7 ways to think like a 21st century economist

The 21st century calls for a far more ambitious and global economic goal: meeting the needs of all within the means of the planet. Draw that goal on the page and – odd though it sounds – it comes out looking like a doughnut. Change the goal: from GDP growth to ‘the Doughnut’įor over half a century, economists have fixated on GDP as the first measure of economic progress, but GDP is a false goal waiting to be ousted. So here are seven ways in which I believe we can all start to think like 21st-century economists:ġ. The insights that I drew out imply that the economic future will be fascinating, but wildly unlike the past, so long as we equip ourselves with the mindset needed to take it on. Spurred on by this question, I pushed aside my old economics textbooks and sought out the best emerging ideas that I could find, drawing on diverse schools of thought including complexity, ecological, feminist, behavioral and institutional economics, and set out to discover what happens when they all dance on the same page. What if we started economics with humanity’s goals for the 21st century, and then asked what economic mindset would give us half a chance of achieving them?

In the process, I realized the obvious: that you can’t walk away from economics because it frames the world we inhabit, so I decided to walk back towards it and flip it on its head. So I walked away from its theories and immersed myself in real-world economic challenges, from the villages of Zanzibar to the headquarters of the United Nations, and on to the campaign frontlines of Oxfam. But like many of today’s disillusioned students, its disconnect from relevance and reality left me deeply frustrated. When I studied economics at university 25 years ago I believed it would empower me to help tackle humanity’s social and environmental challenges. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks. Given the challenges of the 21st century-from climate change and extreme inequalities to recurring financial crises-this is shaping up to be a disaster. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050.

Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home.

7 ways to think like a 21st century economist