Sunday, 15 November 2009
Traditional 'Economics' is dead - and a 'New Economics' is emerging
Stephanie Flanders recent asked for the "New name for a New Economy', when in reality the question should have been about a "New name for a New Economics" ... so I pointed out the huge insights Dr. W. Edwards Deming offered to the world nearly 20 years ago (and from which Leanomics and my book 'Lean World' are founded), and as the discussion continued some commentators questioned whether a "New Economics" is here now, or even needed, so I posted the following:
"... IMHO 'a New Economics' is not here yet, but it is starting to emerge - and following on from my previous post ...
'Economics is the social science that studies the production, distribution, and consumption of goods and services' (Wiki).
IMHO Just like other 'sciences', 'economics' (as defined above) has been functionalised, is too narrow in scope and is effectively dead. The failure all around us now is testament to this. It fails to account for the values (and/or the lack of values) people uphold, their beliefs, the political systems, leadership and management practices, the environment, the intrinsic motivation within people and social relationships that exist.
The fact that we are comparing ourselves more and more to basic animals (i.e. species with very low intellect) arguably shows how low we have now fallen, and how moral values have been progressively jettisoned from the field of play. The fact that economics today is more about how people make money from money (wealth manipulation), rather than adding any real value (wealth creation), is also testament to this, and the purpose of money as a basic bartering system has been almost completely forgotten. This is the world of Poweromics, which is still very much in operation today, with no moral/ethical values, standards or rules, and seeks to manipulate the system for ones own gain ... and it has failed the vast majority ... but has successfully transferred yet more wealth to a small minority - the already wealthy (even from those not yet born - eg spiraling Government debt due to bailouts/failure).
Ignoromics will gradually reduce as the majority of people's lives get much worse ... but Government's will no doubt create wars and blame other people, to divert people's attentions/anger away from themselves, the real villians & from what's really going on.
Some countries are already challenging Poweromics and turning themselves around, kicking out Poweromics (e.g. poor leadership, management, corruption) and using lean management practice (and Leanomics) to improve overall well-being and to create a sustainable prosperous 'economy'. Those that fail to act will fail to survive, and will die by their own ignorance, arrogance and ineptitude. Those current leaching off the others like a plague of locusts will also eventually destroy all the fields they are feeding off, and/or will find a new resistant strains that 'repel attacks' ... and those places where Leamomics starts to thrive will have no time/interest in 'parasitic organisms'.
'Leaders' looking to deflect blame, rather change the system (as well as the way they lead/manage), will be given short shrift soon ... and IMHO that time is not very far away"
One of the original commentators went on to say ... "I hear some college professor at Oxford is to give a huge chunk of his future earnings to a new charity - that's what I call a real change of behaviour but how many will or can really afford to follow his lead?"
To which I commented "This is just a small/individual example of Leanomics I would suggest - it's worth noting more young people/graduates are starting to shun the traditional corporate world ... as they also see the world very differently too ... and they are unlikely to remain on a 'sinking ship' either" ...