Preface
This book is about economic systems, but it takes a broader perspective and pursues its enquiries to deeper levels of our societies and our humanity than in the usual conception of economics. It is written for a general audience, not for specialists, which is appropriate because it is about integration and synthesis rather than about specialisation. This is no text book, nor am I a professional economist. I am a scientist, a geophysicist, which means I use physics to study how the deep interior of the Earth works. My main research interest, in a career exceeding three decades, has been convection in the Earth’s mantle, which is the process that moves continents and tectonic plates slowly around the Earth’s surface.
Why does a geophysicist presume to write about economics? The short answer is that when I encounter a theory, I want to know what its assumptions and main predictions are, and whether they resemble the observable world in any useful way. A few years ago I read an understandable account of the standard theory of free market economics, and immediately it seemed to me that the behaviour of real modern economies is radically different from the standard theory.
That proximate trigger, which set me seriously on the path of writing a book, was the book Tumbling Dice by Brian Toohey , who is an Australian jounalist and economic commentator. It was Toohey who first gave me a coherent account of the central theory underlying free-market rhetoric. In it Toohey confirmed a growing suspicion of mine: that if economies of scale are widespread then there can be no general equilibrium (p. 70). Certainly the point of Toohey’s book was that we shouldn’t put much stock in conventional free-market economics, but I thought the point could be stated more directly and made more strongly. I was already familiar enough with dynamical systems to recognise that if even this one point were borne out, then the theoretical basis of conventional free-market economics would collapse.
A long-standing concern about deficiencies of conventional economic policies then crystallised into the thought that I could make a useful contibution by explaining in plain English why the so-called neoclassical theory of economics is inadequate. It is clear that many people feel the world is being led seriously awry by the current dominance of free-market policies, but they find it hard to contend with the armies of jargon-spouting experts who defend the current regime. I hope to empower such people by showing them where, precisely, the theory is inadequate, why it is inadequate and, most importantly, how far-reaching are the implications.
There have been many critiques of the neoclassical theory of free markets. Many of these criticise its values, many question its assumptions about human behaviour, and a few question its technicalities, but often the implications of making alternative assumptions are not easy to discern. What may distinguish this critique is that it identifies a few fundamental problems with the theory using the theory’s own concepts, and it makes clear that the implications are very far reaching.
A second seminal influence on this book was my reading Mitchell Waldrop’s book Complexity , which gives a fresh and readable account of the notion of complex self-organising systems, through the work of some key contributors to the subject. Though I was aware of some basic things about such systems, it was only through this account that I began to grasp the detail and depth of the parallels between self-organising systems and our experience of life. Waldrop also describes important implications for economics, particularly through the work of economist Brian Arthur, but I felt the implications ran even deeper and more broadly than they seemed to suggest. I didn’t want my book to be just a negative critique, and self-organisation crystallised for me the way to offer a positive and powerful alternative to the conventional theory.
The seeds cast by Waldrop and Arthur fell onto mental ground well-prepared by Jacob Bronowski, Fritjof Capra and others you will encounter through this book. Bronowski, in his seminal 1973 TV series and book The Ascent of Man , portrayed science as an intrinsic part of our culture and history. He showed how the cultural context of the time has conditioned the kinds of ideas that have arisen, and also illuminated science as a refined version of old and widespread processes of discovery. In The Tao of Physics (1976) and The Turning Point (1982) Capra, after embracing physics and spirituality, presumed to draw together our understanding of biology, the human body, medicine, psychology, economics and, by implication, our conception of ourselves and our societies. For me, Capra’s reach was breathtaking. His unifying concept was the systems view, the holistic view that a complex system can be more than the sum of its parts. Capra remains my inspiration and model for boldly reconceiving any or all aspects of our existence.
