"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Wednesday, December 31, 2008

Another Sign of Dawning Realization

Dot Earth is running "Eleven Questions for Obama's Science Team" and I would like to especially recommend they (and all of us) think long and hard on question eight, which is a nice statement of one of our themes here:
My request to the Obama transition team is to introduce the economy team to the science team. Economists like Daniel Tarullo would benefit from discussing the laws of thermodynamics with Steven Chu. I’m also sure that the science community would benefit from learning something of the complexity of economics theory and practice. New ideas might evolve!

I’m certain that physics has laws that must be obeyed at our peril, but I’m not convinced that economics has shown their ‘laws’ to be inviolate. In fact, just now to the contrary those principles are looking quite tarnished. And, I’d like to see a science-cum-economics dialogue continue and evolve throughout Obama’s tenure in the White House. It would greatly benefit our transition to a sustainable economy based on alternative energy, resource conservation, green jobs and creative partipation by all sectors of our society.
Thanks to the questioner, Wayne Hamilton of Springdale, Utah.

 

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