our systems toward the just distribution goals.

This is the non-violent revolution we want. First accept and spread the goal of a just distribution of human necessities. Then use the goal to constrain changes to our systems so that all changes move us toward the goal. Since this is trial and error, we don’t know how long it will take, and of course the “error” part means sometimes when we implement a change, it will move us farther from our goal, or it will have unintended negative consequences, and so we will have to reverse that change. This is surely no worse than what we do now. For example the repeal of Glass-Steagall — which allowed banks to gamble with depositors’ money — should probably be reversed.

The changes we make now are generally not consistent with our goal. They are not consistent with each other either. They often cause waste of human and natural resources. They make things worse. Our evolution is just drifting. We don’t know what we are doing. We don’t know where we are headed. We don’t have any purpose except mostly self  aggrandizement.

We can create economic and political systems that move us, step by step, non-violently towards our just distribution goals. But first we must throw out all the dead and dying grand economic theories.