My experience as a scientist also prepared me in important ways for the unanticipated emergence of this study of economic systems. Studying the Earth keeps you humble, or it should. The Earth’s crust is ancient and messy, and you have to sift through a lot of confusing observations looking for gems of insight. Human affairs are much messier even than the Earth, but the practice was good. My study of the Earth’s inaccessible interior has also taught me to be conscious of the incompleteness of our observations of the world, and to remember that we scientists are inventing stories to explain patterns we think we perceive in our incomplete data. Geology is a historical science. You can’t put the Earth in a laboratory and see what happens if you change a few things. Nevertheless you can still do good science, proposing ideas, pursuing their implications and comparing them with the real Earth. There are more profitable lessons here for the social sciences than in the generally misleading stereotype of laboratory physics.
My own research impinges on many aspects of geology, and this has required me gradually to expand out of my narrow specialty and to learn about other geological disciplines. This has been a challenging and exciting process, and I have learnt to look critically at other people’s evidence and arguments, because often their interpretation is based on only a sketchy understanding of evidence from fields outside their own expertise. Also I became fascinated with the story of life on Earth, through the work of colleagues studying the patterns of change and succession in the fossil record.
Studying the Earth has affected my world view in a more personal way as well. I am humbled by the age of the Earth, which requires sustained acts of imagination to conceive of – more than 4.5 billion years. Life on Earth is almost as ancient as the Earth itself. Although many people for a long time have found living things to be miraculous, the notion that their miraculous complexity and subtlety has accumulated over the vast age of the Earth is relatively new, and humbling in a different way. It takes more sustained acts of imagination to conceive of how complex any living organism must be.
My father was an important influence. Although he had only about eight years of schooling and was a battling farmer most of his life, he had a strong curiosity about the world, was widely read and had a rebellious streak that conceded little respect to authority, unless it was earned. He was also unusual for his time in being both a farmer and a conservationist. He was active in nature conservation work from the late 1950s through the 1980s, before environmentalism became more widespread and well before a common interest between environmentalists and farmers became widely perceived in Australia.
A formative experience of my father’s childhood occurred when his family moved north from Australia’s southern coast to what is known as the Riverina district of southern New South Wales. He was five years old in 1913, and a tract of country was made available for clearing for wheat farming. This land had been grazed by the sheep of “squatters” for many years, but much of the original open woodland remained, and it was full of wildlife. There were kangaroos and emus (the large flightless Australian bird), but the abundance and variety of birds struck my father even at such a young age. Like many boys, he collected birds’ eggs, and soon had the eggs of about 100 species, still an incomplete sample of the birds known to him. We still have the collection. Within a few years most of the woodland was gone, replaced by wheat fields, and with it much of the bird life.
In 1951, when I was seven years old, my family moved south to the Victorian coast, where the rain is more reliable. There was still quite a lot of bushland of various kinds in the area, and my father resolved to do what he could to ensure not all of it was destroyed, the way the woodland of his childhood had been. Later he travelled through much of central, northern and western Australia, and the perceptions he brought home about our fragile continent were strongly informed both by his early experiences and by his life as a farmer.
I have been struck, in writing this book, by a convergence of many current streams of thought and action. Many people perceive the present as a time of great transition, and many people are redefining how they live and how they want to live. This convergence has been paralleled in my personal life by a confluence of my professional experience, my life experience and various long-standing interests that seemed quite disparate but ultimately have merged into this synthesis.
This might be a less integrated and forward-looking book than it is had my own erratic personal journey been different. In the course of personal crises and transitions, I have learnt that we can step through fears of rejection and reach a clarity of communication and a level of intimacy that I hardly dared to believe was possible. My life is richer and more loving for these lessons. I know, from this experience, that it is possible for each of us to change the way we behave towards each other and, in the words of Stan Dale, to replace ignorance and fear with awareness and love .
I have come to believe that irrational fear is at the root of much of the misery that we human beings inflict upon each other, and that irrational fear can be transcended. It seems to me that this is the path to maturity and wisdom. The world will only be changed if each of us makes such deeply personal changes, for it is only as each of us transcends our own fear of change that we will be able together to create a better world.
This is an optimistic book. Optimism is an expression of hope, not a guarantee of good times. There is no guarantee that we can move onto the more positive path I think is opening before us. On the other hand, if we allow ourselves to remain captives of fear and cynicism it is guaranteed that we will fail to find a better path.
